ATTY. GALLARDO ATTY.

PASAWAY GREEN NOTES PROVISIONS REVIEWERS

Labor Relations

Preliminary Discussions

What is Labor?
As an act: Exertion by human beings of physical or mental efforts, or both,
towards the production of goods and services.
As a sector of society: That sector or group in a society, which derives its
livelihood chiefly from rendition of work or services in exchange for
compensation under managerial direction (Mendoza, 2001).
Refers to workers, whether agricultural or non-agricultural

Constitutional Mandates on Labor

The State shall protect and promote the interests of the Filipino Laborer:
Art. II, Sec. 9. The State shall promote a just and dynamic social order that
will ensure the prosperity and independence of the nation and free the people
from poverty through policies that provide adequate social services, promote full
employment, a rising standard of living and improved quality of life for all.
Art. II, Sec. 18. The State affirms labor as a primary social economic force. It
shall protect the rights, of workers and promote their welfare.
The State shall protect and promote the interests of the Filipino Laborer:
Art. XII, Sec. 12. The State shall promote the preferential use of Filipino
labor, domestic materials and locally produced goods, and adopt measures that
help make them competitive.
Art XIII, Sec. 14. The State shall protect women by providing safe and healthful
working conditions, taking into account their maternal functions, and such
facilities and opportunities that will enhance their welfare and enable them to
realize their full potential in the service of the nation.
Art. XV, Sec. 8. The State shall, from time to time, review to upgrade the
pensions and other benefits due to retirees of both the government and the
private sectors.

Rights of Workers
Art. Ill, Sec. 8. 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. (formation of labor organizations)
Art. Ill, Sec. 18(2). No involuntary servitude in any form shall exist except as
a punishment for a crime whereof the party shall have been duly convicted.

Protection to Labor Clause

Art. XIII, Sec. 3 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 negotiations, 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 and decision-making process affecting their rights and benefits as may
be provided by law.

Phrase included in the 1987 constitution to highlight workers participation

in policy-making;
Added in the Labor Code
Article 217, Declaration of Policy
Article 261, Exclusive Bargaining Representation and Workers
Participation in Policy and Decision-Making

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Participation in Policy and Decision Making Processes

Phrase included in the 1987 constitution to highlight workers participation
in policy-making;
Added in the Labor Code
Article 217, Declaration of Policy
Article 261, Exclusive Bargaining Representation and Workers
Participation in Policy and Decision-Making

Defines rights of workers under Labor Standards and Labor Relations:

Under Labor Standards
Security of Tenure;
Living wage;
Share in the fruits of production; and
Humane conditions of work.

Under Labor Relations

Self-organization
Collective bargaining and negotiations
Peaceful concerted activities, including strike;
Participation in policy and decision-making processes.

Constitutional provisions on labor are not self-executory, hence the need for
Social Legislation, Labor Legislation and Welfare Legislation

Social, Labor and Welfare Legislation

Social Legislation - Laws that provide particular kinds of protection or
benefits to society or segments thereof in furtherance of social justice.
Labor Legislation - Statutes, regulations and jurisprudence governing the
relations between capital and labor. It provides for certain employment
standards and a legal framework for negotiating, adjusting and administering
those standards and other incidents of employment.
Welfare Legislation - Provides for the minimum economic security, of the
worker and his family in case, of loss of earnings due to death, old age,
disability, dismissal, injury or disease.

Social Legislation and Labor Legislation, Distinguished

Social legislation encompasses labor legislation, thus is broader in scope than

the latter. All labor laws are social legislations but not all social
legislations are labor laws.

Labor Law, defined.

The law governing the rights and duties of employers and employees with
respect to Labor Standards and Labor Relations.
Labor Standards Law deals with the minimum standards as to wages, hours of
work and other terms and conditions of employment that employers must
provide their employees.

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Labor Relations Law defines the status, rights and duties as well as the
institutional mechanisms that govern the individual and collective
interactions between employers, employees and their representatives.

The Philippine Labor Code, and Other Laws

Presidential Decree No. 442
Deals with Labor Standards and Labor Relations
Became effective November 1, 1974
Special Laws:
Laws on Social Security (SSS Law, GSIS Law, Limited Portability Law
(RA 7699)
National Health Insurance Act
Paternity Leave Act
Retirement Pay Law
Home Mutual Development Fund Law
Anti-Sexual Harassment Act
Anti-Child Labor Act
13th Month Pay Law
Migrant Workers and Overseas Filipinos Act of 1995 (R.A. No. 8042, as
amended by RA 10151)
Expanded Comprehensive Agrarian Reform Law
Magna Carta for Public Health Workers

Labor-related provisions in Other Laws

Civil Code
a. Art. 1700. The relation 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 the special laws on labor unions, collective bargaining,
strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects.
b. Art. 1701. Neither capital nor labor shall act oppressively against
the other, or impair the interest or convenience of the public.
c. Art. 1702. In case of doubt, all labor legislations and all labor
contracts shall be construed in favor of the safety and decent living
for the laborer.
d. Art. 1703. No contract which practically amounts to involuntary
servitude, under any guise whatsoever, shall be valid.

Revised Penal Code

a. Art. 289. Formation, maintenance and prohibition of combination of
capital or labor through violence or threats. The penalty of arresto
mayor and a fine not exceeding 300 pesos shall be imposed upon any
person who, for the purpose of organizing, maintaining or preventing
coalitions of capital or labor, strike of laborers or lock-out of
employees, shall employ violence or threats in such a degree as to
compel or force the laborers or employers in the free and legal
exercise of their industry or work, if the act shall not constitute a
more serious offense in accordance with the provisions of this Code.

The Aim and Basis of Labor Laws

Attainment of Social Justice
Balance the interest of labor and capital (eliminate oppression)
Labor is afforded a greater measure of protection
There is greater supply of labor than demand for their services;
Those who have less in life should have more in law;
The need for employment by labor comes from vital, and even
desperate necessity (survival);

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Social Justice

Social justice is the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and objectively
secular conception may at least be approximated. Social justice means the
PROMOTION OF THE WELFARE of all people, the adoption by the government of
measures calculated to ensure economic stability of all the component elements of
the society through the maintenance of proper economic and social equilibrium in
the interrelations of- the members of the community, constitutionally, through
the adoption of measures, legally justifiable, or extra-constitutionally, through
the exercise of powers underlying the existence of all governments, on the time-
honored principle of salus populi est suprema lex.
(Calalang v. Williams, No. 47800, December 2, 1940).

Basic Principles

What are the basic principles in the constitution and labor-related laws on
protection to labor?
The state shall afford full protection to labor, promote full employment,
equal work opportunities without bias or discrimination, regulate the
relations of employers and employees, and assure workers rights (refer to
protection to labor clause Art. XIII, Sec. 3, 1987 Const. & Art. 3, Labor
Code);
The relation of capital and labor are impressed with public interest, hence
employment contracts are not ordinary contracts (Art. 1700, NCC);
In case of doubt or ambiguity, labor laws and rules are to be construed in
favor of labor (Art. 4, Labor Code, Art. 1702, Civil Code)
IF THERE IS DOUBT as to the meaning of the legal and contractual
provision, the above-mentioned applies.
IF THE PROVISION IS CLEAR AND UNAMBIGUOUS, it must be applied in
accordance with its express terms. (Meralco v. NLRC, GR No. 78763,
July 12, 1989).
The law also recognizes that management has rights which are also
entitled to respect and enforcement in the interest of fair play (St.
Luke's Medical Center Employee's Assoc, v. NLRC, GR No. 162053, March
7, 2007).

Why the preference for labor over capital?

Comes from acknowledgement that capital wields more power than labor;
(Sanchez v. Harry Lyons Construction Inc., GR No. L-2779, October 18, 1950).
There is greater supply than demand for labor;
Those who have less in life should have more in law; and
The need for employment by labor comes from vital, and even
desperate necessity (survival)

To whom does the Labor Code apply?

General Rule: The Code applies to all workers, whether agricultural or non-
agricultural, including employees in a government corporation incorporated under
the corporation code;
Exceptions:
1. Government employees;
2. Employees of government Corporations created by special or original charter;
3. Foreign governments;
4. International Agencies, employees of intergovernmental or international
organizations;
5. Corporate officers/Intra-corporate disputes which fall under PD 902-A and
now fall under the jurisdiction of, the Regular Courts pursuant to the
Securities Regulation Code; and
6. Local water districts except where NLRC jurisdiction is invoked.
Cases
Government employees;

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Employees of government Corporations created by special or original charter

(Juco v. NLRC, GR No. 98107, August 18, 1997);
Foreign governments (JUSMAG-Philippines v. NLRC, GR No. 108813, December 15,
1994);
International Agencies (Lasco v. UNRFNRE, GR Nos. 109095-109107, February
23, 1995), employees of intergovernmental or international organizations
(SEAFDEC-AQD v. NLRC, GR No. 86773, February 14, 1992);
Corporate officers / Intra-corporate disputes which fall under PD 902-A and
now fall under the jurisdiction of, the Regular Courts pursuant to the
Securities Regulation Code (Nacpil v. IBC, GR No. 144767, March 21, 2002);
and
Local water districts (Tanjay Water District v. Gabaton, GR Nos. 63742 and
84300, 17 April 1989) except where NLRC jurisdiction is invoked (Zamboanga
City Water District v. Buat, GR No. 104389, May 27, 1994).

Who is a worker/employee?
Article 13 A worker is any member of the labor force, whether employed or
unemployed.
A person who works for an employer for a fee; a person working for salary or
wages.
Note the term employee under Article 218 of the Labor Code: Not limited to
the employees of a particular employer, 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 unfair labor practice if he has not obtained any
other substantially equivalent or regular employment.

Protection to labor should not come at the expense of oppressing capital!

Law recognizes management rights. The employer has the right to
Conduct business;
Prescribe rules;
Select and hire employees;
Transfer or discharge employees;
Discipline of employees, and
Return of investment and expansion of business.

Management Prerogatives
Rural Bank of Cantilan . v. Julve, GR No. 169750, February 27, 2007.
Under the doctrine of management prerogative, every employer has the
inherent right to regulate, according to his own discretion and
judgment, all aspects of employment, including hiring, work"
assignments, working methods, the time, place and manner of work, work
supervision, transfer of employees, lay-off of workers, and
discipline, dismissal, and recall of employees
Mendoza v. Rural Bank of Lucban, GR No. 155421, July 7, 2004.
Management prerogatives, however, are subject to limitations provided
by
law,
contract or collective bargaining agreements and
general principles of fair play and justice

Viewpoints on Labor Relations

State Policy on Labor Relations

Article 217, Labor Code
Promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and
conciliation, as modes of settling labor or industrial disputes;
Promote free trade unionism as an instrument for the enhancement of
democracy and the promotion of social justice and development;

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Foster the free and voluntary organization of a strong and united

labor movement;
Promote the enlightenment of workers concerning their rights and
obligations as union members and as employees;
Provide an adequate administrative machinery for the expeditious
settlement of labor or industrial disputes;
Ensure a stable but dynamic and just industrial peace; and
Ensure the participation of workers in decision and policy-making
processes affecting their rights, duties and welfare.
Prohibit courts or administrative agencies or officials from setting
or fixing wages, rates of pay, hours of work or other terms and
conditions of employment, except as otherwise provided under the Labor
Code.

Self-Organization
Workers organize as a union or some other form of association (registered or
unregistered)
Effect of registration with the State: Acquisition of legally demandable
rights, e.g. right to demand collective bargaining
Organization must have rules and mechanisms that respect member rights
No employer influence or interference (See Article 261, Labor Code)

Why Workers Organize

Self Advancement
Job Security
Upholding the rule of law over arbitrary exercise of power by capital
Provide employees a sense of participation in the enterprise
There can be many labor organizations in the workplace, but
Only one recognized representative for workers in Collective
Bargaining
Selected by the workers themselves by way of election (with or without
intervention of the government)

What is the rationale for unionization?

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

Who may exercise right to self-organization

All persons employed in commercial, industrial and in religious, charitable,
medical or educational institutions (profit or non-profit)
Includes the right to
Form
Join
Assist
Labor organizations of their own choosing

Right to join union includes right not to join (Victorino vs. Elizalde Rope
Workers, 59 SCRA 54)
Corollary to the right to join is the prerogative not to join, affiliate
with or assist a labor union. Therefore, to become a union member, an employee
must, as a rule, not only signify the intent to become one, but also take some
positive steps to realize the intent.

Employees who CANNOT form, join or assist labor organizations:

a. Managerial employees
b. Confidential employees
c. Government employees, including GOCCs with original charter
d. employees who are MEMBERS of a cooperative

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e. employees of International Organizations or Specialized Agencies which

are registered with the United Nations and which enjoy diplomatic
immunity
f. Aliens without valid working permits; or Aliens with valid working
permits but are nationals of a country which do not grant Filipinos to
exercise the right of self-organization and to join or assist labor
organizations.

Who may and not join unions

Art. 243. ALL PERSONS
-employed in commercial, industrial, and agricultural enterprises and in
religious, charitable, medical, or educational institution
-whether operating for profit or not
-shall have the right to self-organization and to form, join, or assist labor
organization of their own choosing for purposes of collective bargaining.

Government employees
The Rules and Regulations Implementing EO 180 explicitly provide that since the
terms and conditions of employment in the government, including any political
subdivision or instrumentality thereof and government-owned and controlled
corporations with original charters are governed by law, the employees therein
shall not strike for purposes of securing changes thereof (Arizala et al., vs. CA
GR Nos. L-4363334 September 14)

Members of Religious Sect

The free exercise of religious profession or belief is superior to contract
rights. In case of conflict, the latter must yield to the former (Victoriano vs.
Elizalde Rope Workers Union GR No. L-25246 September 12, 1974)
The Courts decision in Victoriano vs. Elizalde upholding the right of members of
the Iglesia ni Kristo Sect not to join a labor union for being contrary to their
religious belief, does not bar the members of that sect from forming their own
union (Kapatiran sa Meat and Canning Division vs. BLR Director GR No. L-82914
June 20,1988).
-General Rule: Any employee may be eligible to join and be a member of a labor
union, beginning on his first day of service, whether employed for a definite
period or not (UST Faculty Union vs. Bitonio GR No. 131235 November 16, 1999).
-Art. 277 Any employee, whether employed for a definite period or not shall,
beginning on his first day of service, be considered an employee for purposes
of membership in any labor union.
Supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial functions if the exercise of such
authority is not merely routinary or clerical in nature but requires
independent judgment. (Art. 212 m)
- The present law abandoned the settled jurisprudence that the prohibition for
supervisory employees to join the rank-and-file employee union extents to the
affiliation with a federation. It now allows the rank- and-file union and the
supervisors union operating within the same establishment to join the same
federation or national union.

Who may not join unions?

- MANAGERIAL EMPLOYEE is one who with power or prerogatives to lay down and
execute management policies and to hire, fire, transfer, suspend, lay-off,
recall, discharge, assign, or discipline employees.

Employee-member of a cooperative
The right to collective bargaining is not available to an employee of a
cooperative who at the same time is a member and co-owner thereof. With respect,
however, to employees who are neither members nor coowners of the cooperative
they are entitled to exercise the rights to self-organization, collective
bargaining and negotiation as mandated by the 1987 Constitution and applicable
statutes (San Jose City Electric Service Cooperative, Inc. v. Ministry of Labor
and Employment, et al. (G.R. No. 77231, May 31. 1991)

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An employee of such cooperative who is a member and co-owner thereof cannot

invoke the right to collective bargaining, for certainly an owner cannot bargain
with himself or his co-owners (San Jose Electric Service Cooperative, Inc. vs.
Ministry of Labor GR No 77231 May 31,1989).

Confidential employees are those who:

1)assist or act in confidential capacity,
2)to persons who formulate, determine, and effectuate management policies in
the field of labor relations.

The two criteria are cumulative, and both must be met if an employee is to be
considered confidential employee. (San Miguel Corporation Supervisors and Exempt
Employees Union v. Laguesma, 277 SCRA 370 (15 August 1997)
-Art. 245 of the Labor Code does not directly prohibit confidential employees
from engaging in union activities. However, under the doctrine necessary
implication, the disqualification of managerial employees equally applies to
confidential employees. The confidential-employee rule justifies the exclusion
of confidential employees because in the normal course of their duties, they
become aware of management policies relating to labor relations It must be
stressed, however, that when the employee does not havee access to confidential
labor relation information, there is no legal prohibition against confidential
employee: from forming, assisting, or joining a union (Sugbuanon Rural Dank,
Inc. vs. Lnguosmn GR No. 116194 February 2, 2000)

LABOR ARBITERS
Original and exclusive jurisdiction to hear and decide, within 30 calendar
days:
ULP cases;
TERMINATION disputes;
If accompanied WITH A CLAIM FOR REINSTATEMENT, those cases that workers
may file involving wages, rates of pay, hours of work and other terms
and conditions of employment;
Claims for actual, moral, exemplary and other forms of DAMAGES arising
from employer-employee relations;
CASES ARISING FROM ANY VIOLATION OF ART 264 of this Code, including
questions involving the legality of strikes and lockouts;
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 P5, 000.00 regardless of whether
accompanies with a claim for reinstatement; and
MONETARY CLAIMS OF OVERSEAS CONTRACT WORKERS under the Migrant Workers
Act of 1995.
Claims of employees against GOCCs WITHOUT ORIGINAL CHARTER and has been
incorporated under the Corporation Code.
(NOTE: Although the provision speaks of EXCLUSIVE AND ORIGINAL JURISDICTION OF
labor arbiters, the cases enumerated may instead be submitted to a voluntary
arbitrator by agreement of the parties under Art. 262. The law prefers
voluntary over compulsory arbitration.)

Cases
Exception to the rule that Er-Ee relationship is necessary for Labor
Arbiters to acquire jurisdiction:
The jurisdiction of Labor Arbiters is not limited to claims arising
from Employer-Employee relationships under Sec. 10 of RA 8042, which
cover money claims arising out of an employer-employee relationship or
by virtue of any law or contract involving Filipino workers for
overseas deployment, including claims fordamages. Santiago vs. CF
Sharp Crew Management, Inc. (GR No. 162419, July 2007)

Corporate Officers

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Nacpil vs. IBC (GR No. 144767, March 21, 2002) Officers designated by the
board are corporate officers
Prudential Bank and Trust Company (GR No. 141093, Feb. 20, 2001) - One
rising from the ranks is not a mere corporate officer
Rural Bank of Coron vs. Cortes, (GR No. 164888, Dec. 6, 2006) A corporate
officer who is also an employee may file an illegal dismissal case with the
labor arbiter.

See also
Okol vs. Slimmers World International (GR No. 160146, December 11, 2009)
Gomez vs. PNOC Development and Management Corporation (GR No. 174044,
November 27, 2009)
Atty. Virgilio R. Garcia vs. Eastern Telecommunications Philippines (GR No.
173115, April 16, 2009)
Renato Real vs. Sangu Philippines, Inc. et al., G.R. No. 168757, 1/19/2011

Venue
Case may be filed in the RAB having jurisdiction over the workplace of
complainant or petitioner
Where two or more RABs have jurisdiction, venue resides in the RAB which
first acquired it
No objection to venue before the filing of position papers, issue is deemed
waived
May be by written agreement, or by motion for meritorious cases
Option of the worker

Case Flow, RAB

The

National Labor Relations Commission

NLRC exercises adjudicatory powers and other functions through its divisions
(not the individual commissioners);
En banc decisions pertain only to
Promulgation of rules governing hearing and disposition of cases in
the divisions (e.g., 2011 NLRC Rules);

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Recommending Labor Arbiters to the President

Allowing a division to hear and decide a case under the jurisdiction
of another division

2011 NLRC Rules of Procedure

Significant changes from 2005 Rules (as discussed by Atty. Ruben Del Rosario)

1. Service of Notices, Resolutions, Orders and Decisions by Private Courier

(Section 4, Rule III). Under the 2005 Rules, service of notices such as summons,
notice of conference, resolutions, orders and decisions is made through the
NLRCs messenger or sent by registered mail only. In the 2011 Rules, service can
be done by private courier also.

2. Authority of the Labor Arbitration Associate to Conduct Conciliation and

Mediation Conference (Section 8a, Rule V). The 2005 Rules state that the Labor
Arbiter shall personally preside over and take full control of the proceedings.
The 2011 Rules state that the Labor Arbiter may be assisted by the Labor
Arbitration Associate in the conduct of the proceedings.
3. Re-filing of a Dismissed Complaint Due to Non-Appearance of Complainant
(Seafarer) (Section 10, Rule V). Under both the 2005 and 2011 NLRC Rules, the
Labor Arbiter can dismiss the complaint if the seafarer fails to appear, despite
due notice, during the two (2) settings for mandatory conciliation and mediation
conference. The dismissal however is without prejudice which means that the
seafarer can re-file his complaint.

However, under the 2005 NLRC Rules, the seafarer cannot re-file the case after it
has been dismissed for the 2nd time on the ground of non-appearance during the
mandatory conferences.

This limitation of 2nd time is not present under the 2011 NLRC Rules. It would
appear that the seafarer can keep filing a new case despite dismissals of his
previous cases due to non-appearance at the mandatory conferences.

4. Failure to Attend Mandatory Conferences by Respondents (Manning Agents)

In case of non-appearance by the respondent (manning agent) during the first

scheduled conference, the second conference as scheduled in the summons shall
proceed. However, if the respondent (manning agent) still fails to appear at the
second conference despite being duly served with summons, he/she shall be
considered to have waived his/her right to file position paper.

The above was not in the 2005 NLRC Rules and is new in the 2011 NLRC Rules.

It is thus important to ensure attendance at the mandatory conferences.

5. Remedy of the Respondents (Manning Agents) When Declared To Have Waived Their
Right to File Position Paper (Section 20, Rule V)

In instances where a party is declared to have waived his/her right to file

position paper, the 2011 NLRC Rules have provided a remedy. The 2011 NLRC Rules
states: A party declared to have waived his/her right to file position paper may,
at any time after notice thereof and before a case is submitted for decision,
file a motion under oath to set aside the order of waiver upon proper showing
that failure to appear during the hearings was due to justifiable and meritorious
grounds. If said motion is granted, the manning agents can now file the necessary
Position Paper.

6. Limited Period to Conduct Hearing or Clarificatory Conference (Section 14a,

Rule V)

The concept of hearing or clarificatory conference referred to in this rule is

independent of and different from the mediation or conciliation hearing wherein
the seafarer and the manning agents are encouraged to enter into an amicable

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settlement. The clarificatory hearing is conducted after the submission of the

position papers

Briefly stated, a clarificatory hearing is rarely held and it is discretionary on

the part of the Labor Arbiter. As the term connotes, its purpose is to ask the
parties clarificatory questions to further elicit facts or information which will
include obtaining relevant documentary evidence from any party or witness. .

The hearing or clarificatory conference shall be terminated within thirty (30)

calendar days from the date of the initial clarificatory conference. The period
now is shorter as it was ninety (90) calendar days under the 2005 NLRC Rules.

In any event, under both the 2005 and 2011 Rules, cases involving overseas
Filipino workers (including seafarers) the mandatory conciliation and mediation
conferences and clarificatory conferences must be terminated within sixty (60)
days from the acquisition of jurisdiction by the Labor Arbiter over the person of
the respondents.
7. Procedure for Recovery of Amount Paid to the Seafarer During Execution
Proceedings (Section 14, Rule XI)

By way of brief background, if the case is lost in the Labor Arbiter level, the
manning agents/principals can file an appeal before the Commission level to
assail the Labor Arbiters decision. If the appeal is dismissed, the remedy of
the manning agents is to file a Motion for Reconsideration. The denial of the
motion will render the Labor Arbiters decision final and executory.
Consequently, at this stage, manning agents and their principals are required to
pay the seafarer based on said final award.

In the meantime, the case can still continue because the manning agents has the
remedy of elevating the matter to the Court of Appeals and eventually, to the
Supreme Court.

In some cases, the Court of Appeals and/or the Supreme Court would either reverse
(the seafarer is not entitled at all to his claim) or modify (the judgment award
is reduced) the decision of the NLRC.

In case of reversal or modification by the Court of Appeals or Supreme Court of

the Labor Arbiters decision, the next recourse of the manning agents is to
recover the amount it has previously paid to the seafarer.

The present 2011 NLRC Rules of Procedure explicitly provides for the steps on how
to recover the said amount from the seafarer. Under the 2011 NLRC Rules the Labor
Arbiters of the NLRC can issue orders of restitution to enable the manning agents
to recover the amount they previously paid to the claimants as a result of the
reversed or modified decisions of the NLRC. This provision was not present under
the 2005 NLRC Rules.
8. Extraordinary Remedy Available to the Manning Agents/Principals Other Than
Appeal (Rule XII)

One of, if not, the most critical stage in NLRC proceedings is during execution
of the judgment award. It is at this point that the seafarer can now collect from
the manning agents or the bonding company the amount mentioned in the Labor
Arbiters decision.

The writ of execution is the basic document which would empower the NLRC Sheriff
to collect the judgment award from manning agent which is the losing party. Under
the 2005 NLRC Rules of Procedure, once the writ is issued, the manning agents are
already helpless to stop the NLRC Sheriff from enforcing the judgment award
unless of course, and this is very rare, the Court of Appeals issues a Temporary
Restraining Order and/or Writ of Injunction.

The 2011 NLRC Rules of Procedure provides for a specific remedy. It is not in the
form of an appeal but a verified petition with the NLRC Commission the purpose of

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which is to annul or modify the order of the Labor Arbiter issuing the writ of
execution.

The immediate effect of the filing of the said verified Petition is that the NLRC
Sheriff cannot, in the meantime, enforce the writ of execution or the NLRC
Sheriff, in laymans term, cannot collect the amount stated in the decision
from the manning agents or from the bonding company.

Please note that the mere filing of the verified Petition will prevent the bank
of either the manning agents or the bonding company from releasing the garnished
amount to the seafarer within fifteen (15) calendar days from the filing of the
Petition. Of course, the period can be longer if the NLRC issues a Temporary
Restraining Order or Writ of Preliminary Injunction which has a lifetime of
twenty (20) or sixty (60) days, respectively. It can also go beyond said period
if the NLRC issues a final injunction.

However, the Temporary Restraining Order or the Writ of Preliminary Injunction

only becomes effective upon posting by the manning agents of a cash bond, not
surety bond, amounting to Php50,000.00 or a higher amount as may be required by
the NLRC.

Important Note: While the extraordinary remedy described above can be availed of
during execution proceedings, Rule XII of the 2011 NLRC Rules can be availed of
by any party aggrieved by an order or resolution of the Labor Arbiter. It is
thus not confined to just execution proceedings but on all orders or resolutions
of the Labor Arbiter. For example, if the manning agent files a Motion to Dismiss
on the ground that the seafarer has already been paid his disability benefits and
it is denied by the Labor Arbiter, the manning agent can avail of the
extraordinary remedy under Rule XII of the 2011 NLRC Rules.

The above are the currently perceived significant changes but we are continually
reviewing the 2011 NLRC Rules and will report on any other significant
developments in subsequent updates.

2011 NLRC Rules, amendments

En Banc Resolution 11-12 amended the 2011 NLRC Rules of Procedure.
Venue: When venue is not objected to before the first scheduled mandatory
conference, such issue or objection will be deemed waived. (Rule IV, Section
1, par. c)
Confidentiality of Commission Records: access to pleadings and other
documents filed by parties to a case are restricted. Reports, drafts of
decisions, records of deliberations, and other documents involving private
rights are made confidential. Nevertheless, decisions, resolutions and
orders of the NLRC are open to the parties and their counsel or authorized
representative during office hours. (Rule XIII, Section 8)
RULE V, SECTION 11. AMENDMENT OF COMPLAINT/PETITION. An amended complaint or
petition may be filed before the Labor Arbiter at any time before the filing
of position paper, with proof of service of a copy thereof to the opposing
party/ies. If the amendment of the complaint or petition involves impleading
additional respondent/s, service of another summons in accordance with
Section 3 hereof is necessary to acquire jurisdiction over the person of the
said respondent/s.
RULE V, SECTION 20. DEATH OF PARTIES. In case a complainant dies during the
pendency of the proceedings, he/she may be substituted by his/her heirs. If
it is the individual respondent, the provision of Section 20, Rule 3 of the
Rules of Court shall apply.
RULE XI, SECTION 5. EFFECT OF A MOTION TO LIFT ENTRY OF JUDGMENT. In case a
motion to lift Entry of Judgment is filed, the execution proceedings shall
not be suspended and the records of the case shall not be elevated to the
Commission unless ordered otherwise.
RULE XI, SECTION 11 EXECUTION IN CASE OF DEATH OF PARTY. Where a party dies
after the entry of judgment or issuance of certificate of finality,

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execution thereon may issue or one already issued may be enforced in

accordance with the applicable provisions of the Rules of Court. The sheriff
shall submit to the Commission or Labor Arbiter a report before and after
the sale. Proceeds of the sale should be deposited with the Cashier for
proper disposition by the Commission or Labor Arbiter.
The foregoing provisions provide mechanisms to: a) amend complaints b)
substitute heirs in case of death of a party and c) execute judgments.
The amendments also clarify certain ambiguities in the rules. For instance,
the amended rules specify the reckoning point of the five (5) year
effectivity of the writ of execution, which is the date of entry of judgment
or issuance of certificate of finality. (Rule XI, Section 7)
In respect of execution of monetary judgments, the amended rules state the
manner by which a losing party may voluntarily tender payment. The amended
rules also enumerate the order of funds and properties against which the
judgment may be enforced in the event the losing party refuses or fails to
pay. Notably, the prevailing party may even file a motion for the issuance
of a break open order with the Commission or the Labor Arbiter if the
losing party prevents the sheriff from entering the place where the property
subject of execution is kept. (Rule XI, Section 9 and 10)
The amended rules introduced a new provision, which would have a significant
effect during execution proceedings. It contemplates a situation where a
case is elevated to the Court of Appeals and subsequently to the Supreme
Court. The new provision states that a total or partial reversal of judgment
by the Court of Appeals has the effect of suspending the execution insofar
as the reversal is concerned even during the pendency of a motion for
reconsideration on such judgment. Where the judgment of the Court of Appeals
is reversed by the Supreme Court, execution proceedings shall commence upon
presentation of a certified true copy of the decision and entry of judgment.
(Section 17, Rule XI)

Doctrine of Forum Non Conveniens

Manila Hotel Corporation vs. NLRC (GR No. 120077, October 13, 2000) The
NLRC has no jurisdiction when the main aspects of the case transpired in
foreign jurisdictions and the only link that the Philippines has with the
case is that the employee is a Filipino citizen.
PNB vs. Cabansag (GR No. 157010, June 21, 2005) when the employee is
directly hired in a foreign country but nonetheless secures a (POEA)
employment certificate, she is an OFW and thus the case falls under the
jurisdiction of the labor arbiter.

Counter claims of employers

Banez vs. Valdevilla (GR No. 128024, May 9, 2000) Art. 217 (now 223) is
comprehensive enough to include claims for all forms of damages arising from
Er-Ee relations, including Ers claims for actual damages against a
dismissed Ee.
Domondon vs. NLRC (GR No. 154376, Sept. 30, 2005)

NLRC, Jurisdiction
Two kinds
Original Jurisdiction
Injunction in ordinary labor disputes
Injunction in strikes and lockouts under Article 270, LC
Certified labor disputes in industries indispensable to the
national interest, where work stoppage is likely or has already
occured
Exclusive Appellate Jurisdiction
Cases decided by the labor arbiters
Cases decided by DOLE regional directors under Article 129

NLRC DIVISION
Original and exclusive:

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Cases certified to it for compulsory arbitration by the Secretary of

Labor under Art. 263 CERTIFIED CASES;
INJUNCTION CASES under Art. 218 and 264; AND
CONTEMPT CASES

Exclusive appellate:
Cases DECIDED BY LABOR ARBITERS under Art 217b of the Labor Code and Sec 10
RA 8012 (Migrant Workers Act); and
Cases DECIDED BY THE REGIONAL OFFICES OF DOLE IN THE EXERCISE OF ITS
ADJUDICATORY FUNCTION under Art 129 of the Labor Code over monetary
claims of workers amounting to not more that P5,000.00

Labor Arbiters & NLRC, distinction of jurisdictions

NLRC has exclusive appellate jurisdiction on all cases decided by the labor
arbiters.
NLRC does not have original jurisdiction on the cases over which labor
arbiters have original and exclusive jurisdiction.
If the labor arbiter does not exercise original and exclusive jurisdiction
over a case, the NLRC has no appellate jurisdiction over it.

Appeals
Labor Arbiters decisions ordinary appeal to the NLRC, w/in 10 calendar
days from receipt. NLRCs decision on appeal is elevated to the CA by way
of special civil action (Rule 65), and then under ordinary appeal (Rule 45)
to the SC

Grounds of Appeal
Prima facie evidence of abuse of discretion on the part of the labor arbiter
Decision, order or award was secured through fraud or coercion, including
graft and corruption
Purely on questions of law
Serious errors in the findings of facts which would cause grave or
irreparable damage or injury to appellant

Perfection of Appeal, requisites

Filed within reglementary period (ten days from receipt of decision by party
seeking appeal)
Under oath
Appeal fee
Posting of cash or surety bond (where judgment involves monetary award)
Proof of service to adverse party
Note the following:
Labor arbiter loses jurisdiction upon perfection of appeal
Lack of verification is not fatal nor jurisdictional
Appeal is still valid despite failure to pay docket fee, but refusal
to pay despite directive is fatal
Raising new issues or changing theory on appeal is not allowed.

Reinstatement Order
Reinstatement is immediately executory even pending appeal
Pioneer Texturizing Corporation vs. NLRC employer is duty-bound to inform
employee of reinstatement
An employer may not stay execution of reinstatement, even when he has posted
a bond
Roquero vs. PAL (GR No. 152329, April 2003) - Labor arbiter has ministerial
duty to implement reinstatement order

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Reinstatement by Employer
Actual reinstatement of the employee to his work under the same terms and
conditions prior to dismissal or separation, or
Reinstatement in the payroll of the company, without requiring actual return
to work

Bureau of Labor Relations

FUNCTIONS OF THE BUREAU OF LABOR RELATIONS ABSORBED BY NCMB
Pursuant to E.O. 126, the National Conciliation and Mediation Board (NCMB)
has absorbed the conciliation, mediation and voluntary arbitration functions
of the BLR.
The BLR functions, as it now stands are confined largely to union matters,
collective bargaining and labor education.
Jurisdiction over labor-management problems or disputes is also exercised by
other offices such as the DOLE regional offices, the Office of the Secretary
of Labor, NLRC, POEA, OWWA, SSS-ECC, the regional wage and productivity
boards, NWPC, and even the regular courts over intra-corporate disputes.

Exclusive and Original Jurisdiction of the BLR

To act on its own initiative or upon the request of either or both parties
on all:
INTRA-union conflicts;
INTER-union conflicts; and
OTHER RELATED Labor Relations Disputes

BUREAU OF LABOR RELATIONS

Original and exclusive
INTRA- union conflicts
INTER- union conflicts
all DISPUTES, GRIEVANCES OR PROBLEMS ARISING FROM OR AFFECTING LABOR
MANAGEMENT RELATIONS IN ALL WORKPLACES WHETHER AGRICULTURAL OR NON-
AGRICULTURAL.
(Note: The parties may however, by agreement, settle their differences by
submitting their case to a voluntary arbitrator rather than taking the case to
the BLR.)

Other Related Labor Relations Disputes (Sec. 2, Rule XI D.O. 40-03)

Shall include any conflict between a labor organization and the employer or
any individual, entity, or group that is NOT a labor organization or
workers association.
This includes:
Cancellation of registration of unions and workers associations; and
A petition for interpleader.

EO 251, S. 1987
removed from the jurisdiction of the BLR all labor-management disputes.
The effect of E.O. 251 is to transfer to the NCMB the mediation,
conciliation, and arbitration functions of the BLR.
The parties may, by agreement, settle their differences by submitting their
case to a voluntary arbitrator rather than taking the case to the BLR.
This category of labor relations disputes as the name suggests is related to
inter/intra union disputes to differentiate it from other labor-management
disputes, such as those under
Article 128: Visitorial and enforcement power
Article 129: recovery of wages, simple money claims and other benefits
Article 223: Jurisdiction of the LA and NLRC
Article 267: Jurisdiction of VA
Article 270(g): Secretary of Labor, on possibility of strikes and
lockouts

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

Functions and Authority of BLR under the 1987 Administrative Code

Sec. 16. Bureau of Labor Relations The BLR shall:
Set policies, standards, and procedures on the registration and supervision
of legitimate labor union activities including denial, cancellation, and
revocation of labor union permits;
Set policies, standards and procedures relating to collective bargaining
agreements, and the examination of financial records of accounts of labor
organization to determine compliance with relevant laws;
Provide proper orientation to workers on their schemes and projects for
improvement of the standards of living of workers and their families.

NATIONAL CONCILIATION AND MEDIATION BOARD

(Absorbed the conciliation, mediation and voluntary arbitration functions of
the BLR.)
Functions:
Formulate policies, etc. pertaining to effective mediation and
conciliation of labor disputes.
Perform preventive mediation and conciliation functions
Coordinate and maintain linkages with other sectors or institutions
concerned with matters relative to the prevention and settlement of
labor disputes.
Formulate policies, etc, pertaining to the promotion of cooperative and
non-adversarial schemes, grievance handling, voluntary arbitration and
other voluntary modes of dispute settlement.
Administer voluntary arbitration program
Provide counseling and preventive mediation assistance
Monitor and exercise technical supervision over Board programs
implemented in the regional offices.
Perform such other functions as may be provided by law or assigned by
the Secretary of Labor.

GRIEVANCE MACHINERY
Interpretation and implementation of CBA
Interpretation and enforcement of company personnel policies

VOLUNTARY ARBITRATOR
Unresolved grievances from the Grievance machinery:
Interpretation and implementation of CBA
Interpretation and enforcement of company personnel policies
Wage distortion issues arising from the application of any wage orders in
organized establishments
Unresolved grievances arising from the interpretation and implementation
of productivity incentive programs.
Other labor disputes by agreement of the parties

MED-ARBITER
1. Hear, conciliate, and decide representation cases
2. Assist in the disposition of intra or inter-union disputes.

VOLUNTARY ARBITRATORS, APPEAL OF DECISION

Appeals from decisions of voluntary arbitrators may be filed with the Court
of Appeals, under Rule 43 of the Revised Rules of Court. Motion for
Reconsideration no longer allowed by Book V Rules from decisions of Voluntary
arbitrators.

How is an appeal perfected from Labor Arbiter to NLRC?

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An appeal to the NLRC is perfected once an appellant FILES THE MEMORANDUM OF

APPEAL, PAYS THE REQUIRED APPEAL FEE and when a monetary award is involved, the
latter POSTS AN APPEAL BOND or SUBMITS A SURETY BOND issued by a reputable
bonding company (Soliman Security Services vs. CA, 384 SCRA 514)

SUMMARY OF PROCEDURES IN VARIOUS LABOR AGENCIES

THE LAW ON VISITORIAL, INSPECTION AND THE ENFORCEMENTPOWER OF THE SECRETARY OF

LABOR AND HIS DULY AUTHORIZED REPRESENTATIVE

Q: Describe briefly the Visitorial Power of the Secretary of Labor.

A: The visitorial power of the Secretary of Labor or any of his duly

authorized representative refers to the power to have access to employers
records and premises at any time of the day or night whenever work is being
undertaken therein.

It includes the right to copy therefrom, to question any employee & investigate
any fact, condition or matter which may be necessary to determine violations or
which may aid in the enforcement of the Code and of any labor law, wage order, or
rules and regulations.

The Secretarys duly authorized representative herein is the Regional Director,

the Labor Regulations Officer or the Labor Employment or Enforcement or Safety
Officer.

Q: Briefly describe the enforcement power of the Secretary of Labor.

A: This refers to the power of the Secretary of Labor to compel the employer to
comply with labor standards upon findings of violations discovered in the course
of the exercise of his visitorial power.

Among these powers are the power to:

Issue Compliance Orders based on the findings of labor employment and

enforcement officers or industrial safety engineers made in the course
of inspection

Issue Writs of Execution for the enforcement of orders except in cases

where the employer contests the findings of the said labor officers and
raises issues supported by documentary proofs which were not considered
in the course of inspection

Order Work Stoppage/Suspension of Operations when non-compliance with

the law or implementing rules and regulations poses grave & imminent
danger to the health and safety of the workers in the workplace.

Conduct hearings within 24 hours to determine whether

an order for stoppage of work/suspension of operations shall be lifted

or not.
employer shall pay the employees concerned their salaries in case the
violation is attributable to his fault

The Secretary may require employers to keep and maintain Employment Records
as may be necessary in aid of his visitorial and enforcement powers (exercised
through the regional directors of DOLE).

The exercise of the above mentioned powers requires an existing employer-

employee relationship.

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

Q: A, B and C are employees of ABC Corporation. They filed complaints for non-
payment of salaries, which is in the nature of a labor standards violation case,
in the amount of P 4,000.00, P 7,500.00 and P 10,000.00, respectively.

Does the Secretary of Labor have jurisdiction over the claims of A, B and
C?

A: Yes. The Secretary of Labor, through the Regional Director, has jurisdiction
over the claims of A, B and C who are still presently employed by ABC Corporation
. Republic Act No. 7730 removed the limit of P 5,000.00 in 1994 based on the
Supreme Court ruling ruling in Servandos, Inc. vs. The Secretary of Labor.

Q: What will be the procedure to be followed in the case presented in the

preceding problem?

A: The procedure shall be as follows:

a) An inspection order will be issued by the Regional Director to a Labor

Regulations Officer.
b) The Labor Relations Officer will then inspect the premises of the
employer, and ask that the records be produced. He will also conduct inquiries
from the employees.
c) If the Labor Relations Officer finds that there were indeed violations of
Labor Standard Laws, he will furnish a report to the Regional Director and to the
employer.
d) If the employer does not do anything within the reglementary period
within which to contest the findings, the Regional Director continues to have
jurisdiction over the claims.

Q: What must the employer do in order to divest the Regional Director of his
jurisdiction over the case and transfer it to the Labor Arbiter?

A: In order to divest the Regional Director of his jurisdiction, the employer

must:
a) contest the findings of the Labor Relations Officer;
b) raise the issue that there is a need to thresh out evidentiary matters;
c) show that such evidentiary matters cannot be obtained in the ordinary
course of inspection.

THE JURISDICTION OF THE REGIONAL DIRECTOR ( ART. 129 Labor Code) AND THE LABOR
ARBITER (ART. 217 (a) (6), Labor Code) IN THE ADJUDI9CATION OF MONEY CLAIMS.

Q: Describe briefly the adjudicatory power of the Secretary of Labor exercised

through the Regional Director.

A: The Regional Director or any of his duly authorized hearing officer is

empowered through summary proceeding and after due notice, to hear and decide
cases involving recovery of wages and other monetary claims and benefits,
including legal interests.

REQUISITES:

1. The claim is presented by an employee or person employed in domestic or

household service or househelper;
2. The claim arises from employer-employee relations;
3. The claimant does not seek reinstatement; and
4. The aggregate money claim of each employee or househelper does not exceed P5,
000.00

In the absence of any of the above mentioned requisites, it is the

labor arbiter who shall have exclusive jurisdiction over claims arising from
employer employee relations, except claims for employees compensation, SSS,

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

medicare and maternity benefits, pursuant to Article 217 of the Labor Code as
amended.
Labor Arbiters JURISDICTION

Q. What are cases within the jurisdictional mandate of the Labor Arbiters?
A. The exclusive and original jurisdiction of labor arbiters is based on Art. 217
(a) (6),which provides :
- Except as otherwise provided under this Code the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within 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. ULP cases;
2. TERMINATION disputes;
3. If accompanied WITH A CLAIM FOR REINSTATEMENT, those cases that workers may
file involving wages, 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
employer-employee relations;
5. Cases arising from any violation of Art 264 of this Code, including questions
involving the legality of strikes and lockouts;
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 P5,000.00 regardless of whether accompanies with a claim for
reinstatement;
7. Monetary claims of overseas contract workers under the Migrant Workers Act of
1995; and
8. Claims of employees against GOCCs if the latter does not have an original
charter and has been incorporated under the Corporation Code.

NOTES: Although the provision speaks of EXCLUSIVE AND ORIGINAL JURISDICTION of

labor arbiters, the cases enumerated may instead be submitted to a voluntary
arbitrator by agreement of the parties under Art 262. The law prefers voluntary
over compulsory arbitration.

JURISPRUDENCE:

EDUARDO G. EVIOTA vs. COURT OF APPEALS [2004]

Not every controversy or money claim by an employee against the employer or vice-
versa is within the exclusive jurisdiction of the labor arbiter. 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 employee-employer relation. Absent such a link, the
complaint will be cognizable by the regular courts of justice

Q. What cases must be disposed of by the labor arbiter by referring the same to
the grievance machinery and voluntary arbitration?
A. Cases which must be disposed of by the labor arbiter by referring the same to
the grievance machinery and voluntary arbitration:
a. Disputes on the interpretation or implementation of CBA and
b. those arising from the interpretation or enforcement of company personnel
policies.

NOTES:
The Labor Arbiter and the NLRC have no jurisdiction over claims filed by
employees against international agencies such as IRRI, WHO etc. unless
they expressly waive their immunity. (Lasco vs. Unrfnre)
They also have no jurisdiction over illegal dismissal cases of corporate
officers which fall under PD 902-A and now fall under the jurisdiction
of the regular courts pursuant to the new Securities Regulation Code.

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[formerly under the jurisdiction of the Securities and Exchange

Commission (SEC) (Dily-Daly Nakpil vs NLRC)]

Q. What is compulsory arbitration?

A. Compulsory arbitration is the process of settlement of labor disputes by a
government agency which has the authority to investigate and make and award
binding to the parties.
The NLRC may conduct compulsory arbitration only in national interest cases
referred to it by the DOLE Secretary.

Q. What is the meaning of the excepting phase except as otherwise provided under
this Code in Art. 217 (a) of the Labor Code, as amended?
A. It simply means that any or all the cases mentioned in the same article as
falling within the jurisdiction of the Labor Arbiters can, by agreement of the
parties, be presented and decided with finality by a voluntary arbitrator or
panel of voluntary arbitrators.

Q. What are cases within the original and exclusive jurisdiction of the NLRC
Division?
A. The cases that are within the exclusive and original jurisdiction of the
NLRC, are as follows:
1. Cases CERTIFIED to it for compulsory arbitration by the Secretary of Labor
under Art. 263 (g), which are ed cases denominated as certified cases;
2. Injunction cases under Art. 218 and 264; and
3. Contempt cases

JURISDICTION OF THE NLRC

Q. What cases are within the exclusive appellate jurisdiction of the NLRC?
A. They are:
1.Cases decided by labor arbiters under Art 217b of the Labor Code and Sec 10 RA
8012(Migrant Workers Act); and
2. Cases decided by the regional office of DOLE in the exercise of its
adjudicatory function under Art 129 of the Labor Code over monetary claims of
workers amounting to not more that p5,000.00

Q. What are the Labor Code provisions related to Art. 217 of the Labor Code, as
amended?
A. See Articles 261 and 262 on Voluntary Arbitration.

Q. What are the powers of the Commission under the Art. 218 of the Labor Code, as
amended?

A. The powers of the Commission are outlined hereunder, thus:

1, Rule-making power [promulgation of rules & regulations governing disposition
of cases before any of its divisions/regional offices]
Power to issue compulsory processes [administer oaths, summon parties,
issue subpoenas]
Power to investigate matters and hear disputes within its jurisdiction
[adjudicatory poweroriginal & appellate jurisdiction over cases]
Contempt power [218]; and
Power to issue injunctions and restraining orders

CONTEMPT POWER

Q. Are the NLRC Divisions or the Labor Arbiters clothed with contempt powers?
A. Yes. Under the NLRC Rules of Procedure, the NLRC Divisions or the Labor
Arbiters may summarily adjudge any person guilty of DIRECT CONTEMPT.

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

Likewise, the Commission or the Labor Arbiter may also cite any person for
INDIRECT CONTEMPT upon grounds and in the manner prescribed under Rule 71 of the
Rules of Court.

Q. Explain why contempt cases are both within the appellate and original
jurisdiction of the NLRC.
A. Under its contempt power, the NLRC can hold any person liable for direct or
indirect contempt. In this instance, the contempt case is within the original
jurisdiction of NLRC.
Likewise, Any person adjudged guilty of direct contempt by a Labor Arbiter
may, within a period of 5 calendar days from notice of the judgement, appeal to
the Commission. In this instance, the contempt case is within the appellate
jurisdiction of the NLRC

Q. What is the procedure for the issuance of restraining order/ injunction?

A. The procedure shall be as follows:
a. filing of a verified petition
b. hearing after due and personal notice has been served in such manner as the
Commission shall direct, to:
all known persons against whom the relief is sought and
also to the Chief Executive or other public officials of the province or
city within which the unlawful acts have been threatened or committed
charged with the duty to protect the complainants property
c. reception at the hearing of the testimonIES of witnesses with opportunity for
cross- examination, in support of the allegations of the complaint made under
oath as well as testimony in opposition thereto
d. finding of fact of the Commission to the effect that :
prohibited or unlawful acts have been threatened and will be committed,
or have been committed and will be continued unless restrained, but no
injunction or temporary restraining order shall be issued on account of
any threat, prohibited or unlawful act, except against the persons,
association or organization making the threat or committing the
prohibited or unlawful act or actually authorizing or ratifying the same
after actual knowledge thereof.
That substantial and irreparable injury to the complainants property will
follow
That as to each item of relief to be granted, greater injury will be
inflicted upon complainant by the denial of the relief than will be
inflicted upon the defendants by the granting of the relief
That complainants has no adequate remedy at law
That public officers charged with the duty to protect complainants
property are unable or unwilling to furnish adequate protection.

e. Posting of a bond

Q. What is irreparable injury?

A. An injury which cannot be adequately compensated in damages due to the nature

of the injury itself or the nature of the right or property injured or when there
exists no pecuniary standard for the measurement of damages.

Q. What is adequate remedy?

A. One that affords relief with reference to the matter in controversy and which
is appropriate to the particular circumstances of the case.

NOTE: The power of the NLRC to enjoin or restrain the commission of any or all
prohibited or unlawful acts under Art. 218 of the Labor Code can only be
exercised in a labor dispute.

Q. What are the requisites before a TRO may be issued ex parte?

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

A. They are the following:

1. The complainant shall allege that, unless a TRO is issued without notice, a
substantial and irreparable injury to complaints property will be unavoidable;
2. testimony under oath is sufficient, if sustained, to justify the Commission in
issuing a temporary injunction upon hearing after notice;
3. The complainant shall first file an undertaking with adequate security/bond in
an amount to be fixed by the Commission sufficient to recompense those enjoined
for any loss, expenses or damage caused by the improvident or erroneous
issuance of such order or injunction, including all reasonable costs, together
with a reasonable attorneys fee, and expense of defense against the granting
of any injunctive relief sought in the same proceeding and subsequently denied
by the Commission.
The TRO shall be effective for no longer than 20 days and shall become
void at the expiration of said 20 days counted from the date of the
posting of the bond.
It may be lifted or it may be upgraded to a permanent injunction.
The procedural and substantial requirements of Art 218 (e) must be
strictly complied with before an injunction may issue in a labor
dispute.

THE NLRCS INJUNCTION POWER

Q. Is the NLRC Division empowered to issue injunctions and temporary restraining

orders?
A. Yes. But the authority of the NLRC to issue injunction is conditioned upon
the existence of a labor dispute. Absent a labor dispute, the authority to issue
injunction belongs to the regular courts.

Q. Is the Labor Arbiter granted the power to issue injunctions and temporary
restraining orders?
A. No. Such power is reserved only to the Commission.

Q.In labor disputes, who can issue injunction/TRO?

A. The President, Secretary of Labor, NLRC, the Regional Directors and the Med-
Arbiters.

Q. What is the ruling of the Supreme Court on the issuance of injunctions and
temporary restraining orders ex parte?
A. The issuance of a temporary restraining order ex parte is not per se
prohibited. Its issuance, however, should be characterized by care and caution.
The law requires that it be clearly justified by considerations of extreme
necessity. (Bisig ng Manggagawa sa Concrete Aggregates, Inc. v NLRC, GR No.
105090, September 16, 1993).

THE BUREAU OF LABOR RELATIONS AND THE NCMB

Q. What is the jurisdictional mandate of the Bureau of Labor Relations (BLR)?

A. The Bureau of Labor Relations, together with the Labor Relations
Divisions in the DOLE Regional Offices of the Department of Labor and Employment,
shall have original and exclusive authority to act, at their own initiative or
upon request of either or both parties, on the following matters.
(a) On all intra and inter-union conflicts; and
(b) All disputes, grievances or problems arising from or affecting labor-
management relations in all workplaces whether agricultural or non-
agricultural, except from those arising from the implementation or
interpretation of collective bargaining agreements which shall be the
subject of grievance procedure and/or voluntary arbitration.

NOTES: Under the last paragraph of Art. 226, the Bureau shall have fifteen
(15) days to act on all labor cases before it, subject to extension by agreement
of the parties (as amended by Sec. 14, Rep. Act. 6715).

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Pursuant to E.O. No. 126, the NATIONAL CONCILIATION AND MEDIATION

BOARD (NCMB) has absorbed the conciliation, mediation and voluntary arbitration
functions of the BLR.
The jurisdiction over labor-management problems or disputes is also exercised by
other offices such as the DOLE regional offices, and the Office of the Secretary,
NLRC, POEA, OWWA, SSS-ECC, the regional wage and productivity boards, NWPC, and
even the regular courts over intra-corporate disputes.

Q. What cases are within the exclusive and original jurisdiction of the BLR?
A. The BLR has jurisdiction to act at its own initiative or upon the request of
either or both parties on all:
1. intra- union conflicts
2. inter- union conflicts
3. all disputes, grievances or problems arising from or affecting labor management
relations in all workplaces whether agricultural or non-agricultural.

NOTES: The parties however, may opt by agreement, to settle their differences by
submitting their case to a voluntary arbitrator rather than taking the case to
the BLR.
The BLR has no jurisdiction on those arising from the
implementation or interpretation of collective bargaining agreements which shall
be subject of grievance procedure and/or voluntary arbitration.

JURISDICTION OF LABOR ARBITERS, NLRC, VOLUNTARY ARBITRATORS & BUREAU OFLABOR

RELATIONS

JURISDICTION OF LABOR ARBITERS

Original and Exclusive Jurisdiction over the following:

1. Unfair Labor practices;
2. Termination disputes;
3. Cases that workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment, if accompanied with claim for
reinstatement;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
from the employeremployee 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 employeremployee relations,
including those of persons in domestic or household service, involving an
amount exceeding five thousand pesos (P5, 000.00) regardless of whether
accompanied with a claim for reinstatement.

Jurisdiction of NLRC
The National Labor Relations Commission exercises two (2) kinds of jurisdiction:
1. original jurisdiction; and
2. exclusive appellate jurisdiction

1. Original Jurisdiction
a. Injunction in ordinary labor disputes to enjoin or restrain any actual
threatened commission of any or all prohibi9ted or unlawful acts or to require
the performance of a particular act in any labor dispute which, if not
restrained or performed forthwith, may cause grave or irreparable damage to any
party.
b. Injunction in strikes or lockouts under Article 264 of the Labor Code.
c. Certified labor disputes causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, certified by the Secretary of
Labor and Employment for compulsory arbitration.

2.Exclusive Appellate jurisdiction.

a. All cases decided by the Labor Arbiters including contempt cases.

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b. Cases decided by the DOLE Regional directors or his duly authorized Hearing
Officers involving recovery of wages, simple money claims and other benefits
not exceeding P5, 000 and not accompanied by for reinstatement.

Distinction between jurisdiction of Labor Arbiters and NLRC.

The NLRC has exclusive appellate jurisdiction over all cases decided by the
Labor Arbiters. The NLRC does not have original jurisdiction over the cases over
which Labor Arbiter has original and exclusive jurisdiction (see above
enumeration). If a claim does not fall within the exclusive original jurisdiction
of the Labor Arbiter, the NLRC cannot have appellate jurisdiction thereover.

Intra-corporate disputes.-Labor Arbiters have no jurisdiction over

termination of corporate officers and stockholders which, under the law,
is considered intra corporate disputes. The Regional Trial Court (not
SEC) now have jurisdiction under R. A. 8799 (Securities Regulations Act
of 2000)). Jurisdiction of RTC includes adjudication on monetary claims
(such as unpaid salaries, leaves, 13th month pay, bonuses, etc.),
damages and attorneys fees.
Government Corporations.- Labor Arbiters have jurisdiction over cases
involving employees of government-owned or controlled corporations
without original charters (organized under the corporation code). They
have no jurisdiction if entity has original charter.
Immuned entitiesLabor Arbiter have no jurisdiction over labor cases
involving from suit. Exception: when said entities propriety activities
(as distinguished from governmental functions).
Ecclesiastical affairs. Labor Arbiters have jurisdiction over labor
cases involving dismissal of priests and religious ministers but not
over purely ecclesiastical (such as excommunication). In Austria vs.
Hon. NLRC, et. Al., G. R.No.124382, August 16,1999, it was held that the
fact that a case involves the church and its religious minister does not
ipso fact give the case religious significance. Simply stated, what is
involved in an illegal dismissal case is the relationship of the church
as an employee-a purely secular matter not related to the practice of
faith, worship or doctrines of the church, in this case the minister was
not excommunicated or expelled from the membership of the church but was
terminated from employment based on the grounds cited in Article 282 of
the Labor Code.

Money claims under pars. (a), [3] and [6] of Article 217; classification.

Money claims falling within the original jurisdiction of the Labor Arbiters may
be classified as follows:

1) any money claim, regardless of amount,, accompanied with a claim for

reinstatement (which presupposes from a termination case); or
2) any money claim, regardless of whether accompanied with a claim reinstatement,,
exceeding the amount five thousand pesos (P5,000.000) per claimant (which does
not necessarily involve termination employment)

Money claims cognizable by the DLOE Regional Directors and not by Labor Arbiter:
requisites.

1. the claim must arise from employeremployee relationship;

2. the claimant does not seek reinstatement; and
3. the aggregate money claim each employee does not exceed P5, 000.00.

Receivership or liquidation of business, effect on jurisdiction of Labor Arbiter.

The jurisdiction conferred upon Labor Arbiters and the NLRC would not be lost
simply because the assets of a former employer had been placed under receivership
or liquidation.

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Wage distortion cases.- Labor Arbiters have jurisdiction over wage

distortion cases only in unorganized establishment, jurisdiction is
vested with voluntary arbitrators.
Money claims OFWs.- Labor Arbiters have jurisdiction over all monetary
claims of overseas workers.
Strikes and Lockouts.-Labor Arbiters have jurisdiction over legality of
strikes and lockouts, except strikes and lockouts in industries
indispensable to the national interest, in which case, either NLRC (in
certified) or DOLE Secretary (in assumed cases) has jurisdiction.

JURISDICTION OF VOLUNTARY ARBITRATORS

Original and Exclusive jurisdiction over the following:

1. all unresolved grievances arising from the interpretation or

implementation of the collective bargaining agreement after exhaustion of the
grievance procedure; and

2. all unresolved grievances arising from the implementation or

interpretation of company personnel policies.

All grievances which are settled or resolved within seven (7) calendar days
from the date of the submission for resolution to the last step of the grievance
machinery, shall automatically be referred to voluntary arbitration prescribed in
the Collective Bargaining Agreement (CBA).

Cases cognizable by voluntary Arbitrator but filed with NLRC and DOLE
Regional Offices.-They shall immediately be disposed and referred to the
Grievance Machinery or Voluntary arbitration provided in the Bargaining
Agreement (CBA)
Jurisdiction over any other labor disputes, irrespective of the nature
of the case, is vested on Voluntary Arbitrators by agreement of the
parties.

JURISDICTION OF BUREAU OFLABOR RELATIONS (BLR)

Original and exclusive jurisdiction over the following:

1. Inter-union disputes or represented disputes which refer to cases
involving petition for certification election filed by a duly registered labor
organization which is seeking to be recognized as the sole and exclusive
bargaining agent of the rank-and-file employees in the appropriate bargaining
unit of a company, firm or establishment.
2. Intra-union disputes or representation disputes which refer to
disputes or grievances arising from any violation or disagreement over any
provision of the constitution and-by laws of the union, including any violation
of the rights and conditions of union membership provided for in the Labor Code.
3. All disputes, grievances or problems arising from or affecting labor-
management relations in all workplaces, except those arising from interpretation
or implementation of the CBA which are subject of grievances procedure and/or
voluntary arbitration.
{Note: The BLR has the following administrative functions: (1) registration of
labor unions; (2) keeping of registry of labor unions; and (3) maintenance and
custody of CBAs.]
APPEALS

APPEAL TO NLRC FROM DECISIONS OF LABOR ARBITERS

Four ((4) grounds for appeal:

(a) If there is a prima facie evidence of abuse of discretion on the pat

of the labor Arbiter;
(b) If the decision order or award secured through fraud coercion,
including graft and corruption;
(c) If made purely on question of law; and

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(d) If serious errors in the finding of facts are raised which would
cause grave or irreparable damage or injury to the appellant.

Requisites for perfection of Appeal.

a. the appeal should be filed on a reglementary period;

b. the Memorandum of Appeal should be under oath;
c. payment of appeal fee;
d. posting of cash surety bond, if judgment involves monetary award; and
e. proof of service to the adverse party.

Reglementary period- 10 calendar days.

a. Saturdays, Sundays and Legal Holidays included in reckoning 10-day reglementary

period.
b. Exceptions to 10-day calendar day period rule.

1. Appeal filed before the Vir-Jen case (G. R. Nos. 58011-12, July 20,1982) at a
time when the rule was 10 working days.
2. 10th day falling on a Saturday.
3. 10th day falling on a Sunday or Holiday.
4. Reliance on erroneous notice of decision.
5. Appeal on the decision of Labor Arbiter on thirdparty claim (10 working days).
6. Appeal from the decision of Labor Arbiter in direct contempt cases (5 calendar
days).
7. When allowing the appeal in interest of justice.
8. Allowing the appeal for other compelling reasons (due to typhoon falling on the
10th day; or excusable negligence).
a. the 10 calendar day reglementary period to appeal is not extendible.
b. Motion for Reconsideration of Labor Arbiters decision is not allowed.
c. 10 calendar-day period so counted from receipt of decision by counsel of party.
d. Failure to Appeal or perfect appeal within 10-calendar day reglementary period
will make the Labor Arbiters decision final and executory.
e. Date of mailing is date filing.
f. Receipt of one of two counsels is receipt by the party.
g. Effect of perfection of appeal-Labor Arbiter loses jurisdiction.
h. Lack of verification of the memorandum of appeal is not fatal nor
jurisdictional.
i. Failure to pay appeal docketing fee; not fatal to the validity of appeal.
j. Submission of new or additional evidence on appeal may be allowed.
k. New issues or change of theory on appeal is not allowed.

Reinstatement aspect of the Labor Arbiters decision.-It is immediately

executory even pending appeal. Such awards does not require a writ of
execution. The employer is duty-bound to inform employee of
reinstatement (either in the payroll or in the position previously held
or in a substantially equivalent position of no longer available, at the
position of the employer)). The remedy if employer refuses if reinstate
is contempt. The posting of bond does not stay reinstatement.
Appeal involving monetary awards.

a. No monetary award, no appeal bond required.

b. Cash or surety bond is required for perfection appeal from monetary award.
c. Real property bond may be posted in the lieu of cash of surety bond.
d. Bond should be posted within the 10-calendar day reglementary period.
e. Award of moral and exemplary damages and attorneys fees, excluded from
computation of bond.
f. If bond is not genuine, appeal is not perfected.
g. Non-posting of bond will not perfect the appeal.
h. Remedy of employee in case employer failed to post bond is to file a motion
to dismiss the appeal.
i. Motion to reduce bond may be granted only in meritorious cases such as when
the monetary claims had already prescribed.

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j. The filing of a motion to reduce bond does not stop the running of the
period to perfect appeal.
Appeal from NLRC decision.-None. The only way to elevate the case to the
Court of Appeals (no longer to the Supreme Court) is through the
original civil action for certiorari under rule 65 of the 1997 Rules of
civil procedure. A motion for reconsideration of the NLRCs decision is
a requisite prior to filing of certiorari petition.
Period which to file certiorari petition-60 days reckoned from the
receipt by party of the denial of the Motion for Reconsideration.
DECISIONS OF DOLE SECRETARY. Remedy is also a petition for certiorari to the
Court of Appeals (same rule as in the case of NLRC).

DECISIONS VOLUNTARY ARBITRATORS. Remedy is appeal (not a petition for

certiorari) to the Court of Appeals.

