Lori (pp. 79 – 129)

CHAPTER IIPOWERS & DUTIES (CONT’D)

(PART 3: PROCEDURE)

ART. 221. TECHNICAL RULES NOT BINDING & PRIOR RESORT TO AMICABLE SETTLEMENT

In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. In any proceeding before the Commission or any Labor Arbiter, the parties may be represented by legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to exercise complete control of the proceedings at all stages.

Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert all efforts towards the amicable settlement of a labor dispute within his jurisdiction on or before the first hearing. The same rule shall apply to the Commission in the exercise of its original jurisdiction. (As amended by Section 11, Republic Act No. 6715, March 21, 1989).

1. PROCEEDINGS BEFORE LABOR ARBITER OR THE COMMISSION; TECHNICAL RULES NOT APPLICABLE

- Administrative & quasi-judicial bodies, like the NLRC, are not bound by the technical rules or procedure in the adjudication of cases

- Simplification of procedure w/o sacrificing the fundamental requisites of due process in mandated to insure speedy administration of justice

- Art 221 allows the NLRC or a labor arbiter to decide a case on the basis of position papers & other documents submitted w/o resorting to technical rules of evidence as observed in the regular courts of justice

Modicum of Admissibility; Substantial Evidence

- While the rules of evidence prevailing in the courts of law or equity are not controlling in proceedings before the NLRC, the evidence presented before it must at least have a modicum of admissibility for it to be given some probative value

- Not only must there be some evidence to support a finding or conclusion, but evidence must be substantial

Substantial evidence- such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion

Cardinal Rights in Quasi-Judicial Proceedings

- While the duty to deliberate does not impose the obligation to decide rightly, it does imply a necessity of having something to support the decision

- A decision w/ absolutely nothing to support it is a nullity when directly attacked

CASE: Ang Tibay v. CIR

Facts:- This concerns the laying off of employees of Ang

Tibay belonging to the NLU, Inc.

Issue:- Whether there was due process observed in the

CIR proceedings

Held:- Although the CIR is not constrained by technical

rules of procedure. This does not mean that it can entirely ignore the essential requirements of due process in trials & investigations of an administrative character

Cardinal rts w/c must be respected in administrative proceedings: (HC SS RIK)

1) rt to a hearing;2) tribunal must consider the evidence presented;3) decision must be supported by something;4) supporting evidence must be substantial;5) decision must be rendered on the evidence

presented or at least contained in the record & disclosed to the parties affected;

6) the administrative body or any of its judges must act on his own independent consideration of the law & facts, & not simply accept the views of the subordinate in arriving at a decision; &

7) decide in such manner that parties can know the various issues involved & the reason for the decision

Verification

- A pleading is verified by an affidavit that the affiant has read the pleading & that the allegations therein are true & correct of his knowledge & belief

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Verification- intended to assure that the allegations in the

pleading have been prepared in good faith or are true & correct, not mere speculations

- Generally, lack of verification is merely a formal defect that is neither jurisdictional nor fatal

Party respondent

- In a complaint for underpayment of wages & other money claims filed by employees of a single proprietorship business, the respondent should be the business owner. This is not necessarily the person in whose name the business is registered

CASE: Mayon Hotel & Restaurant v. Adana

Facts:- Josefa Po, manager of Mayon Hotel, was held

liable for the employees’ money claims eventhough the single proprietor business was registered in the name of her daughter Pacita Po

- Petitioners insist that it was error for the Labor Arbiter & the CA to have ruled that Josefa is the owner since her participation was limited to merely being the overseer

Ruling:- The claim that Josefa Po is merely the overseer is

not borne out by the evidence- Only Josefa appeared in the proceedings w/ the

Labor Arbiter. It was only on appeal w/ the NLRC that Pacita signed the pleadings

- Josefa failed to submit the document of sale. It was she who exercises all acts & manifestations of ownership

- Notwithstanding the certificate of registration, doubts were cast as to the true nature of Josefa’s involvement in the enterprise, & the Labor Arbiter had the authority to resolve this issue

- Even when the case was on appeal w/ the NLRC, nothing was submitted to negate the Labor Arbiter’s finding that Pacita is not the real owner of the hotel

- There is substantial evidence to rule that Josefa is the owner of the hotel

Prohibited Pleadings & Motions

The following pleadings and motions shall not be allowed and acted upon nor elevated to the Commission: (Sec. 4, Rule III, NLRC 2005 Rules of Procedure)

a) Motion to dismiss the complaint except on the ground of lack of jurisdiction over the subject matter, improper venue, res judicata, prescription and forum shopping;

b) Motion for a bill of particulars;

c) Motion for new trial;d) Petition for relief from judgment when filed with

the Labor Arbiter;e) Petition for certiorari, mandamus or prohibition;f) Motion to declare respondent in default;g) Motion for reconsideration or appeal from any

interlocutory order of the Labor Arbiter.

2. MANDATORY CONCILIATION & MEDIATION CONFERENCE; COMPROMISE ENCOURAGED

Nature of Proceedings (Sec. 2, Rule V)

- The proceedings before the Labor Arbiter shall be non-Iitigious in nature.

- Subject to the requirements of due process, the technicalities of law and procedure and the rules obtaining in the courts of law shall not strictly apply thereto.

- The Labor Arbiter may avail himself of all reasonable means to ascertain the facts of the controversy speedily, including ocular inspection and examination of well-informed persons.

Mandatory Conciliation & Mediation Conference (Sec. 3)

a) The mandatory conciliation and mediation conference shall be called for the purpose of (1) amicably settling the case upon a fair compromise; (2) determining the real parties in interest; (3) determining the necessity of amending the complaint and including all causes of action; (4) defining and simplifying the issues in the case; (5) entering into admissions or stipulations of facts; and (6) threshing out all other preliminary matters.The Labor Arbiter shall preside and take full control of the proceedings.

b) Conciliation and mediation efforts shall be exerted by the Labor Arbiters all throughout the proceedings.Should the parties arrive at any agreement as to the whole or any part of the dispute, the same shall be reduced to writing and signed by the parties and their respective counsel or authorized representative, if any, before the Labor Arbiter.

c) In any case, the compromise agreement shall be approved by the Labor Arbiter, if after explaining to the parties, particularly to the complainants, the terms, conditions and consequences thereof, he is satisfied that they understand the agreement, that the same was entered into freely and voluntarily by them, and that it is not contrary to law, morals, and public policy.

d) A compromise agreement duly entered into in accordance with this Section shall be final and binding upon the parties and shall have the force and effect of a judgment rendered by the Labor Arbiter.

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e) The mandatory conciliation and mediation conference shall, except for justifiable grounds, be terminated within thirty (30) calendar days from the date of the first conference.

f) No motion for postponement shall be entertained except on meritorious grounds.

Effect of failure of conciliation & mediation (Sec. 4)

- Should the parties fail to agree upon an amicable settlement, either in whole or in part, during the mandatory conciliation and mediation conference, the Labor Arbiter shall terminate the conciliation and mediation stage and proceed to pursue the other purposes of the said conference as enumerated in the immediately preceding Section.

- Thereafter, the Labor Arbiter shall direct the parties to simultaneously file their respective position papers on the issues agreed upon by the parties and as reflected in the minutes of the proceedings.

Non-appearance of parties (Sec. 5)

- The non-appearance of the complainant or petitioner during the two (2) settings for mandatory conciliation and mediation conference scheduled in the summons, despite due notice thereof, shall be a ground for the dismissal of the case without prejudice.

- In case of non-appearance by the respondent during the first scheduled conference, the second conference shall proceed as scheduled in the summons.

- If the respondent still fails to appear at the second conference despite being duly served with summons, the Labor Arbiter shall immediately terminate the mandatory conciliation and mediation conference.

- The Labor Arbiter shall thereafter allow the complainant or petitioner to file his verified position paper and submit evidence in support of his causes of action, and thereupon render his decision on the basis of the evidence on record.

It is incumbent upon the Labor Arbiter not only to persuade the parties to settle amicably, but equally to ensure that the compromise agreement entered into by them is a fair one & that the same was agreed upon freely, voluntarily, & w/ a full understanding of the terms & conditions as well as the consequencesArt. 222 LC, allows non-lawyers to appear before the labor tribunal in representation of their own selves

Binding Effect of Compromise Agreement

- A judgment on a compromise agreement puts an

end to a litigation & is immediately executory- However, a special authority is required before

an atty can compromise the litigation of his clients

- Attorneys and other representatives of parties shall have authority to bind their clients in all matters of procedure; but they cannot, without a special power of attorney or express consent, enter into a compromise agreement with the opposing party in full or partial discharge of a client's claim. (Sec. 9, Rule III, NLRC RRP)

- The Labor Arbiter’s approval of a compromise agreement is required over a case pending before the Labor Arbiter

CASE: General Rubber & Footwear Corp. v. Drilon

Facts:- Some members of the Union declared a strike

against Gen. Rubber, demanding the differential pay arising from a wage order increasing the minimum wage rate. Gen. Rubber & Sto. Domingo, purporting to represent the striking workers, entered into a return-to-work agreement, where the Union agreed not to demand the differential pay. Majority members of the Union ratified the document.

Issue:- Is the waiver agreement binding upon all the

members of the union, even those who did not sign it?

Ruling:- No. Minority members cannot be bound by the

return-to-work agreement- The waiver of the money claims is a personal rt.

For a waiver thereof to be legally effective, the individual consent or ratification of the employees involved must be shown

Quitclaim & Waivers

CASE: Olacao v. NLRC

Facts:- The employees filed a complaint for unpaid

wages against their employer. Based on “Receipts & Release” documents, the Labor Arbiter dismissed the complaint. The documents, signed by each of the complainants, showed that they received full & final payment of their wages & other claims & that they forever released respondents & its successors of any claims & liabilities.

- The ff yr, an illegal dismissal complaint was filed. The Labor Arbiter dismissed the charge but ordered the company to pay separation pay.

- NLRC reversed the Labor Arbiter, saying that

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the issue of termination pay was already resolved in the previous case & was barred by prior judgment

Ruling:- NLRC correct. Decision in the “Unpaid Wages

Case” legally & finally settled the question of separation pay of petitioners

- Causes of action are the same. In essence, bec petitioners claimed that they had been illegally dismissed, they prayed for backwages from the date of illegal dismissal

- Jurisprudence exists to the effect that a deed of release or quitclaim cannot bar an employee from demanding benefits to w/c he is legally entitled; that quitclaims &/or complete releases executed by the employees do not estop them from pursuing their claim arising from the ULP of the employer; & that employees who received their separation pay are not barred from contesting the legality of their dismissal, & that acceptance of those benefits would not amount to estoppel

- However, in the present case, the issue of validity of the releases, executed by petitioners under oath, was squarely raised & resolved in the Decision in the “Unpaid Wages Case” w/c found categorically that the document forever released the employer & its successors & assigns of any & all claims & liabilities including termination pay

2.2a Final & Executory Judgment Cannot be Negotiated

- Although compromise agreements are encouraged, this general rule does not apply to decisions that have become final & executory

- A final & executory judgment cannot be negotiated, hence, any act to subvert it is contemptuous

- Disrespect for the administration of justice should not be sanctioned

3. MOTION TO DISMISS (Sec. 6, Rule V, NLRC RRP)

- On or before the date set for the mandatory conciliation and mediation conference, the respondent may file a motion to dismiss.

- Any motion to dismiss on the ground of lack of jurisdiction, improper venue, or that the cause of action is barred by prior judgment, prescription, or forum shopping, shall be immediately resolved by the Labor Arbiter through a written order.

- An order denying the motion to dismiss, or suspending its resolution until the final determination of the case, is not appealable.

Motu Propio Dismissal of Complaint Based on Prescription

- The rule on waiver of defenses by failure to plead in the answer or motion to dismiss does not apply when the plaintiff’s own allegations in the complaint shows clearly that the action has prescribed

- In such a case, the court may motu propio dismiss the case, on the ground of prescription

- Even assuming that the employer’s motion to dismiss was filed out of time, there was nothing to prevent the labor arbiter from dismissing the complaint on the ground of prescription (cause of action, dismissal, accrued in 1979; complaint filed in 1984)

Res Judicata as Reason to Dismiss Complaint

CASE: Delfin v. Inciong

Rulings:- Requisites for prior judgment to constitute a bar

to a subsequent case:a. It must be a final judgment or order;b. The court rendering the same must

have jurisdiction over the subject matter & over the parties;

c. It must be a judgment or order on the merits; &

d. There must be between the 2 cases, identity of parties, subject matter, & cause of action

- When a labor union accuses an employer of acts of ULP allegedly committed during a given period of time, the charges should include all acts of ULP committed against any & all members of the union during that period

- The union should not, upon dismissal of the charges first proferred, be allowed to split its cause of action & harass the employer w/ subsequent charges based upon acts committed during the same period of time

No Dismissal of Complaint Despite Death

- A case for reinstatement of the dismissed employees is not extinguished bec of the death of the proprietor

- It was not a money claim, not to say it involved purely employer-employee relationship, w/c falls under the exclusive authority of the labor officials to hear & resolve

- While it combined a claim for backwages & the like, the entitlement of individual employees thereto solely depended on their rt to reinstatement

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- The case falls under the jurisdiction of the NLRC & not the civil courts

Revival or Refiling of Dismissed Case

- A dismissed case is not necessarily dead- A party may file a motion to revive or re-open a

case dismissed without prejudice, within ten (10) calendar days from receipt of notice of the order dismissing the same; otherwise, his only remedy shall be to re-file the case in the arbitration branch of origin.

