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77 ESSENTIAL LABREV QUESTIONS BY ATTY. USITA

1) Discuss the Mcburnie vs. Ganzon ruling regarding appeal bonds.

Mcburnie vs. Ganzon Case
The general rule provides that an appeal in labor cases from a decision involving a
monetary award may be perfected only upon the posting of a cash or surety bond. The Court has
relaxed this requirement under certain exceptional circumstances in order to resolve
controversies on their merits. These circumstances include: (1) the fundamental consideration
of substantial justice; (2) the prevention of miscarriage of justice or of unjust enrichment;
and (3) special circumstances of the case combined with its legal merits, and the amount
and the issue involved.
The filing of a motion to reduce bond is coupled with compliance with the two
conditions for the grant of such motion, namely, (1) a meritorious ground, and (2)
posting of a bond in a reasonable amount, shall suffice to suspend the running of the
period to perfect an appeal from the labor arbiter's decision to the NLRC.
By jurisprudence, the merit referred to may pertain to an appellant's lack of financial
capability to pay the full amount of the bond, the merits of the main appeal such as when
there is a valid claim that there was no illegal dismissal to justify the award, the absence
of an employer-employee relationship, prescription of claims, and other similarly valid issues
that are raised in the appeal. For the purpose of determining a "meritorious ground", the
NLRC is not precluded from receiving evidence, or from making a preliminary determination
of the merits of the appellant's contentions.

To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that
give parties the chance to seek a reduction of the appeal bond are effectively carried out, without
however defeating the benefits of the bond requirement in favor of a winning litigant, all motions
to reduce bond that are to be filed with the NLRC shall be accompanied by the posting of
a cash or surety bond equivalent to 10% of the monetary award that is subject of the
appeal, which shall provisionally be deemed the reasonable amount of the bond in the
meantime that an appellant’s motion is pending resolution by the Commission. In
conformity with the NLRC Rules, the monetary award, for the purpose of computing the necessary
appeal bond, shall exclude damages and attorney’s fees. Only after the posting of a bond in the
required percentage shall an appellant’s period to perfect an appeal under the NLRC Rules be
deemed suspended.

The foregoing shall not be misconstrued to unduly hinder the NLRC’s exercise of its
discretion, given that the percentage of bond that is set by this guideline shall be merely
provisional. The NLRC retains its authority and duty to resolve the motion and determine the final
amount of bond that shall be posted by the appellant, still in accordance with the standards of
"meritorious grounds" and "reasonable amount". Should the NLRC, after considering the motion’s
merit, determine that a greater amount or the full amount of the bond needs to be posted by the
appellant, then the party shall comply accordingly. The appellant shall be given a period of 10
days from notice of the NLRC order within which to perfect the appeal by posting the required
appeal bond.

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2) Enumerate the reliefs for an illegally dismissed employee. Are these available to an
OFW? Explain.
There are two reliefs that may be granted by the Labor Arbiter:
1. Reinstatement to employee’s former position without loss of seniority rights or,
2. Payment of backwages corresponding to the period from his illegal dismissal up to actual
reinstatement.
“Reinstatement restores the employee who was unjustly dismissed to the position from
which he was removed, that is, to his status quo ante dismissal, while the grant of backwages
allows the same to recover from the employer that which he had lost by way of wages as a result
of his dismissal. These twin remedies — reinstatement and payment of backwages — make the
dismissed employee whole and can then look forward to continued employment. Thus, do these
two remedies give meaning and substance to the constitutional right of labor to security of tenure.
The two forms of relief are distinct and separate, one from the other. Though the grant of
reinstatement commonly carries with it an award of backwages, the inappropriateness or non-
availability of one does not carry with it the inappropriateness or non-availability of the other
(Santos vs. NLRC, G.R. No. L-76721, September 21, 1987, 154 SCRA 166).”
The reliefs above mentioned are not applicable to an illegally dismissed OFW
employee. An OFW having been illegally dismissed, is entitled to the salary for the unexpired
portion of the employment contract that was violated together with attorney's fees and
reimbursement of amounts withheld from her salary.
Section 10 of Republic Act No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, states that overseas workers who were terminated without
just, valid, or authorized cause "shall be entitled to the full reimbursement of his placement
fee with interest of twelve (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the unexpired term, whichever
is less (Sameer Overseas Placement Agency, Inc. v. Cabiles, G.R. No. 170139, [August 5,
2014], 740 PHIL 403-459).

3) What is the legal significance of knowing the difference between mandatory and non-
mandatory provisions in the CBA? Enumerate at least two (2) mandatory provisions in the
CBA.
The importance in determining mandatory from non-mandatory provisions is that the
employer’s duty to bargain is LIMITED to MANDATORY bargaining subjects; as to the other
matters, the employer is free to bargain or not to bargain. It must also be remembered that the
initiation of a Collective Bargaining Agreement is on the part of the employee for the employer
would like to maintain the status quo of no existing CBA. Thus, there would be different effects in
negotiation.
The following are examples of matters considered as mandatory subjects of bargaining:
1. Wages and other types of compensation, including merit increases
2. Working hours and working days, including work shifts
3. Vacations and holidays
4. Bonuses

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5. Pensions and retirement plans

6. Seniority
7. Transfer
8. Lay-offs
9. Employee workloads
10. Work rules and regulations
11. Rent of company houses
12. Union security arrangements

4) Enumerate at least two (2) types of Union Security Agreements. Explain one of them.
1. Closed Shop - an agreement whereby the employer binds himself to hire members of the
contracting union only, who must maintain their union membership in good standing to
keep their jobs.
2. Union Shop - an agreement whereby an employer can hire non-members of the
contracting union on condition that they should join the contracting union within a specified
period and maintain their union membership in good standing to keep their jobs.
3. Maintenance of Membership Shop - and agreement which requires employees who are
members of the contracting union at the time of the execution of the CBA to keep their
membership in good standing during the lifetime of the CBA to keep their jobs.
4. Agency Shop - an agreement which does not require union membership but only support
from the employees covered by the bargaining unit in the form of agency fees. It is
authorized by Article 59(e) of the Labor Code.
5. Preferential Shop - an arrangement which requires that members of the contracting union
be given preference or priority in the filing of vacancies, and for them to maintain their
membership in good standing during the lifetime of the CBA as a condition of continued
employment. (Source: Labor Law 3, Fundamentals of Labor Law Review, Ungos, 2021)

5) Explain what is management prerogative; cite two (2) specific examples.

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 (Peckson vs. Robinsons Supermarket Corp., G.R. No. 198534, July 3, 2013).
EXAMPLES OF MANAGEMENT RIGHTS:
1. Discipline;
2. Transfer Employees;
3. Impose Productivity Standard;
4. Grant Bonuses;

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5. Change Working Hours;

6. Impose Rules on Marriage; and
7. Post-Employment Ban (CHAN, supra at 381).

6) When Is Run-off election conducted? Illustrate.

Run-Off Election refers to an election between the labor unions receiving the 2 highest number
of votes in a certification or consent election with 3 or more choices, where such a certified or
consent results in none of the 3 choices receiving the majority of the valid votes cast; provided
that the total number of votes for all contending unions is at least 50% of the number of votes cast
(IRR of the LABOR CODE, Book V, Rule I, Sec. 1(ss), as amended by D.O. No. 40-03).
Note: If the “No Union” option wins the election, there shall be no run-off election. Where the
majority of the valid votes results in “No Union” obtaining majority the Med-Arbiter shall declare
such fact in the order proclaiming the results of the election (IRR of the LABOR CODE, Book V,
Rule IX, Sec. 20, as amended by D.O. No. 40-03

A run-off election is proper if the following conditions exist, namely:

1. Valid election took place because majority of the Collective Bargaining Unit members
voted (First Majority);
2. The total Votes for the unions are at least 50% of the votes cast;
3. Not one of the choices obtained the Majority (50%+1, second majority) of the valid votes
cast;
4. There is no Unresolved challenged votes or election protest which if sustained can
materially alter the results;
5. The said election presented at least 3 Choices (e.g. Union One, Union Two, and No
Union);
Note: “No Union” shall not be a choice in the run-off election.
6. The 2 choices which garnered the Highest number of votes will be declared the winner
provided they get the majority votes of the total votes cast (IRR of the LABOR CODE,
Book V, Rule X, Sec.1, as amended by D.O. No. 40-03).

Illustration from San Beda Memory Aid: The CBU has 100 members, 80 voted. 30 votes for
Union A, 15 for Union B, 15 for Union C, 20 for No Union. No invalid votes. Run-off election is
proper because the contending unions obtained 60 votes which even exceeds 1/2 of the votes
cast (2 AZUCENA, supra at 513).

7) Differentiate backwages from separation pay.

a. Separation pay is paid when reinstatement is no longer possible. While, Backwages is
paid for the compensation which otherwise the employee should have earned had he not
been illegally dismissed.

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b. Separation pay is computed on the basis of the employee’s length of service. While,
Backwages is computed from the time of illegal dismissal up to actual reinstatement, or if
reinstatement is no longer possible, until the finality of the decision.
c. Separation pay is paid as a wherewithal or assistance during the period that an employee
is looking for another employment. Backwages is paid for the loss of earnings during the
period between illegal dismissal and reinstatement.
d. Separation pay is oriented towards the future. While, Backwages is the restoration of the
past income lost (2 AZUCENA, supra at 964).

8) What is the cooling-off period? Immediately after the lapse of the cooling-off period,
can strike be conducted?
The purpose of the strike is to provide for a cooling-off period in order to give the parties
time to settle their disputes in a peaceful manner before declaring a strike. The cooling-off period
shall be counted from the time of the filing of notice of strike up to the intended or actual staging
thereof.
The 15-day cooling-off period need not be observed in case of union busting where the
existence of the union is threatened because of dismissal of the duly elected union officers. This
is provided in Article 278(c) of the Labor Code (Source: Labor Law 3, Fundamentals of Labor Law
Review, Ungos, 2021).
Immediately after the lapse of the cooling-off period strike cannot be conducted yet.
In the event the result of the strike/lockout ballot is filed within the cooling-off period, the seven
(7) day requirement shall be counted from the day following the expiration of the cooling-
off period. In effect, the seven (7) days are added to the 15-day or 30-day cooling off period, as
the case may be.

9) What is retirement? How is the amount of retirement pay determined?

Retirement is the result of a bilateral act of the parties, a voluntary agreement between the
employer and the employee whereby the latter, after reaching a certain age, agrees and/or
consents to sever his employment with the former (Brion v. South PH Union Mission of the
Seventh Day Adventist Church, G.R. No. 135136, May 19, 1999).
Kinds of Retirement Schemes:
1. Compulsory and contributory in character;
2. One set up by agreement between the employer and the employees in CBA or other
agreements between them (other applicable employment contract); and
3. One that is voluntarily given by the employer, expressly as in an announced company
policy or impliedly as in failure to contest the employee’s claim for retirement benefits (Gerlach
v. Reuters Limited, PHL., G.R. No. 148542, January 17, 2005).

When to Retire:
1. Upon reaching the retirement age established in the CBA or any other Employment
Contract (IRR of R.A. No. 7641, Rule II, Sec. 3.1).

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Retirement Benefits – as he may have earned under existing laws and any CBA and other
agreements, provided that:
a. It shall not be less than those prescribed by the Retirement Pay Law; and
b. If such benefits are less, the employer shall pay the difference between the amount
due under the Retirement Pay Law and that provided under the CBA or retirement plan
(IRR of R.A. No. 7641, Rule II, Sec. 3.2).
Note: It is a clear intention and spirit of the law to give employers and employees a free hand to
determine and agree upon the terms and conditions of retirement. Providing a CBA for
compulsory retirement of employees after 25 years of service is legal and enforceable so long as
the parties agree to be governed by such CBA (Pantranco North Express, Inc. v. NLRC, G.R. No.
95940, July 24, 1996).

2. Optional retirement - in the absence of retirement plan or CBA regarding retirement,

employee upon reaching the age of 60 years or more but not beyond 65 years and has served at
least 5 years in the said establishment (IRR of R.A. No. 7641, Rule II, Sec. 4.1).
Retirement Benefits – equivalent to at least ½ month salary for every year of service; a fraction
of at least 6 months being considered as one whole year (IRR of R.A. No. 7641, Rule II, Sec. 5.1).
The term “½ month salary” shall compose of:
a. 15 days salary based on his latest salary rate;
For employees paid by results and do not have a fixed monthly rate, the basis for determination
of the salary for 15 days shall be their average daily salary (ADS);
b. The cash equivalent of not more than 5 days of service incentive leave;
c. 2.5 days representing (1/12) of the 13th month pay (IRR of R.A. No. 7641, Rule II,
Sec. 5.2); and
Note: Total of 22.5 days for every year of service (Serrano v. Severino Santos Transit, G.R. No.
187698, August 9, 2010).
e. All other benefits that the employer and employee may agree upon should be included in
the computation of the employee’s retirement pay (IRR of R.A. No. 7641, Rule II, Sec.
5.2).

3. Compulsory Retirement - upon reaching the age of 65 (IRR of R.A. No. 7641, Rule II, Sec.
4.2).

10) What is the freedom period? Discuss the importance of the freedom period.
As provided under Article 265, the freedom period refers to the 60-day period immediately before
the date of expiry of the 5-year term of the CBA. It is the last 60 days of the 5th and last year of
the CBA wherein a petition questioning the majority status of an incumbent bargaining agent and
the holding of a certification election may be allowed.
What may be done during the 60-day freedom period:

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1. 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 (2
AZUCENA, supra at 207);
2. A petition for Certification Election may be filed (2 AZUCENA, supra at 279);
3. Either party can serve a written notice to Terminate or modify the agreement at least 60
days prior to its expiration period (on re-negotiable/non-representational aspect of the CBA)
(2 AZUCENA, supra at 292).