NOTE: Book V Rules no longer allows a Motion for Reconsideration on decisions

rendered by the Voluntary Arbitrators.

DECISION OF BUREAU OF LABOR RELATIONS. It depends. If rendered in its original

jurisdictionappeal is to the DOLE Secretary. If rendered in its appellate
jurisdiction-a petition for certiorari to the Court of Appeals is the correct
recourse.

Union Disputes
Intra-Union Disputes refer to any conflict between and among union
members, including grievances arising from any violation of the rights and
conditions of membership, violation of or disagreement over any provision of
the unions constitution and by-laws, or disputes arising from chartering or
affiliation.
Inter-Union Disputes refer to any conflict between and among legitimate
labor organizations involving representation questions for purposes of
collective bargaining or to any other conflict or dispute between legitimate
labor organizations based on any violations of their rights as labor
organizations.

Coverage of Inter/Intra-Union Disputes (Sec. 1 Rule XI, D.O. 40-03)

Cancellation of registration of a labor organization filed by its members or
by any other labor organization;
Conduct of election of union and workers association officers/nullification
of election of union and workers association officers;
Audit/accounts examination of union or workers association funds;
De-registration of CBA;
Validity/invalidity of union affiliation or disaffiliation;
Validity/invalidity of acceptance/non-acceptance for union membership;
Validity/invalidity of impeachment/expulsion of union and workers
association officers;
Validity/invalidity of voluntary recognition;
Opposition to application for union and CBA registration;
Violations of or disagreements over any provision in a union or workers
association constitution and by-laws;
Disagreements over chartering or registration of labor organizations and
CBAs;
Violations of the rights and conditions of union or workers association
membership;
Violations of the rights of legitimate labor organizations, except
interpretation of CBAs; and
Such other disputes or conflicts involving the rights to self-organization,
union membership, and collective bargaining
Between and among legitimate labor organizations; and
Between and among members of a union or workers association.

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Special Requirements as to the Filing of Cases

Involving Entire Membership
The complaint must be signed by at least 30% of the entire
membership of the union; and
It must also show exhaustion of administrative remedies.
Involving a Member Only
In such case, only the affected member may file the complaint. Redress
must first be sough within the union itself in accordance with its
constitution and by-laws EXCEPT under any of the following
circumstances:
Futility of intra-union remedies;
Improper expulsion procedure;
Undue delay in appeal as to constitute substantial
injustice;
The action is for damages;
In such case, only the affected member may file the complaint. Redress
must first be sough within the union itself in accordance with its
constitution and by-laws EXCEPT under any of the following
circumstances:
Lack of jurisdiction of the investigating body;
Action of the administrative agency is patently illegal,
arbitrary, and oppressive;
Issue is purely a question of law;
Where the administrative agency had already prejudged the
case; and
Where the administrative agency was practically given the
opportunity to act on the case but did not.

Effects of Filing or Pendency of Inter/Intra-Union Dispute and other Labor

Relations Disputes (Sec. 3, Rule XI, D.O. 40-03)
The rights, relationships and obligations of the part-litigants against each
other and other parties-in-interest prior to the institution of the petition
shall continue to remain during the pendency of the petition and until the
date of finality of the decision rendered therein. Thereafter, the rights,
relationships and obligations of the party litigants against each other and
other parties-in-interest shall be governed by the decision so ordered.

Modes of Appeal in Intra/Inter-Union Disputes (Rule XI, D.O. 40-03

Summary of Rules on Inter/Intra Union Disputes

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Who:
For grounds under Section 1: any LLO members thereof specially concerned
For grounds under Section 2: any party-in-interest
Where
RO that issued its certificate of registration or certificate of creation of
chartered local if it involves labor unions with independent registration,
chartered locals, workers association, its officers or members.
Directly with the BLR if it involves a federation/national union/industry
union, its officers or members

INTER/INTRA-UNION DISPUTES
(Sec. 1 Rule XI of Dept. Order No. 40-03)

Q. What are intra-union disputes?

A. Intra-union disputes refer to any conflict between and among union
members, including grievances arising from any violation of the rights and
conditions of membership, violation of or disagreement over any provision of the
unions constitution and by-laws, or disputes arising from chartering or
affiliation.

Formal requirements
In writing
Verified under oath
Contains:
Name, address and other personal circumstances of the complainant or
petitioner
Name, address and other personal circumstances of the respondent or
person charged
Nature of complaint or petition
Facts and circumstances surrounding complaint or petition
Causes of action
Statement on exhaustion of Administrative Remedies
Reliefs prayed for
Certification of non-forum shopping
Other relevant matters

Effects of Filing or Pendency of Inter/Intra-Union Dispute and other Labor

Relations Disputes (Sec. 3, Rule XI, D.O. 40-03)
The filing or pendency of any inter/intra-union disputes is not a
prejudicial question to any petition for certification election and shall
not be a ground for the dismissal of a petition for certification election
or suspension of proceedings for certification election.

Administrative functions of BLR

Regulation and registration of labor unions
Keeping of registry of labor unions
Maintenance of a file of CBAs
Maintenance of a file of all settlements or final decisions of the SC, CA,
NLRC and other agencies on labor disputes
BLR has no jurisdiction over implementation or interpretation of CBAs, which
shall be subject of grievance procedure and/or Voluntary arbitration.

Compromise Agreements
Purpose: Parties agree to
Avoid litigation, or
Put an end to one already in place
How: making reciprocal concessions

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Win-win
Substantial requirements
Voluntary, devoid of coercion
Not contrary to law, morals, public policy
Reasonable
Formal requirements
In writing
Signed in the presence of person before whom case is filed
When effected:
At any stage of the proceedings, even when there is already a final &
executory judgment
EXCEPT when judgment is in process of execution
Validity: Valid and binding on both parties, with or without DOLE
assistance
Repudiation:
If done without DOLE assistance
In case of non-compliance with agreement
Prima facie evidence of fraud, misrepresentation, coercion
Options when agreement is violated:
Enforce compliance
Regard as rescinded, revert to original demand
Quitclaim: A formal renunciation or relinquishing of a claim
Usually integral in compromise agreements
Cases:
Mindoro Lumber vs. Baay, et.al., GR No. 158753, June 2005
Veloso and Liguaton vs. DOLE, Noahs Ark Sugar Carriers, GR No. 87297,
Aug. 1991
JAG & Haggar Jeans vs. NLRC, GR No. 105710, Feb. 1995
Magbanua vs. Uy, GR No.161003, May 2005

Q. Who is a Med-Arbiter?

A. A MED-ARBITER is an officer in the DOLE regional office or bureau authorized

to hear, conciliate, and decide representation cases or assist in the disposition
of intra or inter-union disputes.

Q. What is the coverage of inter/intra-union disputes under Sec. 1 Rule XI DO

40-03?
A. The coverage of inter/intra-union disputes include:
cancellation of registration of a labor organization filed by its
members or by any other labor organization;
conduct of election of union and workers association
officers/nullification of election of union and workers association
officers;
audit/accounts examination of union or workers association funds;
deregistration of CBA;
validity/invalidity of union affiliation or disaffiliation;
validity/invalidity of acceptance/non-acceptance for union membership;
validity/invalidity of impeachment/ expulsion of union and workers
association officers;
validity/invalidity of voluntary recognition;
opposition to application for union and CBA registration;
violations of or disagreements over any provision in a union or workers
association constitution and by-laws;
disagreements over chartering or registration of labor organizations and
CBAs;
violations of the rights and conditions of union or workers association
membership;

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violations of the rights of legitimate labor organizations, except

interpretation of CBAs;
such other disputes or conflicts involving the rights to self-
organization, union membership, and collective bargaining

1. between and among legitimate labor organizations

2. between and among members of a union or workers association

Q. What is further included in the extended coverage pursuant to Section 2, Rule

XI under DO 40-03 or the New Book V Rules?
A. This includes other related labor relations disputes shall include any
conflict between a labor organization and the employer or any individual, entity,
or group that is not a labor organization or workers association.
cancellation of registration of unions and workers associations; and
a petition for interpleader

Q. What are the special requirements as to the filing of cases?

A. On those involving entire membership
The complaint must be signed by at least 30% of the entire membership of the
union and
It must also show exhaustion of administrative remedies.

On those involving a member only - In such case only the affected member may
file the complaint.
NOTES: Redress must first be sought within the union itself in accordance with
its constitution and by-laws EXCEPT under any of the following circumstances:
a. futility of intra-union remedies
b. improper expulsion procedure
c. undue delay in appeal as to constitute substantial injustice
d. the action is for damages
e. lack of jurisdiction of the investigating body
f. action of the administrative agency is patently illegal, arbitrary, and
oppressive
g. issue is purely a question of law
h. where the administrative agency had already prejudged the case
i. where the administrative agency was practically given the opportunity to act
on the case but it did not.

NOTE: Imposition of fees by the union affects the entire membership, and
therefore requires that the complaint should be signed by at least 30% of the
membership of the union.

Q. What are inter-union disputes?

A. These refer to any conflict between and among legitimate labor
organizations involving representation questions for purposes of
collective bargaining or to any other conflict or dispute between
legitimate labor organizations based on any violations of their rights
as labor organizations.

Q. Who can file cases involving inter-union disputes?

A. 1. For grounds under Sec. 1:

any legitimate labor organization
member(s) thereof specially concerned
2. For grounds under Sec. 2any party-in-interest These refer to any conflict
between and among legitimate labor organizations involving

Q. Where are these cases filed?

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A. 1. Regional Office that issued its certificate of registration or certificate

of creation of chartered local- If it involves labor unions with independent
registrations, chartered locals, workers association, its officers or members
2. Directly with the BureauIf it involves a Federation/National
Unions/Industry Unions, its officers or members

Q. What are the formal requirements?

A. The formal requirements are as follows:

in writing
verified under oath
contains the following averments
a. name, address and other personal circumstances of the complainant(s) or
petitioner(s);
b. name, address and other personal circumstances of the respondent(s) or
person(s) charged;
c. nature of the complaint or petition;
d. facts and circumstances surrounding the complaint or petition;
e. cause(s) of action or specific violation(s) committed;
f. a statement that the administrative remedies provided for in the
constitution and by-laws
-have been exhausted or
-such remedies are not readily available to the complainant(s) or
petitioner(s) through no fault of his/their own or
-compliance with such administrative remedies does not apply to complainant(s)
or petitioner(s);
g. relief(s) prayed for;
h. certificate of non-forum shopping; and
i. other relevant matters

Q. What are the effects of filing/pendency of inter/intra-union dispute and other

labor relations disputes?

A. Under Section 3, Rule XI of DO 40-03or the New Book V Rules the effects are
as follows:
1. The rights, relationships and obligations of the parties litigants against
each other and other parties-in-interest prior to the institution of the petition
shall continue to remain during the pendency of the petition and until the date
of finality of the decision rendered therein. Thereafter, the rights,
relationships and obligations of the parties litigants against each other and
other parties-in-interest shall be governed by the decision so ordered.
2. The filing or pendency of any inter/intra-union disputes is not a prejudicial
question to any petition for certification election and shall not be a ground for
the dismissal of a petition for certification election or suspension of
proceedings for certification election.

Q. Does the Med-Arbiter have the authority to determine the existence of an

employer-employee relationship?

A. In the case of MY San Biscuits, Inc. vs. Laguesma G.R. No. 9511, 22 April 1991
the SC ruled that since the BLR has the original and exclusive jurisdiction to
decide, inter alia, all disputes, grievances or problems arising from or
affecting labor-management relations in all workplaces, necessarily, in the
exercise of this jurisdiction over labor-management relations, the Med-Arbiter
has the authority, original and exclusive, to determine the existence of an
employer-employee relationship. In cases where there is overlapping of
jurisdiction, determine the principal issue. The agency that has jurisdiction
thereon may decide on the incidental issues.

Q. What are the administrative functions of the BLR?

A. They are as follows:

1.The regulation of registration of the labor unions;

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2. The keeping of a registry of labor unions;

3. The maintenance of a file of CBAs; and
4. The maintenance of a file of all settlements or final decisions of the Supreme
Court, Court of Appeals, NLRC and other agencies on labor disputes.

JURISDICTION AND PROCEDURES

I. The Regional Director
a) Art 128. Visitorial and Enforcement Power.
Under R.A. No. 7730, the Regional Director has jurisdiction regardless of the
amount involved. There is therefore no limit as to the amount of the employees
claim provided the following conditions are present;
1. Employer-employee relation still exists.
2 Findings were made in the course of inspection, (complaint or routine
inspection).
3. The employer does not contest the findings of the labor inspector nor
raising issues, which cannot be resolved without considering evidentiary
matters that are not verifiable in the course of inspection.
It covers employees at the time of inspection even if subsequently terminated.
The Order issued by the Regional Director is appealable to the Secretary of Labor
and Employment. b) Art 129. Recovery of Wages, Simple Money Claims and Other
Benefits.
Requisites:
1.There must be a complaint filed with the regional office;
2.Claimant is no longer employed;
3.The aggregate money claim of each employee does not exceed P 5,000.00; i and
4.Complainant does not pray for reinstatement.
The Regional Director has jurisdiction over the monetary claims under Article 129
of the Labor Code. His or her order is appealable to the National Labor Relation
Commission (NLRC)
II. The Labor Arbiter
Cases falling under the jurisdiction of the Labor Arbiter (Art. 127).
1. Unfair Labor Practices (ULP)
2. Termination Disputes
3. Money claims with claim for reinstatement
4. Damages arising from employer-employee relationship
5. Legality of strikes and lock-out
6. Monetary claim involving more than P 5,000.00
7. Claims of Overseas Workers and Seaman (Sec. 10 R.A. 8042)
Perfection of Appeal
The perfection of an appeal in the manner and within the period prescribed by law
is not only mandatory but jurisdictional, and failure to conform to the rules
will render the judgment sought to be reviewed final and unappealable. (Metro
Transit Organization. Inc. v. PIGLAS NFWU-KMU, G.R. No. 175460, April 14, 2008)
Period of Appeal
The shortened period of ten (10) days fixed by Art. 223 contemplates calendar
days and not working days. It is precisely in the interest of labor and that
labor cases be promptly, if not peremptorily, disposed of (Vir-jen Shipping and
Marine Services vs. NLRC GR Nos. 58011-12 July 20,1982).
Under Section 10 of the Migrant workers and Overseas Filipinos Act (R.R. 8042)
the Labor Arbiter of the NLRC shall have original and exclusive jurisdiction to
hear and decide, within 90 calendar days after the filing of the complaint, the
claims arising out of an employer-employee relationship or by virtue of any Iaw
or contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages.
The Med-Arbiter acts on the following cases:
1. Petition for Certification Election
2. Petition for Cancellation of Union Registration
3. Any Inter-Union/Intra union disputes
All decisions of the Med-Arbiter are appealable only to the Secretary of Labor
and Employment.
The Med-Arbiter or the Secretary of Labor has the authority to determine the
existence of an employer- employee relationship between the parties in a petition

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for certification election (M.Y. San Biscuits, Inc. vs. Laguesma GR No. 95011
April 22. 1991).
However, the decision of the Med-Arbiter or the Secretary of Labor in this regard
will not constitute res judicata in an illegal dismissal case, i e., the
principle of bar by prior judgment will not apply (Manila Golf & Country Club,
Inc vs. IAC GR No. 64948 September 27. 1994)
Intra-union dispute- refers to any conflict between and among union members
including grievances arising from any violation of the rights and conditions of
membership, violations o' -r disagreement over any provision of the constitution
and by-laws, or disputes arising from chartering or affiliation of union.
Inter-union dispute- refers to any conflict between and among legitimate labor
unions involving representation questions for purposes of collective bargaining
or to any other conflict or dispute between legitimate labor unions.
IV. The Director of the Bureau of Labor Relations (BLR)
The Bureau of Labor Rotations has jurisdiction over:
1. Registration of labor organization (Arts 231 & 234-237, LC);
2. Cancellation of registration of legitimate labor organizations (Art.
238);
3. Registration of collective bargaining agreements (CBA) and other
related agreements (Art 231, LC);
4. Representation issues including certification, consent and run-off
elections (Arts. 232 & 256- 258, LC);
5. All inter-union and intra-union conflicts (Arts 226 and 241 ,LC)
The issue of disaffiliation does not fall within the jurisdiction of the Labor
Arbiter but with the Bureau of Labor Relation (BLR). (Philippine Skylineders,
Inc. v. NLRC 31 January 2002)
The BLR has no jurisdiction over those arising from the implementation or
interpretation of collective bargaining agreements, which shall be subject of
grievance procedure and/or voluntary arbitration.
V. The Voluntary Arbitrator
The Voluntary Arbitrator or panel of arbitrators shall have original and
exclusive jurisdiction to hear and decide all unresolved grievances arising from:
1. The Interpretation or implementation of the CBA; and
2. The interpretation or enforcement of company personnel policies. (Art.
261, LC)

Collective Bargaining
Presentation of proposals and counter-proposals by the parties
If capital and labor agree on substantially all points, a labor contract is
forged (Collective Bargaining Agreement)
If both parties do not agree on material points, this results in a deadlock
Parties are obliged to avoid or break the impasse
Failure to resolve a deadlock may result in work stoppage
Strike
Lockout
While a legal right, strike or lockout is not an ideal solution to compel a
party to agree to a proposal
Considered as measures of last resort
Strikes and lockouts are heavily regulated
Purpose
Manner of implementation
Violation of established rules will merit sanctions (admin, civil and
criminal)
Parties are allowed to introduce means and methods that will expedite
bargaining
Subject to compliance to legal standards
Parties are primarily responsible for dealing with problems arising out of
their relations (Inter-party relationship)

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Voluntary modes of settling disputes are preferred over compulsory

processes
Grievance machinery: In-house problem solving structure
State steps in only when
Parties fail to agree
Rights are violated

States Intervention
SSS Employees Association vs. CA, 175 SCRA 686: The principle behind labor
unionism in private industry is that industrial peace cannot be secured
through compulsion by law. Relations between private employers and their
employees rest on an essentially voluntary basis. the terms and
conditions of employment in the unionized private sector are settled through
the process of collective bargaining
But, when dispute transgresses legal boundaries, the injuctive powers of the
state may be invoked, especially when national interest is involved.

Definitions
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.
Employee: Includes any person in the employ of an employer. The term shall not
be limited to the employees of a particular employer, unless the Labor Code so
explicitly 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
unfair labor practice if he has not obtained any other substantially equivalent
and regular employment.

Categories of employees
Managerial employees
Supervisory employees
Rank-and-file employees

Existence of Er-Ee Relationship is Vital in Labor Relations

If there is no such relationship, there is no basis for exercising the right
of self-organization for purposes of collective bargaining.
Note also that Labor Arbiters cannot exercise jurisdiction where Er-Ee
Relationship does not exist. (subj. to exception)

Employer-Employee Relationship
Four-Fold Test
1. the selection and engagement of the employee;
2. the payment of wages;
3. the power of dismissal; and
4. the power to control the employees conduct, or the so-called control
test.
Two-tiered test of employment relation ship
1. Control test the employers power to direct the employee (the
manner, means and methods) by which work is accomplished;
2. Economic reality test economic reality of the relationship; the
question of economic dependency of the worker on his employer. (Read
Orozco vs. CA, GR 155207, April 29, 2005)

Existence of Er-Ee Relationship in the following instances:

A stipulation stating expressly that there is no Er-Ee relationship is not
controlling (Chavez vs. NLRC, GR No. 146530, Jan. 2005)
Jeepney and taxi drivers (Paguio Transport Corp. vs. NLRC GR No. 119500,
August 1998)
Bus, auto-calesa drivers (R. Transport Corp. vs. Ejandra, GR No. 148508, May
2004)

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Fishermen (Ruga vs. NLRC, Jan. 1990)

Stevedores
Lawyers, doctors, nurses, dentists, public relations practioners, other
professionals
Employees of cooperatives
Insurance agents (salaried)

No Er-Ee Relationship in the following instances:

Commission salesmen
Agents of prinicipal (who are not employees in other respects)
Working scholars (See Section 14, Rule X, Book III, IRR, Labor Code)
Consultants
Visiting Physicians
Independent contractors

Labor Disputes
Labor disputes: 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.
Nature: arises from Er-Ee relationship, regardless of whether the
disputants stand in the proximate relation of employer and employee;
SMCEU-PTGWO vs. Bersamira & SMC, GR No. 87700, June 1990)
Involves issue of SMCs exclusion of temporary, probationary &
contractual employees in scope of CBA with union
Subject Matter
Terms and conditions of employment
Association or Representation of persons

Kinds
Standards-related
Compensation
Benefits
Working Conditions
Relations Disputes
Organizational rights/ULP
Representation
Bargaining
Contract administration
Personnel policy
Employment tenure disputes

Resolving Labor Disputes

Grievance procedure CBA-prescribed, in-house mechanism for addressing
complaints.
Conciliation involves third person who meets with both parties and, by
assuaging hurt feelings and cooling tempers, aids in reaching agreement.
Mediation third person offers suggested solutions to dispute.
Arbitration dispute is submitted to impartial third person who renders
decision based on evidence, law and jurisprudence. Decision is enforceable.
Voluntary by agreement of parties
Compulsory directed by law. Primarily done by labor arbiters of the
NLRC
Enforcement/Compliance Order dispute arises from concern uncovered by the
exercise of enforcement/visitorial power of SOLE, or adjudicatory powers of
the DOLE Regional Directors (Articles 128, 129, Labor Code)
In case of labor disputes that may affect an industry indispensable to the
national interest, the following apply:
Assumption of jurisdiction by DOLE

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Certification to the NLRC for compulsory arbitration

The National Labor Relations Commission

Jurisdiction, Case Flow, Appeals, Cases
Precursor: Court of Industrial Relations
NLRC was created by the Labor Code
attached to the DOLE
Under EO 204, s. 2005, DOLE exercises administrative supervision over
the commission
Under RA 9347, several changes to the composition of the divisions,
rank equivalence, and reverted to the old version of NLRCs attachment
to DOLE (program and policy coordination)
Equal representation from workers, employers & public sector

Jurisdiction of Labor Arbiters

Original and exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural (Art. 223,
LC, Rule V Section 1, 2011 NLRC Rules):
1. Unfair labor practice cases; ULP Means "Unfair labor practice" means
any unfair labor practice as expressly defined by the Code (Art.
218(K), Art. 254, Art. 255).
2. Termination disputes;
3. If accompanied with a claim for Reinstatement, those cases that
workers may file involving wages, 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 270 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 accompanied with a claim for
reinstatement (Article 223, Labor Code, as amended).
7. Original and exclusive jurisdiction over money claims arising out of
employer-employee relationship or by virtue of any law or contract,
involving Filipino workers for Overseas deployment, including claims
for actual, moral, exemplary and other forms of damages (Section 10,
Republic Act No. 8042, as amended by Republic Act No. 10022).
8. Wage distortion disputes in unorganized establishments not voluntarily
settled by the parties pursuant to Republic Act No. 6727.
9. Enforcement of compromise agreements when there is non-compliance by
any of the parties or if there is prima facie evidence that the
settlement was obtained through fraud, misrepresentation or coercion
(Article 233, Labor Code, as amended).
10. Other cases as may be provided by law.

Registration and Cancellation

Labor Organizations

Definitions (Article 218)

"Labor organization" means any union or association of employees which
exists in whole or in part for the purpose of collective bargaining or of
dealing with employers concerning terms and conditions of employment.

"Legitimate labor organization" means any labor organization duly registered

with the Department of Labor and Employment, and includes any branch or

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local thereof.

"Bargaining representative" means a legitimate labor organization whether or

not employed by the employer.

Definitions (DO 40-03)

"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 the Regional Office in accordance with Rule
III, Section 2-E of these Rules.
"Exclusive Bargaining Representative" refers to a legitimate labor union
duly recognized or certified as the sole and exclusive bargaining
representative or agent of all the employees in a bargaining unit.
"Independent Union" refers to a labor organization operating at the
enterprise level that acquired legal personality through independent
registration under Article 234 of the Labor Code and Rule III, Section 2-A
of these Rules.
"Labor Organization" refers to any union or association of employees in the
private sector which exists in whole or in part for the purpose of
collective bargaining, mutual aid, interest, cooperation, protection, or
other lawful purposes.
"Labor Relations Division" refers to the (1) Labor Organization and CBA
Registration Unit and (2) Med-Arbitration Unit in the Regional Office. The
Labor Organization and CBA Registration Unit is in charge of processing the
applications for registration of independent unions, chartered locals,
workers associations and collective bargaining agreements, maintaining said
records and all other reports and incidents pertaining to labor
organizations and workers' associations.
"Legitimate Labor Organization" refers to any labor organization in the
private sector registered or reported with the DOLE in accordance with Rules
III and IV of these Rules.
"Legitimate Workers' Association" refers to an association of workers
organized for mutual aid and protection of its members or for any legitimate
purpose other than collective bargaining registered with the DOLE in
accordance with Rule III, Sections 2-C and 2-D of these Rules.

Two-Fold Purpose of Labor Organizations

Dealing with the Employer interaction between employers and employees
concerning
Grievances
Wages
Hours
Other terms and conditions of employment
Applies even without registration
Collective Bargaining is a right acquired through registration, and
recognition or certification as the exclusive bargaining representative

Classifications of Los
At the National Level
National Union/Federation
Industry Union
Trade Union Center
Alliance
Company Union
Enterprise Level
Independent Labor Union
Chapter

RA 9481

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AN ACT STRENGTHENING THE WORKERS' CONSTITUTIONAL RIGHT TO SELF-ORGANIZATION,

AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE
KNOWN AS THE LABOR CODE OF THE PHILIPPINES
Amended Articles 240, 244, 245, 261, 262 & 263

Changes to Labor Code Re: Registration of Labor Organizations

20% membership of employees in bargaining unit required only for independent
unions
Chapters acquire legal personality (for purposes of certification election)
upon receiving their charter certificate
Grounds of cancellation revised. Some grounds were removed as they were not
promotive of self organization rights
Petition for Certification Election will continue to be heard despite
petition to cancel registration
Cancellation may be effected by vote of two-thirds of membership, with
application to cancel submitted to DOLE by the organizations board
Reportorial requirements
Supervisors Union and Rank and File Unions may join same Federation
Commingling of supervisors and rank & file employees no longer a ground for
cancellation
PCEs filed by a federation on behalf of its chapter need not identify the
chapters officers and members
Employer cannot oppose a petition for certification election; he is
considered a bystander

Registration of Labor Organizations

Legal personality
Enjoy the rights given to legitimate labor organization.
Petition for certification election
Bargaining rights
Right to strike
Non-registered unions are not illegitimate or illegal
Union registration refers to the process of determining whether the
application for registration of a labor union organized for collective
bargaining complies with the documentary requirements prescribed under Rule
3 and 4 of DOLE Department Order No. 4003and the rules implementing Book V
of the Labor Code, as amended.
All labor unions whose members are employed in commercial, industrial and
agricultural enterprises, and employees of government-owned and controlled
corporations without original charters established under the Corporation
Code, including religious, charitable, medical or educational institutions
whether operating for profit or not which exist in whole and in part for
collective bargaining.
Alien employees with valid working permits issued by DOLE may exercise their
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.

Requirements, Local or Chapter

Duly accomplished and notarized Application Form;
Charter certificate issued by the federation or national union indicating
the creation or establishment of the local/chapter;
The names of the local/chapters officers, their addresses and principal
office of the local/chapter; and,
The local/chapters constitution and by-laws, provided that where the
local/chapters constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.

Requirements, Independent LO
Duly accomplished and notarized Application Form;

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Minutes of Organizational Meeting and Attendance Sheet

List of Members
Financial Report if in existence for at least one (1) year
If less than 1 year, and has not collected any amount, a certification to
this effect.
Constitution and by-laws accompanied by the names and signatures of
ratifying members.
Minutes of adoption or ratification of the constitution and by-laws, date/s
when ratification was made and list of ratifying members.
Minutes of adoption or ratification is not required if it is done
simultaneously with the organizational meeting including the date/s when
ratification was made and list of ratifying members.
Statement that it is not reported as a chartered local or any federation.
List of members comprising at least 20% of the employees of the bargaining
unit.

Affiliation/Disaffiliation
The independent unions act of entering into an agreement of affiliation
with a federation or national union, or
A chartered locals act of maintaining its ties to a federation or national
union despite its subsequent independent registration

Requirements of Affiliation
Report of affiliation of independently registered labor union;
Resolution of LU board approving affiliation
Total number of members, and names of those approving affiliation
Certificate of affiliation
Written notice to the employer concerned if the affiliating union is
the bargaining agent

Affiliation and Disaffiliation

Purpose of Affiliation
The purposes of affiliation by a local union with a mother union or a federation
to increase bv collective action the bargaining power in respect of the terms and
conditions of labor. Yet the locals remained the basic units of association, free
to serve their own and the common interest of all, subjects to the restraints
imposed by the Constitution and By-Laws of the Association, and free also to
renounce the affiliation for mutual welfare upon the terms laid down in the
agreement which brought it into existence. (Malayang Samahan ng mga Manggagawa sa
Greenfields v. Hon C. Trajano, 28 Feb, 2000)
The right of a local union to disaffiliate from its mother federation is
consistent with the constitutional guarantee of freedom of association.
As separate and voluntary association, local unions do not owe their creation and
existence to the national federation to which they are affiliated but, instead,
to the will of their members. (Phil. Skylanders Inc. v. NLRC, January 31, 2002)
-The validity of the dismissals pursuant to the union security clause in the
CBA hinges on the validity of the disaffiliation of the local union from the
federation. (Tropical Hut Employees - CGIO v. Tropical hut Food Market Inc.)
-The right to disaffiliate as an inherent right of a local union. A local
union, which has affiliated with a federation is free to severe such
affiliation anytime and such disaffiliation cannot be considered disloyalty,
in the absence of a specific provision in the constitution and by- laws of the
prohibiting the disaffiliation. (Malayang Samahan ng mga Manggagawa sa
Greenfields v. Hon C. Trajano, 28 Feb, 2000)
In the absence of enforceable provisions in the federation's constitution
preventing disaffiliation of a local union, a local may severe its relationship
with its parent, (Tropical Hut Employees - CGIO v. Tropical hut Food Market Inc.)
When to disaffiliate
While it is true that a local union is free to serve the interest of all its
members and enjoys freedom to disaffiliate, such right to disaffiliate may be
exercised and is thus considered a protected labor activity only when warranted

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by circumstances. Generally, a labor union may disaffiliate from the mother union
to form a local or independent union only during the 60-day freedom period
immediately preceding the expiration of the CBA (Tanduay Distillery Labor Union
vs. NLRC GR No. 75037 April 30,1987)

Effect on existing CBA; The Substitutionary Doctrine

The CBA continues to bind the members of the new or disaffiliated and independent
union up to the CBA's expiration date (Associated V workers Union- PTGWO vs NLRC
GR No. 87266-69 July 30,1990)
Local Union is the Principal, Federation the Agent
Although the federation was designated as sole bargaining agent in the check-off
authorization form, this simply means that it was acting for and in behalf of its
affiliate. The federation possessed the status of an agent while the local union
remained the basic principal union which entered into contract with the
respondent company. When the local union disaffiliated from the mother
federation, the former did not lose its legal personality as the bargaining union
(Elisco-Elirol Labor Union vs. Noriel GR No. L-41955 December 29,1977).

LABOR ORGANIZATIONS

Coverage of right self-organization.- All persons employed in commercial,

industrial and agricultural enterprises in an religious, charitable, medical or
education institutions, whether operating for profit not, shall have the right to
self-organizations of their own choosing for purposes of collective bargaining.
Ambulant, intermittent and itinerant workers, self-employed people, rural workers
and those without any definite employers may form labor organizations for their
mutual aid and protection.

Right to organize of employees in the public service.-Employees of government

corporations established under the Corporation Code shall have the right to
organized and to bargain collectively with their respective employers. All other
employees in the civil case shall have the right to form associations for
purposes not contrary to law.

Prohibition against aliens; general rule.-All aliens, natural or judicial, as

well as foreign organizations are strictly prohibited from engaging directly or
indirectly in all forms of trade union activities without prejudice to normal
contacts between Philippine labor unions and recognized internat6ional labor
centers. Exceptions: Alien Employees with valid working permit issued by the DOLE
may exercise the right to self-organizations for purposes of collective
bargaining, if they are nationals of country which grants the same or similar
rights to Filipino workers, as certified by the Department of Foreign Affairs.

Three (3) categories of employees:

1. Managerial employees (recently classified into: top management and middle
management);
2. Supervisory management (classified as first-time management); and
3. Rank and file employees.

Managerial employees are not allowed to join any labor organization.

Supervisory employees are allowed to join a supervisory union but the
union of rank-and-file employees.
The principle distinction between managerial employees and supervisory
employees is: the former have the power to decide and do managerial
acts: while the latter have the power only to recommend managerial acts
such as laying down policy, or dismissal of employees and the like.

Separation of union doctrine.- The affiliation of both t6he rank-and-file union

and supervisory union in the same company with one and the same federation is not
allowed if the rank-and-file employees are under the direct supervision of the
supervisors composing the supervisory union. If not, said affiliation with one
and the same federation allowed.

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NOTE: This is now allowed under the amendments to the Code.

Confidential employee rule.- Confidential employees are not allowed to join any
union (as they are treated like managers) when they:(1) assist or act in
confidential capacity, (2) to persons who formulate, determine, and effectuate
management policies specifically in the field of labor relations. Otherwise, if
this two conditions do not concur, they can join a union.

Security guards.Present rule is security guards may join rank-and-file or

supervisory union, depending on their rank or position.

Labor organizationany union or association of employees which exists in whole or

in part for the purpose of collective bargaining or for dealing with employers
concerning terms and conditions of employment. It is considered legitimate if
duly registered with DOLE.

Workers association-any association of workers organized for the mutual aid and
protection- any association of workers organized for the mutual aid and
protection of its members or for any legitimate purpose other than collective
bargaining. Registration with DOLE makes it legitimate.

Purpose of labor organization.- (1) Collective bargaining; and (2) Dealing with
employers.

Registration of labor organization.- The application for registration must be

supported by at least 20% of the members of the bargaining unit.

A bargaining unit is the group or cluster of jobs or positions that supports

the labor organization which applying for registration, within the employers
establishment.

Denial of registration; grounds for appeal. The decision may be appealed to the
Bureau of Labor Relations if the denial by the Regional Director, or to the
Secretary, if the denial is by the Bureau of Labor Relations, within ten (10)
days from receipt of notice thereof, on the ground of grave abuse of discretion
or violations of the Rules.

Chartering and affiliation of labor organizations with federation.- An affiliate

of a labor federation or national union may be classified into: (1) a local or a
chapter; or (2) an independently-registered union.
Proof of affiliation.
1. Local or chapter.-Charter certificate issued by the federation or
national union.
2. Independently-registered union.- contract of affiliation between
federation and the union.

Effect of affiliation.

A labor union which affiliates with a federation or national union becomes

subject to the rules and regulations of the latter. The federation is the
principal and the local union, the agent.

An independently-registered union does not lose its independent legal personality

when it affiliates with a federation or a national union. Appending the name of
the federation to the local unions name does not mean that the federation
absorbed the latter.

Chartering vs. Independent Registration

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Revocation of Charter
May only occur on the grounds of disloyalty or such grounds specified in the
constitution & by-laws;
Effected by serving a verified notice to the local/chapter, copy the BLR
Effect
revocation of legal personality, except if local chapter has acquired
independent registration.
If covered by CBA, local chapter may be given opportunity to register
independently

BLR Action
Act on all applications within 30 days from filing, provided all documents
and papers required have been submitted;
When DOLE refuses to register a labor organization which has complied with
the requirements, mandamus is the proper remedy
Approval Order and Certificate of Registration
Disapproval Decision which states clearly reasons for denial

Cancellation of Registration
BLR has jurisdiction
Only for grounds in Article 245
Petition for cancellation will not suspend PCE proceedings
Union may still seek just and equitable remedies in appropriate courts

Grounds for Cancellation

Misrepresentation, false statements or fraud in connection with the adoption
or ratification of the constitution and by-laws or amendments thereto,
minutes of ratification and list of members who took part
Misrepresentation, false statements or fraud in connection with the election
of officers, minutes of the election of officers and list of voters
Voluntary dissolution by members
Ten grounds in Article 245 prior to RA 9481 have been reduced to three
Examples of removed grounds
Failure to submit reportorial requirements
Illegal strike
Engaging in cabo system

CANCELLATION OF UNION AND THE FEDERATIONS REGISTRATION

Q. What are the grounds for the cancellation of a unions registration?

NOTES:

THE NEW GROUNDS FOR CANCELLATION BASED ON RA NO. 9481, JUNE, 2007

SEC. 3. Article 238 of the Labor Code is hereby amended to read as follows:

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

"ART. 238. Cancellation of Registration. - The certificate of registration of any

legitimate labor organization, whether national or local, may be cancelled by the
Bureau, after due hearing, only on the grounds specified in Article 239 hereof."

SEC. 4. A new provision is hereby inserted into the Labor Code as Article 238-A t
o read as follows:

"ART. 238-A. Effect of a Petition for Cancellation of Registration. - A petition

for cancellation of union registration shall not suspend the proceedings for
certification election nor shall it prevent the filing of a petition for
certification election.
In case of cancellation, nothing herein shall restrict the right of the
union to seek just and equitable remedies in the appropriate courts."

Article 239 of the Labor Code is amended to read as follows:

"ART. 239. Grounds for Cancellation of Union Registration. - The following may
constitute grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the

adoption or ratification of the constitution and by-laws or amendments thereto,
the minutes of ratification, and the list of members who took part in the
ratification;

(b) Misrepresentation, false statements or fraud in connection with the

election of officers, minutes of the election of officers, and the list of
voters;

Voluntary Dissolution
May be done by members themselves
2/3 of general membership votes during a meeting called for the purpose of
dissolving organization
Application to cancel registration submitted by the board, attested by the
president

(c) Voluntary dissolution by the members."

A new provision, Article 239-A is inserted into the Labor Code to read as
follows:

"ART. 239-A. Voluntary Cancellation of Registration. - The registration of

a legitimate labor organization may be cancelled by the organization itself.
Provided, That at least two-thirds of its general membership votes, in a meeting
duly called for that purpose to dissolve the organization: Provided, further,
That an application to cancel registration is thereafter submitted by the board
of the organization, attested to by the president thereof."

No. After a certificate of registration is issued to a union, its legal

personality cannot be subject to collateral attack. It may be questioned only in
an independent petition for cancellation (Tagaytay Highlands International Golf
Club, Inc. vs. Tagaytay Highlands Employees Union-PTGWO, G.R. No. 142000, January
22, 2003).

9. What is the SUBSTITUTIONARY DOCTRINE?

It is a principle in labor law which states that even during the effectivity
of a collective bargaining agreement executed between the employer and employees
thru their agent, the employees can change said agent BUT THE CONTRACT CONTINUES
TO BIND THEM UP TO ITS EXPIRATION DATE. The principle applies to a situation

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when there occurs a shift in employees union allegiance after the execution of a
collective bargaining contract.
Rights & Conditions of Membership, LO
Article 247
a. Arbitrary or excessive initiation fees
b. Full and detailed reports
c. Direct election of officers
d. Determination of major policy affecting entire membership of
organization
e. Exclusion of subversive persons from membership
f. Exclusion of convicted member as union officer
g. Collection or disbursement only by authorized officers
h. Receipts for all payments
i. Funds for authorized use only
j. Ban on unauthorized compensation on officers
k. True and correct accounting of funds
l. Inspection of records of organization
m. No unauthorized special levy or assessment of fees
n. Check off
o. Information on the Constitution and by-laws

Article 247can be best grouped into four basic classifications

1. Political rights right to vote and be voted for
2. Deliberation and decision-making. Right to participate in
deliberations on major policy questions and decide by secret ballot
3. Money matters
4. Information
1. Constitution and By-laws
2. Collective Bargaining Agreement
3. Labor Laws

Violation of Rights of Union Members, Consequences

Cancellation of union registration, OR
Expulsion from office of a union officer.
30% of all members (if affecting entire membership) must concur re filing of
complaint with the BLR
Only affected member/members may file a complaint pertaining to a violation
of which they are affected

Relationship of the Union and its Members

Ang Malayang Manggagawa ng Ang Tibay Enterprises, et al. vs. Ang Tibay, et
al., G.R. No. L-8259, December 1957:
The relationship of the union and the members is governed by their
mutual agreement, the terms and conditions of which are set forth in
the union constitution and by laws and binding on the members as well
as the organization itself

Prohibited as members
Non-employees (247(c))
Subversives (247(e))
What about persons convicted of crimes involving moral turpitude?
Allowed as members, not eligible for election as officer (247(f))

Limitations
The labor organization cannot compel employees to become members of their
labor organization if they are already members of a RIVAL UNION
The persons mentioned in Art 247[e] (SUBVERSIVES) of the Labor Code are
prohibited from becoming a member of a labor organization
The members of RELIGIOUS ORGANIZATION whose religion forbids membership in
labor organization could not be compelled into union membership (Victoriano
v. Elizalde Rope Workers Union, L-25246 September 1974)

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Who are entitled to vote?

Tancino vs. Pura Ferrer-Calleja, G.R. 78131, Jan. 1988
Only members of the union have the eligibility to take part in the
election of union officers. Eligibility to vote may be determined
through the use of the applicable payroll period and the status of the
employees during the applicable period. This pertains to the payroll
of the month next preceding the labor dispute, in case of regular
employees and the payroll period at or near the peak of operation, in
case of employees in seasonal industries.

Requirements for Levy of Special Assessments or Extraordinary Fees

Written resolution;
Approved by a majority of all members; and
Approval obtained at a general membership meeting duly called for that
purpose.
Secretary of the organization shall record the minutes of the meeting, which
shall be attested to by the President.
list of all members present
votes cast; and
purpose of the assessment or fees

Strict Compliance Enjoined

(Palacol et aa. v Ferrer-Galleja, et al, GR No. 85222, February 6, 1990) -

Substantial compliance with the aforementioned procedure is not enough the
requirements must be strictly complied with

Check-off
A method of deducting from an employees pay at prescribed period, the
amounts due to the union for fees, fines or assessments

Nature and Purpose of Check-off

Union dues are the lifeblood of the union. All unions are authorized to
collect reasonable membership fees, union dues, assessments and fines and
other contributions for labor education and research, mutual death and
hospitalization benefits, welfare fund, strike fund and credit and
cooperative undertakings(Art. 283 [a])

Requirements With Regard to Check-offs (Art 241 [O])

General Rule: NO special assessment, attorneys fees, registration fees or
any other extraordinary fees may be checked off from any amount due an
employee without an individual written authorization duly signed by the
employee
The Authorization should specifically state the:
Amount; and
Purpose and the beneficiary of the deduction

Exceptions
For mandatory activities provided under the Code; and
When non-members of the union avail of the benefits of the CBA:
Said non-members may be assessed union dues equivalent to that paid by
members;
Only by a board resolution approved by majority of the members in a
general meeting called for the purpose

Check Off
Eduardo J. Marino, Jr. et al. vs. Gil Y. Gamilla, et al., G.R. No. 149763,
July 7, 2009: The individual written authorization duly signed by the
employee is an additional requirement in order that a special assessment may
be validly checked-off. In case of check-off another requisite is necessary
in addition to the requirements for special assessment, enumerated above and

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this is, individual written authorization for check-off duly signed by the
employee concerned.

Jurisdiction over Check-Off Disputes

Being an intra-union conflict, the Regional Director of DOLE has
jurisdiction over check off disputes.

Union Dues
Regular monthly contributions paid by the members to the union in exchange
for the benefits given to them by the CBA and to finance the activities of
the union in representing them.

Agency Fees
Dues equivalent to union dues charged from the non-union members who were
benefited by the CBA provisions.
The relationship between the non-union employees and the Union that is the
bargaining representative is that of principal agent
Since the union was able to secure better terms and conditions of employment
for all employees, it is proper that they be compensated for their
representation

Requisites for Assessing Agency Fees

The employee is part of the bargaining unit,
He is not a member of the union; and
He partook of the benefits of the CBA
Written authorization is not necessary for collection

Union Dues vs. Agency Fees

Agency Fees not Imposable

NAIBAILU v. San Miguel Brewery Inc., GR No. 18170, August 31, 1963
Agency Fee cannot be imposed on employees already in the service and
are members of another union. If a closed shop agreement cannot be
applied to them, neither may an agency fee, as a lesser form of union
security, be imposed to them.
Payment by non-union members of agency fees does not amount to an
unjust enrichment basically because the purpose of such dues is to
avoid discrimination between union and non-union members.

Check-off & Special Assessment

Rule: No assessment, attorney's fees, registration fees or any other
extraordinary fees may be checked-off from any amount due an employee without an
individual written authorization duly signed by the employee.
Exceptions:
1. Recognized union dues
2. Mandatory activities
3. Non-members availed of CBA benefits
Agency Fees
The legal basis of the unions right to agency fees is neither contractual nor
statutory, but quasi- contractual, deriving from the established principle that

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non-union employees may not unjustly enrich themselves by benefiting from

employment conditions negotiated by the bargaining union. (Ban k of the
Philippine Islands vs. BPI Employees Union Davao Chapter-Federation of Unions in
BPI Unibank G.R No. 164301; August 10, 2010; 627 SCRA 590)
The employees who are benefiting from the CBA, without being members of
bargaining union may be required to pay agency fee The collection of agency fees
in an amount equivalent to union dues and fees is recognized by Art. 248 (e). A
written authorization from the non-union employee is not required. The employees
acceptance of benefits from a collective bargaining agreement justifies the
deduction of agency fees from his pay and the unions entitlement thereto (Holy
Cross of Davao College vs. Joaquin, et al. G.R. No. 110007 October 18,1196)
Agency Fee- statutory right of bargaining union whereb/employees of a bargaining
unit who are not members of the collective bargaining agent may be assessed
reasonable fee equivalent to the dues and other fees paid by members of the
bargaining agent, if such non-member accept the benefits under collective
agreement.
Requisites:
a. he is a member of the bargaining unit as a rank-and-file employees;
b. he avails of the benefits of existing CBA; and
c. not a member of any union.
Requisites for Special Assessment:
a. authorization by a written resolution of the majority of all the
members at the general
membership meeting duly called for the purpose;
b. secretarys record of the minutes of the meeting; and
c. individual written authorization for check-off duly signed by the
employees concerned. (Art. 241, LC)
Coverage of CBA to Include Employee-Members of Another Union
Members of a rival union are NOT Considered Free Riders
When the union bids to be the bargaining agent, it voluntarily assumes the
responsibility of representing all employees in the appropriate bargaining
unit.

CHAPTER III. RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS

ART.248 RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS

Rights of A Legitimate Labor Organization

Undertake activities for benefit of members;
Sue and be sued;
Exclusive representative of all employees;
Represent union members;
Be furnished audited financial statements by employers;
Own properties; and
Be exempted from taxes.

ART.248-A: REPORTORIAL REQUIREMENTS

1. Constitution and by-laws, or amendments thereto, minutes of ratification,
and the list of members who took part in the ratification of the
constitution and by-laws or amendments thereto;
2. List of officers, minutes of the election of officers and list of voters
within 30 days from election;
3. Annual financial report within 30 days after the close of every fiscal year;
and
4. List of members at least once a year or whenever required by the Bureau
Failure to comply with the above-mentioned requirements shall not be a
ground for cancellation of union registration
Erring officers or members to be suspended, expelled from membership, or
otherwise sanctioned.

Title Five:Coverage
Art. 249: Coverage and Employees Right to Self-Organization

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Constitutional Basis of the Right to Self-Organization

Art. III, Sec. 8. The right of the people, including those employed in the
public or private sectors, to form unions, associations, or societies for
purposes not contrary to law shall not be abridged.
Art. XIII, Sec. 3. The State shall guarantee the rights of all workers to
self-organization, collective bargaining and negotiations, and peaceful
concerted activities including the right to strike in accordance with law.

Right to Self-Organization, Extent

To form, join and assist labor organizations for the purpose of collective
bargaining through representatives of their own choosing; and
To engage in lawful concerted activities for the same purpose or for their
mutual aid and protection (Art. 252)

Right to Self-Organization,Coverage
All persons employed in commercial, industrial and agricultural enterprises
and in religious, charitable, medical, or educational institutions
Ambulant, intermittent and itinerant workers, self-employed people, rural
workers and those without definite Employers may form labor organizations
for their mutual aid and protection.
Art. 250 : Rights of Employees in the public service
Employees of government corporations established under the Corporation
Code shall have the right to organize and bargain collectively with
their respective ERs.
All other EEs in the civil service shall have the right to form
associations for the purposes not contrary to law.
Art. 251 :
Managerial employees are not eligible to join, assist, or form any
labor organization.
Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file EEs but may join, assist or form
separate labor organizations of their own.

Examples
1. Reys Hair Salon refused to bargain with the union of the barbershop composed
of eight barbers on the ground that the shop was a service establishment and the
number of the barbers was less than ten. Is the contention tenable?
No. The law does not fix the minimum number of employees for the exercise of
the right to self-organization and the right extends to all types of
establishments.
2. Faculty members of a non-profit school converted their club into a labor
union. Is this allowed?
Yes. Even employees in non-profit or religious organizations are entitled to
exercise this right.
3. Is a religious sects directive to its congregation not to join a labor union
a bar for members to form their own union?
The right of the members of a sect not to join a labor union for being
contrary to their religious beliefs does not bar the members of that sect
from forming their own union. (Kapatiran vs. Calleja)

Supervisory Employees
Those, who, in the interest of the ER, effectively recommend such managerial
actions if in the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. (Art. 218)
The criterion which determines whether a particular employee is within the
definition of a statute is the character of the work performed rather than
the title or nomenclature of position held. (NSRC vs. NLRC)
If the recommendation of the teacher area supervisor is subject to
evaluation, review and final approval of the principal, is the teacher a
supervisory employee? No. This is merely ineffective or clerical
recommendation. ( Laguna Colleges vs. CIR )

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Supervisors were given the job of either to assist the foreman if the
effective dispatch of manpower and equipment or execute and coordinate
work plans emanating from his supervisors. Are these supervisors
supervisory personnel? No. They only execute approved and established
policies leaving little or no discretion at all whether to implement the
said policies or not. (Southern Philippines Federation vs. Calleja)

Non-Abridgement of the Right to Organize

Art. 252 speaks of the illegality of the following acts with respect to the
exercise to the right of self-organization
Restraint
Coercion
Discrimination
Undue interfere with employees and the workers in their exercise of
self-organization right
Alexander Reyes vs. Cresenciano Trejano , GR No. 84433, June 1992. The right
to self-organization includes the right not to form or join a union
Airtime Specialists vs. Ferrer- Calleja, (180 SCRA 179). The intendment of
the law is to grant to bona-fide employees of a bargaining unit, whether
members of a labor organization or not, the right to vote in certification
elections
However, by virtue of the operation or enforcement of a closed shop clause
in a CBA, an employee may be compelled under pain of dismissal, to become a
member of a labor union.
May an ER impose as condition for employment that the applicant shall not
join a labor organization or shall withdraw from the one he belongs to?
No. Such a condition partakes of the nature of a yellow dog contract and
constitutes an unfair labor practice. It is interference with the
individuals right to self-organization.
SPFL v. Calleja, 179 SCRA 127, GR No. 80882, April 1989. The right to self-
organization must be upheld in the absence of express provision of law to
the contrary. It cannot be curtailed by a Collective Bargaining Agreement

Labor Code Provisions on Unfair Labor Practices

Art. 253 concept of ULP and procedure for prosecution
Art. 254 ULP by employers
Art. 255 ULP by labor organizations
Art. 267 CBA violations which are gross in character
Art. 270(c) union busting involving dismissal of union officers which
threatens existence of union

Elements of Unfair Labor Practice

Concurrence of BOTH
1. There should exist an employer-employee relationship between the offended
party and offender
2. Act complained of must be EXPRESSLY mentioned and defined in the Labor Code

ULP of Employers
Interference, restraint, coercion of employees in the exercise of their
right to self organization;
Yellow dog contract
Contracting out services or functions performed by union members, that
interfere, restrain or coerce employees in the exercise of their right
Company union

Company Union
Initiate, dominate, assist or otherwise interfere with the formation or
administration of any labor organization
Includes giving of financial or other support to it or its organizers or
supporters

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ULP of Employers
Discrimination
Wages, hours of work, terms and conditions of employment
Except with respect to Union Security Clauses
Dismissal or prejudice or discrimination by reason of testimony
Violation of duty to bargain
Payment of Negotiation or Attorneys Fees to the Union, its officers or
agents
Violate CBA

Yellow dog contract

Known previously as infamous document or iron-clad document
From the United Mine Workers Journal (1921) This agreement has been well
named. It is yellow dog for sure. It reduces to the level of a yellow dog
any man that signs it, for he signs away every right he possesses under the
Constitution and by-laws of the land and makes himself the truckling,
helpless slave of the employer.

ULPsof Labor Organizations

Restraint or coercion of employees in the exercise of their right
Causing or attempting to cause employer to discriminate against an employee
Violate duty, or refuse to bargain collectively with employer
Causing or attempting to cause employer to pay or deliver any money or other
things of value for services which are not performed, including demand for
union negotiation fees (Feather-bedding)
Ask for or accept negotiation or attorneys fees from employers as part of
settlement of any issue in collective bargaining or any other dispute
Violation of a CBA

UNFAIR LABOR PRACTICE

ART. 246. It shall be unlawful for any person to RESTRAIN, COERCE, DISCRIMINATE
against of unduly INTERFERE (CRIP) with the employees and workers in their right
to form, join, or assist labor organization.
I.Essential Elements of Any ULP Act:
1.Employer-employee relationships;
2.Act done is related to right to self-organization;
3.Act falls under either Article 248 or 249, Labor Code
Unfair labor practice refers to acts that violate the workers right to organize.
The test of whether an employer has interfered with and coerced employees within
the meaning of Art. 248 (a) of the Labor Code is whether the employer has engaged
in conduct which it may reasonably be said tends to interfere with the free
exercise of employees rights to self- organization and it is not necessary that
there be direct evidence that any employee was in fact intimidated or coerced by
statements of threats of the employer if there is reasonable interference that
anti-union conduct of the employer has an adverse effect of self-organization and
collective bargaining (Insular Life Assurance Co., Ltd GR. No. L-25291 January
30, 1971)
II. Not only employer (Art. 248) but also labor (Art. 249) can be held
guilty of ULP
ULP of EMPLOYERS ULP of LABOR ORGANIZATION
1. Restrain, Interference or 1. Restrain or coercion in the
Coercion in the exercise of the exercise of the right to self-
right to self-organization. organization.
2. Yellow Dog Contract 2. Feather-bedding
3. Contracting out in order to 3. To cause or attempt to cause
coerce or restrain employees in employer to Discriminate against
the exercise of the right to self- employee
organization.
4. Initiating, Dominating, 4. Violation of the duty to
Assisting, Interfering and Giving bargain.
support to unions. [Company Union]

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5. Discriminating in order to 5. Asking or accepting negotiation

encourage or discourage union or Attorney's fee from the
membership. management.
6. Retaliatory dismissal or 6. To Violate a CBA.
discrimination due to adverse
testimony.
7. Violation of the duty to
bargain.
8. Paying negotiation or
attorney's fee to union.
9. To Violate a CBA

UNFAIR LABOR PRACTICE

1. What is the test to determine whether or not an employer is guilty ULP?

The test of whether an employer has interfered with and coerced employees is
whether the employer has engaged in conduct which it may reasonably be said tends
to interfere with the free exercise of employees rights to self-organization and
it is not necessary that there be direct evidence that any employee was in fact
intimidated or coerced by statements of threats of the employer if there is
reasonable interference that anti-union conduct of the employer does have an
adverse effect on self-organization and collective bargaining. (De Leon vs. NLRC,
358 SCRA 274)

2. Some cases of ULP of EMPLOYERS:

From the employers refusal to bargain, to their act of economic
inducements resulting in the promotion of those who withdrew from the
union, the use of armed guards to prevent the organizers to come in and
the dismissal of union officials and members (Hacienda Fatima vs.
National Federation Sugarcane Workers-Food and General Trade, G.R. No.
149440)
Where the workers were dismissed because they refused to resign from a
union and affiliate with a rival union which was being aided and abetted
by the Company (Development Corporation vs. CIR, 80 SCRA 434)

Two union officers were provoked into a pre-arranged fight by two

recently-hired employees, pursuant to the strategy of the company
designed to prevent an apparently lawful cause for their dismissal
(Visayan Bicycle Co. vs. National Labor Union, 14 SCRA 5)

3. Some cases of ULP of LABOR ORGANIZATIONS:

Workers were reluctantly dismissed from employment upon insistent demand
by the union (Salunga vs. Court of Industrial Relations, 21 SCRA 216)
Union demanded the dismissal from employment on the basis of the union
security clause of the CBA and the employer acceded by placing the
employee on forced leave (Manila Mandarin Employee Union vs. NLRC, 154
SCRA 368)
The strike was staged in violation of the existing CBA provisions on NO
Strike/No Lockout Clause (Union of Filipino Employees vs. Nestle
Philippines, 192 SCRA 396)
4. What is BOULWARISM?
It occurs when:
the employer directly bargains with the employee disregarding the union.
Employer submits its proposals and adopts a take it or leave it stand.
This is not negotiation because the take it or leave it stand implies
threat.

UNFAIR LABOR PRACTICES

Concept of unfair labor practice (ULP).- It violates the right of workers to

self-organization, is inimical to the legitimate interest of both labor and
management, including their right to bargain collective and otherwise deal with

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each other in an atmosphere of freedom and mutual respect, disrupts industrial

peace and hinders the promotion of healthy and stable labor-management relations.

Aspect of ULP:(1) Civil; and (2) Criminal.

Labor Arbiters shall have jurisdiction over the civil aspects of all cases
involving unfair labor practices, which may include claims for actual, moral,
exemplary and other forms of damages, attorneys fees and other affirmative
relief.

Recovery of civil liability in the administrative proceedings shall bar

recovery under the Civil Code No. criminal prosecution may be instituted without
a final judgement finding that an unfair labor practice was committed having been
first obtained in the labor case.

Parties who may commit ULP. (1) Employer (See Article 248, Labor Code); and
(2) Labor Organizations (See Article 249,Labor code for specific acts
constituting ULP).

On the part of the employer, only the officers and agents corporations,
associations or partnership who have participated in, authorized or ratified
unfair labor practices shall be held criminally liable.

On the part of the union, only the officers, members of labor associations
or organizations who have actually participated in, authorized or ratified the
unfair labor, practices shall be held criminally liable.

If the offense is committed by a corporation, trust, firm, partnership,

association or any other entity, the penalty shall be impose upon the guilty
officers or such corporation, trust, firm, partnership, association or entity.
(Article 289,Labor Code).

Elements of ULP. - Before an employer or labor organization, as they can be,

may be said to have committed unfair practices acts, the following ingredients
must both concur:

1. there should exist an employer-employee relationship between the offended

party and the offender; and
2. the act complained must be expressly mentioned and defined in the labor
code as constitutive and unfair labor practice. If not mentioned, there
is no ULP.
Absent one of the elements aforementioned will not make the act an unfair labor
practice act.

ULP of employers.
(a) To interfere with, restrain or coerce employees in the exercise of
their right to self organization;
(b) To require as a condition of employment that a person or an employee
shall not join labor organization or shall withdraw from one to which he
belongs;
(c) To contract out services or functions being performed by union when
such will interfere with, restrain coerce employees in the exercise of
their rights to selforganizations;
(d) To initiate, dominate, assist or otherwise interfere with the
formation or administration of any labor organization, including the
giving of financial or other support to it or its organizers or
supporters;
(e) To discriminate in regard to wages, hours of work and other terms and
conditions of employment in order to encourage or discourage membership
in any labor organization. Nothing in this Code or in any other law shall
stop the parties in requiring membership in a recognized collective
bargaining agent as a condition for employment, except those employees
who are already members of another union at the time of the signing of
the collective bargaining agreement. Employees of an appropriate

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bargaining unit who are not already members of the recognized collective
bargaining agent may be assessed a reasonable fee equivalent to the dues
and other fees paid by members of the recognized collective bargaining
agent,, if such non-union members accept the benefits under the
collective bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph (0) of this shall not
apply to the non-members of the recognized collective bargaining agent.
(f) To dismiss, discharge or other wise prejudice or discriminate against
an employee for having given or being about to give testimony under this
Code;
(g) To violate the duty to bargain collectively as prescribed by this
Code;
(h) To pay negotiation or attorneys fees to the union or its officers or
agents as part of the settlement of any issue in collective bargaining or
any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions preceding paragraph notwithstanding, only the officers and agents
of corporations, associations or partnership who have actually participated in,
authorized or ratified unfair labor practices shall be held criminally liable.

Totality of Conduct of Doctrine.- Expressions of opinion by an employer, may be

held to be constitutive of unfair labor practice because of the circumstances
under which they were uttered, the history of the particular employers labor
relations or anti-union bias or because of their connection with an established
collateral plan of coercion or interference. An expression which might be
permissibly uttered by one employer, might, in the mouth of more hostile
employer, be deemed improper and consequently actionable as an unfair labor
practice.

ULP of Labor Organization

a. To restrain or coerce employees in the exercise of their right to self-
organization. However, a labor organization shall have the right to
prescribe its own rules with respect to the acquisition or retention of
membership.
b. To cause or attempt an employer to discriminate against an employee with
respect to whom membership in such organizations has been denied or
terminate an employee on any other than the usual terms and conditions
under which membership or continuation of membership is made available to
other members.
c. To violate the duty, or refuse to bargain collectively with the employer,
provided it is the representative of the employees.
d. To cause or attempt to cause an employer to pay or deliver or agree to
pay or deliver any money or other things of value, in the nature of an
exaction, for services which are not performed or not to be performed,
including the demand for fee for union negotiations;
e. To ask for or accept negotiations or attorneys fees from part of the
settlement of any issue in collective bargaining or any other dispute; or
f. To violate collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers,
members of governing boards, representatives or agents or members of labor
associations or organizations who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable.

Yellow dog Contract- A yellow dog contract is an agreement which exacts from
workers as a condition of employment, that they shall not join or belong to a
labor organization, or attempt to organized one, during their period of
employment or that they shall withdraw therefrom, in case they are already
members of a labor organizations.

Union Security Clause, the phrase union for security clause is a stipulation in
the CBA whereby the management recognizes, that the membership of employees in
the union which negotiated said should be maintained and continued as a condition

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for employment or retention of employment. The obvious purpose is to safeguard

and ensure the continued existence of the union.

Classification.- (1) Closed shop agreement; (2) Maintenance of membership

agreement; (3) Union shop agreement; (4) Modified union shop agreement; (5)
Exclusive bargaining agreement; (6) Bargaining for members only agreement; (7)
Agency shop agreement; (8) Preferential hiring agreement.

Due process should be observed in dismissal based on union security

clause.
An employee may not compelled to join union based on religious ground.
Agency fee may be deducted from non-union members who availed of the
benefits from CBA even without written authorization..

Runaway shop.- is an industrial plant moved by its owners from one location to
another to escape union labor regulations or state laws. It may also be a
relocation motivated by antiunion animus rather than for business reasons.

Featherbedding.- It shall be unfair labor practice for a labor organization, its

officers, agents representatives to cause or attempt to cause an employer to pay
or deliver or agree to pay or deliver any money or other things of value, in the
nature of an exaction, for services which are not performed or not to be
performed, including the demand for fee union negotiations.

Violations of the CBA.It is ULP only if gross in character which means flagrant
and/or malicious refusal to comply with the provisions thereof.

Criminal Liability for ULPs

Only officers or agents of corporations, associations or partnerships who
actually participated in, authorized or ratified ULPs to be held criminally
liable
On the part of the Union, its officers, members of governing boards,
representatives or agents

Totality of Conduct Doctrine

Expressions of opinion by an employer, though innocent in themselves, may be
constitutive of ULP because of the circumstances under which they are
uttered, the history of the employers labor relations or anti-union bias or
because of their connection with an established collateral plan of coercion
or interference.

Union Security Clause

Stipulation in the CBA where management recognizes membership of employees
in the union which negotiated said agreement should be maintained or
continued as a condition of employment or retention of employment
Purpose is to safeguard and ensure continued existence of the union

Union Security Clause, Types

Closed shop
Maintenance of membership agreement
Union shop agreement
Modified union shop
Exclusive Bargaining Agreement
Bargaining for members only agreement
Agency shop agreement
Preferential hiring agreement

Legal Principles Pertinent to Union Security Clause

Employer must still afford employee due process

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Collective bargaining and administration of agreement

Collective Bargaining
A democratic framework to stabilize Er-Ee relations, to create a climate of
sound and stable industrial peace
A mutual responsibility & legal obligation of the employer and the union
Collective bargaining denotes negotiations looking forward to a collective
agreement, however, it is a continuous process.