Dismissed w/o prejudice- a tentative or temporary dismissal- the complaint may be revived through an

appropriate action

4. SUBMISSION OF POSITION PAPERS & REPLY

Determination of Necessity of Hearing or Clarificatory Conference

- Immediately after the submission by the parties of their position paper or reply, as the case may be, the Labor Arbiter shall, motu proprio, determine whether there is a need for a hearing or clarificatory conference.At this stage, he may, at his discretion and for the purpose of making such determination, ask clarificatory questions to further elicit facts or information, including but not limited to the subpoena of relevant documentary evidence, if any, from any party or witness. (Sec 8, Rule V)

Role of the Labor Arbiter in hearing & clarificatory conference

a) The Labor Arbiter shall take full control and personally conduct the hearing or clarificatory conference. Unless otherwise provided by law, the Labor Arbiter shall determine the order of presentation of evidence by the parties, subject to the requirements of due process. He shall examine the parties and their witnesses with respect to the matters at issue; and ask questions only for the purpose of clarifying points of law or fact involved in the case. He shall limit the presentation of evidence to matters relevant to the issue before him and necessary for a just and speedy disposition of the case.

b) In the cross-examination of witnesses, only relevant, pertinent and material questions necessary to enlighten the Labor Arbiter shall be allowed.

c) The Labor Arbiter shall make a written summary of the proceedings, including the substance of the evidence presented, in consultation with the

parties. The written summary shall be signed by the parties and shall form part of the records. (Sec 9)

Non-appearance of Parties; Postponement of Hearing & Clarificatory Conferences

a) Non-appearance at a hearing or clarificatory conference by the complainant or petitioner, who was duly notified thereof, may be sufficient cause to dismiss the case without prejudice.Subject to Section 16 of this Rule, where proper justification is shown by proper motion to warrant the re-opening of the case, the Labor Arbiter shall call another hearing or clarificatory conference and continue the proceedings until the case is finally decided.The dismissal of the case for the second time due to the unjustified non-appearance of the complainant or petitioner, who was duly notified of the clarificatory hearing, shall be with prejudice.

b) In case the respondent fails to appear during the hearing or clarificatory conference despite due notice thereof, the complainant shall be allowed to present evidence ex-parte, without prejudice to cross-examination at the next hearing or conference.Two (2) successive non-appearances by the respondent during his scheduled presentation of evidence or opportunity to cross-examine witnesses, despite due notice thereof, shall be construed as a waiver on his part to present evidence or conduct cross-examination.

c) The parties and their counsels appearing before the Labor Arbiter shall be prepared for continuous hearing or clarificatory conference.No postponement or continuance shall be allowed by the Labor Arbiter, except upon meritorious grounds and subject always to the requirement of expeditious disposition of cases.In any case, the hearing or clarificatory conference shall be terminated within ninety (90) calendar days from the date of the initial hearing or conference.

d) Paragraph (c) of this Section notwithstanding, in cases involving overseas Filipino workers, the aggregate period for conducting the mandatory conciliation and mediation conference, including hearing on the merits or clarificatory conference, shall not exceed sixty (60) days, which shall be reckoned from the date of acquisition of jurisdiction by the Labor Arbiter over the person of the respondents. (Sec. 10)

5. SUBMISSION OF THE CASE FOR DECISION

Upon the submission by the parties of their position papers or replies, or the lapse of the period to submit the

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same, the case shall be deemed submitted for decision unless the Labor Arbiter calls for a hearing or clarificatory conference in accordance with Section 8 of this Rule, in which case, notice of hearing or clarificatory conference shall be immediately sent to the parties.Upon termination of the said hearing or conference, the case shall be deemed submitted for decision. (Sec 11)

Position Papers as Basis of Decision

- The procedure by w/c issues are resolved based only on position papers, affidavits or documentary evidence, if agreed upon by the parties, may be availed of by the arbiter

- The Labor Arbiter may choose, if he deems it necessary, to set the case for hearing on the merits where witnesses may be presented & examined by the parties

- In both instances, the burden of proving that the termination was for valid or authorized cause rests on the employer

Lack of Verification, Not Fatal

- The lack of verification of the position paper-affidavit is a formal defect w/c could easily be corrected by requiring an oath

- A pleading w/c is required by the ROC to be verified may be given due course even w/o a certification if the circumstances warrant the suspension of the rules in the interest of justice

Due Process: Opportunity To Be Heard

- Procedural due process means that a party to a case must be given sufficient opportunity to be heard. Its very essence is to allow all parties opportunity to present evidence

- There is no denial of due process where the employer was duly represented by counsel & given sufficient opportunity to be heard & present his evidence, nor where the employer’s failure to be heard was due to the various postponements granted to it or to his repeated failure to appear during hearings

Inhibition

- A Labor Arbiter may voluntarily inhibit himself from the resolution of a case and shall so state in writing the legal justifications therefor.Upon motion of a party, either on the ground of relationship within the fourth civil degree of consanguinity or affinity with the adverse party or counsel, or on question of impartiality, the Labor Arbiter may inhibit himself from further hearing and deciding the case.Such motion shall be resolved within five (5) days from the filing thereof.An order denying or granting a motion for inhibition is inappealable.

(Sec 12)

Due Process Includes Impartiality of the Appeal Body

Administrative due process also includes: (Ang Tibay)(a) the rt to notice, be it actual or constructive, of the

institution of the proceedings that may affect a person’s legal rt;

(b) reasonable opportunity to appear & defend his rts & to introduce witnesses & relevant evidence in his favor;

(c) a tribunal so constituted as to give him reasonable assurance of honesty & impartiality, & one of competent jurisdiction; &

(d) a finding or decision by that tribunal supported by substantial evidence presented at the hearing or at least ascertained in the records or disclosed to the parties

- The reviewing officer must perforce be other than the officer whose decision is under review

6. SUSPENSION OF PROCEEDINGS

CASE: Rubberworld v. NLRC

- Consequent to the appointment by the SEC of a receiver or a management committee tasked w/ the rehabilitation of the corporation, all pending actions for claims or other labor cases against such corporation shall be suspended accordingly

- To allow labor cases to proceed would be detrimental to the primary duty of the management committee to work towards rehabilitating the corporation & make it viable again

- The purpose of rehabilitation proceedings is to enable the company to gain a new lease on life & thereby allow creditors to be paid their claims from its earnings

- In insolvency proceedings, the company stops operating & the claims of creditors are satisfied from the assets of the insolvent corporation

- The preference of credit granted to workers under Art 110 LC is not applicable in rehabilitation proceedings

7. FILING & SERVICE OF PLEADINGS & DECISIONS

- All pleadings in connection with the case shall be filed with the appropriate docketing unit of the Regional Arbitration Branch or the Commission, as the case maybe.The party filing the pleadings shall serve the opposing parties with a copy thereof and its

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supporting documents in the manner provided for in these Rules with proof of service thereof. (Sec 5, Rule III)

Service of Notice & Resolutions

a) Notices or summons and copies of orders, shall be served on the parties to the case personally by the Bailiff or duly authorized public officer within three (3) days from receipt thereof or by registered mail; Provided that in special circumstances, service of summons may be effected in accordance with the pertinent provisions of the Rules of Court; Provided further, that in cases of decisions and final awards, copies thereof shall be served on both parties and their counsel or representative by registered mail; Provided further that in cases where a party to a case or his counsel on record personally seeks service of the decision upon inquiry thereon, service to said party shall be deemed effected upon actual receipt thereof; Provided finally, that where parties are so numerous, service shall be made on counsel and upon such number of complainants, as may be practicable, which shall be considered substantial compliance with Article 224 (a) of the Labor Code, as amended.For purposes of appeal, the period shall be counted from receipt of such decisions, resolutions, or orders by the counsel or representative of record.

b) The Bailiff or officer serving the notice, order, resolution or decision shall submit his return within two (2) days from date of service thereof, stating legibly in his return his name, the names of the persons served and the date of receipt, which return shall be immediately attached and shall form part of the records of the case.In case of service by registered mail, the Bailiff or officer shall write in the return, the names of persons served and the date of mailing of the resolution or decision.If no service was effected, the service officer shall state the reason therefor in the return. (Sec. 6, Rule III)

Proof & Completeness of Service

- The return is prima facie proof of the facts indicated therein.Service by registered mail is complete upon receipt by the addressee or his agent; but if the addressee fails to claim his mail from the post office within five (5) days from the date of first notice of the postmaster, service shall take effect after such time.

- Service of the papers may be made by delivering personally a copy to the party or his counsel, or by leaving it in his office with his clerk or with a person having charge thereof. If no person is

found in his office, or his office is not known, or he has no office, then by leaving the copy, between the hours of eight in the morning and six in the evening, at the party's or counsel's residence, if known, with a person of sufficient age and discretion then residing therein. (Rule 13, ROC)

- The ROC applies suppletorily to the Rules of the NLRC in the absence of specific provisions on the service of decisions or orders

- In the absence of any showing that such practice (serving a copy of the decision not by official process servers but by authorized union officials to the employer) is sanctioned by the implementing rules of the NLRC or by the ROC, the party who takes advantage of such irregular practice does so at its own risk & cannot be later heard to complain

- Where the copy of the decision is served on a person who is neither a clerk or one in charge of the atty’s office, such service is invalid & the decision does not therefore become executory

8. RESOLUTION OF DOUBT IN LAR OR EVIDENCE

- Doubt as to the interpretation of labor laws & regulations has to be resolved in favor of labor

- This precept extends to doubts about the evidence of the disputants

CASE: Nicario v. NLRC

Facts:- Petitioner employee claimed that she worked 12

hrs a day, thus rendering OT work for w/c she claimed OT pay. The labor arbiter, taking notice of the fact that the establishment is open for 12 hrs, decided in favor of petitioner. On motion for reconsideration filed by the employer w/ the NLRC, the decision was modified based on the daily time records presented by the employer showing that there was no OT work

Ruling:- The DTR are unreliable since the originals

thereof were not presented in evidence- No noon break is observed but the DTR shows

petitioner has a rest period from 12n – 2pm- All entries in the DTR are suspiciously

inconsistent

- In controversies between a laborer & his master, doubts reasonably arising from the evidence, or in the interpretation of agreements & writing

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should be resolved in the former’s favor

9. DECISION OF LABOR ARBITER

- The Labor Arbiter shall render his decision within thirty (30) calendar days, without extension, after the submission of the case by the parties for decision, even in the absence of stenographic notes; Provided however, that cases involving overseas Filipino workers shall be decided within ninety (90) calendar days after the filing of the complaint which shall commence to run upon acquisition by the Labor Arbiter of jurisdiction over the respondents. (Sec 13, Rule V, NLRC RRP)

Contents of Decisions

- The decisions and orders of the Labor Arbiter shall be clear and concise and shall include a brief statement of the: a) facts of the case; b) issues involved; c) applicable laws or rules; d) conclusions and the reasons therefor; and e) specific remedy or relief granted.In cases involving monetary awards, the decisions or orders of the Labor Arbiter shall contain the amount awarded.