11) What is chartering? How does a chartered local chapter differ from a legitimate labor
organization?
Chartering - A duly registered federation or national union may directly create a local
chapter by issuing a charter certificate indicating the establishment of the local chapter The
chapter shall acquire legal personality only for purposes of filing a petition for certification election
from the date it was issued a charter certificate.
As a general rule, it is only the government, through the DOLE, that can clothe a labor
organization with a legal personality to exercise the rights that are provided by law. The exception
would be that chapters, created by the issuance of a duly registered legitimate federation or
national union of a charter certificate indicating the establishment of the aforementioned chapters,
would have a Tentative Legal Personality only for the purpose of filing a petition for certification
election.
Furthermore, we would note that those labor organizations organized under the
Corporation Code and issued a certificate of incorporation by the SEC shall only have a juridical
capacity before the regular courts of justice and will not acquire the rights and privileges of a
legitimate labor organization (Usita Notes, 2021).

12) What is a legitimate labor organization? What are its powers?

Legitimate Labor Organization (LLO) is any labor organization which is duly registered
with DOLE. The term includes a local/chapter directly chartered by a legitimate federation or
national union which has been duly reported to the Department in accordance with Section 2,
Rule VI, Book V of the Implementing Rules (LABOR CODE, Art. 219(h)).

General Groupings of the Rights of the Union Members:

1. Deliberative and Decision-Making Right – the right to participate in deliberations
on major policy questions and decide by secret ballot.
2. Right to Information – the right to be informed about:
a. The organization’s constitution and by- laws;
b. The collective bargaining agreement, and labor laws.
3. Rights Over Money Matters – the rights of the members:
a. Against imposition of excessive fees;
b. Against unauthorized collection of contributions or unauthorized disbursements;

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c. To require adequate records of income and expenses;

d. To access financial records;
e. To vote on officers’ compensation;
f. To vote on special assessment; and
g. To be deducted a special assessment only with the member’s written
authorization.

4. Political right – the right to vote and be voted for, subject to lawful provisions on
qualifications and disqualifications (2 AZUCENA supra at 225).

13) Discuss the People’s Broadcasting Service (Bombo Radyo) ruling on the jurisdiction
of the Labor Arbiter and the Regional Director with respect to money claims.
1. Under Art. 128(b) of the Labor Code, the DOLE is fully empowered to make a
determination as to the existence of an employer-employee relationship in the exercise of
its visitorial power, subject to judicial review, not review by the NLRC.
No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer-employee relationship. No procedure was laid down
where the DOLE would only make a preliminary finding, that the power was
primarily held by the NLRC. The law did not say tht DOLE would first seek the
NLRC’s determination of the existence of an er-ee relationship, or that should the
existence of the er-ee relationship be disputed, the DOLE would refer the matter
to the NLRC. The DOLE must have the power to determine whether or not an er-
ee relationship exists, and from there to decide whether or not to issue compliance
orders in accordance with Art. 128(b) of the Labor Code, as amended by RA 7730.
2. Art 128(b) has been amended to expand the powers of the DOLE Secretary and his duly
authorized representatives by RA 7730. In these cases, the Court resolved that DOLE had
the jurisdiction, despite the amount of the money claims involved.
3. The Supreme Court provided the rules on jurisdiction of the LA and RD, to wit:
a. If a complaint is brought before the DOLE to give effect to the labor standard provisions
and there is a finding by the DOLE that there is an existing er-ee relationship, DOLE
exercises jurisdiction to the exclusion of NLRC.
b. If the DOLE finds that there is no er-ee relationship, the jurisdiction is properly with the
NLRC
c. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement,
the jurisdiction is properly with the Labor Arbiter, under Art 217(3)
d. If a complaint is filed with the NLRC, and there is an existing er-ee relationship, the
jurisdiction is properly with the DOLE

14) Distinguish regular employment from casual employment.

1. Regular Employment

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Employment arrangement where the employee:

a. Has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer;
b. Has rendered at least 1 year of service, whether such service is continuous or
broken, with respect to the activity in which he is employed; or
c. When an employee is allowed to work after a probationary period (LABOR CODE,
Art. 295).

2. Casual Employment
There is casual employment where an employee is engaged to perform a job, work or service
which is merely incidental to the business of the employer, and such job, work, or service is
for a definite period made known to the employee at the time of engagement (2 AZUCENA,
supra at 786).
a. The status of regular employment attaches to the casual employee who has
rendered at least 1 year of service, whether such service is continuous or broken, with respect
to the activity in which he is employed, and his employment shall continue while such activity
exists (LABOR CODE, Art. 295).
b. A casual employee is only casual for one year, and it is the passage of time that
gives him a regular status (Kasapian ng Malayang Manggagawa sa Coca-Cola-CFW
Local 245 v. CA, G.R. No. 159828, April 19, 2006).

15) What is fixed-term employment? What are its requisites to be valid?

Two criteria validate a contract of employment with a fixed period:
(1) the fixed period of employment was knowingly and voluntarily agreed upon by the parties
without any force, duress or improper pressure being brought to bear on the employee and without
any circumstances vitiating consent or,
(2) it 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 on the latter
(LABAYOG vs M.Y. San Biscuits, G.R. No. 148102, July 11, 2006).

Rules on Fixed-Term Employment:

1. Notice of termination is not necessary in fixed-term employment (Pangilinan v. General
Milling Corporation, supra);
2. Employee is deemed regular if the contract failed to state the specific fixed period of
employment (Poseidon Fishing v. NLRC, G.R. No. 168052, February 20, 2006);
3. Termination prior to lapse of fixed-term contract should be for a just or authorized cause
(Anderson v. NLRC, G.R. No. 111212, January 22, 1996);
4. Liability for illegal dismissal of a fixed-term employee is only for salary for unexpired portion
(New Sunrise Metal Construction v. Pia, G.R. No. 171131, July 10, 2007);

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5. Employees allowed to work beyond the fixed term become regular employees (Viernes
v. NLRC, G.R. No. 108405, April 4, 2003).

16) What is project employment? How is it different from seasonal employment?

Project Employment - There is project employment when the employment has been fixed
for a specific project or undertaking, the completion or termination of which has been
determined at the time of engagement of the employee (LABOR CODE, Art. 295).
General Rule: Project employees are not regular employees; their services being
needed only when there are projects to be undertaken (De Ocampo v. NLRC, G.R.
No. 81077, June 6, 1990).
Exception: Where the employment of project employees is extended long after the
supposed project has been finished, the employees are removed from the scope of
project employees and are considered as regular employees (Tomas Lao Construction
v. NLRC, G.R. No. 116781, September 5, 1997).
Seasonal Employment - Seasonal employment is an employment arrangement where an
employee is engaged to work during a particular season on an activity that is usually
necessary or desirable in the usual business or trade of the employer (Universal Robina Sugar
Milling Corp. v. Acibo, G.R. No. 186439, January 15, 2014).
Note: During off-season, the relationship of employer and employee is not severed but
only suspended; the seasonal employee is merely considered on leave of absence without
pay (Manila Hotel v. Court of Industrial Relations, G.R. No. L-18875, September 30, 1963).

17) What is featherbedding? Illustrate.

Featherbedding (make-work agreements) is a term given to employee practices which create or
spread employment by unnecessarily maintaining or increasing the number of employees used,
or the amount of time consumed, to work on a particular job (2 AZUCENA, supra at 372).
Featherbedding - The act of causing or attempting to cause an employer to pay or deliver any
money or other things of value for services which were not performed or not to be performed
(Ungos, 2015)

18) What is a yellow dog condition? Illustrate.

Yellow Dog Condition requires as a condition for employment that a person or an employee
shall not join a labor organization or shall withdraw from one to which he belongs (LABOR CODE,
Art. 259(b)).
Yellow Dog Contract is a promise exacted from workers as a condition of employment that they
are not to belong to, or attempt to foster, a union during their period of employment. The typical
yellow dog contract contains the following provisions:
a. A representation by the employee that he is not a member of a labor union;
b. A promise by the employee not to join a labor union; and
c. A promise by the employee that, upon joining a labor union, he will quit his employment
(2 AZUCENA, supra at 329).

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19) What is Boulwarism? Illustrate.

Boulwarism, also known as BAD FAITH BARGAINING, a labor law principle in which
management opens the negotiation with a generous offer that is not meant to be negotiated.
Pioneered by General Electric's Lemuel Boulware, the National Labor Relations Board considered
this as an unfair labor practice as essentially, no labor negotiation has taken place. This is famous
for the TAKE IT OR LEAVE IT posture of the employer.
Boulwarism – occurs 1) When the employer directly bargains with the employee
disregarding the union; 2) When the aim was to deal with the union through the employees,
rather than with the employees through the union; 3) When the 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 (2 AZUCENA, supra at 420).

20) Enumerate the authorized causes for termination of employment by the employer;
explain one of them.
AUTHORIZED CAUSES OF DISMISSAL
1. Installation of Labor-saving Devices – reduction of the number of workers in any
workplace made necessary by the introduction of labor-saving machinery or devices (D.O.
No. 147-15, Sec. 4(m). Automation / Robotics – installation of labor- saving devices.
2. Redundancy – condition when the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise or superfluous (D.O.
No. 147-15, Sec. 4(q)).
3. Retrenchment or Downsizing – economic ground for dismissing employees and is
resorted to primarily to avoid or minimize business losses (D.O. No. 147-15, Sec. 4(q)). It
is a reduction of personnel usually due to poor financial returns so as to cut down on costs
of operations in terms of salaries and wages to prevent bankruptcy of the company (Fulton
PHL, Inc.v. Bernardo, G.R. No. 187214, August 14, 2013).
4. Closure or Cessation of Operation of the Establishment or Undertaking – the
complete or partial cessation of the operations and/or shutdown of the establishment of
the employer (D.O. No. 147-15, Sec. 4(c)). It is carried out to either starve off the financial
ruin or promote the business interest of the employer (Eastridge Golf Club, Inc. v.
Eastridge Golf Club Inc., Labor Union-Super, G.R. No. 166760, August 2, 2008).
5. Disease - the requisites are: the employee is suffering from any disease; the continued
employment of the employee is prohibited by law or prejudicial to his/her health as well as
to the health of his/her co-employees; and there must be certification by a competent
public health authority that the disease is incurable within a period of 6 months even with
proper medical treatment (D.O. No. 147-15, Sec. 5.4(e)). Termination of services for
health reasons must be effected only upon compliance with the aforementioned requisites
(2 AZUCENA, supra at 918-919). Note: In case of death, Art. 299 does not apply (Gomez
v. Central Vegetable Oil, G.R. No. L-22702, July 28, 1969).

Common requisites of authorized causes under Article 298:

1. There is good faith in effecting the termination;
2. The termination is a matter of last resort;

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3. 2 separate written notices are served on both the affected employees and the DOLE at
least 1 month prior to the intended date of termination;
4. Separation pay is paid to the affected employees, to wit:
a. If based on:
i. installation of labor-device; or
ii. redundancy – 1 month pay or at least 1 month pay for every year of service,
whichever is higher, a fraction of at least 6 months shall be considered as 1 whole
year.
b. If based on:
i. Retrenchment; or
ii. Closure not due to serious business losses or financial reverses – 1 month pay or
at least ½ month pay for every year of service, whichever is higher, a fraction of at
least 6 months shall be considered as 1 whole year.
c. If closure is due to serious business losses or financial reverses – no separation pay
is required.
d. In case the CBA or company policy provides for a higher separation pay. The same
must be followed instead of the one provided in Art. 298 (CHAN, supra at 315);
e. Fair and reasonable criteria in ascertaining what positions are to be affected by the
termination (Lambert Pawnbrokers and Jewelry Corp. v. Binamira, G.R. No. 170464, July
12, 2010).

21) Enumerate the just causes for termination of employment by the employer; explain one
of them.
ENUMERATION:
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 (LABOR CODE, Art. 297).

EXPLANATION ON JUST CAUSES:

1. Serious Misconduct
Misconduct has been defined as 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 (D.O. No. 147-15, Sec. 4(o)).

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Requisites:
a. There must be misconduct;
b. The misconduct must be of such grave and aggravated character;
c. It must relate to the performance of the employee’s duties; and
d. There must be showing that the employee becomes unfit to continue working for
the employer (D.O. No. 147-15, Sec. 5.2(a)).

Examples:
a. Sexual harassment (D.O. No. 147-15, Sec. 6);
b. Fighting within company premises (Technol Eight Philippines Corp. v. NLRC, G.R.
No. 187605, April 13, 2010);
c. Uttering obscene, insulting or offensive words against a superior (Autobus
Workers’ Union, et al v. NLRC, G.R. No. 117453, June 26, 1998);
d. Falsification of time records (Felix v. Enertech Systems Industries, Inc., G.R. No.
142007, March 28, 2001);
e. Sexual intercourse inside company premises and during work hours (Imasen
Philippine Manufacturing Corporation v. Alcon, G.R. No. 194884, October 22, 2014);
f. Theft of company-owned property (Nagkakaisang Lakas ng Manggagawa sa
Keihin (NLMK-OLALIA-KMU) v. Keihin PHL Corp., G.R. No. 171115, August 9, 2010); and
g. Gross immorality (Valdez v. Atty. Dabon, Jr., A.C. No. 7353, November 16, 2015).
The determination of whether a conduct is disgraceful or immoral involves a two-step process:
1. A consideration of the totality of the circumstances surrounding the conduct; and
2. An assessment of the said circumstances vis-à-vis the prevailing norms of conduct,
i.e., what the society generally considers moral and respectable.

When the law speaks of immoral or, necessarily, disgraceful conduct, it pertains to public
and secular morality and not religious; it refers to those conducts which are proscribed
because they are detrimental to conditions upon which depend the existence and progress of
human society.
The pregnancy out of wedlock of an employee, employed in an educational institution, is
not a disgraceful or immoral conduct when she and the father of her child have no impediment
to marry each other (Leus v. St. Scholastica’ College Westgrove, G.R. No. 187226, January
28, 2015).

2. Willful Disobedience or Insubordination

Insubordination refers to the refusal to obey some order, which a superior is entitled to give
and have obeyed. It is a willful or intentional disregard of the lawful and reasonable instructions
of the employer (D.O. No. 147-15, Sec. 4(l)).