Collective Bargaining, Process

Negotiation of wages, hours & terms, conditions of employment
Execution of written contract embodying terms
Negotiation of issues arising out of interpretation or application of
agreement
Negotiation of terms of new contract, or proposed modifications.
System of collective bargaining consists of:
Negotiation of contracts (legislative phase)
Administration of contract (executive phase)
Interpretation or application (judicial phase)

Collective Bargaining, Process (Article 256, 257, Labor Code)

Party seeking negotiation serves Engaged Party makes reply thereto

within 10 calendar days from
written notice & statement of receipt of notice
proposals

Conciliation proceedings by
Request for conference within 10
NCMB to resolve dispute, calendar days to address
either motu proprio or upon differences in proposals
request

Collective Bargaining Agreement

A contract
executed upon request of either the employer or the exclusive bargaining
representatives
Incorporating all agreements reached during negotiations
With respect to wages, hours of work and other terms and conditions of
employment
Including proposals for adjusting any grievance or questions under
such agreement
Azucena:
It is more than a contract; it is a generalized code to govern a myriad
cases which the draftsmen cannot wholly anticipate. It covers the whole
employment relationship and prescribes the rights and duties of the parties. It
is a system of industrial self-government with the grievance machinery at the
very heart of the system.

Collective Bargaining, Parties

Employer Where there is no relationship, there is no duty to

bargain,

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Employees
ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

Where there is no duty to bargain, refusal to

bargain violates no right.

Bargaining Representative
Refers to the Legitimate Labor Organization selected or designated by
the employes. Does not refer to its officers.
How selected is discussed under Articles 261-265 of Labor Code

COLLECTIVE BARGAINING AGREEMENT (CBA)

What is a Collective Bargaining Agreement (CBA)?

Collective Bargaining Agreement (CBA) refers to the negotiated contract between a

legitimate labor organization and the employer concerning wages, hours of work
and all other terms and conditions of employment in a bargaining unit. The CBA is
deemed the law between the parties during its lifetime. Its provisions are
construed liberally.

What are the legal principles applicable to Collective Bargaining Agreement

(CBA)?

A proposal not embodied in CBA is not part thereof.

Minutes of CBA negotiation - no effect if its contents are not
incorporated in the CBA.
Making a promise during the CBA negotiation is not considered bad faith.
Adamant stance resulting in impasse, not bad faith.
The DOLE Secretary cannot order inclusion of terms and conditions in CBA
which the law and the parties did not intend to reflect therein.
Signing bonus, not demandable under the law.
Allegations of bad faith, wiped out with signing of CBA.

Is the collective bargaining procedure in Article 250 mandatory?

In National Union of Restaurant Workers vs. CIR, [10 SCRA 843], it was held that
failure to reply within ten (10) calendar days does not constitute refusal to
bargain. The requirement under the law that a party should give its reply within
said period is merely procedural and non-compliance therewith is not unfair labor
practice.

Recently, however, there has been a shift in the interpretation of the provision
of Article 250. According to the pronouncement in General Milling Corporation vs.
CA, [G. R. No. 146728, February 11, 2004], the procedure in collective bargaining
prescribed by the Labor Code under Article 250 is mandatory because of the basic
interest of the State in ensuring lasting industrial peace. It underscored the
fact that the other party upon whom the proposals was served shall make a reply
thereto not later than ten (10) calendar days from receipt of such notice.
Consequently, the employers failure to make a timely reply to the proposals

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presented by the union is indicative of its bad faith and utter lack of interest
in bargaining with the union. Its excuse that it felt the union no longer
represented the workers, was mainly dilatory as it turned out to be utterly
baseless. Consequently, the employer in this case was held guilty of unfair
labor practice under Article 248 [g] of the Labor Code.

In Colegio de San Juan de Letran vs. Association of Employees and Faculty of

Letran, [G. R. No. 141471, September 18, 2000], petitioner-school was declared to
have acted in bad faith because of its failure to make a timely reply to the
proposals presented by the union. More than a month after the proposals were
submitted by the union, petitioner still had not made any counter-proposals.
This inaction on the part of petitioner prompted the union to file its second
notice of strike on March 13, 1996. Petitioner could only offer a feeble
explanation that the Board of Trustees had not yet convened to discuss the matter
as its excuse for failing to file its reply. This is a clear violation of Article
250 of the Labor Code governing the procedure in collective bargaining. The
schools refusal to make a counter-proposal to the unions proposed CBA is an
indication of its bad faith. Its actuation shows a lack of sincere desire to
negotiate rendering it guilty of unfair labor practice.

The same holding was made in Kiok Loy vs. NLRC, [141 SCRA 179, 186 (1986)] where
the companys refusal to make any counter-proposal to the unions proposed CBA
was declared as an indication of its bad faith. Where the employer did not even
bother to submit an answer to the bargaining proposals of the union, there is a
clear evasion of the duty to bargain collectively. (See also The Bradman Co.,
Inc. vs. Court of Industrial Relations, 78 SCRA 10, 15 [1977]).

What are the kinds of bargaining under the latest implementing rules?

The Rules to Implement the Labor Code, as amended in 2003, provide for two (2)
kinds of bargaining, namely:

1. Single-enterprise bargaining; and

2. Multi-employer bargaining.

What is single enterprise bargaining?

Single-enterprise bargaining involves negotiation between one certified labor

union and one employer. Any voluntarily recognized or certified labor union may
demand negotiations with its employer for terms and conditions of work covering
employees in the bargaining unit concerned. (Section 3, Rule XVI, Book V, Rules
to Implement the Labor Code, as amended by Department Order No. 40-03, Series of
2003, [Feb. 17, 2003]).

What is multi-employer bargaining?

Multi-employer bargaining involves negotiation between and among several

certified labor unions and employers.

Any legitimate labor unions and employers may agree in writing to come together
for the purpose of collective bargaining, provided:

(a) only legitimate labor unions which are incumbent exclusive bargaining agents
may participate and negotiate in multi-employer bargaining;
(b) only employers with counterpart legitimate labor unions which are incumbent
bargaining agents may participate and negotiate in multi-employer bargaining; and
(c) only those legitimate labor unions which pertain to employer units which
consent to multi-employer bargaining may participate in multi-employer
bargaining. (Section 5, Rule XVI, Book V, Ibid.).

What is meant by duty to bargain collectively when there has yet been a CBA?

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Article 251 contemplates a situation where there is yet no CBA or other

voluntary arrangements or modes providing for a more expeditious manner of
collective bargaining. Accordingly, the law itself mandates that the procedures
in collective bargaining laid down in the Labor Code, specifically Article 250
thereof, among other pertinent provisions, should be followed by the employer and
the representatives of the employees in their collective bargaining efforts.
Essentially, the duty to bargain in this situation still requires the performance
of the obligation by the employer and the union to meet, convene and confer for
collective bargaining purposes. The basic requisites of collective bargaining
such as the existence of employer-employee relationship, majority status of the
bargaining union and the demand to negotiate an agreement, should likewise be
fully satisfied before such negotiations may be validly held. The advantage of
negotiating a CBA for the first time lies in the fact that both parties are not
restricted or encumbered by any previous agreement on any of the issues that may
be raised in the course thereof. They are free to take positions on anything,
without having to worry about possible past agreements affecting the current ones
for discussion.

What is meant by duty to bargain collectively when there exists a CBA?

When there is a collective bargaining agreement, the duty to bargain

collectively shall mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a written notice
to terminate or modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to keep the status quo and
to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement is reached by the
parties.

What are the mandatory requisites of publication, ratification and registration

of the CBA?

a. Posting of CBA.

The general rule is that the CBA is required to be posted in two (2) conspicuous
places in the work premises, for a period of at least five (5) days prior to its
ratification.

In the case of multi-employer bargaining, two (2) signed copies of the CBA should
be posted for at least five (5) days in two (2) conspicuous areas in each
workplace of the employer units concerned. Said CBA shall affect only those
employees in the bargaining units who have ratified it. (Section 7, Rule XVI,
Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-
03, Series of 2003, [Feb. 17, 2003]).

b. Posting is mandatory.

This requirement on the posting of the CBA as above-described is considered a

mandatory requirement. Non-compliance therewith will render the CBA ineffective.
(Associated Trade Unions [ATU] vs. Trajano, G. R. No. L-75321, June 20, 1988).

c. Posting is responsibility of employer.

The posting of copies of the CBA is the responsibility of the employer which can
easily comply with the requirement through a mere mechanical act. (Associated
Labor Union [ALU] vs. Ferrer-Calleja, G. R. No. 77282, May 5, 1989).

d. Ratification by majority of the members of the bargaining unit.

The ratification of the CBA should be made not by the majority of the members of
the bargaining union but by the majority of the members of the bargaining unit
which is being represented by the bargaining union in the negotiations.

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e. Registration of CBA.

The CBA shall be registered with the Department of Labor and Employment in
accordance with the Rules to Implement the Labor Code, as amended in 2003.
(Section 7, Rule XVI, Book V, Rules to Implement the Labor Code, as amended by
Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]).

What is the consequence of refusal of party to negotiate the CBA?

The refusal of the employer to bargain with the collective bargaining

representative, by ignoring all notices for negotiations and requests for
counter-proposals so much so that the union had to resort to conciliation
proceedings, may indicate bad faith. (Kiok Loy vs. NLRC, G. R. No. 54334, Jan.
22, 1986, 141 SCRA 179).
For refusing to send a counter-proposal to the union and to bargain anew on
the economic terms of the CBA, the company commits an unfair labor practice act
under Article 248 [g] of the Labor Code (violation of the duty bargain
collectively). As held in General Milling Corporation vs. CA, [G. R. No. 146728,
Feb. 11, 2004], the union lived up to this obligation when it presented proposals
for a new CBA to the management within three (3) years from the effectivity of
the original CBA. But the employer failed in its duty under Article 252. What it
did was to devise a flimsy excuse, by questioning the existence of the union and
the status of its membership to prevent any negotiation.

According to Colegio De San Juan De Letran vs. Association of Employees and

Faculty of Letran, [G.R. No. 141471, Sept. 18, 2000, 340 SCRA 587, 595], the
managements refusal to make a counter-proposal to the unions proposal for CBA
negotiation is an indication of its bad faith. Where the employer did not even
bother to submit an answer to the bargaining proposals of the union, there is a
clear evasion of the duty to bargain collectively.

What is the effect of the refusal of party to sign the CBA?

A party to a fully-concluded CBA may be compelled to sign it, especially if said

refusal to sign is the only remaining hitch to its being implemented. Such
refusal is considered unfair labor practice. (Roadway Express vs. General
Teamster, 320 F 2d, 859).

What is the effect if there is no meeting of the minds?

In University of the Immaculate Concepcion, Inc. vs. The Hon. Secretary of Labor
and Employment, [G. R. No. 146291, January 23, 2002], the petitioner presented to
the union a draft of the CBA allegedly embodying all the terms and conditions
agreed upon during the conciliation sessions held by the NCMB. Petitioner
contended that the union was bound to comply with the terms contained in the
draft-CBA since said draft allegedly contains all the items already agreed upon
before the NCMB. The Supreme Court disagreed. In affirming the finding of the
Court of Appeals that there was still no new CBA because the parties had not
reached a meeting of the minds, the Supreme Court ratiocinated, thusly:

As in all other contracts, there must be clear indications that the parties
reached a meeting of the minds.

In this case, no CBA could be concluded because of what the union perceived as
illegal deductions from the 70% employees share in the tuition fee increase from
which the salary increases shall be charged. Also, the manner of computing the
net incremental proceeds was yet to be agreed upon by the parties.

Petitioner insisted that a new collective bargaining agreement was concluded

through the conciliation proceeding before the NCMB on all issues specified in
the notice of strike. Although it is true that the university and the union may
have reached an agreement on the issues raised during the collective bargaining
negotiations, still no agreement was concluded by them because, among other

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reasons, the DOLE Secretary, who assumed jurisdiction on January 23, 1995 only
was set to resolve the distribution of the salary increase of the covered
employees. The Court of Appeals found that there are many items in the draft-
CBA that were not even mentioned in the minutes of the July 20, 1994 conference.

Considering the parties failed to reach an agreement regarding certain items of

the CBA, they still have the duty to negotiate a new collective bargaining
agreement in good faith, pursuant to the applicable provisions of the Labor
Code.

Can a CBA be negotiated and concluded during suspension of operation?

There is no legal basis to claim that a new CBA should not be entered into
or that collective bargaining should not be conducted during the effectivity of a
temporary suspension of operations which an employer can lawfully do under
Article 286 of the Labor Code. In the absence of any other information, the
plain and natural presumption is that the employer would resume operations after
six (6) months and, therefore, it follows that a new CBA will be needed to govern
the employment relations of the parties, the old one having already expired.

Consequently, it was held in San Pedro Hospital of Digos, Inc. vs. Secretary of
Labor, [G. R. No. 104624, Oct. 11, 1996, 263 SCRA 98], that while the employer
cannot be forced to abandon its suspension of operations even if said suspension
be declared unjustified, illegal and invalid, neither can the employer evade its
obligation to bargain with the union, using the cessation of its business as
reason therefor. For, as already indicated above, the employer-employee
relationship is merely suspended (and not terminated) for the duration of the
temporary suspension. Using the suspension as an excuse to evade the duty to
bargain is further proof of its illegality. It shows abuse of this option and
bad faith on the part of the employer. And since it refused to bargain without
valid and sufficient cause, the DOLE Secretary, in the exercise of his powers
under Article 263 [i] of the Labor Code to decide and resolve labor disputes,
properly granted the wage increase and imposed the union shop provision.

Can a CBA be negotiated and concluded in case of closure of business?

An employer which has already decided to close shop cannot be compelled to

enter into a new CBA. The Supreme Court said in the same case of San Pedro
Hospital [supra] that it cannot impose upon the employer the directive to enter
into a new CBA with the union for the very simple reason that to do so would be
to compel the employer to continue its business when it had already decided to
close shop, and that would be judicial tyranny on its part.

Can a CBA proposed by the union be imposed lock, stock and barrel on employer
who refused to negotiate a CBA?

The Supreme Court, following the provision of Article 253 which imposes on both
parties to keep the status quo and to continue in full force and effect the terms
and conditions of the existing agreement during the 60-day period [prior to its
expiration date] and/or until a new agreement is reached by the parties, has
lately consistently ruled that the CBA, as proposed by the union, may be
unilaterally imposed on the employer in the event the latter fails to discharge
its duty to bargain collectively by refusing to make any counter-proposals to the
proposals of the union or engaging in bad faith bargaining.

Article 253 basically mandates the parties to keep the status quo while they are
still in the process of working out their respective proposals and counter
proposals. The general rule is that when a CBA already exists, its provision
shall continue to govern the relationship between the parties until a new one is
agreed upon. The rule necessarily presupposes that all other things are equal.
That is, that neither party is guilty of bad faith. However, when one of the
parties abuses this grace period by purposely delaying the bargaining process, a
departure from the general rule is warranted.

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Under this situation, the employer which violates the duty to bargain
collectively, loses its statutory right to negotiate or renegotiate the terms and
conditions of the draft CBA proposed by the union. Hence, the proposals of the
union may be adopted as the CBA and, consequently, imposed on the employer, lock,
stock and barrel.

General Milling Corporation vs. CA.

In General Milling Corporation vs. CA, [G. R. No. 146728, Feb. 11, 2004],
the Supreme Court imposed on the employer the draft CBA proposed by the union for
two years commencing from the expiration of the original CBA. This was because
of the employers refusal to counter-propose to the unions proposals which
constitutes unfair labor practice under Article 248 [g] of the Labor Code.

Kiok Loy vs. NLRC.

In the case of Kiok Loy vs. NLRC, [No. L-54334, January 22, 1986, 141 SCRA
179, 188], the Supreme Court found that petitioner therein, Sweden Ice Cream
Plant, refused to submit any counter proposal to the CBA proposed by its
employees certified bargaining agent. It ruled that the former had thereby lost
its right to bargain the terms and conditions of the CBA. Thus, the High Court
did not hesitate to impose on the erring company the CBA proposed by its
employees union - lock, stock and barrel.

Divine Word University of Tacloban vs. Secretary of Labor and Employment.

Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and

Employment, [213 SCRA 759, September 11, 1992], petitioner therein refused to
perform its duty to bargain collectively. Thus, the High Tribunal upheld the
unilateral imposition on the university of the CBA proposed by the Divine Word
University Employees Union.

Distinction between the aforesaid cases, disregarded.

As strictly distinguished from the facts of General Milling [supra], there was no
pre-existing CBA between the parties in Kiok Loy and Divine Word University of
Tacloban. Nonetheless, the Supreme Court deemed it proper to apply in General
Milling the rationale of the doctrine in the said two cases. To rule otherwise,
according to the Court, would be to allow General Milling to have its cake and
eat it, too.

What is freedom period?

Freedom period is the last sixty (60) days of the lifetime of a collective
bargaining agreement immediately prior to its expiration It is so called because
it is the only time when the law allows the parties to serve notice to terminate,
alter or modify the existing agreement. It is also the time when the majority
status of the bargaining union or agent may be challenged by another union by
filing appropriate petition for certification election.

What is automatic renewal clause?

Automatic renewal clause means that at the expiration of the freedom period,
the employer shall continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification election is filed.

What is the effect of CBA renewal or registration before or during 60-day

period?

The representation case shall not be adversely affected by a CBA registered

before or during the last sixty (60) days of a subsisting agreement or during the

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pendency of the representation case. (Samahan ng Manggagawa sa Pacific Plastic

vs. Laguesma, G. R. No. 111245, Jan. 31, 1997, 267 SCRA 303, 310).

It is well-settled that the sixty-day freedom period based on the original CBA
shall not be affected by any amendment, extension or renewal of the CBA for
purposes of certification election. (ALU vs. Calleja, 179 SCRA 127 [1989]).

In the case of Warren Manufacturing Workers Union [WMWU] vs. Bureau of

Labor Relations, [159 SCRA 387 (1988)], it was held that an agreement prematurely
signed by the union and the company during the freedom period does not affect the
petition for certification election filed by another union. (See also Oriental
Tin Can Labor Union vs. Secretary of Labor and Employment, G. R. No. 116751, Aug.
28, 1998, 294 SCRA 640).

The reason is, with a pending petition for certification, any such agreement
entered into by management with a labor organization is fraught with the risk
that such a labor union may not be chosen thereafter as the collective bargaining
representative. Any other view would render nugatory the clear statutory policy
to favor certification election as the means of ascertaining the true expression
of the will of the workers as to which labor organization would represent them.
(Vassar Industries Employees Union [VIEU] vs. Estrella, No. L-46562, March 31,
1978, 82 SCRA 280, 288; Todays Knitting Free Workers Union vs. Noriel, L-45057,
Feb. 28, 1977, 75 SCRA 450).

What is the term (lifetime) of a CBA?

Representation aspect (sole and exclusive status of certified union): - The term
is 5 years which means that no petition questioning the majority status of the
incumbent bargaining agent shall be entertained by DOLE and no certification
election shall be conducted outside of the 60-day freedom period.

All other provisions (which refer to both economic and non-economic provisions
except representation): Shall be renegotiated not later than three (3) years
after its execution.

May CBA negotiations be suspended for 10 years?

Yes. The Supreme Court, in the case of Rivera vs. Espiritu. (G.R. No.135547,
January 23, 2002), ratiocinated, thus:

The assailed PAL-PALEA agreement was the result of voluntary collective

bargaining negotiations undertaken in the light of the severe financial situation
faced by the employer, with the peculiar and unique intention of not merely
promoting industrial peace at PAL, but preventing the latter's closure. We find
no conflict between said agreement and Article 253-A of the Labor Code. Article
253-A has a two-fold purpose. One is to promote industrial stability and
predictability . Inasmuch as the agreement sought to promote industrial peace at
PAL during its rehabilitation, said agreement satisfies the first purpose of
Article 253-A. The other is to assign specific timetables wherein negotiations
become a matter of right and requirement. Nothing in Article 253A, prohibits the
parties from waiving or suspecting the mandatory timetables and agreeing on the
remedies to enforce the same.

In the instant case, it was PALEA, as the exclusive bargaining agent of PAL 's
ground employees, that voluntarily entered into the CBA with PAL. It was also
PALEA that voluntarily opted for the 10-year suspension of the CBA. Either case
was the union's exercise of its right to collective bargaining. The right to free
collective bargaining, after all, includes the right to suspend it.

The acts of public respondents in sanctioning the 10-year suspension of the PAL-
PALEA CBA did not contravene the "protection to labor" policy of the
Constitution. The agreement afforded full protection to labor; promoted the

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shared responsibility between workers and employers; and they exercised voluntary
modes in settling disputes, including conciliation to foster industrial peace.".

What is meant by retroactivity of CBA?

a. Rules involving CBAs concluded by the parties through negotiation (not

concluded through arbitral award).
The collective bargaining agreement or other provisions of such agreement
entered into within six (6) months from the date of expiry of the term
of such other provisions as fixed in the collective bargaining agreement
shall retroact to the day immediately following such date.
If any such agreement is entered into beyond six (6) months, the parties
shall agree on the date of effectivity thereof.

b. Rule involving CBAs concluded through arbitral awards by DOLE Secretary, NLRC
or Voluntary Arbitrator (Jurisprudence varies).

In case of arbitral awards, the retroactivity of the CBA provided under Article
253-A of the Labor Code (enumerated above) has no application. Thus, the Supreme
Court ruled:

In St. Luke's Medical Center, Inc. vs. Torres, [223 SCRA 779 (1993)], the
effectivity date was made retroactive to the date of the expiration of the
previous CBA.

In Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan-Confesor, [241 SCRA
294, 307 (1995)], the effective date of the new CBA should be the date the
Secretary of Labor and Employment has resolved the labor dispute.

In Manila Electric Company vs. Quisumbing, [G. R. No. 127598, January 27, 1999,
302 SCRA 173, 209], the effectivity date was made prospective per its January 27,
1999 ruling. Later, per its February 22, 2000 ruling in the same case which was
rendered upon motion for reconsideration, the effectivity of the CBA was made
retroactive. But later, in its August 1, 2000 ruling which was rendered after a
Motion for Partial Reconsideration was filed by Meralco, the Supreme Court
finally changed the effectivity date thereof. It held that the arbitral award
should retroact to the first day after the six-month period following the
expiration of the last day of the CBA, i.e., from June 1, 1996 to May 31, 1998.

LATEST RULING: In the case of LMG Chemicals Corporation vs. Secretary of DOLE,
(G. R. No. 127422, April 17, 2001), the Supreme Court ruled that retroactivity
of CBA in arbitral awards is subject to the discretion of the DOLE Secretary

What are the remedies in case of CBA deadlock?

In case of a deadlock in the negotiation or renegotiation of the collective

bargaining agreement, the parties may exercise the following rights under the
Labor Code:
Conciliation and mediation by the NCMB, DOLE.
Declaration of a strike or lockout, as the case may be.
Referral of case to compulsory or voluntary arbitration.

COLLECTIVE BARGAINING

1. What is Collective Bargaining Agreement (CBA)?

It refers to a contract executed upon request of either the employer or the
exclusive bargaining representative incorporating the agreement reached after

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negotiations with respect to wages, hours of work and all other terms and
conditions of employment.

2. Mandatory aspects of bargaining:

a. Wages, hours of work and other terms and conditions of employment
b. CBA should not provide for benefits below the standard prescribed by law,
award or order.
c. CBA should include the mandatory provisions such as grievance procedure,
family planning, no strike-no lockout clause, cooperative scheme, Labor
Management Council

3. What is the duty to bargain collectively under Art. 252 of the LC?
It 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,
but such duty does not compel any party to agree to a proposal or to make any
concession.

4. What is the effect for failure to exhaust all steps in the grievance
machinery?
For failing to exhaust all the steps in the grievance machinery and
arbitration proceedings provided in the CBA, the notice of strike should be
dismissed and the union ordered to proceed with the grievance and arbitration
proceedings.

5. ULP in Collective Bargaining

a. Bargaining in bad faith
b. Refusal to bargain
c. Individual bargaining
d. Gross violation of CBA provisions

6. DIFFERENT KINDS OF UNION SECURITY ARRANGEMENTS (EXCEPTIONS TO ULP ON

INTERFERENCE ON THE EMPLOYEES EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION):
A. CLOSED-SHOP AGREEMENT - the employer undertakes not to employ any individual
who is not a member of the contracting union and the said individual once
employed must, for the duration of the agreement, remain a member of the union in
good standing as a condition for continued employment.
does not have any retroactivity
apply only to new hires

EXCEPTIONS:
employees belonging to any religious sect which prohibit affiliation of
their members with any labor organization are not covered by such
agreementThe free exercise of religious belief is superior to contract
rights (Victoriano vs. Elizalde Rope Workers).
members of the rival union are not covered by such arrangement.

SEMI-CLOSED SHOP AGREEMENT- has no requirement for the employee to remain as

member of the contracting union in good standing as a condition for continued
employment.

B. UNION SHOP AGREEMENT -stipulation whereby any person can be employed by the
employer but once employed such employee must, within a specific period, become a
member of the contracting union and remain as such in good standing for continued
employment for the duration of the CBA [take note of the exceptions in the
preceding number.]

C. MAINTENANCE OF MEMBERSHIP CLAUSE - the agreement DOES NOT require non-members

to join the contracting union BUT provides that those who are members thereof at
the time of the execution of the CBA and those who may thereafter on their own
volition become members must for the duration of the agreement maintain their

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membership in good standing as a condition for continued employment in the

company for the duration of the CBA.

D. PREFERENTIAL SHOP AGREEMENT an agreement whereby the employer merely agrees

to give preference to the members of the bargaining union in hiring, promotion or
filing vacancies and retention in case of lay-off. The employer has the right to
hire from the open market if union members are not available.

E. AGENCY SHOP AGREEMENT - 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.
This is directed against FREE RIDER employees who benefit from union
activities without contributing support to the union, to prevent a situation of
non-union members enriching themselves at the expense of union members.
Employee members of another/rival union are not considered free riders
since when the union [agent] bids to be the bargaining agent, it
voluntarily assumed the responsibility of representing all the employees
in the appropriate bargaining unit.

COLLECTIVE BARGAINING AGREEMENT

Collective Bargaining Agreement (CBA) refers to the negotiated contract between a

legitimate labor organization and the employer concerning wages, hours of work
and all other terms and conditions of employment in a bargaining unit. The CBA is
deemed the law between the parties during its lifetime. Itys provisions are
construed liberally.

A proposal not embodied in CBA is not part thereof.

Minutes of CBA negotiation-no effect if its contents are not
incorporated in the CBA.
Making a promise during the CBA negotiation is not considered bad faith.
Adamant stance resulting in impasse, not bad faith.
The DOLE Secretary cannot order inclusion of terms and conditions in CBA
which the law and the parties did not intend reflect therein.
Signing bonus, not demandable under the law.
Allegations of bad faith, wiped out with signing of CBA.

Duty to bargain collectively when exists a CBA.- When there is a collective

bargaining agreement, the duty to bargain collectively shall also mean that
neither party shall terminate or modify such agreement during its lifetime.
However, either party can serve a written notice to terminate or modify the
agreement at least sixty (60) days prior to its expiration date. It shall be the
duty of both parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement during the 60-day
period and/or until a new agreement is reached by the parties.

Freedom period.- The last sixty (60) days of the lifetime of a collective
bargaining agreement immediately prior to its expiration is called the freedom
period. It is so called because it is only the time when the law allows the
parties to serve notice to terminate, alter or modify the existing agreement. It
is also the time when the majority status of the bargaining union or agent may be
challenged by another union appropriate petition for certification election.

Automatic renewal clause.- At the time of the freedom period, the employer shall
continue to recognize the majority status of the incumbent bargaining agent where
not petition for certification election is filed.

Terms of a CBA:

Representation aspect (sole exclusive status of certified union): -The term and
condition is 5 years which means that no petition questioning the majority status

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of the incumbent bargaining agent shall be entertained by DOLE and no

certification election shall be conducted outside of the 60-day freedom period.

All other provisions (which refer to both economic and non-economic provisions
except representation): Shall be renegotiated not later that three (3) years
after its execution..

Retroactive of CBA.

a. Rule involving CBAs concluded by the parties (not concluded through arbitral
award)..

1. The collective bargaining agreement or other provisions of such agreement

entered into within six (6) months from the date of expiry of the term of
such other provisions as fixed in the collective bargaining agreement
shall retract to the day immediately following such date.
2. If any such agreement is entered into beyond six (6) months, the parties
shall agree on the date of effectivity thereof.

b. CBAs concluded through arbitral award by DOLE Secretary, NLRC or Voluntary

Arbitrator (Jurisprudence varies).

In case of arbitral awards, the retroactivity of the CBA provided under Article
253-A of the Labor Code (enumerated above) has no application.. Thus, Supreme
Court Ruled:

In Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan-Confesor,[241 SCRA

294, 307,1995], the effective date of the new CBA should be the date the
Secretary of Labor and Employment has resolved the Labor dispute.

In St. Lukes Medical Center, Inc. vs. Torres,[223 SCRA 779 (1993)], the
effectivity date of was retroactive to the date of the expiration of the previous
CBA.

In Manila Electric Company vs. Quisumbing, [G. R. No. 127598, January 27,1999,
302 SCRA 173, 209], the effectivity date was made prospective.

CBA Deadlock.
In case of a deadlock in the negotiation or renegotiation of the collective
bargaining agreement, the parties may exercise the following rights under the
Labor Code.

1. Conciliation and mediation by the NCMB, DOLE.

2. Declaration of a strike or lockout, as the case may be.
3. Referral of case compulsory or voluntary arbitration.

GRIEVANCE AND VOLUNTARY ARBITRATION

Grievance is any question by either the employer or the union regarding

the interpretation or application of the collective bargaining agreement or
company personnel policies or any claim by either party that the other party that
is violating any provisions of the CBA or company personnel policies. It is a
complaint or dissatisfaction arising from the interpretation or implementation of
the CBA and those arising from interpretation or enforcement of personnel
policies

Grievance machinery refers to the mechanism for the adjustment and

resolution of grievances arising from the interpretation or implementation of a
CBA and those and those arising from interpretation or enforcement of company
personnel policies. It is a part of the continuing process of collective
bargaining.

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Grievance procedure refers to the internal rules of procedure established

by the parties in their CBA with voluntary arbitration as the 6terminal step,
which are intended to resolve all issue arising from the implementation and
interpretation of their CBA. It is refers to the system of grievance settlement
at the plant level as provided in the collective bargaining agreement. It is
usually consists of successive steps starting at the level of the complainant and
his immediate supervisor and ending, when necessary, at the level of the top
union and company officials.
All grievances submitted to the grievance machinery which are not settled
within seven (7) calendar days from the date of their submission shall
automatically be referred to voluntary arbitration prescribed in the CBA.
For this purpose, parties to a CBA shall name and designate in advance a
Voluntary Arbitrators, or include n the agreement a procedure for the selection
of such Voluntary Arbitrators or panel of Voluntary Arbitrators, preferably from
the listing of qualified Voluntary Arbitrators duly accredited by the NCMB. In
case the parties fail to select a Voluntary Arbitrator or panel of Voluntary
Arbitrators, the NCMB shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure
agreed upon in the CBA, which shall act with the same force and effect as if the
Arbitrator or panel of Arbitrators has been selected by the parties as described
above.

Role of Sole Bargaining Agent.- It is the representative of all

employees of purposes of collective bargaining. However, an individual
employee group of employees shall have the right at any time to present
grievances to their employer.
Participation of workers in policy and decision-making processes.- Workers shall
have the right participate in policy and decision-making processes of the
establishment where they are employed insofar as said processes will directly
affect their rights, benefits, and welfare. For this purpose, workers and
employers may form labor-management councils: Provided, That the representatives
of the workers in such labor-management councils shall be elected by at least the
majority of all employees in said establishment.

Selection or Designation of Exclusive Bargaining Agent

Manifestation of workers participatory right
PAL vs. NLRC (GR No. 85985, Aug. 1993) The CBA may not be interpreted as
cession of employees right to participate in the deliberation of matters
which may affect their rights and the formulation of policies relative
thereto.
May be exercised by a Labor-Management Council, aside from or instead of a
union (dealing with the employer vs. collective bargaining)
Does not preclude the exercise of an individual employees right to raise
his own grievance.
Collective Bargaining Unit
That group of jobs and jobholders represented by the recognized or certified
union when it bargains with the employer.
May comprise all of the supervisors or, separately, all the rank-and-file
population of the company.
The law favors having only one grouping per category (following the united-
we-stand, divided we fall logic), but does not prohibit sub-groups that are
appropriate.

CBU, Under DO 40-03

Refers to a group of employees sharing mutual interests within a given
employer unit, comprised of all or less than all of the entire body of
employees in the employer unit or any specific occupational or geographical
grouping within such employer unit.

What is Appropriateness?
BLRs primary function, considering all legally relevant factors.
Bargaining Unit may be determined following the four recognized modes:

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1. Substantial Mutual Interests principle or community or mutuality of

interests rule
2. Will of the Employees (Globe Doctrine)
3. Collective Bargaining History
4. Employment Status

Substantial Mutual Interests Rule

Employees sought to be represented must have substantial mutual interests in
terms of employment and working conditions
Characterized by similarity of employment status, same duties and
responsibilities and substantially similar compensation and working
conditions.
There must be a logical basis for the formation of a bargaining unit.
Adherence to the adage Strength in Numbers
Geographical location can be completely disregarded if communal or mutual
interests of the employees are not sacrificed.
However, if employers in two plants are clearly distinct, each group of
employees in the plants are treated as separate units (Diatagon vs. Ople)

Cases, Substantial Mutual Interests

SMC Employees Union vs. Confesor, (GR No. 111262, Sep. 1996)
Philtranco Service Enterprises vs. BLR, (GR No. 85343, Jun. 1989)
SMC vs. Laguesma (GR No. 100485, Sep. 1994)
SMC Supervisors and Exempt Employees Union vs. Laguesma (GR No. 110399, Aug.
1997)
St. James School of Quezon City vs. Samahang Manggagawa sa St. James School
of Quezon City (GR No. 151326, Nov. 23, 2005)

Globe Doctrine
Globe Machine and Stamping Co., 3 N.L.R.B. 294 (1937),
A petitioning union claimed that there were three separate bargaining units
in the plant, whereas an intervening union argued for treating the plant as one
overall unit.
The US NLR Board found that either arrangement would result in appropriate
bargaining units, and concluded that the question was so evenly balanced that the
determining factor should be the desire of the employees themselves.
Globe Machine and Stamping Co., 3 N.L.R.B. 294 (1937),
Each of the three separate units was given the opportunity to vote for the
petitioning union (and representation as a separate unit), the intervening union
(and representation as an overall unit), or no union.
The Globe procedure thereby allows employees "to determine the scope of a
unit by allowing them to cast a vote for each of several potential units which
the Board has determined are appropriate."
US Case: Globe Machine & Stamping Co. (3 NLRB 294, 1937)
In defining the appropriate bargaining unit, the determining factor is the
desire of the workers themselves. Consequently, a certification election
should be held separately to choose which representative union will be
chosen by the workers.

Collective Bargaining History

Prior collective bargaining history and affinity of employees should be
considered in determining the appropriate bargaining unit.
The existence of a prior collective bargaining history is neither decisive
nor conclusive in the determination of what constitutes an appropriate
bargaining unit (see SMC vs. Laguesma, NAFTU vs. Mainit Lumber Devt. Company
Workers Union)

CB History vs. Mutuality of Interest

NAFTU vs. Mainit SC applied mutuality of interest among workers in sawmill
division and logging division, despite the history of divisions being
treated as separate units and geographical distance (see also SMC vs.
Laguesma)

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Employment Status
Casual employees and those employed on day-to-day basis must be considered
separate because there is no mutuality of interest (Philippine Land-Air-Sea
Labor Union vs. CIR, GR No. L-14656, Nov. 1960)
Confidential employees cannot be allowed to be included in rank-and-file
bargaining units
Belyca Corporation vs. Ferrer-Calleja (GR No. 77395, Nov. 1988)

Selection of Bargaining Representative

Certification Election
Consent Election
Voluntary Recognition

Certification Election
Process of determining by secret ballot the sole and exclusive bargaining
agent of the employees in an appropriate bargaining unit, for purposes of
collective bargaining.
No longer necessary under the following circumstances
Voluntary recognition of the employer
Employees designate the union as the bargaining representative

Certification Election, Requisites

Organized establishments
Petition questioning the majority status of the incumbent bargaining
agent is filed with the DOLE during the 60-day freedom period
Verification of Petition necessary
Support of at least 25% of all employees in bargaining unit
In unorganized establishments, certification election shall be
automatically conducted upon the filing of a petition by a legitimate
labor organization

Party Filing Certification Election

Legitimate labor organization, or
Employer, when requested by a labor organization to bargain and status of
organization is in doubt.
Note: Art. 264-A Employer is a bystander in petitions of certification
election. Employers participation limited to:
Being notified or informed of petitions of such nature
Submitting list of employees to Med-Arbiter during pre-election
conference

Petition for Certification Election

May be filed at any time in the absence of a CBA, except:
Certification year-bar rule
Bargaining deadlock bar rule
Contract bar rule
Certification year-bar rule A certification election may not be filed
within one year from the date of a valid certification, consent or run-off
election, or one year from the date of voluntary recognition.
Bargaining deadlock-bar rule.
Before the filing of a petition for certification election, the duly
recognized or certified union has commenced negotiations with the
employer within the one-year period from the date of a valid
certification, consent or run-off election or voluntary recognition.
A bargaining deadlock to which an incumbent or certified bargaining
agent is a party had been submitted to conciliation or arbitration or
become the subject of a valid notice of strike or lockout.

Cases, Bargaining Deadlock Rule

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Kaisahan ng Manggagawang Pilipino (Kampil-Katipunan) vs. Trajano (GR No.

75810, Sept. 1991)
Capitol Medical Center Alliance of Concerned Employees-USFW vs. Laguesma (GR
No. 118915, Feb. 1997)

CERTIFICATION ELECTION
Certification Election- process of determining through a secret ballot the sole
and exclusive bargaining epresentative of the employees in the appropriate
bargaining unit, for purposes of collective bargaining
Bargaining Unit- refers to a group of employees sharing mutual interest within a
given employer unit comprised of all or less than all of the entire body of
employees in the employer unit or any specific occupational or geographical
grouping within such employer unit. (Rule I, (q) D O. 09)
The "community or mutuality of interests" test has provided the standard in
determining the proper constituency of a collective bargaining unit. However,
where the employor operates two enterprises engaged in two different kinds of
business (i.e., garment factory and cinema), the employees may be separated into
two (2) distinct bargaining units for purposes of the certification election.
This is so because the employees in the two businesses do not share commonality
of interest as the work they perform are different from each other (Cruzvale,
Inc. vs. Laguesma GR No. 124193 March 6, 1998).
Globe Doctrine- the will of the employees themselves is decisive on the matter
of determining their bargaining unit where more than one form of unit is
possible. Certification election is necessary to ascertain the will of the
employees.
I. Different Modes to Determine Bargaining Representative or Agent
1- Voluntary Recognition- refers to the process by which a legitimate
labor union is recognized by the employer as the exclusive bargaining
representative or agent in a bargaining unit, reported with the DOLE
Regional Office in accordance with Rule VII, Section 2 of Department Order
No. 40-03.
2. Certification Election- refers to the process of determining, through
secret ballot, the sole and exclusive bargaining agent of the employees in
an appropriate bargaining unit, for purposes of collective bargaining or
negotiation.
3. Consent Election- means the election voluntarily agreed upon by the
parties to determine the issue of majority representation of all the
workers In the appropriate collective bargaining unit.
A certification election is ordered by the Department, while a consent
election is. voluntarily agreed upon by the parties, with or without the
intervention by the Department. (See DO 40-03)
4. Run-off Election - refers to an election between the labor unions
receiving the two (2) highest number of votes in a certification or
consent election with three (3) or more choices, where such certification
or consent results in none of the three (3) or more choices receiving the
majority of the valid votes cast; provided that the total number of votes
for all contending unions is at least fifty percent (50) of the number of
votes cast.
There will be RUN-OFF Election when:
1.The election provides for at least three (3) choices.
2.The election results in none of the choices receiving a majority of the
valid votes cast.
3.Run-off election shall be conducted between the labor union receiving the
two highest number of votes, provided that the total number of votes for all
the contending unions is at least fifty percent (50%) of the total votes cast.
(256, LC; Section 4, Rule X, D.0.40-03)
II. Requirements for the filing of the Petition for Certification Election
1. IN UNORGANIZED ESTABLISHMENT (Art. 257):
There must be a petition; and
It must be filed by a Legitimate Labor Organization (LLO)
2. IN ORGANIZED ESTABLISHMENT (Art. 256):
There must be a verified petition;
Filed by a Legitimate Labor Organization Filed within the Freedom Period

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Supported by written consent of 25% of all employees In the BU,

3. WHEN FILED BY THE EMPLOYER:
The Bargaining Unit is Unorganized: and
The employer was requested to bargain collectively
III. Declaration or Certification of Winner in Certification Election.
To certify the winning union as the sole and exclusive bargaining agent (SEBA):
1. There must be a valid election;
2. Wherein the union received a majority of the valid votes cast; and
3. No pending protest
"To have a valid election, at least majority of all eligible voters In the unit
must have cast their votes. The labor union receiving the majority of the valid
votes cast shall be certified as the exclusive bargaining agent of all the
workers in the unit." (Art. 256)
IV. Appeal
The order granting the conduct of a certification election in an unorganized
establishment shall not be subject to appeal. Any issue arising therefrom may be
raised by means of protest on the conduct and results of the certification
election. (Section 17, Rule IX. D.0.40-03)
The order granting the conduct of a certification election in an organized
establishment and the decision dismissing or denying the petition, whether in an
organized or unorganized establishment, may be appealed to the Office of the
Secretary within ten (10) days from receipt thereof."
V. The Three (3) Bars in C.E
One-year Bar- No C.E. may be held within one-year from a previous C.E. or a
consent election, or a run-off election or voluntary recognition by the employer.
Deadlock Bar- No C.E. may be held if there is a pending bargaining deadlock which
has been submitted to conciliation or arbitration or has become the subject of
valid notice of strike or lock-out.
VI. Relevant Doctrines
Petition to cancel union registration does not bar CE.
An order to hold a certification election is proper despite the pendency of the
petition for cancellation of the registration certificate of the union. The
rationale for this is that at the time the union is filed its petition, it still
had the legal personality to perform such act absent an order directing the
cancellation (Pepsi-Cola Products Phils, vs. Secretary of Labor GR No. 96663
August 10,1999).
-In Association of Court of Appeals Employees v. Calleja, a certification
election can be conducted despite pendency of a petition to cancel the union
registration certificate. For the fact that at the time the respondent union
filed its petition for certification, it still had the legal personality to
perform such act absent an order directing its cancellation. (Samahan ng
Manggagawa sa Pacific Plastic v Laguesma, 267 SCRA 303)
No Collateral Attack
A labor union's personality cannot be collaterally attacked in a certification
election proceeding. Samahang manggagawa sa Charter Chemical Solidarity of Unions
in the Philippines for Empowerment and Reforms (SMCC- Super) vs. Charter Chemical
and Coating Corporation (G.R No. 169717; March 16, 2011; 645 SCRA 538;
After a certificate of registration is, issued to a union, its legal personality
cannot be subject to collateral attack. It may be questioned only in an
independent petition for cancellation in an independent petition for cancellation
in accordance with Section 5 of Rule V, Book IV of the Rule to Implement the
Labor Code. (D.O. 09 & 40-03)
Under the prevailing rules, once a union acquires legitimate status as a labor
organization, it continues as such until its certificate of registration is
cancelled or revoked in an independent action for cancellation. Article 245 of
the Labor Code merely prescribe s the requirements for eligibility in joining a
union and does not prescribe the ground for cancellation of union registration.
Certification election cannot be collaterally attacked. Cancellation proceeding
is an independent action. (SPI Technologies vs DOLE. March 8. 99) "Therefore, a
petition for cancellation of union registration is not a bar to the conduct of
certification election.

Retraction

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Withdrawals (from the union by the members through affidavits of recantation)

made before the filing of the petition (for certification election) are presumed
voluntary unless there is convincing proof to the contrary, whereas withdrawals
made after the filing of the petition are deemed involuntary, because then the
employees supporting the petition become known to the employer since their names
are attached to the petition. Thus, the employer may use foul means for said
employees to withdraw their support.
Even assuming the veracity of the affidavits, the legitimacy of respondent as a
labor organization must be affirmed. The fact remains that at the time of the
union's application for registration, the affiants were members of respondent and
they compromised more than the required 20% membership (of the bargaining unit)
for purposes of registration as a labor union. Article 234 of the Labor Code
merely requires a 20% minimum membership during the application for union
registration. It does not mandate the union must maintain the 20% minimum
membership requirement all throughout its existence. (Mariwasa Siam Ceramics,
Inc. v. The Secretary of the Department of Labor and Employment GR No. 183317,
December 21, 2009)
The By-Stander Rule (Art.258-A)
The policy and jurisprudence on the by-stander rule is now part of the law.
Employer is not a party with a concomitant right to oppose the petition for
certification election.
Certification election is the sole concern of the workers. In certification
election, the employer is a by-stander, it has no right or material interest to
assail the certification election.
Employers participation in certification election proceedings has been limited
to:
1. be notified or informed of the petition; and
2. submit the list of employees during the pre-election conference should the
Med- Arbiter act favorably on the petition
Certification election is the sole concern of the workers and the employer is
regarded as nothing more than a bystander with no right to interfere at all in
the election. The only exception is where the employer has to file a petition for
certification election because it is requested to bargain collectively.
Thereafter the role of the employer in the certification process ceases. It
becomes merely a bystander. (TUPAS vs. Trajano et al., G.R. No. 61153)
A certification election is the sole concern of the workers; hence, an employer
lacks the personality to dispute the same. The general rule is that an employer
has no standing to question the process of certification election, since this is
the sole concern of the workers. Law and policy demand that employers take a
strict, hands-off stance In certification elections. The bargaining
representative of employees should be chosen free from any extraneous influence
of management. A labor bargaining representative, to be effective, must owe its
loyalty to the employees alone and to no other. The only exception is v/here the
employer itself has to file the petition pursuant to Article 258 of the Labor
Code because of a request to bargain collectively. San Miguel Foods, Inc. vs. San
Miguel Corp. Supervisors and Exempt Union (G.R No.146206; August 1,2011)
When a petition for certification election Is filed by a legitimate labor
organization, it is good policy of the employer not to have any participation or
partisan interest in the choice of the bargaining representative. While employer
may rightfully be notified or informed of petitions of such nature, they should
not, however, be considered parties thereto with an alienable right to oppose it.
(SMC Quarry Workers Union vs. Titan Megabags Industrial Corp, 19 May 2004)
Unless it filed a petition for a certification pursuant to Article 258 of the
Labor Code, the employer has no standing to question the election, which is the
sole concern of the workers. The Labor Code states that any party to an election
may appeal the decision of the med-arbiter. Petitioner was not such a party to
the proceedings, but a stranger wh.ch had no right to interfere therein. (Notre
Dame of Greater Manila v.Laguesma, 29 June 2004)

Contract Bar Rule

The BLR shall not entertain any petition for certification election or any
other action which may disturb the administration of duly registered
existing collective bargaining agreements affecting the parties.

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Exceptions
60-day Freedom Period
CBA is not registered with the BLR
CBA contains provisions lower than statutory standards
Falsified, fraudulent or misrepresented documents
Incomplete CBA
Collective bargaining and negotiations entered into prior to the 60-day
freedom period
Internal strife in the union resulting in an industrial dispute which does
not foster industrial peace.

Petition for Certification Election, Other Grounds for Dismissal

Petitioner is not listed in DOLEs registry of legitimate labor
organizations, or whose registration is revoke or cancelled with finality
Petition filed outside of freedom period, provided that the 60 day period
based on the original CBA shall not be affected by any amendment, extension
or renewal of the CBA
Failure to submit 25% support requirement for filing of petition

Consent Election
Voluntarily agreed upon by the parties with or without the intervention of
the DOLE

Distinction, Certification Election vs. Consent Election

Certification Election to determine the sole and exclusive bargaining
agent of all the employees in an appropriate bargaining unit for the purpose
of collective bargaining;
Consent Election to determine the issue of majority representation of all
workers in the appropriate collective bargaining unit mainly for the purpose
of determining the administrator of the CBA; not for the purpose of
determining the bargaining agent for purposes of collective bargaining.

CERTIFICATION ELECTION & REPRESENTATION ISSUES

Sole and exclusive bargaining agent.-refers to any legitimate labor organizations

duly recognized pr certified as the sole and exclusive bargaining agent of all
the exclusive bargaining agent of all the employers n a bargaining unit.

Exclusive bargaining representative; how determined.

1. voluntary recognition in cases where there is only one legitimate labor

organization operating within the bargaining unit; or
2. certification election; or
3. run-off election; or
4. consent election.

Definition of Terms.

Voluntary recognit9ion of union.- Voluntary recognition of bargaining agent is

the free and voluntary act of the employer of extending and conferring full
recognition to a union as the sole and exclusive bargaining representative of the
employees in the appropriate bargaining unit, for purposes of collective
bargaining. This is allowed when there is only one union operating in the
bargaining unit.

Certification election.- refers to the process of determining through secret

ballot sole the sole and exclusive bargaining representative of the employees in
an appropriate bargaining unit, for purposes of collective bargaining.

Run-off election.-refers to an election between the receiving the two (2) highest
number of votes when a certification election which provides for three (3) more

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choices res4lts in no choice receiving a majority of the valid votes cast;

provided, that the total number of votes for all contending unions is at least
fifty percent 50% union of the number of votes cast.

Consent election.- refers to the election voluntarily agreed upon by the parties,
with or without the intervention of the of th4e Department of Labor and
Employment, to determine the issue of majority representation of all the workers
in the appropriate collective bargaining unit.

Bargaining unit.- refers to a group of employees sharing mutual interests within

a given employer unit, comprised of all or less than all of the entire body of
employees in the employer unit or any specific occupational and geographical
grouping within such employer unit.

Bargaining unit, how determined. No specific criteria but the following may be
used:
1. Substantial mutual interests principle or Community or mutuality of
interests rule
2. Globe doctrine [will of the employees]
3. Collective bargaining history
4. Employment status.

Consent election and certification election distinguished.-Consent election is a

separate and distinct process and has nothing to do with the important and effort
of a certification election in the sense that the purpose of the latter is to
determine the sole and exclusive bargaining agent of all the employees in the
bargaining unit.

Direct certification, not allowed.

Requisites for certification election in organized establishments.

1. that a petition questioning the majority status of the incumbent

bargaining agent is filed before the DOLE within 60-day freedom period;
2. that such petition is verified; and
3. that the petition is supported by the written consent of at least twenty-
five (25%) of all employees in the bargaining unit.

Note: In unorganized establishments, certification election shall be

automatically conducted upon the filing of a petition for
certification election by a legitimate labor organization.

Who may file a petition for certification election?

A certification for certification election may filed by:
1. a legitimate labor organization; or
2. a dederation or national union in behalf of a local or chapter
3. as employer, only when requested by a labor organization to bargain
collectively and the status of the union is in doubt.

When to file petition for certification election.- The general rule is, in the
absence of a collective bargaining agreement duly registered in accordance with
Article 231 of the Labor Code, a petition for certification election may be filed
at any time.

Exceptions.
However, no certification election may held under the following rules:
1. certification yearbar rule;
2. bargaining deadclock-bar rule; or
3. contract-bar rule.
4. Consent election bar

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1. Certification year-bar rule Under this rule, a certification election

petition may not be filed within one (1) year: (1) from date of a valid
certification, consent or run-off election; or (2) from the date of voluntary
recognition.

2. Bargaining deadclock-bar rule.. Neither a representation questioned be

entertained if:

1. Before the filing of the petition for certification election, the duly
recognized or certified union has commenced negotiations with the
employer within one-year period from the date of a valid certification,
consent or run-off election or from the date voluntary recognition; or
2. A. bargaining deadclock to which an incumbent or certified bargaining
agent is a party had been submitted to a conciliation or arbitration or
had become the subject of a valid notice of strike or lockout.
3. Contract-bar rule.- The Bureau of Labor Relations shall not entertain any
petition for certification election or any other action which may disturb the
administration of duly registered existing collective bargaining agreements
affecting the parties.

Exceptions to the contract-bar rule.

1. during the 60day period;
2. when the CBA, is not registered with the BIR or DOLE Regional Offices;
3. when the CBA, although registered, contains provisions lower than the
standards fixed by law;
4. when the documents supporting its registration are falsified, fraudulent
or tainted with misrepresentation;
5. when the collective bargaining agreement is not complete as it does not
contain any of the requisite provisions which the law requires;
6. when the collective bargaining agreement was entered into prior to the
60-day freedom period;
7. when there is a mass defection or schism in the union resulting in an
industrial dispute wherein the collective bargaining agreement can no
longer foster industrial peace.

Appeal in certification election cases.-To the DOLE Secretary within 10 days from
receipt of the decision.

NOTE: In an unorganized estab;ishment, if the petition is granted, there is no

appeal thereto.

Voluntary Recognition
Process whereby the employer recognizes a labor organization as the
exclusive bargaining representative of the employees in the appropriate
bargaining unit after a showing that the labor organization is supported by
at least a majority of the employees in the bargaining unit.
Available only in unorganized establishments.

FAQs
What is Certification Election?
Certification election is a process of determining through secret ballot the
sole and exclusive bargaining agent (SEBA) of all the employees in an
appropriate bargaining unit for the purpose of collective bargaining.
2. Where does a union file a petition for certification election (PCE)?
A PCE is filed at the Regional Office which issued the certificate of
petitioning unions certificate of registration/certificate of creation of
chartered local.
3. What are the requirements in filing a PCE?
Among the important requirements are the following:
a) A statement indicating any of the following:
That the bargaining unit is unorganized or that there is no registered CBA
covering the employees in the bargaining unit;

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If there exists a duly registered CBA, that the petition is filed within the
sixty-day freedom period of such agreement;
If another union had been previously recognized voluntarily or certified in
a valid certification, consent or run-off election, that the petition is
filed outside the one-year period from entry of voluntary recognition or
conduct of certification or run-off election and no appeal is pending
thereon.
b) In an organized establishment, the signature of at least twenty-five
(25%) percent of all employees in the appropriate bargaining unit shall be
attached to the petition at the time of its filing (Section 4, Rule VIII, of
the Department Order No. 40-03).
4. What happens after receipt of the PCE?
The petition will be raffled to the Med-Arbiter for preliminary conference
to determine, among others, the bargaining unit to be represented, the
contending unions, and the possibility of consent election.
5. What happens upon approval of the conduct of certification election by
the Mediator-Arbiter?
The PCE will be endorsed to an election officer for the conduct of pre-
election conference wherein the date, time and place of election will be
identified, the list of challenged and eligible voters will be made, as well
as the number and location of polling places.
6. May a PCE be denied?
Yes, a PCE may be denied if:
a) it was filed before or after the freedom period of a registered CBA;
b) the petitioner union is not listed in the DOLE Registry of legitimate
labor organization; or
c) the legal personality of the petitioner-union has been revoked or
cancelled with finality.
7. Who will conduct the CE?
The DOLE Regional Office through the election officer conducts the
certification election.
8. How is the SEBA determined?
The union that garners majority of the valid votes cast in a valid
certification election shall be certified as the SEBA.
9. May election protest be entertained?
Yes, but protest should have been first recorded in the minutes of the
election proceedings.
10. What happens if the petitioner union fails to garner the majority of the
valid votes cast?
There will be no SEBA, but another PCE may be filed one year thereafter.

Collective Bargaining Agreement

A negotiated contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other terms and conditions
of employment in a bargaining unit
Deemed as the law between the parties during its lifetime
Provisions are construed liberally

Legal Principles Applicable to CBA

A proposal not embodied in the CBA is not part thereof
Minutes of CBA negotiation have no effect if not incorporated in the CBA
Making a promise during the CBA negotiation is not considered bad faith
Adamant stance resulting in impasse is not bad faith
No terms and conditions may be imposed by the DOLE or any other agency which
the law and the parties did not intend to reflect in the CBA
Signing bonus is not demandable under the law
Allegations of bad faith are erased with the signing of the CBA

Collective Bargaining, Kinds

Single Enterprise

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Between on certified labor union and one employer

Multi-Employer Bargaining
Between and among several certified labor unions and employers
Conditions
Only LLOs that are the SEBA may participate and negotiate
Only employers with counterpart LLOs which are incumbent
bargaining agents may participate
Employers must consent to multi-enterprise bargaining may
participate

Duty to Bargain Collectively

Where there is yet no CBA:
Compliance to Article 256, LC
Er and union must MEET, CONVENE and CONFER for collective bargaining
purposes
Requisites of collective bargaining must be complied with
Er-Ee relationship
Majority status of bargaining union
Demand to negotiate
Advantage where the negotiations have no precedent CBA: Clean slate,
unencumbered by previous agreements

Where there exists a CBA

Neither party shall terminate nor modify such agreement during its
lifetime.
Parties may serve notice to terminate or modify agreement during
freedom period
Parties to keep the status quo during freedom period until new
agreement is reached.

Requisites in Relation to CBA

Posting of CBA
Posted in two conspicuous places in the work premises, at least five
days prior to ratification
Mandatory requirement; non-compliance will result in ineffectiveness
of CBA (ATU vs. Trajano, 1988)
Employer responsible for posting (ALU vs. Ferrer-Calleja, May 1989)
Ratification by Majority of Employees in Bargaining Unit
Registration of CBA

Refusal to Negotiate
Ignoring all notices for negotiation and requests for counter-proposals
Refusing to bargain anew on economic terms of the CBA, using flimsy excuses
such as questioning union
Not serving an answer
All the above are indications of bad faith
Employer who violates the duty to bargain collectively loses its statutory
right to negotiate or renegotiate terms and conditions of the draft CBA; and
may impose the adoption of the proposals of the union as the CBA
Cases
General Milling Corporation vs. CA,
Kiok Loy vs. NLRC
Divine Word University of Tacloban vs. SOLE

Lifetime of a CBA
Representation aspect 5 years, meaning no petition questioning the
majority status of the incumbent agent shall be entertained by DOLE
Economic and non-economic provisions except representation renegotiated not
later than three years after its execution

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Retroactivity of CBA
New CBA concluded by negotiation
The CBA or other provisions of such agreement entered into within 6
months from expiration of term shall retroact to the day immediately
following date of expiration
If entered into beyond 6 months, parties shall agree on effectivity
CBA concluded through arbitral award
LMG Chemicals Corporation vs. Secretary of DOLE, (GR No. 127422, April
2001)

Q. What is gross violation of the CBA?

A. It is the flagrant and/or malicious refusal to comply with the economic

provisions of the CBA.
1. JURISDICTION BY AGREEMENT OF THE PARTIES (Art. 262)

-all other disputes including ULP and bargaining deadlocks

NOTES: The disputes the parties may submit to a Voluntary Arbitrator can include
any or all the disputes mentioned in Art. 217 which otherwise fall under the
exclusive jurisdiction of a labor arbiter.
Voluntary arbitration may be viewed as a master procedure to prevent or resolve
labor disputes
Q. What are the grounds for judicial review of decisions of voluntary
arbitrators?

A. They are:
1. Lack of jurisdiction
2. Grave abuse of discretion
3. Violation of due process
4. Denial of substantial justice
5. Erroneous interpretation of the law

NOTE: A voluntary arbitrator is a quasi-judicial instrumentality (Sec 9 BP129 as

amended by RA 7902); hence, a petition for certiorari under Rule 65 of the Rules
of Court will lie where a grave abuse of discretion or an act without or in
excess of jurisdiction of the voluntary arbitrator is shown, which may be filed
with the Court of Appeals

Breaking the Deadlock

Conciliation and Mediation with NCMB, DOLE
Declaration of Strike or Lockout
Referral to conciliation or voluntary arbitration

COLLECTIVE BARGAINING & NEGOTIATION

Collective Bargaining - is the process by which the representative of an employee
and its employees jointly discuss and negotiate wages, hours of work and other
terms and conditions of employment with the end view of concluding a mutually
acceptable contract.
I. Mechanic of Collective Bargaining
There are certain requisites before the management could be compelled to deal and
negotiate with the union. As held by the Supreme Court in the case of Associated
Labor Union v. Ferrer-Calleja, 173 SCRA 178, the mechanics of collective
bargaining are set in motion only when the following jurisdictional preconditions
are present:
1. Possession of the status of majority representation by the employees
representative in accordance with any of the means of selection and/or
designation provided by the Labor Code
2. Proof of majority representation; and
3. A demand to bargain
II. The Duty to Bargain

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- Violation of the Duty to Bargain as ULP

1. Existence of employer-employee relation
2. The union must be a legitimate labor organization
3. The union must be the sole and exclusive bargaining agent" (SEBA)
4. There must be demand.
Only the labor organization designated or selected by the majority of the
employees in an appropriate bargaining unit is the exclusive representative of
the employees in such unit for the purpose of collective bargaining. (Phil.
Diamond Hotel and Resort, Inc. vs. MDHEU, 494 SCRA 195)
For a union to become an exclusive bargaining representative of a particular
establishment, it must emerge as winner in a certification election Macalum
Mining Corp. vs. Brion, 482 SCRA 87)
The company's refusal to make counter-proposal to the union's proposed CBA is an
indication of its bad faith. Where the employer did not even bother to submit an
answer to the bargaining proposals of the union, there is a clear evasion of the
duty to bargain collectively. (Colegio de San Juan de Letran v. AEFL, September
18, 2000)
-Collegio do San Juan de Letran violated its duty to barga.p collectively when it
failed without valid reasons to give counter-proposals within ton (10) days from
receipt of the unions proposals. This is required under Article JQU at the Laboi
Codo. Ih& mtun filing of u /Million tot certification election does not Ipso
facto Justify the suspension of negotiation by the employer. The petition must
first comply with the requirements for a valid petition. Here, the petition was
filed two (2) years after the lapse of the freedom period. (Collegio de San Juan
de atran vs Assn, of Employees & Faculty of Letran, September 18, 2000)

III. Term of the CBA

1. Five (5) years representation right and not later than (Art. 253-A LC)
Veaf or renegotiation on all other provisions
2. Retroactivity if agreement is reached within six (6) months after
expiry of the term; agreement reached after six month, retroactivity, by
agreement of the parties.
Retroactivity clause
Any agreement on such other provisions of the CBA entered into within six (6)
months from the date of expiry of the term of such other provisions as fixed in
such CBA,' shall retroact to the day immediately following system" if any
agreement is entered beyond six (6) months, the parties "shall agree on the
duration of retroactivity thereof'. In case of deadlock, the parties may exercise
their rights under this Code (Art. 253-A)
IV. Union Security Clauses
Union Security Clauses- are stipulations in the CBA providing for increased or
sustained union membership as a condition or preference in the hiring or
retention of workers
1. Close shop- only members can be hired and the workers must remain
union members as a condition of continued employment.
2. Union shop- where the company can employ anybody but he is required to
be a member of the union
and should maintain his membership in good standing.
3. Maintenance of membership - once a member of a union, employee must
remain a member in good
standing for the duration of the agreement as a condition of continued
employment.
4. Agency shop- non-members may be assessed a reasonable fee equivalent
to the dues paid by members if such non-union members accept the benefits
under the CBA.
Dismissal of employee pursuant to the close-shop agreement must comply with the
procedural requirements of due process.
While the company may validly dismiss employees expelled for union for disloyalty
under the union security clause of the collective bargaining agreement upon
recommendation by the union, the dismissal should not be done hastily and
summarily thereby eroding the employees1 right to due process, self-organization
and security of tenure. Even on the assumption that the federation had valid
grounds to expel the union officers, due process requires that they be accorded a

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separate hearing by the company. (Malayang Samahan ng mga Mangaggawa sa M.