- In case the decision of the Labor Arbiter includes an order of reinstatement, it shall likewise contain: a) a statement that the reinstatement aspect is immediately executory; and b) a directive for the employer to submit a report of compliance within ten (10) calendar days from receipt of the said decision. (Sec 14, Rule V)

No Motions for Reconsideration & Petitions for Relief from Judgment

- No motions for reconsideration or petitions for relief from judgment of any decision, resolution or order of a Labor Arbiter shall be allowed.However, when one such motion for reconsideration is filed, it shall be treated as an appeal provided that it complies with the requirements for perfecting an appeal.In the case of a petition for relief from judgment, the Labor Arbiter shall elevate the case to the Commission for disposition. (Sec 15, Rule V)

NOT AUTOMATICALLY IN FAVOR OF LABOR

- The law in protecting the rts of the laborer authorizes neither oppression nor self-destruction of the employer. More importantly, while the Constitution is committed to the policy of social justice & the protection of the working class, it should not be supposed that every labor dispute will automatically be decided in favor of labor (Mkti

Haberdashery v. NLRC/ Mla Electric Co. v. NLRC)

ART. 222. APPEARANCES & FEES

(a) Non-lawyers may appear before the Commission or any Labor Arbiter only:

1. If they represent themselves; or 2. If they represent their organization or

members thereof.(b) No attorney’s fees, negotiation fees or similar

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

1. APPEARANCE OF NON-LAWYERS

Under the NLRC Rules of 2005, a non-lawyer may appear before the Commission or Labor Arbiter only if:

(1) he represents himself as party to the case;(2) he represents a legitimate labor organization, as

defined under Article 212 and 242 of the Labor Code, as amended, which is a party to the case: Provided, that he presents: (i) a certification from the Bureau of Labor Relations (BLR) or Regional Office of the Department of Labor and Employment attesting that the organization he represents is duly registered and listed in the roster of legitimate labor organizations; (ii) a verified certification issued by the secretary and attested to by the president of the said organization stating that he is authorized to represent the said organization in the said case; and (iii) a copy of the resolution of the board of directors of the said organization granting him such authority;

(3) he represents a member or members of a legitimate labor organization that is existing within the employer's establishment, who are parties to the case: Provided, that he presents: (i) a verified certification attesting that he is authorized by such member or members to represent them in the case; and (ii) a verified certification issued by the secretary and attested to by the president of the said organization stating that the person or persons he is representing are members of their organization which is existing in the employer's establishment;

(4) he is a duly-accredited member of any legal aid office recognized by the Department of Justice or Integrated Bar of the Philippines: Provided, that he (i) presents proof of his accreditation;

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and (ii) represents a party to the case;(5) he is the owner or president of a corporation or

establishment which is a party to the case: Provided, that he presents: (i) a verified certification attesting that he is authorized to represent said corporation or establishment; and (ii) a copy of the resolution of the board of directors of said corporation, or other similar resolution or instrument issued by said establishment, granting him such authority. (Sec 8b, Rule III)

- The appearance of labor federations & local unions as counsel in labor proceedings has been given legal sanction under Art 222 LC

2. CHANGE OF LAWYER

No substitution of atty will be allowed unless the ff requisites concur:

(1) there must be filed a written application for substitution;

(2) there must be filed the written consent of the client to the substitution;

(3) there must be filed the written consent of the atty to be substituted, is such consent can be obtained; &

(4) in case such written consent cannot be procured, there must be filed w/ the application for substitution, proof of the service of notice of such motion in the manner required by the rules, on the atty to be substituted

- There can be no valid substitution of counsel until the prescribed procedure is followed

- Any change or withdrawal of counsel or representative shall be made in accordance with the Rules of Court. (Sec 8, Rule III)

3. AUTHORITY TO BIND PARTY

Attorneys and other representatives of parties shall have authority to bind their clients in all matters of procedure; but they cannot, without a special power of attorney or express consent, enter into a compromise agreement with the opposing party in full or partial discharge of a client's claim. (Sec 9, Rule III)

CASE: Kanlaon Construction Enterprises Co., Inc. v. NLRC

Facts:- Laborers of a construction company filed claims

against respondent company & the 2 engineers who were project managers where the claimants worked. The engineers, both non-lawyers, admitted the company’s liability & agreed to pay

the money claims. They also waived the company’s rt to file position papers. The company refused to pay as directed by the arbiter since the engineers had no authority to represent & bind the corporation

Ruling:- The appearance of the engineers on behalf of

the company required written proof of authorization w/c they did not have. It was incumbent upon the labor arbiters to ascertain this authority especially since both engineers were named co-respondents

- A promise to pay amounts to an offer to compromise & requires a special power of atty or the express consent of petitioner

4. ATTORNEY’S FEE

- Art 222 prohibits the payment of AF only when it is effected through forced contributions from the workers from their own funds as distinguished from the union funds

- Purpose is to prevent imposition on the workers of the duty to individually contribute their respective shares in the fee to be paid the atty for his services on behalf of the union in its negotiations w/ the management

- The obligation to pay the AF belongs to the union & cannot be shunted to the workers as their direct responsibility

- Any agreement to the contrary shall be null & void ab initio

Negotiation Fee

- The 10% negotiation fee w/c covers AF, agency fee, & the like is based on the amount of backwages receivable under the CBA w/c is beyond what the law grants

CASE: Cebu Institute of Technology (CIT) v. Ople

Facts:- The court awarded 10% of the backwages

payable to all members of the bargaining unit as negotiation fee w/c covers AF, agency fee & the like. Only members of the bargaining unit should be made to pay this assessment

- Employer school contends that the nego fee of 10% should not be charged against the 60% incremental proceeds from tuition fee increases on the ground that this is not a bargainable matter as it has already been fixed by law; hence, only 30% should be subject to the computation of the 10% nego fee

- The faculty association asserts that the whole 90% incremental proceeds from TF increases

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should be the basis for computing the 10% nego fee. It alleged that were it not for the demand made by the union & subsequent notice of strike that ensued arising from the nonimplementation of PD 451, the school would not grant the benefits thereunder

Ruling:- The school is correct- The whole 90% economic package awarded by

the NLRC cannot be the basis for computing the negotiation fees as the law has already provided for the minimum percentage of TF increases to be allotted for teachers & other school personnel. This is mandatory & cannot be diminished although it may be increased by collective bargaining

- Only the amt beyond that mandated by law should be subject to nego fees & AF since it is only this w/c the employees had to bargain for

- The 60% w/c the law grants is not a negotiable issue & not obtained by negotiation

For Services Rendered by Union Officers

- Art 222b prohibits the imposition on any individual union member of AF, nego fees & similar charges arising from negotiation of a bargaining agreement

- The collection of the special assessment partly for the payment of services rendered by union officers, consultants & others may not be in the category of AF or nego fees, but is an exaction w/c falls w/in the category of similar charge, & therefore, w/in the coverage of the prohibition

- The manner of imposition of AF & nego fee should be correlated w/ Art 241 (n & o), Art 239 (h), & Art 249 (e)

Attorney’s Fee Collectible Only from Union Funds

- Art 222b allows AF to be charged against “union funds”

- The economic benefits granted by a newly concluded CBA do not constitute “union funds” when the employees have not received them yet

CHAPTER IIIAPPEAL

ART. 223. APPEAL

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

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

(b) If the decision, order or award was secured through fraud or coercion, including graft and corruption;

(c) If made purely on questions of law; and(d) If serious errors in the findings of facts are

raised which would cause grave or irreparable damage or injury to the appellant.

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.

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

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

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

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

1. NO MOTION FOR RECONSIDERATION OF LABOR ARBITER’S DECISION

- If any of the grounds exist, the losing party may appeal

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- The NLRC Rules of 2005 does not allow a motion for reconsideration of a labor arbiter’s decision

- SECTION 15.  MOTIONS FOR RECONSIDERATION/PETITION FOR RELIEF FROM JUDGMENT. - No motions for reconsideration/petition for relief from judgment of any decision, resolution or order of a Labor Arbiter shall be allowed. However, when one such motion for reconsideration is filed, it shall be treated as an appeal provided that it complies with the requirements for perfecting an appeal. In the case of a petition for relief from judgment, the Labor Arbiter shall elevate the case to the Commission for disposition.

- NLRC decision may be elevated to the CA but a motion for reconsideration must first be filed

Final Decisions Cannot Be Amended

- If not appealed on time, the LA’s decision becomes final & cannot be amended

- The perfection of an appeal w/in the reglementary period is not only mandatory but also jurisdictional

- Except for correction of clerical errors, or the making of a nunc pro tunc (a ruling w/c applies retroactively to correct an earlier ruling; now for then) entries w/c cause no prejudice to any party, or where the judgment is void, after the judgment has become final & executory, the same can neither be amended nor altered even if the purpose is to correct a perceived conclusion of fact or of law

2. PERIOD TO APPEAL FROM LA

Ten Calendar Days

- The 10-day period refers to 10 calendar days & not to 10 working days (Vir-Jen Shipping & Marine Services v. NLRC)

- Saturdays, Sundays are Legal Holidays are included

- This is in line w/ the objective of the law for speedy disposition of labor cases w/ the end in view of protecting the interests of the working men

10-Calendar-Day Rule Not Applicable Prior to Vir-Jen Case

- cannot be applied to a case where the appeal to the NLRC was filed prior to the promulgation of the SC’s decision in the Vir-jen case on July 20, 1982

Under the 2005 NLRC Rules of Procedure

- Decisions, resolutions or orders of the Labor Arbiter shall be final and executory unless

appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, resolutions or orders of the Labor Arbiter and in case of a decision of the Regional Director within five (5) calendar days from receipt of such decisions, resolutions, or orders. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or a holiday, the last day to perfect the appeal shall be the next working day (Sec 1, Rule VI)

Date of Receipt by Mail

- Service by registered mail is complete either upon actual receipt by the addressee or at the end of 5 days, if he does not claim it w/in 5 days from the 1st notice of the postmaster

- Purpose is to place the date of receipt of pleadings, judgments & processes beyond the power of the party being served to determine at his pleasure

Failure to Give Copy of Appeal to Adverse Party W/in 10 Days

- not fatal if the appellee was not prejudiced by the delay in the service of said copy of the appeal

- The dismissal of an employees appeal on a purely technical ground is inconsistent w/ the constitutional mandate on protection to labor

No Extension of Period

- No motion or request for extension of the period w/in w/c to perfect an appeal shall be allowed

Periods Generally Mandatory

- Only strong consideration of equity will lead the SC to allow an exception to the procedural rule in the interest of substantial justice

- It is precisely in the interest of labor that the law has commanded that labor cases be promptly if not peremptorily disposed of

3. GROUNDS OF APPEAL

- The appeal may be entertained only on any of the following grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter or Regional Director;

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(b) If the decision, resolution or order was secured through fraud or coercion, including graft and corruption;

(c) If made purely on questions of law; and/or

(d) If serious errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable damage or injury to the appellant. (Sec 2, Rule VI)

4. WHERE TO FILE APPEAL

- Regional Arbitration Branch or Regional Ofc where the case was heard & decided

5. REQUISITES FOR PERFECTION OF APPEAL

a) The appeal shall be:

1) filed within the reglementary period provided in Section 1 of this Rule;

2) verified by the appellant himself in accordance with Section 4, Rule 7 of 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, resolution or order;

4) in three (3) legibly typewritten or printed copies; and

5) accompanied by

i) proof of payment of the required appeal fee;

ii) posting of a cash or surety bond as provided in Section 6 of this Rule;iii) a certificate of non-forum shopping; and iv) 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 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 answer or reply within the said period may be construed as

a waiver on his 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. (Sec 4, Rule 6)

6. FRIVOLOUS APPEAL

- Not only the Commission but also the LA is empowered to impose reasonable penalties upon a party for filing a frivolous appeal

- Even when appeal is still w/ the LA, & not yet transmitted to the Commission, the former may already find it frivolous &, there & then, terminate the appeal

Unverified Letter Not Proper Appeal

CASE: Garcia v. NLRC

- NLRC acted w/ grave abuse of discretion & in excess of jurisdiction in treating the letter of private respondent’s (employer) president as an appeal from the judgment of the LA

- Even assuming that the letter is a valid notice of appeal, the lack of a cash or surety bond is fatal to the appeal since the judgment in question involves a monetary award

7. PAYMENT OF APPEAL FEES

- The appellant shall pay an appeal fee of One Hundred Fifty Pesos (P150.00) to the Regional Arbitration Branch or Regional Office of origin, and the official receipt of such payment shall form part of the records of the case (Sec 5, Rule 6)

- Failure to pay the appeal docketing fee confers a directory & not a mandatory power to dismiss an appeal, & such power must be exercised w/ a sound discretion & w/ a great deal of circumspection considering all attendant circumstances

8. APPEAL BOND; FILING ON TIME; EXCEPTIONS

In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary

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award, exclusive of damages and attorney's fees.

In case of surety bond, the same shall be issued by a reputable bonding company duly accredited by the Commission or the Supreme Court, and shall be accompanied by original or certified true copies of the following:

a) a joint declaration under oath by the employer, his counsel, and the bonding company, attesting that the bond posted is genuine, and shall be in effect until final disposition of the case.

b) an indemnity agreement between the employer-appellant and bonding company;

c) proof of security deposit or collateral securing the bond: provided, that a check shall not be considered as an acceptable security;

d) a certificate of authority from the Insurance Commission;

e) certificate of registration from the Securities and Exchange Commission;

f) certificate of authority to transact surety business from the Office of the President;

g) certificate of accreditation and authority from the Supreme Court; and

h) notarized board resolution or secretary's certificate from the bonding company showing its authorized signatories and their specimen signatures.