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Requisites:
a. There must be disobedience or insubordination;
b. The disobedience or insubordination must be willful or intentional characterized by
a wrongful and perverse attitude;
c. The order violated must be reasonable, lawful, and made known to the employee;
and
d. The order must pertain to the duties which he has been engaged to discharge
(D.O. No. 147-15, Sec. 5.2(b)).
Note: There is no law that compels an employee to accept a promotion, as a promotion is in
the nature of a gift or a reward, which a person has a right to refuse. When petitioner refused
to accept his promotion to Director of International Sales, he was exercising a right and he
cannot be punished for it as qui jure suo utitur neminem laedit. He who uses his own legal
right injures no one (Dosch v. NLRC, G.R. No. L-51182 July 5, 1983).
Examples:
a. Failure to answer memo to explain constitutes willful obedience.
Note: Another notice is required in case of termination on the ground of failure to answer
memo to explain (Ace Promotion and Marketing Corp. v. Ursabia, G.R. No. 171703,
September 22, 2006).
b. Refusal to undergo random drug testing constitutes both serious misconduct and
insubordination (Kakampi et al. v. Kingsport Express and Logistic, G.R. No. 194813, April
25, 2012).
c. Refusal to render overtime to meet production deadline (R.B. Michael Press v. Galit,
G.R. No. 153510, February 13, 2008).

3. Gross and Habitual Neglect of Duties

In order to constitute a just cause for the employee’s dismissal, the neglect of duties must not
only be gross but also habitual and work-related.
a. Gross neglect - the absence of that diligence that an ordinarily prudent man would
use in his/her own affairs (D.O. No. 147-15, Sec. 4(j)).
b. Habitual neglect - repeated failure to perform one’s duties over a period of time,
depending upon the circumstances (D.O. No. 147-15, Sec. 4(k)).
Requisites:
a. There must be neglect of duty; and
b. The negligence must be both gross and habitual in character (D.O. No. 147-15, Sec.
5.2(c)).
Note: The sufficiency of the evidence as well as the resultant damage to the employer should be
considered in the dismissal of the employee (School of Holy Spirit of Quezon City v. Taguiam,
G.R. No. 165565. July 14, 2008).
An unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and
habitual neglect of duties. Poor or unsatisfactory performance of an employee does not

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necessarily mean that he is guilty of gross and habitual neglect of duties (INC Shipmanagement,
Inc. v. Camporedondo, G.R. No. 199931, September 7, 2015).
Actual damage, loss or injury is not an essential requisite (Department of Labor Manual,
Sec. 4343.01(2))

Forms of Neglect of Duty

a. Habitual tardiness and absenteeism;
b. Abandonment of work (Labor v. NLRC, G.R. No. 110388, September 14, 1995).
Requisites:
a. Unauthorized and inexcusable absences (Japos v. First Agrarian Reform Multi-
Purpose Cooperative, G.R. No. 208000, July 26, 2017); and
b. Clear intention to sever Er-Ee relationship being manifested by some overt acts
(Tamblot Security & General Services v. Item, G.R. No. 199314, December 7, 2015).
To constitute abandonment, it is essential that an employee failed to report for work without any
valid and justifiable reason and that he had a clear intention to sever the employment relationship
by some overt act. Mere failure to report for work after notice to return does not constitute
abandonment (Litex Glass and Aluminum Supply v. Sanchez, G.R. No. 198465, April 22, 2015).

Due Process in Abandonment:

a. First Notice to apprise the employee of the particular acts or omissions for which his
dismissal is sought;
b. Second notice to inform him of the employer’s decision to dismiss him on the ground
of abandonment (Kingsize Manufacturing Corp. v. NLRC, G.R. Nos 110452-54, November
24, 1994).
Notices in abandonment cases must be sent to employee’s last known address (Agabon v.
NLRC, G.R. No. 158693, November 17, 2004).
Examples:
a. Subcontracting for another company (Agabon v. NLRC, G.R. No. 158693, November
17, 2004);
b. An employee who failed to report for work after the expiration of the duly approved
leave of absence (Ramo v. Elefaño, G.R. No. L-55629, July 30, 1981); and
c. An employee who failed to comply with the order for his reinstatement (East Asiatic
v. CIR, G.R. No. L-29068, July 30, 1981).

4. Fraud or Willful Breach of Trust

Fraud or dolo consists in the conscious and intentional design to evade the normal fulfillment
of an obligation (Luzon Brokerage Co., Inc. v. Maritime Building Co. Inc., G.R. No. L-25885,
January 31, 1972).

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Fraud refers to any act, omission, or concealment which involves a breach of legal duty, trust
or confidence justly reposed, and is injurious to another (D.O. No. 147-15, Sec. 4 (i)).

Willful Breach of Trust

Breach of trust or confidence must be willful. A breach is willful if it is done intentionally, knowingly
and purposely, without justifiable excuse. The breach must be work-related and committed
against the employer or his representative (Bluer than Blue Joint Ventures Co. v. Esteban., G.R.
No. 192582, April 7, 2014).

Requisites for Fraud or Willful Breach of Trust:

a. There must be an act, omission, or concealment;
b. The act, omission or concealment involves a breach of legal duty, trust, or confidence
justly reposed;
c. It must be committed against the employer or his/her representative;
d. It must be in connection with the employee’s work (D.O. No. 147-15, Sec. 5.2(d)).
Examples:
a. Head supervisor initiating and leading a boycott (Top Form Mfg. Co., Inc. v. NLRC,
G.R. No. 65706);
b. Habitual absence of managerial employee (GT Printers v. NLRC, G.R. No. 100749,
April 24, 1992);
c. Failure of cashier to account for the shortage of company funds (San Miguel Corp. v.
NLRC, G.R. No. 88268, June 2, 1992);
d. Complicity in the attempt to cover up pilferage of the company’s toll collections (CDCP
Tollways Operation Employees and Workers Union v. NLRC, G.R. Nos. 7618-19, July 3,
1992);
e. Stealing company property (Zamboanga City Water District v. Bartolome, G.R. No.
L-66766, December 20, 1985); and
f. Using double or fictitious requisition slips in order to withdraw company materials
(PLDT Company v. NLRC, G.R. No. L-63191, April 30, 1984)

Loss of Confidence refers to a condition arising from fraud or willful breach of trust reposed in
him/her by his/her employer or his/her duly authorized representative (D.O. No. 147-15, Sec.
4(n)).
Requisites:
a. There must be an act, omission or concealment;
b. The act, omission or concealment justifies the loss of trust and confidence of the
employer to the employee;
c. The employee concerned must be holding a position of trust and confidence;

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d. The loss of trust and confidence should not be simulated;

e. It should not be used as a subterfuge for causes which are improper, illegal, or
unjustified; and
f. It must be genuine and not a mere afterthought to justify an earlier action taken in
bad faith (D.O. No. 147-15, Sec. 5.2(e)).

Guidelines for the application of the Doctrine of Loss of Confidence:

a. Loss of confidence should not be Simulated (reasonable basis for loss of trust and
confidence);
b. Not used as a Subterfuge for causes which are improper, illegal or unjustified;
c. Not arbitrarily Asserted in the face of overwhelming evidence to the contrary;
d. Must be Genuine, not a mere afterthought to justify earlier action taken in bad faith;
and
e. The employee involved holds a Position of trust and confidence (China City
Restaurant Corp. v. NLRC, G.R. No. 97196, January 22, 1993).

Two Classes of Positions of Trust

a. Managerial employees; and
b. Those who in the normal and routine exercise of their functions, regularly handle
significant amounts of money or property (e.g. cashiers, auditors, property custodians,
etc.) (D.O. No. 147-15, Sec. 4(n)).

Note: As to the degree of proof required, with respect to rank-and–file personnel, it requires higher
proof of involvement in the events in question and that mere uncorroborated assertions and
accusations by the employer will not suffice. But as regards a managerial employee, the mere
existence of a basis for believing that he has breached the trust of his employer would suffice for
his dismissal (Alcantara v. The PH Commercial and International Bank, G.R. No. 151349, October
20, 2010).
There must be “some basis” for the loss of trust and confidence which means that there is
reasonable ground to believe, if not to entertain the moral conviction, that the concerned
employee is responsible for the misconduct and that the participation therein rendered him
unworthy of the trust and confidence demanded by his position (Central Pangasinan Electric
Cooperative, Inc. v. Macaraeg, G.R. No. 145800, January 22, 2003).
Note: Generally, employers are allowed a wider latitude of discretion in terminating the
employment of managerial personnel or those who, while not of similar rank, perform functions
which by their nature require the employer’s full trust and confidence (Coca-Cola Bottlers PHL
Inc., v. NLRC, G.R. No. 84075, April 25, 1989).
It is not the job title but the actual work that the employee performs that determines whether he
or she occupies a position of trust and confidence (Bluer than Blue Joint Ventures Company v.
Esteban, G.R. No. 192582, April 7, 2014).

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5. Commission of a Crime or Offense refers to an offense by the employee against the person
of his employer or any member of his family or his duly authorized representative (D.O. No. 147-
15, Sec. 4(d)).
Requisites:
a. There must be an act or omission punishable/prohibited by law; and
b. That act or omission was committed by the employee against any of the following
persons:
i. His employer;
ii. Any immediate member of his employer’s family; or
iii. His employer’s duly authorized representative (D.O. No. 147-15, Sec 5.2(f)).
Note: The conviction of an employee in a criminal case is not indispensable to warrant his
dismissal by his employer and that the fact that a criminal complaint against the employee has
been dropped by the city fiscal is not binding and conclusive upon the labor tribunal (Starlite
Plastic Industrial Corp. v. NLRC, G.R. No. 78491, March 16, 1989).
Note: The phrase “immediate members of family” refers to those persons having family relations
under Art. 150 of the Family Code, to wit:
a. Between husband and wife
b. Between parents and children
c. Among brothers and sisters, whether of the full or half-blood (CHAN, supra at 311).

6. Analogous Causes must be due to the voluntary and/or willful act or omission of the
employee (Nadura v. Benguet Consolidated, G.R. No. L-17780, August 24, 1962).
Requisites:
a. There must be act or omission similar to those specified just causes;
b. The act or omission must be voluntary and/or willful on the part of the employees
(D.O. No. 147-15, Sec 5.2(g)).
No act or omission shall be considered as analogous cause unless expressly specified in the
company rules and regulations or policies (D.O. No. 147-15, Sec 5.2(g)).
Examples:
a. Violation of company rules and regulations (Sampaguita Auto Transport Corp. v.
NLRC, G.R. No. 197384, January 30, 2013);
b. Gross inefficiency—analogous to gross neglect of duty (ex. failure to meet sales
quota based on a valid productivity standard) (International School Manila v. ISAE, G.R.
No. 167286, February 5, 2014);
c. Illegally diverting employer’s products (2 AZUCENA, supra at 861); and
d. Theft of property of co-employee (John Hancock Life Insurance Corp. v. Davis, G.R.
No. 169549, September 3, 2008).

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BURDEN OF PROOF
The burden of proving that there is just cause for termination is on the employer. The employer
must affirmatively show rationally adequate evidence that the dismissal was for a justifiable
cause." Failure to show that there was valid or just cause for termination would necessarily mean
that the dismissal was illegal.

To show that dismissal resulting from inefficiency in work is valid, it must be shown that:
1) the employer has set standards of conduct and workmanship against which the
employee will be judged;
2) the standards of conduct and workmanship must have been communicated to the
employee; and
3) the communication was made at a reasonable time prior to the employee's
performance assessment.

22) Discuss the Kiok Loy doctrine regarding the effects of refusal to bargain collectively.
Under the Kiok Loy Ruling or Lock Stock and Barrel Rule, the CBA proposed by the union
may impose lock, stock, and barrel on employers who refused to negotiate a CBA. 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.

23) Discuss the effects of non-observance of procedural due process in termination

disputes.
Article 292(B) of the Labor Code outlines the procedural requirements which the employers must
observe before dismissing an employee for just cause. The procedure requires the employer to:
1. Serve a written notice to explain;
2. Conduct a hearing, if necessary;
3. Serve a written notice of decision to the employee, indicating the justification thereof.
Where the dismissal is adjudged to be valid, lack of due process does not nullify the dismissal, or
render it illegal, much less ineffectual. The employer is only liable for nominal damages, the
account of which is addressed to the sound discretion of the court.

24) What is a collective bargaining unit? Enumerate the factors in determining the
appropriateness of a collective bargaining unit.
Collective Bargaining Unit - It is a group of employees of a given employer, comprised of all or
less than all the entire body of employees, which, consistent with equity to the employer, indicate
to be the best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provision of the law.

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Collective Bargaining: A democratic framework to stabilize the relation between the labor and
management to create a climate of sound and stable industrial peace. It is a mutual responsibility
of the employer and the union and is their legal obligation (Kiok Loy v. NLRC, 1986)
Collective Bargaining does not end with the execution of an agreement. It is a continuous
process which requires both parties, the employer and duly authorized representatives of
employees, to deal with each other with open and fair minds and sincerely endeavor to fight the
obstacles in the process to stabilize the employer-employee relationship (PAMBUSCO v.
PAMBUSCO Employees Union)

Four Factors in Determining the Appropriate Bargaining Unit:

1. Community of Interest Doctrine or Substantial Mutual Interest Rule – affinity and unity
of employees' interest, such as substantial similarity of work and duties, or similarity of
compensation and working conditions (San Miguel Corp. Employees Union PTGWO v. Confesor,
G.R. No. 111262, September 19, 1996).
The following are factors that may be considered:
a. Similarity in the scale and manner of determining earnings;
b. Similarity in the employment benefits, hours of work and other terms and
conditions of employment;
c. Similarity in the kinds of work performed;
d. Similarity in the qualifications, skills and training of the employees;
e. Frequency of contact or interchange among the employees;
f. Geographic proximity;
g. Continuity or integration of production processes;
h. Common supervision and determination of labor-relations policy;
i. History of collective bargaining;
j. Desires of the affected employees; or
k. Extent of union organization (2 AZUCENA, supra at 460-461).
Preference is given in the application of the Community of Interest Doctrine in determining the
appropriate bargaining unit.
Note: Geographical location can be completely disregarded if the communal or mutual interests
of the employees are not sacrificed (San Miguel Corp. Supervisors and Exempt Employees Union
v. Laguesma, G.R. No. 110399, August 15, 1997).