Greenfield et al vs. Hon. Cresencio J. Trajano et al., G.R. No. 113907, February
28, 2000)
Union Security clauses are also governed by law and by principles of justice,
fair play, and legality. The same cannot be used by union officials against an
employer, much less their own members, except with a high sense of
responsibility, fairness, prudence, and judiciousness. A union member may not be
expelled from her union, and consequently from her job, for personal or impetuous
reasons or for causes foreign to the closed-shop agreement and in a manner
characterized by arbitrariness and whimsicality (Alabang Country Club, Inc. vs.
NLRC G.R No. 170287, Feb. 14, 2008)

VI. Effect of Expired CBA

Automatic renewal clause
It is the duty of both parties to keep status quo and to continue in full force
and effect the terms and conditions of the agreement during the 6*)-day period
and/or until a new agreement is reached by the parties.
Article 253 mandates the puilloa to keep (ho status quo and to continue in full
force and effect the terms and conditions of the existing agreement during the
60-day period prior to the expiration of the old CBA and/ or until a new
agreement is reached by the parties. In the same manner that it does not provide
for any exception nor qualification on which economic provisions of existing
agreement are to retain its force and effect, the law does not distinguish
between a CBA duly agreed upon by the parties and an imposed CBA like the one
under consideration. (General Milling Corporation -Independent Labor Union [GMC-
ILUJ Vs. General Milling Corporation (G.R Nos. 183122/183889; June 15. 2011)
VII. Relevant Terms
Substitutionary Doctrine- employees cannot revoke the validly executed collective
bargaining contract with their employer by the simple expedient of changing their
agent.
Sweetheart contract-entering Into a CBA with terms and conditions of employment
below minimum standards established by law
Surface bargaining- is defined as going through the motions of negotiating"
without any legal intent to much an agreement (Standard Chartered Bank
EmployeeUnion (NUBE) vs. Confessor. June 16, 2004)
Bluesky bargaining means making exaggerated or unreasonable proposals.

Grievance and Voluntary Arbitration

Grievance
Any question by Er or union regarding
interpretation or application of the CBA, or
company personnel policies, or
Any claim by either party that the other party is violating the CBA or
company personnel policies.
Complaint or dissatisfaction arising from the interpretation or
implementation of CBA and those arising from interpretation or enforcement
of personnel policies.

Grievance Machinery
Refers to mechanism for the adjustment and resolution of grievances arising
from the interpretation or implementation of a CBA and those arising from
the interpretation and enforcement of company personnel policies.

Grievance Procedure
Internal rules of procedure established by the parties in their CBA with
voluntary arbitration as the terminal step.
Refers to the system of grievance settlement at the plant level as provided
in the CBA.
Consists of successive steps starting at complainant and his immediate
supervisor, up to the level of top union and company officials

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All grievances submitted to the grievance machinery that are not settled in
seven calendar days from submission shall be referred to Voluntary
Arbitration prescribed in the CBA
Voluntary Arbitrators shall be named and designated in advance, or include a
procedure for selection of VAs.
In case parties fail to select VA, NCMB shall designate

Grievance Machinery and Voluntary Arbitration (Art. 260 to 262-B (Inclusive).

Q. What are the Constitutional and Statutory bases of Grievance Machinery and
Voluntary Arbitration?

A. They are:
1. Constitutional Basis.
2. Statutory Basis.
Art. 260. Grievance Machinery and Voluntary Arbitration. - The
parties to a Collective Bargaining Agreement shall include therein provisions
that will ensure the mutual observance of its terms and conditions. They shall
establish a machinery for the adjustment and resolution of grievances arising
from the interpretation or implementation of their collective Bargaining
Agreement and those arising from the interpretation or enforcement of company
personnel policies.
All grievances submitted to the grievance machinery which are not
settled within seven (7) calendar days from the date of its submission shall
automatically be referred to voluntary arbitration prescribed in the Collective
Bargaining Agreement.
For this purpose, parties to a Collective Bargaining Agreement shall
name and designate in advance a Voluntary Arbitrator or panel of voluntary
Arbitrators, or include in the agreement a procedure for the selection of such
Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the
listing of qualified Voluntary Arbitrators duly accredited by the Board. In case
the parties fail to select a Voluntary Arbitrator or panel of Voluntary
Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure
agreed upon in the Collective Bargaining Agreement, which shall act with the same
force and effect as if the Arbitrator or panel of Arbitrators has been selected
by the parties as described above.
Art. 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 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
matter under the exclusive and original jurisdiction or 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.

Art. 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.

Art. 262-A. Procedures. - The Voluntary Arbitrator or panel of

Voluntary Arbitrators shall have the power to hold hearings, receive evidences

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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. Hearing may be adjourned for 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 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 the
panel of Voluntary Arbitrators or the Labor Arbiter in the region where the
movant resides, 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.
Art. 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 fee 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.

Q. What is a grievance machinery?

A. It is a mechanism for the adjustment of controversies or disputes
arising from the interpretation or implementation of the CBA and the
interpretation or enforcement of company personnel policies

Q. What is a grievance?

A. Grievance arises when a dispute or controversy arises over the implementation

or interpretation of a CBA or from the implementation or enforcement of company
personnel policies, and either the union or the employer invokes the grievance
machinery provision for the adjustment or resolution of such dispute or
controversy.

Q. What is its nature?

\A. It is a must provision in any CBA and no collective agreement can be

registered in the absence of such procedure.
It is a part of the continuous process of collective bargaining intended to
promote a friendly dialogue between labor and management as a means of
maintaining industrial peace.

Q. What is voluntary arbitration?

A. It is a contractual proceedings where parties to a dispute select a judge of

their own choice and by consent submit their controversy to him for
determination.

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All grievances not settled within 7 days from the date of its submission to
the grievance machinery shall automatically be referred voluntary arbitration
prescribed in the CBA.

NOTE: Although the provision mentions parties to a collective bargaining

agreement, it does not mean that a grievance machinery cannot be set up in a
CBA-less enterprise. In any work place where grievance can arise, a grievance
machinery (regardless of name) can be established.
In a unionized company, Art. 255 allows an employee, union member or not, to
raise a grievance directly to the employer.

Q. How may arbitration be initiated?

A. Through any of the following:

1. Submission Agreement where the parties define the disputes to be resolved;
or
2. Demand or Notice invoking a collective agreement arbitration clause.

Q. What is the jurisdiction of Voluntary Arbitrators?

A. JURISDICTION OF VOLUNTARY ARBITRATORS:
1. EXCLUSIVE ORIGINAL JURISDICTION CONFERRED BY LAW

a) All grievances arising from the interpretation or implementation of the CBA.

b) Those arising from the interpretation or enforcement of company personnel
polices.
c) Hear and decide wage distortion issues arising from the application of any wage
orders in organized establishments.
d) Unresolved grievances arising from the interpretation and implementation of the
productivity incentive programs under RA 6071 .

NOTE: It is the labor arbiter and not the grievance machinery which has
jurisdiction over dismissals pursuant to the union security clause.
Violations of CBA, except those which are gross in character, shall no longer be
treated as ULP and shall be resolved as grievances.

Voluntary Arbitration
Mode of settling labor-management disputes
Parties select a competent, trained and impartial third person
Decision based on merits of the case
Decision is final and executory

Voluntary Arbitration vs. Court

Arbitrable Disputes
Contract-negotiation disputes
Terms and conditions of contracts
Collective bargaining issues
Known as arbitration of interest

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Contract interpretation disputes

Arises out of existing CBAs
Known as arbitration of grievance or rights

Interplay of Jurisdiction, Labor Arbiters vs. Voluntary Arbitrators

Jurisdiction of LA Article 223
Jurisdiction of VA- Article 267, 268
Interpretation or implementation of CBA are disposed of by LAs by referring
the matter to the grievance machinery, of which the terminal step is
voluntary arbitration
Under Article 268, VAs may, upon voluntary agreement of the parties hear and
decide ALL other labor disputes including ULP and bargaining deadlocks
Termination disputes may fall within the jurisdiction of VAs, provided that
the parties had agreed in unequivocal language that the termination dispute
would be referred to the grievance machinery and voluntary arbitration.

Cases
San Jose vs. NLRC & Ocean Terminal Services (GR 121227, Aug. 1998)
San Miguel Corporation vs. NLRC
Sanyo Philippines Workers Union vs. Canizares, GR No. 101619, July 1992

Voluntary Arbitrator
Any person accredited by NCMB as such, or
Any person named or designated in the CBA as such, or
One appointed by the NCMB in case either party refuses to submit to
voluntary arbitration
Note that VAs are not part of DOLE or any government agency. His authority
to render arbitral awards are vested by law.

Enforcement of VAs Decision

Article 268-A: Upon motion of any interested party, the VA may issue a writ
of execution requiring the sheriff of the NLRC or regular courts or public
officials whom the parties may designate in the submission agreement

Strikes, Lockouts and Picketing

Concerted Activities
People planning and acting together
One undertaken by two or more employees, or by one on behalf of others.

Strikes
Temporary stoppage of work by the concerted action of the employees as a
result of an industrial or labor dispute.
Consists not only of concerted work stoppages but also sitdowns, mass
leaves, slowdowns, attempts to damage, destroy or sabotage plant equipment
or facilities and similar activities.
Cessation of work by employee in an effort to get more favorable terms for
employment
Concerted refusal by employees to do any work for their employer, or work at
their customary rate of speed until the object of strike is attained by
employers concession

Characteristics of Strikes
Established relationship between strikers and persons against whom the
strike is called
Relationship must be of employer-employe
Existence of 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 to demands
Even though work cessation is by belligerent suspension, Employment
relation still continues

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Work stoppage is temporary

Concerted action by employees
Striking group is a LLO, and in the case of bargaining deadlock, the sole
bargaining representative

Lockout
Temporary stoppage of work by reason of refusal of an employer to furnish
work as a result of an industrial or labor dispute
An employers means of protecting his bargaining position
Employer must show that his act is primarily defensive, and not an act of
hostility to collective bargaining or of discriminaiton.

Valid Lockouts
To forestall threatened acts of sabotage (Rizal Cement Workers Union vs.
Madrigal Co.)
In anticipation of a threatened strike where motivated by economic
considerations
In response to unprotected strike or walkout
In response to a whipsaw strike

Picketing
A right given to workers to peacefully march to and from before an
establishment involved in a labor dispute accompanied by the carrying and
display of signs, placards and banners intended to inform the public about
the dispute.

Picketing Allowed by Law

Included in the constitutional guarantee
to engage in concerted activities for purposes of collective
bargaining for their mutual benefit and protection
Freedom of speech principle
Can be performed by persons even in the absence of Er-Ee relationship

Limitations
Right to peaceful picketing should be exercised with due respect to the
right of others; coercion, intimidation or acts of violence are strictly
prohibited
Picketers cannot rightfully prevent employees of another company which is
not their employer from entering or leaving their rented premises (innocent
bystander)

Kinds of Strikes
Extent
General occur over a whole community, province, state or country.
An extended form of sympathetic strike; many workers stop working to
put pressure on government or paralyze economic & social systems
Local or Particular applies only in a particular enterprise or
locality
Nature of the Act
Sitdown Strike Possession, trespass and prevention of access and
operation
Slowdown reduction of production output
Partial or quickie strike intermittent, unannounced work stoppage;
used interchangeably with wildcat strike
Employee Interest
Primary Strike declared by employees who have a direct and immediate
interest in the subject of the dispute between them and the Er
Secondary Strike Coercive measure adopted by workers against an
employer connected by product or employment with alleged unfair labor
conditions or practices

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Sympathetic Strike striking employees have no demands or grievances

of their own, but strike to directly or indirectly aid others without
direct relation to the advancement of the interest of the strikers.
Economic Strike one intended to force wage and other concessions from the
employer, which he is not required by law to grant.
Unfair Labor Practice Strike called against the ULP of the employer,
usually for the purpose of making him desist from further committing such
practices. Called for mutual protection, and for the discontinuance of
employer abuses.

Avoidance of Strikes
Parties must first exhaust measures or remedies that will avoid the strike,
akin to the doctrine of Exhaustion of Administrative Remedies.
Only when non-disruptive alternatives have proved unsuccessful may strikes
be deemed justified.
Jumping the gun on the grievance procedure/voluntary arbitration of a
dispute will mean that the strike is PREMATURE, thus illegal

Premature Strikes
Insurefco Paper Pulp Project Workers Union vs. Insular Sugar Refinery
Corporation, 95 Phil. 161
Almeda vs. CIR, 97 Phil. 306
National Labor Union vs. Phimco., 70 Phil 300
Until all the remedies and negotiations looking toward the adjustment or
settlement of labor disputes have been exhausted, the law does not look with
favor upon resort to radical measures, the pernicious consequences of which
transcend the rights of the immediate parties. (Union of the Philippine
Education Employees (NLU) vs. PECO, L-4423, March 31, 1952)

Avoidance of Strikes
Once an issue has been submitted for conciliation, mediation or compromise,
the employees cannot resort to a strike.
Discussions during conciliation proceedings are confidential and treated as
privileged information
Parties can enter into compromise agreements to avoid a strike, which
compromise shall be immediately final and executory.

Labor Code Provisions Protecting the Right to Strike

Art. 260 Not subject to labor injunction or restraining order
Art. 254 No discrimination against striker in the exercise of the right
Art. 270(a) Preservation of employment relationship
Art. 270(c) Prohibition on Strike-breakers

Strike-Breakers
Persons
who obstruct, impede or interfere
with any peaceful picketing by employees during any labor controversy
affecting wages, conditions of work or in the exercise of their rights
Through force, violence, coercion, threats or intimidation

Strikes, Mandatory Requisites

First requisite: Valid and factual ground
(1) CBA Deadlock; and
(2) Unfair labor practice (ULP).
Second Requisite: Notice (of Strike or Lockout)
(1) CBA Deadlock - 30 days from intended date of strike
(2) Unfair labor practice (ULP) 15 days.

Third requisite: Notice to NCMB-DOLE at least 24 hours priot to the taking of the
strike or lockout vote (secret ballot)
Decision to conduct vote

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Date, time and place

Fourth Requisite: Strike or Lockout Vote
Majority approval required
Must be implemented even in cases of union-busting
Fifth requisite: Strike/Lockout Vote Report
Submitted at least seven days prior to strike/lockout
If report submitted during cooling off period, seven day waiting period
begins on the day following the cooling off period
If for union busting, cooling period may be dispensed with
Sixth Requisite: Cooling Off Period
Reckoned from filing of notice of strike/lockout
30 days for deadlock, 15 for ULP
If strike is for union-busting, period is dispensed with
Seventh requisite: Waiting period
Seven days from submission of strike vote report

Nota Bene: Strike Rules

1. Failure to comply with requisites will render the strike or lockout illegal.
2. A strike or lockout based on non-strikeable issues is illegal
3. A strike or lockout is illegal if the issues involved are already subject of
compulsory or voluntary arbitration or conciliation or the steps in
grievance machinery are not exhausted.
4. A strike or lockout is illegal if unlawful means were employed or prohibited
acts or practices were committed (e.g., Use of force, violence, threats,
coercion, etc.; Barricades, blockades and obstructions of ingress to
[entrance] or egress from [exit] the company premises).
5. A strike or lockout is illegal if the notice of strike or notice of lockout
is already converted into a preventive mediation case.
6. A strike or lockout is illegal if staged in violation of the No-Strike, No-
Lockout clause in the collective bargaining agreement.
7. A strike or lockout is illegal if staged in violation of a temporary
restraining order or an injunction or assumption or certification order.
8. A strike is illegal if staged by a minority union.
9. A strike or lockout is illegal if conducted for unlawful purpose/s (e.g.:
Strike to compel dismissal of employee or to compel the employer to
recognize the union or the so-called Union-Recognition Strike)
10. The local union and not the federation is liable to pay damages in
case of illegal strike.

Preventive Mediation
The NCMB has the authority to convert a notice of strike filed by the union
into a preventive mediation case if it finds that the real issues raised
therein are non-strikeable in character.
NCMB has duty to exert all efforts at mediation and conciliation to enable
parties to settle the dispute amicably and in line with the state policy of
favoring voluntary modes of settling labor disputes.
Once a notice of strike/lockout is converted into a preventive mediation
case, it will be dropped from the docket of notices of strikes/lockouts.
Once dropped therefrom, a strike/lockout can no longer be legally staged
based on the same notice. The conversion has the effect of dismissing the
notice.

Invalid Grounds for Strike

1. Violation of collective bargaining agreements, except those which are gross
in character.
2. Inter-union or intra-union disputes. A strike declared more on the ground of
inter-union and intra-union conflict which is a non-strikeable issue is
patently illegal pursuant to the provision of paragraph [b] of Article 263
(now 269) of the Labor Code. (Filcon Manufacturing Corporation vs. Lakas
Manggagawa sa Filcon-Lakas Manggagawa Labor Center [LMF-LMLC], G. R. No.
150166, July 26, 2004).

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3. Issues already assumed by the DOLE Secretary or certified by him to the NLRC
for compulsory arbitration. Once the Secretary of Labor and Employment
assumes jurisdiction over a labor dispute affecting national interest or
certifies the same to the NLRC for compulsory arbitration, the issues
involved in said labor dispute can no longer be invoked by the union in
staging a strike or by management in conducting a lockout.
4. Issues already brought before grievance machinery or voluntary arbitration.
In a plethora of case, it was held that a strike is illegal because of the
failure to exhaust all the steps in the grievance machinery/voluntary
arbitration provided for in the CBA. (Union of Filipro Employees, vs. Nestle
Philippines, Inc., G. R. No. 88710-13, Dec. 19, 1990).

Illegal Strikes
1. Those that are expressly prohibited by law
2. Does not comply with statutory requirements
3. Declared for an unlawful purpose
4. Employs unlawful means
5. In violation of an existing injunction
6. In violation of assumption or certification order
7. Violation of no-strike, no-lockout clause
8. Minority union calls strike
9. Strike by a non-registered union
10. Premature strike

Assumption of Jurisdiction
Occurs when labor dispute that caused or may cause strike is in an industry
indispensable to the national interest
DOLE Secretary assumes jurisdiction and
May decide the case, or
Certify the same to the NLRC for compulsory arbitration
The power of assumption of jurisdiction over labor disputes in these
industries is in the nature of the POLICE POWER measure

Effects of Assumption
Automatically enjoins intended or impending strike or lockout
All striking or locked out employees shall return to work immediately
Note that striking employees are not considered to have abandoned
their employment, but only ceased from their labor
Employer shall resume operations and admit all workers under same conditions
pre-strike
No Motion for Reconsideration will stay the assumption order

Wages to be paid during strike

No work, no pay rule applied
Exceptions
ULP strike
Unconditional and voluntary offer to return to work is refused by
employer
Employees are discriminated against despite a RTWO
Non-participating employees were locked out by employer
Reinstatement no longer possible

Prohibited Activities
Article 270 - Note prohibitions on:
Labor Organizations
Third Persons
Employers
Public Officials or Employees
Picketers

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Return to Work Order

Enjoins striking workers to RETURN TO WORK
Defiance of RTWO is considered an illegal act
Strike becomes illegal
Defiant strikers may be sanctioned with disciplinary measures, e.g.
dismissal or loss of employment status or criminal prosecution

Improved Offer Balloting

NCMB shall conduct a referendum by secret ballot on or before 30th day of
the strike;
If majority of union members accept offer
Striking workers shall return to work immediately
Employer readmits striking workers upon signing of agreement
Initiated when EMPLOYER makes an offer that is, in his opinion, better than
his previous stance in the labor dispute

Reduced Offer Balloting

NCMB shall conduct a referendum by secret ballot on or before 30th day of
the lockout;
If majority of board members, trustees or directors accept offer
Locked out workers shall return to work immediately
Employer readmits workers upon signing of agreement
Initiated when STRIKERS make an offer that is, in their opinion, more
acceptable than their previous stance in the labor dispute

STRIKE;
Strike- means any temporary stoppage of work by the concerted action of employees
as a result of an industrial or labor disputes (Art 212 [o])
Lockout- means the temporary refusal of an employer to furnish work as a result
of an industrial or labor dispute. (Art. 212 [p])
Requisites
All the requisites for a valid strike likewise apply for a lockout to be valid.
Thus, It must ho for a lawful puipoii>- undertaken through lawful means, and in
compliance with the procedural .requirements of law such as; notice of lockout,
cooling off period, taking and filing of lockout vote, and seven day lockout ban
(Association of Independent Unions in the Philippines vs. NLRC GR NO. 120505
March 25,1999).
Picketing- meaning walking or patrolling in the vicinity of a place of business
involved in a labor dispute It is form of protest action which may happen even if
there is no strike or work stoppage and its part of the freedom of speech
guaranteed by the Constitution.
I. Elements of Strike:
1. Any temporary stoppage of work
2. By the concerted actions of employees
3. As a result of a labor or industrial disputo
II. Requisites for a Valid Strike
The test of determining the legality of strike is whether or not the striking
union had complied with these four requisites.
III. Procedural Requirements
1. Valid grounds
a. Bargaining Deadlock
b. Unfair Labor Practice
c. Union Busting
2. Procedural Requirements
a. Notice of Strike
b. Cooling-off Period
c. Strike Vote
d. Seven-day Strike Ban
3. Lawful Means and Methods
a. without violence, coercion or intimidation
b. without obstruction of free ingress to or egress from the employers
premises for lawful purposes

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c. without obstruction of public thoroughfares

4. Proper Party
a. Certified of duly recognized bargaining representative
b. Legitimate Labor Organization only on ground of ULP
No labor organization or employer shall declare a strike or lockout without first
having bargained collectively x x or without first having filed the required
notice or without the necessary strike or lockout vote first having been obtained
and reported (Art. 264, a, LC).
a) Notice & Cooling-off Period
In cases of bargaining deadlocks, a notice of strike or lockout should be filed
with the regional branch of the NCMB at least 30 days before the intended date
thereof, with a copy served on the other party.
In cases of unfair labor practices, the period or notice shall be 15 days.
-In union busting cases, the 15-day cooling-off period shall not apply, and the
union may take action immediately after the strike vote conducted and the result
thereof submitted to the DOLE.
b) Strike Vote
-A decision to declare a strike must be approved by a majority of the total union
membership in the bargaining unit concerned, obtained by secret ballot in
meetings or referenda called for the purpose.
Requisites:
1. With majority vote of all union member (not of bargaining unit or
participants in strike vote)
2. By secret balloting
3. Results thereof must be submitted to the NCMB.
-Unions failure to submit the strike vote results to the NCMB renders the
strike illegal (Samahan ng mga Manggagawa sa Moldex vs. NLRC, February UOOO)
c) Seven-day Strike Ban
The Eerjod and the seven-day ban after submission mandatory in character.
(NFSW vs. Ovejera, 114 SCRA 354).
- The requisite seven-day period is intended to give DOLE an opportunity to
verify whether the projected strike really carries the approval of the majority
of the union members. The notice of strike and the cooling-off period were
intended to provide an opportunity for mediation and conciliation. The
requirements are mandatory and failure of a union to comply therewith renders the
strike illegal. A strike simultaneously with or immediately after a notice of
strike will render the requisite periods nugatory. (Grand Boulevard Hotel v.
Glowhrain. July 18. 2003)
VI. Consequences of Strike
Any union officer who knowingly participates In al illegal strike and any worker
or union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost their employment status (Art. 264-a,
LC)
a) Legal/Lawful Strike
1.admission or Reinstatement (all entitled; to the same or substantially
equivalent position) SST-BSS termination of his employment, even if a
replacement had been hired by the employer during such lawful strike. (Art.
264 3 par)
2.Striking workers generally have a right to be readmitted by their employer
after a strike, because the employment relationship remains Intact. But in
the case of a protest resignation accepted by the employer should the
resigned employees reapply and are rehired, they cannot claim seniority for
their past service because the resignations had severed the relationship.
(Ecarma and Enriquez vs. Zamora, 146 SCRA 393).
b) Illegal Strike
1. Dismissal - officers who knowingly participated in illegal strike are
deemed dismissed
2. Liability for damages - a possibility
3. Liability for criminal acts - violation for Art. 264
-The law, in using the word "may" grants the employer the option of considering a
union officer who participated in illegal strike as having lost his employment
(Gold City Integrated Port Services vs. NLRC. 245 SCRA 627).
Consequences of Illegal Acts During the Strike .

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1. Dismissal - workers or officers who knowingly participate in

commission of the illegal acts may be declared to have lost their employment
status
2. Liability for damages - a possibility
3. Liability for criminal acts - violation of Art. 264, prosecution for
other criminal Act (mutually exclusive)
- The penalty of dismissal for participating in an illegal strike is limited only
to the unton leaders (Lapantay Workers Union vs. NLRC). An ordinary striking
worker cannot be terminated for mere participation in an illegal strike. There
must be proof that he committed illegal acts during a strike; a union officer may
be terminated for both acts. Thus, rank and file workers who were merely misled
in supporting illegal strikes should be reinstated, but they should not be
compensated for services skipped during the illegal strike (Gold City Integrated
Pot Services, vs. NLRC).
V. Prohibited Strikes
No strike or lockout shall be declared after assumption of jurisdiction by the
President or the Secretary or after certification or submission of the dispute to
compulsory or voluntary arbitration or during the pendency of cases involving the
same grounds for the strike or lockout. (Art 264, LC)
*A strike as a temporary stoppage of work by the concerted action of employees as
a result of an industrial or labor dispute, is prohibited in the following cases:
1. Intra-union and inter-union disputes
2. After assumptions of jurisdiction by the President or Secretary of
Labor and Employment.
3. After certification or submission of the labor dispute to compulsory
or voluntary arbitration.
4. When the issue in the strike is the same as that in pending cases.
6. Where the CBA has no strike no lockout clause.

No Strike Agreement" of the Parties

A strike can be prohibited no only by law but also by agreement of the parties. A
CBA no lockout clause is deemed to be an agreement, a contract which provision is
Illegal. But this may be invoked by an employer only when the strike is economic
in nature, or one conducted to force wage or other concessions from the employer
that are not mandated to be granted by the law. It would be inapplicable to
prevent a strike, which is ground on ULP. (Panay Electric Cooperative vs. NLRC,
248 SCRA 688).
A strike is likewise illegal if it is in violation of a CBA providing for
conclusive arbitration clauses. (PAL vs. PALEA, 104 Phil. 1058)
VI. Powers of the SOLE and the President Relative to Strikes (263 g)
When, in his opinion, there exists a labor dispute causing or likely to a cause a
strike or lockout in an industry 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 compulsory arbitration.(Art 263 g)
a) The SOLE may assume jurisdiction over a labor dispute
When in his opinion there is:
1. a labor dispute
2. causing of likely to cause
3. a strike or lockout
4. In an industry indispensable to the national interest
b) 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. (Art. 263 g)
Assumption and certification orders are executory in character and are strictly
complied with by the parties even during the pendency of any petition questioning
their validity. This extra ordinary authority given to the Secretary of labor is
aimed at arriving at a peaceful and speedy solution to labor disputes. without
jeopardizing national interests. (BCF vs. NLRC, May 6, 1993; UFE v. NESTLE, 192
SCRA 396; Philthread Tire and rubber corp. v* NLRC, Feb. 15, 1993)
c) Effect of defiance of a return-to-work order.
Defiance of a Return-to-work order is itself an illegal Act and Prohibited
Activity.

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-Return to work is not a matter of option or voluntariness but of obligation.

Those workers who refused to obey the said order and instead wage a strike are
not entitled to be paid for work not done or to reinstatement to the positions
they have abandoned by their refusal to return thereto as ordered. (Union of
Filipino Employees vs Nestle Philippines). If it is the employer who defies it by
refusing to readmit to work the strikers, it shall be liable for backwages.
VII. Injunction Against Strike Art. 254. Injunction Prohibited
No temporary or restraining order in any case involving or growing out of labor
disputes shall be issued by any court or other entity, except as otherwise
provided in Articles 218 and 264 of the Cod. (Art. 254, LC)
Article 254 states the rule that labor disputes are generally not subject to
injunction. Injunction and restraining orders therefore may b issued only on
case of extreme necessity based on legal grounds clearly established after due
consultations or hearing and when all efforts at conciliations are exhausted., in
short, labor injunction is generally not favored.
a) Requisites for Labor Injunctions
Article 218 (e) enumerates the requirements of a valid issuance of injunctions,
namely:
1. After hearing (with cross-examination)
2. A finding of fact that:
a. Unlawful acts are being committed or threatened to be committed
b. The act, if not enjoined or if not performed forthwith, may cause
grave or irreparable damage.
c. Witness must be heard and opportunity for cross-examination provided
d. The complaint must be under oath
e. As to each item of relief, the imjury to complainant will be greater
by its denial than to defendant by it grant
f. Complainant has no adequate remedy at law
g. Public officers are unwilling or unable to do their duty to adequately
protect complainants property
b) The Innocent by-stander rule
The by-stander" establishment which is entitled to enjoin a labor or picket must
be entirely different from without any connection whatsoever to either party to
the dispute.
If such establishment is in fact partly owned by the employer struck against,
and, furthermore, produces the same product and uses the same factory and
machinery which said employer owns, then the by-stander rule does not apply. The
petition for a writ of injunction may be denied. (MSF Tire and Rubbers, Inc, vs.
CA, G.R. No. 128632)

STRIKES & LOCKOUTS

Strike.- Any temporary stoppage of work by the concerted action of the

employees as a result of an industrial or labor dispute. It consists not only of
concerted work stoppages but also showdown, mass, leaves, sitdowns, attempts to
damage, destroy or sabotage plant equipment and facilities and similar
activities.

Lockout.- Any temporary refusal of an employer to furnish work as a result

of an industrial or labor dispute.

Industrial or labor dispute.- It includes any controversy or matter

concerning terms and condition 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.

Forms of strikes:

a. Legal strike-one called for a valid purpose and conducted through means allowed
by law.
b. Illegal strike-one staged for a purpose not recognized by law, or, if for a
valid purpose, conducted through means not sanctioned by law.

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c. Economic strike-one declared to demand higher wages, overtime pay, holiday pay,
vacation pay, etc. It is one declared the purpose of forcing wage or other
concessions from the employer which he is not required by law to grant.
d. ULP strike-one called to protest against the employers acts of unfair labor
practice enumerated in Article 248 of the Labor Code as amended, including
gross violation of the collective bargaining agreement (CBA) and union-busting.
e. Slow down strike-one stage without the workers quitting t heir work but by
merely slackening or by reducing their normal work output.
f. Wildcat strike-one declared and staged without the majority approval of the
recognized bargaining agent.
g. Sit down strike- one where the workers stop working but do not leave their
place of work.

Requisites of a lawful strike or lockout:

First requisite: Valid and final factual ground
a. Valid grounds: (1) CBA Deadlock; and (2) ULP
b. No other grounds are allowed except the two mentioned above.

Second requisite: Notice of strike or notice of lockout

a. When to file notice:
ULP: 15 days from intended date of strike/lockout
CBA Deadlock: 30 days from the intended date thereof
a. Parties who may file notice: Any certification union, in case of strike;
and employer in case of lockout.
b. Where to file notice-NCMB

Third requisite: Strike vote or lockout vote

a. Majority approval of strike or lockout is required
b. Strike vote still necessary even in case of union-busting.

Fourth requisite: Strike vote report or lockout vote report

a. When to submit strike or lockout vote report-at lest seven (7) days prior
to strike lockout, as the case may be.
b. Effect of none-submission of strike vote NCMB, DOLE-strike or lockout is
illegal
c. Effect on seven-day waiting period if filed within cooling-off period.
d. Strike vote report in case of union-busting-still necessary, it being
mandatory unlike the cooling-off period which may be dispensed with.

Fifth requisite: Cooling off-period

a. General rule: CBA Deadlock-30 days; ULP: 15 days
b. Exceptions in the case of union-busting: Cooling-off period need not be
complied with.
c. When Cooling-off periods starts-from the time the notice of
strike/lockout is filed with NCMB, DOLE.

Sixth requisite: 7-day waiting period or strike ban

a. Cooling-off period and waiting and waiting period distinguished. Waiting
period is counted from the time of submission of strike vote report to
NCMB; Cooling-off period is counted from the filing of Notice of
Strike/Lockout with NCMB.
b. Purpose of the seven-day waiting period- To ensure that the strike votes
vote was indeed taken and that the majority approved of it.
c. Deficiency of even one-day of the seven-day strike ban (or cooling-off
period) is fatal. Hence, the strike is illegal.
Summary of principles governing strikes:
1. A strike or lockout is illegal if any of the legal requirements
(enumerated above) is not complied with. Procedural requirements are
mandatory.
2. A strike or lockout is illegal if it is based on non-strikeable issues
(e.g., inter-union or intra-union disputes or wage distortion).

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3. A strike or lockout is illegal if the issues involved are already subject

of compulsory or voluntary arbitration or conciliation or the steps of
grievance machinery are not exhausted.
4. A strike or lockout is illegal if unlawful means were employed or
prohibited acts practices were committed (e.g., Use of force, violence,
threats, coercion, etc.; Barricades, blockades, and obstruction of
ingress [entrance] or egress from [exit] the company premises).
5. A strike or lockout is illegal if the notice of strike or notice of
lockout in already converted into a preventive mediation case.
6. A strike or lockout is illegal if staged in violation of the Not Strike,
No Lockout cause in the collective bargaining agreement.
7. A strike or lockout is illegal if staged in violation of temporary
restraining order or an injunction or assumption or certification order.
8. A strike is illegal if staged by a minority union.
9. A strike or lockout is illegal if conducted for unlawful purpose/s (e.g.,
Strike to compel dismissal of employee; Union-recognition-strike)

Improved offer balloting.- In case of a strike, the Regional Branch of the NCMB
shall, at its own initiative or upon the request of any affected party, conduct a
referendum by secret balloting on the improved offer, the striking workers shall
immediately return to work and the employer shall thereupon readmit them upon the
signing of the agreement.

Reduced offer balloting.- In case of lockout, the Regional Branch of the NCMB
shall conduct a referendum by secret balloting on the reduced offer of the union
on or before the 30th day of the lockout. When at least a majority of the board of
directors or trustees or the partners holding the controlling the interest in the
case of partnership, vote to accept the reduced offer, the workers shall
immediately return to work and the employer shall thereupon readmit them signing
of the agreement.

Power to assume or certify labor disputes

The DOLE Secretary may (himself) assume the jurisdiction over, or certify to the
NLRC for compulsory arbitration, a labor dispute which, in his opinion, may cause
or likely to cause a strike or lockout in an industry indispensable to the
national interest.

Effect of assumption or certification of labor dispute:

a. On intended or impending strike or lockout-automatically enjoined even if a

Motion for Reconsideration is filed.
b. On actual strike or lockout- strikers or locked out employees should
immediately return to work and employer should readmit them back.
c. On case filed or may be filed- All shall be subsumed/absorbed by the assumed or
certified case when the order specified otherwise. The parties to the case
should inform the DOLE Secretary of pendency thereof.

Injunction in strike or lockout cases.-

General rule: No injunction may be issued against strikes or lockouts validly and
legally held.

Exception: when illegal acts are committed or threatened to be committed in the

course thereof.

Return to-work order; automatic in nature.- A return-to-work order is automatic

in nature. It may be enforced even if the assumption or certification order does
not contain a return to work order because it is considered the logical and legal
effect of the issuance of the said order. Violation thereof, even for one day,
would make the strike illegal. This holds true even if a Motion for
Reconsideration thereof is filed.

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Strikes in hospitals, clinics and medical institutions. The DOLE Secretary may
immediately assume jurisdiction over the labor dispute within 24 hours from his
knowledge thereof.

Concerted activities and strikes in the government service..- Not allowed because
the terms and conditions of government employment are governed by law. Government
employees may, however, organize government employees organizations and may
negotiate certain terms and condition of employment except: (1) those requiring
appropriations; or (2) exercise of prerogatives.

Effect if illegality of strike on employment.- Union officers are deemed to have

lost their employment status. This adverse consequence does not apply to ordinary
union members except when they participate in the commission of illegal acts in
the course thereof (even in the case of legal strike), in which case, shall be
deemed to have also lost their employment status.

Strike Breakers..Any person who obstruct, impedes or interferes with by force,

violence, coercion, threats, or intimidation any peaceful picketing by employees
during any labor controversy affecting wages, conditions of work or in the
exercise of right to selforganization or collective bargaining. Use or
employment of strike breakers is prohibited by law.

STRIKES, LOCKOUT AND PICKETING

1. ASSUMPTION ORDER OF THE SECRETARY, ITS LEGAL IMPLICATIONS

Under Art. 263(g) of the Labor Code, such assumption shall have the effect
of automatically enjoining the intended or impending strike or lockout as
specified in the assumption order. If one had already taken place at the time of
assumption, all striking or lockout employees shall immediately return to work
and the employer shall immediately resume operations and re-admit all workers
under the same terms and conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment may seek the assistance of law enforcement
agencies to ensure compliance with this provision as well as he may issue to
enforce the same. The mere issuance of an assumption order by the Secretary of
Labor automatically carries with it a return to work order, even if the directive
to return to work is not expressly stated in the assumption order. Those who
violate the foregoing shall be subject to disciplinary action or even criminal
prosecution.
Under Art. 264 of the Labor Code, no strike or lockout shall be declared
after the assumption of jurisdiction by the Secretary.
Power of Sec. of Labor is plenary and discretionary. (St. Lukes Medical
Center vs. Torres, 29 June 1993)

2. TESTS IN DETERMINING THE LEGALITY OF A STRIKE

Purpose Test (bargaining deadlock and/or unfair labor practice)
Compliance with Procedural and substantive requirements of law
notice of strike
30/15-day cooling-off period
strike vote
7 day strike ban

Means employed test - A strike may be legal at its inception but

eventually be declared illegal if the strike is accompanied by violence
which violence is widespread, pervasive and adopted as a matter of
policy and not merely violence which is sporadic which normally occur in
a strike area.

Pre-week in Labor Law and Social Legislation - JOBL NOTES

The three tests must concur. Non-compliance with any of the

aforementioned requisites renders the strike illegal.
3. STRIKERS WHO ARE NOT ENTITLED TO REINSTATEMENT

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1. Union officers who knowingly participate in an illegal strike; and

2. Any striker/union member who knowingly participates in the commission of
illegal acts during the strike.
Those union members who joined an illegal strike but have not committed
any illegal act shall be reinstated but without any backwages.

4. DEFIANCE OF RETURN TO WORK ORDER IN A STRIKE CASE WHICH IS UNDER ASSUMPTION

OF JURISDICTION, ITS IMPLICATIONS:

In the case of Telefunken Semiconductors Employees Union FFW v. CA, G.R. No.
143013-14, December 18, 2000, the Supreme Court held that the strike of the Union
cannot be viewed as anything but illegal for having been staged in open and
knowing defiance of the assumption and return-to-work orders. The necessary
consequence thereof are also detailed by the Supreme Court in its various
rulings. In Marcopper Mining Corp. v. Brillantes (254 SCRA 595), the High
Tribunal stated in no uncertain terms that -
by staging a strike after the assumption of jurisdiction or
certification for arbitration, workers forfeited their right to be
readmitted to work, having abandoned their employment, and so could be
validly replaced.

5. What are the grounds for declaration of strike?

1. deadlock in collective bargaining (ECONOMIC); and/or
2. unfair labor practices (POLITICAL)

6. What are considered ILLEGAL STRIKES?

A. SIT-DOWN STRIKE - is characterized by a temporary work stoppage of
workers who thereupon seize or occupy property of the employer or refuse to
vacate the premises of the employer. ILLEGAL- amounts to a criminal act
because the employees trespass on the premises of the employer.
B. WILDCAT STRIKE- is a work stoppage that violates the labor contract and
is not authorized by the union. ILLEGAL- It is not valid because it fails
to comply with certain requirements of the law, to wit: notice of strike,
vote, and report on strike vote.
C. SYMPATHETIC STRIKES- are work stoppages of workers of one company to make
common cause with other strikers of other companies, without demands or
grievances of their own against the employer. ILLEGAL - because there is no
labor dispute between the workers who are joining the strikers and the
latters employer.
D. SECONDARY STRIKES- are work stoppages of workers of one company to exert
pressure on their employer so that the latter will in turn bring pressure
upon the employer of another company with whom another union has a labor
dispute. ILLEGAL- because there is no labor dispute involved.
E. WELGA NG BAYAN ILLEGAL because it is a political strike and therefore
there is neither a bargaining deadlock nor any ULP. It is a political
rally.
7. General Rule: A strike staged by workers, inspired by good faith, DOES NOT
automatically make the same illegal (PNOC Dockyard and Engineering
Corporation vs. NLRC, 291 SCRA 231).
Exception: Good faith is NO LONGER A DEFENSE if no procedural compliance
for valid strike (Grand Boulevard Hotel vs. Genuine Labor Organizations, G.R.
No. 153664)

8. What is INNOCENT BYSTANDER RULE?

An innocent bystander, who seeks to enjoin a labor strike, must satisfy the
court that aside from the grounds specified in Rule 58 of the Rules of Court, it
is entirely different from, without any connection whatsoever to, either party to
the dispute and, therefore, its interests are totally foreign to the context
thereof (MFS Tire and Rubber, Inc. vs. CA).

Compare economic strike from a political strike.

A. AS TO THEIR NATURE, an economic strike is a voluntary strike because the
employee will declare a strike to compel management to grant its demands. On the

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other hand, a political strike is an involuntary strike; the labor organization

is forced to go on strike because of the ULP committed against them by the
employer. It is an act of self-defense since the employees are being pushed to
the wall and their only remedy is to stage a strike.
AS TO WHO INITIATES THE STRIKE, an economic strike is initiated by the
collective bargaining agent of the appropriate bargaining unit. A political
strike is initiated by either the collective bargaining agent or the legitimate
labor organization in behalf of its members.
AS TO THE COOLING OFF PERIOD, an economic strike must have a cooling off
period of 30 days from the filing of the notice of strike before the intended
date of actual strike subject to the 7-day strike ban. In a political strike,
the cooling off period is 15 days from the filing of the notice of strike.
AS TO EXCEPTIONS TO THE COOLING OFF PERIOD, there are no exceptions in an
economic strike. On the other hand, in a political strike, the cooling off
period may be dispensed with, and the union may take immediate action in case of
dismissal from employment of their officers duly elected in accordance with the
unions Constitution and By-laws, which may constitute union busting where the
existence of the union is threatened. but it must still observe the mandatory 7-
day period before it can stage a valid strike.
AS TO STRIKE DURATION PAY IN CASE THE STRIKE WAS LEGAL, Those participating
in an economic strike are not entitled to said pay, based on the principle that a
fair days wage accrues only for a fair days labor. On the other hand, those
participating in a political strike may be awarded the said pay in the discretion
of the authority deciding the case.

Q. What are characteristics of strikes?

A. They are as follows:
1. there must be an established relationship between the strikers and the
person/s 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 mens demands
4. the contention advanced by the workers that although the 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 the concerted action of the employees
7. the striking group is a legitimate labor organization, and in case of
bargaining deadlock, is the employees sole bargaining representative.

Q. What are the tests in determining the legality of a strike?

A. They are:
1. Purpose Test
2. Compliance with Procedural and substantive requirements of law
3. Means employed test

Q. What is purpose test?

A. It means that the strike must be due to either
bargaining deadlock and/or
unfair labor practice.

Q. What are the procedural requirements of law that must be complied with?
A. They are:
a. notice of strike
b. 30/15-day cooling-off period before the intended date of actual strike
subject to the 7-day strike ban.
c. strike vote
d. 7-day strike ban

Q. What is a cooling off period?

A. It is that period of time given the NCMB to mediate and conciliate the
parties.

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It is that span of time allotted by law for the parties to settle theirdisputes
in a peaceful manner, before staging a strike or lockout.

Q. What is a strike vote?

A. It is a requirement wherein the decision to declare a strike must be:
1. approved by a majority of the total union membership in the bargaining unit
concerned [not of the whole bargaining unit],
2. obtained by secret ballot
in meetings or referenda called for the purpose.

Q. What is the purpose of a strike vote?

A. To ensure that the intended strike is a majority decision
NOTE: The report on the strike vote must be submitted to the DOLE at least 7 days
before the intended strike subject to the cooling-off period.

Q. What is the 7-day strike ban?

A. It is the 7 day waiting period before the date of the purported strike [within
which the union intending to conduct a strike must at least submit a report to
the Department as to the result of the strike vote] intended to give the
Department an opportunity to verify whether the projected strike really carries
the imprimatur of the majority of the union members in addition to the cooling
off period before actual strike.

Q. What are cases of note, on strikes?

A. They are as follows:

BUKLURAN NG MANGGAGAWA SA CLOTHMAN KNITTING CORP. - SOLIDARITY OF UNIONS IN THE

PHILIPPINES FOR EMPOWERMENT AND REFORMS (BMC-SUPER) et al vs. COURT OF APPEALS
[G.R. No. 158158. January 17, 2005; 448 SCRA 642]
In order for a strike to be valid, the following requirements laid down in
paragraphs and (f) of Article 263 of the Labor Code must be complied with: (a)
a notice of strike must be filed; (b) a strike-vote must be taken; and (c) the
results of the strike-vote must be reported to the DOLE. It bears stressing that
these requirements are mandatory, meaning, non-compliance therewith makes the
strike illegal. The evident intention of the law in requiring the strike notice
and strike-vote report is to reasonably regulate the right to strike, which is
essential to the attainment of legitimate policy objectives embodied in the law.

CAPITOL MEDICAL CENTER, INC. vs. NATIONAL LABOR RELATIONS COMMISSION [G.R. No.
147080. April 26, 2005]
Aside from the mandatory notices embedded in Article 263, paragraphs and (f) of
the Labor Code, a union intending to stage a strike is mandated to notify the
NCMB of the meeting for the conduct of strike vote, at least twenty-four (24)
hours prior to such meeting. Unless the NCMB is notified of the date, place and
time of the meeting of the union members for the conduct of a strike vote, the
NCMB would be unable to supervise the holding of the same, if and when it decides
to exercise its power of supervision.
The purpose of the strike vote is to ensure that the decision to strike
broadly rests with the majority of the union members in general and not with a
mere minority, and at the same time, discourage wildcat strikes, union bossism
and even corruption. A strike vote report submitted to the NCMB at least seven
days prior to the intended date of strike ensures that a strike vote was, indeed,
taken. In the event that the report is false, the seven-day period affords the
members an opportunity to take the appropriate remedy before it is too late. The
15 to 30 day cooling-off period is designed to afford the parties the opportunity
to amicably resolve the dispute with the assistance of the NCMB
conciliator/mediator, while the seven-day strike ban is intended to give the DOLE
an opportunity to verify whether the projected strike really carries the
imprimatur of the majority of the union members.
The requirement of giving notice of the conduct of a strike vote to the NCMB
at least 24 hours before the meeting for the said purpose is designed to (a)
inform the NCMB of the intent of the union to conduct a strike vote; (b) give the
NCMB ample time to decide on whether or not there is a need to supervise the

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conduct of the strike vote to prevent any acts of violence and/or irregularities
attendant thereto; and (c) should the NCMB decide on its own initiative or upon
the request of an interested party including the employer, to supervise the
strike vote, to give it ample time to prepare for the deployment of the requisite
personnel, including peace officers if need be. Unless and until the NCMB is
notified at least 24 hours of the unions decision to conduct a strike vote, and
the date, place, and time thereof, the NCMB cannot determine for itself whether
to supervise a strike vote meeting or not and insure its peaceful and regular
conduct. The failure of a union to comply with the requirement of the giving of
notice to the NCMB at least 24 hours prior to the holding of a strike vote
meeting will render the subsequent strike staged by the union illegal.

GRAND BOULEVARD HOTEL vs. GENUINE LABOR ORGANIZATION OF WORKERS IN HOTEL,

RESTAURANT AND ALLIED INDUSTRIES [2004]
The respondents claim of good faith is not a valid excuse to dispense with the
procedural steps for a lawful strike. Thus, even if the union acted in good faith
in the belief that the company was committing an unfair labor practice, if no
notice of strike and a strike vote were conducted, the said strike is illegal.
Hence, the need for a union to adhere to and comply strictly with the procedural
conditions sine qua non provided for by the law in staging a strike.

Q. What is the means employed test?

A. A strike may be legal at its inception but eventually be declared illegal if
the strike is accompanied by violence which violence is widespread, pervasive and
adopted as a matter of policy and not merely violence which is sporadic which
normally occur in a strike area [see prohibited activities under art. 264].

NOTE: The 3 tests must concur. Non-compliance with any of the aforementioned
requisites renders the strike illegal.

Q. What is the effect of good faith of strikers on the legality of a strike?

A. A strike may be considered legal where the union believed that the company
committed ULP and the circumstances warranted such belief in good faith, although
subsequently such allegations of ULP are found out as not true. (Bacus vs. Ople)

Q. What is the Totality of Conduct Doctrine?

A. The culpability of an employers remarks are to be evaluated not only on the
basis of their implicit implications but are to be appraised against the
background of and in conjunction with collateral circumstances.
Under this doctrine expressions of opinion by an employer which, though
innocent in themselves, frequently were held to be culpable because:
a. of the circumstances under which they were uttered
b. the history of the particular employers labor relations of anti-union bias or
c. because of their connection with an established collateral plan of coercion or
interference.

Q. When can the Secretary of Labor assume jurisdiction over a strike?

A. In this instance:
1. there exists a labor dispute causing or likely to cause a strike or lockout in
a industry indispensable to the national interest,
2. the Secretary of Labor and Employment may:
a. decide it, or
b. certify the same to the NLRC for COMPULSORY ARBITRATION.

NOTE: What constitutes indispensable industry is based solely upon the discretion
of the Secretary of Labor.

JURISPRUDENCE:
PHILIPPINE LONG DISTANCE TELEPHONE CO. INC. vs. MANGGAGAWA NG KOMUNIKASYON SA
PILIPINAS [G.R. No. 162783. July 14, 2005]
When the Secretary exercises the powers granted by Article 263(g) of the Labor
Code, he is, indeed, granted great breadth of discretion. However, the
application of this power is not without limitation, lest the Secretary would be

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above the law. Discretion is defined as the act or the liberty to decide,
according to the principles of justice and ones ideas of what is right and
proper under the circumstances, without willfulness or favor. Where anything is
left to any person to be done according to his discretion, the law intends it
must be done with a sound discretion, and according to law. The discretion
conferred upon officers by law is not a capricious or arbitrary discretion, but
an impartial discretion guided and controlled in its exercise by fixed legal
principles. It is not a mental discretion to be exercised ex gratia, but a legal
discretion to be exercised in conformity with the spirit of the law, and in a
manner to subserve and not to impede or defeat the ends of substantial justice.
From the foregoing, it is quite apparent that no matter how broad the exercise of
discretion is, the same must be within the confines of law. Thus, the wide
latitude of discretion given the Secretary under Art. 263(g) shall and must be
within the sphere of law.
As Article 263(g) is clear and unequivocal in stating that 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, then the unmistakable mandate must be
followed by the Secretary.

Q. What are the effects of the assumption of jurisdiction of the secretary?

A. The effects are as follows:
1. automatically enjoins the intended or impending strike or lockout as specified
in the assumption or certification order;
2. 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
3. the employer shall immediately resume operations and readmit all workers under
the same terms and conditions prevailing before the strike or lockout.

NOTE: A motion for reconsideration does not suspend the effects as the assumption
order is immediately executory.

JURISPRUDENCE:

UNIVERSITY of IMMACULATE CONCEPCION, INC., vs. The SECRETARY OF LABOR G.R. No.
151379. January 14, 2005; 448 SCRA 190
Article 263(g) of the Labor Code aforementioned states that all workers must
immediately return to work and all employers must readmit all of them under the
same terms and conditions prevailing before the strike or lockout. The phrase
under the same terms and conditions makes it clear that the norm is actual
reinstatement. This is consistent with the idea that any work stoppage or
slowdown in that particular industry can be detrimental to the national interest.
As an exception to the rule, payroll reinstatement must rest on special
circumstances that render actual reinstatement impracticable or otherwise not
conducive to attaining the purposes of the law.
The superseding circumstances mentioned by the Acting Secretary of Labor no
doubt refer to the final decision of the panel of arbitrators as to the
confidential nature of the positions of the twelve private respondents, thereby
rendering their actual and physical reinstatement impracticable and more likely
to exacerbate the situation. The payroll reinstatement in lieu of actual
reinstatement ordered in these cases, therefore, appears justified as an
exception to the rule until the validity of their termination is finally
resolved. This Court sees no grave abuse of discretion on the part of the Acting
Secretary of Labor in ordering the same. Furthermore, the issue has not been
raised by any party in this case.

Q. What are the only issues that the Secretary of Labor can resolve when he
assumes jurisdiction over a labor dispute?
A. They are:
a. Only issues submitted to the Secretary may be resolved by him. (PAL vs. Sec.
of Labor, 23 January 1991).
b. Issues submitted to the Secretary for resolution and such issues involved in
the labor dispute itself. (St. Scholasticas College vs. Torres; 29 June 1992)

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c. Secretary of Labor may subsume pending labor cases before Labor Arbiters which
are involved in the dispute and decide even issues falling under the exclusive
and original jurisdiction of labor arbiters such as the declaration of legality
or illegality of strike. (Intl Pharmaceuticals vs. Sec of Labor; 09 January
1992).
d. Power of Sec. of Labor is plenary and discretionary. (St. Lukes Medical
Center vs. Torres; 29 June 1993; reiterated in PAL vs. Confesor; 10 March 1994).

Q. In case the strike is declared legal, are the strikers entitled to strike
duration pay?
A. Generally, no, but see exceptions.
GENERAL RULE: Strikers are not entitled to their wages during the period of a
strike, even if the strike is legal.
EXCEPTIONS:
1. In case of a ULP strike, in the discretion of the authority deciding the case
[see table for more distinction bet. Economic and ULP strike]
2. Where the strikers voluntarily and unconditionally offered to return to work,
but the employer refused to accept the offer [e.g. of an unconditional offer:
we will return tomorrow and NOT willing to return provided]

NOTE: They are entitled to backwages from the date the offer was made

3. Where there is return-to-work order and the employees are discriminated

against.

NOTE: They are entitled to backwages from the date of discrimination.

Q. What is the rule on reinstatement of striking workers?

A.
GENERAL RULE : Striking employees are entitled to reinstatement, regardless of
whether or not the strike was the consequence of the employers ULP. The reason
is that while out on strike, the strikers are not considered to have abandoned
their employment, but rather have only ceased from their labor.

NOTE: The declaration of a strike is NOT a renunciation of employment relation.

EXCEPTIONS - The following strikers are NOT entitled to reinstatement:

1. Union officers who knowingly participate in an illegal strike; and
2. any striker/union member who knowingly participates in the commission
of illegal acts during the strike.

NOTE: Those union members who joined an illegal strike but have not committed any
illegal act shall be reinstated but without any backwages.

Q. What is the rule on strikes in hospitals?

A. They are:
1. It shall be the duty of striking employees or locking-out employer to provide
and maintain an effective skeletal workforce of medical and other health
personnel for the duration of the strike or lockout.
2. Secretary of Labor may immediately assume jurisdiction within 24 hours from
knowledge of the occurrence of such strike or lock-out or certify it to the
Commission for compulsory arbitration.

Q. What are prohibited activities as far as labor organizations are concerned?

A. No labor organization or employer shall declare a strike or lockout
1.without first having bargained collectively in accordance with Title VII of
this Book or
2. without first having filed the notice required in Art. 263 or
3.without the necessary strike or lockout vote first having been obtained and
reported to the Department.

Q. What are the instances wherein no strike or lockout may be declared?

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A. They are:
a. AFTER assumption of jurisdiction by the President or the Secretary or
b. AFTER certification or submission of the dispute to compulsory or voluntary
arbitration or
c. DURING the pendency of cases involving the same grounds for the strike or
lockout.

Q. What are prohibited activities as far as third persons are concerned?

A. No person [3rd persons] all obstruct, impede or interfere with by force,
violence, coercion, threats or intimidation
1. any peaceful picketing by employees
2. during any labor controversy or in the exercise of the right of self-
organization or collective bargaining or
3. shall aid or abet such obstruction or interference.

Q. What are prohibited activities as far as employers are concerned?

A. No employer shall use or employ any STRIKE-BREAKER nor shall any person be
employed as a strikebreaker.

Q. What are prohibited activities as far as public officials are concerned?

A. No public official or employee, including officers and personnel of the New
Armed Forces of the Philippines of the Integrated National Police, or armed
persons,

1. shall bring in, introduce or escort in any manner, any individual who seeks
to replace strikes in entering or leaving the premises of a strike area, or work
in place of the strikers.
2. The police force shall keep out of the picket lines unless actual violence or
other criminal acts occur therein:
Provided, That nothing herein shall be interpreted to prevent any public officers
from taking any measure necessary to:
a. maintain peace and order,
b. protect life and property, and/or
c. enforce the law and legal order.

Q. What are prohibited activities as far as persons engaged in picketing are

concerned?
A. No person engaged in PICKETING shall:
a. commit any act of violence, coercion or intimidation or
b. obstruct the free ingress to or egress from the employers premises for
lawful purposes, or
c. obstruct public thoroughfares

Q. What are the consequence of an Illegal Strike?

A. Article 264 of the Labor Code, in providing for the consequences of an illegal
strike, makes a distinction between union officers and members who participated
thereon. Thus, knowingly participating in an illegal strike is a valid ground for
termination from employment of a union officer. However, mere participation in an
illegal strike is not a sufficient ground for termination of the services of the
union members. But the employer must still comply with the two-notice rule in
dismissing the union officer. [STAMFORD MARKETING CORP. vs. JOSEPHINE
JULIAN(2004) ]
In Article 264 (a) of the Labor Code it could be gleaned that while a union
officer can be terminated for mere participation in an illegal strike, an
ordinary striking employee, like petitioners herein, must have participated in
the commission of illegal acts during the strike. There must be proof that they
committed illegal acts during the strike. Substantial evidence, which may justify
the imposition of the penalty of dismissal, may suffice. [ELIZABETH C. BASCON vs.
COURT OF APPEALS (2004)]

Q. Compare improved offer balloting from reduced offer balloting?

A. In improved offer balloting, a referendum conducted by the NCMB on or before
the 30th day of the strike, for the purpose of determining whether or not the

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improved offer of the employer is acceptable to the union members. In reduced

offer balloting, a referendum conducted by the NCMB for the purpose of
determining whether or not the reduced offer of the union is acceptable to the
board of directors, trustees or partners.
The purpose of improved offer balloting is determining whether or not the
improved offer of the EMPLOYER is acceptable to the union members. The purpose of
reduced offer balloting is determining whether or not the improved offer of the
UNION is acceptable to the board members.
The period of filing for both shall be on or before the 30 th day of the strike or
the lockout, as the case may be.
Improved offer balloting and reduced offer balloting both applies only to
economic strikes (deadlock in bargaining).

BOOK SIX
POST EMPLOYMENT

Title I
TERMINATION OF EMPLOYMENT
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)

Security of Tenure
Defined: The constitutional right granted the employee that the employer
shall not terminate the services of an employee except for JUST CAUSE, or
when AUTHORIZED BY LAW.
It extends to regular (rank and file, managerial) as well as non-regular
employment (probationary, seasonal, project)
Applies as protection from unwarranted and unconsented demotion and transfer

SECURITY OF TENURE
Security of tenure does not exclusively apply to regular employment only. It
id also applies to probationary, seasonal, project and other forms of employment
during the effectivity thereof. Managerial employees also enjoy security of
tenure.

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.
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.

Kinds and Forms of Employment

Article 286

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Regular
Casual
Project
Seasonal
Other forms
Fixed Period
Probationary

Regular Employment
Employee has been engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer
One year of service has been rendered, whether continuous or broken, with
respect to the activity in which he is employed

Determining Regular Status

Nature of Work Test Whether or not there is reasonable connection between
the particular activity performed by the employee in relation to the usual
business or trade of the employer
Period of Service Test Employees length of service is at least one year,
whether continuous or broken
Probationary Employee Test Whether or not the employee is allowed to work
after the lapse of the probationary period.

Casual Employment
Employee has been engaged to perform activities which are not necessary or
desirable in the usual trade or business of the employer
Once a casual employee has rendered at least one year of service, his status
becomes REGULAR
The purpose of this rule is to honor the constitutional guarantee of
security of tenure and right to self-organization

Project Employment
Employee has been engaged for a SPECIFIC project or undertaking
the completion or termination of the project has been determined at the time
of engagement of the employee
REGULAR STATUS vested when
Continuous re-hiring of project employees even after the cessation of
a project for the same tasks or nature of tasks
Tasks performed by project employee are vital, necessary and
indispensable to the usual business or trade of the employer

Exodus International Construction Corporation, et al. v. Guillermo Biscocho,

et al., G.R. No. 166109, Feb. 2011:
Two types of employees in the construction industry:
Project employees or those employed in connection with a
particular construction project or phase thereof and such
employment is coterminous with each project or phase of the
project to which they are assigned.
Non-project employees or those employed without reference to any
particular construction project or phase of a project; when one
project is completed, employees are automatically transferred to
the next project awarded to employer. There was no employment
agreement given employees which clearly spelled out the duration
of their employment and the specific work to be performed and
there is no proof that they were made aware of these terms and
conditions of their employment at the time of hiring.

Fixed Period Employment

Employment is for a pre-determined period established at the time of
engagement

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Validity of Fixed Period Employment:

1. 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; 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 or the latter. (Lynvil Fishing Enterprises,
Inc. vs. Andres G. Ariola, et al., G.R. No. 181974, Feb. 2012)

Probationary Employment
Section 6 of the Implementing Rules of Book VI, Rule VIII-A of the Code
specifically requires the employer to inform the probationary employee of
such reasonable standards at the time of his engagement, not at any time
later; else, the latter shall be considered a regular employee.
The essence of a probationary period of employment fundamentally lies in the
purpose or objective of both the employer and the employee during the
period. While the employer observes the fitness, propriety and efficiency of
a probationer to ascertain whether he is qualified for permanent employment,
the latter seeks to prove to the former that he has the qualifications to
meet the reasonable standards for permanent employment. The trial period
or the length of time the probationary employee remains on probation depends
on the parties agreement, but it shall not exceed six (6) months under
Article 281 of the Labor Code.

Cases
Canadian Opportunities Unlimited, Inc. vs. Bart Q. Dalangin, Jr., G.R.
No. 172223, February 6, 2012.
Armando Ailing vs. Jose B. Feliciano, Manuel F. San Mateo III, et al.,
G.R. No. 185829. April 25, 2012.

Management Prerogatives
Our laws recognize and respect the exercise by management of certain rights
and prerogatives. For this reason, courts often decline to interfere in
legitimate business decisions of employers. In fact, labor laws discourage
interference in employers judgment concerning the conduct of their
business. (Philippine Industrial Security Agency Corporation vs. Aguinaldo,
G. R. No. 149974, June 15, 2005; Mendoza vs. Rural Bank of Lucban, G.R. No.
155421, July 7, 2004).
An employer can regulate, generally without restraint, according to its own
discretion and judgment, every aspect of its business. (Deles, Jr. vs. NLRC,
G. R. No. 121348, March 9, 2000).
This privilege is inherent in the right of employers to control and manage
their enterprise effectively. (Mendoza vs. Rural Bank of Lucban, G.R. No.
155421, 07 July 2004).

Extent of management prerogatives

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).
Management retains the prerogative to change the working hours of its
employees. (Sime Darby Pilipinas, Inc. vs. NLRC, G.R. No. 119205, 15 April
1998, 289 SCRA 86).

A transfer means a movement (1) from one position to another of equivalent

rank, level or salary, without a break in the service; or (2) from one
office to another within the same business establishment. (Sentinel Security
Agency, Inc. vs. NLRC, G. R. No. 122468, Sept. 3, 1998).

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Prerogative of management to transfer an employee from one office to another

within the business establishment upheld, provided
1. There is no demotion in rank or diminution of salary, benefits, and
other privileges, and;
2. Action is not motivated by discrimination, made in bad faith, or
effected as a form of punishment or demotion without sufficient cause.
(Mendoza vs. Rural Bank of Lucban, G. R. No. 155421, July 7, 2004;
Benguet Electric Cooperative vs. Fianza, G. R. No. 158606, March 9,
2004).

Transfer, tests
Must be exercised without grave abuse of discretion
Basic elements of justice and fair play adhered to.
Employer must be able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee, otherwise, the employees
transfer is tantamount to constructive dismissal. (The Philippine American
Life and General Insurance Co. vs. Gramaje, G. R. No. 156963, Nov. 11, 2004;
Globe Telecom, Inc. vs. Florendo-Flores, G. R. No. 150092, Sept. 27, 2002).

Transfer
William Endeliseo Barroga vs. Data Center College of the Philippines, et
al., G.R. No. 174158, June 2011
Constructive dismissal is quitting because continued employment is
rendered impossible, unreasonable or unlikely, or because of a
demotion in rank or a diminution of pay. It exists when there is a
clear act of discrimination, insensibility or disdain by an employer
which becomes unbearable for the employee to continue his employment.
It is management prerogative for employers to transfer employees on
just and valid grounds such as genuine business necessity, e.g.
financial constraints

No vested right in position

An employee has a right to security of tenure, but this does not give her
such a vested right in a position as would deprive the employer of its
prerogative to change employee assignments or transfers where the employees
service will be most beneficial to the employers client.