A cash or surety bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved or terminated, or the award satisfied. This condition shall be deemed incorporated in the terms and conditions of the surety bond, and shall be binding on the appellants and the bonding company.

The appellant shall furnish the appellee with a certified true copy of the said surety bond with all the above-mentioned supporting documents. The appellee shall verify the regularity and genuineness thereof and immediately report any irregularity to the Commission.

Upon verification by the Commission that the bond is irregular or not genuine, the Commission shall cause the immediate dismissal of the appeal, and censure or cite in contempt the responsible parties and their counsels, or subject them to reasonable fine or penalty.

No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award.

The mere filing of a motion to reduce bond without complying with the requisites in the preceding paragraphs shall not stop the running of the period to perfect an appeal. (Sec 6, Rule 6)

- The appeal of a decision involving a monetary award in labor cases may be perfected only upon the posting of a cash or surety bond

CASE: Rosewood Processing v. NLRC (1998)

- Petitioner had filed, together w/ its memorandum on appeal & notice of appeal, a motion to reduce the appeal bond accompanied by a surety bond for P50K

- But the judgment being appealed from was for P700K+, so the SolGen argued that it was defective since it was not equivalent to the monetary award in the judgment appealed from

- SC held that petitioner’s motion to reduce the bond is a substantial compliance w/ the LC. Letter-perfect rules must yield to the broader interest of substantial justice

- HOWEVER, more recent SC decisions require strict observance of the reglementary period

CASE: Sameer Overseas Placement Agency v. Levantino (2005)

Facts:- Sameer, the recruitment agency, appealed to

the NLRC from a decision granting a monetary award to the dismissed employee

- On the 10th day, it filed its notice of appeal & memorandum of appeal along w/ a motion for extension of time to file a surety-appeal bond, alleging that it was still arranging for the issuance of such w/ the binding company

- 6 days after, it filed the appeal bond- The NLRC & the CA both dismissed the appeal

for failure to perfect it w/in the 10-day reglementary period

- Sameer argues that the filing of the bond should retroact to the date of the filing of the motion for reduction. It characterized the appeal bond requirement as procedural, & urges that the case be decided on the merits

Ruling:- The appeal bond requirement is not merely

procedural but jurisdictional, for w/o it, the NLRC does not acquire jurisdiction over the appeal

- The filing of the motion to reduce bond shall not stop the running of the period to perfect appeal

8.1 Motion to Reduce Bond Under NLRC Rules

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No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award.

The mere filing of a motion to reduce bond without complying with the requisites in the preceding paragraphs shall not stop the running of the period to perfect an appeal.

8.2 No Bond, No Appeal Perfected

CASE: Borja Estate v. Sps. R. Ballad

- “only” makes it clear that the lawmaker’s intended the posting of a cash or surety bond by the employer to be the exclusive means by w/c an employer’s appeal may be considered completed

- The law however does not require its outright payment, but only the posting of a bond to ensure that the award will be eventually paid should the appeal fail

- What petitioners have to pay is a moderate & reasonable sum for the premium of such bond

- “may be perfected” refers to the perfection of an appeal as optional on the part of the defeated party, but not to the posting of an appeal bond, if he desires to appeal

- The posting of a cash or surety bond is mandatory & the perfection of an appeal in the manner & w/in the period prescribed by law is not only mandatory but jurisdictional

8.2a Relaxing the 10-Day Period

Situations where the court allowed tardy appeals (Borja case):

- where the presence of any justifying circumstance recognized by law (fraud, accident, mistake) properly vested the judge w/ discretion to approve or admit an appeal filed out of time

- where on equitable grounds, the questioned decision was served directly upon petitioner instead of her counsel of record who at the time was already dead

- where the counsel relied on the footnote of the notice of the decision of the LA that the aggrieved party may appeal w/in 10 working days

- where the tardy appeal is from a decision granting separation pay w/c was already granted in an earlier final decision (to prevent unjust enrichment)

- where there are special circumstances in the case combined w/ its legal merits or the amt & the issue involved

8.3 No Distinction Between “Filing” & “Perfection” of Appeal; Star Angel Decision, Not “Venerable”

- Star Angel ruling that the appeal must be filed w/in 10 days but may be perfected after that period, was just an obiter dictum & must not be invoked

CASE: Computer Innovations Center v. NLRC

- Star Angel ruling has not acquired the sheen of venerability reserved for repeatedly-cited cases

- The present provision in the NLRC Rules of Procedure that the filing of a motion to reduce bond shall not stop the running of the period to perfect appeal flatly contradicts the notion expressed in Star Angel that there is a distinction between filing an appeal & perfecting an appeal

8.4 Amount of Appeal Bond Excludes Damages

- An appeal is deemed perfected upon the posting of the bond equivalent to the monetary award exclusive of moral & exemplary damages as well as attorney’s fees

- This NLRC exclusionary rule explains how the appeal bond shall be computed & this does not conflict w/ Art 223 w/c lays down the requirement that an appeal bond should be filed

8.5 Is Property Bond Acceptable?

CASE: UERM Memorial Medical Center v. NLRC

- Appealing the P17M award, the employer hospital posted as appeal bond a real estate bond worth more than P100M since it was not in a financial position to post a cash bond or to pay an annual premium of P700K for a surety bond

- The NLRC rejected the property bond & dismissed the appeal arguing that the bond should either be cash or surety

- SC held that the real property bond sufficiently protects the interests of private respondents should they finally prevail

8.6 Bond Accepted Conditionally

- If a bond filed by the appellant is accepted by the NLRC subject to certain conditions (such as submission of a certified copy of the title), the failure to fulfill those conditions on time is tantamount to a failure to post the bond required by law

8.7 Supersedeas Bond

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- There is no procedural error that may be imputed to the arbiter in requiring the employer to post supersedeas bond (a type of surety bond that a court requires from an appellant who wants to delay payment of a judgment until the appeal is over) as a condition for the stay of immediate execution of the judgment against it, after appeal had been taken from said judgment

- Since the motion for immediate execution was presented w/in the period of appeal, it was w/in the arbiter’s competence for him to consider the matter & resolve it even after the lapse of the appeal period

9. RECORDS & TRANSMITTAL

The records of a case shall have a corresponding index of its contents which shall include the following: a) the original copy of the complaint; b) other pleadings and motions; c) minutes of the proceedings, notices, transcripts of stenographic notes, if any; d) decisions, orders, and resolutions as well as proof of service thereof, if available; e) the computation of the award; f) memorandum of appeal and the reply or answer thereto, if any, and proof of service, if available; g) official receipt of the appeal fee; and h) the appeal bond, if any.

The records shall be chronologically arranged and paged prominently.

Within forty-eight (48) hours after the filing of the appeal, the records of the case shall be transmitted by the Regional Arbitration Branch or office of origin to the Commission. (Secs 7 & 8, Rule 6)

10. EFFECT OF APPEAL OF ARBITER’S DECISION

Without prejudice to immediate reinstatement pending appeal underSection 6 of Rule XI, once an appeal is filed, the Labor Arbiter loses jurisdiction over the case. All pleadings and motions pertaining to the appealed case shall thereafter be addressed to and filed with the Commission. (Sec 9, Rule 6)

10.1 Execution or Reinstatement Pending Appeal

In case the decision includes an order of reinstatement, and the employer disobeys the directive under the second paragraph of Section 14 of Rule V or refuses to reinstate the dismissed employee, the Labor Arbiter shall immediately issue writ of execution, even pending appeal,

directing the employer to immediately reinstate the dismissed employee either physically or in the payroll, and to pay the accrued salaries as a consequence of such reinstatement at the rate specified in the decision.

The Sheriff shall serve the writ of execution upon the employer or any other person required by law to obey the same.If he disobeys the writ, such employer or person may be cited for contempt in accordance with Rule IX. (Sec 6, Rule 11)

10.2 Effect of Perfection of Appeal on Execution

The perfection of an appeal shall stay the execution of the decision of the Labor Arbiter on appeal, except execution for reinstatement pending appeal. (Sec 9, Rule 11)

11. FRIVOLOUS OR DILATORY APPEALS

No appeal from an interlocutory order shall be entertained.To discourage frivolous or dilatory appeals, including those taken from interlocutory orders, the Commission may censure or cite in contempt the erring parties and their counsels, or subject them to reasonable fine or penalty.

12. APPEALS FROM DECISION OF OTHER AGENCIES

The Rules provided herein governing appeals from the decisions or orders of Labor Arbiters shall apply to appeals to the Commission from decisions or orders of the other offices or agencies appealable to the Commission according to law.

13. PROCEEDINGS BEFORE THE COMMISSION

(see RA 9347 w/c, among other changes, increased the NLRC divisions from 5 to 8, w/ 3 commissioners each division)

Commission En Banc. - The Commission shall sit en banc only for purposes of promulgating rules and regulations governing the hearing and disposition of cases before its Divisions and Regional Arbitration Branches, and for the formulation of policies affecting its administration and operations.It may, on temporary or emergency basis, allow cases within the jurisdiction of any Division to be heard by any other Division whose docket allows the additional workload and such transfer will not expose litigants to unnecessary additional expense.

Divisions. - Unless otherwise provided by law, the Commission shall exercise its adjudicatory and all other

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powers, functions and duties through its five (5) Divisions.Each Division shall consist of one member from the public sector who shall act as the Presiding Commissioner and one member each from the workers and employers sectors, respectively.

The presence of a majority of all the members of the Commission shall be necessary to constitute a quorum.The vote or concurrence of the majority of the members constituting a quorum shall be the decision or resolution of the Commission en banc.

The presence of at least two (2) Commissioners of a Division shall constitute a quorum.The concurrence of two (2) Commissioners of a Division shall be necessary for the pronouncement of a judgment or resolution.

Whenever the required membership in a Division is not complete and the concurrence of two (2) Commissioners to arrive at a judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the other Divisions as may be necessary from the same sector.

Role of Chairman in the Division. - The Chairman of the Commission may convene and preside over the session of any Division to consider any case pending before it and participate in its deliberations, if in his judgment, his presence therein will best serve the interests of labor justice.He shall not however, participate in the voting by the Division, except when he is acting as Presiding Commissioner of the Division in the absence of the regular Presiding Commissioner. (Sec 2 & 4, Rule 7)

13.1 Issues on Appeal

- The Commission shall, in cases of perfected appeals, limit itself to reviewing those issues w/c are raised on appeal

- Those w/c are not raised on appeal shall be final & executory

- However, the issued raised on appeal shall be opened for review & any action taken thereon by the Commission are w/in the parameters of its jurisdiction

13.2 Technical Rules Not Binding

The rules of procedure and evidence prevailing in courts of law and equity shall not be controlling and the Commission shall use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.

In any proceeding before the Commission, the parties may be represented by legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner or

Commissioner to exercise complete control of the proceedings at all stages. (Sec 10, Rule 7)

13.2a Evidence Submitted on Appeal to NLRC

- The NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in labor cases

- The submission of additional evidence in support of the employee’s appeal does not prejudice the employer since the latter could submit counter-evidence

CASE: Philippine Telegraph & Telephone Corporation v. NLRC

- Respondent Commission rejected the uncontradicted evidence submitted by petitioner employer showing payment to the employee of his holiday & rest day pay since it was not presented at the 1st opportunity, presumably when the case was pending w/ the LA

- Even if the evidence was not submitted to the LA, the fact that it was duly introduced on appeal to respondent Commission is enough basis for the latter to have been more judicious in admitting the same

- Labor officials should use every reasonable means to ascertain the facts in each case speedily & objectively, w/o regard to technicalities of law or procedure, all in the interest of due process

13.3 Conciliation / Mediation

In the exercise of its exclusive, original and appellate jurisdiction, the Commission may exert all efforts towards the amicable settlement of a labor dispute.

The settlement of cases on appeal, to be valid and binding between the parties, shall be made before the Commissioner or his authorized representative. (Sec 11, Rule 7)

13.4 Consultation

The conclusions of a Division on any case or matter submitted to it for decision shall be reached in consultation before the case is assigned to a member for the writing of the opinion.It shall be mandatory for the Division to meet for the purpose of the consultation ordained herein.