2. Globe Doctrine – based on the express will or desire of the employees.

In defining the appropriate bargaining unit for purposes of collective bargaining, the determining
factor is the desire of the workers themselves. (2 AZUCENA, supra at 466-467)
Foreign-hired teachers do not belong to the bargaining unit of the local hires because the former
have not indicated their intention to be grouped with the latter for purposes of collective
bargaining. Although foreign-hires perform similar functions under the same working conditions

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as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires
(International School Alliance of Educators v. Quisumbing, G.R. No. 128845, June 1, 2000).

3. Employment Status, such as:

a. Temporary;
b. Seasonal; and
c. Probationary employee.
Piece workers employed on casual or day to day basis who do not have reasonable basis for
continued or renewed employment for any appreciable time, cannot be considered to have such
mutuality of interest as to justify their inclusion in a bargaining unit composed of permanent or
regular employees (Philippine Land Air – Sea Labor Union v. CIR, G.R. No. L-14656. November
29, 1960).

4. Prior collective bargaining History (Sta. Lucia East Commercial Corp. v. Hon. Secretary
of Labor and Employment, G.R. No. 162355, August 14, 2009).
Note: The existence of a prior collective bargaining history is neither decisive nor conclusive in
the determination of what constitutes an appropriate bargaining unit (San Miguel Corp. v.
Laguesma, G. R. No. 100485, September 21, 1994)

25) What is an exclusive bargaining representative? Enumerate (do not discuss) the
methods of choosing or selecting the exclusive bargaining representative.
Exclusive Bargaining Representative means any legitimate labor organization duly recognized
or certified as the sole and exclusive bargaining representative or agent of all the employees in a
bargaining unit (IRR of the LABOR CODE, Book V, Rule 1, Sec 1(t), as amended by D.O. No. 40-
03).

The methods of determining the bargaining representative are:

1. Request for SEBA (D.O. No. 40-I-15, Rule VII);
2. Certification election (IRR of the LABOR CODE, Book V, Rule VIII);
3. Run-off election (IRR of the LABOR CODE, Book V, Rule X);
4. Re-run election (D.O. No. 40-I-15, Rule I, Sec. 1(tt)); and
5. Consent election (IRR of the LABOR CODE, Book V, Rule VIII, Sec. 10).

26) Enumerate the jurisdictional preconditions to collective bargaining.

Jurisdictional Preconditions for Collective Bargaining/ Requisites of Collective Bargaining
1. Possession of the status of Majority representation by the employees’ representative in
accordance with any of the means of selection or designation provided for by the Labor Code;

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2. Proof of majority representation (Certification of the BLR that the representative of the
employees is the sole and exclusive bargaining agent having won in a certification election); and
3. Demand to bargain under Article 261 (a) of the Labor Code (Kiok Loy v. NLRC, G.R. No.
L-54334, January 22, 1986).
The duty to bargain collectively arises only between the employer and its employee.
Where neither party is an “employer” nor an “employee” of the other, no such duty would exist
(Allied Free Workers’ Union v. Compania Maritima, G.R. Nos. L-22951-52, January 31, 1967).
Note: Where a majority representative has been designated, it is a ULP for the employer,
as a refusal of collective bargaining, to deal and negotiate with the minority representative to the
exclusion of the majority representative (2 AZUCENA, supra at 381).

27) When does a collective bargaining agreement take effect?

Article 264, Labor Code. (Art. 253). Duty to bargain collectively when there exists a
collective bargaining agreement. When there is a collective bargaining agreement, the duty to
bargain collectively shall also 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.
Article 265, Labor Code. (Art. 253-A). Terms of a collective bargaining agreement.
Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the
representation aspect is concerned, be for a term of five (5) years. No petition questioning the
majority status of the incumbent bargaining agent shall be entertained and no certification election
shall be conducted by the Department of Labor and Employment outside of the sixty-day period
immediately before the date of expiry of such five-year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not
later than three (3) years after its execution. Any agreement on such other provisions of the
Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the
term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to
the day immediately following such date. If any such agreement is entered into beyond six months,
the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the
renegotiation of the Collective Bargaining Agreement, the parties may exercise their rights under
this Code. (As amended by Section 21, Republic Act No. 6715, March 21, 1989)

Summary:
• If the CBA is the very first in the bargaining unit, the effectivity date is whatever date the
parties agree on.
• If the CBA is a renegotiated one, the following rules apply:
1. If the renegotiation is finished and the new CBA is concluded within six (6) months from
the expiry of the old CBA, then the new CBA starts to take effect on the date following
such expiry date;
2. If no new CBA was completed within the six-month period, the new CBA, when done,
will not automatically retroact. If it will retroact at all, the retroaction date will have to be
agreed upon by the negotiating parties.
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28) What is the duration of a collective bargaining agreement?

Duration of the CBA
1. With respect to the representation aspect, the same lasts for 5 years.
No petition questioning the majority status of the incumbent bargaining agent shall be
entertained and no certification election shall be conducted by the DOLE outside the 60-
day period immediately prior to the expiration of such 5 year term of the CBA.
2. With respect to all other provisions (economic and non-economic other than
representational), of the CBA, it shall be renegotiated not later than 3 years after its execution
(LABOR CODE, Art. 265).

29) What is the effect of non-renewal of a CBA after its expiration? Kindly check the answer.
Automatic Renewal Clause - The CBA shall remain effective and enforceable even after the
expiration of the period fixed by the parties as long as no new agreement is reached by them
(LABOR CODE, Art. 264).
Reason: To avoid or prevent a situation where no collective bargaining agreement at all
would govern between the employer company and its employees.
Note: The Automatic Renewal pertains only to the economic provisions of the CBA and
does not include the representational aspect of the CBA (PICOP Resources, Inc. v. Dequilla, G.R.
No. 172666, December 7, 2011).
When a collective bargaining agreement expires, the employer must continue paying the
same wages and benefits—and continue most other terms and conditions of employment—until
the parties reach a new agreement or an impasse in negotiations. In short, the contract may have
expired, but the obligation does not. This rule is an outgrowth of the rule that an employer's
unilateral change in a term or condition of employment violates the statutory obligation to bargain
in good faith.

30) What is an ‘Assumption Order” issued by the Secretary of Labor? Discuss its legal
effects.
When there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor will assume jurisdiction over
the labor dispute of the industry. The power of assumption of jurisdiction or certification by the
Secretary of Labor is in the nature of a police power measure (Philtread Workers Union v. Sec.
Confesor, G.R. No. 117169. March 12, 1997).

Conditions for a Valid Exercise of the Assumption of Jurisdiction Authority

1. Both parties have requested the Secretary of Labor to assume jurisdiction over the labor
dispute; or
2. After a conference called by the Secretary of Labor on the propriety of the issuance of the
Assumption or Certification Order, motu proprio or upon request or petition by either party to
the labor dispute (D.O. No. 40-H-13, Rule XXII, Sec. 15).

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The Secretary of Labor may either:

1. Assume jurisdiction and decide it; (personal) or
2. Certify the same to the NLRC for compulsory arbitration (delegation) (2 AZUCENA, supra
at 637).

Industries Indispensable to the National Interest:

1. Hospital sector;
2. Electrical power supply;
3. Water supply services, to exclude small water supply services such as bottling and
refilling stations;
4. Air traffic control; and
5. Such other industries as may be recommended by the National Tripartite Industrial
Peace Council (NTIPC) (D.O. No. 40-H-13, Rule XXII, Sec. 16).

Effects of the Assumption of Jurisdiction of the Secretary

1. If a strike or lockout has not taken place, the parties are enjoined to conduct any untoward
action that may lead to a strike or lockout.
2. If a strike or lockout has already taken place, all striking and locked out workers shall,
within 24 hours from receipt of an Assumption or Certification Order, 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.
3. At any point in time, the parties are not prevented from submitting the dispute to Voluntary
Arbitration with the Secretary of Labor and Employment or his/her duly authorized
representative as voluntary Arbitrator or Panel of Voluntary Arbitrators (D.O. No. 40-G-03,
Sec. 3).
A motion for reconsideration does not suspend the effects, as the assumption order is immediately
executory (Telefunken Semiconductors Employees Union-FFW v. Secretary of Labor and
Employment, G.R. No. 122743, December 12, 1997).

31) What is a “labor dispute”? When may a “Certification Order” be issued by the Secretary
of Labor?
Labor dispute includes any controversy or matter concerning terms or conditions of employment
or the association or representation of persons in negotiations, fixing, maintaining, changing or
arranging the terms and conditions of employment, regardless of whether or not the disputants
stand in the proximate relation of employers and employees (Gold City Integrated Port Service,
Inc. v. NLRC, G.R. No. 103560, July 6, 1995).
Note: A labor dispute may be assumed by the Secretary or certified to the NLRC even before the
actual staging of a strike or a lockout since Art. 263 of the Labor Code does not require the
existence of the strike but only of a labor dispute involving national interest. What constitutes
“indispensable industry” is based upon the discretion of the Secretary of Labor. However, the

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President of the Philippines shall not be precluded from determining industries, which in his
opinion are indispensable to the national interest (2 AZUCENA, supra at 642).
Prior notice and hearing are not required in the issuance of the assumption or certification
order (2 AZUCENA, supra at 640).

32) Discuss the duty to bargain collectively.

Art. 263. Meaning of duty to bargain collectively. The duty to bargain collectively means the
performance of a mutual obligation to meet and convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement with respect to wages, hours of work and all other
terms and conditions of employment including proposals for adjusting any grievances or questions
arising under such agreement and executing a contract incorporating such agreements if
requested by either party but such duty does not compel any party to agree to a proposal or to
make any concession.

33) Distinguish “blue sky bargaining” from “surface bargaining”.

Blue-Sky Bargaining is defined as making exaggerated or unreasonable proposals.
Whether or not the union is engaged in blue-sky bargaining is determined by the evidence
presented by the union as to its economic demands. Thus, if the union requires exaggerated or
unreasonable economic demands, it is guilty of ULP (Standard Chartered Bank Employees Union
v. Hon. Confesor, G.R. No. 114974, June 16, 2004).
Surface Bargaining means going through the motions of negotiating without any legal
intent to reach an agreement. It involves the question of whether or not the employer’s conduct
demonstrates an unwillingness to bargain in good faith or is merely hard bargaining (Standard
Chartered Bank Employees Union v. Confesor, G.R. No. 114974, June 16, 2004);

34) Distinguish between improved-offer balloting and reduced offer balloting.

Improved Offer Balloting
● To determine whether or not the improved offer of the employer is acceptable to the union
members.
● To ascertain the real sentiment of the silent majority of the union members on strike.
● It is filed on or before the 30th day of the strike.
Reduced Offer Balloting
● To determine whether or not the improved offer of the union is acceptable to board,
trustees and partners.
● To ascertain the real sentiment of the silent majority of the union members on strike.
● It is filed on or before the 30th day of the lockout. (LABOR CODE, Art. 280).
35) What is a notice of strike? Who may file a notice of strike?
Notice of Strike: Notice of Strike is an indispensable requirement being filed before declaring a
strike. The notice of strike shall state, among others, the names and addresses of the employer
and the union involved, the nature of the industry, to which the employer belongs, the number of

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union members and of the workers in the bargaining unit, and such other relevant data as may
facilitate the settlement of the dispute, such as a brief statement or enumeration of all pending
labor disputes involving the same parties.
In cases of bargaining deadlocks, the notice shall, as far as practicable, further state the
unresolved issues in the bargaining negotiations and be accompanied by the written proposals of
the union, the counter-proposals of the employer and the proof of a request for conference to
settle the differences.
In cases of unfair labor practices, the notice shall, as far as practicable, state the acts
complained of and the efforts taken to resolve the dispute amicably.

Who may declare a strike or lockout? Any certified or duly recognized bargaining
representative may declare a strike in cases of bargaining deadlock and unfair labor practice.
Likewise, the employer may declare a lockout in the same cases.
In the absence of a certified or duly recognized bargaining representative, any legitimate labor
organization in the establishment may declare a strike but only on the ground of unfair labor
practice (Section 2, Rule XIII Book V, Omnibus Rules Implementing The Labor Code, as
amended).

36) Enumerate the procedural requirements to be observed in order to have a valid strike.
Explain one of them.
The requirements for a valid strike or lockout are as follows:
1. Notice of Strike. It must be based on a valid and factual ground. The law recognizes 2
grounds for the valid exercise of the right to strike or lockout, namely: Collective Bargaining
Deadlock (CBD) and/or Unfair Labor Practice (ULP).
2. Cooling-off Period. A strike or lockout NOTICE shall be filed with the National
Conciliation and Mediation Board (NCMB) at least 15 days before the intended date of
the strike or lockout if the issues raised are unfair labor practices, or at least 30 days
before the intended date thereof if the issue involves bargaining deadlock.
○ In cases of dismissal from employment of union officers duly elected in accordance
with the union constitution and by-laws, which may constitute UNION BUSTING
where the existence of the union is threatened, the 15-day cooling-off period shall
not apply and the union may take action immediately after vote is conducted and
the result thereof submitted to the Department of Labor and Employment.
3. A Notice must be served to NCMB-DOLE at least 24 hours prior to the taking of the strike
vote by secret balloting.
4. Strike Vote Balloting: A strike must be approved by a majority vote of the members of
the Union and a lockout must be approved by a majority vote of the members of the Board
of Directors of the Corporation or Association or of the partners in a partnership, obtained
by secret ballot in a meeting called for that purpose.
5. 7-Day Strike Ban. A strike or lockout VOTE shall be reported to the NCMB-DOLE
Regional Branch at least 7 days before the intended strike or lockout subject to the cooling-
off period.