Cases
OSS Security & Allied Services, Inc., vs. NLRC, G. R. No. 112752, Feb.
9, 2000
Tan vs. NLRC, 299 SCRA 169, 180 [1998]
Chu vs. NLRC, G. R. No. 106107, June 2, 1994

II. TYPES OF EMPLOYEES AND GROUNDS FOR THEIR DISMISSAL

1. Regular Employees
1.1. Who is considered as Regular Employee?
A regular employee is one who:
1. has been engaged to perform activities which are usually necessary and
desirable in the usual business or trade of the employer;
2. has rendered at least one year of service, whether such service is
continuous or broken, with respect to the activity in which the person is
employed and such employment continues while such activity exists; and
3. has been allowed to work after a probationary period.
There are two kinds of regular employees under the law:
1. those engaged to perform activities which are necessary or desirable
in the usual business or trade of the employers; and
2. those casual employees who have rendered at least one year of service,
whether continuous or broken, with respect to the activities in which they
are employed. ( See ABS-CBN Broadcasting Corporation vs. Marlyn Nazareno, et.
al, 26 September 2006; Fabela vs. SMC, Feb. 29,2007)
1.2. Standards of determining regular employment

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The primary standard therefore, of determining regular employment is the

reasonable connection between the particular activity performed by the employee
in relations to the usual trade or business of the employer. The test is whether
the former is usually necessary or desirable in the usual trade or business of
the employer. The connection can be determined by considering the nature of the
work performed and its relations to the scheme of the particular business or
trade in its entirety. Also if the employee has been performing the job for at
least a year, even if the performance is not continuous and merely intermittent,
the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the
business. Hence, the employment is considered regular but only with
1.3. Cause of termination
2. Casual Employees
An employment is deemed to be casual if it is not covered by the (first paragraph
of Articles 280 on regular, project or seasonal employment. Simply stated, an
employment is casual when the employee is engaged to perform tasks or activities
which are not usually necessary or desirable in the usual business or trade of
the employer.
2.1. When is casual employment deemed regular?
Casual employee is deemed as regular employees if they have rendered at least one
year of service regardless of the fact it such service may be continuous or
broken (Art. 280, par. 2, LC) It is not the nature of his work that makes them
regular but the lapse of time in rendering service.
Casual employees become regular employees one year (1) after they are employed by
the company. The law does not require that the employees be issued a regular
appointment or must first be formally declared as such before she/he can acquire
regular status. (Conti v. NLRC, 206 SCRA 643).
Allowing a casual worker to work beyond the one-year period is the legal
barometer to determine whether an activity is necessary or desirable in an
employers usual business or trade. Eveni if the performance is not continuous or
merely intermittent, the law deems the repeated and continuing need for its and
performance as sufficient evidence of the necessity if not indispensability of
the activity to the business.
(Baguio Country Club v. NLRC, 206 SCRA 643)
3. Project Employees
Project employees are those workers hired:
3.1.
a) for as specific project or undertaking; and
b) the completion or termination of such project has been determined at of the
employee.
Are project employees considered regular?
The time of the engagement
Project employees" are not considered as regular employees because the
completion or termination of their employment is more or less determinable at the
time of employment. They include those employed in connection with a "particular
construction project, and seasonal employees" whose employment by its nature is
only desirable for a limited period of time.
Even then, if these employees rendered at least one year of service, whether
continuous intermittent, they are deemed regular but only with respect to the
activity performed and while such activity actually exists. (Herminias L. Liaanza
vs. RBL Shipyard Corporation", G. R. No. 159862, 17 October 2006) The fact that a
project employment has gone beyond one (1) year does not legally dissolve the
status of an employee as a project employee. (ALU-TUCP v. NLRC, 234 SCRA 678)
The repeated re-hiring and continuing need for the services of project employees
over a long span of time have made them regular employees (Tomas Lao Construction
vs. NLRC, 278 SCRA 716
3.2. Do they have the right to security of tenure?
Project employees also enjoy security of tenure, and cannot be dismissed before
completion of the project or a phase thereof, except for lawful cause. (De Ocampo
v. NLRC, 201 SCRA 332)
A project employee hired for a specific task also enjoys security of tenure. His
dismissal prior to the completion of the project must comply with the substantive
and procedural requirements of due process. A mere claim of project completion is

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not sufficient to terminate a project worker's employment without adequate proof

to demonstrate such claim. (Archbuild Masters and Construction, Inc., et. Al. v.
NLRC, December, 26, 1995)
When the contract of employment specifies the period of its duration, it
terminates on the expiration of such period without the necessity of any notice.
(Blancaflor v. NLRC, 218 SCRA 366)
3.3. Are they entitled to separation pay?
In general, project employees are not entitled to separation pay. (Sandoval
Shipyards, In. v. RC, 136 SCRA 674) However, project employees are entitled to
separation pay if the projects they filed have not been completed when th;.rir
services are terminated. (De Ocampo, Jr. v. NLRC, 186 SCRA 360)
3.4. Requirement for termination of project employees and effect of continuous
employment.
Before an employee hired on a per diem basis can be dismissed. '
1. A report must be made to the nearest employment office of the termination of
the services of the workers every time it completed a project, pursuant to
Policy Instruction No. 20 ("Herminias L. Liganzas. RBL Shipyard Corporation"
G. R. No. 15986?, 17 October 2006. citing earlier ruling m Brahm Industries
Inc. vs. NLRC GRNo. 118853.10 October 1907. find
( ) an employment ceases to be coterminous with specific projects when the
employee is continuously rehired due to the demands of employer's business and
re-engaged for many more projects without interruption (citing the earlier case
of Tomas Lao Construction, v. NLRC. G R. No. 116781. September 1997.1
4. Probationary Employees.
Probationary employment is employment for a specified period which usually does
not exceed six (6) months purposely to determine whether the employee can qualify
for regular employment in accordance with reasonable standards prescribed by the
employer.
Probationary employment shall not exceed six (6) months from the date the
employee working, unless it is covered by an apprenticeship agreement stipulating
a longer period
A probationary appointment is intended to afford the employer an Wrtunity to
observe the skill, competence and attitude of a probationer (Escorpizo v.
University of Baguio, 306 SCKA w j.)
4.1. Are they entitled to security of tenure?
Yes During their tenure of employment or before their contract expires,
probationary employees cannot be removed except for cause as provided by law.
(Skillworld Management and Marketing Corporation v. NLRC, 186 SCRA 65).
4.2. Is double of successive probation allowed?
The system of double or successive probation is not allowed for being a
transparent scheme to circumvent the plain mandate of the law on regularization
and make it easier fro the employer to dismiss its employees (Holiday Inn Manila
v. NLRC, 226 SCRA 417)
4.3. Can the six-month probationary period be extended?
As a rule probationary period shall not exceed six months from the date the
employee started working and an employee whirls allowed to work after a
probationary period shall be considered a regular employee (Art. 281). The
employer is deemed to have approved of his qualifications for regular employment.
However the six-month period in Article 281 is not mandatory, and may be extended
when the employer wants to afford an employee a second chance to make good after
having failed in the firs* instance. (Mariwasa Manufacturing Inc. v. Leogardo,
169 SCRA 465)
4.4. Cause for termination of employment
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 regular employee in
accordance with reasonable standards made known by the employer to the employee
at the time of his engagement. (Art. 281, LC)
A probationary employee may be dismissed for unsatisfactory performance during
probationary period. (Lucero v. C.A. and PNB, July 3, 2003).
When the employer failed to specify reasonable standard for performance at the
time of engagement, he can not terminate a probationary employee. (Orient Express
Placement Philippines vs. NLRC, POEA and A. Flores. GR 113713)
5. Seasonal Employees.

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Seasonal Employees are those whose work or service is seasonal in nature and the
employment is for the duration of the season.
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 also been employed only for the duration of one season. The fact that
respondents repeatedly worked as sugarcane workers for petitioners for several
years is not denied by the latter. Evidently, petitioners employed respondents
for more than one season. Therefore, the general rule for regular employment is
applicable. (Hacienda Fatima et al v. National Federation of Sugarcane Workers-
food and General Trade. January 28, 2003)
The employment of seasonal employee legally ends upon the completion of the
season and their termination at the end of the season does not constitute illegal
dismissal. (Mercado v. NLRC. 201 SCRA 322)
6 Fixed Term Employees
6.1. Fixed term agreement is recognized
Fixed term employees refer to those engaged for a period of time within, which to
perform work. (St. Novaliches v. NLRC, 289 SCRA 110) the duties of these
employees consist of activities usually necessary or desirable in the usual
business of the employer. Employment for a fixed period is not itself illegal.
Even if the duration usually necessary or desirable in the usual business of the
list of activities the parties are forbidden from agreeing on a period of time
for the follow that a contract of employment for a fixed term. (Fabela vs SMC.
February ^OO?)
6.2. Expiration of term as cause for termination
Agreed period of the fixed term employees may be terminated on the ground of the
expiration of the does not specifically provide for the concept of a fixed term
employee, expiration or term has been recognized to be a valid cause for
termination of employment.
6.3. Guidelines for Fixed Agreement to be valid.
1) The fixed period of employment was agreed upon knowingly and
voluntarily 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, or
2) It is satisfactorily appears that the employer and employee dealt with
each other on more or less equal terms with no moral dominance whatever being
exercised by the former over the latter. (Brent School v. Zamora, 181 SCRA
716) *
A fixed-term employment is valid only under certain circumstances, such as
1)When the employee himself insists upon the period, or
2)Where the nature of the engagement is such that, without being seasonal or
for a specific project, a definite date of termination is a sine qua non.
(Fabela vs. SMC, February 29. 2007)
6.4. When may fixed term agreed be ignored?
The law affords protection to an employee, and it will not countenance any
attempt to subvert it spirit and intent. A stipulation In an agreement can be
ignored as an employee of his security of tenure". (Paguio v. NLRC, Metromedia,
May 9, 2003)
When periods have been imposed to preclude the acquisition of tenurial security
by the employee, ttmy should be struck down as contrary to public morals, good
customs or public order. (Tomas Lao Construction vs. NLRC, 278 SCRA 716)
6.5. Seafarer as Contractual Employees
A seafarer is not a regular-employee as defined in Article 280 of the Labor Code.
Hence he is not entitled to full backwage and separation pay in lieu of
reinstatement as provided in Article 279 of the Labor Code. Seafarers are
contractual employees whose rights and obligations are governed primarily by the
POEA Standard Employment contract for Filipino Seamen, the Rules and Regulations
governing Overseas Employment, and, more importantly, by R.A. No. 8042.
A seafarer is a contractual, not a regular employee, and his employment Is
contractually fixed for a certain period of time. His employment, including his
claims for death or illness compensations, is governed by the contract he signs
every time he is hired, and is not rooted from the provisions of the Labor Code
(NYK-Fil Ship f Management, Inc. vs. NLRC, September 27, 2006)
7. Part-Time Employees

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That an employee worked only on a part-time basis does not mean that he is not a
regular employee. Ones regularity of employment is not determined by the number
of hours one works but by the nature and by the length of time one has been in
the particular job. (Perpetual Help Credit Cooperative, Inc. v. Feburada et al,
October 8, 2001)
II. Requirements for Valid Dismissal
T. Valid Causes
a.Just cause
b.Authorized cause
2. Compliance with Due Process
a. Written notice of the charges
b. Hearing or conference
c. Written notice of termination
III. Requisites of Specific Causes for Dismissal I. JUST CAUSES
1.1. Serious Misconduct:
Serious misconduct- has been defined as improper or wrong conduct It is
established and definite rule of action, a dereliction of duty willful in chare
intent and not mere error in judgment. (Alma Cosep vs. NLRC, June 1998)
transgression of some , and implies wrongful
Requisites:
1. must be serious;
2. must relate to the performance of the employer's duty; and

1.2. Willful Disobedience

Insubordination of an employee is not always punishable with dismissal. There
must be a reasonable proportionality between the act of insubordination and the
penalty imposed therefore. (Gold City Integrated Port Services vs. NLRC, 189 SCRA
811)
Requisites:
1. Employees conduct must be willful and intentional;
2. Order violated must be reasonable and lawful known to the employee,
and. must pertain to the employees duty.
1.3. Fraud or Breach of Trust
Fraud or willful breach of trust by the employee refers to any fault or
culpability on the part of the employee in the discharge of his duty rendering
him absolutely unworthy of the trust and confidence demanded by his position.
(International rice Research Institute v. NLRC, 221 SCRA 760)
For a breach of trust to be a ground for dismissal, it must be shown that the
employee concerned holds a position of trust. The betrayal of this trust is the
essence of the offense for wh.ch employee, penalized. (Santos v. San Miguel
Corporation. March 14, 2003). It mus be based on wilful breach of trust and
founded on clearly established facts, (National Bookstore v. C.A.)
1. 4. Gross Negligence
Gross negligence has been defined as the want or absence of or failure to
exercise slight care or diligence, or entire absence of care. (National Bookstore
v. C.A.. February 27,2002)
Requisites:
1. Want or absence of or failure to exercise slight care or diligence, or
the entire absence of care,
2. It evinces a thoughtless disregard of consequences without exerting
any effort to avoid them.
3 The negligence should not only be gross but must also be habitual. (Phil.
Aelous Automotive Corp v. NLRC)
1.5 Analogous Causes
Analogous causes must have an element similar to those found in the specific
causes enumerated under Article 282 of the Labor Code. Some of those causes are
abandonment, immorality, inefficiency, absenteeism and tardiness and,
unreasonable behavior.
a) Abandonment
1. Employee failed to report for work without justifiable reason; &
2. Clear intention to severe the employment manifested by some overt
acts.

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The filing by the employee of a complaint for illegal dismissal on the day of
effectivity of his dismissal is proof of the desire to return to work and negates
the charges of abandonment of works (Northwest Tourism Corporation et. Al. vs.
CA, June 27, 2005)
b) Immoral Conduct that conduct which is so willful, flagrant or shameless as
to show indifference to the opinion of good and respectable members of the
community. Furthermore, such conduct must not only be immoral, but grossly
immoral. It must be so corrupt or reprehensible to a high degree of committed
under such scandalous or revolting circumstances as to shock the common sense of
decency.
Such may be valid ground to dismiss in instance where the work of the employee,
necessitates that he be awake and watchful at all times inasmuch as his company
from pilferage. (VH Manufacturing Inc. vs. NLRC. January 19, 2000)

II. AUTHORIZED CAUSES

Auction of personnel for the purpose of cutting down the cost of operation
in terms was resorted to by employer because of losses in operation of a
business occasioned by lack of work and considerable reduction in the
volume of business.

1 Procedural Requirements for Valid Retrenchment:

1. Necessary to prevent losses and the same is proven;
2. Written notice to DOLE and employee one month prior to intended date;
and
3. Payment of separation pay. (Stanley Garments Specialist vs. George
Gomez, August 11, 2005)
- Requisites of retrenchment: (S-l-N-E)
c) The losses expected should be substantial and not merely de minimis in
extend;
d) The substantial losses apprehended must be reasonably imminent:
e) The retrenchment must be reasonably necessary and likely to effectively
prevent the expected losses; and
f) The alleged losses, if already incurred, and the expected imminent losses
sought to be forestalled must be proved by sufficient ana convincing evidence.
(Bonifacio Anino vs. NLRC, 21 May 1998)
b. Redundancy- exists where the services of an employee are in excess of what
would reasonably be demanded by the actual requirements of the enterprise.
c. Installation of Labor-Saving Devices- contemplates the installation of
machinery to effect economy and efficiency In its method of production.
-Reorganization as a cost-saving device is acknowledged by jurisprudence. An
employer is not precluded from adopting a new policy conducive to a more
economical and effective management, and the law does not require that the
employer should be suffering financial losses before he can terminate the
services of the employee on the around of redundancy (Dole Phils. Vs. NLRC. 13
September 2001; Agustilo vs. CA, 7 September 2001)
-Lack of notice to the DOLE does not render the redundancy program void,
especially if the employee consented to his retrenchment or voluntarily applied
for retrenchment with the employer. (Dole Phils. V. NLRC, 13 September 2001)
d. Closure of Business- ART. 283
- Closure of business or undertaking due to business losses is the reversal
of fortune of the employer whereby there is a complete cessation of
business operations to prevent further financial drain upon an employer who
cannot pay anymore his employees since business has already stopped.
(Alabang Country Club Inc., et al vs. National Labor Relations Commission
et al, August 9, 2005)
-The relocation of the employer's plant to Batangas amounts to cessation of
its business operations in Makati. Closure ort cessation of operation of an
establishment or undertaking not due to serious business losses or reverses
lender Article 283 of the Labor Code includes both the company business.
The Court considered the transfer as closure not due to serious business
losses for which the workers are entitled to separation pay. (See Cheniver
Deco Print Technics Corporation vs. NLRC et al., G. R No. 122876, February
17, 2000)

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-The determination to cease operation is a management prerogative that the

State does not usually interfere in. Indeed, no business can be required to
continue operating at a loss, simply to maintain the workers in employment.
That would be taking of property without due process of law. But where it
is manifest that the closure is motivated not by a desire to avoid further
losses, but to discourage the workers from organizing themselves into a
union for more effective negotiations with management, the State is bound
to intervene. ( Me-Shurn Corporations vs. Me-shurn Workers Union-FSM, G.R.
No. 156292, January 11, 2005)
e. Disease
Article 284 requires that employer shall not terminate the service of the
employee suffering from any disease unless there is a certification by a
competent public health authority that the disease is incurable within a period
of six months even with proper medical treatments.
IV. Consequences of Dismissal
a) If Dismissal is Legal:
1. Rule: No Separation pay when employee is terminated for just causes
Exception: Under compassionate justice principle, financial assistance or
separation pay may be extended to the dismissed employee
Exception to exception: No separation pay is allowed for acts involving:
-Serious misconduct; or
-Causes reflecting on his moral character (PLOT v. NLRC 14 SCRA 671)
Separation pay for authorized causes (1 month or 'A month pay for higher (Art.
283, LC). every year of service whichever is
b) If Dismissal is Illegal
without the employee who was justly dismissed from work shall be entitled to
REINSTATEMENT other privileges and to his full BACKWAGES. Inclusive of
allowances, other benefits to their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual
reinstatement.
1. Reinstatement- is the remedy that most effectively restores the right of an
employee to his employment before he was unjustly deprived of his job (Quijano v.
Mercury Drug, 8 July 1998)
Kinds of Reinstatement:
1. Art. 279, to former position; or
2. Art. 223, (d), in the payroll
Art. 223. (d) - In any event, the decision of the Labor Arbiter reinstating a
dismissed or separated employee, insofar as the reinstatement aspect is
concerned, shall immediately be executory. Even pending appeal. The employee
shall either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement provided therein.
-Under Article 223 of the Labor Code, an award for reinstatement shall be
immediately executory even pending appeal and the posting of bond by the employer
shall not stay the execution for reinstatement (Pioneer Texturizing Corp. v. NLRC
October 16,1997)
2. Back wages- represents the amount of earnings lost by reason of an
unjustified dismissal. (Quebec Sr. v. NLRC, 22 january 1999)
- Full backwages, Including allowances, other benefits or monetary equivalent
computed from the time his compensation was withheld from him up to the time of
his actual reinstatement. (Ajt. 279)
- Without deducting from backwages the earnings derived elsewhere by the
concerned employee during the period of his dismissal (Bustamante v. NLRC 265
SCRA 61)
3. Damages
- Moral and exemplary damages are recoverable only where the dismissal of the
employee was attended by bad faith or fraud, or constituted an act oppressive to
labor, or were done on a manner contrary to morals, good customs or public
policy. (Audition Electric Co. vs. NLRC, GR 106648, 17 June 1999)
- Nominal damages for non-observance of procedural due process.
The violation of the petitioners right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal damages. The

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amount of such damages is addressed to the sound discretion of the court, taking
into account the relevant circumstances. Considering the prevailing circumstances
in the case at bar, we deem it proper to fix it at P30.000.00 ((Agabon vs. NLRC,
17 November, 2004)
It is established that JAKA failed to comply with the notice requirement under
the same' Article. Considering the factual circumstances in the instant case and
the above ratiocination, we. Therefore, deem it proper to fix the indemnity at
P50.000.00
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just
cause under Article 282 but the employer failed to comply with the notice
requirement, the sanction to be imposed upon him should be tempered because the
dismissal process was, in effect, initiated by an act imputable to the employee;
and (2) if the dismissal is based on an authorized cause under Ariicle 283 but
the employer failed to comply with the notice requirement, the sanction should be
stiffer because the dismissal process was initiated by the employer's exercise of
his management prerogative.(JAKA Food Processing Corp. v. Darwin Pacot, et. al.,
28 Mr- jh 2005)

Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes:
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 representatives; and

5. Other causes analogous to the foregoing.

Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of
any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by
serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled
to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is
higher. In case of 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, the separation pay shall be equivalent to one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole
year.
Art. 284. Disease as ground for termination. An employer may terminate the services of an employee who has been found
to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the
health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2)
month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.
Art. 285. Termination by employee.
1. An employee may terminate without just cause the employee-employer relationship by serving a written
notice on the employer at least one (1) month in advance. The employer upon whom no such notice was
served may hold the employee liable for damages.

2. An employee may put an end to the relationship without serving any notice on the employer for any of the
following just causes:

1. Serious insult by the employer or his representative on the honor and person of the employee;

2. Inhuman and unbearable treatment accorded the employee by the employer or his representative;

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3. Commission of a crime or offense by the employer or his representative against the person of the
employee or any of the immediate members of his family; and

4. Other causes analogous to any of the foregoing.

Art. 286. When employment not deemed terminated. The bona-fide suspension of the operation of a business or
undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate
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 operations of his employer or from his relief
from the military or civic duty.

TERMINATION OF EMPLOYMENT
I. EMPLOYER-EMPLOYEE RELATIONSHIP
A. TEST OF EMPLOYER-EMPLOYEE RELATIONSHIP ,
Four-fold test
In determining the existence of an employer -employee relationship, the elements
that are generally considered are the following:
1. the selection and engagement of the employees;
2. the payment of wages;
3. the power of dismissal; and
4 the power to control the employee's conduct.
No particular form of proof is required to prove the existence of an employer-
employee relationships.
Any competent and relevant evident may show he relationship, If only documentary
evidence would be required to demonstrate the relationship, no scheming employer
would be brought before the bar of justice (Vinoya vs. NLRC et at. G.R. No.
126586, February 2, 200)

DUE PROCESS CONSTITUTIONAL BASIS.

The right to due process of law is constitutionally-guaranteed right. It is
basic constitutional tenet that no person shall be deprived of life, liberty or
property without due process, nor shall any person be denied the equal protection
of the laws. (Section 1,Article III [Bill of Rights], 1987 Constitution).

SUBSTANTIVE DUE PROCESS.

Just causes and authorized causes.- As mentioned in Article 279, there are
two (2) kinds of causes or grounds to terminate employment by employer, to wit:

1. Just causes which refer to those instances enumerated under Article 282
[Termination by employer] of the Labor Code.
2. Authorized causes which refer to those instances enumerated under Article 283
[Closure of establishment and reduction of personnel] and 284 [Disease as
ground for termination] of the Labor Code.

PROCEDURAL DUE PROCESS.

Two-fold process requirement.- The requirement of due process is two-fold,
thus:
(1) Substantive aspect; and (2) Procedural aspect.
Twin requirement of notice of hearing. The twin requirements of notice and
hearing constitute the essential elements of procedural due process and neither
of these elements can be eliminated without running a foul of the procedural
mandate.

Summary of basic due process principles:

Termination with just cause but without procedural due process-the

dismissal IS UPHELD OR TERMINATION is without procedural due process,
there shall be nominal damages to be awaeded based on Agabon and Jaka
cases. (Serrano vs. NLRC et. al., [G. R. No. January 27, 2000 was
abandoned by these two cases]).
Termination without just cause and due process-Illegal.

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Termination for false or non-existent cause- Employees should be

reinstated.
In cases where employee was not dismissed but he filed an illegal
dismissal case and failed to prove itemployee should be reinstated and
employer should readmit him. No damages, attorneys fees or backwages
shall be awarded.
Quantum of evidence in all termination casesmere substantive
evidence.. ther standards of evidence (such as proof beyond reasonable
doubt or preponderance of evidence are not applicable in labor
cases).

SUSPENSION OF EFFECTS OF TERMINATION (Art. 277 [b]).

Grounds.The secretary may suspend the effects of termination pending
resolution of the case in the event of a prima facie finding by the appropriate
official of the Department of Labor and Employment before whom the dispute is
pending that:
1. the termination may cause a serious labor dispute; or
2. the termination is in implementation of a mass lay-off.

PREVENTIVE SUSPENSION.
a. Legal basis.- The Labor Code does not contain any provision on preventive
suspension. The legal basis for the valid imposition thereof is found in
the Rules to implement the Labor Code.
b. Justification for the imposition of preventive suspension (not a penalty;
period.

The employer may place the worker concerned under preventive suspension for a
period of 30-days if his continued employment poses a serious imminent threat to
the life or property of the employer of his co-workers. During the said period,
the employee is not entitled to his wages. But if the 30-day period is extended
because the employer has not finished
TERMINATION OF EMPLOYMENT

1. What are the JUST CAUSES FOR DISMISSAL?

1. Serious MISCONDUCT OR WILLFUL DISOBEDIENCE by the employee of the lawful

orders of his employer or representative in connection with his work;
Misconduct- transgression of some established and definite rule of action,
a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment. (Dept. of Labor
Manual, Sec. 4353.01)
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 organized representative
Fraud must be committed against the employer or his representative and in
connection with the employees work. (Dept. of Labor Manual, Sec.
4353.01 [3])
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
Conviction or prosecution is not required.
5. Other causes ANALOGOUS to the foregoing.
A cause must be due to the voluntary or willful act or omission of the
employee. (Nadura v. Benguet Consolidated, G.R. No. L-17780)

NOTES:

Q. What are the just causes for dismissal under the Labor Code?

A. They are:

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1. Serious misconduct or willful disobedience by the employee of the lawful

orders of his employer or representative in connection with his work;
Serious misconduct is generally characterized as improper and wrongful conduct.
According to the DOLE Manual (Sec. 4353.01), serious misconduct is the
transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, willful in character and implies wrongful intent
and not mere error in judgment.
NOTES: In order for misconduct be a valid ground for dismissal, the
wrongdoing must be one that is serious. Moreover, based on jurisprudence, the
act of misconduct although serious in nature, should be in connection with the
employees work. Otherwise, the dismissal effected by the employer based on
this ground will be declared illegal.

Q. Give examples of acts upheld by the Supreme Court as Serious Misconduct:

A: They are as follows:

(a) Drinking Liquor and Sexual Intercourse Within Company Premises. A Security
coordinator bringing in Liquor within company premises and drinking with a
guard on duty and had sexual intercourse with two (2) female security guards
(Stanford Microsystems, Inc. vs. NLRC, et. al., G.R. No. L- 74187, 28 January
1988).
(b) Fighting Within Work Premises and During Work Hours. This pertains
to the case of a seaman who assaulted a crew member with a knife. This was held
as serious misconduct because of its deleterious and pervasive effect to the
employees interest (Gold City Integrated Port Services, Inc. vs. NLRC, et.
al., G. R. No. 86000, 21 September 1990).
. Utterance of Offensive, Insulting and Obscene Words Against
Superior and Reason. Such act was ruled as serious misconduct because it
destroys the morale of his fellow employees and is a violation of companys
rules and regulations (Asian Design and Mfg. Corp. vs. Deputy Minister (now
Secretary of Labor), et. al., G.R. No. 70552, 12 May 1986).
(d) Employee Hurls Unfounded Accusations Against Employer in Union
Newspaper. This case pertains to an employee writing in a union newspaper that
management was exerting political pressure, on a public official to frustrate
legitimate activities of the employees. The Court ruled herein that the act of
the employee is inimical to the interest of the employer as such publication
sullied its reputation and therefore a serious misconduct.(Lopez vs. Chronicle
Publications, 12 SCRA 694)
(e) Perjurious Statement to Favor Another Employee (Manila Times vs.
Inciong, 122 SCRA 873 ).
(.f) Instigation of Labor Unrest (EEI vs. MRC, 133 SCRA 752).
(g) Assaulting an Agent of a Person in Authority (National Service
Corporation vs.Leogardo, 130 SCRA 502).
(h) Shouting Invectives. The utterances of an employee of putang
ina mo directed to a company lady doctor because the latter failed to grant
the employees request for a sick leave , was ruled to an act of serious
misconduct. (De la Cruz vs. NLRC, et. al., G.R. No. 82703, 15 September 1989).
(i) Gambling Inside Company Premises or Compound and Reason. This was
ruled as serious misconduct because it was considered as a prohibited act and
violative of the Company Rules that warrant termination. Hence. An act of
serious misconduct (Dimalanta vs. Secretary of Labor, et. al., G. R. No.83854,
24 May 1988).
(j) Misleading and Deceiving a Customer For Personal Pecuniary
Interest or Gain. An employee who makes representation to a customer that
telephone line repair will take a long time to undertake, but if he will pay
P160.00, the same can be facilitated . After the customer informed PLDT
management , the private respondent was dismissed. In this case the Court ruled
that the employee committed an act inimical to the employer. Although the
private respondent Abucay presented an affidavit of retraction by the customer
the Court disregarded the as an afterthought and of no probative value(PLDT VS.
NLRC, et. al., G.R. no. 74562, 31 May I987)
(k) Intoxication. As a rule, drinking liquor which interferes with
ones work is serious misconduct. Stated otherwise, if intoxication resulting

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from drinking liquor does not interfere with ones work, the same is not
deemed as serious misconduct. In Philippine Air Lines (PAL) vs. NLRC, et. al.,
G.R. No. L-62961, 02 September 1983, an airline captain forced two (2) co-
pilots to drink six (6) bottles of beers each and thereafter ordered them to
stand erect and then hit both on the stomach, was dismissed for serious
misconduct. The obvious reason in his case was the fact of knowledge by the
captain that the two pilots will have flight duties the next morning
(l) Security Guard Caught Sleeping on Duty Coupled with Gross
Insubordination and Challenging Superiors to a Fight is Serious Misconduct
( Luzon Stevedoring Corp. vs. CIR, et. al., G. R. No. 18683, 31December 1965).
(m) Circulation of Manifesto Against School Direc-tress and
Principal. In this case the Court upheld serious misconduct as a ground for
dismissal for reason that said act disrupted the good order and decorum of the
school. Although the employee who circulated the Manifesto admitted authorship
thereof, the same was disclaimed by the majority of the teachers that the
school interfered with the exercise of their right to self-organization or that
they were blacklisted (St. Marys College, et. al., vs. NLRC, et. al., G.R.
No. 75602, 29 December 1989).
(n) Selling of the Products of a Competitor Company. In Elizalde
International (Phils.), Inc. vs. Court of Appeals, 103 SCRA 247), the Court
upheld the dismissal of the employee based on serious misconduct because said
act is a violation of his employment contract with his employer.
(o) Violation of a Banks Policy On Temporary Over-drafts and
Drawings Against Uncollected Deposits. This was a valid ground for the
dismissal of a banks employee on the ground of serious misconduct (Associated
Citizens Bank vs. Ople, 103 SCRA 130).
(p) Discrimination Against and Uttering Words Belittling Filipinos By
an Alien Hotel Manager. It was held by the Court in Riker vs. Hon. Blas Ople,
et. al, G.R. No.50492, 27 October 1987, that such acts constitute serious
misconduct by the alien hotel manager, aside from abuse in ordering food in the
hotel more than he can consume.
q) Immoral Conduct. The act by a male worker embracing a female co-
employee after working time inside a dormitory within the company compound was
ruled as serious misconduct.
NOTE: This infraction although committed outside of the workers office
hours but inside the company premises, was deemed as serious misconduct
flowing from an immoral conduct (Navarro vs. Judge I. D. Damasco, et. al., G.R.
No. 101675, 14 July 1995).

Q. Explain Willful Disobedience.

A. Based on jurisprudence, the case instructive of willful disobedience is BLTB
Co. vs. The Court of Appeals, 71 SCRA 470, wherein the Court laid down the
test for willful disobedience as a valid ground for effecting dismissal.
The Court ruled in this wise: To constitute as a valid cause for
dismissal, the disobedience must be willful and intentional, willfulness being
characterized by a wrongful and perverse mental attitude rendering the
employees act inconsistent with proper subordination. The rules, instructions
or commands must be reasonable and lawful. They must be known to the employee
and must pertain to the duties which the employees have been engaged to
discharge.
The prime consideration being looked into by labor tribunals, in order
that this ground is to be upheld as a just cause for dismissal, is that, the
lawful orders of the employer should have been deliberately and willfully
disobeyed by the employee.
One case of note, on willful disobedience, is Nuez vs. NLRC, et. al.,
G.R. No. 107574, 28 December 1994, wherein the Court reiterated the well-
recognized right of management to regulate all aspects of employment as well as
the corresponding obligation of the workers to obey company rules and
regulations. This is one ground where the employers are accorded the right to
dismiss employees who deliberately disobey or disregard company rules. Whats
more, an employer cannot be compelled to continue retaining a worker found
guilty of maliciously committing acts detrimental to the formers interest. For

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if the rule would be otherwise, this would render a mockery of the regulations
that employees are required to observe. (Reference Cases: )

Q. What are the Elements/Requisites for Validity of Rules and Regulations

Issued by the Company?
A: These are: (a) the orders, regulations and instructions must be lawful and
reasonable; (b) they must be sufficiently be made known to the employees; and
(c) they must be in connection with the duties which the employee has been
engaged to discharge (Family Planning Organization of the Philippines, Inc. vs.
NLRC, et. al., G. R. No. 75907, 23 March 1992).
NOTE: In order that the employers ground based on willful
disobedience be upheld as a lawful and valid ground for dismissal, the
foregoing requisites should concur because absence of any of the requisites, al
strictly speaking the disregard or failure to follow the orders and
instructions of the employer is disobedience, it not willful disobedience
as contemplated by law and jurisprudence.

Q. What are the requisites for Willful Disobedience As a Just Cause for
Dismissal?
A. In order for the ground of willful disobedience will pass as a just cause
for termination o employment, the following requisites should concur, notably:
(a) The assailed conduct of the employee must have been willful, deliberate or
intentional, the willfulness being characterized by a wrongful and perverse
attitude;
(b) the order (rule or instruction) must have been reasonable and lawful
and made known to the employee; and
(c) the deliberate disregard or disobedience must pertain to the duties
which the employee had been engaged to discharge. (Based on Nuez vs. NLRC
[supra]; Aguilar vs. NLRC, et. al,. 216 SCRA 207 and BLTB vs. CA, 71 SCRA 470).

Q. Give some jurisprudence on Willful Disobedience.

A. Wrongful Acts Ruled as Willful Disobedience:

(a) A security guard smoking in a combustible area is a valid rule and
is a ground for dismissal.
(b) An employee dismissed because he violated the no-gambling policy
of the company was ruled as valid (Dimalanta vs. Secretary of Labor [supra]).
(c) In Soco vs. Mercantile Corporation, et. al., G.R. No. 83854, 24
May 1989, the Court sustained the dismissal of an employee for violation of
the rule against the unauthorized use of a company-owned vehicle for private
purposes without the prior authority of the employer.

No Willful Disobedience Found:

(a) In Manebo vs. NLRC, et. al., G.R. No. 10721, 10 January
1994, the Court ruled that the alleged willful disobedience leveled against
an employee of an unreasonable order or one not connected to his duties, cannot
be a valid ground for dismissal.

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

As a ground for the dismissal, the neglect of duty herein referred to, as a
general rule, must be one which is characterized as gross and habitual.
Otherwise, any other negligent act will be merely considered as isolated act
of negligence and may be an unjustified ground for the dismissal of an
employee. However, in Fuentes vs. NLRC, et. al., G. R. No. 75955, 28 October
1988, it was ruled that the element of habituality as a consequence of an
employees negligent act when the amount involved is substantial may be
disregarded.
In Citibank N. A. vs. Gatchalian, et. al., G. R. No. 111222, 18
January 1995, the Court stated that gross negligence evinces a thoughtless
disregard of consequences without exerting any effort to avoid them. Moreover,

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gross negligence may also mean want or absence of or failure to exercise

slight care or diligence, or the entire absence of care.

3. Fraud or willful breach by the employee of the trust reposed in him

by his employer or duly organized representative

Fraud as a Ground for Dismissal. Fraud refers to any act, omission, or

concealment justly reposed and is injurious to another. To constitute a just
cause for terminating the employees services, the fraud must be committed
against the employer or his duly authorized representative and in connection
with the employees work. Otherwise stated, the fraud committed by an employee
against a third person not in connection with his work and which does not in
any way involve his employer, is not a valid ground that will justify the
dismissal of the employee (Based on the cases of Lepanto Consolidated Mining
vs. Court of Appeals, G.R. No. L-15171, 29 April 1961 and the Philippine
Education Co. vs. Union of Philippine Education Employees, G.R. No. L-13778,
29 April 1960;).

NOTE: Fraud must be committed against the employer or his representative and in
connection with the employees work. ((Dept. of Labor Manual)

Q. Explain Willful Breach of Trust.

A. An employee to whom trust or confidence is reposed in connection with his

duty or work assignment and shall willfully breach the same, may be dismissed
by the employer on said ground. This ground is akin to loss of trust and
confidence as a ground for dismissal. If the breach of trust is not willful or
intentional , the dismissal based on this ground may not be justified.

Q. Explain Loss of Trust and Confidence.

A. In China City Restaurant Corporation vs. NLRC, 217 SCRA 443 and related
cases, the Court set forth the guidelines in order that this ground for
dismissal be justified. These are: (1) the loss of confidence must not be
simulated; (2) that this ground should not be used as a subterfuge for causes
which are improper, illegal or unjustified; (3) that the loss of confidence
must not arbitrarily asserted in the face of overwhelming evidence to the
contrary; and (4) that the ground must be genuine, not a mere afterthought to
justify earlier action taken in bad faith by management.

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;
NOTE: Conviction or prosecution is not required.

5. Other causes analogous to the foregoing.

Abandonment As an Analogous Ground, Elements.

a. Abandonment is defined in the case of R Transport Corporation vs. Ejandra,

428 SCRA 725, May 20, 2004, as:

According to petitioner, private respondent abandoned his job and lied about
the confiscation of his license. To constitute abandonment, two elements must
concur: (1) the failure to report for work or absence without valid or
justifiable reason and (2) a clear intention to sever the employer-employee
relationship. Of the two, the second element is the more determinative factor
and should be manifested by some overt acts. Mere absence is not sufficient.
It is the employer who has the burden of proof to show a deliberate and
unjustified refusal of the employee to resume his employment without any
intention of returning.

Q. How should a charge of abandonment be substantiated?

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A. This is the ruling of the Supreme Court in Hantex Trading Co., Inc. vs.
Court of Appeals, 390 SCRA 181, September 27, 2002, thus:

At any rate, petitioners undoubtedly could have presented better

evidence to buttress their claim of abandonment. After all, being the
employers, they are in possession of documents relevant to this case. For
instance, they could have at least presented in evidence copies of respondents
daily time records, which are on-file in its office, to prove the dates
respondent was on AWOL (absence without leave); or any letter wherein they
required respondent to report for work and explain his unauthorized absences.
But, as it is, petitioners defense of abandonment cannot be given credence for
lack of evidentiary support.

NOTE:. A cause must be due to the voluntary or willful act or omission of the
employee. (Nadura v. Benguet Consolidated, G.R. No. L-17780)

Q. What is the procedure on due process to be observed by the employer before

an employee is dismissed?
A. For termination of the employment based on the any of the just causes for
termination, the requirements of due process that an employer must comply with
are:
Written notice should be served to the employee specifying the ground
or grounds for termination and giving the said employee reasonable
opportunity within which to explain;
A hearing or conference should be held during which the employee
concerned, with the assistance of counsel, if the employee so desires,
is given the opportunity to respond to the charge, present his evidence
and present the evidence presented against him;
A written notice of termination, if termination is the decision of the
employer, should be served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to
justify his termination.

NOTES: For termination of employment based on authorized causes, the

requirements of due process shall be deemed complied with upon service of a
written notice to the employee and the appropriate Regional office of the
Department of Labor and employment at least thirty days before the effectivity
of the termination specifying the grounds for termination.
Under the AGABON AND JAKA CASES, which reinstated the so-called WENPHIL
DOCTRINE if the services of the employee was terminated due to a just or
authorized cause but the affected employees right to due process has been
violated, the dismissal is legal but the employee is entitled to nominal
damages by way of indemnification for the violation of the right.
SERRANO vs. ISETANN et. al. is abandoned wherein then it was ruled that if
the employee is dismissed under just or authorized cause but the affected
employees right to due process has been violated, his dismissal becomes
ineffectual. Therefore, the employee is entitled to backwages from the time he
was dismissed until the determination of the justness of the cause of the
dismissal.

2. What are the AUTHORIZED CAUSES OF TERMINATION BY THE EMPLOYER?

1. installation of labor-saving devices (AUTOMATION)

2. REDUNDANCY (superfluity in the performance of a particular work)
redundancy, for purposes of the Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. (Wiltshire File Co. Inc. vs. NLRC)
3. RETRENCHMENT to prevent losses (there is excess of employees and employer
wants to prevent financial losses). Requirements:
(a) substantial losses which are not merely de minimis in extent;

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(b) imminence of such substantial losses;

(c) retrenchment would effectively prevent the expected and additional losses;
(d) the alleged losses and expected losses must be proven by sufficient and
convincing evidence.
1. closing or CESSATION OF OPERATION of the establishment or undertaking UNLESS
the closing is for the purpose of circumventing the provisions of the Labor
Code.
2. DISEASE
a. the disease is incurable within 6 months and the continued employment of
the employee is prohibited by law or prejudicial to his health as well as
to the health of his co-employees
b. with a certification from public heath officer that the disease is
incurable within 6 months despite due medication and treatment.

Q. What are the authorized causes of termination by the employer?

A. They are as follows:
1. installation of labor-saving devices (automation)
2. redundancy (superfluity in the performance of a particular work). This
exists where the services of an employee are in excess of what is reasonably
demanded by the actual requirement of the enterprise.
It was further ruled that a position is redundant where it is
superfluous, and superfluity of a position may be the outcome of a number of
factors, such as over hiring of workers, decreased volume of business, or
dropping of a particular line or service activity previously undertaken by the
enterprise.
NOTES: redundancy, for purposes of the Labor Code, exists where the services of
an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. (Wishire File Co. Inc. vs. NLRC)
Reorganization as a cost-saving device is acknowledged by jurisprudence. An
employer is not precluded from adopting a new policy conducive to a more
economical and effective management, and the law does not require that the
employer should be suffering financial losses before he can terminate the
services of the employee on the ground of redundancy (DOLE PHILIPPINES, INC et
al., vs. NATIONAL LABOR RELATIONS COMMISSION et al.)

3. Retrenchment to prevent losses (there is excess of employees and employer

wants to prevent financial losses)

Q. Under what conditions may an employer retrench its employees?

A. The conditions are:
(a) substantial losses which are not merely de minimis in extent;
(b) imminence of such substantial losses;
(c) retrenchment would effectively prevent the expected and additional losses;
(d) the alleged losses and expected losses must be proven by sufficient and
convincing evidence. (NDC - Guthrie Plantations, Inc., Vs. National Labor
Relations Commission, Et. Al)

4. Closure or cessation of operation of the establishment or undertaking UNLESS

the closing is for the purpose of circumventing the provisions of the Labor
Code.

5. Disease
a. the disease is incurable within 6 months and the continued employment of
the employee is prohibited by law or prejudicial to his health as well as
to the health of his co-employees
b. with a certification from public health officer that the disease is
incurable within 6 months.
c. Before an employer could dismiss an employee based on a disease, Section 8
of Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code requires 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 even with proper medical treatment. (Cathay 44Pacific Airways vs. NLRC
and Martha Singson)

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Q. What are some jurisprudence regarding the authorized causes?

A.
Retrenchment
Requisites For Losses to Be a Valid Ground For Retrenchment: (a) Losses
expected should be substantial and not merely de minimis in extent; (b)
Losses must be imminent; (c) The retrenchment must be reasonably necessary to
prevent expected losses; (d) The expected imminent losses (or losses actually
incurred) must be proven by sufficient and convincing evidence (Based on
Catatista vs. NLRC, 247 SCRA 46).

Serious Business Losses

Are terminated employees of a company due to serious business losses entitled
to separation pay benefits accorded by Art. 283 of the Code? No. This issue
was squarely ruled by the Supreme Court en banc in the case North Davao Mining
Corporation, Inc., et. al., vs. NLRC, G.R. No. 112546, 13 March 1996, when it
succinctly declared that the employer is not liable to pay separation pay when
the closure or cessation of business operations is due to serious business
losses or financial reverses. Payment of separation pay under Art. 283 of the
labor Code is justified if the closure or cessation of business operations is
not due to serious business losses or financial; reverses. In this case, the
Court stated that one cannot squeeze blood out of a dry stone nor water out
of parched land.
In two earlier cases notably: Bank Filipino Savings and Mortgage Bank, et. al.,
vs. NLRC, et. al., G. R. No. 82135, 20 August 1990 and International Hardware,
Inc. vs. NLRC, G. R. No. 80770, 10 August 1989, the Court ruled that the
employees of the bank are entitled to separation pay citing Art. 283 even if
the closure was due to serious business losses which was based on social
justice and equity.

Sale or Transfer of Business

It is generally recognized rule that the sale or transfer of business is

recognized as within the sphere of management prerogative and if exercised in
good faith and not tainted with unfair labor practice, the same should be
upheld as a valid transaction.
On the basis of jurisprudence, it is likewise recognized that the buyer or
the transferee of business, as a rule, is not liable to absorb the employees
of the transferor corporation. This is so, because there is no law requiring a
bona-fide purchaser of an on-going concern to absorb in its employ, the
employees of the latter and to continue enjoying them. Unless the sale or
transfer was made in bad faith, the liabilities of the old owner of the
business establishment to his employees before the sale, are not enforceable
against the buyer or transferee thereof (Yu, et. al., vs. The National Labor
Relations Commission, et. al., G. R. Nos. 111810-11, 16 June 1995 and companion
cases).
The only exception herein is when there is stipulation in the sale or
transfer of business or assets providing for the absorption or retention by the
new buyer or owner of the employees of the old owner-employer. Such stipulation
are deemed to be binding , valid and enforceable by the affected employees.
If, however , the sale or transfer of business was tainted or clothed by bad
faith, while the purchaser or new owner is not duty bound legally to absorb the
employees of the seller of the assets or the enterprise, the parties may be
held liable to the employees. Thus, the transaction between the seller and the
buyer-transferee corporations must be motivated in good faith as an element for
exemption from liability(Associated Labor Unions-Vimcontu, et. al., NLRC, et.
al., G. R. No. 74861 and ALU-Vimcontu, et. al., vs. Mobil Oil Philippines, et.
al., G. R. No. 75667, 29 December 1991).

Q. How much can an employee terminated for an authorized cause get as

separation pay?

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A. It depends on the authorized cause:

If the cause is automation, the separation pay is equivalent to at least one
month pay or at least one month pay for every year of service, whichever is
higher.
If the cause is redundancy, the separation pay is equivalent to at least one
month pay or at least one month pay for every year of service, whichever is
higher.
If the cause is retrenchment, the separation pay is equivalent to one month pay
or at least one-half month pay for every year of service, whichever is higher.
If the cause is closure or cessation of operations not due to serious business
losses or financial reverses, the separation pay is equivalent to one month pay
or at least one-half month pay for every year of service, whichever is higher.
If the cause is disease, the separation pay is equivalent to at least one-month
salary or to month salary for every year of service, whichever is greater. A
fraction of at least 6 months shall be considered one (1) whole year.

NOTES: ARTICLE 283 governs the grant of separation benefits in case of

closures or cessation of operation of business establishments NOT due to
serious business losses or cessation of operation [North Davao Mining Corp. vs.
NLRC, et al]. Therefore, the employee is not entitled to such benefit if the
closure was due to SERIOUS BUSINESS LOSSES.
When termination of employment is brought by the failure of an employee to meet
the standards of the employer in case of probationary employment, it shall be
sufficient that a written notice is served the employee within a reasonable
time from the effective date of termination.
When termination is brought about by the completion of the contract or phase
thereof, no prior notice is required

Q. May termination be made by the employee?

A. Yes. But the manner depends where there is just cause or not.
a. WITHOUT A JUST CAUSE- by serving a WRITTEN NOTICE on the employer at least
one month in advance. . The employer upon whom no such notice was served may
hold the employee liable for damages.
b. WITH A JUST CAUSE - An employee may put an end to establish WITHOUT
SERVING ANY NOTICE on the employer.

Pre-week in Labor Law and Social Legislation - JOBL NOTES

3. TERMINATION BY EMPLOYEE
WITHOUT JUST CAUSE- by serving a WRITTEN NOTICE on the employer at least one
month in advance. The employer upon whom no such notice was served may hold the
employee liable for damages.
WITH JUST CAUSE - An employee may put an end to employment WITHOUT SERVING
ANY NOTICE on the employer for any of the following just causes:
1. SERIOUS INSULT by the employer or his representative on the hour and person
of the employee;
2. Inhuman and UNBEARABLE TREATMENT accorded the employee by the employer or
his representative;
3. Commission of a CRIME OR OFFENSE by the employer or his representative
against the person of the employee or any of the immediate members of his
family; and
4. Other causes ANALOGOUS to any of the foregoing.

4. DISMISSAL, PRESENCE OF JUST/AUTHORIZED CAUSE AND DUE PROCESS

Four possible situations under AGABON vs. NLRC, November 17, 2004:
If dismissal is for a just/authorized cause and due process was
observed- dismissal is valid and employer will not suffer any liability.

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If dismissal is without just/authorized cause but due process was

observed dismissal is illegal, apply Art 279 regarding reinstatement
and backwages.
If dismissal is without just/authorized cause and without due process-
dismissal is illegal, apply Art. 279 regarding reinstatement and
backwages.
Dismissal is for just/authorized cause but due process was not observed
Dismissal is valid. However, Sanctions must be imposed on the
employer. Such sanctions must be stiffer than that imposed in Wenphil.

Under the WENPHIL DOCTRINE, if the services of the employee was terminated
due to a just or authorized cause but the affected employees right to due
process has been violated, the dismissal is legal but the employee is entitled to
damages by way of indemnification for the violation of the right.
SERRANO vs. ISETANN et al. abandoned the Wenphil doctrine and ruled that if
the employee is dismissed under just or authorized cause but the affected
employees right to due process has been violated, his dismissal becomes
ineffectual. Therefore, the employee is entitled to backwages from the time he
was dismissed until the determination of the justness of the cause of the
dismissal.
The most recent case of AGABON vs. NLRC abandoned the Serrano doctrine and
REINSTATED THE WENPHIL DOCTRINE. The sanctions however must be stiffer than that
imposed in Wenphil.
The Court in the case of JAKA FOOD PROCESSING CORP. vs. PACOT et al., March
28, 2005, said that If the dismissal is based on a just cause under Article 282
but the employer failed to comply with the notice requirement, the sanction to be
imposed upon him should be tempered because the dismissal process was, in effect,
initiated by an act imputable to the employee; and
If the dismissal is based on an authorized cause under Article 283 but the
employer failed to comply with the notice requirement, the sanction should be
stiffer because the dismissal process was initiated by the employers exercise of
his management prerogative.

5. What is the TOTALITY OF INFRACTIONS DOCTRINE?

Where the employee has been found to have repeatedly incurred several
suspensions or warnings on account of violations of company rules and
regulations, the law warrants their dismissal as akin to HABITUAL DELINQUENCY
(Villeno vs. NLRC, 251 SCRA 494)

6. When is the STRAINED RELATIONSHIP RULE APPLICABLE?

Strained relationship may be invoked ONLY AGAINST EMPLOYEES WHOSE POSITIONS
DEMAND TRUST AND CONFIDENCE or whose DIFFERENCES WITH THEIR EMPLOYER ARE OF
SUCH NATURE OR DEGREE AS TO PRECLUDE REINSTATEMENT (Dimabayao vs. NLRC, 303 SCRA
655).
It does not apply to ULP cases where the employee was dismissed for union
activities.

Title II
RETIREMENT FROM THE SERVICE
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 employees retirement benefits under any
collective bargaining and other agreements shall not be less than those provided therein.
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

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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.
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.
Retail, service and agricultural establishments or operations employing not more than ten (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 under Article 288 of this Code.

V. Retirement
A. Retirement under R.A. No. 7641
All employees regardless of their position designation or status and irrespective
of the me'hod by which their wages are paid are entitled to retirement benefits
under R.A. 7641 upon compulsory retirement at the age of 65 or upon optional
retirement a 60 or more but not 65.
This benefit does not apply to the following:
1. Government employees
2. Employees of retail service and agricultural establishments or
operations regularly employing not more than ten (10) employees.
B. Retirement Under the CBA or Contract.
Upon reaching the retirement ago established In e or applicable agreement
contract and shall receive the retirement benefits granted therein; prove ,
however, that such retirement benefits shall net be less than the retirement pay
required by RA. 7641 and provided further that if such retirement benefits under
the agreement are less, the employer shall pay the difference.
C. Retirement Age for Underground Miners (R.A. 8558)
In the absence of a retirement plan or other applicable agreement providing for
retirement benefits of underground mine employees in the establishment, an
employee may retire upon reaching the age of i compulsory retirement age of sixty
(60) years or upon optional retirement at fifty (50) years, provided he/she has
served for at least five (5) years as an underground mine employee or in
underground mine of the establishment.

RETIREMENT (R.A 7641, approved on December 9, 1992 it has a retroactive effect

being a curative social legislation)
a) Compulsory upon reaching 65 years of age; with at least 5 years of
service
b) Optional upon reaching 60 years of age; with at least 5 years of
service; at the option of the employee

Components of Retirement Pay:

15 days based on the employees latest salary
1/12 of the 13th month pay
cash equivalent of the 5 days service incentive leave
Computation: 22.5 days x number of years of service
{22.5 days: 15 days plus 2.5 days representing 1/12 of the 13th
month pay plus 5 days of service incentive leave}

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SOCIAL LEGISLATION
A. Social Security Service (SSS) Law I. Compulsory Coverage
1. Employers of employees not over sixty years of age.
2. Employees not over sixty years of age.
3. Self-Employed persons earning PI, 800.00 or more per annum
Employer- one who uses the services of another person who is under his orders as
regards the employment.
Employee- Any person who performs services for an employer in which either or
both mental and physical efforts are used and who receives compensation for such
services, where there is an employee-employer relationship: Provided, that a
self-employed person shall be both employee and employer at the same time.
Cftnuni employee* rti* not mih|nr.| in ilm compulsory coverage of the SSS Law.
(Sec 8[j])

H. Voluntary Coverage
Filipinos recruited in the Philippines by foreign-based employers for
employment abroad may be covered by the SSS on a voluntary basis. Also spouse who
devoted full time to managing the household and family affairs may be covered by
the SSS on a voluntary basis. (Sec. 9[b] R.8282)
III. Social Security Benefits
1. Retirement pension
2. Dependent pension
3. Death benefits
4. Permanent disability benefit
5. Permanent Partial disability benefit
6. Funeral benefit
7. Sickness benefit
8. Maternity leave benefit
IV. Sickness Benefit
Under the SSS law, sickness benefits is paid to an employee who has paid at least
(3) monthly contributions and is confined for more than three day because of
sickness or injury. The daily sickness benefit shall be paid not longer than 120
days in one calendar year and begins after all private sick leaves of absence
with full pay shall have been exhausted.
V. Effect of Separation from Employment
The separation of an employee under compulsory coverage has the effects:
1. His employer's contribution on his account and his obligation to pay
contribution arising from the employment shall cease at the end of the
month of separation.

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2. Said employee shall be credited with all the contributions paid on his
behalf and entitled to the benefits according to the provisions of the SSS
Law.
3. The employee may,, however, continue to pay the total contributions to
maintain his rights to full benefit. (Sec. 11. R.R. 8282)
VI. Effect of Non-remittance
The failure or refusal of the employer or remit contributions shall not
prejudice the right of the covered employee to the benefits of the coverage (Sec.
22 b)
BENEFICIARIES SSS LAW GSIS
1. PRIMARY a. Dependent Spouse a. Legal, Dependent
until remarriage; and Spouse until
b. Dependent remarriage; and
Legitimate or b. Dependent Children
Legitimate of Adopted
and Illegitimate
Children
In the absence of Dependent Parents; and
primary beneficiaries, Legitimate descendants
Dependent Parent subject to
restrictions on
dependent children,
legitimate descendants
2. SECONDARY Absent primary and As to the Death
secondary Benefits, if no
beneficiaries, any beneficiary qualifies
other person under the Act,
designated by member benefits shall be paid
as secondary to legal Heirs
beneficiary

3. OTHERS
B. GSIS
1 Membership in the Government Service Insurance System shall be
compulsory for all permanent employees below 60 years of age upon
appointment to permanent status, and for all elective officials for the
durations of their tenure.
SPECIAL LAWS

1. SSS, COVERAGE:
Compulsory:
Compulsory upon all employees not over 60 years of age and their
employers
In case of domestic helpers, their monthly income should not be less
than one thousand pesos
Compulsory upon such self- employed persons as may be determined by the
Commission including but not limited to the following (Sec 9-A): All
self employed professionals
Partners and single proprietors
Actors and actresses directors, scriptwriters and news correspondents who
do not fall within the definition of the term employee in Section 8 (d)
of this Act
Professional athletes, coaches, trainers, and jockeys
Individual farmers and fishermen

Voluntary:
Spouses who devote full time to managing the household and family
affairs, unless they are also engaged in other vocation or employment
which is subject to mandatory coverage, may be covered by the SSS on a
voluntary basis.

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Filipinos recruited by foreign based employers for employment abroad may

be covered by the SSS on a voluntary basis
Employees separated from employment may continue to pay contributions to
maintain his right to full benefits (Sec. 11)
Self-employed with no income (11-A)

By Agreement:
Any foreign government, international organization, or their wholly-owned
instrumentality employing workers in the Philippines, may enter into an agreement
with the Philippine government for the inclusion of such employees in the SSS
except those already covered by their respective civil service retirement systems
(Sec.8 (j (4), RA 8282).

EFFECTIVE DATE OF COVERAGE UNDER THE SSS

Employer: It shall take effect on the first day of his operation
Employee: On the day of his employment
Self-employed: It shall take effect upon his registration with SSS

Maternity Leave- is the period of time which may be availed of by a woman

employee, married or unmarried, to undergo and recuperate from childbirth,
miscarriage or complete abortion during which she is permitted to retain her
rights and benefits flowing from her employment.

Maternity leave benefit- benefit granted to a female member who has paid at
least three (3) monthly contributions in the twelve-month period immediately
preceding the semester of her childbirth or miscarriage which is equivalent to
one hundred percent (100%) of her average daily salary credit for sixty (60)
days or seventy-eight (78) days in case of caesarian delivery.

Paternity leave- refers to the benefits granted to a married male employee

allowing him not to report for work for seven (7) days but continues to earn
the compensation therefore, or on the condition that his spouse has delivered a
child or suffered miscarriage for purposes of enabling him to effectively lend
support to his wife in her period of recovery and/or in the nursing of the
newly-born child. (Section 3, Republic Act No. 8187; Section 1(a), Revised
Implementing Rules and Regulations of R. A. No. 8187 (March 13, 1997)

EMPLOYEES COMPENSATION PROGRAM

AND STATE INSURANCE FUND

1. What is the Employees Compensation Program (ECP)?

It is the program provided for in Article 166 to 208 of the Labor Code
whereby a fund known as the State Insurance Fund is established through premium
payments exacted from employers and from which employees and their dependents
in the event of work-connected disability or death, may promptly secure
adequate income benefit, and medical or related benefits.

2. What are the basic features of the new ECP?

The basic features of the new program are:

It is tax exempt.
It is funded by monthly contributions of all covered employers.
Compulsory and Wider coverage. All employers and their employees not
over 60 years of age are covered. With the inclusion into the system of
employers with at least one employee and regardless of the
capitalization and the type or nature of their business, more employees
are now covered.
Exclusivity of benefits. The benefits are exclusive and in place of all
other liabilities of the employer to the employee, his dependents or

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anyone otherwise entitled to receive damages on behalf of the employee

or his dependents.
Integration of benefits. Compensation benefits for work-connected injury,
sickness, disability and death have been integrated with those of the
SSS/GSIS and Medicare, simplifying and facilitating the processing of
claims.
Increase in benefits. An allowed income benefit has been considerably
increased; death and permanent disability benefits now consist of a
lifetime pension. Burial expenses have also been increased.
Prompt payment of income benefits. The new program does away with in the
adversary type of proceedings. The claimant is not required to go to
court to establish his claim. In fact, his own employer will file the
claim in his behalf. The new simplified system results in the early
settlement of claims and the prompt payment of income benefits.
Legal service dispensed with. Legal services are dispensed with in the
processing of claims under the system, eliminating the payment of
attorneys fees.
Exclusive jurisdiction. The System has its own adjudication machinery
with exclusive original jurisdiction to settle any dispute with respect
to coverage, entitlement to benefits, collection and payment of
contributions and penalties thereon, or any other matter related
thereto, independent of other tribunals except the Supreme Court
A more balanced rehabilitation program. It enables permanently disabled
employees to avail themselves of rehabilitation services under the
employees Compensation Program which can help them regain, as soon as
possible, their physical capacity to the maximum level. Disabled workers
could therefore remain as useful assets of society and regain their self
confidence and self respect. (San Miguel Corporation vs. NLRC, G.R. No.
57473, August 15, 1988).

3. Who are covered under the ECP?

The following are covered under the law:

Employers All employers belonging to the public or private sector are
covered;
Employers All employees not over sixty (60) years old are covered.
Employees who are over sixty (60) years old shall be covered if he has
been paying contribution prior to the age of sixty (60) and has not been
compulsorily retired. Employees covered by both the GSIS and the SSS
shall be compulsorily covered by both systems. (Sec. 2, Rule I, Amended
Rules on Employees Compensation).

4. Who are Employers?

The term shall mean any person, natural or juridical, domestic or foreign, who
carries on the Philippines any trade, business, industry, undertaking or
activity of any kind and uses the services of another person who is under his
orders as regards the employment.
An employer shall belong to either:
The public sector covered by the GSIS, comprising the National
Government, including government-owned or -controlled corporations with
original charters, the Philippine Tuberculosis Society, the Philippine
National Red Cross and the Philippine Veterans Bank; or
The private sector covered by the SSS, comprising all employers other
than those defined in the immediately preceding paragraph (Sec. 3a, Rule
I, Amended Rules on Employees Compensation)

5. Who are Employees?

The term shall mean any person who performs services for an employer.

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An employee shall belong to either:

The public sector comprising the employed workers who covered by the
GSIS, including the members of the Armed Forces of the Philippines,
elective officials who are receiving regular salary, and any person
employed as casual, emergency temporary, substitute or contractual.
The private sector comprising the employed workers who are covered by the
SSS (Sec. 4, Rule I, Ibid).

6. Are Filipinos under foreign employment covered?

Filipinos working abroad in the service of an employer, domestic or foreign,

who carries on in the Philippines any trade, business, industry, undertaking or
activity of any kind are also covered. They are entitled to the same benefits
given to employees working in the Philippines (Sec. 5(a), Rule I, Amended Rules
on Employees Compensation).

7. When does such compulsory coverage take effect?

The effectivity dates of coverage are the following:

For employers First day of operation but not earlier than January 1,
1975;
For employees First day of employment (Sec. 6, Rule I, Amended Rules on
Employees Compensation).

8. What is the registration as requirement?

The employer and the employees shall register with the system by accomplishing
the prescribed forms. The private sector shall register with the SSS, while the
public sector shall register with the GSIS. (Sec. 1, Rule II, Amended Rules on
Employees Compensation).
9. When is the employee deemed reported?
An employee is deemed to have been duly reported for coverage, if the System
(SSS or GSIS) has received a report or written communication about him from his
employer or an EC (Employer Compensation) contribution paid in his name by his
employer before a compensable contingency occurs (Sec. 3 (b)(3), Rule II,
Amended Rules on Employees Compensation).
10. What is the penalty for non-registration?

Failure or refusal to register its employees shall make the employer or

responsible official who committed the violation liable for a fine of not less
than P1, 000.00 nor more than P10, 000.00 and/or imprisonment for the duration
of the violation or non compliance or until such time that the rectification of
the violation has been made, at the discretion of the Court.
In case a compensable contingency occurs after 30 days from employment and
before the system receives any report for coverage about the employee or EC
contribution on his behalf, his employer shall be liable to the System for the
lump sum equivalent to the benefits to which the employee or his dependents may
be entitled (Sec. 4, Rule II, Amended Rules on Employees Compensation).

11. What are the grounds for a claim for benefits under the ECP?
They are the following:
sickness and the resulting disability or death by reason of an employment
accident; and
sickness and the resulting disability or death by reason of an
occupational disease.
12. What is the meaning of compensable sickness?