A certification to this effect signed by the Presiding Commissioner of the Division shall be issued and a copy thereof attached to the record of the case and served upon the parties. (Sec 5, Rule 7)

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13.5 Dissenting Opinion

Should any member of a Division indicate his intention to write a dissenting opinion, he may file the same within the period prescribed for deciding or resolving the appeal; otherwise, such written dissenting opinion shall not be considered part of the records of the case. (Sec 6, Rule 7)

13.6 Inhibition

No motion to inhibit the entire Division of the Commission shall be entertained.However, any Commissioner may inhibit himself from the consideration and resolution of any case or matter before the Division and shall so state in writing the legal or justifiable grounds therefor.In the event that a member inhibits himself, the case shall be raffled by the Executive Clerk or Deputy Executive Clerk to either of the two (2) remaining Commissioners.In case two (2) Commissioners in a Division inhibit themselves in a case or matter before it, the Chairman shall, as far as practicable, appoint two (2) Commissioners from other Divisions representing the sector of the Commissioners who inhibited themselves. (Sec 7, Rule 7)

14. FORM OF DECISION, RESOLUTION & ORDER

The decision, resolution and order of the Commission shall state clearly and distinctly the findings of facts, issues, and conclusions of law on which it is based, and the relief granted, if any.If the decision, resolution or order involves monetary awards, the same shall contain the specific amount awarded as of the date the decision is rendered. (Sec 13, Rule 7)

- Under Art 223, the Commission shall decide all cases w/in 20 calendar days from receipt of the answer of the appellee

- The decision of the Commission shall be final & executory after 10 calendar days from receipt thereof by the parties

- Any enforcement agency may be deputized by the Sec. of Labor or the Commission in the enforcement of decision, awards, or orders

Reasoned Reversal

- While it is w/in the Commission’s competence, as an appellate agency reviewing decisions of Labor Arbiters, to disagree with & set aside the latter’s findings, it should state an acceptable cause therefor, otherwise, it is subject to invalidation by the extraordinary writ of certiorari

Extended Meaning of “Appeal” under Art. 223; NLRC May Issue Writ of Certiorari

CASE: Triad Security & Allied Services, Inc. v. Ortega

- Petitioners insist that the NLRC is bereft of authority to rule on a matter involving GAD that may be committed by a LA

- Abuse of discretion is admittedly w/in the ambit of certiorari & its grant thereof to the NLRC indicates the lawmakers’ intention to broaden the meaning of appeal

- Being the administrative agency especially tasked w/ the review of labor cases, the NLRC is in a far better position to determine whether petitioners’ grounds for certiorari are meritorious

- The CA correctly dismissed the petition for certiorari brought before it

15. FINALITY OF DECISION OF THE COMMISSION & ENTRY OF JUDGMENT

a) Finality of the Decisions, Resolutions or Orders of the Commission. - Except as provided in Section 9 of Rule X, the decisions, resolutions or orders of the Commission shall become final and executory after ten (10) calendar days from receipt thereof by the parties.

b) Entry of Judgment. - Upon the expiration of the ten (10) calendar day period provided in paragraph (a) of this Section, the decision, resolution, or order shall be entered in a book of entries of judgment.

The Executive Clerk or Deputy Executive Clerk shall consider the decision, resolution or order as final and executory after sixty (60) calendar days from date of mailing in the absence of return cards, certifications from the post office, or other proof of service to parties. (Sec 14, Rule 7)

16. MOTIONS FOR RECONSIDERATION

Motion for reconsideration of any decision, resolution or order of the Commission shall not be entertained except when based on palpable or patent errors; provided that the motion is under oath and filed within ten (10) calendar days from receipt of decision, resolution or order, with proof of service that a copy of the same has been furnished, within the reglementary period, the adverse party; and provided further, that only one such motion from the same party shall be entertained.

Should a motion for reconsideration be entertained pursuant to this section, the resolution shall be executory after ten (10) calendar days from receipt thereof. (Sec 15, Rule 7)

- The NLRC Rules does not allow a 2nd motion for reconsideration

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- A supplemental motion for reconsideration filed outside of the 10-day appeal period cannot be entertained

16.1 Party Who Failed to Appeal on Time From Decision of LA May Still File Motion for Reconsideration of NLRC Decision

CASE: Sadol v. Pilipinas Kao, Inc.

Facts:- Illegal dismissal case filed by Sadol against

respondents. The LA rendered a decision ordering private respondent to pay petitioner separation pay at 1 month for every year of service. Petitioner appealed to the NLRC. Respondents also appealed but it was filed out of time

- The NLRC modified the appealed decision ordering respondent to reinstate petitioner w/ full backwages & other accrued benefits. Respondent’s appeal was dismissed for being filed out of time

- Upon receipt of respondent of the NLRC decision, a motion for reconsideration was filed w/c petitioner opposed

- The NLRC set aside its decision & dismissed the case for lack of merit

- Hence, the petition for certiorari

Ruling:- Party who failed to appeal from a decision of the

LA to the NLRC can still participate in a separate appeal timely filed by the adverse party by a motion for reconsideration of the decision of the NLRC on appeal

- The rules of technicality must yield to the broader interest of justice. It is only by giving due course to the motion for reconsideration that was timely filed that the NLRC may be able to equitably evaluate the conflicting versions of facts presented by the parties

Avril (129-142)

Appeal from the NATIONAL LABOR RELATIONS COMMISSION

Review by Certiorari by the Court of Appeals

Case:

St Martin Funeral Home vs. NLRCGR no. 130866, Sept. 16, 1998Regalado, J.

Facts: Bienvenido Aricayos, a former overseas contract worker started to work as Operations Manager of St, Martin Funeral Home on February 6, 1995 as a financial assistance from the Mother of Amelita Malabad, the owner of said entity. There was no employment contract executed nor was Aricayos’ name was included in the payroll.

In January 1996, Amelita’s mother passed away. Amelita took over the management of the business. This is where she found out that there were arrears in the payment of taxes and other governmental fees but the records show it was paid. Amelita made some changes in the business and dismissed Aricayos and his wife by not allowing them to participate in the management anymore.

Aricayos filed a complaint with the Labor Arbiter claiming he was illegally dismissed by Amelita. The Labor Arbiter ruled that no employee-employer relationship exists and, therefore, the office has no jurisdiction over the case. Aricayos appealed to the NLRC, which set aside the decision of the LA stating the there exists an employee-employer relationship. The case was remanded to the LA for immediate appropriate proceedings. Hence, this present petition.

ISSUE:Whether or not the SC has jurisdiction over the case for judicial review?

RULING:There is an underlying power of the courts to scrutinize the acts of quasi-judicial agencies on question of law and jurisdiction even though no right to review is given by statute. The purpose of judicial review is to keep the administrative agency within its jurisdiction and protect the substantial rights of the parties. It is a part of checks and balances which restricts the separation of powers. Such review is available within 60 days from notice of decision under rule 65 on action for certiorari.

BP 129 originally states that IAC shall have appellate jurisdiction over decisions of quasi-judicial agencies and original jurisdiction over certioraris and other auxillary

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writs. However the provisions do not apply to orders issued under the Labor Code and CBAA. RA 7902, amending BP129, states that the CA has exclusive original jurisdiction over final judgments, decisions, resolutions, orders and awards of quasi-judicial agencies, except those falling within the appellate jurisdiction of the SC in accordance with the constitution, the Labor Code of the Philippines, as amended.

Under such excepting clause, the appeal from NLRC cannot be brought to CA but to the SC. Congress could not have intended such since there are no cases in Labor Code that falls within the appellate jurisdiction of the SC.

In Senate Bill No.1495, Senator Roco states that BP 129 expanded the jurisdiction of the CA. The purpose of the law is to ease the workload of the SC. The exceptions seem to cut short that purpose and should be eliminated. In a subsequent session, such amendment was approved.

Such amendment now declares that appeals from NLRC shall be petitions for certiorari under rule 65 and should be initially filed with the CA in strict observance of the doctrine on the hierarchy of courts.

Instant petition is remanded to CA for appropriate action.

Doctrine of the case:1. to review NLRC decision is through special civil

action of certiorari under rule 652. jurisdiction of such belong to SC and CA3. in line with hierarchy of courts , petition should be

initially filed with the CA, as the lower court

When and Where to File Petition

AM No. 00-2-03SC amending Rule 65, Sec.4 (effective September 1, 2000) provides:

petition shall be filed no later than 60 days from the notice of the judgment, order or resolution

in case of motion for reconsideration, the 60 days period shall be counted from notice of the denial of such motion

amendment is procedural and has retroactive effect and applies to petitions filed before September 1, 2000 which are pending and undetermined at the time of its passage.

Note: the 60-day period must be carefully observed Reglementary Periods are indispensable

interdictions against needless delays Incorrect computation of time by the petitioner’s

counsel is “inexcusable neglect,” and the client is bound by the counsel’s conduct, negligence and mistakes

Appeals under Rule 45 and in Original Civil Actions for Certiori under Rule 65, what is required

is the Certified True copy of the questioned judgment which is the NLRC’s decision

Effect on NLRC’s Decision

A petition for certiorari does not stay execution the decision of the NLRC, unless a TRO is issued by the CA or SC

Appeal to Labor Secretary Abolished

Due to the PD No. 1391 amending Art. 223 of the Labor Code, the remedy of appeal from a decision of the NLRC to the Secretary of Labor has been abolished

Grounds for Certiorari (as a special civil action)

a) the tribunal, board or officer exercising judicial function has acted without or in excess of its jurisdiction

b) grave abuse of dicretion amounting to lack or in excess of jurisdiction

the prayer must be for annulment of modification of the proceedings

although the decision of administrative agencies are final as stated in statutory provisions, the CA and SC has the power of judicial review when there is a:

a. want of jurisdictionb. grave abuse of discretionc. violation of the due process, d. denial of substantial justicee. erroneous interpretation of the law

there is no appeal from the decisions of the NLRC for a reversal of its factual or legal conclusions

Grave Abuse of Discretion

by definition it means the capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction

the petitioner must prove the abuse of discretion amounting to lack or excess of jurisdiction on the part of the public respondent

proving a reversible error or mere abuse of discretion is not enough

Sole Office of Certiorari

the appellate court’s jurisdiction to review a decision of the NLRC in a petition for certiorari is confined in the issues of jurisdiction or grave abuse of discretion amounting to lack or excess of jurisdiction

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it dose not include correction of the NLRC’s evaluation of the evidence or of its factual findings

Not a Slave to Technical Rules

Erwin Reyes vs.  NLRC, CCBP and/or Rotaida TaguibaoG.R. No. 180551, February 10, 2009

FACTS: Coca-Cola Bottlers Philippines (CCBP) is a corporation engaged in the business of production and distribution of carbonated drinks. Rotaida Taguibao is its Human Resource Manager. Erwin Reyes was first employed by respondent CCBP, through Interserve Manpower Agency (Interserve), as a Leadman in February 1988. His contract was renewed every five months and he was assigned a different task every time.  Such an arrangement continued until petitioner was directly hired by CCBP as a Route Salesman on September 15, 2000.  Exactly one year from the time of petitioner’s employment as a Route Salesman, respondent CCBP, thru Taguibao, terminated his services on September 15, 2001.  Since he already acquired the status of a regular employee, he is now asserting that he was illegally dismissed and is claiming for moral and exemplary damages and attorney’s fees.

 Labor Arbiter ruled in favor of Reyes, since CCBP and Taguibao as they failed to present a copy of petitioner’s purported Contract of Employment but only the Affidavit of Taguibao herself. The LA ordered reinstatement and payment of backwages and attorney’s fees. In compliance with the directive of the LA, CCBP and Taguibao immediately reinstated petitioner to his former position.  However, they filed a Memorandum of Appeal before the NLRC. The NLRC dismissed the appeal affirming with modification the Decision of the LA.Petitioner, on one hand, maintained that the reckoning point for the computation of his backwages must be from the time his employment was unlawfully terminated, and not from the institution of his Complaint for illegal dismissal and elevated his case before the Court of Appeals by filing a Petition for Certiorari.The Court of Appeals dismissed petitioner’s Petition for Certiorari for his failure to give any explanation why a copy of the said Petition was not personally served upon the counsel of the adverse parties. Thereafter petitioner sought for the liberality of the Court of Appeals, faulting his former counsel for the procedural defects of his Petition but was denied. Hence, this petition.

ISSUE: Whether or not the CA gravely abused its discretion in not excusing petitioner’s procedural lapses?

RULING:Yes. A dismissal on a mere technicality defeats the greater interest of substantial justice.  Petitioner attributes the technical flaws committed before the appellate court to his former counsel, and urges the Court to excuse him since

compliance with the procedural rules calls for the application of legal knowledge and expertise which he, as a layman, cannot be expected to know.