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6. In the event the result of the strike/lockout ballot is filed within the cooling-off period, the
7-day requirement shall be counted from the day following the expiration of the cooling-off
period. (NSFW vs. Ovejera, G.R. No. 549743, May 31, 1982)
○ In case of dismissal from employment of union officers which may constitute union
busting, the time requirement for the filing of the Notice of Strike shall be dispensed
with but the strike vote requirement, being mandatory in character, shall “in every
case” be complied with.
7. The dispute must not be the subject of an assumption of jurisdiction by the President or
the Secretary of Labor and Employment, a certification for compulsory arbitration, or
submission to compulsory or voluntary arbitration nor a subject of a pending case involving
the same grounds for the strike or lockout (Primer on Strike, Picketing and Lockout, Chan
Robles).

37) Is Welga ng Bayan legal or illegal? Explain your answer.

Welga ng bayan is illegal because it is a POLITICAL STRIKE and therefore there is
neither a bargaining deadlock nor any ULP. It is a political rally. Welga ng bayan is a cause-
oriented strike. It is a sympathy strike where strikers have no demands or grievances or labor
dispute of their own against their employer, but nonetheless stage the strike for the purpose of
aiding, directly or indirectly, other strikes in other establishments without necessarily having any
direct relation to the advancement of strike interest.

38) Enumerate the factors affecting the legality of strikes. Discuss one of them.
SIX FACTORS AFFECTING LEGALITY OF STRIKES:
1. Statutory prohibition;
Employees in the public service may not engage in strikes. While the Constitution
recognizes the right of government employees to organize, they are prohibited from staging
strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which will result
in temporary stoppage or disruption of public services (Bangalisan v. CA, G.R. No. 124678, July
31, 1997).
2. Strict compliance with Procedural requirements of the Law;
3. Purpose must be ULP or Economic;
Conversion Doctrine - Involves the conversion of a strike from an economic to a ULP and
vice versa. A strike or lockout may start as an economic strike or lockout but later on, because of
the actuation of the parties, the same may be converted to ULP strike or lockout, or vice versa.
Under this situation, the conversion doctrine shall apply in which case the requirements for the
converted strike/lockout (to economic from ULP, or vice versa, as the case may be) shall be
observed (Consolidated Labor Association of the PHL v. Marsman and Co, Inc., G.R. Nos. L-
17038, July 31, 1964).
4. Lawful Means and methods;
A strike may be legal at its inception but eventually be declared illegal if the strike is
accompanied by violence which is widespread, pervasive and adopted as a matter of policy and

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not merely violence which is sporadic which normally occurs in a strike area (Shell Oil Workers’
Union v. Shell Company of the PHL, G.R. No. L-28607, May 31, 1971).
Note: A strike or lockout may be declared illegal when:
1. Any of the requirements for a valid strike or lockout is not complied with;
2. It is based on non-strikeable issues;
3. Issues involved are already subject of arbitration; or
4. Either of the parties commit prohibited acts or practices, the strike or lockout may be
declared illegal (NCMB Primer on Strike, Picketing, and Lockout).
5. Injunction; and
6. Agreement of the parties
A no-strike prohibition in a CBA is applicable only to economic strikes. In other words, ULP
strike is not covered and workers may go on strike based on ULP despite the no-strike provision
(PH Metal Foundries Inc. v. Court of Industrial Relations, G.R. Nos. L-34948-49, May 15, 1979).

39) Distinguish between resignation and retirement.

In case of Resignation, the employee who resigns is not entitled to benefits under the Labor Code,
unless the CBA so provides for the said benefits. In Retirement, on the other hand, the retired
employee is entitled to benefits under the Labor Code such as retirement pay.

Resignation is the voluntary act of employees who are compelled by personal reasons to
dissociate themselves from their employment. It must be done with:
1. Intention of relinquishing an office; and
2. Accompanied by the act of abandonment (Grande v. Philippine Nautical Training College,
G.R. No. 213137, March 1, 2017).

Retirement is the result of a bilateral act of the parties, a voluntary agreement between the
employer and the employee whereby the latter, after reaching a certain age, agrees and/or
consents to sever his employment with the former (Brion v. South PH Union Mission of the
Seventh Day Adventist Church, G.R. No. 135136, May 19, 1999).

40) What is an unfair labor practice? Cite two (2) examples of ULP committed by a labor
organization.
The term “unfair labor practice” does not refer to every unfair act or decision of an
employer. It refers only to those acts listed in Articles 259 and 260 of the Labor Code.
Unfair labor practices violate the constitutional right of workers and employees to self-
organization, are inimical to the legitimate interests of both labor and management, including their
right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and
mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-
management relations (Art. 258, Labor Code).

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Art. 259. Unfair labor practices of employers. It shall be unlawful for an employer to commit
any of the following unfair labor practice:
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 a
labor organization or shall withdraw from one to which he belongs;
C. To contract out services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their rights to self-
organization;
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 from 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 bargaining unit who are not
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 (o) of this Code shall not apply to the non-members of the recognized
collective bargaining agent;
F. To dismiss, discharge or otherwise 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 attorney’s 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 of the preceding paragraph notwithstanding, only the officers and agents
of corporations, associations or partnerships who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable. (As amended by Batas Pambansa
Bilang 130, August 21, 1981)

Art. 260. Unfair labor practices of labor organizations. It shall be unfair labor practice for a
labor organization, its officers, agents or representatives:
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 to cause an employer to discriminate against an employee, including
discrimination against an employee with respect to whom membership in such
organization has been denied or to terminate an employee on any ground other than the

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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 negotiation or attorney’s fees from employers as part of the settlement
of any issue in collective bargaining or any other dispute; or
F. To violate a 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. (As amended by Batas Pambansa Bilang 130, August 21, 1981).

41) How is an appeal perfected from the Labor Arbiter’s decision to the NLRC?
A. Requisites for Perfection of Appeal. The appeal shall be:
1. Filed within the reglementary period provided in Section 1 of this Rule;
2. Verified by the appellant himself/herself in accordance with Section 4, Rule 7of the Rules
of Court, as amended;
3. in the form of a memorandum of appeal which shall state the grounds relied upon and the
arguments in support thereof, the relief prayed for, and with a statement of the date the
appellant received the appealed decision, award or order;
4. in three (3) legibly typewritten or printed copies; and accompanied by:
a. proof of payment of the required appeal fee and legal research fee;
b. posting of a cash or surety bond as provided in Section 6 of this Rule; and
c. proof of service upon the other parties.
B. A mere notice of appeal without complying with the other requisites aforestated shall not stop
the running of the period for perfecting an appeal.
C. The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal
was filed, his/her answer or reply to appellant's memorandum of appeal, not later than ten (10)
calendar days from receipt thereof. Failure on the part of the appellee who was properly furnished
with a copy of the appeal to file his/her answer or reply within the said period may be construed
as a waiver on his/her part to file the same
D. Subject to the provisions of Article 218 of the Labor Code, once the appeal is perfected in
accordance with these Rules, the Commission shall limit itself to reviewing and deciding only the
specific issues that were elevated on appeal. (Section 4, Rule VI, 2011 NLRC Rules of Procedure)

42) Distinguish “just cause” from “authorized cause” dismissal of employees.

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As to Nature of Cause:
● Dismissal for Just Cause - The employee is dismissed for causes which are attributable
to his fault or culpability (D.O. No. 147-15, Sec. 4(b)).
● Termination for Authorized Cause - The employee is dismissed for causes brought by
the necessity and exigencies of business, changing economic conditions and illness of the
employee (D.O. No. 147-15, Sec. 4(a))
As to entitlement to separation pay:
● Dismissal for Just Cause - As a rule, a dismissed employee is not entitled to separation
pay
● Termination for Authorized Cause - An employee terminated for authorized cause is
entitled to separation pay (LABOR CODE, Art. 298-299).
As to requirement of due process:
● Dismissal for Just Cause - Before an employee is dismissed for just cause, he must be
given ample opportunity to be heard and to defend himself (D.O. No. 147-15, Sec. 5.1(b)).
● Termination for Authorized Cause - Employer must give the employee to be terminated
a written notice at least one (1) month before the intended day of termination (D.O. No.
147-15, Sec. 5.3).
As to requirement of notice to DOLE:
● Dismissal for Just Cause - Notice to DOLE is not required (D.O. No. 147-15, Sec. 5.1)
● Termination for Authorized Cause - Notice to DOLE is required (D.O. No. 147-15, Sec.
5.3).

43) Enumerate the exclusive and original jurisdiction of the Labor Arbiter.
Art. 224. Jurisdiction of the Labor Arbiters. Except as otherwise provided under this Code, the
Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision without extension, even
in the absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving
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 264 of this Code, including questions involving
the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. Xxx

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44) What is voluntary arbitration? Discuss the jurisdiction of a Voluntary Arbitrator.

Voluntary Arbitration refers to the mode of settling labor-management disputes by which the
parties select a competent, trained and impartial person who shall decide on the merits of the
case and whose decisions is final, executory and unappealable (NCMB Procedural Guidelines in
the Conduct of Voluntary Arbitration dated October 15, 2004, RULE II, Sec.1(d)) [hereinafter,
NCMB GUIDELINES].

Jurisdiction of Voluntary Arbitrators:

1. Unresolved grievances arising from the interpretation or implementation of the CBA (LABOR
CODE, Art. 274);
2. Unresolved grievances arising from the interpretation or enforcement of company personnel
policies (LABOR CODE, Art. 274);
3. Violations of the CBA which are not gross in character (LABOR CODE, Art. 274);
4. Oher labor disputes, including unfair labor practices and bargaining deadlocks, upon
agreement of the parties (LABOR CODE, Art. 275);
5. Wage distortion issues arising from the application of any wage orders in organized
establishments (LABOR CODE, Art. 124);
6. Unresolved grievances arising from the interpretation and implementation of the Productivity
Incentive Programs under R.A. No. 6971 (R.A. No. 6971, Sec. 9); and
7. National interest cases (LABOR CODE, Art. 278 (g)).

Note: The Voluntary Arbitrators have original and exclusive jurisdiction over money claims arising
from the interpretation or implementation of the CBA and those arising from the interpretation or
enforcement of company personnel policies (LABOR CODE, Art. 274).
Violations of CBA, except those which are gross in character, shall no longer be treated as ULP
and shall be resolved as grievances (2 AZUCENA, supra, at 551).

45) What is a grievance? How is grievance resolved?

Grievance refers to any question by either the employer or the union regarding:
1. The interpretation or implementation of any provision of the CBA;
2. Interpretation or enforcement of company Personnel policies; or
3. Violation of any provisions of the CBA or company personnel policies (IRR of LABOR
CODE, Book V, Rule XIX, Sec. 1, as amended by D.O. No. 40-03).

Grievance Machinery 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 (IRR of LABOR CODE, Book V, Rule XIX, Sec. 1, as amended by
D.O. No. 40-03).

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Procedure in Handling Grievances

Generally, provisions of the CBA shall apply. However, in the absence of a specific provision in
the CBA or existing company practice prescribing for the procedures in handling grievances, the
following shall apply:
1. An employee shall present his grievance or complaint orally or in writing to the shop
steward (one of the union officers). The latter shall verify the facts and determine whether or
not the grievance is valid.
2. If the grievance is valid, the shop steward shall immediately bring the complaint to the
employee’s immediate supervisor. The shop steward, the employee and his immediate
supervisor shall exert efforts to settle the grievance at their level.
3. If no settlement is reached, the grievance shall be referred to the grievance committee
which shall have 10 days to decide the case (IRR of LABOR CODE, Book V, Rule XIX, Sec.
2, as amended by D.O. No. 40-03).
4. Where grievance remains unresolved, either party may serve notice upon the other of its
decision to submit the issue to voluntary arbitration ((IRR of LABOR CODE, Book V, Rule XIX,
Sec. 3, as amended by D.O. No. 40-03).

46) What is a collective bargaining agreement? Explain the “automatic renewal rule” in
connection therewith.
Collective Bargaining Agreement (CBA) is a contract executed upon request of either the
employer or the exclusive bargaining representative of the employees, incorporating the
agreement, reached after negotiations with respect to Wages; Hours of work; and All Other terms
and conditions of employment in a bargaining unit, including proposals for adjusting any grievance
or question under such agreement (i.e. mandatory provisions for grievances and arbitration
machineries) (Davao Integrated Port Stevedoring Services v. Abarquez, G.R. No. 102132, March
19, 1993).
Automatic Renewal Clause - The CBA shall remain effective and enforceable even after the
expiration of the period fixed by the parties as long as no new agreement is reached by them
(LABOR CODE, Art. 264).

47) What is constructive dismissal? How is it different from actual dismissal?

Constructive Dismissal
1. There may be constructive dismissal if an act of clear discrimination, insensibility, or
disdain by an employer becomes so unbearable on the part of the employee that it could foreclose
any choice by him except to forego his continued employment (Hyatt Taxi Services, Inc. v.
Catinoy, G.R. No. 143204, June 26, 2001).
2. Demotion in rank/diminution of pay (2 AZUCENA, supra at 1046).
3. Floating status of a security guard, such as respondent, for more than 6 months constitutes
constructive dismissal (Emeritus Security and Maintenance Systems, Inc. v. Dailig, G.R. No.
204761, April 2, 2014).

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Constructive dismissal is defined as quitting or cessation of work because continued

employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank
or a diminution of pay and other benefits. It exists if an act of clear discrimination, insensibility, or
disdain by an employer becomes so unbearable on the part of the employee that it could foreclose
any choice by him except to forego his continued employment. There is involuntary resignation
due to the harsh, hostile, and unfavorable conditions set by the employer. The test of constructive
dismissal is whether a reasonable person in the employee's position would have felt compelled
to give up his employment/position under the circumstances (G.R. No. 215627).
It is different from actual dismissal where the Dismissal has been terminated by the
employer due to the terms under the employment contract with regard to just and authorized
causes of termination.

48) What is preventive suspension? When may it be imposed?