Sickness means any illness definitely accepted as an occupational disease

listed by the Employees Compensation Commission, or any illness caused by
employment subject to proof by the employee that the risk of contracting the
same is increased by working conditions.

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For this purpose, the Commission is empowered to determine and approve

occupational diseases and work-related illness that may be considered
compensable based on peculiar hazards of employment.
However, there are cases where the disease although not listed as occupational,
is still compensable such as when the worker was exposed to adverse working
conditions, or the risk of contracting the disease was increased by the working
conditions (De Guia vs. ECC, 198 SCRA 834; Ibid).

13. Discuss briefly the theory of increase risk.

The term sickness as defined includes any illness caused by employment
subject to proof by the employee that the risk of contracting the same is
increased by working conditions. This is a recognition of the theory of
increased risk. To establish compensability under the same, the claimant must
show substantial proof of a reasonable work-connection and not a direct causal
relation. The test of evidence of the relation of the disease with the
employment is probability and not certainty. To require otherwise, would not
be consistent with the liberal interpretation of the Labor Code and the social
justice guarantee.

14. What is an occupational disease?

An occupational disease is one which results from the nature of the employment
and by the nature is meant which all employees of a class are subject and which
produce the disease as a natural incident of a particular occupation, and
attach to that occupant a hazard which distinguishes it from the usual run of
the occupation a hazard attending employment in general.
This type of disease is characterized by the fact that (a) it occurs in
association with particular types of occupation, and (b) the disability due to
the injurious exposure grows gradually over a period of time.
Familiar examples of this disease are the following: (a) lead poisoning among
miners; (b) silicosis among miners; (c) bends among drivers; and (d)
communicable disease among nurses directly in contact with patients with such
disease, is also held to be an occupational disease.

15. Is cancer an occupational disease?

Although the cause of cancer is not yet known, it has already been included as
a qualified occupational disease in certain cases. Thus, cancer of the
epithelial lining of the bladder is considered occupational when contracted by
employees engaged in work involving exposure to alphanaphtylamine,
betanaphtylamine, or benzidine or part of the salts, and suramine or magenta.
Likewise, cancer of the skin or of the corneal surface of the eye is considered
occupational in work involving the use or handling or exposure to tar, pitch,
bitumen, mineral oil including paraffin, soot, or any compound or residue of
any of its substances.
Cancer of the stomach and other lymphatic and forming vessels, or of the nasal
cavity and sinuses is recognized as an occupational disease among woodworkers,
carpenters, loggers, and employees in pulp, paper and plywood mills; while
cancer in the lungs, liver and brain is listed as an occupational disease of
vinyl chloride or plastic workers.

16. What is the Doctrine of presumptive compensability and theory of

aggravation?

The presumption of compensability and the theory of aggravation established

under the Workmens Compensation Act (Act No. 3428) as amended have been
abandoned under the new Labor Code. However, the Supreme Court held that:
while these doctrines may have been abandoned, the liberalities of the law
still subsists. This decision gave substance to the liberal and compassionate
spirit of the law found in Article 4 of the Labor Code which provides that all
doubts shall be resolved in favor of labor.

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Note that for claims that have accrued prior to the new Labor Code, the above
rules should be applied.

17. Is the claimant under the ECP required to present proof of causal relation
or aggravation where the cause or origin of the disease is still unknown?

Yes. If the disease not intended by law to be compensated are inadvertently

or recklessly included, the integrity of the State Insurance Fund is
endangered. Compassion for the victims of diseases not covered by the law
ignores the need to show greater concern for the trust fund to which tens of
millions of workers and their families look for compensation whenever
accidents, disease, and deaths occur.
18. What is the old doctrine?

Under the old doctrine, the necessity of proof is present only when the cause
of the disease is known. If unknown, there is no duty to present proof, for the
requirement that the disease was caused or aggravated by the employment or work
applies only to an illness where the cause can be determined or proved (Mora
vs. ECC, G.R. No. 62157, 1December 1987.)
However, actual proof of causation is not necessary to justify compensability.
The degree of proof required to establish work connection between the illness
and the employment is only substantial evidence of reasonable work-connection
(Cristobal vs. ECC, 181 SCRA 874). The claimant must show that the development
of the disease is brought largely by the conditions present in the nature of
the job (Zozobrado vs.ECC, 141SCRA 136). In other words, the employee has the
burden of proving that his illness is work-related.
19. What is the new doctrine?

The new doctrine provides two (2) approaches to a solution in cases where it
cannot be proved that the risk of contracting an illness, not listed as an
occupational disease, was increased by the claimants working conditions. One
approach is that if a claimant cannot prove the necessary work connection
because the cause of the disease are still unknown, it must be presumed that
working conditions increased the risk of contracting the ailment. On of the
order hand, the other approach provides that if there is no proof of the
required work connection, the disease is not compensable because the law says
so.

20. What are the conditions for compensability of occupational diseases?

For an occupational disease and the resulting disability or death to be
compensable, all of the following conditions must be satisfied:
The employees work must involve the risk described herein;
The disease was contracted as a result of the employees exposure to the
describe risks;
The disease was contracted within the period of exposure and under such
other factors necessary to contract it;
There was no notorious negligence on the part of the employee.
The employer who has failed to provide the adequate protection and safety
devices shall be subject to the penalty imposed by Article 200 of the Code.
Where he has provided adequate protection and safety devices, there shall be a
determination as to whether or not the employee has been notoriously negligent.
(Annex A, Amended Rules on Employees Compensation).
21. What is the crucial test of compensability?
The crucial test compensability is the existence of employer-employee
relationship which is the jurisdictional foundation for recovery of
compensation under the law. Where the relationship has already been severed,
the provisions of the law will not apply. For purposes of determining the
existence of employer-employee relationship, the most important test is the
power to control the employees conduct (Iloilo Chinese Commercial School vs.
Fabrigas, L 16600, 27 December 1961).
22. Is employment the sole factor?
NO. Under the law, it is not required that employment should be the sole
factor in the growth development or acceleration of the illness to entitle him

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to benefits provided therein. It is enough that his employment had contributed,

even in a small degree to the development of the disease (Red Line
Transportation Co., Inc. vs. Barriso, 11 SCRA 801; Lao vs. ECC, 97 SCRA 780).

23. Is Hansens Disease (leprosy) compensable?

Yes, provided the illness is traceable to employment. Leprosy, like

tuberculosis, is a system disease; its specific cause is bacteria and the same
can be acquired through body contact with a person harboring the germs; and
some of the participating factors leading to the development of the disease are
exposure to sudden changes in the environment and temperature and the lessening
of the body resistance of the person affected. (Better Buildings, Inc. vs.
Pucan, G.R. No. L-42731, February 28, 1985)

24. F.C. worked in the printing department of a government agency. He handled

various chemicals for printing, ate without washing his hands, and was exposed
to intense heat. He often neglected personal necessity due to inadequate
facilities in his place of work. F.C. later died of rectal cancer. Is his
death compensable? Why?

Yes. Although rectal cancer is not listed as an occupational disease, there is

ample proof that the risk of contracting the same was increased, if not caused,
by the working conditions prevailing in the employers premises. (Cristobal
vs. Employees Compensation Commission, G.R. No. L-49280, April 30, 1980)

25. S., employed as a mechanic in a naval shipyard, died of pyelonephritis

(acute pyelogenic infection of the kidney) and bronchopneumonia (infection of
the bronchi and lung tissue). Is his death compensable? Why?

No. The diseases are not occupational with respect to the work of the
deceased. Besides, the risk of contracting them was not increased by his
working conditions. (Sulit vs. Employees Compensation Commission, G.R. No. L-
48602, June 30, 1980)

26. Is ureterolithiosis (presence of renal stones in the ureter and urinary

stones) of a chemical laboratory technician of the NBI compensable under the
employees compensation program? Explain.

Yes. Though not expressly recognized as an occupational disease,

ureterolithiosis may be compensable by reason of the theory of increased risk.
It is medically established that environment, water or other liquid intake and
the nature of the occupation are important factors in the development or
inhibition of the disease.
The work of the NBI laboratory technician exposed her to drugs,
insecticides, volotile poisons, fuels and inorganic compounds, and chemical
laboratory equipment. Moreover, she attended to filed cases and rendered
holiday and night duties once a week and helped the chemist in the examination
of incoming cases. She often missed some important health habits such as
regularly drinking water and urination in order not to interrupt the flow of
concentration.
Despite the abandonment of the presumption of compensability, the present
law has not ceased to be a social legislation; the liberality of the law in
favor of the working man or woman still prevails. (Employees Compensation
Commission vs. Court of Appeals, G.R. No. 121545, November 14, 1996)
27. Give instances of compensable illnesses.
The following ailments are compensable:
Tuberculosis considered occupational disease or work connected in such
occupation as that of a teacher, laborer, driver, land inspector and
other similar occupations (Visual vs. ECC, 187 SCRA 623).
Diabetes mellitus contracted by a public school teacher whose work was
physically and emotionally stressful (Millora vs. ECC, 143 SCRA 151).
Hepatoma and post-necrotic cirrhosis contracted by a cashier of a bank,
who was constantly exposed to various chemicals in the form of carbon

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paper, erasing fluids, and others and whose assignments involved

irregular working hours and expose to different working conditions, body
fatigue and psychological stress (Neri vs. ECC, 127 SCRA 672). The DBP
cashier was exposed to handling money bills (Ibid).
Cirrhosis contracted by a nursery farm aide who was constantly exposed to
plant chemicals and insecticides (San Valentin vs. ECC, 118 SCRA 160).
Cardiovascular disease which includes myocardial infraction in work-
related disease (Telefast Communications vs. Castro, G.R. No. 78367, 29
February 1988).
Cancer of the lungs contracted by a librarian who has work for 15 years
during which she was exposed to dusty books and other deleterious
substances in the library (Dator vs. ECC, 111 SCRA 632).
Cancer of the liver contracted by a school teacher who has served for
twenty-four (24) years (Abadiano vs. GSIS, 111 SCRA 509).
Rheumatoid arthritis contracted by school teacher usually associated with
the nature and character of their occupation (Gersalino vs, WCC, 187
SCRA 1).
Senile cataract contracted by a construction worker who was constantly
exposed to the suns glared and heat as well as excessive dirt and dust
(Jarillo vs. ECC, 112 SCRA 264).
28. Give instances of non-compensable illnesses.

The following ailments are not compensable:

Ailments of a telephone operator diagnosed as chronic pylonephritis,
diabetes mellitus, anemia metastases (cancer) are not occupational
diseases (De Jesus vs. ECC, G.R. No. 56191, 27 May 1986).
Cancer of the pancreas contracted by a bookkeeper (Milano vs. ECC, 142
SCRA 52).
Senile cataract of a district engineer is not listed as occupational
disease (Zozodrado vs. ECC, G.R. No. 65856, 17 January 1986).
Pylonephritis and bronchopneumonia contracted by a mechanic (Sulit
vs.ECC, 98 SCRA 478).
Peptic ulcer is not included in the list of occupational diseases
(Dabatian vs. GSIS G.R. No. 47294, 8 April 1987).
Bells Palsy, anxiety neurosis, peripheral neuritis not listed as
occupational diseases (Galanida vs. ECC, G.R. No. 70660, 24 September
1987)
Parotid Carcinoma or cancer of the salivary glands contracted by an
accounting clerk is not an occupational disease (Sarmiento vs. ECC, G.R.
No. 65680, 11 May 1988).
Glaucoma is no longer compensable (Hatta Hataie vs. ECC, 195 SCRA 580).
29. What an injury?
Injury is defined as any harmful changes in human organism from any accident
sustained at work while executing an order for the employer.
30. What are the conditions for compensability of injuries?

For injury and the resulting disability or death to be compensable, the injury
must be the result of an accident that satisfies all of the following
conditions:
The employee must have been injured at the place where his work requires
him to be;
The employee must have been performing his official functions;
If the injury was sustained elsewhere, the employee must have been
executing an order for the employer (Sec. 1(a), Rule III, Amended Rules
on Employees Compensation).
Thus an injury or accident is said to arise in the course of employment when
it takes place within the period of employment, at a place where the employee
may be, and while he is fulfilling his duties or is engaged in doing something
incidental thereto. Note that in the course factor applies to time, place and
circumstances (PHHC vs. WCC, L 18246, 30 October 1964).

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31. Distinguish arising out of and in the course of factors?

An injury or illness arise out of when it results from a risk or hazard which
is necessarily or ordinarily or reasonably inherent in or incident to the
conduct of such work or business. It refers to the origin or cause of the
accident and are descriptive of its character (PASUDECO vs. 16 SCRA 784).
In the course of takes place when an employee is doing the duty which he is
required to perform. It refers to time, place, and circumstances under which
accident takes place (Afable vs. Singer Machine Co.,58 Phil. 42).

32. What are the instances of compensable injuries?

The following are instances of compensable injuries:

Peculiar risks. A metro aide while at work on a public street was crushed
to death by an automobile. The injury caused by an accident was in
pursuance his employment, thus compensable.
Street perils. A camineros death or injury performing his work when hit
by a fast moving vehicle is held to be compensable (Balajadia vs.
Province Supra).
A street sweeper is exposed to the perils of the street thus any injury arising
there from is compensable (Balajadia vs. Province, G.R. No. L-41979, 15 October
1934).
Acts of ministration. The injury of the employee who heeded the call of
nature and sustained injuries in the performance of such act, is deemed
compensable. Likewise, acts necessary to the health and comfort of an
employee while at work such as satisfaction of thirst, hunger, etc. are
incidental to employment and injuries sustained there from are held to
be compensable. (Chua vs. Roman, L-14827, 31 October 1960).
Acts of God. A ships captains death because his vessel sank in a marine
disaster arising out of employment is thus compensable (Murillo vs.
Mendoza, 66 Phil, 689).
A farm workers death while administering insecticides to agricultural
plants in the open field, and lightning struck him, was held to be compensable.
Assaults. A heated argument ensued between two workers over a work
assignment resulting in an assault by one to the other; the injury or
death arising there from has been held to be compensable (BLTC vs.
Mandaguit, 70 Phil. 685).
However, assault occasional not attributable to employment such as when it
sprang from jealousy over a beautiful girl, as the two workers as rivals, was
held to be not compensable.
Recreational activities. The injury of the employee who was injured
during a company-sponsored recreational activity is deemed compensable.
The test is whether such activity is for the benefit or interest of the
employer; otherwise it is not compensable. (99 C.J.S. 737; RP vs. Amil,
10 SCRA 669).
An employee won a prize (around the world tour) for having been chosen as the
most outstanding employee of the year. In the course of such tour he met an
accident; the injury is deemed compensable.
Acts for the benefit of the employer. In an attempt to protect the
properties of the company, an employee was killed by the burglars. The
resulting death is compensable.
In his desire to retrieve the logs being carried away by strong current, the
employee, although a good swimmer, met his death by drowning as a consequence.
This is deemed compensable (Cuevo vs. Barrredo, No. L-45699, 24 February 1938).
Acts during emergency. Whatever injuries are sustained in the course of a
rescue work during an emergency arising out of the employment are
compensable. Injury suffered by an employee in his attempt to rescue a
co-worker arising out of employment, is also a compensable (Estandarte
vs. Phil. Motor Alcohol Co., G.R. No. 39722, 1 November 1933).

33. Can injuries sustained off the premises be compensable?

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YES. An injury is compensable when it is sustained an employee anytime and

anywhere while executing an order for the employer. A well-known rule on the
matter is the coming and going rule. The following are compensable off-
premise injuries:
The employee is on the way to or from work in a vehicle owned or supplied
by the employer. Example is the employers supplied bus (Talisay-silay
Milling Co. vs. WCC, 21 SCRA 366).
The employee is subject to call at all hours or at the moment of the
injury. Example: The employer summoned him, while on his way he was
injured in an accident.
The employee is traveling for the employer. Example: Traveling workers.
The employee is on his way to further work at time, even though on a
fixed salary. Example: The employer required employee to bring some
papers at home for overtime purposes; on his way he met an accident
(Torbela vs. ECC, G.R. No. L-42627, 21 February 1980).
The employee is required to bring the car to employers business place
for use therein (Iloilo Dock and engineering Co. vs. 26 SCRA 102, 105).
The employee is accidentally injured at a point reasonably proximate to
the place of work, such injury is deemed to have arisen out of and in
the course of his employment. Example: The school principal sustained an
injury in a vehicular accident while he was on his way to school and at
the time of the accident, he had in his possession official papers he
worked on his residence on the eve of his death (Vda. De Torbela vs.
ECC, 96 SCRA 260).

34. What is the going and coming rule? Give the exceptions to the rule.

The general rule in workmens compensation law known as the going and coming
rule, is that in the absence of special circumstances, an employee injured
while going to or coming from his place of work is excluded from the benefits
of the workmens compensation law. Thus, an injury or accident sustained by an
employee while using the public streets and highways in going to or returning
from the place of employment is not compensable. Such as injury is suffered as
a consequence of risk and hazard of employment. Furthermore, the employer is
not an insurer against all accidental injuries which might happen to an
employee while in the course of employment. (Iloilo Dock and Engineering Co.
vs. WCC, 26 SCRA 102, 105)
This rule, however, admits of exceptions, to wit:
where the employee is proceeding to or from his work on the premises of
his employer;
where the employee is about to enter or about to leave the premises of
his employer by the way of the exclusive or customary means of ingress
and egress (proximity rule);
where the employee is charged, while on his way to of from his place of
employment or at his home, or during his employment with some duty or
special errand connected with his employment; and
where the employer as an incident of the employment provides the means of
transportation to and from the place of employment.

35. Explain and illustrate the proximity rule.

The proximity rule, an exception to the coming and going rule, provides that an
injury or accident sustained off the employers premise, but while in close
proximity thereto and while using a customary means of ingress and egress, is
deemed compensable.
Where the employee, while proceeding to work and running to avoid the rain,
slipped and fell into a ditch fronting the main gate of the employer's factory,
and as a result of which he died the next day, it was held that the accident
occurred within the zone of employment and therefore compensable.

36. What defenses may be interposed by the State Insurance Fund against a
claim for compensation made by a covered employee or his dependents?

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The following defenses may be set up:

The injury is not work-connected or the sickness is not occupational.
The disability or death was occasioned by the employees intoxication,
willful intention to injure or kill himself or another, or his notorious
negligence.
No notice of sickness, injury or death was given to the employer.
The claim was filed beyond three (3) years from the time the cause of
action accrued.

37. Does intoxication bar compensation?

In order to prevent payment of compensation the following conditions must

concur:
there must be proof of actual intoxication;
the intoxication must be to such a degree that the employee is
incapacitated from substantially engaging in employment and performing
his task;
the intoxication must be the proximate cause of the injury;
the intoxication must not only be the proximate cause (Schneider,
Workmens Compensation Laws, Vol. VI, 493-4; Balbija vs. Time Taxicab,
1219-R, 20 October 1955).

38. Does suicide bar compensation?

Since the employee committed the crime by himself, the resulting death is not
covered for compensation as in the following cases;
when It results from insanity resulting from compensable injury or
disease;
when it occurs during a delirium resulting from compensable injury or
disease; and
when it flows from an uncontrollable impulse arising from compensable
injury or disease (Horovits, 41 Nebraska Law Journal, 36).

39. What is notorious negligence? Does it bar compensation?

Notorious negligence is equivalent to gross negligence; it is something more

than mere carelessness or lack of foresight; it falls under the designation of
evident and manifest negligence and signifies a deliberate act of the employee
to disregard his own personal safety. However, mere disobedience to the rules,
orders and/or prohibition does not in itself constitute notorious negligence,
if no intention can be attributed to the injured to end his life.
Notorious negligence resulting in serious injury or death of the employee is
not compensable. However, no man in his senses would deliberately cause death.
Thus, the presumption is that the laborer by his instinct of self-preservation
takes precaution to avoid such danger unless a willful intention is attributed
to him to end his life (Dela Cruz vs. Cia. Maritima, G.R. No. 38236, 21 August
1933).

40. What is the liability of the State Insurance Fund?

Whenever other laws provide similar benefits for the same contingency, the
employee who qualifies for the benefits shall have the option to choose the law
under which the benefit will be paid to him. If the law chosen provides for
benefits lesser than those provided by the Labor Code, he shall be entitled
only to the difference.
The employee cannot avail himself at the same time of similar benefits provided
by different laws, except the difference thereof. However, the employer may
continue to grant benefits already earned by the employees under any collective

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bargaining agreement or any other arrangement (Sec. 2, Rule V, Amended Rules

on Employees Compensation).

41. What are the benefits excluded by the State Insurance Fund?

The following benefits are excluded by the State Insurance Fund:

Gratuity benefits under Section 699 of the Revised Administrative Code,
as amended by R.A. No. 1232;
Retirement, disability, sickness, and death benefits under the SSS Law
( R.A. No. 1161, as amended);
Life insurance, disability and retirement benefits under the GSIS Law
(Com. Act. No. 186, as amended);
Gratuities and pensions of every personnel for deaths and disabilities
incurred in line of duty in accordance with R.A. No. 610, as amended;
Medical benefits administered by the Philippine Medical Care Commission
provided in R.A. No. 4864, as amended; and
Other benefits granted by other laws and administered either by the GSIS
or SSS.

42. Is Article 173 of the Labor Code, as amended a bar to claim for damages
under the Civil Code?

NO. Article 173 of the Labor Code does not bar to claim for damages under
Civil Code arising from employers negligence, for liability under Article 173
is confined only to illness or injury.

43. Is simultaneous recovery of benefits allowed?

YES. While it is true the SSS Law (R.A. No. 1161, as amended) is distinct and
different from the labor Code, the provisions of Sections 15 of the SSS law
and Article 173 of the Labor Code are in pari materia insofar as they both
relate to payment of compensation to covered employees, and insofar also as
both provisions barred the simultaneous recovery of benefits under both the SSS
Law and the Labor Code, until Article 173 was amended by P.D No. 1921 in 1984.
The amendment introduced by P.D No. 1921 to Article 173 lifted the ban against
the simultaneous recovery of benefits under the Labor Code and the SSS law, and
is deemed to have repealed by necessary implication the provision of Section 15
of the SSS Law. Since P.D. No. 1921 is the latest expression of the
legislative will, it will prevail over Section 15 of the SSS Law. (Opinions of
the Secretary of justice dated May 23, 1989 and January 12, 1990 addressed to
the SSS).
Furthermore, benefits under the State Insurance Fund accrue due to the
employees concerned due to hazards involved and are made a burden on the
employment itself. On the other hand, social security benefits are paid to SSS
members by reason of their membership therein for which they contribute their
money to a general fund.
It must be noted that under the new Social Security Act (R.A. 8282), the
provision of Section 15 of the old SSS law which bars simultaneous recovery of
benefits, has already been deleted.

44. Can a claimant who has already recovered from the State Insurance Fund
still recover damages in a criminal or civil case in relation thereto?

No. Unless otherwise provided, the liability of the State Insurance Fund under
this Title shall be exclusive and in place of all other liabilities of the
employer to the employee, his dependents or anyone otherwise entitled to
receive damages on behalf of the employee or his dependents.

45. G., who worked in the weaving department of a textile firm, was stabbed to
death by L., his fellow employee. L. was convicted of homicide and sentenced
to pay indemnity to the heirs of G. If the heirs have already recovered from
the State Insurance Fund, can they still hold the employer subsidiarily liable

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for the indemnity to be paid by L., in the event the latter is unable to pay
the same? Why?

No, the heirs can no longer recover indemnity from the employer. The
liability of the State Insurance Fund is exclusive and in place of all other
liabilities of the employer to the employee and his dependents or
beneficiaries. This includes the subsidiary liability of the employer under
the Revised Penal Code. (Generoso vs. Universal Textile Mills, Inc. G.R. No.
L-28586, January 22, 1980)

46. What are the liabilities of third parties?

In case the injury or death is caused by circumstances creating a legal

liability against a third party other than the employer, the injured employee
or his dependents may either claim compensation from the System under the Labor
Code or sue for damages in accordance with law. In case the benefit is paid by
the system, the latter is subrogated to the rights of the injured employee or
his dependent in accordance with the general law. Where the System recovers
from such third party damages in excess of those paid or allowed under Title
II, Book IV, of the Labor Code, such excess shall be delivered to the injured
employee or another person entitled thereto, after deduction of the expenses of
the System and the cost of the proceedings.
It must be noted that injuries or death caused by a third person are
compensable provided the requisites of compensability are present. However,
the injured employee cannot claim payment twice for the same injuries, that is,
from the third party and from the SSS or GSIS (Alba vs. Bulaong, 101 Phil.
434).

47. S., a driver-mechanic, was killed when he tried to fight unidentified men
who carnapped the vehicle of his employers. As a consequence of his death, his
heirs filed an action for death compensation and damages before the RTC against
his employers. The latter, however, contended that the complaint should be
dismissed as the appropriate remedy is a claim under the Employees
Compensation Program. Is the contention of the employers correct? Explain.

No. The employee or his heirs have the choice of cause of action and the
corresponding relief, i.e. either an ordinary action for damages based on
Article 1171 of the New Civil Code before the regular courts or a special claim
for limited compensation under the Employees Compensation Program. But the
right of choice is qualified in that the employee should be held to the
particular remedy in which he stakes his fortune. (Vda. de Severo vs. Go, G.R.
No. L-44330, January 29, 1988)

32. What are the instances of compensable injuries?

The following are instances of compensable injuries:

Peculiar risks. A metro aide while at work on a public street was crushed
to death by an automobile. The injury caused by an accident was in
pursuance his employment, thus compensable.
Street perils. A camineros death or injury performing his work when hit
by a fast moving vehicle is held to be compensable (Balajadia vs.
Province Supra).
A street sweeper is exposed to the perils of the street thus any injury arising
there from is compensable (Balajadia vs. Province, G.R. No. L-41979, 15 October
1934).
Acts of ministration. The injury of the employee who heeded the call of
nature and sustained injuries in the performance of such act, is deemed
compensable. Likewise, acts necessary to the health and comfort of an
employee while at work such as satisfaction of thirst, hunger, etc. are
incidental to employment and injuries sustained there from are held to
be compensable. (Chua vs. Roman, L-14827, 31 October 1960).

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

Acts of God. A ships captains death because his vessel sank in a marine
disaster arising out of employment is thus compensable (Murillo vs.
Mendoza, 66 Phil, 689).
A farm workers death while administering insecticides to agricultural
plants in the open field, and lightning struck him, was held to be compensable.
Assaults. A heated argument ensued between two workers over a work
assignment resulting in an assault by one to the other; the injury or
death arising there from has been held to be compensable (BLTC vs.
Mandaguit, 70 Phil. 685).
However, assault occasional not attributable to employment such as when it
sprang from jealousy over a beautiful girl, as the two workers as rivals, was
held to be not compensable.
Recreational activities. The injury of the employee who was injured
during a company-sponsored recreational activity is deemed compensable.
The test is whether such activity is for the benefit or interest of the
employer; otherwise it is not compensable. (99 C.J.S. 737; RP vs. Amil,
10 SCRA 669).
An employee won a prize (around the world tour) for having been chosen as the
most outstanding employee of the year. In the course of such tour he met an
accident; the injury is deemed compensable.
Acts for the benefit of the employer. In an attempt to protect the
properties of the company, an employee was killed by the burglars. The
resulting death is compensable.
In his desire to retrieve the logs being carried away by strong current, the
employee, although a good swimmer, met his death by drowning as a consequence.
This is deemed compensable (Cuevo vs. Barrredo, No. L-45699, 24 February 1938).
Acts during emergency. Whatever injuries are sustained in the course of a
rescue work during an emergency arising out of the employment are
compensable. Injury suffered by an employee in his attempt to rescue a
co-worker arising out of employment, is also a compensable (Estandarte
vs. Phil. Motor Alcohol Co., G.R. No. 39722, 1 November 1933).

33. Can injuries sustained off the premises be compensable?

YES. An injury is compensable when it is sustained an employee anytime and

anywhere while executing an order for the employer. A well-known rule on the
matter is the coming and going rule. The following are compensable off-
premise injuries:
The employee is on the way to or from work in a vehicle owned or supplied
by the employer. Example is the employers supplied bus (Talisay-silay
Milling Co. vs. WCC, 21 SCRA 366).
The employee is subject to call at all hours or at the moment of the
injury. Example: The employer summoned him, while on his way he was
injured in an accident.
The employee is traveling for the employer. Example: Traveling workers.
The employee is on his way to further work at time, even though on a
fixed salary. Example: The employer required employee to bring some
papers at home for overtime purposes; on his way he met an accident
(Torbela vs. ECC, G.R. No. L-42627, 21 February 1980).
The employee is required to bring the car to employers business place
for use therein (Iloilo Dock and engineering Co. vs. 26 SCRA 102, 105).
The employee is accidentally injured at a point reasonably proximate to
the place of work, such injury is deemed to have arisen out of and in
the course of his employment. Example: The school principal sustained an
injury in a vehicular accident while he was on his way to school and at
the time of the accident, he had in his possession official papers he
worked on his residence on the eve of his death (Vda. De Torbela vs.
ECC, 96 SCRA 260).

34. What is the going and coming rule? Give the exceptions to the rule.

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

The general rule in workmens compensation law known as the going and coming
rule, is that in the absence of special circumstances, an employee injured
while going to or coming from his place of work is excluded from the benefits
of the workmens compensation law. Thus, an injury or accident sustained by an
employee while using the public streets and highways in going to or returning
from the place of employment is not compensable. Such as injury is suffered as
a consequence of risk and hazard of employment. Furthermore, the employer is
not an insurer against all accidental injuries which might happen to an
employee while in the course of employment. (Iloilo Dock and Engineering Co.
vs. WCC, 26 SCRA 102, 105)
This rule, however, admits of exceptions, to wit:
where the employee is proceeding to or from his work on the premises of
his employer;
where the employee is about to enter or about to leave the premises of
his employer by the way of the exclusive or customary means of ingress
and egress (proximity rule);
where the employee is charged, while on his way to of from his place of
employment or at his home, or during his employment with some duty or
special errand connected with his employment; and
where the employer as an incident of the employment provides the means of
transportation to and from the place of employment.

35. Explain and illustrate the proximity rule.

The proximity rule, an exception to the coming and going rule, provides that an
injury or accident sustained off the employers premise, but while in close
proximity thereto and while using a customary means of ingress and egress, is
deemed compensable.
Where the employee, while proceeding to work and running to avoid the rain,
slipped and fell into a ditch fronting the main gate of the employer's factory,
and as a result of which he died the next day, it was held that the accident
occurred within the zone of employment and therefore compensable.

36. What defenses may be interposed by the State Insurance Fund against a
claim for compensation made by a covered employee or his dependents?

The following defenses may be set up:

The injury is not work-connected or the sickness is not occupational.
The disability or death was occasioned by the employees intoxication,
willful intention to injure or kill himself or another, or his notorious
negligence.
No notice of sickness, injury or death was given to the employer.
The claim was filed beyond three (3) years from the time the cause of
action accrued.

37. Does intoxication bar compensation?

In order to prevent payment of compensation the following conditions must

concur:
there must be proof of actual intoxication;
the intoxication must be to such a degree that the employee is
incapacitated from substantially engaging in employment and performing
his task;
the intoxication must be the proximate cause of the injury;
the intoxication must not only be the proximate cause (Schneider,
Workmens Compensation Laws, Vol. VI, 493-4; Balbija vs. Time Taxicab,
1219-R, 20 October 1955).

38. Does suicide bar compensation?

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Since the employee committed the crime by himself, the resulting death is not
covered for compensation as in the following cases;
when It results from insanity resulting from compensable injury or
disease;
when it occurs during a delirium resulting from compensable injury or
disease; and
when it flows from an uncontrollable impulse arising from compensable
injury or disease (Horovits, 41 Nebraska Law Journal, 36).

39. What is notorious negligence? Does it bar compensation?

Notorious negligence is equivalent to gross negligence; it is something more

than mere carelessness or lack of foresight; it falls under the designation of
evident and manifest negligence and signifies a deliberate act of the employee
to disregard his own personal safety. However, mere disobedience to the rules,
orders and/or prohibition does not in itself constitute notorious negligence,
if no intention can be attributed to the injured to end his life.
Notorious negligence resulting in serious injury or death of the employee is
not compensable. However, no man in his senses would deliberately cause death.
Thus, the presumption is that the laborer by his instinct of self-preservation
takes precaution to avoid such danger unless a willful intention is attributed
to him to end his life (Dela Cruz vs. Cia. Maritima, G.R. No. 38236, 21 August
1933).

40. What is the liability of the State Insurance Fund?

Whenever other laws provide similar benefits for the same contingency, the
employee who qualifies for the benefits shall have the option to choose the law
under which the benefit will be paid to him. If the law chosen provides for
benefits lesser than those provided by the Labor Code, he shall be entitled
only to the difference.
The employee cannot avail himself at the same time of similar benefits provided
by different laws, except the difference thereof. However, the employer may
continue to grant benefits already earned by the employees under any collective
bargaining agreement or any other arrangement (Sec. 2, Rule V, Amended Rules
on Employees Compensation).

41. What are the benefits excluded by the State Insurance Fund?

The following benefits are excluded by the State Insurance Fund:

Gratuity benefits under Section 699 of the Revised Administrative Code,
as amended by R.A. No. 1232;
Retirement, disability, sickness, and death benefits under the SSS Law
( R.A. No. 1161, as amended);
Life insurance, disability and retirement benefits under the GSIS Law
(Com. Act. No. 186, as amended);
Gratuities and pensions of every personnel for deaths and disabilities
incurred in line of duty in accordance with R.A. No. 610, as amended;
Medical benefits administered by the Philippine Medical Care Commission
provided in R.A. No. 4864, as amended; and
Other benefits granted by other laws and administered either by the GSIS
or SSS.

42. Is Article 173 of the Labor Code, as amended a bar to claim for damages
under the Civil Code?

NO. Article 173 of the Labor Code does not bar to claim for damages under
Civil Code arising from employers negligence, for liability under Article 173
is confined only to illness or injury.

43. Is simultaneous recovery of benefits allowed?

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YES. While it is true the SSS Law (R.A. No. 1161, as amended) is distinct and
different from the labor Code, the provisions of Sections 15 of the SSS law
and Article 173 of the Labor Code are in pari materia insofar as they both
relate to payment of compensation to covered employees, and insofar also as
both provisions barred the simultaneous recovery of benefits under both the SSS
Law and the Labor Code, until Article 173 was amended by P.D No. 1921 in 1984.
The amendment introduced by P.D No. 1921 to Article 173 lifted the ban against
the simultaneous recovery of benefits under the Labor Code and the SSS law, and
is deemed to have repealed by necessary implication the provision of Section 15
of the SSS Law. Since P.D. No. 1921 is the latest expression of the
legislative will, it will prevail over Section 15 of the SSS Law. (Opinions of
the Secretary of justice dated May 23, 1989 and January 12, 1990 addressed to
the SSS).
Furthermore, benefits under the State Insurance Fund accrue due to the
employees concerned due to hazards involved and are made a burden on the
employment itself. On the other hand, social security benefits are paid to SSS
members by reason of their membership therein for which they contribute their
money to a general fund.
It must be noted that under the new Social Security Act (R.A. 8282), the
provision of Section 15 of the old SSS law which bars simultaneous recovery of
benefits, has already been deleted.

44. Can a claimant who has already recovered from the State Insurance Fund
still recover damages in a criminal or civil case in relation thereto?

No. Unless otherwise provided, the liability of the State Insurance Fund under
this Title shall be exclusive and in place of all other liabilities of the
employer to the employee, his dependents or anyone otherwise entitled to
receive damages on behalf of the employee or his dependents.

45. G., who worked in the weaving department of a textile firm, was stabbed to
death by L., his fellow employee. L. was convicted of homicide and sentenced
to pay indemnity to the heirs of G. If the heirs have already recovered from
the State Insurance Fund, can they still hold the employer subsidiarily liable
for the indemnity to be paid by L., in the event the latter is unable to pay
the same? Why?

No, the heirs can no longer recover indemnity from the employer. The
liability of the State Insurance Fund is exclusive and in place of all other
liabilities of the employer to the employee and his dependents or
beneficiaries. This includes the subsidiary liability of the employer under
the Revised Penal Code. (Generoso vs. Universal Textile Mills, Inc. G.R. No.
L-28586, January 22, 1980)

46. What are the liabilities of third parties?

In case the injury or death is caused by circumstances creating a legal

liability against a third party other than the employer, the injured employee
or his dependents may either claim compensation from the System under the Labor
Code or sue for damages in accordance with law. In case the benefit is paid by
the system, the latter is subrogated to the rights of the injured employee or
his dependent in accordance with the general law. Where the System recovers
from such third party damages in excess of those paid or allowed under Title
II, Book IV, of the Labor Code, such excess shall be delivered to the injured
employee or another person entitled thereto, after deduction of the expenses of
the System and the cost of the proceedings.
It must be noted that injuries or death caused by a third person are
compensable provided the requisites of compensability are present. However,
the injured employee cannot claim payment twice for the same injuries, that is,
from the third party and from the SSS or GSIS (Alba vs. Bulaong, 101 Phil.
434).

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47. S., a driver-mechanic, was killed when he tried to fight unidentified men
who carnapped the vehicle of his employers. As a consequence of his death, his
heirs filed an action for death compensation and damages before the RTC against
his employers. The latter, however, contended that the complaint should be
dismissed as the appropriate remedy is a claim under the Employees
Compensation Program. Is the contention of the employers correct? Explain.

No. The employee or his heirs have the choice of cause of action and the
corresponding relief, i.e. either an ordinary action for damages based on
Article 1171 of the New Civil Code before the regular courts or a special claim
for limited compensation under the Employees Compensation Program. But the
right of choice is qualified in that the employee should be held to the
particular remedy in which he stakes his fortune. (Vda. de Severo vs. Go, G.R.
No. L-44330, January 29, 1988)

48. Who are entitled to benefits under the employees compensation program?

The covered employee, his dependents, and in case of his death, his
beneficiaries.

49. Who are the dependents of the employee?

Dependents include the following:

the legitimate, legitimated or legally adopted child who is:
unmarried,
not gainfully employed, and
not over eighteen years of age,
or over eighteen but not over twenty-one years of age provided that he
is enrolled in school,
or over twenty-one years of age provided that he is congenitally
incapacitated and incapable of self-support due to physical or mental
defect which is congenital or acquired during minority;
the legitimate spouse living with the employee; and
the legitimate parents of said employee wholly dependent upon him for
regular support.

Sexual harassment in a work-related or employment environment- in a work-

related or employment environment, sexual harassment is committed when:
the sexual favor is made a condition in the hiring or in the employment,
re-employment or continued employment of said individual or 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 any way would
discriminate, deprive or diminish employment opportunities or otherwise
adversely affect said employee;
the above acts would impair the employees rights or privileges under
existing labor laws; or
the above acts would result in an intimidating, hostile, or offensive
environment for the employee. (Section 3(a), Republic Act No. 7877)

Sexual harassment in an education or training environment- in an education or

training environment, sexual harassment is committed:
against one who is under the care, custody or supervision of the
offender;
against one whose education, training, apprenticeship or tutorship is
entrusted to the offender;
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

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

when the sexual advances result in an intimidating, hostile or offensive

environment for the student, trainee or apprentice. (Section 3(b),
Republic Act No. 7877)

Pre-week in Labor Law and Social Legislation - JOBL NOTES

2. GSIS, COMPULSORY MEMBERSHIP

Compulsory for all employees (as defined in Section 2 (d) of GSIS Law)
receiving compensation who have not reached the compulsory retirement age,
irrespective of employment status, EXCEPT MEMBERS OF THE ARMED FORCES AND THE
PNP, subject to the condition that they must settle first their financial
obligations with the GSIS and contractuals who have no employer and employee
relationship with the agencies they serve.
EXCEPT FOR THE MEMBERS OF THE JUDICIARY AND CONSTITUTIONAL COMMISSIONS WHO
SHALL HAVE LIFE INSURANCE ONLY, all members of the GSIS shall have life
insurance, retirement and all other social security protection such as
disability, survivorship, separation and unemployment benefits (Sec. 3, RA 8291)

THE SOLO PARENTS' WELFARE ACT OF 2000

Q. What is parental leave?

Answer: Republic Act No. 8972 (An Act Providing for Benefits and Privileges to
Solo Parents and Their Children, Appropriating Funds Therefor and for Other
Purposes), otherwise known as The Solo Parents Welfare Act of 2000, was
approved on November 7, 2000 providing for parental leave of seven (7) days. It
is defined as follows:

(d) Parental leave - shall mean leave benefits granted to a solo parent to
enable him/her to perform parental duties and responsibilities where physical
presence is required.

It bears noting that this leave privilege is an additional leave benefit

which is separate and distinct from any other leave benefits provided under
existing laws or agreements. Thus, under Section 8 thereof, it is provided:

Sec. 8. Parental Leave. - In addition to leave privileges under existing

laws, parental leave of not more than seven (7) working days every year shall be
granted to any solo parent employee who has rendered service of at least one (1)
year.

Q. What is meant by flexible work schedule under R. A. No. 8972?

Answer: Under Republic Act No. 8972, solo parents are allowed to work on a
flexible schedule, thus:

Sec. 6. Flexible Work Schedule. The employer shall provide for a

flexible working schedule for solo parents: Provided, That the same shall not
affect individual and company productivity: Provided, further, That any employer
may request exemption from the above requirements from the DOLE on certain
meritorious grounds. (Section 6, Republic Act No. 8972).

The phrase flexible work schedule is defined in the same law as follows:

(e) Flexible work schedule - is the right granted to a solo parent

employee to vary his/her arrival and departure time without affecting the core
work hours as defined by the employer. (Section 3[e], Republic Act No. 8972).
Entitlement

Q: How many days are entitled to a solo parent?

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Answer: A Male or Female Solo Parent is entitled to 1 7 days of leave each

year.

Q: Who is considered a solo parent under Republic Act 8972\

A: The following are considered a solo parent:

1. A woman who gives birth as a result of rape;
2. A widow or widower;
3. A spouse of convict in jail;
4. A spouse of insane;
5. A spouse after legal separation with custody of children;
6. A spouse after declaration of nullity of marriage with custody of children;
7. A spouse abandoned for at least one year;
8. An unmarried mother or father with custody of children;
9. Any person who solely provides pastoral care and support to a child; and
10. Any family member who assumes responsibility of a parent who abandons. (R.A.
NO. 8972, 11/7/2000)

GUIDE ON THE BATTERED WOMANS LEAVE

Q: How many days leave is entitled to a battered woman under R.A. 9262?

A: A battered woman is entitled to ten (10) days leave with pay in addition to
other paid leaves under the labor code, other laws and company policies.
\
BATTERED WOMAN DEFINED

Q: Who is considered a Battered Woman?

A: A Battered Woman is one who is a victim of any act or series of acts of

violence committed by any person which resulted to her physical, sexual or
psychological suffering.

Q: How does a battered woman apply for such leave?

A: The woman employee has to submit a certification from the barangay captain or
kagawad or prosecutor or the clerk of court that an action under R.A. No. 9262
has been filed and is pending.

Usage of the 10-day leave is at the option of the woman employee. It shall
cover the day or days when she will have to attend to medical and legal concerns.
Leaves not availed of are non-cumulative and not convertible to cash (R.
A. No. 9262, the anti-violence against women and their children act of 2004;
3/8/04).

SOLO PARENTS' WELFARE ACT OF 2000

Q. What is parental leave?

Answer: Republic Act No. 8972 (An Act Providing for Benefits and Privileges to
Solo Parents and Their Children, Appropriating Funds Therefor and for Other
Purposes), otherwise known as The Solo Parents Welfare Act of 2000, was
approved on November 7, 2000 providing for parental leave of seven (7) days. It
is defined as follows:

(d) Parental leave - shall mean leave benefits granted to a solo parent to
enable him/her to perform parental duties and responsibilities where physical
presence is required.

It bears noting that this leave privilege is an additional leave benefit

which is separate and distinct from any other leave benefits provided under
existing laws or agreements. Thus, under Section 8 thereof, it is provided:

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

Sec. 8. Parental Leave. - In addition to leave privileges under existing

laws, parental leave of not more than seven (7) working days every year shall be
granted to any solo parent employee who has rendered service of at least one (1)
year.

Q. What is meant by flexible work schedule under R. A. No. 8972?

Answer: Under Republic Act No. 8972, solo parents are allowed to work on a
flexible schedule, thus:

Sec. 6. Flexible Work Schedule. The employer shall provide for a

flexible working schedule for solo parents: Provided, That the same shall not
affect individual and company productivity: Provided, further, That any employer
may request exemption from the above requirements from the DOLE on certain
meritorious grounds. (Section 6, Republic Act No. 8972).

The phrase flexible work schedule is defined in the same law as follows:

(e) Flexible work schedule - is the right granted to a solo parent

employee to vary his/her arrival and departure time without affecting the core
work hours as defined by the employer. (Section 3[e], Republic Act No. 8972).
Entitlement

Q: How many days are entitled to a solo parent?

Answer: A Male or Female Solo Parent is entitled to 1 7 days of leave each
year.

Q: Who is considered a solo parent under Republic Act 8972\

A: The following are considered a solo parent:

1. A woman who gives birth as a result of rape;
2. A widow or widower;
3. A spouse of convict in jail;
4. A spouse of insane;
5. A spouse after legal separation with custody of children;
6. A spouse after declaration of nullity of marriage with custody of children;
7. A spouse abandoned for at least one year;
8. An unmarried mother or father with custody of children;
9. Any person who solely provides pastoral care and support to a child; and
10. Any family member who assumes responsibility of a parent who abandons. (R.A.
NO. 8972, 11/7/2000)

GUIDE ON THE BATTERED WOMANS LEAVE

Q: How many days leave is entitled to a battered woman under R.A. 9262?

A: A battered woman is entitled to ten (10) days leave with pay in addition to
other paid leaves under the labor code, other laws and company policies.
\
BATTERED WOMAN DEFINED

Q: Who is considered a Battered Woman?

A: A Battered Woman is one who is a victim of any act or series of acts of

violence committed by any person which resulted to her physical, sexual or
psychological suffering.

Q: How does a battered woman apply for such leave?

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

A: The woman employee has to submit a certification from the barangay captain or
kagawad or prosecutor or the clerk of court that an action under R.A. No. 9262
has been filed and is pending.

Usage of the 10-day leave is at the option of the woman employee. It shall
cover the day or days when she will have to attend to medical and legal concerns.
Leaves not availed of are non-cumulative and not convertible to cash (R.
A. No. 9262, the anti-violence against women and their children act of 2004;
3/8/04).

Briefly state the laws on employment of minors.

A: As a general rule, no child below 15 shall be employed. The exceptions to

the rule are:
1. When the child works directly under the sole responsibility of his/her
parents or legal guardian who employs members of his/her family only under the
following conditions:
employment does not endanger the childs life, safety, health and
morals;
employment does not impair the childs normal development; and
the parent/legal guardian provides the child with the primary and/or
secondary education prescribed by DECS.

2. Where the childs employment or participation in public entertainment

or information through cinema, theater, radio, or television is essential,
provided that:
employment does not involve advertisements or commercials promoting
alcoholic beverages, intoxicating drinks, tobacco and its by-products or
exhibiting violence;
There is a written contract approved by the DOLE; and
The conditions prescribed for the employment of minors {above stated} are
met.

Q: What are considered hazardous work places?

A: The following are considered hazardous places:

1. where the nature of the work exposes the workers to dangerous environmental
elements, contaminants or work conditions;
2. where the workers are engaged in construction work, logging, fire-fighting,
mining, quarrying, blasting, stevedoring, dock work, deep-sea fishing, and
mechanized farming;
3. where the workers are engaged in the manufacture or handling of explosives and
other pyrotechnic products;
4. where the workers use or are exposed to heavy or power-driven machinery or
equipment; and
5. where the workers use or are exposed to power-driven tools,

CHILD LABOR
Child laborers are persons aged below 15, or from 15 to below 18 years,
performing work or service that is hazardous or deleterious in nature, or
exploitative, or unsupervised by the childs parent or guardian, or that
interferes with normal development, or deprives that childs right to health and
education.
However, not all children who work are engaged in child labor. Work
performed by any person below 15 years of age is not considered child labor if it
falls under allowable situations under Republic Act No. 7658. Light work that is

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

occasional, legal and respects the childs right to health and education is not
child labor.

Note on CHILD LABOR:

Republic Act 9231, Sec. 3 (July 28, 2003), allows a child below 15 years of
age to work for not more than 20 hours a week, provided: (a) that the work shall
not be more than 4 hours at any given day; (b) he does not work between 8PM and
6AM of the following day; and (c) the work is not hazardous or deleterious to his
health or morals. A child 15 years but below 18 years shall not work for more
than 8 hours a day and in no case beyond 40 hours a week and he is not allowed to
work from 10PM to 6AM.

New: NIGHT WORKERS

RUN-OFF ELECTION
Double majority rule: Before a labor union can be declared a winner, a
majority of the eligible voters must have cast their votes (include
spoiled ballots) and a majority of the valid votes cast is for such
union (exclude spoiled ballots but include challenged votes).
Run-off election is proper when:
there is a valid election because a majority of the eligible voters
voted (1st majority)
the said election presented at least 3 choices
not one of the choices obtained the majority of the valid votes cast
(2nd majority)
total votes cast for the contending unions is at least 50% of the votes
cast
the unions obtaining the two highest votes will participate in the run-
off, take note that NO UNION shall not be a choice in the run-off
election
the union obtaining the majority of the total votes cast shall be
declared winner in the run-off election

GUIDE TO CORRECT ANSWERS FOR MCQ

Constitutional mandate.

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 negotiations, 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 and 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 setting 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 of production and
the right of enterprises to reasonable returns on investments, and to expansion
and growth. (Section 3 (Labor), Article XIII [Social Justice and Human Rights]
of the 1987).

1. Declaration of basic principles.

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The State shall afford protection to labor, promote full employment, ensure equal
work opportunities regardless of sex, race or creed and regulate the relations
between workers and employers. The State shall assure the rights of workers to
self-organization, collective bargaining, security of tenure, and just and humane
conditions of work.

1. Labor contracts are not ordinary contracts as the relation between

capital and labor is impressed with public interest.
2. In case of doubt, labor laws and rules shall be interpreted in favor of
labor.
3. Labor Code applies to all workers, whether agricultural or non-
agricultural.
4. Applicability of Labor Code to government-owned or controlled
corporations:
When created with original or special charter Civil Service laws,
rules and regulations;
When created under the Corporation Code applies.

RECRUITMENT AND PLACEMENT OF WORKERS

1. Relevant law Migrant Workers and Overseas Filipinos Act of 1995 (R. A.
No. 8042).
2. Free placement services by public employment offices for
domestic/overseas work.

Entities authorized to engage in recruitment and placement

a. public emplyment offices;
b. Philippine Overseas Employment Administration (POEA);
c. Private recruitment entities;
d. Private employment agencies;
e. Shipping or manning agents or representatives;
f. Such other persons or entities as may be authorized by the Secretary of
Labor and Employment; and
g. Construction contractors.

Money claims of OFWs jurisdiction and appeal

1. Jurisdiction over money claims of OFWs is vested with Labor Arbiters of
the NLRC and not with POEA (R. A. no. 8042).
2. Decisions of Labor Arbiters in money claims of OFWs are appealable to
NLRC.

Liability of local recruitment agency and foreign principal

1. Local Agency is solidarily liable with foreign principal.
2. Severance of relations between local agent and foreign principal does not
affect liability of local recruiter.

Claims for Death and other Benefits

1. Labor Arbiters have jurisdiction over claims for death, disability and
other benefits arising from employment.
2. Basis of compensation for death generally is whichever is greater between
Philippine law or foreign law.
3. Work-connection required.

Disciplinary Action Cases [POEA retains jurisdiction over disciplinary action

cases]

Direct-hiring
1. Employers cannot directly hire workers for overseas employment except
through authorized entities (see enumeration above).
2. Rationale for the ban to ensure full regulation of employment in order
to avoid exploitation.
3. Non-resident foreign corporation directly hiring Filipino workers is
doing business in the Philippines and may be sued in the Philippines.

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Illegal recruitment
1. Illegal recruitment under Article 38 applies to both local and overseas
employment.
2. Illegal recruitment- may be committed by any person whether licensees or
non-licensees or holders or non-holders of authority.
3. Elements of illegal recruitment:
a. First element: recruitment and placement activities.

Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring,

or procuring workers and includes referring, contract services, promising or
advertising for employment abroad, whether from profit or not, when undertaken by
a non-licensee or non-holder of authority: Provided, That any such licensee or
non-holder who, in any manner, offers or promises for a fee employment abroad to
two or more persons shall be deemed as engaged in such act.

a. Second element: Non-licensee or non-holder of authority means any

person, corporation or entity which has not been issued a valid
license or authority to engage in recruitment and placement by the
Secretary of Labor and Employment, or whose license or authority has
been suspended, revoked or canceled by the POEA or the Secretary of
Labor and Employment.

Note:
i. Mere impression that recruiter is capable of providing work abroad is
sufficient.
i. Referral of recruits also constitutes recruitment activity.
ii. Absence of receipt to prove payment is not essential to prove
recruitment.
iii. Only one (1) person recruited is sufficient to constitute recruitment.
iv. Non-prosecution of another suspect is not material.
1. Illegal recruitment, when considered economic sabotage when the
commission thereof is attended by the qualifying circumstances as
follows:
a. By a syndicate if carried out by a group of 3 or more persons
conspiring and confederating with one another;
b. In large scale if committed against 3 or more persons individually
or as a group.
1. Prescriptive period of illegal recruitment cases Under Republic Act No.
8042 Five (5) years except illegal recruitment involving economic
sabotage which prescribes in 20 years.

Employment of non-resident aliens

1. Non-resident aliens should secure Alien Employment Registration
Certificate (AERC).
2. There should be understudies.
3. Alien employee should not transfer to another job or charge his employer.

TRAINING AND EMPLOYMENT OF SPECIAL WORKERS:

APPRENTICES
1. Apprenticeship program to be implemented and administered by TESDA.
2. Apprenticeship means any training on the job supplemented by related
theoretical instruction involving apprenticeable occupations and trades
as may be approved by the Secretary of Labor and Employment. An
apprentice is a worker who is covered by a written apprenticeship
agreement with an employer.
3. Qualifications of apprentices:
a. be at least fifteen (15) years of age, provided those who are at least
fifteen (15) years of age but less than eighteen may be eligible for
apprenticeship only in non-hazardous occupation;
b. be physically fit for the occupation in which he desires to be
trained;

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ATTY. GALLARDO ATTY. PASAWAY GREEN NOTES PROVISIONS REVIEWERS

c. possess vocational aptitude and capacity for the particular occupation

as established through appropriate tests; and
d. possess the ability to comprehend and follow oral and written
instructions.
1. Wage rate of apprentices 75% of the statutory minimum wage.
2. Apprentices become regular employees if program is not approved by DOLE.
3. Ratio of theoretical instructions and on-the-job training 100 hours of
theoretical instructions for every 1,000 hours of practical training on-
the-job.

LEARNERS
1. Learners is a person hired as a trainee in industrial occupations which
are non-apprenticeable and which may be learned through practical
training on the job for a period not exceeding three (3) months, whether
or not such practical training is supplemented by theoretical
instructions.
2. Pre-requisites before learners may be validly employed:
a. when no experienced workers are available;
b. the employment of learners is necessary to prevent curtailment of
employment opportunities; and
c. the employment does not create unfair competition in terms of labor
costs or impair or lower working standards.
1. Wage rate of learners 75% of the statutory minimum wage.

HANDICAPPED WORKERS
1. Handicapped workers are those whose earning capacity is impaired:
a. by age; or
b. physical deficiency; or
c. mental deficiency; or
d. injury
1. If disability is not related to the work for which he was hired, he
should not be so considered as handicapped worker. He may have a
disability but since the same is not related to his work, he cannot be
considered a handicapped worker insofar as that particular work is
concerned.
2. Wage rate 75% of the statutory minimum wage.

THE SOLO PARENTS' WELFARE ACT OF 2000

Q. What is parental leave?

Answer: Republic Act No. 8972 (An Act Providing for Benefits and Privileges to
Solo Parents and Their Children, Appropriating Funds Therefor and for Other
Purposes), otherwise known as The Solo Parents Welfare Act of 2000, was
approved on November 7, 2000 providing for parental leave of seven (7) days. It
is defined as follows:

(d) Parental leave - shall mean leave benefits granted to a solo parent to
enable him/her to perform parental duties and responsibilities where physical
presence is required.

It bears noting that this leave privilege is an additional leave benefit which is
separate and distinct from any other leave benefits provided under existing laws
or agreements. Thus, under Section 8 thereof, it is provided:

Sec. 8. Parental Leave. - In addition to leave privileges under existing laws,

parental leave of not more than seven (7) working days every year shall be
granted to any solo parent employee who has rendered service of at least one (1)
year.
Q. What is meant by flexible work schedule under R. A. No. 8972?

Answer: Under Republic Act No. 8972, solo parents are allowed to work on a
flexible schedule, thus:

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Sec. 6. Flexible Work Schedule. The employer shall provide for a flexible
working schedule for solo parents: Provided, That the same shall not affect
individual and company productivity: Provided, further, That any employer may
request exemption from the above requirements from the DOLE on certain
meritorious grounds. (Section 6, Republic Act No. 8972).

The phrase flexible work schedule is defined in the same law as follows:

(e) Flexible work schedule - is the right granted to a solo parent employee to
vary his/her arrival and departure time without affecting the core work hours as
defined by the employer. (Section 3[e], Republic Act No. 8972).
Entitlement
Q: How many days are entitled to a solo parent?
A: A Male or Female Solo Parent is entitled to 1 7 days of leave each year.

Q: Who is considered a solo parent under Republic Act 8972\

A: The following are considered a solo parent:
1. A woman who gives birth as a result of rape;
2. A widow or widower;
3. A spouse of convict in jail;
4. A spouse of insane;
5. A spouse after legal separation with custody of children;
6. A spouse after declaration of nullity of marriage with custody of children;
7. A spouse abandoned for at least one year;
8. An unmarried mother or father with custody of children;
9. Any person who solely provides pastoral care and support to a child; and
10. Any family member who assumes responsibility of a parent who abandons. (R.A.
NO. 8972, 11/7/2000)

BATTERED WOMAN LEAVE

Q: How many days leave is entitled to a battered woman under R.A. 9262?
A: A battered woman is entitled to ten (10) days leave with pay in addition to
other paid leaves under the labor code, other laws and company policies.
BATTERED WOMAN DEFINED.
Q: Who is considered a Battered Woman?
A: A Battered Woman is one who is a victim of any act or series of acts of
violence committed by any person which resulted to her physical, sexual or
psychological suffering.
Q: How does a battered woman apply for such leave?
A: The woman employee has to submit a certification from the barangay captain or
kagawad or prosecutor or the clerk of court that an action under R.A. No. 9262
has been filed and is pending.
Usage of the 10-day leave is at the option of the woman employee. It shall
cover the day or days when she will have to attend to medical and legal concerns.
Leaves not availed of are non-cumulative and not convertible to cash (r.a. no.
9262, the anti-violence against women and their children act of 2004; 3/8/04).

SOCIAL SECURITY SYSTEM

RA1161 as amended by RA 8282

COVERAGE:

Compulsory:
Compulsory upon all employees not over 60 years of age and their
employers
In case of domestic helpers, their monthly income should not be less
than one thousand pesos

Limitation: Sec. 9 (a)

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Any benefit already earned by the employees under private benefit plans
existing at the time of the approval of the Act shall not be
discontinued, reduced or otherwise impaired
Private plans which are existing and in force at the time of compulsory
coverage shall be integrated with the plan of the SSS in such a way
where the employers contribution to his private plan is more than that
required of him in this Act, he shall pay to the SSS only the
contribution required of him and he shall continue his contribution to
such private plan less his contribution to the SSS so that the
employers total contribution to his benefit plan and and to the SSS
shall be the same as his contribution to his private benefit plan
before any compulsory coverage.
Any changes, adjustments, modifications, eliminations or improvements in
the benefits to be available under the remaining private plan, which may
be necessary to adopt by reason of the reduced contribution thereto as a
result of the integration shall be subject to agreements between the
employers and the employees concerned
The private benefit plan which the employer shall continue for his
employees shall remain under the employers managementand control unless
there is an existing agreement to the contrary.
Nothing in this Act shall be construed as a limitation on the right of
employers and employees to agree on and adopt benefits which are over
and above those provided under this act

3. Compulsory upon such self- employed persons as may be determined by the

Commission including but not limited to the following (Sec 9-A): (APAPI)
1. All self employed professionals
2. Partners and single proprietors
3. Actors and actresses directors, scriptwriters and news correspondents who
do not fall within the definition of the term employee in Section 8 (d)
of this Act
4. Professional athletes, coaches, trainers, and jockeys
5. Individual farmers and fishermen

Voluntary:

Spouses who devote full time to managing the household and family
affairs, unless they are also engaged in other vocation or employment
which is subject to mandatory coverage, may be covered by the SSS on a
voluntary basis.
Filipinos recruited by foreign based employers for employment abroad may
be covered by the SSS on a voluntary basis
Employees separated from employment may continue to pay contributions to
maintain his right to full benefits (Sec. 11)
Self-employed with no income (11-A)

BY AGREEMENT:

Any foreign government, international organization, or their wholly-owned

instrumentality employing workers in the Philippines, may enter into an agreement
with the Philippine government for the inclusion of such employees in the SSS
except those already covered by their respective civil service retirement systems
(Sec.8 (j (4)).

Excluded Employment (Sec. 8 (j)):

Employment purely casual and not for the purpose of occupation or
business of the employer
Service performed on or in connection with an alien vessel by an
employee if he is employed when such vessel is outside the Philippines.
Service performed in the employ of the Philippine government or
instrumentality or agency thereof.

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Service performed in the employ of a foreign government, international

organization, or their wholly owned instrumentality;
Services performed by temporary employees, which may be excluded by
regulation of the commission.

EFFECTIVE DATE OF COVERAGE:

Employer: It shall take effect on the first day of his operation

Employee: On the day of his employment
Self-employed: It shall take effect upon his registration with SSS

Definition of Terms

EMPLOYER
Any person natural or juridical, domestic or foreign, who carries on in the
Philippines, any trade business, industry undertaking or activity of any kind
and uses the services of another person who is under his orders as regards the
employment except the Government and any of its political subdivisions, branches
or instrumentalities, including corporations owned or controlled by the
Government
Self- employed person shall be both the employer and employee at the same time

EMPLOYEE

Any person who performs services for an employer in which either or both
mental and physical efforts are used and who receives compensation for such
services, where there is an employer- employee relationship.
Self- employed person shall be both the employer and employee at the same time

DEPENDENTS:

The legal spouse entitled by law to receive support from the member
the legitimate, legitimated or legally adopted and illegitimate child
who is unmarried, not gainfully employed and has not reached 21 years of
age or if 21 years of age, he is congenitally incapacitated or while
still a minor has been permanently incapacitated and incapable of self-
support, physically and mentally and
the parent who is receiving regular support from the member

BENEFICIARIES

a. The dependent spouse until he or she remarries, the dependent legitimate,

legitimated or legally adopted and illegitimate children who shall be the
primary beneficiaries of the member
b. PROVIDED that the dependent illegitimate children shall be entitled to 50%
of the share of the legitimate, legitimated or legally adopted children.
c. PROVIDED FURTHER in the absence of the legitimated, legally adopted or
legitimate children, illegitimate children shall be entitled to 100% of
the benefits.
d. In their absence, the dependent parents who shall be the secondary
beneficiaries.
e. In the absence of all of the foregoing, any person designated by the
covered employee as secondary beneficiary.

Benefits

1. Monthly pension

1. Dependents pension
It shall be paid for each dependent child conceived on or before the date of the
contingency but not exceeding five, beginning with the youngest without

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substitution PROVIDED that where there are legitimate and illegitimate children,
the former shall be preferred.

1. Retirement benefits

A member who has paid at least 120 monthly contributions prior to the
semester of retirement and who:
has reached the age of 60 years and is already separated from employment
or has ceased to be self-employed
has reached the age of 65 years, shall be entitled for as a covered
member who is 60 years old not qualified under No. 1 shall still be
entitled to retirement benefits PROVIDED, he is separated from
employment and is not continuing payment of contributions to the SSS on
his own.

SUSPENSION OF MONTHLY PENSION: Upon the re-employment or resumption of

self-employment of a retired employee who is less than 65 years old.

1. Death Benefits

1. Permanent disability benefits

1. Funeral Benefit
A funeral grant equivalent to Twelve thousand pesos (P12, 000.00) shall
be paid, in cash or in kind, to help defray the cost of funeral expenses upon the
death of a member, including permanently totally disabled member or retiree.