A court shall consider the importance of the subject matter of the case or the issues involved therein, and theprima facie merit of the pleading sought to be expunged for violation of Section 11.  This Court cannot rule otherwise as it is against the purpose of avoiding delay in the administration of justice.

 The Rules of Court itself calls for its liberal construction, with the view of promoting their objective of securing a just, speedy and inexpensive disposition of every action and proceeding.  The procedural rules are not to be belittled or simply disregarded, however, it is equally true that litigation is not merely a game of technicalities.  Law and jurisprudence grant to courts the prerogative to relax compliance with procedural rules of even the most mandatory character, to reconcile both the need to put an end to litigation speedily and the parties’ right to an opportunity to be heard.

  In the instant case, it is the petitioner’s former counsel who was negligent in handling his case before the Court of Appeals. The basic general rule is that the negligence of counsel binds the client.  Hence, if counsel commits a mistake in the course of litigation, thereby resulting in his losing the case, his client must perforce suffer the consequences of the mistake. However, where the negligence of counsel is one that is so gross, palpable, pervasive, reckless and inexcusable, then it does not bind the client since, in such a case, the client is effectively deprived of his or her day in court.  

Notes: the gross negligence of the petitioner’s former

counsel resulted to the foreclosure of available remedies to the petitioner

higher interest of justice and equity demand the petitioner be granted his day in court and not made to suffer for his counsel’s indiscretion

Appeal from OSEC to CA; St. Martin Ruling applies

Rulings issued by the Office of the Secretary (OSEC)of DOLE may be appealed to the CA, not SC, under the ff. instances

a. regarding regional director’s decisions on complaints of employment agencies

b. regarding compliance order in labor standard cases under Art. 128 Sec. 2. in relation to Sec. 3a and 4, Rule X, Book III, Implementing Rules, Rules on Disposition of labor standard cases under Sec.1, Rule IV, execution, on occupational health and safety cases

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c. denial of application for registration by BLR of federation, national or industry union, or trade union center under Art. 236

d. Under Art. 238, cancellation of regisgtration by BLR or Regional Office

e. Under Art. 259, order of a med-arbiter on a petition for certification election or as to the results of a certificate election

f. Under Book V of the Implementing Rules: decision of BLR regarding administration of unions

g. Under Art 263, decisions in cases of assumption of jurisdiction

Exhaustion of Administrative Remedies

a) the initial remedy to the decision of the Secretary of DOLE is to file a motion for reconsideration as a precondition to a subsequent remedy

b) then file a special civil action of certiorari under Rule 65

- must be preceded by exhaustion of administrative remedies

Sunshine Transportation, Inc. vs NLRC and Santos, GR no. 116025, Feb. 22 1996

- the court dismissed the petition for certiorari requiring that a motion for reconsideration must first be made in light of the doctrine od exhaustion of administrative remedies

Exceptions:

In one subsequent case to Sunshine the court ruled that by reason of justice and equity, it admits of certain exceptions to the doctrine of exhaustion of administrative remedies, among which is the finding that a motion for reconsideration would be useless

In Fe Alindao vs. Joson, GR no. 114132, Nov. 14, 1996, the court summarized the exceptions:

a. issue is purely of lawb. public interest is involvedc. cases of urgencyd. where special circumstances

warrant immediate or more direct action

NOTES: The remedy of appeal from the Secretary of Labor

to the Office of the President is NOT MANDATORY, failure to avail such relief is not an impediment to judicial intervention

Despite of such doctrine, DOLE D.O. amended book V of the Code stating that “The decision of the Secretary shall become final and executory after 10 days from receipt of the parties. No motion for reconsideration shall be entertained.”

Certificate of Non-Forum Shopping

Forum Shopping- the act or attempt to present the same

dispute to different jurisdictions, in the hope of securing a favorable ruling

- not allowed as it contradicts the rule that one dispute shall be litigated once in one forum

- manifests when a party “repetitively avails itself of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in, or already resolved adversely by, some other courts”

- if the acts of the party or his counsel clearly constitutes willful and deliberate forum shopping, it is a ground for dismissal with prejudice and shall constitute direct contempt

Filing of Certificate- failure to comply of filing such certificate

shall be a cause for dismissal without prejudice- filing of a false certificate constitute a

direct contempt of court

Certificate of Non-Forum Shopping must be made by Petitioner

Santos, et al. vs. CA, Pepsi Cola Products, et al, GR no. 141947, July 5, 2001

- Sec. 3 Rule 46 of the ROC states that “ the petitioner shall together with the petitions sworn certification that he has not theretofore commenced any other action involving the same issues in the SC, the CA or different divisions thereto, or any other tribunal or agency”

- Clearly, certification must be made by the petitioner himself and his counsel as he is in the best position to know such fact

BA Savings Bank vs. Sia

- certification against forum shopping may be signed by the authorized lawyer if the petitioner is a corporation, since a corporation can only act through a natural person

Disposition by the CA

SC and CA is allowed to review matters not assigned as errors, if it finds that its consideration is necessary in arriving at a just decision

Remand

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- where there is ambiguity in the appraisal of the NLRC and LA and there are still matters that need to be clarified, equity calls for a remand of the case the NLRC

Dismissal of Appeal

- even if there is appending appeal to the NLRC, the SC or CA in a petition for certiorari may find on substantial proof that the appeal was filed late, such may constrained to order the NLRC to dismiss such appeal

Finding of Facts Generally Final

- as a general rule, findings of administrative agencies are accorded with finality

- such finding of facts is binding to the SC and CA if supported by substantial evidence

- in the same way, if not supported by substantial evidence, it is not binding to the SC and CA

Exceptions:

In Insular Life Assurance Company vs CA, GR no.126850, April 28, 2004, the exceptions to the rule that SC is not a trier of facts:

a. findings are grounded entirely on speculation, surmises or conjectures

b. when the inference made is manifestly mistaken, absurd or impossible

c. when there is grave abuse of discretion

d. when the judgment is based on a misapprehension of facts

e. when the finding of facts are conflicting

f. when in making its findings, the CA went beyond the issues of the case or its findings are contrary to the admissions of both appellant or appellee

g. when the findings are contrary to the trial courth. when the findings are conclusions without citation

specific evidence on which they are basedi. when the facts set forth in the petition as well as in the

petitioner’s main and reply briefs are not disputed by the respondent

j. when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record

k. when the CA manifestly overlooked certain relevant facts not disputed by the parties which would justify a different conclusion if properly considered

EILEEN (142(20.5)-157)

20.5 EXAMPLES: SOME FINDINGS OF FACTS REVERSED

Reglementary Period: The reglementary period for appeal fixed by the

Labor Code is 10 days.

1. it is wrong and a grave abuse of discretion for the NLRC to fail or refuse to take into account the appeal taken by the employee from the decision of the labor arbiter, dismissing his complaint, was late, because it was perfected 12 days after service on him of notice of the decision.

2. the NLRC affirmed the arbiter’s decision, but at the same time ordered the company to continue paying the employee’s salary since the arbitration case was not yet over.

3. The SC ruled that NLRC order was an abuse of discretion. The court explained that the clause “pending final resolution of the case by arbitration” should be limited only to the proceedings before the labor arbiter.

4. it is also a grave abuse of discretion on the part of the NLRC not to give weight to the claim that petitioner is an Adecor employee, in glossing over the face that it is fully corroborated by indubitable documents.

21. FROM CA TO SC: ONLY QUESTION OF LAW, RULE 45

Proper Remedy: Petition for review is the proper remedy under Rule 45 of the Rules of Court to appeal to the SC a judgment, final order or resolution of the CA.

Such petition for review on certiorari can raise only question of law.

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

IN CASE OF FAILURE TO APPEAL: the petition for certiorari in the nature of special civil action is NOT available. (NOTE: the special civil action for certiorari under Rule 65 cannot be used as a substitute for an appeal under Rule 45 that the petitioner already lost.)

In one case, the court reminded that a special civil action for certiorari under Rule 65 lies only when there is neither appeal nor plain, speedy and adequate remedy in the ordinary course of law.

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Certiorari is not allowed when a party fails to appeal a judgment or final order.

The remedies of appeal and certiorari are mutually conclusive and NOT alternative or successive.

In Metro Transit case, the dismissed employee was ordered reinstated by the Labor Arbiter, which decision was upheld both by the NLRC and CA. The employer brought the case to the SC through a petition for review on certiorari. The petitioner employer contended that the CA decision had “no basis in fact” and “contrary to law.” It argued that the CA failed to consider the evidence the employer presented.

HELD: The Sc ruled that in petition for review on certiorari only question of law may be raised. The court cannot reexamine the probative value of evidence, unless the appreciation of the evidence is glaringly erroneous. Thus, petition on certiorari had to be dismissed.

ARTICLE 224. Execution of decisions, orders or awards. – (a) The Secretary of Labor and Employment or any Regional Director, the Commission or any Labor Arbiter, or Med-Arbiter or Voluntary Arbitrator may, motu proprio or on motion of any interested party, issue a writ of execution on a judgment within five (5) years from the date it becomes final and executory, requiring a sheriff or a duly deputized officer to execute or enforce final decisions, orders or awards of the Secretary of Labor and Employment or regional director, the Commission, the Labor Arbiter or med-arbiter, or voluntary arbitrators. In any case, it shall be the duty of the responsible officer to separately furnish immediately the counsels of record and the parties with copies of said decisions, orders or awards. Failure to comply with the duty prescribed herein shall subject such responsible officer to appropriate administrative sanctions.

(b) The Secretary of Labor and Employment, and the Chairman of the Commission may designate special sheriffs and take any measure under existing laws to ensure compliance with their decisions, orders or awards and those of the Labor Arbiters and voluntary arbitrators, including the imposition of administrative fines which shall not be less than P500.00 nor more than P10,000.00.

1. EXECUTION A writ of execution is an order to carry out, to

implement, a final judgment. Under Art. 224, it may be issued by the following

officials for the final decisions, orders or awards promulgated by them:

a. Secretary of Labor and Employment;b. DOLE Regional Director;c. NLRC;

d. Labor Arbiter;e. Med-arbiter;f. Voluntary Arbitrator; org. Panel of Arbitrators

WHEN TO ISSUE: may be issued motu proprio or on motion of any interested party within 5 years from the date it becomes final and executory.

Execution is done through the regular or special sheriff. BUT alternatively, the PNP or any law enforcement agencies may deputize in the enforcement of final awards, orders or decisions by the Secretary, the Commission, any Labor Arbiter, the Regional Director or the Director of the Bureau of labor Relations.

1.1 BOTH PARTY AND COUNSEL SHOULD BE NOTIFIED

- in Labor Cases, both the party and its counsel must be duly served their separate copies of the order, decision, or resolution.

1.2 ARTICLE 224 IS EXECUTION, NOT APPEAL, PROCEDURE

- Art. 224 is about execution; it does not govern the procedure for filing a petition for certiorari with the CA from the decision of the NLRC.

It refers to the execution of “final decisions, orders or awards.”

The period or manner of appeal from the NLRC to CA is governed by RULE 65 and NOT ARTICLE 224.

2. EXECUTION UPON FINALITY OF DECISION OR ORDER

a. A writ of execution may be issued moto proprio or on motion, upon a decision that finally disposes of the action or proceeding, BUT only after the expiration of the period to appeal if no appeal has been filed, as shown by the certificate of finality.

b. NO motion for execution shall be entertained nor a writ of execution be issued UNLESS the Labor Arbiter or the Commission is in possession of the records of the case which shall include an entry of judgment if the case was appealed.

EXCEPTIONS: as provided in Sec. 14 of Rule 5 and Sec. 6 of this Rule, and in those cases where partial execution is allowed by law.

PRE-EXECUTION CONFERENCEThe Labor Arbiter shall schedule a pre-execution

conference or hearing within 2 working days from receipt

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of a motion for the issuance of a writ of execution and subject to Section 1, par. B of this Rule.

This is to thresh out matters relevant to execution, including the computation of award.

FORM AND CONTENTS OF A WRIT OF EXECUTION1. issued in the name of Republic of the Philippines;2. signed by the Commission or Labor Arbiter;

3. requiring the Sheriff to execute the decision,order or award of the Commission or Labor Arbiter;

4. must contain the dispositive portion thereof, amount to be demanded, and all lawful fees to be collected from the losing party or any other person required by law to obey the same.

COMPUTATION DURING EXECUTIONIf it is necessary during the course of the

execution proceedings, no writ of execution shall be issued until after the computation has been approved by the Labor Arbiter.

