LECTURE

LABOR RELATIONS
By: Atty. Marvyn L. Maristela
CY 2020-2021

Labor Legislations

Labor Standards – refers to minimum terms and conditions of employment which

employees are legally entitled to and employers must comply.

Books I to IV of the Labor Code

Labor Relations – refers to the inter actions between the employer and
employees or their representatives and the mechanism by which the employment
standards are negotiated, adjusted and enforced.

Books V to VII of the Labor Code

Art 211

The government relations policy is declared in Art. 211 which is a focused elaboration of
the basic labor policy announced in Art. 3, which states:

Declaration of basic policy – 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 worker and
employers. The state shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just humane
conditions of work.

This is an echo of the provision in the 1987 Constitution Art XIII Sec 3, to wit:

“The State shall afford 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 preferential use of voluntary modes in settling
 disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.

The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and
the right of enterprise to reasonable returns on investments, and to
expansion and growth.”

Summary of Labor Relations:

Organize themselves into union or some other form of association;

They may or may not register their organization with the government (BLR), but if they
do they may acquire certain rights that are legally demandable, such as right to bargain;
The employer is prohibited from meddling with the organizational effort, otherwise he
commits “Unfair Labor Practice or ULP” which may trigger a strike;

After employee representation questions are settled, the employer’s and employee’s
representatives meet and talk over proposals and counter-proposals

A deadlock may or may not occur; parties must find ways to avoid it or break it;

Unresolved bargaining deadlock may again, lead to a work stoppage or strike;

The agreement, when reached, is embodied in a labor contract, commonly called

Collective Barganing Agreement (CBa) which is subject to periodic negotiated revision.

The relations are essentially inter-party, which means that the employer and employees
themselves must deal with issues and problems in a manner most comfortable to them.
This is the reason why the policy promotes “free” bargaining and negotiations. Under
Art. 251, the parties themselves may devise a more and expeditious method of
bargaining than that prescribed in the Code. They have this freedom as regards the
subject and t he manner of their negotiation. But of course, they and their contract
cannot brush the law aside; legal standards are deemed written into their contract.

REASONS FOR ORGANIZING

The basic urge which leads workers to organize, the spark which gave unions life
and the power of growth under favourable conditions, is the human drive toward self-
advancement.
 Self-help through economic action necessarily requires increasing the
bargaining power of employees; hence, one of the basic purposes of a labor union is
to eliminate competition among employees in the labor market. The labor union seeks
to exercise the power of a monopolist. The growth of the large corporation diminished
the bargaining power of the individual worker to such an extent that talk of freedom of
individual contract became an empty slogan. Thus, the near-monopoly which the union
obtains is often opposed by the near-monopsony of the large corporation which is the
only buyer of labor in a local market.

Three other human desires should be noted among the forces that led
workers to organize. (1) One is the desire for job security. Skilled craftsmen
organized in order to secure control over available jobs so as to hold them
against the competition of the unskilled immigrants. (2) Employees wished to
substitute what we should term “the rule of law” for the arbitrary and often
capricious exercise of power by the boss. Forty years ago a foreman could
discharge an employee for any reason or no reason. Labor unions have
subordinated this absolute power to the rules set forth in collective agreements,
and administration of the rules is usually subject to impartial review. The
illustration afforded by the regulation of discipline is typical of what has occurred
throughout life in industrial establishments. (3) Finally, union helped to give
employees a sense of participation in the business enterprises of which they are
part – a function of labor unions which became important as organization spread
into mass production industries.

The average employee has never rushed spontaneously to form a labor union
even when there was no employer opposition. Organization is sparked by a few
aggressive individuals, who may call outside help but who are just as often sought out
by union organizers anxious to extend the membership. (Archibald Cox, Derek Curtis
Bok, and Robert A. Gorman, Cases and Materials on Labor Law, The Foundation
Press, New York, 1977, p. 15)

Whoever, works for another and is forced to do so all his life has a moral right to
demand security for a permanent livelihood. All the other classes of society enjoy such
security. Why should the toiler alone have to go to his work, day after day, haunted by
the thought: “I do not know whether tomorrow I shall have the wages on which my
existence and the existence of my wife and my children depend. Who knows? Perhaps
tomorrow a crowd of famished workmen will come from afar and rob me of my
employment by underbidding me, and my wife and children must work or starve.”
(Joseph Hussein, “The Necessity of Collective Bargaining”, America, Vol. 24 (Dec. 11,
1920, p. 180.)