1. Sickness Benefit

Requirements:
a. A member must have paid at least 3 monthly contributions in the twelve
month period immediately preceding the semester of sickness or injury
b. and is confined therefor for more than three days in a hospital or
elsewhere with the approval of the SSS

1. Maternity Leave Benefit

It shall be paid to a female employee who has paid at least 3 monthly

contributions in the twelve month period immediately preceding the semester of
her childbirth or miscarriage PROVIDED:
a. That the employee shall have notified her employer of her pregnancy and
the probable date of her childbirth which notice shall be transmitted to
the SSS.
b. The full payment shall be advanced by the employer within 30 days from the
filing of the maternity leave application
c. Payment of daily maternity benefits shall be a bar to the recovery of
sickness benefits
d. The maternity benefits provided under this section shall be paid only for
the first 4 deliveries or miscarriages
e. The SSS shall immediately reimburse the employer 100% of the benefits
advanced by the latter
f. If no contributions were remitted by the employer or no notice was given
to SS, the employer shall be liable for damages equivalent to the benefits
which said employee member would otherwise have been entitled to.

Non-transferability of Benefits (Sec. 15)

Such benefits are not transferable and no power of attorney or other

document executed by those entitled thereto, in favor of any agent, attorney or
any other person for the collection thereof on their behalf shall be recognized,
except when they are physically unable to collect personally such benefits.

Sources of Fund

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1. Collection:
Beginning on the last day of the month when an employees compulsory
coverage takes effect and every month thereafter during his employment, his
employer shall pay the employers contribution and shall deduct and withhold from
such employees monthly salary the employees contribution.The same time of
collection for self-employed

1. Remittance:
It shall be remitted within the first 10 days of each calendar month
following the month for which they are applicable or within such time as the
Commission may prescribe.
For self-employed they shall remit their contributions quarterly on such dates
and schedules as the Commission may require.

(NOTE: SEE TABLE ON SOCIAL WELFARE LEGISLATION FOR COMPARISON WITH GSIS)

TRANSFER OF HEALTH INSURANCE FUNDS OF SSS AND GSIS

It shall be transferred to the Corporation within 60 days from the promulgation

of the Implementing Rules and Regulation

The SSS and GSIS shall continue to perform Medicare functions under contract with
the Corporation until such time that such functions are assumed by the
Corporation.
TRANSFER OF MEDICARE FUNCTIONS OF THE SSS AND GSIS

Within 5 years from the promulgation of the implementing rules and regulations.
But the SSS and GSIS shall continue performing its Medicare functions beyond the
stipulated 5-year period if such extension will benefit Program members.

PRIMER ON SOCIAL SECURITY LAW OF 1997

Republic Act No. 8282

1. In addition to the Employees Compensation Law found in the Labor Code, what
are the other social securities law in the Philippines?

The following social security laws:

(1) RA No. 8282-Social Security Act of 1997
(2) RA No. 8291-Government Service Insurance System Act of 1997
(3) RA No. 7875-National Health Insurance Act of 1995
(4) RA No. 7699-Limited Portability Scheme in Social Security System
(5) PD 1753 as amended by RA No. 7743 - The Home Development
Mutual Fund Law of 1980 or the PAG-IBIG Fund.

2. What law governs the social security system of the private employees?

The Social Security Law of 1997 which is RA No. 1161 as amended by RA No.
8282 which took effect last 24 May 1997.

3. What is the declared policy of the state relative to social security system?

As provided by Sec.2, RA No. 8282:

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Sec. 2. Declaration of Policy- It is the policy of the State to establish,

develop, promote and perfect a sound and viable tax-exempt social security system
suitable to the needs of the people throughout the Philippines which shall
promote social justice and provide meaningful protection to members and their
beneficiaries against the hazards, disability, sickness, maternity, old age, and
death and other contingencies resulting in loss of income or financial burden.
Towards this end, the State shall endeavor to extend social security protection
to workers and their beneficiaries.

4. Give the organizational set-up of the Social Security System.

The Social Security System is a corporate body, with principal place of

business in Metro Manila. It is directed and controlled by the Social Security
System.
The Social Security System is composed by the Secretary of Labor and
Employment or his duly designated undersecretary, the SSS president and sever (7)
appointive members, three of whom shall represent the workers' group, one of whom
shall be a woman, three from the employers' group, at least one of whom shall be
a woman and one, the general public whose representative shall have adequate
knowledge and experience regarding social security, to be appointed by the
President of the Philippines. (Sec. 3, RA No. 8282)

5. Who shall generally conduct the operations and management functions of the
SSS?

Vested in the SSS President who shall serve as chief executive officer in
carrying the SSS program.

6. What are the duties and powers of the Commission?

These powers and duties:

(1) To adopt, amend, rescind, subject to the approval of the President such
rules and regulations as may be necessary to carry out the provision and purposes
of this Act.
(2) To establish a provident fund for the members which will consist of
voluntary contributions of employers and/or employees, self-employed and
voluntary members and their earnings, for payment of benefits, subject to such
rules and regulations as it may promulgate and approved by the President of the
Philippines.
(3) To maintain a Provident Fund which consist of contributions made by both
the SSS and its officials and employees and their earnings, for th payment of
benefits to such officials and employees or their heirs under such terms and
conditions as it may prescribe;
(4) To approve restructuring proposals for the payment of due but unremitted
contributions and unpaid loan amortization under such terms and conditions as it
may prescribe.
(5) To authorize cooperatives registered with cooperative development
authority to act as collecting agent of SSS with respect to their members;
(6) To compromise or release in whole or in part any interest, penalty or
civil liability to SSS in connection with the investment under Sec. 26 of this
Act.
(7) To approve, confirm, pass upon any and all actions of the SSS. [ Sec.
4(a), RA No. 8282].

7. What are the powers and duties of the Social Security System?

The following:
(1) To submit annually public report to the President, not later than 30
April;
(2) To require the actuary to submit a valuation report on the SSS benefit
program every four years; and to undertake actual studies and cancellations for
any possible increase of benefits.

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(3) To establish SSS offices covering many provinces and cities and
congressional districts;
(4) To enter into contracts or agreements for such services and aids;
(5) To adopt from time to time a budget of expenditures;
(6) To set up its accounting systems;
(7) To require reports, compilations and analyses of statistical and
economic data;
(8) To acquire and dispose of property, real or personal;
(9) To acquire, receive or hold by way of purchase, expropriation or
otherwise, public and private property
(10) To sue and be sued in court;
(11) To perform such other corporate acts as it may deem appropriate for the
proper enforcement of this Act [Sec. 4(b), RA No. 8282].

8. Are decisions of the Commission appealable by judicial review to regular

courts?

Yes. The appeal by judicial review under Sec. 5( c ), RA No. 8282 may be
made within 15 days from receipt of decision/order/denial of motion for
reconsideration to:
(1) Court of Appeals if it involves question of law and fact.
(2) Supreme Court if it involves solely question of law

9. Under the existing SSS system what are the two classes of coverages?

Coverage of the system may either be:

(1) Compulsory coverage of the system; and
(2) Voluntary coverage of the system.

10. When shall the coverage in the SSS be considered as compulsory or mandatory?

Coverage shall be compulsory upon:

(1) All employees not over sixty (60) years of age and their employers;
(2) Domestic helpers whose monthly income shall not be less than P1,000.00 a
month
(3) Self-employed persons, including but not limited to:
(a) All self-employed professionals;
(b) Partners and single proprietors of business;
(c ) Actors and actresses, directors, scriptwriters and news
correspondents who do not fall within the term "employee under Sec. 8(d) of this
act
(d) Individual farmers and fishermen. [Sec.9(a), RA No. 8282].

11. Who may be covered by the SSS on a voluntary basis?

The following:
(1) Spouses who devote full time to managing the household and family
affairs unless they are also engaged in other vocation or employment which is
subject to mandatory coverage may be covered by the SSS on a voluntary basis.
[Sec.9(b), RA No. 8282]
(2) Filipinos recruited by foreign-based employers for employment abroad may
be covered by the SSS on a voluntary basis. [Sec.9(c ), RA No. 8282].

12. What is meant by "employer" under the SSS?

Employer means any person, natural or juridical, domestic or foreign, who

carries on in the Philippines any trade, business, industry, undertaking or
activity of any kind and uses the services of another person who is under his
orders as regards the employment, except government and any of its political
subdivisions, branches or instrumentalities including corporations owned and
controlled by the Government; Provided, That a self-employed person shall be
both employee and employer at the same time. [Sec.8(c), RA No. 8282].

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13. What is an "employee" within the coverage of the SSS?

Any person who performs services for an employer in which either or both
mental and physical efforts are used and who receives compensation for such
services, where there is an employer-employee relationship. Provided, that a
self-employed person shall be both employee and employer at the same time.
[Sec.8(d), RA No. 8282].

14. Under the SSS, what do you mean by "self-employed"?

Self-employed shall mean any person whose income is not derived from
employment, as defined in this Act, as well as those workers enumerated in
Section 9-A hereof.

15. Under the SSS, what is meant by employment?

Any service performed by an employee for an employer except:

(1) Employment purely casual and not for the purpose of business or
occupation of the employer;
(2) Service performed on or in connection with an alien vessel by an
employee if he is employed when such vessel is outside of the Philippines;
(3) Service performed in the employ of the Philippine Government or
instrumentality or agency thereof.
(4) Service performed in the employ of a foreign government or international
organization or their wholly-owned instrumentality.
(5) Such other services performed by temporary employees which may be
excluded by the regulation of the Commission. [Sec.8(j)]

16. When does the compulsory coverage of an employer, employee or a self-employed

person take effect? or when is the effective date of SSS coverage?

Compulsory coverage of the employer shall take effect on the first day of
his operation and that the compulsory coverage of the self-employed shall take
effect upon his registration with the SSS. (Sec.10, RA No. 8282)

17. State the effect of the employee's separation of employment upon his
membership in the SSS.

When an employee under compulsory coverage is separated from employment, his

employer's contribution on his account and his obligation to pay contribution
arising from that employment shall cease at the end of the month of separation,
but said employee shall be credited with all contributions paid on his behalf and
entitled to the benefits according to the provisions of this Act. He may,
however, continue to pay the total contribution to maintain his right to full
benefits. (Sec.11, RA No. 8282).

18. Cite the effects of interruption of business or professional income.

If the self-employed realizes no income in an government, he shall not be

required to pay contributions for that month. He may, however, be allowed to
continue paying contributions under the same rules and regulations applicable to
separated employee member. (Sec. 11-A).

19. What are the benefits accorded/available to the SSS members?

The benefits are:

(1) Monthly pensions (Sec.12)
(2) Dependent's pension (Sec.12-A);
(3) Retirement benefits (Sec.12-B);
(4) Death benefits (Sec.13)
(5) Permanent disability benefits (Sec.13-A);
(6) Funeral benefits (Sec.13-B);
(7) Sickness benefit (Sec.14);

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(8) Maternity leave benefit (Sec.14-A)

20. What is the minimum monthly pension?

The following:
(1) P1,200.00 for members with at least 10 credited years of service;
(2) P2,400.00 for those with 20 credited years of service [Sec.12(b), RA No.
8282].

21. What shall be the highest monthly pension?

The monthly pension shall be the highest of the sum of P300.00 plus:
(1) 20% of the average monthly salary credit; plus
(2) 2% of the average monthly salary credit for each credited year of
service in excess of ten years; or
Forty percent (40%) of the average monthly salary credit; or
One thousand pesos (P1,000.00) Provided that the monthly pension shall in no
case be paid for an aggregate amount of less than 60 months. * Monthly salary
credit means- the compensation base for contributions and benefits as indicated
in the schedule 18 of this Act. [Sec.8(g), RA No. 8282].

22. Who are the dependents under SSS?

The dependents shall be the following:

(1) The legal spouse entitled by law to receive support from the member.
(2) The legitimate, legitimated or legally adopted, and illegitimate child
who is unmarried, not gainfully employed and has not reached 21 years of age or
over if congenitally incapacitated or incapable of self-support, physically or
mentally. [Sec.8(e), RA No. 8282].
(3) The parent who is receiving regular support from the member.

23. Explain briefly dependent's pension.

The dependent pension shall be 10% of the monthly pension or P250.00

whichever is higher to be received by each dependent but not exceeding five.
(Sec. 12-A)

24. Who are the members to enjoy retirement benefits?

The following:
(1) Those who contributed prior to his semester of retirement has paid 120
monthly contributions;
(2) Those who reach the age of 60 or 65 years of age. (Sec.12-B)

25. Classify beneficiaries under SSS.

They are:
(1) Primary beneficiaries - dependent spouse, dependent
legitimate/legitimated/adopted/illegitimate children;
(2) Secondary beneficiaries - in the absence of the primary beneficiaries,
the dependent parents and other person designated by the member.

26. How much is the death benefit to be enjoyed by the primary beneficiaries?

If the member has paid at least 36 monthly contributions, the benefit shall
be a lump sum equivalent to 36 times the monthly pension.
However, if he had not paid the 36 monthly contributions, the beneficiary
shall be entitled to a lump sum benefit equivalent to the monthly pension times
the number of monthly contributions paid to SSS or 12 times the monthly pension
whichever is higher.

27. What are the two types of permanent disability?

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(1) Permanent total disability - is loss or reduction of earning capacity

due to impairment of the normal functions of the physical and/or mental
faculties, recovery therefrom being medically remote. The loss or reduction of
earning capacity must amount to at least 75% or the aggregate loss or reduction
of earning capacity from more than one injury or disease amounts to at least
100%. [Sec.13-1 (g), RA No. 8282].
(2) Permanent partial disability - accrues or arises when the loss or
reduction or earning capacity amounts to less than 75% or when the aggregate loss
or reduction of earning capacity resulting from more than one injury or disease
amounts to less than 100% as a result of unrecoverable anatomical loss.

28. What is the condition to entitle a member to permanent disability benefits?

He has paid 36 monthly contributions prior to the semester of the

disability. [Sec.13-A(a), RA No. 8282].

29. How are permanent disability benefits classified?

They are classified as permanent total disability benefits and the permanent
partial disability benefits.

30. What disabilities are considered permanent and total?

The following:
(1) Complete loss of sight of both eyes;
(2) Loss of two limbs at or above the ankle or wrists;
(3) Permanent complete paralysis of two limbs;
(4) Brain injury resulting to incurable imbecility or insanity; and
(5) Such cases as determined and approved by the SSS [Sec.13-A(c ), RA No.
8282]

31. What are the disability benefits provided by SSS?

(1) Upon the permnanent total disability of a member who has paid at least
36 monthly contributions prior to the semester of disability, he shall be
entitled to the monthly pension. [Sec.13-A(a)]
(2) If the disability is permanent partial, and such disability occurs
before the 36 monthly contributions have been paid prior to the semester of
disability, the benefit shall be such percentage of the lump sum benefit
prescribed in the preceding paragraph with due regard to the degree of disability
as the Commission may determine.
(3) If the disability is permanent partial and such disability occurs after
36 monthly contributions have been paid prior to the semester of disability, the
benefit shall be the monthly pension for permanent total disability payable than
the period designated in the schedules set forth in par. (f), Sec.13-A, RA No.
8282.

32. When is the monthly pension as well as the dependent's pension be suspended?

The monthly pension and the dependent's pension shall be suspended upon the
re-employment or resumption of self-employment or the recovery of the disabled
member from his permanent total disability or his failure to present himself for
examination of at least once a year upon notice by the SSS. [Sec.13-A(b), RA No.
8282].

33. Who are entitled to monthly pensions?

(1) Those who are receiving retirement benefits (Sec.12-B);

(2) Those who are receiving permanent disability benefits (Sec.13-A);
(3) Primary beneficiaries upon the death of the retired members [Sec.12-B
(d), RA No. 8282];
(4) Primary beneficiaries upon the death of the permanent total disability
pensioner. [Sec. 13-A(c )].

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34. In case a permanent total disability pensioner dies, are his beneficiaries
entitled to any death benefits?

His primary beneficiaries shall be entitled to the monthly pensions upon the
death of the permanent total disability pensioner. (Sec.13-A)

35. If a retired employee pensioner dies, what death benefits if any will his
beneficiaries and dependents get?

Upon the death of the retired employee pensioner, his primary beneficiaries
shall be entitled to the monthly pension and if he has no primary beneficiaries,
his secondary beneficiaries shall be entitled to a lump sum benefit. [Sec. 12-B
(c ), RA No. 8282].

36. In case no beneficiary qualifies for entitlement of death benefit under the
SSS law, how will such benefits be disposed of?

The death benefits shall be paid to the legal heirs of the deceased in
accordance with the law of succession (Sec. 15, RA No. 8282)

37. How much is the funeral benefit?

P12,000.00 (Sec.13-B).

38. What is the sickness benefit?

It is a daily allowance paid to a covered employee who becomes sick and is

confined in a hospital for more than three days or elewhere with the Commission's
approval. Such daily sickness benefit equivalent to 90% of his average daily
salary credit. (Sec.14).
* Average daily salary credit - the result obtained by dividing the sum of
the six highest monthly salary credits in the twelve month period immediately
preceding the semester of contingency by 180 [Sec.8(n), RA No. 8282].
*Contingency - the retirement, death, permanent disability, injury or
sickness and maternity of the member [Sec.8 (l)].

39. What are the conditions governing sickness benefits?

(1) The payment of the daily allowance not to exceed 120 days in one
calendar year;
(2) The daily sickness benefits shall not be paid for more than 240 days on
account of the same confinement; and
(3) The employee shall notify his employer of the fact of his sickness or
injury within five days from the start of the confinement. [Sec.14(1)(20)(3), RA
No. 8282].

40. Who may advance the daily allowance for the sickness benefit?

The employer subject to 100% reimbursement by SSS provided said employer

complied the notification requirement.

41. Give the effect if the employer has failed to make the proper notification.

The employer is not entitled to reimbursement.

42. When is the employer or the unemployed member not entitled to reimbursement
of sickness benefits?

(1) Where the employer failed to notify the SSS of the confinement;
(2) In case of the unemployed, where he failed to send the notice directly
to the SSS except when the confinement is in a hospital; and

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(3) Where the claim for reimbursement is made after one (1) year from date
of confinement.

43. Who are entitled to maternity benefit under SSS?

A female employee who has paid at least three (3) monthly contributions in
the twelve month period immediately preceding the semester of her childbirth or
miscarriage shall be paid daily maternity benefit equivalent to 100% of her
average salary credit for 60 days or 78 days in case of Caesarian delivery
subject to certain conditions. (Sec.14-A).

44. What are the conditions set by SSS relative to maternity benefits?

The conditions are:

(1) That the employee shall have notified her employer of her pregnancy and
the probable date of her childbirth which notice shall be transmitted to the SSS
in accordance with the rules and regulations it may provide;
(2) The full payment shall be advanced by the employer within 30 days from
the filing of the maternity leave application.
(3) That the payment of daily maternity benefits shall be a bar to the
recovery of sickness benefits provided by this Act for the same period for which
daily maternity benefits have been received.
(4) That the maternity benefits provided under this section shall be paid
only for the first four (4) deliveries or miscarriages. [Sec.14-A(a-d), RA No.
8282].

45. What are the effects if no contributions being made due to the fault of the
employer?

As a rule, the SSS shall immediately reimburse the employer of the 100% of
the amount of maternity benefits advanced by the employer upon the receipt of
satisfactory proof of such payment and legality thereof [Sec.14-A(e), RA No.
8282]. However, if an employee should give birth or suffer a miscarriage without
the required contribution having been remitted for her by her employer to the SSS
or without the latter having been previously notified by the employer of the time
of the pregnancy, the employer shall pay to the SSS damages equivalent to the
benefits which said employee member would otherwise have been entitled to
[Sec.14-A(f), RA No. 8282].

46. Who are those beneficiaries disqualified to receive any benefits under the
SSS law?

Those beneficiaries who are nationals of foreign countries which do not

extend benefits to the Filipino beneficiaries residing in the Philippines or
which are not recognized by the Philippines, shall not be entitled to receive any
benefit under this Act; Provided, that notwithstanding the foregoing, where the
best interest of the SSS will be served, the Commission may direct payments
without regard to nationality or country of residence. (Sec.15, RA No. 8282).

47. What are the characteristics of the SSS benefits?

(1) Enjoyable only by covered members;

(2) Non-transferrable (Sec.15)
(3) Exempted from tax or attachments (Sec.16)
(4) Not chargeable by any agent or attorneys (Sec.17)

48. What is contribution?

It is the amount paid to the SSS by and on behalf of the member in

accordance with Sec. 18 of this Act.

49. Define compensation.

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All actual remunerations for employment, the mandated cost of living

allowance, as well as the cash value of any remuneration paid in any medium other
than cash except that part of the remuneration received during the month in
excess of the maximum salary credit as provided under Sec.18 of this Act
[Sec.8(f)].

50. What are the sources of funds of the SSS?

From the contributions of the following:

(1) Employees contributions (Sec.18);

(2) Employers contributions
(3) Contributions of the self-employed. (Sec.19-A)
(4) Government contribution and guarantee (Sec.20 & 21)

51. What is the method of remittance, collection and payment?

The SSS shall require a complet and proper collection and payment of
contributions and proper collection and payment of contributions and proper
identification of the employer and the employee. Payment may be made in cash,
checks, stamps, coupons, tickets or other reasonable devices that the Commission
may adopt (Sec. 23, RA No. 8282).

52. What is a "Reserved Fund"?

All revenues of the SSS that are not needed to meet the current
administrative and operational expenses incidental to the carrying of this Act
shall be known as the the Reserve Fund (Sec.26, RA No. 8282).

53. What is an "Investment Reserve Fund"?

Such portion of the Reserve Fund as are not needed to meet the current
benefit obligations thereof shall be known as the "Investment Reserve Fund" which
the Commission shall manage and invest with the skill, care, prudence and
diligence necessary under the circumstances then prevailing that a prudent man
setting in like capacity and familiar with such matters would exercise in the
conduct of an enterprise of a like character and with similar aims. (Sec.26, RA
No. 8282).

54. For what purpose are the contributions to the Social Security System
utilized?

The revenue of the SSS are to be used to meet current administrative and
operational expenses and for the payment of the benefits under the SSS law.

55. What are the various loans that may be extended by SSS to its members?

The various loans are:

(1) salary loan
(2) educational loan
(3) housing loan
(4) community hospital loan

56. Before local government may issue any business permit or license, what is
required?

Notwithstanding any law to the contrary, local government units shall prior
to issuing any annual business license or permit, require submission of
certificate of SSS coverage and compliance with the provisions of this Act.
Provided, that the certification or clearance shall be issued by the SSS within
five (5) working days from receipt of the request [Sec.239(g), RA No. 8282].

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57. Relative to the SSS Investment Reserve Fund, in what fields of investments
are they allowed to be invested?

The SSS Reserve Fund may be invested in any or all of the following:
(1) Interest-bearing bonds or securities of the Government of the
Philippines;
(2) Interest-bearing deposits or securities in any domestic bank doing
business in the Philippines;
(3) In loans or interest-bearing advances to the National Government for
construction of bridges, roads and public buildings;
(4) In direct housing loans;
(5) In small short-term loans to covered employees;
(6) In other income earning projects and investments secured by first
mortgages on real estate collaterals which, in the determination of the Social
Security Commission, shall redound to the benefit of the SSS, its members as well
as the public welfare. (Sec.26, RA No. 8282).

58. Is the SSS law a law of succession?

No. The benefits under the SSS law do not form part of the estate of the SSS
member. Further, persons other than the heirs of deceased employee may be
entitled to the said benefits.

59. What are the proprietary functions of the SSS?

The SSS is exercising proprietary reasons for the following reasons:

(1) It can enter into agreements or contracts for the proper, stable and
efficient administration of the System;
(2) It can sue and be sued;
(3) It covers an insurance scheme of general application; and
(4) It is operated for profit, it being authorized to invest its funds in
profitable securities.

60. How is the Social Security law to be construed?

The SSS law should be construed in favor of giving benefits to its members
and their beneficiaries. Any doubt shall be resolved in favor of the claimant.
Even if a person was mistakenly or wrongfully covered, when he paid the premium
regularly and where the mistaken covered was discovered only after his death, his
beneficiaries or heirs upon his death, shall be entitled to the death benefits.
Thus it was ruled that the provisions of the SSS should be liberally construed in
favor of those seeking its benefits. Any interpretation which would defeat rather
than promote the ends for which the SSS was enacted should be schewed.

61. Distinguish ECC and SSS.

Employers' Compensation Social Security System

1) requires injury or death to 1) injury or death need not be work
be work connected connected
2) only employers contribute 2) both are required to contribute
3) no loan benefits 3) affords loan benefits
4) administered by Employees 4) GSIS or SSS
Compensation Commission

62. What rules or guidelines govern the Househelpers?

Circular No. 21-V dated September 1, 1993 entitled " Guidelines on SSS
Coverage of Househelpers".

63. Who are the househelpers that are mandatorily covered by SSS?

Under Sec. 1, Rule II, the following appears: "Coverage in the SSS shall be
compulsory upon all househelpers who are sixty (60) years of age and below (i.e.,

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have not yet reached their 61st birth) and who are receiving a monthly cash
compensation of at least one thousand pesos. (Sec.1, II, Coverage).

64. Define the following: househelper, domestic or household services, and

household employer.

(1) Househelper - any person who renders domestic or household services

exclusively to a household employer. (i.e., driver, babysitter, gardener, cook,
nursemaid, etc.)
(2) Domestic or household services - service in the employer's home which is
usually necessary or desirable for the maintenance thereof and includes
ministering to the personal comfort and convenience of the members of the
employer's household including services of family drivers.
(3) Household employer - any person who engages the services of a
househelper. For the purposes of this rule, the head of the family (i.e., the
husband or in his absence, the wife) shall be deemed the household helper's
employer (Secs.1-3. I, (Circular No. 21-V).

65. Define Compensation, Contribution, Monthly Salary Credit and Quarter as used
in Circular No. 21-V.

(1) Compensation - monthly cash wage paid to the househelper.

(2) Contribution - amount paid or to be paid to the SSS by the househelper
and by his/her employer in accordance with the attached scheduled of Monthly
contributions.
(3) Monthly Salary Credit - the compensation base for contributions/benefits
as indicated in the attached Schedule Monthly Contribution.
(4) Quarter - period of three consecutive calendar months ending on the last
day of March, June, September and December.

66. When is the effective date of the coverage?

To take effect on the day of his employment but not earlier than 1 September
1, 1993.

67. What are required in the registration of househelpers?

Prior to reporting by the household employer, a househelper subject to

compulsory coverage shall first secure his SSS number by submitting duly
accomplished SSS Form No. E-1 together with: birth certificate (in its absence,
baptismal certificate) and if none, joint affidavit of two persons personally
known attesting to the correct names and date of birth.

68. State the effect of separation.

He may continue to pay voluntarily the contributions of both the employer

and employee shares. If re-employed he can use the same SSS number.

69. What are the rights of the covered household employer? Covered househelper?

A household employer shall be subject to the same rights and obligations

applicable to a regular covered employer under SSS, Medicare and EC laws and
pertinent rules and regulations (Sec.2, III. Implementing Guidelines).
A covered househelper shall be entitled to the same benefits, loans and
other privileges that are made available to a regular covered employee under the
SSS, Medicare and EC laws (V, Implementing Guidelines).

70. What are the prohibited and penal acts under the SSS?

(1) Whoever, for the purpose of any payment to be made under this Act, or
under agreement thereunder, where none is authorized to be paid, shall make or
cause to be made, false statement or representation as to any compensation paid
or received or whoever makes or causes to be made any false statement of a

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material fact of any claim for any benefit payable under this act, or application
for loan with SSS, or whoever or causes to be made false statement or
representation, affidavit or document in connection with such claim or loan,
shall suffer the penalty provided for in Art. 172 of the Revised Penal Code.
(2) Whoever shall obtain or receive any money or check under this Act or any
agreement thereunder, without being entitled thereto with intent to defraud any
covered employee, employer or the SSS shall be fined not less than P5,000.00 nor
more than P20,000.00 and imprisoned for not less than six years and one day nor
more than 12 years.
(3) Whoever buys, sells, offers for sale, uses, transfers, takes or gives in
exchange, or pledges to give a pledge, except as authorized in this Act or in
regulation made pursuant thereto any stamp, coupon, ticket, book or other device,
prescribed pursuant to Sec.27 hereof by the Commission for the collection or
payment of contributions required herein, shall be fined not less than P5,000.00
nor more than P20,000.00 or imprisoned for not less than six years and one day
nor more than 12 years, or both at the discretion of the court.
(4) Whoever, with intent to defraud, alters, forges or makes counterfeits
any stamp, coupon, ticket, book or other device prescribed by the Commission for
the collection or payment of any contribution required herein, or uses, sells,
lends, or has in his possession any such altered, forged or counterfeited
materials, or makes, uses, sells or has in his possession any material imitation
of the materials, used in the manufacture of such stamps, coupons, ticket, book
or other device shall be fined not less than P5,000.00 nor more than P20,000.00
or imprisoned for not less than six years and one day nor more than 12 years, or
both at the discretion of the court.
(5) Whoever fails or refuses to comply with the provisions promulgated by
the Commission, shall be punished by a fine not less than P5,000.00 nor more than
P20,000.00 or imprisoned for not less than six years and one day nor more than 12
years, or both at the discretion of the court. Provided, that when the violation
consists in failure or refusal to register employees or himself, in case of the
covered self-employed or to deduct contributions from employee's compensation and
remit the same to the SSS, the penalty shall be a fine not less than P5,000.00
nor more than P20,000.00 and imprisoned for not less than six years and one day
nor more than 12 years.
(6) Any employee of the SSS who receives or keeps funds or property
belonging, payable or deliverable to the SSS and who shall appropriate the same,
or shall take or misappropriate or shall consent or through abandonment or
negligence shall permit any other person to take such property or funds, wholly
or partially, or shall otherwise be guilty of misappropriation of such funds or
property, shall suffer the penalties provided in Art. 217 of the RPC.
(7) Any employer who, after deducting the monthly contribution or loan
amortizations from his employee's compensation fails to remit said contribution
to the SSS within 30 days from the date they become due shall be presumed to have
misappropriated such contributions or loan amortizations and shall suffer
penalties provided in Art.315 of the RPC. (Sec. 28, RA No. 8282).

71. In case juridical person commits any of the prohibited acts under the SSS
law, who shall be liable?

If the act or omission penalized by this Act be committed by an association,

partnership, corporation or any other institution, its managing head, directors
or partners shall be liable to the penalties provided in this Act for the
offense. [Sec.28 (f), RA No.8282].

72. Who will initiate the filing of the criminal cases under the penal cause of
this Act?

Criminal action arising from a violation of the provisions of this Act may
be commenced by the SSS or the employee concerned either under this Act or in
appropriate case under the RPC; Provided, that such criminal action may be filed
by the SSS in the city or municipality where the SSS provincial or regional
office is located if the violation was committed within its territorial

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jurisdiction or in Metro Manila, at the option of the SSS. [Sec.28 (j), RA No.
8282].

BAR QUESTIONS ON SSS LAW

1. Phil. Daily News prints and publishes the Daily News, copies of which are
circulated through dealers in Metro Mla. These dealers, who are single
proprietors exclusively distributing the Daily News but handling competing
dailies for a fixed amount per copy sold, engage the services of newsboys. These
newsboys are given a specified number of copies to sell everyday within a six
hour period in the morning. After this period, the newsboys are free to sell
other newspapers or go to school or engage in other activities. Each newsboy is
paid 50c for every copy sold.
As counsel for the Phil. Daily News would you advise your client to report
the dealers and newsboys as its employees pursuant to the SSS Act? (BAR 1987).

I will advise my client not to cover the dealers and newsboys because Phil.
Daily News will not qualify as their employer under the SSS law. They are not
under its supervision or control. But dealers and newsboys may be covered by SSS
as its self-employed persons.

2. Union Drug Company has sick leave policy, contained in a collective

bargaining agreement requiring the accumulation of five days of the 15 days sick
leave earned annually. Thus, an employee could use only 10 days of earned sick
leave every year. The accumulated leave is convertible to cash when employment is
terminated for any cause but may be used upon prior application with and approved
by the company.
Pedro San Juan, an employee of the company, applied for sickness benefits
under the Social Security Act, when he fell ill of pneumonia and his 10 day
company sick leave had been exhausted. The System denied the application.
Decide. (BAR 1987).

The System has no reason to deny the applied sick benefits because of these
reasons:
First, the sickness benefit has not yet reached its limitations. Thus, (1) In no
case shall daily sickness benefit be paid longer than 120 days in one calendar
year; nor shall any unused portion of the 120 days of sickness benefit granted
under this section be carried forward and added to the total number of
compensable days allowable in the subsequent year [Sec.14(a)(1), RA No. 8282].
(2) The daily sickness benefit shall not be paid for more than 240 days on
account of the same confinement.
Second, The compensable confinement shall begin on the first day of
sickness, and the payment of such allowances shall be promptly made by the
employer every regular payday or on the 15th and last day of each month and
similarly, in the case of direct payment by the SSS, for as long as such
allowance are due and payable; Provided, That such allowances shall being only
after all sick leaves of absence with full pay to the credit of the employee
shall have been exhausted [Sec.14(b), RA No. 8282].

3. Leonardo Marasigan started working for Madrid Development Corporation in

August 1984 when it was being organized and had no fixed offices. The company did
not ask for his Social Security Registration number, nor did it report him to the
SSS. He died a year later and his widow filed a claim for death benefits with the
SSS. While following up the claim, the widow discovered that it was only in
November 1985 whn he was reported by his employer to the SSS and the premiums
covering the entire period from August 1984 were remitted.
Leonardo's widow came to you for assistance. What would be your legal
advice? (BAR 1987).

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I will advise the widow that as primary beneficiary she is entitled to

receive the SSS death benefits.
The nonreporting is not fatal because the premium were adequately remitted.
Since Leonardo failed to pay 36 monthly contributions, his widow is not
entitled to a monthly pension but the widow as primary beneficiary is entitled to
a lump sum benefit equivalent to 35 times the monthly pension.

4. Sapatilya Company, a manufacturer of wooden shoes, started its operations on

Jan. 1, 1989. As of June 15, 1989, the company had in its payroll a general
manager, an assistant general manager, three supervisors and forty rank and file
employees,all of whom started with the company on Jan.1, 1989. On July 1, 1989,
the company also had 10 casual employees who had been in the company since Feb.
16, 1989 and 12 contractual employees whose contract of employment with the
company is for the period from Aug.1, 1989 to Sept. 30, 1989. Who among the
aforementioned employees are under the coverage of the Social Security Law? When
did their coverage under the said law take effect? (BAR 1987).

All of them are covered (Sec. 9, RA No. 8282). Formerly, employment purely
casual and not for the purpose of occupation or business of employer are not
covered. The mandatory coverage of all employees takes effect on the day of their
employment.

5. Don Jose, a widower owns a big house with a large garden. One day, his
househelper and gardener left after they were scolded. For days, Don Jose, who
lives alone in the compound to look for someone who could water the plants in
the garden and clean the house. He chanced upon Mang Kiko on the street and asked
him to water the plants and clean the house. Without asking any question, Mang
Kiko attended to the plants in the garden and cleaned the house. He finished the
work in two days.
(a). Is there an employer-employee relationship between Don Jose and Mang
Kiko?
(b) Are they compulsorily covered by the SSS? (BAR 1991).

(a) No employer-employee relationship exists between them. The test and

elements of the relationship are not present.
(b) No, he was performing a domestic service. He cannot be covered by the
SSS because there is no mention in the problem that his monthly salary is
P1,000.00 or more which makes a person doing household or domestic services
within the coverage of SSS.

6. Ma. Sara Mira is an unwed mother with three children from 3 different
fathers. In 1999, she became a member of the Social Security System. In August
2000, she suffered a miscarriage, also out of wedlock and again by a different
father. Can Ma. Mira claim maternity benefits under the Social Security Act of
1997? Reason. (BAR 2000).

Yes. She is entitled to maternity benefits because such benefit (not

dependent upon her being married or not under Sec.14-A, RA No. 8282). However,
the delivery or miscarriage under such benefits cannot extend beyond four
deliveries/miscarriages.

7. Marvin Patrimonio is a caddy rendering caddying services for the members and
guests of the Barili Gold and Country Club. As such caddy, he is subject to
Barili's golf's rules and regulations governing Caddies regarding conduct, dress,
language, etc. However, he does not have to observe any working hours, he is free
to leave anytime he pleases and he can stay away for as long as he likes.
Nonetheless, if he is found remise in the observance of club rules, he can be
disciplined by being barred from the premises of the Barili Golf.
Is Marvin within the compulsory coverage of the Social Security System?
When? (BAR 1999).

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No employer-employee relationship exists between them (Manila Golf & Country

Club, Inc. vs. IAC; 237 SCRA 207). However, Marvin Patrimonio may qualify as
self-employed person under Sec.9-A of the Social Security Act of 1997.

FREQUENTLY ASKED QUESTIONS ON SSS

1. How can one register with the SSS?

General Requirements
A person registering with the SSS for the first time as an employee, self
employed, non-working spouse or OFW should submit, together with the SSS
registration form, a photocopy of his/her birth or baptismal certificate or
passport. In the absence of these documents, any two of the following documents:
record of employment
GSIS member's record
certificate from the National Archive
birth/baptismal certificate of children
marriage contract
drivers license
school records or voters ID card
Alien Certificate of Registration, or
joint affidavit of two disinterested parties attesting to the correct
name and/or fact of birth of the person concerned
A married person should also submit his or her marriage contract upon
registration. If reporting children, he or she should submit the birth or
baptismal certificate of the child, if legitimate; proof of filiation showing
acknowledgment of the child, if illegitimate; or decree of adoption, if legally
adopted.
The original or certified true copies of these documents should be presented to
the SSS for authentication.
For Employees
An employee should accomplish SSS Form E-1 (Personal Data Record) and submit it
together with the general requirements.
For Employers
Single Proprietorships
An owner of a single proprietorship business should accomplish and submit SSS
Forms R-1 (Employer's Data Record) and R-1A (Initial or Subsequent List of
Employees).
Partnerships
Any of the partners of a partnership firm should accomplish SSS Forms R-
1 (Employer's Data Record) and R-1A (Initial or Subsequent List of
Employees) and submit these forms together with a photocopy of the
Articles of Partnership. The original copy of the Articles of
Partnership must be presented for authentication.
Corporations
A corporation must accomplish SSS Forms R-1 (Employer's Data Record) and
R-1A (Initial or Subsequent List of Employees) signed by its President
or any of the corporate officers or incorporators and submit these forms
together with the photocopy of the Articles of Incorporation. The
original copy of the Articles of Incorporation must be presented to the
SSS for authentication.
Household-Helper Employers
A household-helper employer who has an existing SS number should use his
personal SS number as his employer number in all transactions with
regard to his household-helper. If the employer has no existing SS
number, he should get his SS number by accomplishing SSS Form E-1
(Member's Data Record).

For Self-Employed Members

A self-employed person should accomplish SSS Form RS-1 (Self-Employed Data
Record) and submit it together with the general requirements. If the self-

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employed member has employees, he should also register as an employer and secure
an employer ID number that his company must use in all transactions with the SSS.
For Voluntary Members
Separated Members
A member who is separated from employment or ceased to be self-employed/ overseas
Filipino worker/ non-working spouse and would like to continue paying his
contributions should get in touch with the nearest SSS office. Being a previous
member, he will not be issued a new number. It is only his membership status that
will be changed from covered employee, self-employed, OFW or non-working spouse
to a voluntary paying member.
Non-Working Spouses
A non-working spouse should accomplish SSS Form NW-1 (Non-Working Spouse Data
Record) and submit it, duly signed by the working spouse, with a copy of his
marriage certificate. In the absence of the marriage certificate, the applicant
may submit a copy of SSS Form E-1 or E-4 of the working spouse where his name is
reported.
Overseas Filipino Workers (OFWs)
An OFW should accomplish SSS Form OW-1 (Overseas Worker Record Form) and submit
it together with the general requirements.

2. How can a member change the data in his membership records?

Changes in a member's record should be reported immediately to the nearest SSS
office by accomplishing SSS Form E-4 (Member's Data Amendment Form). He should
submit a photocopy of the following:
marriage certificate for change of status
birth or baptismal certificates of children for change or addition of
dependents
birth or baptismal certificate for correction of birth date and name
In case of non-availability of birth record or baptismal certificate, submit a
certificate of loss or non-availability from the local civil registrar of the
place where the member was born and from the parish priest of the locality where
the member was baptized, together with any two of the following documents:
record of employment
GSIS member's record
certificate from the National Archive
Alien Certificate of Registration
birth/baptismal certificates of children
marriage contract
school records
passport
joint affidavit of two disinterested parties attesting to the correct
name and/or fact of birth of the person concerned
The original or certified true copies of the documents should be presented to the
SSS for authentication.
3. Who are considered the legal dependents of a member?
The legal beneficiaries of a married member are his legally married spouse,
legitimate, legitimated, legally adopted or illegitimate children. These are his
primary beneficiaries.
If he is single, his benefits will go to his dependent parents, who are
considered his secondary beneficiaries.
In the absence of both primary and secondary beneficiaries, whoever is designated
by the member in his membership record becomes the legal beneficiary.

4. When the member loses his SS ID card or cannot remember his SS number, should
he secure another SS number?
No. The SS number assigned to a member is his lifetime number and must always be
used in all transactions with the SSS. He should not secure another number at any
other time.
If he wishes to secure another SS ID and cannot remember his SS number, he may
inquire from the nearest SSS office.
5. What are the duties and responsibilities of an SSS employee-member?

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An SSS member should:

secure an SS number;
ensure that he is reported by his employer to the SSS;
pay his monthly share of contributions and ensure that these
contributions are remitted to the SSS by his employer;
ensure that SSS Form R3s (Quarterly Collection Lists), where his name is
included, are submitted to the SSS by his employer every quarter;
pay his monthly loan amortization, if any, through salary deduction and
ensure that these payments are remitted to the SSS by his employer;
update or correct his personal records with the SSS by submitting a duly
filled-up SSS Form E-4 (Member's Data Amendment Form) and supporting
documents, such as marriage certificate for change of status, or birth
or baptismal certificate for change or correction of name or date of
birth, to avoid delays in the processing of benefit claims; and
be conscious of changes and improvements in SSS policies and benefit
structure.
6. What are the duties and responsibilities of an SSS employer-member?
An employer is obliged to:
require the presentation of the SS number of prospective employees;
report all his employees for SS coverage within one month from date of
employment by submitting an
accomplished SSS Form R-1A at the membership counter of the nearest SSS
office;
deduct from his employees the monthly SS contribution based on the
schedule of contributions; pay his share of contributions including
Employees' Compensation (EC) and remit these contributions to any SSS-
accredited bank within five days after the covered month;
submit a summary of all his employees' contributions (Contribution
Collection List) together with a copy of the Special Bank Receipt (SBR)
and SSS Form R-5 (Payment Return Form) to the nearest SSS branch or
Postal Services Office within 10 days after the applicable quarter;

An employer may also participate in the SSSNet, a computer service using

the electronic data interchange technology, designed to hasten the
posting of employees contributions for faster processing and availment
of benefits and loan privileges. Employers who are using this facility
shall pay their employees' contributions and transmit both the employee
and employer contributions data on or before the 10th day following the
month when said contributions are due and applicable.

Or, the employer may opt to participate in the R3 Tape/ Diskette

Project, which allows the submission of the quarterly summary of
employees' contributions thru a computer tape or diskette. This system
is a better alternative to manual reporting as it minimizes encoding
errors and processing time. Under this scheme, the employer shall submit
the R3 tape or diskette on or before the last working day of the
applicable month.
issue official receipts and maintain official records of employment and
remittances for all contributions deducted from his employees every
month or indicate such deductions from his employees' pay envelopes;
A household helper employer should submit an accomplished SSS Form H-3
(Quarterly Collection List for Househelpers) together with the SSS Form
R-5s. Household helpers employers in the National Capital Region may
enroll in the Auto-Debit Arrangement System, which allows the one-time
enrollment of the employer's bank account for the automatic payment of
monthly SS contributions and loan repayments. This arrangement is open
at the United Coconut Planters Bank, Far East Bank and Trust Co.,
Equitable Bank, Bank of the Philippine Islands, Metropolitan Bank and
Trust Co. and the Philippine National Bank.
remit to the SSS all salary, educational, stocks investment or
privatization loan amortization of his employees and submit an

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accomplished SSS Form ML-1 (Quarterly Salary/ Educational/ Calamity/

Stock Investment Loan Payment Return Form) to any of the SSS-accredited
banks on or before the 20th day of the month after the applicable
quarter; submit a summary of all employees' loan amortization thru an
accomplished SSS Form ML-2 (Collection List) with copies of the SBRs and
SSS Form ML-1 to the nearest branch or Postal Services Office within 10
days after the applicable quarter;

An employer may also participate in the Salary Loan Repayment

Tape/Diskette project, which allows the submission of the quarterly
summary of employees' loan repayment thru a computer tape or diskette.
This system provides the employer with convenience and hastens the
posting of member's loan repayments. Under this scheme, the employer
shall submit the ML-2 tape or diskette on or before the last working day
of the applicable month.
advance SS and EC sickness benefits due his employees once these are
approved by the SSS;
advance SS maternity benefits due to qualified female employees;
file for reimbursement for all legally advanced sickness and maternity
benefits;
keep his employees updated on the changes in SSS policies and increases
in their benefits;
ensure that all forms submitted are properly and accurately accomplished;
inform SSS of any change in company address, business name, or
temporary/permanent cessation of business operations thru the submission
of a duly notarized SSS Form R-8 (Employer's Data Amendment Form);
submit annually an updated SSS Form L-501 (Specimen Signature Card); and,
certify Medicare forms and other SSS-related documents for the employees
when required for purposes of their claims.

7. What are the duties and responsibilities of a voluntary/self-employed member?

A voluntary/self-employed member should:
pay his contributions using SSS Form RS-5 (Contributions Payment Return
Form) monthly or in accordance with the prescribed schedule; In case of
change in monthly earnings or contribution, he should notify the nearest
SSS office in writing.
update or correct his personal records with the SSS by submitting a duly
filled-up SSS Form E-4 (Member's Data Amendment Form) and supporting
documents such as marriage certificate;
be conscious of changes and improvements in SSS policies and benefit
structure.
Self-employed and voluntary members in the National Capital Region may enroll in
the Auto-Debit Arrangement System, which allows the one-time enrollment of the
member's bank account for the automatic payment of monthly SSS contributions and
loan repayments. This arrangement is open at the United Coconut Planters Bank,
Far East Bank and Trust Co., Equitable Bank, Bank of the Philippine Islands,
Metropolitan Bank and Trust Co., and the Philippine National Bank.

8. Monthly contributions based on the gross compensation of SSS members are

payable under two programs, as follows:
SSS - 9.4% average monthly compensation not exceeding P15,000 and payable
by both employer (6.07%) and employee (3.33%).
EC - 1% of average monthly compensation not exceeding P1,000 and payable
only by the employer.

9. What is the basis for determining the monthly salary credit and monthly
contributions of an SSS member?
For an employee - The monthly salary credit should be based on the total
actual remuneration from employment, including cost of living allowance,
as well as the cash value of any remuneration paid in kind as stated in
the Social Security Law of 1997, Sec. 8 (f). The monthly contributions

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of a member can be determined based on his monthly salary credit which

will be according to the Table of Contributions.
For self-employed or voluntary members - the monthly earnings declared at
the time of registration shall be the basis of his monthly salary
credit. However, the declared earnings should not be lower than P1,000
per month except for the OFWs whose lowest monthly salary credit is
pegged at P3,000.

10. What is the minimum/maximum monthly salary credit of a member?

The minimum monthly salary credit is P1,000 and the maximum is P15,000 beginning
January 2002.

11. What are the different modes of paying the SSS contributions?
SSS contributions may be paid through:
accredited banks;
over-the-counter transactions at the Cashiering Department in the SSS
head office;
electronic data interchange (EDI) for enrolled employer members;
automatic debit arrangement (ADA) with banks.

12. How should the member pay his monthly contributions?

For an employee, including household helpers - monthly through salary

deduction, starting on the first month of employment.
The employer should use SSS Form R-5 (Contributions Payment Return) for payments
over-the-counter and through accredited banks. Household employers may also pay
through ADA.
For a self-employed member, including farmers and fisherfolks - monthly,
upon approval of membership.
The self-employed should use SSS Form RS-5 (Contributions Payment Return for
Self-employed/ Voluntary Members) for payment through accredited banks or over-
the-counter. He may also pay through ADA.
For a voluntary member, including non-working spouses and OFWs - monthly.
The voluntary member should use SSS Form RS-5 (Contributions Payment
Return for Self-employed/ Voluntary Members) for payment through
accredited banks or over-the-counter. He may also pay through ADA.

Self-employed and voluntary members are allowed to change their monthly

salary credit (MSC) once in a given year without a need for a written
request. Increase or decrease in MSC shall be up to 20 percent of the
current MSC but in no case shall it be lower than P1,000 (P3,000 for
OFWs). Increase made in excess of 20 percent shall require the
presentation and submission of a copy of the income tax return (ITR) for
the prior year, duly received by the Bureau of Internal Revenue (BIR).
Retroactive payment of contributions will not be allowed for self employed and
voluntary members.

13. When is the remittance of contributions due?

For employers
Employers who remit through the electronic data interchange (EDI) system
- on or before the 10th day of the month following the applicable month
Household employers who remit through automatic debit arrangement (ADA)
- deducted from bank account every 10th day of the month following the
applicable month
Employers, including household helper employers, who remit over-the-
counter or through banks - on or before the 5th calendar day of the
month following the applicable month
For self-employed and voluntary members

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Self-employed and voluntary members who remit through automatic debit

arrangement (ADA) - deducted from bank account on or before the 10th day
of the month following the applicable month
Self-employed and voluntary members who remit over-the-counter or
through banks - on or before the 5th day of the month following the
applicable month
14. When and how should employers report their contribution payments to the SSS?
Employers who remit through the electronic data interchange (EDI) system
- monthly, through the Monthly Collection List (MCL), on or before the
10th day of the month following the applicable month.
Household employers who remit through automatic debit arrangement (ADA)
- reporting is done between the SSS and the bank upon enrollment of the
employer.
Employers, including household employers, who remit over-the-counter or
through banks - within the first 10 days after every quarter ending in
March, June, September and December using the Contribution Collection
List (SSS Form R-3) with the copies of the validated SSS Form R-5 and
SBR; or within the first 5 days following the applicable month using R-3
diskette with copies of the validated Form R-5 and SBR and transmittal
letter.

PRIMER ON GOVERNMENT SERVICE INSURANCE SYSTEM-Republic Act No. 8921

What is the title of Rep. Act No. 8921?

Rep. Act No. 8921 provides: Sec. 1 Presidential Decree as amended,
otherwise known as the Revised Government Service Insurance Act of 1997 is
further amended to read as the follows: Sec. 1 Title- The short title of this
Act shall be the Government service Act of 1997.
What is the significance of PD No. 1146 of the GSIS law as amended by
Republic Act No. 8921?
PD 1146 is the law expanding and improving the Social Service Insurance
System. It increases the pension benefits, expands disability benefits, expands
disability benefits, expands disability benefits and will eventually extend the
compulsory coverage of the social security and insurance programs to all
government officers regardless of employment status.
3. Who is the employer for purposes of the GSIS law?
The national government, its political subdivisions, branches, agencies or
instrumentalities, including government-owned or controlled corporations, and
financial institutions with original charters, the constitutional commissions and
the judiciary;
4. Who is an employee or member of the GSIS?
Any person receiving compensation while in the service of an employer as
defined herein, whether by election or appointment, irrespective of status of
appointment, including barangay and Sanggunian officials;
5. Who may be considered as dependents of a member?

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Dependents shall be the following: (a) the legitimate spouse dependent

for support upon the member or pensioner; (b) the legitimate, legitimated,
legally adopted child, including the illegitimate child, who is unmarried, not
gainfully employed, not over the age of majority, or is over the age of majority
but incapacitated and incapable of self-support due to a mental or physical
defect acquired prior to age of majority; and (c) the parents dependent upon the
member for support;
6. Classify the different beneficiaries of a member.
a. Primary beneficiaries- The legal dependent spouse until he/she remarries
and the dependent children;
b. Secondary beneficiaries- The dependent parents and, subject to the
restrictions on dependent children, the legitimate descendants;
7. What is meant by a. contribution? b. compensation c. What are the sources of
funds of GSIS?
a. Contribution- the amount payable to the GSIS by the member and the employer
in accordance with Section 5 of this Act:
1. Member- 9.0% and 12 %
2. Employee of the Judiciary 3% and employer- 3%
b. Compensation- basic pay or salary received by an employee, pursuant to
his election/ appointment, excluding per diem, bonuses, overtime pay, honoraria,
allowances and any other emoluments received in addition to the basic pay which
are not integrated into the basic pay under existing laws ( Sec 2(j), GSIS)
c. The funds of the GSIS come from the monthly contributions required by the
covered employees and their employers (Sec 5, GSIS).
5. What do you understand of the term lump sum?
The basic monthly pension multiplied by sixty (60);
6. Is membership in the GSIS Compulsory?
Membership in the GSIS shall be compulsory for all employees receiving
compensation who have not reached the compulsory retirement age, irrespective of
employment status, except members of the Armed Forces of the Philippines and the
Philippine National Police, subject to the condition that they must settle first
their financial obligation with the GSIS, and contractuals who have no employer
and employee relationship with the agencies they serve.
"Except for the members of the judiciary and constitutional commissions who shall
have life insurance only, all members of the GSIS shall have life insurance,
retirement, and all other social security protections such as disability,
survivorship, separation, and unemployment benefits. (Section 3)
7. What is the effect of separation from government service?
A member separated from the service shall continue to be a member, and shall be
entitled to whatever benefits he has qualified to in the event of any contingency
compensable under this Act. (SEC. 4.)
8. What are the obligations of the employer under the GSIS law?
The employer has the following obligations under the GSIS law:
To report to the GSIS the names of all employees, their corresponding
employment status, positions, salaries and other information;
To remit directly to GSIS the employer and employees contribution within
the first ten days of the calendar month following the month to which
the contributions apply. (Section 6, GSIS).
10. What is the penalty for non- remittance or delayed remittance?
Penalized by interest penalty not less than 2% per month.
11. Enumerate the benefits that may be enjoyed by covered member of GSIS.
The benefits are:
Basic monthly pension benefit
Separation benefits
Retirement benefits
Permanent disability benefits
Temporary disability benefits
Survivorship benefits
Funeral benefits
Life insurance benefits
12.How is the basic monthly basic Pension Computed?

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SEC. 9. Computation of the Basic Monthly Pension. - (a) The basic monthly pension
is equal to:
"1) thirty-seven and one-half percent (37.5%) of the revalued average monthly
compensation; plus
"2) two and one-half percent (2.5%) of said revalued average monthly compensation
for each year of service in excess of (15) years: Provided, That the basic
monthly pension shall not exceed ninety percent (90%) of the average monthly
compensation.
"(b) The basic monthly pension may be adjusted upon the recommendation of the
President and General Manager of the GSIS and approved by the President of the
Philippines in accordance with the rules and regulations prescribed by the GSIS:
Provided, however, that the basic monthly pension shall not be less than One
thousand and three hundred pesos (P1,300.00): Provided, further, that the basic
monthly pension for those who have rendered at least twenty (20) years of service
after the effectivity of this Act shall not be less than Two thousand four
hundred pesos (P2,400.00) a month.
13. How is the length of service computed?
"SEC. 10. Computation of Service. - (a) The computation of service for the
purpose of determining the amount of benefits payable under this Act shall be
from the date of original appointment/election, including periods of service at
different times under one or more employers, those performed overseas under the
authority of the Republic of the Philippines, and those that may be prescribed by
the GSIS in coordination with the Civil Service Commission.
"(b) All service credited for retirement, resignation or separation for which
corresponding benefits have been awarded under this Act or other laws shall be
excluded in the computation of service in case of reinstatement in the service of
an employer and subsequent retirement or separation which is compensable under
this Act.
"For the purpose of this section, the term service shall include full-time
service with compensation: Provided, that part-time and other services with
compensation may be included under such rules and regulations as may be
prescribed by the GSIS.
14. When is retirement compulsory?
Unless the service is extended by appropriate authorities, retirement shall be
compulsory for an employee 65 years of age, with at least 15 years of service.
Provided That if he has less than 15 years of service he may be allowed to
continue in the service in accordance with existing civil service rules and
regulations ( Sec 13 b, GSIS)
15. What shall consist the separation benefits?
The separation benefits shall consist of: (a) a cash payment equivalent to one
hundred percent (100%) of his average monthly compensation for each year of
service he paid contributions, but not less than Twelve thousand pesos (P12,000)
payable upon reaching sixty (60) years of age upon separation, whichever comes
later: Provided, that the member resigns or separates from the service after he
has rendered at least three (3) years of service but less than fifteen (15)
years; or
"(b) a cash payment equivalent to eighteen (18) times his basic monthly pension
at the time of resignation or separation, plus an old-age pension benefit equal
to the basic monthly pension payable monthly for life upon reaching the age of
sixty (60): Provided, that the member resigns or separates from the service after
he has rendered at least fifteen (15) years of service and is below sixty (60)
years of age at the time of resignation or separation.
16. Supposing a government employee retires, what are the benefits that he may
receive from the GSIS?
Retirement benefits shall be:
"(1) the lump sum payment as defined in this Act payable at the time of
retirement plus an old-age pension benefit equal to the basic monthly pension
payable monthly for life, starting upon expiration of the five-year (5)
guaranteed period covered by the lump sum; or
"(2) cash payment equivalent to eighteen (18) months of his basic monthly pension
plus monthly pension for life payable immediately with no five-year (5)
guarantee.

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"(b) Unless the service is extended by appropriate authorities, retirement shall

be compulsory for an employee of sixty-five (65) years of age with at least
fifteen (15) years of service: Provided, That if he has less than fifteen (15)
years of service, he may be allowed to continue in the service in accordance with
existing civil service rules and regulations.
17. To be entitled to the retirement benefits mentioned under No. 12, what
requirements must a government employee satisfy?
(1) he has rendered at least fifteen years of service;
(2) he is at least sixty (60) years of age at the time of retirement; and
(3) he is not receiving a monthly pension benefit from permanent total
disability.
18. Under the GSIS, what are the two classes of disability benefits?

1. Permanent Disability Benefits

2. Temporary Disability Benefits

19. What do you mean by the following terms: 1. disability 2. total disability 3.
permanent total disability 3. temporary total disability 4. permanent partial
disability?

1. Disability- any loss or impairment of the normal functions of the physical

and/ or mental faculty of a member which reduces or eliminates his/ her capacity
to continue with his/her current gainful occupation or engage in any other
gainful occupation.
2. Total disabilty- complete incapacity to continue with his present employment
or engage in any gainful occupation due to the loss or impairment of the normal
functions of the physical and/ or mental faculties of the members.
3. Permanent total disability- accrues or arises when recovering from impairment
mentioned in Sec 2 Q is medically remitted.
4. Temporary Total Disability- accrues or arises when the impaired physical or
mental faculties can be rehabilitated and/ or restored to their normal functions.
5. Permanent Partial Disability- accrues or arises upon the irrevocable loss or
impairment of certain portion/s of the physical faculties, despite which the
member is able to pursue a gainful occupation.

20. What are the two classes of permanent disability benefits?

1. Permanent total disability benefits
2. Permanent partial disability benefits
21. What are the general conditions that must concur before a member may be
entitled to permanent disability benefits?
A member, who suffers permanent disability for reasons not due to his grave
misconduct, notorious negligence, habitual intoxication, or willful intention to
kill himself or another, shall be entitled to the benefits provided for under
Sections 16 and 17 immediately following, subject to the corresponding conditions
thereof.
22. In case the disability is total, what amount will a member receive because of
such disability?
If the permanent disability is total, he shall receive a monthly income benefit
for life equal to the basic monthly pension effective from the date of
disability:
23. What additional conditions must concur before a member may be entitled to
permanent disability benefits?
(1) he is in the service at the time of disability; or
(2) if separated from the service, he has paid at least thirty-six (36) monthly
contributions within the five (5) year period immediately preceding disability,
or has paid a total of at least one hundred eighty (180) monthly contributions,
prior to his disability: Provided, further, That if at the time of disability, he
was in the service and has paid a total of at least one hundred eighty (180)
monthly contributions, in addition to the monthly income benefit, he shall
receive a cash payment equivalent to eighteen (18) times his basic monthly
pension: Provided, finally, That a member cannot enjoy the monthly income benefit
for permanent disability and the old-age retirement simultaneously.

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"(b) If a member who suffers permanent total disability does not satisfy
conditions (1) and (2) in paragraph (a) of this section but has rendered at least
three (3) years of service at the time of his disability, he shall be advanced
the cash payment equivalent to one hundred percent (100%) of his average monthly
compensation for each year of service he paid contributions, but not less than
Twelve thousand pesos (P12,000.00) which should have been his separation benefit.
24. When is the disability benefit suspended?
Unless the member has reached the minimum retirement age, disability benefit
shall be suspended when:
"(1) he is reemployed; or
"(2) he recovers from his disability as determined by the GSIS, whose decision
shall be final and binding; or
"(3) he fails to present himself for medical examination when required by the
GSIS.

25. What disabilities are considered total and permanent?

The following disabilities shall be deemed total and permanent:

"(1) complete loss of sight of both eyes;
"(2) loss of two (2) limbs at or above the ankle or wrist;
"(3) permanent complete paralysis of two (2) limbs;
"(4) brain injury resulting in incurable imbecility or insanity; and
"(5) such other cases as may be determined by the GSIS.
26. What are the conditions that must concur before a member may be entitled to
temporary disability benefits?
"A member who suffers temporary total disability for reasons not due to any of
the conditions enumerated in Section 15 hereof shall be entitled to seventy-five
percent (75%) of his current daily compensation for each day or fraction thereof
of temporary disability benefit not exceeding one hundred twenty (120) days in
one calendar year after exhausting all his sick leave credits and collective
bargaining agreement sick leave benefits, if any, but not earlier than the fourth
day of his temporary total disability: Provided, That:
"(1) he is in the service at the time of his disability; or
"(2) if separated, he has rendered at least three (3) years of service and has
paid at least six (6) monthly contributions in the twelve-month period
immediately preceding his disability.
"Provided, however, That a member cannot enjoy the temporary total disability
benefit and sick leave pay simultaneously: Provided, further, That if the
disability requires more extensive treatment that lasts beyond one hundred twenty
(120) days, the payment of the temporary total disability benefit may be extended
by the GSIS but not to exceed a total of two hundred forty (240) days.
27. In case a GSIS pensioner dies, will his survivors receive any benefit under
this Act?
Yes, his survivors will receive survivorship benefits. When a member or
pensioner dies, the beneficiaries shall be entitled to survivorship benefits
provided in Sections 21 and 22 hereunder subject to the conditions therein
provided for. The survivorship pension shall consist of:
(1) the basic survivorship pension which is fifty percent (50%) of the basic
monthly pension; and
(2) the dependent childrens pension not exceeding fifty percent (50%) of the
basic monthly pension.

28. State the policies on survivorship benefits when the deceased member was in
the active service?
The policies or rules are:
First, if at the time of death, a member is in the active service and has
rendered at least 15 years of creditable service:
The primary beneficiaries shall receive the survivorship pension and cash
payment equivalent to 18 x the basic monthly pension; or
In the absence of primary beneficiaries, his secondary, the legal heirs
of members shall receive the cash payment.
Second, if at the time of death, the member was in the service with less than 15
years of creditable service, his primary beneficiaries shall receive the cash

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payment equivalent to 100% of the average monthly compensation for every year of
creditable service, but not less than P12, 000 .

29. What should be the governing rules and policies on the survivorship benefits
of inactive members?

Survivors of members who retired under retirement laws not administered

by the GSIS shall not receive any survivorship benefits from the system.
Primary beneficiaries of inactive members who have at least 15 years of
creditable service shall receive the survivorship pension.
Primary beneficiaries of inactive members who have at least three years
but les than 15 years of creditable service and were less than sixty
years of age at the time of death shall receive a cash benefit
equivalent of 100% of the deceased inactive members average monthly
compensation for every year of creditable service but not less than
P12,000.
Primary beneficiaries of inactive members who have less than 15 years of
creditable service and were at least 60 years of age at time of
separation from service, shall not be entitled to receive survivorship
benefits. However, if the member has not yet received the separation
benefits within four years after his separation, the primary
beneficiaries shall receive the cash benefit equivalent to 100% of the
inactive members average monthly compensation for every year of
creditable service.