EXECUTION OF MONETARY JUDGMENTa. Immediate payment on demand – the Sheriff shall enforce by demanding the immediate payment of the full amount stated in the writ of execution and all lawful fees from the losing party or any other person required by law to obey the same.

b. In case of failure or refusal to pay, the Sheriff shall immediately proceed against the cash deposit or surety bond posted by the losing party, if any.

c. if the bonding company refuses to comply with the writ of execution, then its president and officers or authorized representatives shall be cited for contempt and be barred from transacting business with the Commission.

d. if the cash or surety bond is insufficient, or if cannot be proceeded against for any reason, the Sheriff shall within 5 days from demand, execute the monetary judgment by levying on the property, personal and real, of the losing party not exempt from execution.

Which must be sufficient to cover the judgment award, which may be disposed of for value at a public auction to the highest bidder.

e. proceeds of execution must be deposited with the Cashier of the concerned Division or Regional Arbitration Branch, or with an authorized depositary bank.

If payment is in check, the same shall be payable to the Commission.

ENFORCEMENT OF WRIT OF EXECUTIONThe sheriff or other authorized officer acting as

sheriff of the Commission shall be guided strictly by these

Rules, and by the Manual on Execution of Judgment, which shall form part of these Rules. The Rules of Court, as amended, shall be applied suppletory.

EXECUTION BY MOTION OR BY INDEPENDENT ACTION

Within 5 years from the date it becomes final and executory.

After the lapse of such period, the judgment shall become dormant, and may only be enforced by an independent action within the period of 10 years from the date of its finality.

EFFECT OF PETITION FOR CERTIORARI ON EXECUTION

A petition for certiorari with the CA or SC shall not stay the execution of the assailed decision unless a restraining order is issued by said courts.

RESOLUTION OF MOTION TO QUASHIt must be resolved by the Labor Arbiter within

10 working days from submission of said motion for resolution.

3. APPEAL ON THE EXECUTION OF DECISION; SUPERVENING EVENTS

Generally, once a judgment becomes final and executory, it can no longer be disturbed, altered or modified.

EXCEPT: in cases of supervening events, it becomes imperative, in the highest interest of justice, to direct its modification in order to harmonize the disposition with the prevailing circumstances or whenever it is necessary to accomplish the aims of justice.

The correctness of the execution of the decision of Labor Arbiter may be appealed to and reviewed by NLRC.

Abbott vs NLRCIn the instant case, what must be reviewed is the

manner of its execution and not the decision itself.

FACTS: the fact alone that the labor arbiter, in recomputing the award in the original decision, raised it from the amount of P98,883.80 to the astonishing sum of P1,372,451.55 is justification enough for the respondent NLRC to issue the challenged TRO. In the meantime anyway, the petitioners are protected by the supersedeas bond put up by the respondent in the amount of the recomputed award.

HELD: The Court ruled that the NLRC has the authority to look into the correctness of the execution of the decision and to consider the supervening events that may affect such execution, like the possible off-set of the

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petitioners’ advances or debts against their total claim, their discontinuance from employment by abandonment or resignation, and other relevant developments.

Pacific Mills, Inc. vs NLRC

FACTS: The entry of judgment having been effected, the NLRC in the process of execution of the decision of the labor arbiter made a computation of the award to the private respondent in the amount of P680,037.30. The NLRC issued a partial writ of execution for P655,527.30.

The petitioner filed a motion to stay execution/reconsideration citing supervening events that affect the computation of the award as follows:

1. the computation of separation pay did not consider the length of service of each complainant as borne out from the records;

2. the computation did not consider the wage exemptions granted petitioner-respondent company;

3. the computation included payment of awards to a respondent who had already been recalled to active duty, one who was already paid in a case separately filed, and another who was already paid regardless of the result of the case docketed G.R. No. 79535;

4. Meanwhile, all the capital assets of the petitioner have already been attached by Philippine Cotton Corp., and/or otherwise foreclosed by the DBP in appropriate proceedings.

The NLRC did not stay execution of judgment and issued an order for immediate implementation of the partial writ of execution without further delay.

Petitioner filed a petition before the SC.

HELD: The Supervening events cited by petitioner would certainly affect the computation of the award in the decision of the NLRC.

Thus, a prompt and immediate determination of these objections and a recomputation of the award should be made.

A denial of this opportunity to correct clear error in the execution of the judgment constitutes a grave abuse of discretion.

4. GENERAL RULE: RTC CANNOT ISSUE INJUNCTION AGAINST NLRC

A regular court has no jurisdiction to hear and decide questions which arise and are incidental to the enforcement of decisions, orders or awards rendered in labor cases by appropriate officers and tribunals of the DOLE.

The tribunal which issued the writ of execution has the inherent power to control its own processes in order to enforce its judgments and orders.

The RTC has jurisdiction for an action for damages.

Jurisdiction to try and adjudicate labor cases including execution of decisions, awards or order pertains exclusively to the proper labor official concerned under the DOLE.

In one case, petitioner failed to realize that by filing its third-party claim with the deputy sheriff, it submitted itself to the jurisdiction of the Commission acting through Labor Arbiter.

Once Jurisdiction is acquired it is not lost upon the instance of the parties but continues until the case is terminated.

Any court which issued a writ of execution has the inherent power, for the advancement of justice, to correct errors of its ministerial officers and to control its own processes.

4.1 EXECUTION OVER PROPERTY OWNED ONLY BY JUDGMENT DEBTOR; REMEDIES OF THIRD PARTY CLAIMANT; the YUPANGCO CASE

The power of the Court or NLRC to execute its judgments extends only to properties unquestionably belonging to the judgment debtor.

If a third-party claim does not involve nor grows out of, a labor dispute, a separate action for injunctive relief against such levy may be maintained in court.

Under the Revised Rules of the NLRC (Sec.4, Rule IX) [Sec. 7, Rule VIII of the NLRC Rules, 2002], the sheriff of the Commission, or other officer acting as such, must “…be guided strictly by the Sheriff’s Manual which shall form part of these Rules”; and under Sec. 2, Rule VI of the said Manual, when a third party claims the property subject of the execution and files an affidavit thereto, the Labor Arbiter shall “..conduct a hearing xxx and resolve the validity of the claim…”

YUPANGCO COTTON MILLS, INC. vs. CA A third party whose property has

been levied upon by a sheriff to enforce a decision against a judgment debtor is afforded with several alternative remedies cumulatively, to protect its interests.

The following are the remedies:1. file a third party claim with the

Sheriff or Labor Arbiter;2. if denied, the third party may appeal

it to NLRC.

Section 17(now 16), Rule 39,

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Revised Rules of Court supports the third party claim in case it was denied and to recover the property illegally seized by the sheriff.

In Ong vs Tating, et al., a third person whose property was seized by a sheriff to answer for the obligation of a judgment debtor may invoke the supervisory power of the court which authorized such execution.

However, the claim will be denied if the claimant’s proofs do not persuade the court of the validity of his title or right of possession.

TERCERIA – a remedy available to a third-party claimant (provided in Sec. 17 (now 16), Rule 39), by serving on the officer making the levy an affidavit of his title and a copy thereof upon the judgment creditor.

WHEN AN ACTION FOR DAMAGES BE BROUGHT AGAINST THE SHERIFF?

Within 120 days from the filing of the bond.

‘PROPER ACTION’ AGAINST THE SHERIFF AND SUCH OTHER PARTIES TO HAVE COLLUDED WITH HIM FOR THE WRONGFUL EXECUTION PROCEEDINGS?

1. recovery of ownership; or2. possession of the property seized by the Sheriff3. damages resulting from the allegedly wrongful

seizure and detention thereof.

These remedies are cumulative and may be resorted to by a third-party claimant independent of or separately from and without need of availing of the others.

The filing of the third-party claim with the Labor Arbiter and the NLRC did not preclude the petitioner from filing a subsequent action for recovery of property and damages with the RTC. And, the institution of such complaint will not make petitioner guilty of forum shopping.

4.2 RTC INJUNCTION AGAINST LABOR ARBITER OR NLRC, WHEN ALLOWED

The RTC can issue an injunction or TRO against the execution ordered by a labor arbiter or the NLRC where the reinvindicatory action is filed.

YUPANGCO COTTON MILLS, INC. vs. CA-

In Santos vs. Baylon, FACTS:

the Labor Arbiter Ceferina Diosana rendered a decision in favor of Kamapi, the NLRC affirmed the decision.

Kamapi obtained a writ of execution against the properties of Poly-Plastic Products or Anthony Ching.

Respondent Priscilla Carrera filed a third-party claim alleging that Ching had sold the property to her.

The NLRC Sheriff proceeded with the public auction sale upon posting by the judgment creditor of an indemnity bond.

Carrera filed with RTC an action to recover the levied property and obtained a TRO against Labor Arbiter Diosana and the NLRC Sheriff from issuing a certificate of sale over the levied property.

Labor Arbiter Santos issued anorder allowing the execution to proceed against the property of Poly-Plastic Products.

Santos and NLRC Sheriff filed amotion to dismiss the civil case instituted by respondent Carreraon the ground that RTC has no jurisdiction.HELD:

The power of the NLRC to execute its judgments extends only to properties unquestionably belonging to the judgment debtor.

GR.: NO court has the power to interfere by injunction with the judgments or decrees of another court with concurrence or coordinate jurisdiction possessing equal power to grant injunctive relief, applies only when no third-party claimant is involved.

In Consolidated Bank and Trust Corp. vs CA A proper levy is indispensable to a

valid sale on execution. A sale unless preceded by a valid

levy is void. Thus, the private respondent did not

take any title to the properties sold thereunder, since there was no sufficient levy on the execution in question.

In Lorenzana vs Cayetano The rights of a third-party claimant

should be decided in a separate action instituted by the third person.

The appeal that should be interposed is a separate reinvindicatory action against the execution creditor or purchaser of the property after the sale at public auction, or complaint for damages to be charged against the bond filed by the judgment creditor in favor of the Sheriff. Such action is reserved to third-party claimant.

A separate action for recovery, upon a claim and prima facie showing of ownership by the petitioner, cannot be considered as interference.

4.3 THIRD PARTY CLAIM The NLRC Rules of Procedure,

revised in 2005 provides:1. a third party claim shall be filed

within 5 days from the last day of posting or publication of the notice of execution sale

2. otherwise, the claim shall forever be barred.

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REQUIREMENTS FOR THE THIRD PARTY CLAIMANT:1. execute an affidavit2. state his title to the property or right

of possession thereof with supporting evidence3. shall file the same with the Sheriff

and the Commission or Labor Arbiter4. The Labor Arbiter who issued the

writ MAY require to adduce additional evidence in support of his claim and

5. to post a cash or surety bond equivalent to the amount of his claim

EFFECT OF RECEIPT OF THIRD PARTY CLAIM?All proceedings, with respect to the execution of

the property subject of such claim, shall automatically be suspended.

DUTY OF LABOR ARBITER TO RESOLVE THE CLAIM, WHEN?

Within 10 working days from submission of said claim for resolution.

4.4 SIMULATED SALE, VOID AB INITIO

Tanongon vs. SamsonFACTS:

Four employees won in their illegal dismissal case.

The labor arbiter issued a writ of execution.

The sheriff levied a tanker purportedly belonging to the employer.

Petitioner Tangonan alleged that he was the owner of the tanker because it had been sold to her. Thus, she filed a third-party claim.ISSUE: W/N the execution can proceed.HELD:

The CA correctly ruled that the act of employer Olizon was a “cavalier attempt to evade payment of the judgment debt.”

A third-party claim on levied property does not automatically prevent execution.

Judicial rescission is not necessary in the case at bar.

Petitioner’s claim of ownership is not supported by evidence on record.

The MARINA wrote the parties in two separate letters and said that the registration of the disputed vessel under petitioner’s name had not been effected, and that the Certificates of Ownership and Vessel Registry covering motor tanker M/T Petron 7-CI had not been released.

Insofar as third persons like herein respondents were concerned, the ownership of the disputed vessel remained with Olizon and CAYCO.

Thus, CA correctly held that the NLRC could proceed with the levy and the sale on execution.

ART. 225. CONTEMPT POWERS OF THE SECRETARY OF LABOR

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

TUGADE (pp. 158-170)

Article 226- Bureau of Labor Relations The Bureau of Labor Relations and the labor relations divisions in the regional offices of the Department of Labor and Employment shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all workplaces whether agricultural or non-agricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration.

1. BLR JURISDICTION AND FUNCTIONS-The Bureau of Labor Relations (BLR, for brevity) no longer handles ‘all’ labor disputes. It is now confined to:

UNION MATTERS, COLLECTIVE BARGAINING REGISTRY and LABOR EDUCATION (effect of enactment of E.O. 251, creating the National Conciliation and Mediation Board, and RA 6715, which expanded and enhanced the NLRC)-Functions of BLR, as provided by the Administrative Code are as follows:1) set policies, standards and procedures on the registration and supervision of legitimate labor union activities including cancellation and revocation of labor permits2) set policies, standards and procedures relating to the collective bargaining agreements and the examination of financial records of accounts of labor organizations to determine compliance with relevant laws3) provide proper orientation to workers on their schemes and projects for improvement of the standards of living of workers and their families.