“Bargaining individually with the employer, the worker is at a serious disadvantage

because of the difference of economic status, bargaining knowledge and skill, t he
nature of the labor supply, and other conditions. The employer usually is not forced to
take the labor of any particular worker, since substitution is easy except in the case of
the most skilled groups, and even skilled-trades, machine processes tend to increase
the possibility of substitution. The worker enjoys no such advantage, since he must
accept the particular job offered him or else face the alternative of charity or starvation.
The employer can afford to wait for a worker who will accept the condition; the worker
cannot wait for the employer who will hire him at attractive terms. Labor is very
perishable; a day’s labor lost is not regainable. Refusal of a job may mean to the worker
the loss and serious danger to the health of those dependent upon him. (Gordon
Watkins, An introduction to the Study of Labor Problems (New York Thomas Cromwell
Co., 1922), pp. 331-332.)

SOME REASONS FOR JOINING A UNION

1. Need to improve conditions. When the work condition, or some part of it, is
unsatisfactory, and going through channels fails to bring any results, employees
cannot be blamed if they listen to the voice of an outsider who promises to
intercede in their behalf.

2. Discontent with wages. If the wages are below the community average (and
workers know) and the problem is not recognized or its solution is not
communicated, employees may actually seek someone to champion their cause.
This is especially true where factory workers earn more than office employees,
which is so often the case.

3. Inadequate benefits. Fringe benefits are expected to be comprehensive. They

should be known and understood by workers. When a situation arises in their
personal or family lives for which benefits seemed inadequate, workers may feel
that management has short changed them.

4. No feeling of justice. To whom do they go with their grievances when there is

no formal grievance procedure established? They will look for someone to listen
to their gripes.

5. Insecurity. The fear of automation, procedural changes, management

reorganization and similar changes, if left unanswered, will send employees
scurrying for job security measures, such as the protective umbrella of seniority.

6. Poor supervision. Employees want supervisors whom they can look up to and
respect. If management leadership is missing, don’t be surprised if employees go
elsewhere for the guidance they need.

7. Lack of communication. Companies talk about an “open door” policy. But who
walks in? In a union representation there is always a steward handy and eager to
listen to employees. What’s more, he can get a quick answer from management
to the employee’s question or problem.
 Most likely than not, employees join a union or do not join a union because of little
things. The big problem situations are either well known or soon become evident, and
management generally responds with dramatic and prompt action. It’s the little things,
ordinarily unrecognized and therefore left unattended, which cause the problem. It
doesn’t take any talent to spot the obvious, but it does call for real managerial acumen
to locate the potential trouble spots that are not apparent on the surface.

Dartnell Personnel Administration Handbook

Purpose of the Union – to promote the common welfare or interest, safety, and
happiness, and generally, for the purpose of elevating their position.

Selling the labor of their members on stipulated terms, securing better working
conditions, and improved relations with employers;
Advancing and maintaining their wages, fixing the hours of labor and rate of wages and
arbitrating their labor disputes;

Obtaining employment for their members, or of securing control of the work connected
with their trade, or favorable terms of t heir employers in the purchase of material, and
contracts of protecting and conserving their rights and interest against possible
aggression by the employer, or of gaining collective bargaining power, or of
accumulating a fund reasonably necessary for the lawful conduct of a strike.

ARTICLE 212. Definitions. –

(a) “Commission” means the National Labor Relations Commission or any of its
divisions, as the case may be, as provided under this Code.

(b) “Bureau” means the Bureau of Labor Relations and/or the Labor Relations Divisions
in the regional offices established under Presidential Decree No. 1, in the Department of
Labor.

(c) “Board” means the National Conciliation and Mediation Board established under
Executive Order No. 126.