Preventive Suspension
An employee may be placed under preventive suspension, if:
1. The evidence of guilt is strong, and the employer or head of establishment is convinced
that the continued stay of the employee during the period of investigation constitutes a
distraction to the normal operations of the company; and
2. His continued employment poses a serious and imminent threat to life or property of the
employer or his co-workers (Gatbonton v. NLRC, G.R. No. 146779, January 23, 2006).

It shall be for a maximum period of 30 days, during which period the employee placed under
preventive suspension is not entitled to any wages.
Preventive suspension should not last for more than 30 days. The employee should be made to
resume his work after 30 days (IRR of the Labor Code, Book V, Rule XXIII, Sec. 9, as amended
by D.O. No. 09-97).
After the lapse of the 30-day period for justifiable reasons, the same can be extended
provided the employer pays the suspended employee his wages and other benefits (Philippine
Airlines, Inc. v. NLRC, G.R. No. 114307, July 8, 1998).

49) Explain how the legality or illegality of a strike is affected by “agreement” and
“statutory prohibition”.
● Employees in the public service may not engage in strikes. While the Constitution
recognizes the right of government employees to organize, they are prohibited from
staging strikes, demonstrations, mass leaves, walk outs, and other forms of action which
will result in temporary stoppage or disruption of public services. Basis: Civil Service
Circular/Memorandum in relation to the Constitution.
● A CBA contains a no strike/no lockout clause. It provides that disputes between parties,
including alleged U.L.P. acts by the employer should be resolved through voluntary
arbitration instead of through a strike.
● A strike has to be pursued within the bounds of law. A strike does not suspend the binding
force of law; it does not put the strikers above the law or above their fellow men. The right

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to self-organization and the right to strike, as offspring of the industrial civilization, are not
envisioned to create an uncivilized situation.
● A strike may be legal at its inception but eventually be declared illegal if the strike is
accompanied by violence which is widespread, pervasive and adopted as a matter of
policy and note merely violence which is sporadic which normally occurs in a strike area.

50) What is probationary employment? What are the grounds for termination of
probationary employment?
Probationary Employment exists where the employee, upon his engagement is made to
undergo a trial period during which the employer determines his fitness to qualify for regular
employment based on reasonable standards made known to him at the time of his engagement
(IRR of the LABOR CODE, Book VI, Rule I, Sec. 6(d)).

General Rule: Probationary employment shall not exceed 6 months from the date the employee
started working (LABOR CODE, Art. 296).
The computation of the 6-month probationary period is reckoned from the date of appointment up
to the same calendar date of the 6th month following (Alcira v. NLRC, G.R. No. 149859, June 9,
2004).

Exceptions:
1. When it is covered by an apprenticeship agreement stipulating a longer period (LABOR
CODE, Art. 296);
2. When the parties to an employment contract agree otherwise;
3. When the same is established by company policy; and
4. When the same is required by the nature of the work performed by the employee.

Termination of Probationary Employment

Probationary employees are protected by the security of tenure provision of the Constitution
during and before the end of the probationary period.
However, a probationary employee may be dismissed at any time before the expiration of the
probationary period on any of these grounds:
1. Just cause;
2. Authorized cause; and
3. When he fails to qualify as a regular employee in accordance with reasonable standards
prescribed by the employer (Universidad De Sta. Isabel v. Sambajon, Jr., G.R. Nos. 196280
& 196286, April 2, 2014).

Limits to termination

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1. It must be exercised in accordance with the specific requirements of the contract

2. If a particular time is prescribed, the termination must be within such time and if formal
notice is required, then that form must be used
3. Employer’s dissatisfaction must be real and in good faith, not feigned so as to
circumvent the contract or the law
4. There must be no unlawful discrimination in the dismissal [Manila Hotel Corporation v.
NLRC, G.R. No. 53453 (1986)]

51) What is illegal recruitment? Discuss briefly the 2 types of illegal recruitment.
Illegal Recruitment is any act of canvassing, enlisting, transporting, contracting, hiring,
utilizing, or procuring workers and includes contract services, referring, advertising, or promising
for employment abroad, whether for profit or not, when undertaken by a non-licensee or non-
holder of authority contemplated in Art. 13(f) of the Labor Code (R.A. No. 8042 as, Sec. 6; LABOR
CODE, Art. 13(b)).
It also covers the acts enumerated under Art. 34 of the Labor Code and the acts committed
by any person whether or not a licensee or a holder of authority under Section 76, R.A. 8042, as
amended.

Kinds of Illegal Recruitment

1. Simple Illegal Recruitment – Illegal recruitment committed by any person who is neither
a licensee nor a holder of authority;
2. Economic Sabotage/Qualified Illegal Recruitment
a. Large-Scale Illegal Recruitment – Illegal recruitment by 1 person or with another
person against 3 or more persons individually or as a group;
b. Illegal Recruitment by a Syndicate –Illegal recruitment committed by a syndicate
or a group of 3 or more persons conspiring and confederating with one another in carrying
out the act circumscribed by the law commits the fourth type of illegal recruitment by the
law (People v. Sadiosa, G.R. No. 107084, May 15, 1998).

52) Discuss the People’s Broadcasting Service (Bombo Radyo) ruling on the jurisdiction
of the Labor Arbiter and the Regional Director with respect to money claims.
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
empowered to make a determination as to the existence of an employer-employee relationship in
the exercise of its visitorial and enforcement power, subject to judicial review, not review by the
NLRC.
There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730, there
is still a threshold amount set by Arts. 129 and 217 of the Labor Code when money claims are
involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the regional director of
the DOLE, under Art. 129, and if the amount involved exceeds PhP 5,000, the jurisdiction is with
the labor arbiter, under Art. 217. The view states that despite the wording of Art. 128(b), this would
only apply in the course of regular inspections undertaken by the DOLE, as differentiated from

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cases under Arts. 129 and 217, which originate from complaints. There are several cases,
however, where the Court has ruled that Art. 128(b) has been amended to expand the powers of
the DOLE Secretary and his duly authorized representatives by RA 7730. In these cases, the
Court resolved that the DOLE had the jurisdiction, despite the amount of the money claims
involved. Furthermore, in these cases, the inspection held by the DOLE regional director was
prompted specifically by a complaint. Therefore, the initiation of a case through a complaint does
not divest the DOLE Secretary or his duly authorized representative of jurisdiction under Art.
128(b).
To recapitulate, if a complaint is brought before the DOLE to give effect to the labor
standards provisions of the Labor Code or other labor legislation, and there is a finding by the
DOLE that there is an existing employer-employee relationship, the DOLE exercises jurisdiction
to the exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship,
the jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under
Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive
jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and
conditions of employment, if accompanied by a claim for reinstatement. If a complaint is filed with
the NLRC, and there is still an existing employer-employee relationship, the jurisdiction is properly
with the DOLE. The findings of the DOLE, however, may still be questioned through a petition for
certiorari under Rule 65 of the Rules of Court.

53) Distinguish Regular Holiday from Special Day/Holiday.

Regular Holiday
● Compensable even if unworked subject to certain conditions.
● Limited to the 12 enumerated by the Labor Code and special laws.
● Rate is 200% of the regular rate if worked.

Special Holiday
● No work, no pay
● Not exclusive since a law or ordinance may provide for other special holidays.
● Rate is 130% of the regular wage if worked.
54) Discuss briefly the non-diminution of benefits rule.
Non-Diminution Rule
General Rule: Nothing in the Labor Code shall be construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed at the time of promulgation of this Code
(LABOR CODE, Art. 100).
Generally, employees have a vested right over existing benefits voluntarily granted to
them by their employer (University of the East v. University of the East Employees’ Association,
G.R. No. 179593, September 14, 2011).
Thus, benefits being given to employees cannot be taken back or reduced unilaterally by
the employer because the benefit has become part of the employment contract, written or

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unwritten (Central Azucarera de Tarlac v. Central Azucarera de Tarlac Labor Union-NLU, G.R.
No. 188949, July 26, 2010).
Note: The proper legal bases for the invocation of the principle that any benefit or supplement
being enjoyed by employees cannot be reduced, discontinued or eliminated by the employer are
the following:
1. The Constitution (Sec. 18, Art II and Sec. 3, Art. XIII);
2. Art. 4 of the Labor Code;
3. Express terms of an employment agreement; and
4. Company practice which refers to the implied terms of an employment agreement which
the employer has freely, voluntarily and consistently extended to its employees and thus
cannot be withdrawn except by mutual consent of the contracting parties (Arco Metals v.
SAMARM-NAFLU, G.R. No. 170734, May 14, 2008)
Exceptions:
1. Correction of error;
2. Negotiated benefits;
3. Wage order compliance;
4. Benefits on reimbursement basis;
5. Reclassification of position;
6. Contingent benefits of conditional bonus; and
7. Productivity incentives (1 AZUCENA, supra at 330).

55) Give 3 distinctions between learners and apprentices.

As to nature of occupation:
● Learnership - Semi-skilled or other occupations
● Apprenticeship - Highly technical industry
As to theoretical instruction:
● Learnership - May or may not be supplemented by theoretical instruction
● Apprenticeship - Always supplemented by theoretical instruction
As to Period:
● Learnership - Not exceeding three (3) months
● Apprenticeship - Not less than four (4) months but not exceeding six (6) months
As to when employable:
● Learnership -
1. When no experienced workers are available;
2. When necessary to prevent curtailment of employment opportunities; and,
3. When employment does not create unfair competition

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● Apprenticeship - No conditions set by law

As to hiring after training period:
● Learnership - Required to hire
● Apprenticeship - Has the option to hire or not
As to qualifications:
● Learnership - Law does not provide for qualification of learners
● Apprenticeship -
1. At least fifteen (15) years of age;
2. Possess vocational aptitude and capacity for appropriate test;
3. Possess the ability to comprehend and follow written instructions; (Art. 59)
4. Physically fit for the occupation

56) What is an apprenticeable occupation? May apprentices be hired without paying them
any compensation? Explain briefly.
Apprenticeable occupation is an occupation officially endorsed by a tripartite body and
approved for apprenticeship by the Authority. (Sec.4m, RA 7796)
Yes. The Secretary of Labor and Employment may authorize the hiring of apprentices
without compensation whose training on the job is required by the school or training program
curriculum or as requisite for graduation or board examination. [Art. 72]
If ever there be compensation: The wages of apprentices and learners shall in no case be
less than seventy-five percent (75%) of the applicable minimum wage rates. [Sec. 7, Wage Order
No. NCR-19]

57) What is wage distortion? How is it resolved?

Wage Distortion/Rectification
A situation where an increase in prescribed wage rates results in the elimination or severe
contraction of intentional quantitative differences in wage or salary rates between and among
employee groups in an establishment as to effectively obliterate the distinctions embodied in such
wage structure based on skills, length of service, or other logical bases of differentiation. [Art. 124]

HOW TO RESOLVE WAGE DISTORTION [Art. 124]

Organized Establishment
a. Employer and the union shall negotiate to correct the distortions.
b. Disputes shall be resolved through the grievance procedure.
c. If still unresolved, voluntary arbitration.
Grievance Procedure (under the CBA) → if unresolved, VOLUNTARY arbitration

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Unorganized Establishment
a. ERs and EEs shall endeavor to correct such distortions.
b. Disputes shall be settled through the National Conciliation and Mediation Board.
c. If still unresolved after 10 calendar days of conciliation, it shall be referred to the
appropriate branch of the NLRC – compulsory arbitration
Both the employer and employee cannot use economic weapons.
d. Employer cannot declare a lock-out; Employee cannot declare a strike because the law
has provided for a procedure for settling
e. The salary or wage differential does not need to be maintained. [National Federation of
Labor v. NLRC, G.R. No. 103586 (1994)]
National Conciliation and Mediation Board → if unresolved, COMPULSORY arbitration by
the NLRC

58) Give 3 distinctions between facilities and supplements.

FACILITIES Supplements

What it is?

Articles or services/items of expense; Extra remuneration or special benefits/

EXCLUDES tools of the trade or articles or
articles or services/ tools of the trade
service primarily for the benefit of the
given to or received by laborers over andabove
ER [Sec. 5, Rule 7- A, Book III, IRR]
their ordinary earning or wages
[Sec. 5, Rule 7-A, Book III, IRR;]

Who benefits?

For the benefit of the employee and For the benefit or convenience of the
employer
his family; for their existence and subsistence

Part of the wage?

Yes No

Deductible from wage?

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Yes – part of the wage so it is deductible [Art. No – independent of the wage so not
97] deductible [Art. 97]

59) Give 3 distinctions between labor-only contracting and legitimate job contracting.
The Omnibus Rules Implementing the Labor Code distinguishes between permissible job
contracting (or independent contractorship) and labor-only contracting.

Job contracting is permissible under the Code if the following conditions are met:
(a) The contractor carries on an independent business and undertakes the contract work
on his own account under his own responsibility according to his own manner and method,
free from the control and direction of his employer or principal in all matters connected
with the performance of the work except as to the results thereof; and
(b) The contractor has substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the conduct of
his business.

In contrast, job contracting shall be deemed as labor-only contracting, an arrangement

prohibited by law, if a person who undertakes to supply workers to an employer:
(1) Does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises and other materials; and
(2) The workers recruited and placed by such person are performing activities which are
directly related to the principal business or operations of the employer in which workers
are habitually employed.

As a general rule, a contractor is presumed to be a labor-only contractor, unless such

contractor overcomes the burden of proving that it has the substantial capital, investment, tools
and the like (DIAMOND FARMS, INC. vs. SOUTHERN PHILIPPINES FEDERATION OF LABOR,
G.R. Nos. 173254-55 & 173263. January 13, 2016).

60) What is labor-only contracting? Why is it prohibited under the law?