30. State the new rule or policy on the GSIS Pensioner or Recipient of Monthly
Income Benefits for Permanent Total Disability?

The survivorship benefits of a retiree- pensioner or a member receiving a monthly

income benefit for permanent total disability shall be entitled to:
The primary beneficiaries shall receive the survivorship pension.
In the case of a pensioner who dies within the covered period by the lump
sum, the survivorship pension shall be paid after the expiration of the
said period.

31. Under Res. No. 188, what is meant by average monthly compensation(AMC)?

Consistent with the Premium based Policy, the AMC shall be the average salary for
the last three years of service of the member prior to his/ hr death or
separation, where the corresponding premium contributions have been paid and
remitted to the GSIS.( Res. No. 188 No. 6, August 13, 2003).
32. Under the GSIS law, is there such a thing as compulsory life insurance?
Yes, all employees except for Members of the Armed Forces of the Philippines
(AFP) and the Philippine National Police (PNP) shall, under such terms and
conditions as may be promulgated by the GSIS, be compulsorily covered with life
insurance.
33. What are the benefits under the compulsory insurance?
The member of his designated beneficiaries/ legal heirs are entitled to any of
the following benefits available under the compulsory life insurance:
Maturity benefit
Death Benefit
Accident Cash benefit
Cash Surrender Value
Insurance Loans

34. What are the two classes of life insurance under the GSIS?

1. Compulsory life insurance

2. Optional Insurance

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35. When may a member apply for optional insurance? What are the benefits under
an optional life insurance policy.

Subject to the rules and regulations prescribed by GSIS, a member may apply for
insurance and / or pre need coverage embracing life, health, hospitalization,
education, memorial plans, and such other plans as may be designed by the GSIS
for himself and/ or his dependents. Any employer may likewise apply for group
insurance coverage for its employees.

36. Who will effect payment of premium in optional insurance?

The payment of the premium/ installments for optional insurance and pre- need
products may be made by the insured or his employer and/ or any person acceptable
to the GSIS.
37. Until what time should claims for benefits under the GSIS law be filed?
Claims for benefits under this Act except for life and retirement shall prescribe
after four (4) years from the date of contingency.
38. Does this 4 year prescriptive period cover life and retirement?
No.
39. Give the effects in case of wrong payment of benefits to
ineligible/disqualified party?
Payments made by the GSIS, prior to receipt of an adverse claim,to a beneficiary
or claimant subsequently found not entitled thereto shall not bar the legal and
eligible recipient to his right to demand the payment of benefits, proceeds and
claims from the GSIS, who shall however, have a right to institute the
appropriate action in a court of law against the ineligible recipient.(Sec 29
GSIS)
40. What government agency has exclusive original jurisdiction to hear disputes
arising from the GSIS law?
The GSIS shall have original and exclusive jurisdiction to settle any disputes
arising under this Act and any other laws administered by the GSIS.
The Board may designate any member of the Board, or official of the GSIS who is a
lawyer, to act as hearing officer to receive evidence, make findings of fact and
submit recommendations, together with all documentary and testimonial evidence to
the Board within thirty (30) working days from the time the parties have closed
their respective evidence and filed their last pleading. The Board shall decide
the case within thirty (30) days from the receipt of the hearing officers
findings and recommendations. The cases heard directly by the Board shall be
decided within thirty (30) working days from the time they are submitted by the
parties for decision.
41. What powers have been enjoyed by officials and employees authorized by the
Board to hear and receive evidence for the Board on any GSIS dispute within its
jurisdiction?
They have the power:
To administer oaths and affirmation
Take depositions
Certify to official acts
Issue subpoena to persons to testify and for the production of books,
papers, correspondence and other records.

42. What rules shall govern appeals from any decision of the Board?
Appeals from any decision or award of the Board shall be governed by Rules 43 and
45 of the 1997 Rules of Civil Procedure adopted by the Supreme Court on April 8,
1997 which will take effect on July 1, 1997: Provided, That pending cases and
those filed prior to July 1, 1997 shall be governed by the applicable rules of
procedure: Provided, further, That the appeal shall take precedence over all
other cases except criminal cases when the penalty of life imprisonment or death
or reclusion perpetua is imposable.
The appeal shall not stay the execution of the order or award unless ordered by
the Board, by the Court of Appeals or by the Supreme Court and the appeal shall
be without prejudice to the special civil action of certiorari when proper.
43. What constitute GSIS Social Insurance Fund?

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All contributions payable under Sec. 5 of this Act together with the earnings and
accrual thereon shall constitute the GSIS social Insurance Fund (Section 34,
GSIS)
44. What are the other funds being administered by GSIS?
Optional Insurance Fund
Employees Compensation Insurance Fund
General Insurance Fund
Other Special Funds
45. When should the retirement benefits be paid to a member?"
The GSIS shall pay the retirement benefits to the employee on his last day of
service in the government: Provided, That all requirements are submitted to the
GSIS within a reasonable period prior to the effective date of the retirement;
46. In case an employee is also covered by another law, which grants similar
benefits to what is granted by the GSIS law, may such employee claim under both
laws?
No, the employee may not claim under both. Under Section 55. of the GSIS law:
Exclusiveness of Benefits. - Whenever other laws provide similar benefits for
the same contingencies covered by this Act, the member who qualifies to the
benefits shall have the option to choose which benefits will be paid to him.
However, if the benefits provided by the law chosen are less than the benefits
provided under this Act, the GSIS shall pay only the difference.
47. What are the powers and functions of the GSIS?
To formulate, adopt and amend rules and regulations;
To adopt and approve the annual supplemental budget of receipts and
expenditures;
To invest funds of GSIS;
To acquire, utilize and dispose of its real and personal properties;
To conduct actuarial and statistical studies and evaluation to determine
the financial condition of the GSIS
To have the power of succession.
To sue and be sued
To enter into contracts;
To carry on any lawful business;
To establish offices for the conduct of its business;
To borrow money from other sources;
To invest, own or participate in equity in any establishment firm or
entity;
To approve appointments;
To design and adopt early Retirement Incentive plan;
To fix and periodically review and adjust rates of interest and other
terms and conditions;
To enter into any agreement with SSS or with any other entity;
To be able to float proper instrument to liquefy long term maturity by
pooling funds for short term secondary market;
To submit annually report to the President and Congress of the
Philippines;
To maintain provident fund;
To approve guidelines affecting investments;
To authorize payment of remunerations to officials and employees;
To determine an impose interest upon unpaid premiums due from employers
and employees;
To ensure all collection of all indebtedness, liabilities, and
accountabilities;
To design and implement programs;
To exercise such other powers and functions as may be necessary and
useful in promoting the purposes and objectives of GSIS.

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BAR QUESTIONS ON GSIS LAW

1. Gregorio Reposo, a 59 year old government employee and member of the GSIS
could not wait for his retirement benefits and thought of enjoying them in
advance of his retirement at age 60 by borrowing 80% of the retirement benefits
from a friendly money lender, assigning to him the entire amount of his expected
benefits. He obtained the approval of the assignment from the GSIS.
Reposo spent the proceeds on a business venture that failed. A supplier sued
Reposo for unpaid materials and attempted to proceed against his retirement
benefits.
Reposo seeks your assistance in an effort to shield his retirement benefits. What
legal advice would you give? (Bar 1987)
I would advise him that the party in interest is now the money lender due to the
approved assignment. Incidentally however, I would advise him that his retirement
benefits cannot be subject to attachment, garnishment, levy and other
processes.Sec 39 GSIS Act of 1997).
2. Juan de la Cruz was employed in a private company and was covered employee
under the SSS. Her thereafter resigned but opted to maintain his membership with
the system by shouldering the total contributions required. He later accepted an
appointment in the government service and by reason thereof, became a member of
the GSIS.
Question Can Cruz continue his membership under both systems? Since both systems
provide for permanent disability benefits and should Cruz thus become disabled,
which system should answer for such benefit? ( Bar 1979).
Yes, Cruz can be both a self-employed individual under the SSS and a GSIS member
by virtue of his governmental appointment. As to recovery of benefits, he has the
option to choose which benefit is favorable to him. However, if the benefits
chosen are less, the other system will provide for the difference applying the
portability and totalization scheme of Rep. Act. No. 7699, infra.
3. An old-age pensioner of the GSIS had not received the lump sum payment of his
pension and died within the guaranteed period of five years. He was survived by
his wife and minor children.
Are his heirs entitled to any benefit or benefits under the GSIS Act of 1997?(BAR
Q. 1980).
Yes, his primary beneficiaries are entitled to the balance of the monthly pension
which is guaranteed for five years. They may instead opt for a lump-sum payment.
Survivorship pension shall be given to the heirs after 5-year guaranteed period.
Additionally, a funeral benefit of P18,000 (formerly P12,000.00 see Sec.23, GSIS)
shall be paid upon the death of the pensioner.

PRIMER IN EMPLOYEES COMPENSATION PROGRAM AND STATE INSURANCE FUND

1. What is the Employees Compensation Program (ECP)?

It is the program provided for in Article 166 to 208 of the Labor Code
whereby a fund known as the State Insurance Fund is established through premium
payments exacted from employers and from which employees and their dependents in
the event of work-connected disability or death, may promptly secure adequate
income benefit, and medical or related benefits.

2. What are the basic features of the new ECP?

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The basic features of the new program are:

It is tax exempt.
It is funded by monthly contributions of all covered employers.
Compulsory and Wider coverage. All employers and their employees not
over 60 years of age are covered. With the inclusion into the system of
employers with at least one employee and regardless of the
capitalization and the type or nature of their business, more employees
are now covered.
Exclusivity of benefits. The benefits are exclusive and in place of all
other liabilities of the employer to the employee, his dependents or
anyone otherwise entitled to receive damages on behalf of the employee
or his dependents.
Integration of benefits. Compensation benefits for work-connected injury,
sickness, disability and death have been integrated with those of the
SSS/GSIS and Medicare, simplifying and facilitating the processing of
claims.
Increase in benefits. An allowed income benefit has been considerably
increased; death and permanent disability benefits now consist of a
lifetime pension. Burial expenses have also been increased.
Prompt payment of income benefits. The new program does away with in the
adversary type of proceedings. The claimant is not required to go to
court to establish his claim. In fact, his own employer will file the
claim in his behalf. The new simplified system results in the early
settlement of claims and the prompt payment of income benefits.
Legal service dispensed with. Legal services are dispensed with in the
processing of claims under the system, eliminating the payment of
attorneys fees.
Exclusive jurisdiction. The System has its own adjudication machinery
with exclusive original jurisdiction to settle any dispute with respect
to coverage, entitlement to benefits, collection and payment of
contributions and penalties thereon, or any other matter related
thereto, independent of other tribunals except the Supreme Court
A more balanced rehabilitation program. It enables permanently disabled
employees to avail themselves of rehabilitation services under the
employees Compensation Program which can help them regain, as soon as
possible, their physical capacity to the maximum level. Disabled workers
could therefore remain as useful assets of society and regain their self
confidence and self respect. (San Miguel Corporation vs. NLRC, G.R. No.
57473, August 15, 1988).

3. Who are covered under the ECP?

The following are covered under the law:

Employers All employers belonging to the public or private sector are
covered;
Employers All employees not over sixty (60) years old are covered.
Employees who are over sixty (60) years old shall be covered if he has
been paying contribution prior to the age of sixty (60) and has not been
compulsorily retired. Employees covered by both the GSIS and the SSS
shall be compulsorily covered by both systems. (Sec. 2, Rule I, Amended
Rules on Employees Compensation).

4. Who are Employers?

The term shall mean any person, natural or juridical, domestic or foreign, who
carries on the Philippines any trade, business, industry, undertaking or activity
of any kind and uses the services of another person who is under his orders as
regards the employment.
An employer shall belong to either:
The public sector covered by the GSIS, comprising the National
Government, including government-owned or -controlled corporations with

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original charters, the Philippine Tuberculosis Society, the Philippine

National Red Cross and the Philippine Veterans Bank; or
The private sector covered by the SSS, comprising all employers other
than those defined in the immediately preceding paragraph (Sec. 3a, Rule
I, Amended Rules on Employees Compensation)

5. Who are Employees?

The term shall mean any person who performs services for an employer.

An employee shall belong to either:

The public sector comprising the employed workers who covered by the
GSIS, including the members of the Armed Forces of the Philippines,
elective officials who are receiving regular salary, and any person
employed as casual, emergency temporary, substitute or contractual.
The private sector comprising the employed workers who are covered by the
SSS (Sec. 4, Rule I, Ibid).

6. Are Filipinos under foreign employment covered?

Filipinos working abroad in the service of an employer, domestic or foreign, who

carries on in the Philippines any trade, business, industry, undertaking or
activity of any kind are also covered. They are entitled to the same benefits
given to employees working in the Philippines (Sec. 5(a), Rule I, Amended Rules
on Employees Compensation).

7. When does such compulsory coverage take effect?

The effectivity dates of coverage are the following:

For employers First day of operation but not earlier than January 1,
1975;
For employees First day of employment (Sec. 6, Rule I, Amended Rules on
Employees Compensation).

8. What is the registration as requirement?

The employer and the employees shall register with the system by accomplishing
the prescribed forms. The private sector shall register with the SSS, while the
public sector shall register with the GSIS. (Sec. 1, Rule II, Amended Rules on
Employees Compensation).
9. When is the employee deemed reported?
An employee is deemed to have been duly reported for coverage, if the System (SSS
or GSIS) has received a report or written communication about him from his
employer or an EC (Employer Compensation) contribution paid in his name by his
employer before a compensable contingency occurs (Sec. 3 (b)(3), Rule II, Amended
Rules on Employees Compensation).
10. What is the penalty for non-registration?

Failure or refusal to register its employees shall make the employer or

responsible official who committed the violation liable for a fine of not less
than P1, 000.00 nor more than P10, 000.00 and/or imprisonment for the duration of
the violation or non compliance or until such time that the rectification of the
violation has been made, at the discretion of the Court.
In case a compensable contingency occurs after 30 days from employment and before
the system receives any report for coverage about the employee or EC contribution
on his behalf, his employer shall be liable to the System for the lump sum
equivalent to the benefits to which the employee or his dependents may be
entitled (Sec. 4, Rule II, Amended Rules on Employees Compensation).

11. What are the grounds for a claim for benefits under the ECP?
They are the following:

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sickness and the resulting disability or death by reason of an employment

accident; and
sickness and the resulting disability or death by reason of an
occupational disease.
12. What is the meaning of compensable sickness?

Sickness means any illness definitely accepted as an occupational disease listed

by the Employees Compensation Commission, or any illness caused by employment
subject to proof by the employee that the risk of contracting the same is
increased by working conditions.
For this purpose, the Commission is empowered to determine and approve
occupational diseases and work-related illness that may be considered compensable
based on peculiar hazards of employment.
However, there are cases where the disease although not listed as occupational,
is still compensable such as when the worker was exposed to adverse working
conditions, or the risk of contracting the disease was increased by the working
conditions (De Guia vs. ECC, 198 SCRA 834; Ibid).

13. Discuss briefly the theory of increase risk.

The term sickness as defined includes any illness caused by employment
subject to proof by the employee that the risk of contracting the same is
increased by working conditions. This is a recognition of the theory of
increased risk. To establish compensability under the same, the claimant must
show substantial proof of a reasonable work-connection and not a direct causal
relation. The test of evidence of the relation of the disease with the
employment is probability and not certainty. To require otherwise, would not be
consistent with the liberal interpretation of the Labor Code and the social
justice guarantee.

14. What is an occupational disease?

An occupational disease is one which results from the nature of the employment
and by the nature is meant which all employees of a class are subject and which
produce the disease as a natural incident of a particular occupation, and attach
to that occupant a hazard which distinguishes it from the usual run of the
occupation a hazard attending employment in general.
This type of disease is characterized by the fact that (a) it occurs in
association with particular types of occupation, and (b) the disability due to
the injurious exposure grows gradually over a period of time.
Familiar examples of this disease are the following: (a) lead poisoning among
miners; (b) silicosis among miners; (c) bends among drivers; and (d) communicable
disease among nurses directly in contact with patients with such disease, is also
held to be an occupational disease.

15. Is cancer an occupational disease?

Although the cause of cancer is not yet known, it has already been included as a
qualified occupational disease in certain cases. Thus, cancer of the epithelial
lining of the bladder is considered occupational when contracted by employees
engaged in work involving exposure to alphanaphtylamine, betanaphtylamine, or
benzidine or part of the salts, and suramine or magenta.
Likewise, cancer of the skin or of the corneal surface of the eye is considered
occupational in work involving the use or handling or exposure to tar, pitch,
bitumen, mineral oil including paraffin, soot, or any compound or residue of any
of its substances.
Cancer of the stomach and other lymphatic and forming vessels, or of the nasal
cavity and sinuses is recognized as an occupational disease among woodworkers,
carpenters, loggers, and employees in pulp, paper and plywood mills; while cancer
in the lungs, liver and brain is listed as an occupational disease of vinyl
chloride or plastic workers.

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16. What is the Doctrine of presumptive compensability and theory of

aggravation?

The presumption of compensability and the theory of aggravation established under

the Workmens Compensation Act (Act No. 3428) as amended have been abandoned
under the new Labor Code. However, the Supreme Court held that: while these
doctrines may have been abandoned, the liberalities of the law still subsists.
This decision gave substance to the liberal and compassionate spirit of the law
found in Article 4 of the Labor Code which provides that all doubts shall be
resolved in favor of labor.
Note that for claims that have accrued prior to the new Labor Code, the above
rules should be applied.

17. Is the claimant under the ECP required to present proof of causal relation
or aggravation where the cause or origin of the disease is still unknown?

Yes. If the disease not intended by law to be compensated are inadvertently

or recklessly included, the integrity of the State Insurance Fund is endangered.
Compassion for the victims of diseases not covered by the law ignores the need to
show greater concern for the trust fund to which tens of millions of workers and
their families look for compensation whenever accidents, disease, and deaths
occur.
18. What is the old doctrine?

Under the old doctrine, the necessity of proof is present only when the cause of
the disease is known. If unknown, there is no duty to present proof, for the
requirement that the disease was caused or aggravated by the employment or work
applies only to an illness where the cause can be determined or proved (Mora vs.
ECC, G.R. No. 62157, 1December 1987.)
However, actual proof of causation is not necessary to justify compensability.
The degree of proof required to establish work connection between the illness and
the employment is only substantial evidence of reasonable work-connection
(Cristobal vs. ECC, 181 SCRA 874). The claimant must show that the development of
the disease is brought largely by the conditions present in the nature of the job
(Zozobrado vs.ECC, 141SCRA 136). In other words, the employee has the burden of
proving that his illness is work-related.
19. What is the new doctrine?

The new doctrine provides two (2) approaches to a solution in cases where it
cannot be proved that the risk of contracting an illness, not listed as an
occupational disease, was increased by the claimants working conditions. One
approach is that if a claimant cannot prove the necessary work connection because
the cause of the disease are still unknown, it must be presumed that working
conditions increased the risk of contracting the ailment. On of the order hand,
the other approach provides that if there is no proof of the required work
connection, the disease is not compensable because the law says so.

20. What are the conditions for compensability of occupational diseases?

For an occupational disease and the resulting disability or death to be
compensable, all of the following conditions must be satisfied:
The employees work must involve the risk described herein;
The disease was contracted as a result of the employees exposure to the
describe risks;
The disease was contracted within the period of exposure and under such
other factors necessary to contract it;
There was no notorious negligence on the part of the employee.
The employer who has failed to provide the adequate protection and safety
devices shall be subject to the penalty imposed by Article 200 of the Code. Where
he has provided adequate protection and safety mdevices, there shall be a
determination as to whether or not the employee has been notoriously negligent.
(Annex A, Amended Rules on Employees Compensation).
21. What is the crucial test of compensability?

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The crucial test compensability is the existence of employer-employee

relationship which is the jurisdictional foundation for recovery of compensation
under the law. Where the relationship has already been severed, the provisions of
the law will not apply. For purposes of determining the existence of employer-
employee relationship, the most important test is the power to control the
employees conduct (Iloilo Chinese Commercial School vs. Fabrigas, L 16600, 27
December 1961).
22. Is employment the sole factor?
NO. Under the law, it is not required that employment should be the sole factor
in the growth development or acceleration of the illness to entitle him to
benefits provided therein. It is enough that his employment had contributed, even
in a small degree to the development of the disease (Red Line Transportation Co.,
Inc. vs. Barriso, 11 SCRA 801; Lao vs. ECC, 97 SCRA 780).

23. Is Hansens Disease (leprosy) compensable?

Yes, provided the illness is traceable to employment. Leprosy, like

tuberculosis, is a system disease; its specific cause is bacteria and the same
can be acquired through body contact with a person harboring the germs; and some
of the participating factors leading to the development of the disease are
exposure to sudden changes in the environment and temperature and the lessening
of the body resistance of the person affected. (Better Buildings, Inc. vs.
Pucan, G.R. No. L-42731, February 28, 1985)

24. F.C. worked in the printing department of a government agency. He handled

various chemicals for printing, ate without washing his hands, and was exposed to
intense heat. He often neglected personal necessity due to inadequate facilities
in his place of work. F.C. later died of rectal cancer. Is his death
compensable? Why?

Yes. Although rectal cancer is not listed as an occupational disease, there is

ample proof that the risk of contracting the same was increased, if not caused,
by the working conditions prevailing in the employers premises. (Cristobal vs.
Employees Compensation Commission, G.R. No. L-49280, April 30, 1980)

25. S., employed as a mechanic in a naval shipyard, died of pyelonephritis

(acute pyelogenic infection of the kidney) and bronchopneumonia (infection of the
bronchi and lung tissue). Is his death compensable? Why?

No. The diseases are not occupational with respect to the work of the
deceased. Besides, the risk of contracting them was not increased by his working
conditions. (Sulit vs. Employees Compensation Commission, G.R. No. L-48602,
June 30, 1980)

26. Is ureterolithiosis (presence of renal stones in the ureter and urinary

stones) of a chemical laboratory technician of the NBI compensable under the
employees compensation program? Explain.

Yes. Though not expressly recognized as an occupational disease,

ureterolithiosis may be compensable by reason of the theory of increased risk.
It is medically established that environment, water or other liquid intake and
the nature of the occupation are important factors in the development or
inhibition of the disease.
The work of the NBI laboratory technician exposed her to drugs,
insecticides, volotile poisons, fuels and inorganic compounds, and chemical
laboratory equipment. Moreover, she attended to filed cases and rendered holiday
and night duties once a week and helped the chemist in the examination of
incoming cases. She often missed some important health habits such as regularly
drinking water and urination in order not to interrupt the flow of concentration.
Despite the abandonment of the presumption of compensability, the present
law has not ceased to be a social legislation; the liberality of the law in favor
of the working man or woman still prevails. (Employees Compensation Commission
vs. Court of Appeals, G.R. No. 121545, November 14, 1996)

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27. Give instances of compensable illnesses.

The following ailments are compensable:
Tuberculosis considered occupational disease or work connected in such
occupation as that of a teacher, laborer, driver, land inspector and
other similar occupations (Visual vs. ECC, 187 SCRA 623).
Diabetes mellitus contracted by a public school teacher whose work was
physically and emotionally stressful (Millora vs. ECC, 143 SCRA 151).
Hepatoma and post-necrotic cirrhosis contracted by a cashier of a bank,
who was constantly exposed to various chemicals in the form of carbon
paper, erasing fluids, and others and whose assignments involved
irregular working hours and expose to different working conditions, body
fatigue and psychological stress (Neri vs. ECC, 127 SCRA 672). The DBP
cashier was exposed to handling money bills (Ibid).
Cirrhosis contracted by a nursery farm aide who was constantly exposed to
plant chemicals and insecticides (San Valentin vs. ECC, 118 SCRA 160).
Cardiovascular disease which includes myocardial infraction in work-
related disease (Telefast Communications vs. Castro, G.R. No. 78367, 29
February 1988).
Cancer of the lungs contracted by a librarian who has work for 15 years
during which she was exposed to dusty books and other deleterious
substances in the library (Dator vs. ECC, 111 SCRA 632).
Cancer of the liver contracted by a school teacher who has served for
twenty-four (24) years (Abadiano vs. GSIS, 111 SCRA 509).
Rheumatoid arthritis contracted by school teacher usually associated with
the nature and character of their occupation (Gersalino vs, WCC, 187
SCRA 1).
Senile cataract contracted by a construction worker who was constantly
exposed to the suns glared and heat as well as excessive dirt and dust
(Jarillo vs. ECC, 112 SCRA 264).
28. Give instances of non-compensable illnesses.

The following ailments are not compensable:

Ailments of a telephone operator diagnosed as chronic pylonephritis,
diabetes mellitus, anemia metastases (cancer) are not occupational
diseases (De Jesus vs. ECC, G.R. No. 56191, 27 May 1986).
Cancer of the pancreas contracted by a bookkeeper (Milano vs. ECC, 142
SCRA 52).
Senile cataract of a district engineer is not listed as occupational
disease (Zozodrado vs. ECC, G.R. No. 65856, 17 January 1986).
Pylonephritis and bronchopneumonia contracted by a mechanic (Sulit
vs.ECC, 98 SCRA 478).
Peptic ulcer is not included in the list of occupational diseases
(Dabatian vs. GSIS G.R. No. 47294, 8 April 1987).
Bells Palsy, anxiety neurosis, peripheral neuritis not listed as
occupational diseases (Galanida vs. ECC, G.R. No. 70660, 24 September
1987)
Parotid Carcinoma or cancer of the salivary glands contracted by an
accounting clerk is not an occupational disease (Sarmiento vs. ECC, G.R.
No. 65680, 11 May 1988).
Glaucoma is no longer compensable (Hatta Hataie vs. ECC, 195 SCRA 580).
29. What an injury?
Injury is defined as any harmful changes in human organism from any accident
sustained at work while executing an order for the employer.
30. What are the conditions for compensability of injuries?

For injury and the resulting disability or death to be compensable, the injury
must be the result of an accident that satisfies all of the following conditions:
The employee must have been injured at the place where his work requires
him to be;
The employee must have been performing his official functions;

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If the injury was sustained elsewhere, the employee must have been
executing an order for the employer (Sec. 1(a), Rule III, Amended Rules
on Employees Compensation).
Thus an injury or accident is said to arise in the course of employment when it
takes place within the period of employment, at a place where the employee may
be, and while he is fulfilling his duties or is engaged in doing something
incidental thereto. Note that in the course factor applies to time, place and
circumstances (PHHC vs. WCC, L 18246, 30 October 1964).

31. Distinguish arising out of and in the course of factors?

An injury or illness arise out of when it results from a risk or hazard which
is necessarily or ordinarily or reasonably inherent in or incident to the conduct
of such work or business. It refers to the origin or cause of the accident and
are descriptive of its character (PASUDECO vs. 16 SCRA 784).
In the course of takes place when an employee is doing the duty which he is
required to perform. It refers to time, place, and circumstances under which
accident takes place (Afable vs. Singer Machine Co.,58 Phil. 42).

32. What are the instances of compensable injuries?

The following are instances of compensable injuries:

Peculiar risks. A metro aide while at work on a public street was crushed
to death by an automobile. The injury caused by an accident was in
pursuance his employment, thus compensable.
Street perils. A camineros death or injury performing his work when hit
by a fast moving vehicle is held to be compensable (Balajadia vs.
Province Supra).
A street sweeper is exposed to the perils of the street thus any injury arising
there from is compensable (Balajadia vs. Province, G.R. No. L-41979, 15 October
1934).
Acts of ministration. The injury of the employee who heeded the call of
nature and sustained injuries in the performance of such act, is deemed
compensable. Likewise, acts necessary to the health and comfort of an
employee while at work such as satisfaction of thirst, hunger, etc. are
incidental to employment and injuries sustained there from are held to
be compensable. (Chua vs. Roman, L-14827, 31 October 1960).
Acts of God. A ships captains death because his vessel sank in a marine
disaster arising out of employment is thus compensable (Murillo vs.
Mendoza, 66 Phil, 689).
A farm workers death while administering insecticides to agricultural
plants in the open field, and lightning struck him, was held to be compensable.
Assaults. A heated argument ensued between two workers over a work
assignment resulting in an assault by one to the other; the injury or
death arising there from has been held to be compensable (BLTC vs.
Mandaguit, 70 Phil. 685).
However, assault occasional not attributable to employment such as when it sprang
from jealousy over a beautiful girl, as the two workers as rivals, was held to be
not compensable.
Recreational activities. The injury of the employee who was injured
during a company-sponsored recreational activity is deemed compensable.
The test is whether such activity is for the benefit or interest of the
employer; otherwise it is not compensable. (99 C.J.S. 737; RP vs. Amil,
10 SCRA 669).
An employee won a prize (around the world tour) for having been chosen as the
most outstanding employee of the year. In the course of such tour he met an
accident; the injury is deemed compensable.
Acts for the benefit of the employer. In an attempt to protect the
properties of the company, an employee was killed by the burglars. The
resulting death is compensable.

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In his desire to retrieve the logs being carried away by strong current, the
employee, although a good swimmer, met his death by drowning as a consequence.
This is deemed compensable (Cuevo vs. Barrredo, No. L-45699, 24 February 1938).
Acts during emergency. Whatever injuries are sustained in the course of a
rescue work during an emergency arising out of the employment are
compensable. Injury suffered by an employee in his attempt to rescue a
co-worker arising out of employment, is also a compensable (Estandarte
vs. Phil. Motor Alcohol Co., G.R. No. 39722, 1 November 1933).

33. Can injuries sustained off the premises be compensable?

YES. An injury is compensable when it is sustained an employee anytime and

anywhere while executing an order for the employer. A well-known rule on the
matter is the coming and going rule. The following are compensable off-premise
injuries:
The employee is on the way to or from work in a vehicle owned or supplied
by the employer. Example is the employers supplied bus (Talisay-silay
Milling Co. vs. WCC, 21 SCRA 366).
The employee is subject to call at all hours or at the moment of the
injury. Example: The employer summoned him, while on his way he was
injured in an accident.
The employee is traveling for the employer. Example: Traveling workers.
The employee is on his way to further work at time, even though on a
fixed salary. Example: The employer required employee to bring some
papers at home for overtime purposes; on his way he met an accident
(Torbela vs. ECC, G.R. No. L-42627, 21 February 1980).
The employee is required to bring the car to employers business place
for use therein (Iloilo Dock and engineering Co. vs. 26 SCRA 102, 105).
The employee is accidentally injured at a point reasonably proximate to
the place of work, such injury is deemed to have arisen out of and in
the course of his employment. Example: The school principal sustained an
injury in a vehicular accident while he was on his way to school and at
the time of the accident, he had in his possession official papers he
worked on his residence on the eve of his death (Vda. De Torbela vs.
ECC, 96 SCRA 260).

34. What is the going and coming rule? Give the exceptions to the rule.

The general rule in workmens compensation law known as the going and coming
rule, is that in the absence of special circumstances, an employee injured while
going to or coming from his place of work is excluded from the benefits of the
workmens compensation law. Thus, an injury or accident sustained by an employee
while using the public streets and highways in going to or returning from the
place of employment is not compensable. Such as injury is suffered as a
consequence of risk and hazard of employment. Furthermore, the employer is not
an insurer against all accidental injuries which might happen to an employee
while in the course of employment. (Iloilo Dock and Engineering Co. vs. WCC, 26
SCRA 102, 105)
This rule, however, admits of exceptions, to wit:
where the employee is proceeding to or from his work on the premises of
his employer;
where the employee is about to enter or about to leave the premises of
his employer by the way of the exclusive or customary means of ingress
and egress (proximity rule);
where the employee is charged, while on his way to of from his place of
employment or at his home, or during his employment with some duty or
special errand connected with his employment; and
where the employer as an incident of the employment provides the means of
transportation to and from the place of employment.

35. Explain and illustrate the proximity rule.

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The proximity rule, an exception to the coming and going rule, provides that an
injury or accident sustained off the employers premise, but while in close
proximity thereto and while using a customary means of ingress and egress, is
deemed compensable.
Where the employee, while proceeding to work and running to avoid the rain,
slipped and fell into a ditch fronting the main gate of the employer's factory,
and as a result of which he died the next day, it was held that the accident
occurred within the zone of employment and therefore compensable.

36. What defenses may be interposed by the State Insurance Fund against a claim
for compensation made by a covered employee or his dependents?

The following defenses may be set up:

The injury is not work-connected or the sickness is not occupational.
The disability or death was occasioned by the employees intoxication,
willful intention to injure or kill himself or another, or his notorious
negligence.
No notice of sickness, injury or death was given to the employer.
The claim was filed beyond three (3) years from the time the cause of
action accrued.

37. Does intoxication bar compensation?

In order to prevent payment of compensation the following conditions must concur:

there must be proof of actual intoxication;
the intoxication must be to such a degree that the employee is
incapacitated from substantially engaging in employment and performing
his task;
the intoxication must be the proximate cause of the injury;
the intoxication must not only be the proximate cause (Schneider,
Workmens Compensation Laws, Vol. VI, 493-4; Balbija vs. Time Taxicab,
1219-R, 20 October 1955).

38. Does suicide bar compensation?

Since the employee committed the crime by himself, the resulting death is not
covered for compensation as in the following cases;
when It results from insanity resulting from compensable injury or
disease;
when it occurs during a delirium resulting from compensable injury or
disease; and
when it flows from an uncontrollable impulse arising from compensable
injury or disease (Horovits, 41 Nebraska Law Journal, 36).

39. What is notorious negligence? Does it bar compensation?

Notorious negligence is equivalent to gross negligence; it is something more

than mere carelessness or lack of foresight; it falls under the designation of
evident and manifest negligence and signifies a deliberate act of the employee to
disregard his own personal safety. However, mere disobedience to the rules,
orders and/or prohibition does not in itself constitute notorious negligence, if
no intention can be attributed to the injured to end his life.
Notorious negligence resulting in serious injury or death of the employee is not
compensable. However, no man in his senses would deliberately cause death. Thus,
the presumption is that the laborer by his instinct of self-preservation takes
precaution to avoid such danger unless a willful intention is attributed to him
to end his life (Dela Cruz vs. Cia. Maritima, G.R. No. 38236, 21 August 1933).

40. What is the liability of the State Insurance Fund?

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Whenever other laws provide similar benefits for the same contingency, the
employee who qualifies for the benefits shall have the option to choose the law
under which the benefit will be paid to him. If the law chosen provides for
benefits lesser than those provided by the Labor Code, he shall be entitled only
to the difference.
The employee cannot avail himself at the same time of similar benefits provided
by different laws, except the difference thereof. However, the employer may
continue to grant benefits already earned by the employees under any collective
bargaining agreement or any other arrangement (Sec. 2, Rule V, Amended Rules on
Employees Compensation).

41. What are the benefits excluded by the State Insurance Fund?

The following benefits are excluded by the State Insurance Fund:

Gratuity benefits under Section 699 of the Revised Administrative Code,
as amended by R.A. No. 1232;
Retirement, disability, sickness, and death benefits under the SSS Law
( R.A. No. 1161, as amended);
Life insurance, disability and retirement benefits under the GSIS Law
(Com. Act. No. 186, as amended);
Gratuities and pensions of every personnel for deaths and disabilities
incurred in line of duty in accordance with R.A. No. 610, as amended;
Medical benefits administered by the Philippine Medical Care Commission
provided in R.A. No. 4864, as amended; and
Other benefits granted by other laws and administered either by the GSIS
or SSS.

42. Is Article 173 of the Labor Code, as amended a bar to claim for damages
under the Civil Code?

NO. Article 173 of the Labor Code does not bar to claim for damages under
Civil Code arising from employers negligence, for liability under Article 173 is
confined only to illness or injury.

43. Is simultaneous recovery of benefits allowed?

YES. While it is true the SSS Law (R.A. No. 1161, as amended) is distinct and
different from the labor Code, the provisions of Sections 15 of the SSS law and
Article 173 of the Labor Code are in pari materia insofar as they both relate to
payment of compensation to covered employees, and insofar also as both provisions
barred the simultaneous recovery of benefits under both the SSS Law and the Labor
Code, until Article 173 was amended by P.D No. 1921 in 1984. The amendment
introduced by P.D No. 1921 to Article 173 lifted the ban against the simultaneous
recovery of benefits under the Labor Code and the SSS law, and is deemed to have
repealed by necessary implication the provision of Section 15 of the SSS Law.
Since P.D. No. 1921 is the latest expression of the legislative will, it will
prevail over Section 15 of the SSS Law. (Opinions of the Secretary of justice
dated May 23, 1989 and January 12, 1990 addressed to the SSS).
Furthermore, benefits under the State Insurance Fund accrue due to the employees
concerned due to hazards involved and are made a burden on the employment itself.
On the other hand, social security benefits are paid to SSS members by reason of
their membership therein for which they contribute their money to a general fund.
It must be noted that under the new Social Security Act (R.A. 8282), the
provision of Section 15 of the old SSS law which bars simultaneous recovery of
benefits, has already been deleted.

44. Can a claimant who has already recovered from the State Insurance Fund still
recover damages in a criminal or civil case in relation thereto?

No. Unless otherwise provided, the liability of the State Insurance Fund under
this Title shall be exclusive and in place of all other liabilities of the

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employer to the employee, his dependents or anyone otherwise entitled to receive

damages on behalf of the employee or his dependents.

45. G., who worked in the weaving department of a textile firm, was stabbed to
death by L., his fellow employee. L. was convicted of homicide and sentenced to
pay indemnity to the heirs of G. If the heirs have already recovered from the
State Insurance Fund, can they still hold the employer subsidiarily liable for
the indemnity to be paid by L., in the event the latter is unable to pay the
same? Why?

No, the heirs can no longer recover indemnity from the employer. The
liability of the State Insurance Fund is exclusive and in place of all other
liabilities of the employer to the employee and his dependents or beneficiaries.
This includes the subsidiary liability of the employer under the Revised Penal
Code. (Generoso vs. Universal Textile Mills, Inc. G.R. No. L-28586, January 22,
1980)

46. What are the liabilities of third parties?

In case the injury or death is caused by circumstances creating a legal liability

against a third party other than the employer, the injured employee or his
dependents may either claim compensation from the System under the Labor Code or
sue for damages in accordance with law. In case the benefit is paid by the
system, the latter is subrogated to the rights of the injured employee or his
dependent in accordance with the general law. Where the System recovers from
such third party damages in excess of those paid or allowed under Title II, Book
IV, of the Labor Code, such excess shall be delivered to the injured employee or
another person entitled thereto, after deduction of the expenses of the System
and the cost of the proceedings.
It must be noted that injuries or death caused by a third person are compensable
provided the requisites of compensability are present. However, the injured
employee cannot claim payment twice for the same injuries, that is, from the
third party and from the SSS or GSIS (Alba vs. Bulaong, 101 Phil. 434).

47. S., a driver-mechanic, was killed when he tried to fight unidentified men
who carnapped the vehicle of his employers. As a consequence of his death, his
heirs filed an action for death compensation and damages before the RTC against
his employers. The latter, however, contended that the complaint should be
dismissed as the appropriate remedy is a claim under the Employees Compensation
Program. Is the contention of the employers correct? Explain.

No. The employee or his heirs have the choice of cause of action and the
corresponding relief, i.e. either an ordinary action for damages based on Article
1171 of the New Civil Code before the regular courts or a special claim for
limited compensation under the Employees Compensation Program. But the right of
choice is qualified in that the employee should be held to the particular remedy
in which he stakes his fortune. (Vda. de Severo vs. Go, G.R. No. L-44330,
January 29, 1988)

48. Who are entitled to benefits under the employees compensation program?

The covered employee, his dependents, and in case of his death, his
beneficiaries.

49. Who are the dependents of the employee?

Dependents include the following:

the legitimate, legitimated or legally adopted child who is:
unmarried,
not gainfully employed, and
not over eighteen years of age,

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or over eighteen but not over twenty-one years of age provided that he
is enrolled in school,
or over twenty-one years of age provided that he is congenitally
incapacitated and incapable of self-support due to physical or mental
defect which is congenital or acquired during minority;
the legitimate spouse living with the employee; and
the legitimate parents of said employee wholly dependent upon him for
regular support.

50. What is the meaning of dependency?

Dependency is a relationship between two persons where the claimant-

beneficiary looks up to or relies for support upon another for the purpose of
maintaining himself consistent with the dependents station in life. Thus, a
lawful dependent is one who relies upon the deceased for the support with
reasonable expectation that the same shall continue. The support may take the
form of sustenance, dwelling, clothing and medical attendance. (Art. 290, New
Civil Code)

51. Who are included under the term beneficiaries?

Beneficiaries mean the dependent spouse until he remarries and dependent children
who are the primary beneficiaries. In their absence, the dependent parents
subject to the restrictions imposed on dependent children, the illegitimate
children and legitimate descendants, who are the secondary beneficiaries.

52. Who are the primary beneficiaries?

The following beneficiaries are considered primary:

The legitimate spouse living with the employee at the time of the
employees death until he remarries; and
Legitimate, legitimated or legally adopted or acknowledged natural
children who are unmarried, not gainfully employed, not over 21 years of
age, or over 21 years of age provided that he is incapacitated and
incapable of the self support, due to physical or mental defect which is
congenital or acquired during minority: Provided further that the
dependent acknowledged natural chill shall be considered a primary
beneficiary only when there are no other dependent children who are
qualified and eligible for monthly income benefit: Provided, Finally,
that if there are two or more acknowledged natural children, they shall
be counted from the youngest and without substitution, but not exceeding
five. (Sec. 1(b), Rule XV, Amended Rules on Employees Compensation)

53. Who are the secondary beneficiaries?

The following beneficiaries are considered secondary:

The legitimate beneficiaries parents wholly dependent upon the employee
for support.
The legitimate descendants and illegitimate children who are unmarried,
not gainfully employed and not over 21 years of age, or over 21years of
age provided that he is incapacitated and incapable of self-support due
to physical or mental defect which is congenital or acquired during
minority. (Sec.1(c), Rule XV, Amended Rules on Employees Compensation)

54. Who shall have priority?

Primary beneficiaries shall have priority claim to death benefit over secondary
beneficiaries. Whenever there are primary beneficiaries, no death benefit shall
be paid to secondary beneficiaries.

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If the deceased employee has no primary beneficiaries at the time of his death
benefit shall be paid to his secondary beneficiaries.
If the deceased employee has no beneficiaries at the time of his death, the death
benefits shall accrue to the Employees Compensation Fund. (Sec.2, Rule XV,
Amended Rules on Employees Compensation)

55. Classify the benefits which may be enjoyed under the State Insurance Fund.
a. Medical Benefits
b. Disability Benefits
c. Death Benefits and
d. Funeral Benefits

56. What are medical benefits?

Medical benefit means all payments made under this Title to the providers of
medical care, rehabilitation services and hospital care. It consists of medical
services and rehabilitation services.

57. What is the scope of medical services?

Medical services cover the following:

During confinement in an accredited physician;
Subsequent domiciliary care by an accredited hospital, in case of injury.
(Annex C, Amended Rules on Employees Compensation)

58. What are the conditions of entitlement to medical services?

Any employee shall be entitled to such medical services, appliances and supplies
as the nature of his disability and the progress of his recovery may require,
provided, the following conditions are satisfied:
he has been duly reported to the System (SSS or GSIS);
he sustains an injury or contracts sickness; and
the System has been duly notified of the injury or sickness.

59. What is the period for entitlement?

The medical services, appliances and supplies shall be provided to the afflicted
employee beginning with the first day of injury or sickness, during the
subsequent period of his disability, and as the progress of his recovery may
require, subject to the periodic submission of a medical report on his disability
certified by his physicians (Sec. 2, Rule VIII, Amended Rules on Employees
Compensation).

60. What is the meaning of rehabilitation?

Rehabilitation is the process by which there is provided a balanced program of

remedial treatment, vocational assessment and preparation designed to meet the
individual needs of each handicapped employee to restore him to suitable
employment, including assistance as may be within its resources to help
rehabilitee to develop his mental, vocational or social potentials. (Sec.1 (a),
Rule IX, Amended Rules on Employees Compensation)

61. What is the nature of the coverage?

Coverage of handicapped employees in the rehabilitation services program is

voluntary in nature. (Sec.2, Rule IX, Amended Rules on Employees Compensation)

62. What are the conditions for entitlement?

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Any employee shall be employees in the rehabilitation services, if all of the

following conditions are satisfied:
He has been reported to the System;
He sustains a permanent disability as a result of compensable injury or
sickness;
the System has been duly notified of the injury or sickness which caused
the disability;
He has not been placed in suitable employment (Sec. 3, Rule IX, Amended
Rules on Employees Compensation).

63. What is the period of entitlement?

Rehabilitation services shall be provided during the period of disability unless

suspended or terminated under any of the following grounds:
upon suitable employment;
by self-termination;
upon suspension or termination of such services by the rehabilitation
center. (Sec.4, Rules IX, Amended Rules on Employees Compensation)

64. What is the extent of the services?

Rehabilitation services shall consist of medical-surgical management,

hospitalization, necessary appliances and supplies, vocational training and
assistance for placement. Transportation allowance between place of residence and
the rehabilitation facility, launch, and dormitory allowance in appropriate cases
may be included in the extent of service. (Sec.5, Rule IX, Amended Rules on
Employees Compensation)

65. What are the disability benefits?

They are income benefits in case of temporary total disability, permanent
total disability and permanent partial disability.

66. What is the meaning of temporary total disability?

A total disability is temporary if as a result of the injury or sickness, the

employee is unable to perform any gainful occupation for a continuous period not
exceeding 120 days, or where the injury or sickness still requires medical
attendance beyond 120 days but not to exceed 240 days from the onset of
disability. (Sec. 2, Rule VII Amended Rules on Employees Compensation)

67. What are the conditions for entitlement?

An employee is entitled to an income benefit for temporary total disability

if all the following conditions are satisfied:
The employee has been duly reported to the System;
The employee sustains the temporary total disability as a results of the
injury or sickness;
The system has been duly notified of the injury or sickness which caused
disability;
If the illness or injury occurs before the employee is duly reported for
coverage, the employer shall be liable for the benefit. (Sec. 1, Rule Amended
Rules on Employees Compensation)

68. What is the period of entitlement?

The income benefit shall be paid beginning on the first day of the disability. If
caused by an injury or sickness, it shall not be paid longer than 120 consecutive
days except where such injury or sickness still requires medical attendance
beyond 120 days but not to exceed 240 days from onset of disability. However,
the System may declare the total and permanent status at any time after120 days
of continuous temporary total disability as may be warranted by the degree of

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actual loss or impairment of physical or mental functions as determined by the

System. (Sec. 2, Rule X, Amended Rules on Employees Compensation)
After an employee has fully recovered from an illness as duly certified to by the
attending physician, the period covered by an relapse or recurrence of illness
resulting in disability, shall be considered independent of and separate from the
period covered by the original disability. (Sec.2(a), Rule X, Amended Rules on
Employee Compensation)

69. How much is the employee entitled?

Any employee entitled to benefit for temporary total disability shall be

paid income benefit equivalent to 90% of his average daily salary credit,
provided that the daily income benefit shall not be less than P10.00 nor more
than P90.00 nor paid longer than 120 days for the same disability unless the
injury or sickness requires more extensive treatment that lasts beyond 120 days
as may be determined by the Commission. (Sec.3, Rules X, Amended Rules on
Employee Compensation)

70. May the said benefit be suspended?

The monthly income benefits shall be suspended if the employee fails to

submit a monthly medical report certified by his attending physician. (Sec.3,
Rule X, Amended Rules on Employees Compensation)

71. What is the meaning of permanent total disability?

A disability is total and permanent if as a result of the injury or sickness, the

employee is unable to perform any gainful occupation for a continuous period
exceeding 120 days except when the disability that lasts beyond 120 days is
considered as temporary total. (Sec.2(b), Rule XI, Amended Rules on Employees
Compensation)

72. What are the disabilities that are considered total and permanent?

The following disabilities shall be deemed total and permanent:

Temporary total disability lasting continuously for more than one hundred
twenty days;
Complete loss of sight of both eyes;
Lost of two limbs at or above the ankle or wrist;
Permanent complete paralysis of two limbs;
Brain injury resulting in incurable imbecility or insanity; and
Such cases as determined by the Medical Director of the System and
approved by the Commission.

73. May a permanent total disability arise although the employee does not lose
the use of any part of his body?

Yes. Where the employee is unable, by reason of the injury or sickness, to

perform his customary job for more than 120 days, permanent total disability
arises.

74. What are the conditions for entitlement?

An employee shall be entitled to an income benefit for permanent total

disability if all of the following conditions are satisfied:
The employee has been duly reported to the system;
He sustains permanent
The system has been duly notified of the injury or sickness which caused
hi disability.

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The employer shall be liable for the benefit if such injury or sickness occurred
before the employee is duly reported for coverage to the System (Rule XI, Amended
Rules on Employee Compensation)

75. What is the period of entitlement?

The full monthly income benefit shall be paid for all compensable months of
disability. (Sec.2, Rule XI, Amended Rules on Employees Compensation) The monthly
income benefit is guaranteed for five (5) years.

76. May the said benefits be suspended?

The monthly income benefits can be suspended under any following conditions:
Failure of the employee to present himself for examination at least once
a year upon notice by the system.
Failure to submit a quarterly medical report certified by the attending
physician;
Complete or full recovery from his permanent disability; or
Upon being gainfully employed. (Sec.2, Rule XI Amended Rules on Employees
Compensation)

77. How much is the amount of benefit?

Each dependent child, but not exceeding five (5), counted from the youngest
and without substitution, shall be entitled to 10% of the monthly income benefit
of the employee. (Sec.4, Rule XI, Amended Rules on Employees Compensation)
In this case of the SSS, the monthly income benefit of an employee is
equivalent to 15% of the sum of the average monthly salary credit multiplied by
the replacement ratio and 1 of the average monthly credit for each credited
years of service in excess of ten years. In the case of the GSIS, the monthly
income benefit of an employee shall be the basic monthly pension as defined in
P.D. 1146 plus 20% thereof but not less than P250.00 or more than the actual
salary at the time of contingency. (Sec.9, Rule VI, Amended Rules on Employees
Compensation)

78. What is the meaning of permanent partial disability?

A disability is partial and permanent if as a result of injury or sickness,

the employee suffers a permanent partial loss of the use of any part of his body.
(Sec.2(c), Rule XII, Rules on Employees Compensation)

79. For how long may the permanent partial disability income benefit be enjoyed?

The benefit shall be paid for not more than the period designated in the
following schedule:
Complete and permanent loss of
Number of months
the use of:
One thumb 10
One index finger 8
One middle finger 6
One ring finger 5
One little finger 3
One big toe 6
Any toe 3
One hand 39
One arm 50
One foot 31
One leg 46
One ear 10
Both ears 20
Hearing of one ear 10
Hearing of both ears 50

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Sight of one eye 25

80. May a permanent partial disability be converted to permanent total

disability after the employee's retirement? Why?

Yes. This is in line with the social justice provision in the Constitution. A
persons disability may not manifest itself fully at on precise moment in time but
rather a period of time. And disability should not be understood more on its
medical significance but on loss of earning capacity.

81. What are the conditions for entitlement?

An employee is entitled to the income benefit for permanent partial

disability if all the following conditions are satisfied:
The employee has been duly reported to the System;
The employee sustains a permanent partial disability as a results of
injury or sickness; or
The system has been duly notified of the injury or sickness which caused
his disability. If the injury or sickness occurred before the employee
is duly reported for coverage to the system, the employer shall be
liable for the benefit. (Sec.1, Rule XII, Amended Rules on Employees
Compensation)
A covered employee shall continue to receive the income benefits even if he is
gainfully employed and receiving is wages or salary.

82. How should the monthly income benefit be paid?

If the number of months for payment of income benefit for permanent partial
disability exceeds twelve (12) months, income benefit shall be paid in monthly
pension, otherwise, the system may pay the income benefit in lump sum. (Sec.3(a),
Rule XII, Amended Rules on Employees Compensation)

83. How much is the amount of income benefit?

In the case of primary beneficiaries, the monthly income benefit for permanent
total disability, which shall be guaranteed for five years, increased by ten
percent (10%) for each dependent child not exceeding five(5) beginning with the
youngest and without substitution: Provided that, the aggregate monthly benefit
payable in the GSIS shall in no case exceed the monthly wage or salary actually
received by the employee at the time of his death; and provided further that the
minimum income benefit shall not be less than fifteen thousands pesos
(15,000.00), The death benefits shall be paid during the entire period for which
they are entitled thereto.
If the employee has been receiving income benefit for permanent total disability
at the time of his death, the primary beneficiaries shall be paid the monthly
income benefit equivalent to 80% plus dependents pension equivalent to 10% for
every dependent child but not exceeding five counted from the youngest and
without substitution.
In the case of secondary beneficiaries, the income benefit is payable in monthly
pension which shall not exceed the period of sixty (60) months and the aggregate
income benefit shall not be less than P15,000.00.
If the employee has been monthly income benefit for permanent total disability at
the time of his death, the secondary beneficiaries shall be paid the monthly
pension, excluding the dependents pension of the remaining balance of the five
year guaranteed period. (Sec.3, Rule XIII, Amended Rules on Employees
Compensation)

84. What are the death benefits?

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Death benefits are the monthly income benefit which accrue to the primary
beneficiaries upon the death of a covered employee in an amount equivalent to the
monthly income benefit plus ten per cent for each dependent child, but not
exceeding five, beginning with the youngest and without substitution. The said
monthly income benefit shall be guaranteed for five years. However, if he has no
primary beneficiary the System shall pay to his secondary beneficiaries monthly
income benefit but not to exceed six months.

85. What are the conditions for entitlement to death benefits?

The beneficiaries of a deceased employee shall be entitled to an income benefit
if all the following conditions are satisfied:
a. he has been duly reported to the System (SSS or GSIS);
b. he dies as a result of an injury or sickness; and
c. the System has been duly notified of his death, as well as the injury or
sickness which caused his death.
If the employee has been receiving monthly income benefit for permanent total
disability at the time of his death, the surviving spouse must show that the
marriage has been validly subsisting at the time of his disability. (Sec.1(b),
Rule XIII, Amended Rules on Employees Compensation)

86. Give the rules governing payment of death benefits to the beneficiaries.

Primary beneficiaries shall have priority claim to death benefits over

secondary beneficiaries. Whenever there are primary beneficiaries, no
death benefit shall be paid to his secondary beneficiaries.
If the deceased employee has no primary beneficiaries at the time of his
death, the death benefit shall be paid to his secondary beneficiaries.
If the deceased employee has no beneficiaries at the time of his death,
the death benefit shall accrue to the Employees Compensation Fund.

87. For how long are the primary beneficiaries entitled to the death benefits?
The dependent spouse, until he or she remarries; the dependent children until
they get married, or find gainful employment, or reach 21 years of age; and in
the case of the child suffering from physical or mental defect, when such defect
disappears.

88. If the employee suffers disability or dies before he is duly reported for
coverage to the System (SSS or GSIS), who will be liable for the benefits?
The employer.

89. What is the funeral benefit?

A funeral benefit of P10,000.00 shall be paid upon the death of a covered
employee or a permanently totally disabled pensioner.

90. Who are entitled to funeral benefits?

The funeral benefit shall be paid upon the death of a covered employee or
permanently totally disabled pensioner to one of the following:
the surviving spouse; or
the legitimate child who spent for the funeral services; or
any other person who can show incontrovertible proof of having borne the
funeral expenses. (Rule XIV, Amended Rules on Employees Compensation)

91. What is the nature of the relationship required by law?

What has been contemplated by the law for purposes of claiming income
benefits for death is legitimate relationship. Thus, if the beneficiary is the
surviving spouse, then she or he must be the legal wife or husband of the
deceased at the time of death. The same rule also applies to children. Under

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the Civil Code, they must be legitimate, legitimated or legally adopted children
in order to qualify them as legitimate beneficiaries.

92. How may relationship be proved?

Dependency may be established by submission of proof of filiations. The

filiations of a legitimate child can be proven by the record of birth appearing
in the civil register, or by any authentic document, or a final judgment of the
court. In their absence, it can be proven by the continuous possession of the
status of a legitimate child (Art. 265 and 266, New Civil Code). On the part of
a legitimate spouse, it can be proven by authentic documents such as the marriage
contract or the marriage certificate.

93. What is the composition of Employees Compensation Commission (ECC)?

The Employees Compensation Commission is composed of the following:

Secretary of Labor and Employment ex-officio Chairman
Executive Director of ECC ex-officio Member
GSIS general manager ex-officio Member
SSS Administrator ex-officio Member
Chairman of Medicare Commission ex-officio member
Employees Representative appointive Member
Employees Representative appointive Member

94. What are their qualification?

The appointive members, that is, the employees representative and employers
representative shall have at least five (5) years experience in workmens
compensation or social security program.

95. What is the status of ECC?

The Employees Compensation Commission is a Government corporation. For purposes

of policy coordination and guidance, it is attached to the Department of labor
and Employment.

96. What are the powers and duties of ECC?

The ECC has the power to determine and approve additional occupational diseases
and work-related illnesses with specific criteria based on peculiar hazards
employment. (Sec. 3, Rule III, Amended Rules on Employment Compensation)
Also, as a corporate entity, it can sue and be sued in court, it can acquire
real, or personal property and it can enter into agreements or contracts.

97. How should the ECC invest its funds?

The State Insurance Fund should be used exclusively for payment of employees
compensation benefits and no amount thereof can be used for any other purpose.
The same can be invested with due and prudent regard for the liquidity needs of
the system.

98. Who should file the claims?

Claims for medical benefits shall be filed by the accredited physician accredited
hospital directly with the SSS or GSIS, as the case may be, using the prescribed
form. (Sec. 1, Rule XVIII, Amended Rules on Employees Compensation)
On the other hand, claims for income benefit may be filed by the employee, his
dependent, his dependents or his employer on his behalf,

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99. What is the effect of erroneous payment?

Payment in good faith made by the Systems to a dependent with inferior right
discharges the System from liability, unless and until a dependent with superior
right notifies the System of his claim prior to the payment.

100. When does the right to compensation or benefit for loss or impairment of an
employee's earning capacity due to work-related illness or injury arise?

It arises or accrues upon, and not before, the happening of the contingency.
Hence, an employee acquires no vested right to a program of compensation benefits
because it was operative at the time he became employed. Although said program
provides for better benefits than what may be enjoyed under Employees'
Compensation Program, the employee can only claim for the benefits under the
latter if the illness or injury was sustained while the ECP was already in
effect.

101. What is the prescriptive period for filling claims?

Claims for compensation shall be filed with the System within three (3) years
from the time the cause of action accrued; otherwise, it shall forever be barred
by prescription.

102. Who has jurisdiction over disputes under the ECP with respect to coverage,
entitlement to benefits, collection and payment of contribution and penalties or
any other matter related thereto?

The System (SSS or GSIS) has original and exclusive jurisdiction, subject to
appeal within ten (10) days from receipt of the decision to the Employees'
Compensation Commission, which shall decide appealed cases within twenty (20)
working days from the submission of the evidence.
Decisions, awards, judgments, final orders or resolution of the Commission may be
appealed to the Court of Appeals within fifteen (15) days from notice of the
award, judgment final orders or resolution, whether the appeal involves questions
of fact, law, or mixed questions of fact and law.

103. How can the decision be enforced?

Enforcement of decision order or resolution of the Commission (ECC) becomes final

and executory if no appeal is taken within ten (10) days from notice thereof.
The Commission has the power to issue a writ of execution necessary for the
enforcement of such decision, order or resolution. Any person who fails or
refuses to comply with the writ of execution, shall upon application by the
Commission, be punished for contempt by the proper court.

104. Who are required to make contributions to the State Insurance Fund?

Contributions to the State Insurance Fund shall be paid in their entirety by the
employer and any contract or device for the deduction of any portion thereof from
the wages or salaries of the employees shall be null and void.

105. Discuss the process of contribution by the employer.

For covered employees in the public sector, his employer shall remit to the GSIS
a monthly contribution equivalent to one percent of the actual wages or salary
received by him as of the last day of the month but not to exceed P30.00 per
employee.
For a covered employee in the private sector, his employer shall remit to the SSS
a monthly contribution equivalent to one percent of his monthly salary credit as
of last day of the month in accordance with the following schedule.

106. What is the liability of the delinquent employer?

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The employer who is delinquent in his contributions is liable for the following;
the benefits which may have been paid to his employee or their
dependents, and any benefit and expenses to which the employer is liable
shall constitute a preferred lien on all his property, real or personal,
over any credit except taxes;
fine of not less than P1000.00 nor more than P1,000.00 and/or
imprisonment for the duration of the violation or non-compliance or
until such time that a rectification of the violation has been made, at
the discretion of the court;
3% penalty per month from the date the contribution falls due until paid
(Sec. 3, Rule V, Amended Rules on Employees Compensation)

107. Does payment erase the criminal liability?

NO. The payment by the employer of the lump sum equivalent to such
liability shall absolve him from payment of the delinquent contributions due and
payable during the calendar year of the contingency and the penalty thereon with
respect to the employee concerned; but said employer shall still be subject to
criminal liability.

108. When is the employer liable to pay a penalty to the State Insurance Fund?

In case the employee's injury or death was due to the failure of the employer to
comply with any law, or to install and maintain safety devices, or take other
precautions for the prevention of injury, said employer shall pay to the State
Insurance Fund a penalty of twenty-five percent of lump sum equivalent of the
income benefit payable by the System to the employee. All employers, especially
those who should have been paying a rate of contribution higher than that
required of them under this Title, are enjoined to undertake and strengthen
measures for the occupational health and safety of their employees.

109. Are contributions refundable?

The refund of required contributions is not allowed (Sec.1(5), Rule V, Amended

Rules on Employees Compensation).

110. What if the funds got depleted?

The claimant employee has nothing to fear that he cannot collect his benefit if
and when the State Insurance Fund in depleted.
In order to insure payment of benefits due an employee, the government guarantee
such benefits provided under the law and accept general responsibility for the
solvency of the State Insurance Fund. Thus, in case of any deficiency, the same
can be covered by supplemental appropriations from the national government.

111. What is the Principle of non-assignment of benefits?

Under the principle of non-thjassignment of benefits, compensation benefits are

unassignable (non-transferable); not subject to tax, and not subject to
execution, attachment, garnishment, levy or seizure, that is exempted from
creditor claims, expect in payment of a debt to the System.

112. What is the purpose of the law?

The law is police regulation aimed at promoting the lot of the working man by
completely securing to them the payment of compensation benefits free from
attachment, garnishment, execution, levy, tax, or charges so that the claimant
may enjoy and use it to the fullest. Otherwise, it would defeat the very purpose
for which this law has been enacted. (Cristobal vs. ECC, L 49280, 21 February
1981)

113. What is the prohibition on award of attorneys fees?

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A close scrutiny of the provisions of the Labor Code on employees compensation

expressly reveals that claim proceedings in both the SSS and GSIS are non-
adversarial. This is the primordial reason why an agent, attorney or other
person pursuing or in charge of the preparation or filling of any compensation
claim or benefit is prohibited to demand or charge for his compensation for
payment of such fees is null and void. The prohibition is in keeping with the
intent and spirit of the law to promote the lot of the working man.
Since the claimant is exempted from liability for attorneys fess, who, therefore
is liable? Well-settled is the rule that the defaulting employer or government
agency remains liable for attorneys fees, because it compelled claimant to
employ the services of the counsel by unjustly refusing to recognize the validity
of the claim. (Cristobal vs. ECC, 103 SCRA 339; Godizano vs. ECC, 136 SCRA 344)

114. When can attorneys fees be awarded?

Attorneys fees can be awarded as a separate and distinct item from compensation
benefits. Fairness and equity dictate that the lawyer must receive reasonable
compensation for services rendered. This is so, for it would be very difficult
for claimant, majority of whom are not learned in the intricacies of the law, to
get and enjoy good legal services. Thus, there is no prohibition against imposing
10% attorneys fee on the employer for the benefit of claimants counsel.
(Panotes vs. ECC, 138 SCRA 595)

115. What is the purpose of notice to the employer?

Notice to the employer of the occurrence of the contingency is important to

enable the employer may make the proper entries in his logbook, as required by
law, within five days from notice or knowledge thereof. Within five days after
such entry, the employer shall report to the System only those contingencies it
deems to be work-connected.

116. When is notice not required?

Giving of notice can be dispensed with in the following instances:

In case medical, surgical and hospital services and supplies have been
voluntary furnished by the employer;
In case the employer or his duly authorized representatives had actual
knowledge of the contingency:
In case the employer did not suffer by the delay or failure to give
notice.

117. When is the law applicable?

Book IV, Title II, of the Labor Code, dealing on Employees Compensation and State
Insurance Fund applies only to injury, sickness, disability or death occurring on
or January 1, 1975. (Corales vs. ECC, 88 SCRA 547; Chavez vs. ECC, 149 SCRA 82)

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