(d) “Council” means the Tripartite Voluntary Arbitration Advisory Council established
under Executive Order No. 126, as amended.

(e) “Employer” includes any person acting in the interest of an employer, directly or
indirectly. The term shall not include any labor organization or any of its officers or
agents except when acting as employer.
(f) “Employee” includes any person in the employ of an employer. The term shall not be
limited to the employees of a particular employer, unless the 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.

Employer-employee relationship:

There has been no uniform test to determine the existence of an employer-employee

relation. Generally, courts have relied on the so-called right of control test, where the
person for whom the services are performed reserves a right to control not only the end
to be achieved but also means to be used in reaching such end. Subsequently, however
the Court considered in addition to the standard of right-of-control, the existing
economic conditions prevailing between the parties, like the inclusion of the employee in
the payrolls, in determining the existence of an employer-employee relationship. Ex.:
the fact that one had been designated “branch manager” does not make such person an
employee. Employment is determined by the right-of-control test and certain economic
parameters. Titles are weak indicators (Sevilla vs Court of Appeals, G.R. Nos. 44182-3,
April 15, 1988)

In determining the employer-employee relationship, the elements that are generally

considered are the following:

a) the selection and engagement of the employee;

b) the payment of wages;
c) the poser of dismissal;
d) the employer’s power to control the employee with respect to the means and
methods by which the work is to be accomplished.

Absent the power of control the employee with respect to the means and methods
by which his work was to be accomplished, there is no employer-employee
relationship (Continental Marble Corp, et al v NLRC, G.R. No. 43825, May 1, 1988)

 Evidence of employment: ID, Vouchers, SSS Registration, Memorandum

 Mode of compensation, not a test of Employment Status: The compensation,
whether called wage, salary, commission or other name, maybe computed on
time spent on the job or it may be based on the quality and/or quantity of the
 work done; in short, time-based or result-based. It may further be dependent
on skills possessed, seniority earned, or performance and initiative shown by
the employee. Employment relationship is one thing, pay determination is
another. Xxx Time rate, piece rate, or pakyaw rate does not necessarily
create or necessarily negate employee status. In the case of Labor Congress
of the Phils vs. NLRC, decided on May 21, 1988, the Court made this
pronouncement: “Thus, while petitioners’ mode of or compensation was on a
“per piece basis,” the status and nature of their employment was that of
regular employee.

 Existence of Employment Relationship determined by Law; not by Contract:

the existence of EE-ER relationship cannot be negated by expressly
repudiating it in the contract and providing therein “employee” is an
independent contractor when the terms of the agreement clearly show
otherwise. The employment status or a person is defined and prescribed by
law and not by what the parties say it should be. In determining the status of
the management contract, the “four-fold test” has to be applied.

(g) “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.

(h) “Legitimate labor organization” means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.

(i) “Company union” means any labor organization whose formation, function or
administration has been assisted by any act defined as unfair labor practice by this
Code.

(j) “Bargaining representative” means a legitimate labor organization whether or not

employed by the employer.

(k) “Unfair labor practice” means any unfair labor practice as expressly defined by the
Code.

(l) “Labor dispute” includes any controversy or matter concerning terms and 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.

(m) “Managerial employee” is one who is vested with the powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.

(n) “Voluntary Arbitrator” means any person accredited by the Board as such or any
person named or designated in the Collective Bargaining Agreement by the parties to
act as their Voluntary Arbitrator, or one chosen with or without the assistance of the
National Conciliation and Mediation Board, pursuant to a selection procedure agreed
upon in the Collective Bargaining Agreement, or any official that may be authorized by
the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written
request and agreement of the parties to a labor dispute.

(o) “Strike” means any temporary stoppage of work by the concerted action of
employees as a result of an industrial or labor dispute.

(p) “Lockout” means any temporary refusal of an employer to furnish work as a result of
an industrial or labor dispute.

(q) “Internal union dispute” includes all disputes or grievances arising from any violation
of or disagreement over any provision of the constitution and by laws of a union,
including any violation of the rights and conditions of union membership provided for in
this Code.

(r) “Strike-breaker” means any person who obstructs, impedes, or interferes with by
force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages,
hours or conditions of work or in the exercise of the right of self-organization or
collective bargaining.