It is clear that contracting arrangements for the performance of specific jobs or services
under the law and its implementing rules are allowed. However, contracting must be made to a
legitimate and independent job contractor since labor rules expressly prohibit labor-only
contracting.
Labor-only contracting exists when the contractor or subcontractor merely recruits, supplies
or places workers to perform a job, work or service for a principal and any of the following
elements are present:
1) The contractor or subcontractor does not have substantial capital or investment which
relates to the job, work or service to be performed and the employees recruited, supplied

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or placed by such contractor or subcontractor are performing activities which are directly
related to the main business of the principal; or
2) The contractor does not exercise the right to control the performance of the work of the
contractual employee. (Aliviado v. Procter & Gamble Phils., Inc., 628 Phil. 469, 483 (2010)

61) Distinguish regular from casual employment.

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:
a. 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
b. The work or service to be performed is seasonal in nature and the employment is for
the duration of the season. [Art. 295]
An employee who is allowed to work after a probationary period shall be considered a regular
employee. [Art. 296]

An employment shall be deemed to be casual where:

a. An employee is engaged to perform a job, work or service which is merely incidental
to the business of the employer, and such job, work or service is for a definite period made
known to the employee at the time of engagement. [Sec. 5(b), Rule I, Book VI, IRR]
b. 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
c. The work or service to be performed is seasonal in nature and the employment is
for the duration of the season. [Art. 295]
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. 295]

62) Who are considered “nightworkers”? What are their benefits and privileges?
Night worker
Any employed person whose work requires performance of a substantial number of
hours of night work which exceed a specified limit. This limit shall be fixed by the
Secretary of Labor after consulting the workers’ representatives/labor organizations and
employers. [Art. 154, as amended by RA 10151]

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Any employed person whose work covers the period from 10:00 pm to 6:00 am the
following morning, provided that the worker performs no less than 7 consecutive hours of work.
[Sec. 2, Rule XV, Book III, Rule XV, Sec. 2, IRR, through D.O. No. 119-12]

BENEFITS AND PRIVELEGES OF NIGHT WORKERS

• Article 157 of the Labor Code of the Philippines, as amended by R.A. No. 10151 provides
that:
“Night workers who are certified as unfit for night work, due to health reasons, shall
be transferred, whenever practicable, to a similar job for which they are fit to work.

“If such transfer to a similar job is not practicable, these workers shall be granted
the same benefits as other workers who are unable to work, or to secure
employment during such period.

“A night worker certified as temporarily unfit for night work shall be given the same
protection against dismissal or notice of dismissal as other workers who are
prevented from working for reasons of health.”

• Before introducing work schedules requiring the services of night workers, the employer
shall consult the workers’ representatives/labor organizations concerned on the details of
such schedules and the forms of organization of night work that are best adapted to the
establishment and its personnel, as well as on the occupational health measures and
social services which are required. In establishments employing night workers,
consultation shall take place regularly (Article 154, par.2 of the Labor Code, as amended
by R.A. No. 10151).

• Measures shall be taken to ensure that an alternative to night work is available to women
workers, pregnant and nursing employees, who would otherwise be called upon to
perform such work xxx (Article 158 of the Labor Code, as amended by R.A. No. 10151).

• Mandatory facilities as provided for in Section 4 of Department Order 119-12 (Rules

Implementing Republic Act No. 10151), should be made available for workers performing
night work

• As provided for in Article 155 of the Labor Code, as amended by R.A. No. 10151:
“At their request, workers shall have the right to undergo a health assessment
without charge and to receive advice on how to reduce or avoid health problems
associated with their work:

“(a) Before taking up an assignment as a night worker;

“(b) At regular intervals during such an assignment; and

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“(c) If they experience health problems during such, an assignment which are not
caused by factors other than the performance of night work”.

63) Explain briefly the solidary liability of a recruitment agency and a foreign-based
employer.
“xxx The liability of the principal/employer and the recruitment/placement agency for any
and all claims under this section shall be joint and several. This provision shall be incorporated
in the contract for overseas employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placement agency, as provided by law, shall be
answerable for all monetary claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and solidarily liable with the corporation
or partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the employment
contract and shall not be affected by any substitution, amendment or modification made locally or
in a foreign country of the said contract.” [Sec. 10 of RA 8042, as amended]

Purpose of solidary liability

This ensures that overseas workers have recourse in law despite the circumstances of
their employment. By providing that the liability of the foreign employer may be "enforced to the
full extent" against the local agent, the overseas worker is assured of immediate and sufficient
payment of what is due them. Corollarily, the provision on joint and several liability in R.A. No.
8042 shifts the burden of going after the foreign employer from the overseas worker to the local
employment agency. However, the local agency that is held to answer for the overseas worker's
money claims is not left without remedy. The law does not preclude it from going after the foreign
employer for reimbursement of whatever payment it has made to the employee to answer for the
money claims against the foreign employer (Powerhouse StaffBuilders International Inc. vs.
Romelia Rey, November 7, 2016)..

64) What is the Theory of Imputed Knowledge? What is its relevance to our labor laws?
• This is a doctrine in agency stating that the principal is chargeable with and bound by the
knowledge of or notice to his agent received while the agent was acting as such.
• Notice to the agent is notice to the principal.

Relevance to Labor Laws

A local employment agency is considered the agent of the foreign employer, the principal.
Knowledge of the former of existing labor and social legislation in the Philippines in binding on
the latter. Notice to the former of any violation thereof is notice to the latter.
But, notice to the principal is NOT notice to the agent. Notice to the foreign employer,
therefore, is not notice to the local employment agency.

Applicable Case: Sunace International Management Service vs. NLRC, January 25, 2006

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The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the
principal, employer Xiong, not the other way around. The knowledge of the principal-foreign
employer cannot, therefore, be imputed to its agent Sunace.

There being no substantial proof that Sunace knew of and consented to be bound under
the 2-year employment contract extension, it cannot be said to be privy thereto. As such, it and
its "owner" cannot be held solidarily liable for any of Divina's claims arising from the 2-year
employment extension. As the New Civil Code provides,
Contracts take effect only between the parties, their assigns, and heirs, except in case
where the rights and obligations arising from the contract are not transmissible by their
nature, or by stipulation or by provision of law.

Furthermore, as Sunace correctly points out, there was an implied revocation of its agency
relationship with its foreign principal when, after the termination of the original employment
contract, the foreign principal directly negotiated with Divina and entered into a new and separate
employment contract in Taiwan. Article 1924 of the New Civil Code reading
The agency is revoked if the principal directly manages the business entrusted to the
agent, dealing directly with third persons

65) Who is an Overseas Filipino Worker? If the employer breaches his contract of
employment, what rights and remedies are available to him/her?
Overseas Filipino Worker/Migrant Worker –
A person who is to be engaged, is engaged or has been engaged in a remunerated activity:
1. In a state of which he or she is not a citizen; or
2. On board a vessel navigating the foreign seas other than a government ship used for
military or non-commercial purposes or
3. On an installation located offshore or on the high seas. [Sec. 2 (a), RA 8042, as amended]

REMEDIES FOR BREACH OF CONTRACT

● “xxx In case of termination of overseas employment without just, valid or authorized cause
as defined by law or contract, the workers shall be entitled to the full reimbursement of his
placement fee with interest of twelve (12%) per annum, plus his salaries for the unexpired
portion of his employment contract or for three (3) months for every year of the unexpired
term, whichever is less. xxx xxx xxx” (Section 10, R.A. 8042, as amended)
● Section 15 of Republic Act No. 8042 states that "repatriation of the worker and the
transport of his [or her] personal belongings shall be the primary responsibility of the
agency which recruited or deployed the worker overseas". The exception is when
"termination of employment is due solely to the fault of the worker.”

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● The Labor Code also entitles the employee to 10% of the amount of withheld wages as
attorney's fees when the withholding is unlawful (Sameer Overseas Placement Agency,
Inc. v. Cabiles, G.R. No. 170139, [August 5, 2014], 740 PHIL 403-459).

66) What are recruitment activities? Enumerate three (3) prohibited recruitment activities.
SECTION 76. Acts Constituting Illegal Recruitment. XXX It shall likewise include the following
prohibited acts committed by any person whether or not a licensee or a holder of authority:
a. To charge or accept directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary or to make a worker pay the
recruiter or its agents or acknowledge any amount greater than that actually loaned or
advanced to him;
b. To furnish or publish any false notice or information or document in relation to
recruitment or employment;
c. To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code;
d. To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of documenting hired workers with the POEA, which
include the act of reprocessing workers through a job order that pertains to non-existent
work, work different from the actual overseas work, or work with a different employer
whether registered or not with the POEA;
e. To induce or attempt to induce a worker already employed to quit his/her employment
in order to offer him another unless the transfer is designed to liberate a worker from
oppressive terms and conditions of employment;
f. To influence or attempt to influence any person or entity not to employ any worker who
has not applied for employment through his/her agency or who has formed, joined or
supported, or has contacted or is supported by any union or workers’ organization;
g. To engage in the recruitment or placement of workers in jobs harmful to public health
or morality or to the dignity of the Republic of the Philippines as may be prohibited by law
or duly constituted authority;
h. To obstruct or attempt to obstruct inspection by the Secretary or by his/her duly
authorized representative;
i. To fail to submit reports on the status of employment, placement vacancies, remittance
of foreign exchange earnings, separation from jobs, departures and such other matters or
information as may be required by the Secretary under penalty of law;
j. To substitute or alter to the prejudice of the worker, employment contract approved and
verified by the DOLE from the time of actual signing thereof by the parties up to and
including the period of the expiration of the same without the approval of the DOLE;
k. For an officer or agent of a recruitment or placement agency to become an officer or
member of the Board of any corporation engaged in travel agency or insurance agency or
to be engaged directly or indirectly in the management of a travel agency or insurance
agency;

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l. To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations, or for any other reasons, other than those authorized
under the Labor Code and its implementing rules and regulations;
m. To fail to actually deploy a contracted worker without valid reason as determined by
the DOLE;
n. To fail to reimburse expenses incurred by the worker in connection with his/her
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault;
o. To allow a non-Filipino citizen to head or manage a recruitment agency;
p. To arrange, facilitate or grant a loan to an Overseas Filipino Worker with interest
exceeding eight percent (8%) per annum, which will be used for payment of legal and
allowable placement fees and make the migrant worker issue, either personally or through
a guarantor or accommodation party, postdated checks in relation to the said loan;
q. To impose a compulsory and exclusive arrangement whereby an Overseas Filipino
Worker is required to avail of a loan only from specifically designated institutions, entities
or persons;
r. To refuse to condone or renegotiate a loan incurred by an Overseas Filipino Worker
after the latter’s employment contract has been prematurely terminated through no fault
of his/her own;
s. To impose a compulsory and exclusive arrangement whereby an Overseas Filipino
Worker is required to undergo health examinations only from specifically designated
medical clinics, institutions, entities or persons, except in the case of a worker whose
medical examination cost is shouldered by the principal;
t. To impose a compulsory and exclusive arrangement whereby an Overseas Filipino
Worker is required to undergo training, seminar, instruction or schooling of any kind only
from specifically designated institutions, entities or persons, except for recommendatory
trainings mandated by principals where the latter shoulder the cost of such trainings;
u. For a suspended recruitment agency to engage in any kind of recruitment activity
including the processing of pending workers’ applications; and
v. For a recruitment agency or a foreign principal/employer to pass on to the Overseas
Filipino Worker or deduct from his/her salary the payment of the cost of insurance fees,
premium or other insurance related charges, as provided under the compulsory worker’s
insurance coverage” (R.A. 8042).
67) What is a Wage Order? Give three (3) factors/criteria in prescribing the minimum wage
Wage Order (WO) – an order issued by the Regional Tripartite Wages and Productivity Boards
(“Regional Boards”) that establishes the minimum wage rates to be paid by ERs in the region,
which shall in no case be lower than the applicable statutory minimum wage rates. [NWPC Rules
of Procedure on Minimum Wage Fixing].

Standards/Criteria in Wage Fixing

a. The demand for living wages;
b. Wage adjustment vis-a-vis the consumer price index;

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c. The cost of living and changes or increases therein;

d. The needs of workers and their families;
e. The need to induce industries to invest in the countryside;
f. Improvements in standards of living;
g. The prevailing wage levels;
h. Fair return of the capital invested and capacity to pay of employers;
i. Effects on employment generation and family income; and
j. The equitable distribution of income and wealth along the imperatives of economic and social
development. [Art. 124, as amended by RA 6727]

68) What is repatriation? When is repatriation mandatory?