(s) “Strike area” means the establishment, warehouses, depots, plants or offices,
including the sites or premises used as runaway shops, of the employer struck against,
as well as the immediate vicinity actually used by picketing strikers in moving to and fro
before all points of entrance to and exit from said establishment. (As amended by
Section 4, Republic Act No. 6715, March 21, 1989).
NATIONAL LABOR RELATIONS COMMISSION

COMMISSION:

 Chairman + 14 Members
5 from Worker Sector
5 from Employer Sector
5 from Public Sector (Chairman must come from this sector)

 Commission may sit:

En Banc - for promulgation of rules and regulations governing hearing and

disposition of cases

In Divisions (5 Divisions / 3 members each) – adjudicatory power and all powers,

functions, and other duties.

Concurrence of two (2) Commissioners of a division shall be necessary

for the pronouncement of a judgment of resolution.

Qualification and Appointment:

Commissioners - Members of the Bar

Must engaged in practice of law for 15 years / 7 years exposure in
Labor Cases

LABOR ARBITERS:

Executive Labor Arbiters/Labor Arbiters - 7 years and 3 years labor cases

Commissioners - Appointed by the President subject to confirmation by the Commission

on Appointments

Executive Labor Arbiter/Labor Arbiter - Appointed by the President upon

recommendation of the Secretary of Labor

POWERS AND DUTIES:

Jurisdiction of Labor Arbiters and the Commission – Original and Exclusive (OE)
jurisdiction, except as otherwise provided in this Code, to hear and decide:

1. Unfair Labor Cases;

ULP are act and commissions committed by the employer of the labor
organization violating the right of the employees to self organization. WE will
discussed more on this in Title VI Chapter 1 of this book.
 2. Termination Disputes;

An illegally dismissed employee is entitled to full backwages from the time his
compensation was withheld from him up to the time of his actual
reinstatement. (Back wages has been defined as part of the earnings lost by
a worker due to his illegal dismissal) Where reinstatement is considered no
longer feasible, necessitating award of separation pay instead, the period of
computation of backwages and separation pay shall be up to the time of
finality of the Supreme Court’s decision. Separation pay shall be granted as
an option to reinstatement can no longer be enforced due to the strained
relations between the parties brought about by the litigation.

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 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 five thousand pesos (P5,000.00) regardless of whether
accompanied with claim for reinstatement;

7. Cases arising from the interpretation or implementation of collective

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

POWERS OF THE COMMISSION:

a) Promulgate rules and regulations governing the hearing and disposition of cases,
as well as thos pertaining to internal functions and such rules and regulations
necessary to carry out the purpose of this Code;
b) To administer oaths, summon the parties, issue subpoenas requiring attendance
and testimony of witnesses or the production of books, papers, contracg,
records, statement of accounts and others, and to testify in any investigation or
hearing conducted;
c) To conduct investigation;
d) To hold any person in contempt, directly or indirectly and impose penalties;
e) To enjoin or restrain any actual or threatened commission of any or all prohibited
or unlawful acts or to require the performance of a particular act in any labor
dispute which , if not restrained, may cause grave or irreparable damage to any
party or render ineffectual any decision in favor of such party: Provided, That no
temporary or permanent injunction in any case involving or growing out of a labor
dispute as defined in this Code shall be issued except after hearing the testimony
of witnesses, with opportunity for cross-examination, in support of the allegations
of a complaint made under oath, and testimony in opposition thereto, if offered,
and only after a finding of fact by the Commission, to the effect:

(1) That prohibited or unlawful acts have been threatened and will be 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 person or 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;
(2) That substantial and irreparable injury to complainants property will follow;
(3) That as to each item of relief to be granted, greater injury will be inflicted upon
complainant by the denial of relief than will be inflicted upon defendants by the
granting of relief;
(4) That complainant has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainants property
are unable or unwilling to furnish adequate protection.

ARTICLE 219. Ocular inspection. – The Chairman, any Commissioner, Labor

Arbiter or their duly authorized representatives, may, at any time during working
hours, conduct an ocular inspection on any establishment, building, ship or
vessel, place or premises, including any work, material, implement, machinery,
appliance or any object therein, and ask any employee, laborer, or any person,
as the case may be, for any information or data concerning any matter or
question relative to the object of the investigation.

ARTICLE 221. Technical rules not binding and prior resort to amicable

settlement. – In any proceeding before the Commission or any of the Labor
Arbiters, the rules of evidence prevailing in courts of law or equity shall not be
controlling and it is the spirit and intention of this Code that the Commission and
its members and the Labor Arbiters shall use every and all reasonable means to
ascertain the facts in each case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of due process. In any
proceeding before the Commission or any Labor Arbiter, the parties may be
represented by legal counsel but it shall be the duty of the Chairman, any
Presiding Commissioner or Commissioner or any Labor Arbiter to exercise
complete control of the proceedings at all stages.
 Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert
all efforts towards the amicable settlement of a labor dispute within his
jurisdiction on or before the first hearing. The same rule shall apply to the
Commission in the exercise of its original jurisdiction. (As amended by Section
11, Republic Act No. 6715, March 21, 1989).

ARTICLE 222. Appearances and Fees. – (a) Non-lawyers may appear before the
Commission or any Labor Arbiter only:

- If they represent themselves; or

- If they represent their organization or members thereof.

(b) No attorneys fees, negotiation fees or similar charges of any kind arising from
any collective bargaining agreement shall be imposed on any individual member
of the contracting union: Provided, However, that attorneys fees may be charged
against union funds in an amount to be agreed upon by the parties. Any contract,
agreement or arrangement of any sort to the contrary shall be null and void. (As
amended by Presidential Decree No. 1691, May 1, 1980).

ARTICLE 223. Appeal. – Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. Such appeal may be
entertained only on any of the following grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor
Arbiter;
(b) If the decision, order or award was secured through fraud or coercion, including graft
and corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the findings of facts are raised which would cause grave or
irreparable damage or injury to the appellant.

In case of a judgment involving a monetary award, an appeal by the employer may be

perfected only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from.

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 herein.
To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter shall
impose reasonable penalty, including fines or censures, upon the erring parties.

In all cases, the appellant shall furnish a copy of the memorandum of appeal to the
other party who shall file an answer not later than ten (10) calendar days from receipt
thereof.

The Commission shall decide all cases within twenty (20) calendar days from receipt of
the answer of the appellee. The decision of the Commission shall be final and executory
after ten (10) calendar days from receipt thereof by the parties.

Any law enforcement agency may be deputized by the Secretary of Labor and
Employment or the Commission in the enforcement of decisions, awards or orders. (As
amended by Section 12, Republic Act No. 6715, March 21, 1989).

ARTICLE 224. Execution of decisions, orders or awards. – (a) The Secretary of

Labor and Employment or any Regional Director, the Commission or any Labor Arbiter,
or Med-Arbiter or Voluntary Arbitrator may, motu proprio or on motion of any interested
party, issue a writ of execution on a judgment within five (5) years from the date it
becomes final and executory, requiring a sheriff or a duly deputized officer to execute or
enforce final decisions, orders or awards of the Secretary of Labor and Employment or
regional director, the Commission, the Labor Arbiter or med-arbiter, or voluntary
arbitrators. In any case, it shall be the duty of the responsible officer to separately
furnish immediately the counsels of record and the parties with copies of said decisions,
orders or awards. Failure to comply with the duty prescribed herein shall subject such
responsible officer to appropriate administrative sanctions.

(b) The Secretary of Labor and Employment, and the Chairman of the Commission may
designate special sheriffs and take any measure under existing laws to ensure
compliance with their decisions, orders or awards and those of the Labor Arbiters and
voluntary arbitrators, including the imposition of administrative fines which shall not be
less than P500.00 nor more than P10,000.00. (As amended by Section 13, Republic Act
No. 6715, March 21, 1989).

ARTICLE 225. Contempt powers of the Secretary of Labor. – In the exercise of his

powers under this Code, the Secretary of Labor may hold any person in direct or
indirect contempt and impose the appropriate penalties therefor.