Repatriation is the return of someone to their own country.
Underage migrant workers; repatriation is mandatory
Upon discovery or upon being informed of the presence of migrant workers whose actual
ages fall below the minimum age requirement for overseas deployment, the responsible officers
in the Foreign Service shall without delay repatriate said workers and advise the DFA through the
fastest means of communication available of such discovery and other relevant information. [Sec.
6, Rule XIII, IRR of RA 8042, as amended by RA 10022]

69) What is overtime pay? May an employer require his employees to render overtime
work? Explain.
Overtime compensation is additional pay for service or work rendered or performed in excess of
eight hours a day by employees or laborers covered by the Eight-hour Labor Law. [National
Shipyard and Steel Corp. v. CIR, G.R. No. L-17068 (1961)]

Emergency overtime
Any employee may be required by the employer to perform overtime work in any of the following
cases:
1. When the country is at war or when any other national or local emergency has been
declared by the National Assembly or the Chief Executive;
2. When it is necessary to prevent loss of life or property or in case of imminent danger to
public safety due to an actual or impending emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;
3. When there is urgent work to be performed on machines, installations, or equipment, in
order to avoid serious loss or damage to the employer or some other cause of similar
nature;
4. When the work is necessary to prevent loss or damage to perishable goods; and

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5. Where the completion or continuation of the work started before the eighth hour is
necessary to prevent serious obstruction or prejudice to the business or operations of the
employer. [Art. 89]
6. Where overtime work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon. [added by Rule 1,
Sec. 10]

70) What is Rest Day? May an employee choose his rest day? Explain.
Rest Periods
It shall be the duty of every employer, whether operating for profit or not, to provide each
of his employees a rest period of not less than twenty-four (24) consecutive hours after every six
(6) consecutive normal work days. [Art. 91 (a)]

Preference of the employee

The employer shall determine and schedule the weekly rest day of his employees subject
to collective bargaining agreement and to such rules and regulations as the Secretary of Labor
and Employment may provide. However, the employer shall respect the preference of employees
as to their weekly rest day when such preference is based on religious grounds. [Art. 94 (b)]
The employee shall make known his preference to the employer in writing at least seven
days before the desired effectivity of the initial rest day so preferred.
When the choice of the employee as to his rest day based on religious grounds will
inevitably result in serious prejudice or obstruction to the operations and the employer cannot
normally be expected to resort to other measures, the employer may so schedule the weekly rest
day of his choice for at least two days in a month. [Rule III, Sec. 4]

71) What are “compensable hours worked”? Is “waiting time” compensable? Explain.
Rest period – short duration or “coffee break”
1. Rest periods of short duration during working hours shall be counted as hours worked.
[par. 2, Art. 84, par. 2]
2. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be
considered as compensable working time. [par. 2, Sec. 7, Rule I, Book III, IRR]
On call
Compensable work time, if employee is:
1. Required to remain on call in the employer’s premises or so close thereto
2. That he cannot use the time effectively and gainfully for his own purpose shall be
considered as working while on call.
Note: An employee who is not required to leave word at his home or with company officials

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Inactive due to work interruptions

The time during which an employee is inactive by reason of interruptions in his work beyond
his control shall be considered working time either:
1. If the imminence of the resumption of work requires the employee's presence at the
place of work OR
2. If the interval is too brief to be utilized effectively and gainfully in the employee's
own interest. [Sec. 4 (d), Rule I, Book III, IRR]

72) Explain the visitorial and enforcement power of the DOLE Secretary or his duly
authorized representative.
Art. 289. Visitorial Power. –The Secretary of Labor and Employment or his duly authorized
representative is hereby empowered:
1. To inquire into the financial activities of legitimate labor organizations
a. Upon the filing of a complaint under oath and duly supported by the written
consent of at least twenty percent (20%) of the total membership of the labor organization
concerned
2. To examine their books of accounts and other records to determine compliance or non-
compliance with the law
3. To prosecute any violations of the law and the union constitution and by-laws
Provided, That such inquiry or examination shall not be conducted during the sixty
(60)-day freedom period nor within the thirty (30) days immediately preceding the date of
election of union officials.

Doctrines:
• The visitorial and enforcement powers of the DOLE Regional Director to order and enforce
compliance with labor standard laws can be exercised even where the individual claim
exceeds P5,000.00. [Cirineo Bowling Plaza, Inc. v. Sensing, G.R. No. 146572 (2005)].

• If a complaint is brought before the DOLE to give effect to the labor standards provisions
of the Labor Code or other labor legislation, and there is a finding by the DOLE that there
is an existing employer-employee relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC. The findings of the DOLE, however, may still be questioned
through a petition for certiorari under Rule 65 of the Rules of Court.

• The DOLE's labor inspection program can now proceed without being sidetracked by
unscrupulous employers who could render nugatory the "expanded visitorial and
enforcement power of the DOLE granted by RA7730 . . . by the simple expedient of
disputing the employer-employee relationship [and] force the referral of the matter to the
NLRC.” [People's Broadcasting Service v. Secretary of the Department of Labor and
Employment, G.R. No. 179652 (2012 Resolution)]

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• The factual findings of the SOLE or the Regional Directors made in the exercise of their
visitorial and enforcement powers are binding on Labor Arbiters and the NLRC under the
doctrine of res judicata [Norkis Trading v. Buenavista, G.R. No. 182018, (2012)]

73) What is a “Night Shift Differential”? How is it different from “Service Incentive Leave”?

NIGHT SHIFT DIFFERENTIAL (NSD)

- refers to the additional compensation of ten percent (10%) of an employee’s regular wage
for each hour of work performed between 10 p.m. and 6 a.m.

Coverage of NSD:
This benefit applies to all employees except:
1. Government employees, whether employed by the National Government or any of its political
subdivisions, including those employed in government owned and/or controlled corporations with
original charters or created under special laws;
2. Those of retail and service establishments regularly employing not more than five (5) workers
3. Kasambahay and persons in the personal service of another;
4. Managerial employees, if they meet all of the following conditions:
1. Their primary duty is to manage the establishment in which they are employed or
of a department or subdivision thereof;
2. They customarily and regularly direct the work of two or more employees therein;
and
3. They have the authority to hire or fire other employees of lower rank; or their
suggestions and recommendations as to hiring, firing, and promotion, or any other
change of status of other employees are given particular weight.
5. Officers or members of a managerial staff, if they perform the following duties and
responsibilities:
1. Primarily perform work directly related to management policies of their employer;
2. Customarily and regularly exercise discretion and independent judgment;
(a) Regularly and directly assist a proprietor or managerial employee in the
management of the establishment or subdivision thereof in which he or she is
employed; or
(b) execute, under general supervision, work along specialized or technical lines
requiring special training, experience, or knowledge; or
(c) execute, under general supervision, special assignments and tasks; and
3. Do not devote more than twenty percent (20%) of their hours worked in a workweek to
activities which are not directly and closely related to the performance of the work
described in paragraphs 5 .1, 5 .2, and 5 .3 above;

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6. Field personnel and those whose time and performance are unsupervised by the employer.

Computation of Night Shift Differential

The COLA shall not be included in the computation of night shift pay. (Handbook on Workers
Statutory Monetary Benefits, 2020)

NSD in Overtime Work

If work done between 10 PM and 6 AM is overtime work, then the 10% night shift differential
should be based on the overtime rate.
Reason: NSD pay is given as a premium for working at a time when the employee is supposed
to sleep and rest in accordance with the law of nature.

NSD not Waivable: Additional compensation for nighttime work is founded on public policy
(Mercury Drug v. Dayao, G.R. No. L-30452, September 30, 1982). Thus, NSD is not waivable
except for higher and bigger benefits.

SERVICE INCENTIVE LEAVE

- Every employee who has rendered at least one (1) year of service is entitled to Service
Incentive Leave (SIL) of five (5) days with pay.

Coverage of SIL:
This benefit applies to all employees except:
1. Government employees, whether employed by the National Government or any of its political
subdivisions, including those employed in government owned and/or controlled corporations with
original charters or created under special laws;
2. Persons in the personal service of another;
3. Managerial employees, if they meet all of the following conditions:
1) Their primary duty is to manage the establishment in which they are employed or of a
department or subdivision thereof;
2) They customarily and regularly direct the work of two or more employees therein; and
3) They have the authority to hire or fire other employees of lower rank; or their suggestions
and recommendations as to hiring, firing, and promotion, or any other change of status of
other employees are given particular weight.
4. Officers or members of a managerial staff, if they perform the following duties and
responsibilities:
1) Primarily perform work directly related to management policies of their employer;
2) Customarily and regularly exercise discretion and independent judgment;

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3) (a) Regularly and directly assist a proprietor or managerial employee in the management
of the establishment or subdivision thereof in which he or she is employed; or (b) execute,
under general supervision, work along specialized or technical lines requiring special
training, experience, or knowledge; or (c) execute, under general supervision, special
assignments and tasks; and
4) Do not devote more than twenty percent (20%) of their hours worked in a workweek to
activities which are not directly and closely related to the performance of the work
described in paragraphs 4 .1, 4 .2, and 4 .3 above;
5. Field personnel and those whose time and performance is unsupervised by the employer;
6. Those already enjoying this benefit;
7. Those enjoying vacation leave with pay of at least five (5) days; and
8. Those employed in establishments regularly employing less than ten (10) employees

Meaning of “one year of service”

The phrase “one year of service” of the employee means service within twelve (12)
months, whether continuous or broken, reckoned from the date the employee started working.
The period includes authorized absences, unworked weekly rest days, and paid regular holidays.
If through individual or collective agreement, company practice or policy, the period of the working
days is less than twelve (12) months, said period shall be considered as one year for the purpose
of determining the entitlement to the service incentive leave.

Usage/Conversion to CashCash
The service incentive leave may be used for sick and vacation leave purposes. The
unused service incentive leave is commutable to its money equivalent at the end of the year. In
computing, the basis shall be the salary rate at the date of conversion.
The use and conversion of this benefit may be on a pro rata basis (Handbook on Workers
Statutory Monetary Benefits).

74) What is direct-hiring? In relation to direct-hiring, state the general policy of the law as
well as the exceptions thereto.
Direct Hiring - workers directly hired by the employers for overseas employment.

GENERAL RULE:
SECTION 123. Ban on Direct Hires. — No employer shall directly hire an Overseas Filipino
Worker for overseas employment.

EXEMPTIONS:
SECTION 124.Exemption from the Ban on Direct Hiring. — The following are exempted from the
ban on direct hiring:

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a. Members of the diplomatic corps;

b. International organizations;
c. Heads of state and government officials with the rank of at least deputy minister; or
d. Other employers as may be allowed by the Secretary of Labor and Employment, such as:
1. Those provided in (a), (b) and (c) who bear a lesser rank, if endorsed by the POLO, or
Head of Mission in the absence of the POLO;
2. Professionals and skilled workers with duly executed/authenticated contracts containing
terms and conditions over and above the standards set by the POEA. The number of
professional and skilled Overseas Filipino Workers hired for the first time by the employer
shall not exceed five (5). For the purpose of determining the number, workers hired as a
group shall be counted as one; or
3. Workers hired by a relative/family member who is a permanent resident of the host
country.

75) Explain the four-fold test in determining the existence of ER-EE relationship.
Four-Fold Test
Elements of an EER:
1. Selection and engagement of the employee;
2. Payment of wages;
3. Power of dismissal; and
4. Employer’s power to control the employee’s conduct with respect to the means and methods
by which the work is to be accomplished [Brotherhood Labor Unity Movement of the PH v.
Zamora, G.R. No. 48645, (1987)]

Payment of wages
The following are not conclusive of the absence of an EER:
• That a worker was not reported as an employee to SSS;
• That a worker’s name does not appear in the payrolls and pay envelope records
submitted by the employer.
Note: For a payroll to be utilized to disprove the EER, it must contain a true and complete
list of employees. [Southeast East International Rattan v Coming, G.R. No. 186621 (2014)]

Power to control
• This is the most important element when determining the existence of an EER. It pertains
not only to results, but also to the means and methods to attain those results. [Lirio v.
Genovia, G.R. No. 169757 (2011)].

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• The “existence” of the right to control is sufficient for the element to be present. There
need not be “actual exercise” of the right. [Zanotte Shoes v. NLRC, G.R. No. 100665,
(1995)]

• Not every form of control will create an EER. No EER exists when control is in the form of
rules that merely serve as guidelines towards the achievement of results without dictating
the means or methods to attain them. EER exists when control is in the form of rules that
fix the methodology to attain a specified result and bind the worker to use such. [Insular
Life Assurance Co, LTD v. NLRC, G.R. No. 84484 (1989)].

NOTE: There has been no uniform test to determine the existence of an employer-employee
relationship. The “four-fold” test may be regarded as the traditional or conventional test of the
employment question. But it is not the sole test. There is the need to consider the existing
conditions between the parties, in addition to the right-of-control element (Sevilla v. CA, G.R. No,
L-41182-3, April 15, 1988).

76) In determining the existence of ER-EE relationship, what is the so-called “two-tiered
approach”?
Economic Dependence or Economic Reality Test - Refers to whether the worker is dependent
on the alleged employer for his continued employment in that line of business (Francisco v. NLRC,
G.R. No. 170087, August 31, 2006).

Two-tiered Approach:
1. The putative employer’s power to control employee with respect to the means and
methods by which the work is to be accomplished; and
2. The underlying economic realities of the activity or relationship (Francisco v. NLRC, G.R.
No. 170087, August 31, 2006).

Note: The determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as:
1. The extent to which the services performed are an integral part of the employer’s business;
2. The extent of the worker’s investment in equipment and facilities;
3. The nature and degree of control exercised by the employer;
4. The worker’s opportunity for profit and loss;
5. The amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise;
6. The permanency and duration of the relationship between the worker and the employer;
and
7. The degree of dependency of the worker upon the employer for his continued employment
in that line of business (Francisco v. NLRC, G.R. No. 170087, August 31, 2006).

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77) What is Bona Fide Occupational Qualification? Explain its relevance to labor laws.
BFOQ in Philippine Jurisdiction
The concept of a bona fide occupational qualification is not foreign in our jurisdiction. We
employ the standard of reasonableness of the company policy which is parallel to the bona fide
occupational qualification requirement.

Employment in particular jobs may not be limited to persons of a particular sex, religion,
or national origin unless the employer can show that sex, religion, or national origin is an actual
qualification for performing the job. The qualification is called a bona fide occupational
qualification (BFOQ).

In the United States, there are a few federal and many state job discrimination laws that
contain an exception allowing an employer to engage in an otherwise unlawful form of prohibited
discrimination when the action is based on a BFOQ necessary to the normal operation of a
business or enterprise. BFOQ is valid "provided it reflects an inherent quality reasonably
necessary for satisfactory job performance."

BFOQ is valid "provided it reflects an inherent quality reasonably necessary for

satisfactory job performance."

In Duncan Association of Detailman-PTGWTO v. Glaxo Wellcome Philippines, Inc. The

Court did not hesitate to pass upon the validity of a company policy which prohibits its employees
from marrying employees of a rival company. It was held that the company policy is reasonable
considering that its purpose is the protection of the interests of the company against possible
competitor infiltration on its trade secrets and procedures.

Verily, there is no merit to the argument that BFOQ cannot be applied if it has no
supporting statute. The Labor Arbiter, NLRC, and CA are one in holding that the weight standards
of PAL are reasonable. A common carrier, from the nature of its business and for reasons of
public policy, is bound to observe extraordinary diligence for the safety of the passengers it
transports. It is bound to carry its passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances [Yrasuegui v. PAL, G.R. No. 168081 (2008)].

Note: The Constitution, the Labor Code, and RA No. 7277 or the Magna Carta for Disabled
Persons contain provisions similar to BFOQ.

------------------------------------------------- NOTHING FOLLOWS -----------------------------------------------

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