2. INTER UNION AND INTRA UNION DISPUTES; DO 40-03-"Intra-Union Dispute" refers to any conflict between and among union members, including grievances arising from any violation of the rights and conditions of membership, violation of or disagreement over any provision of the union's constitution and by-laws, or disputes arising from chartering or affiliation of union.-"Inter-Union Dispute" refers to any conflict between and among legitimate labor unions involvingrepresentation questions for purposes of collective bargaining or to any other conflict or disputebetween legitimate labor unions.

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-Inter/intra-union disputes shall include:(a) cancellation of registration of a labor organization filed by its members or by another labor organization;(b) conduct of election of union and workers' association officers/nullification of election of union and workers' association officers;(c) audit/accounts examination of union or workers' association funds;(d) deregistration of collective bargaining agreements;(e) validity/invalidity of union affiliation or disaffiliation;(f) validity/invalidity of acceptance/non-acceptance for union membership;(g) validity/invalidity of impeachment/expulsion of union and workers association officers and members;(h) validity/invalidity of voluntary recognition;(i) opposition to application for union and CBA registration;(j) violations of or disagreements over any provision in a union or workers' association constitution and by-laws;(k) disagreements over chartering or registration of labor organizations and collective bargaining agreements;(l) violations of the rights and conditions of union or workers' association membership;(m) violations of the rights of legitimate labor organizations, except interpretation of collective bargaining agreements;(n) such other disputes or conflicts involving the rights to self-organization, union membership and collective bargaining -(1) between and among legitimate labor organizations;(2) between and among members of a union or workers' association. (Rule XI, DO 40-03)-Other related labor relations disputes shall include any conflict between a labor union and the employer or any individual, entity or group that is not a labor organization or workers' association. This includes: (1) cancellation of registration of unions and workers associations; and (2) a petition for interpleader.

- (WHO MAY FILE) A complaint involving intra/inter union dispute may be filed by a legitimate labor organization or its members. Where the issue, however involves the entire membership, the complaint shall be supported by at least 30% of the membership. A complaint involving other related labor relations disputes may be filed by a party in interest who is not necessarily a union or union member.

- (WHERE TO FILE) Regardless of the kind of dispute, if it involves a independent union, chartered local, or a worker’s association, the same shall be filed with the DOLE Regional Office where the labor organization is registered; if it involves a federation or an industry/national union, it shall be filed with BLR itself.

-Other procedures are provided by DO 40-03. 2.1 DO 40-03

- the said Department Order4 replaced DO (, series of 1997. it covers entire subject of labor relations, except NLRC and comprises the entire Implementing Rules of Book V of the Labor Code. It also introduces new concepts such as union merger and union consolidation and multi employer bargaining.

-it is aimed at the following objectives: 1) simplify the formation and registration of

unions, especially chartered locals2) simplify and expedite the holding of

certification elections3) promote responsible unionism, particularly in

the administration of union funds4) authorize union merger, consolidation and

change of names5) authorize deregistration of collective

bargaining agreements2.2 Effect of Pendency

-The status of the parties, i.e., their rights, obligations and relationships, with respect to each other, shall continue to remain during the pendency of the petition and until the date of finality of the decision rendered therein. Thereafter, their status shall be governed by the decision. The said pendency is not a prejudicial question to any PETITION FOR CETIFICATION ELECTION and shall NOT be a GROUND FOR DISMISSAL of the said petition or SUSPENSION for the proceedings thereof.2.3 Appeal

-Decision is appealable within ten (10) days from RECEIPT thereof to the BLR if decided by the Med-Arbiter or Regional Director; to the SOLE if decided by the BLR in its ORIGINAL JURISDICTION. Appeal shall be verified under oath and consists of a Memorandum of Appeal, specifically stating the grounds relied upon.

-Where no appeal is filed, the BLR and Regional Director or Med-Arbiter shall enter the finality of the decision in the records of the case and cause the immediate implementation thereof.

-If an appeal was filed, a reply thereto may be made within ten days. The SOLE or the BLR has twenty (20) days to decide the appeal upon receipt of the entire records of the case. The SOLE or the BLR may call the parties to a clarificatory hearing in aid of its APPELLATE JURISDICTION.

-Decision of the SOLE of the BLR shall become final and executory after ten (10) days from receipt thereof by the parties unless a motion for its reconsideration is filed by any party therein within the same period. Only one MR shall be allowed.

3. EXTENT OF BLR’S AUTHORITY-The same has been described as broad and

expansive. It may hold a referendum election among the members of a union for the purpose of determining whether or not they desire to be affiliated with a federation. But the BLR has no authority to order a referendum among union members to decide whether to expel or suspend union officers. Neither does the BLR have authority to forward a case to the Trade Union Congress of the Philippines for arbitration and decision which labor organization can truly represent the working force.

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4. KATARUNGANG PAMBARANGAY, NOT APPLICABLE TO LABOR DISPUTES

-PD 1508 applies only to courts of justice and not to labor commissions or labor arbitrators’ offices. It is the Bureau and its divisions and not the Barangay Lupong Tagapayapa which are vested by law with the original and exclusive authority to conduct conciliation and mediation proceedings on labor controversies before their endorsement to the appropriate labor arbiter for adjudication. Requiring conciliation of labor disputes before barangay courts would defeat the very salutary purposes of the law. Instead of simplifying labor proceedings designed at the expeditious settlement of or referral to the proper court or office to decide it finally, barangay conciliation would duplicate the conciliation proceedings and unduly delay the disposition of the labor case.

Article 227- Compromise agreements Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Secretary of Labor and Employment, shall be final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.

1. COMPROMISE AGREEMENTS-A fundamental policy of Philippine Labor Law is to

allow parties to find solutions of their own disputes. The Constitution, it may be recalled, commands the State to promote the preferential use of voluntary modes of settling disputes since the maintenance of industrial peace is a joint responsibility of workers and employers.

-The assistance of the BLR or the Regional Office of the DOLE in the execution of a compromise settlement is generally a basic requirement; without it, there can be no valid compromise settlement. The resulting agreement, if freely authored by them and not unconscionable or otherwise unlawful, is legally binding. The NLRC or any Court shall not assume jurisdiction over issues involved therein, except: a) in case of noncompliance with the compromise agreement, or 2) if there is prima facie evidence that settlement was obtained through fraud, misrepresentation or coercion.

2. FORMAL REQUIREMENTS OF COMPROMISE AGREEMENTSG.R. No. 90519 March 23, 1992UNION OF FILIPINO WORKERS (UFW), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, SIMEX INTERNATIONAL INC., LILIA SANTANDER, GEORGE SANTANDER and JOSEPH SANTANDER, respondents

Agreements must be reduced into writing and signed in the presence of the Regional Director or his duly authorized representative. Also, as provide by the

Civil Code, an agent, including a counsel, must be authorized before he can enter into a compromise.

3. VALID COMPROMISE AND QUITCLAIM G.R. No. 87297 August 5, 1991ALFREDO VELOSO and EDITO LIGUATON petitioners, vs. DEPARTMENT OF LABOR AND EMPLOYMENT, NOAH'S ARK SUGAR CARRIERS AND WILSON T. GO, respondents

The case is about a complaint against the employer for unfair labor practices. Pending his MR, after an adverse judgment against him (private respondent), petitioners signed a quitclaim for an amount lesser than that awarded in his favor. But later on, petitioners impugned the said quitclaims on the ground that they were constrained to sign such documents because of extreme necessity.

Upon elevation to the Supreme Court, the Court held that The law looks with disfavor upon quitclaims and releases by employees who are inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities. On the other hand, there are legitimate waivers that represent a voluntary settlement of laborer's claims that should be respected by the courts as the law between the parties. "Dire necessity" is not an acceptable ground for annulling the releases, especially since it has not been shown that the employees had been forced to execute them. It has not even been proven that the considerations for the quitclaims were unconscionably low and that the petitioners had been tricked into accepting them. Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.

4. COMPROMISE SHOULD BE DULY AUTHORIZEDG.R. No. 105710 February 23, 1995JAG & HAGGAR JEANS AND SPORTSWEAR CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, LAKAS MANGGA-GAWA SA JAG, DOMINGO NAMIA, RIZALDE FLORES, JULIETA ADRIANO, ROBERTO ALAMO, JOSE BALDELOBAR, LILIBETH BIDES, NARCISO GARBIN, AMELITA LEBRIAS, MARIBEL MADRID, VERONICA MAGPILI, IMELDA NEPOMUCENO, AND DAN VILLAMOR, respondents

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The waiver of reinstatement, like waivers of money claims, must be regarded as a personal right which must be exercised personally by the workers themselves. "For a waiver thereof to be legally effective, the individual consent or ratification of the workers or employees involved must be shown. Neither the officers nor the majority of the union had any authority to waive the accrued rights pertaining to the dissenting minority members . . . The members of the union need the protective shield of this doctrine not only vis-a-vis their employer but also, at times, vis-a-vis the management of their own union, and at other times even against their own imprudence or impecuniousness" We have ruled that ". . . when it comes to individual benefits accruing to members of a union from a favorable final judgment of any court, the members themselves become the real parties in interest and it is for them, rather than for the union, to accept or reject individually the fruits of litigation" The authority to compromise cannot lightly be presumed and should be duly established by evidence.

We also find no reason for the union members to enter into a compromise when the decision of NLRC ordering their reinstatement is more advantageous to them than their being dismissed from their jobs under said Compromise Agreement.

The Compromise Agreement does not apply to private respondents who did not sign the Compromise Agreement, nor avail of its benefits.

5. RULINGS ON COMPROMISE SETTLEMENTS SUMMARIZEDG.R. No. 110388 September 14, 1995ARTEMIO LABOR, PEDRO BONITA, JR., DELFIN MEDILLO, ALLAN ROMMEL GABUT, and IRENEO VISABELLA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, GOLD CITY COMMERCIAL COMPLEX, INC., and RUDY UY, respondents.

Even if the petitioners did enter into a compromise settlement with Gold City, such agreement would be valid and binding only if, per Veloso, quoting Periquet vs. National Labor Relations Commission, the agreement was voluntarily entered into and represents a reasonable settlement of the claims. In this case, as in Fuentes, the amounts purportedly received by the petitioners were unreasonably lower than what they were legally entitled to.

Furthermore, like in Pampanga, the "compromise settlements" with the petitioners were not executed with the assistance of the Bureau of Labor Relations or the Regional Office of the DOLE pursuant to Article 227 of the Labor Code. The records do not disclose that the assistance of such office was ever solicited. What Gold City did was merely to file with the Regional Office of the DOLE in Davao City the vouchers purporting to show payments of the alleged considerations of the "compromise settlements." Such filing can by no stretch of the imagination be considered as the requisite assistance in the execution of compromise settlements.

6. WHEN TO EFFECT COMPROMISE: FINAL DECISION, NEGOTIABLE?

-The old rule was final and executory judgment cannot be altered and neither can it be negotiated. Such act is contemptuous and if upheld, would render the very decision of the Court meaningless. It manifested a willful disregard of the authority of the Court as the final arbiter of cases brought to it. (see 6.1 for the new rule)

Eunika (pp 170-185)

6. WHEN TO EFFECT COMPROMISE: FINAL DECISION, NEGOTIABLE?

- compromise agreement may be effected at any stage of the proceeding, even when there is already a final executor judgment (See Magbanua v. Uy, below)

- settlement of cases in court: authorized and even encouraged by express provision of law. Law does not limit compromises to cases about to be filed or cases already pending in courts. Compromise may be effected even after final judgment is impliedly authorized by article 240.

- No limitation on the right to compromise (i.e. one claimed by petitioners to exist that there was already a final executor judgment in favour of petitioners; no reason for limiting the right of compromise to pending cases, excluding those already in the process of execution.

- 1991 decision, Court rendered a contrary pronouncement: final and executor judgment cannot be altered and neither can it be “negotiated.” Such act is contemptuous and if upheld, would render the very decision of the Court meaningless. Wilful disregard of the authority of Court as the final arbiter of cases brought to it. (Alba Patio de Makati v. NLRC)

6.1 The definitive Ruling: Magbanua v. Uy

- Court gave a definitive answer in this case: a compromise agreement covering a case pending trial, on appeal, or with final judgment, allowed and valid, except for vices of consent or forgery.

CASE: Magbanua, et al. V. Uy G.R. No. 161003, May 6, 2005

Facts:- SC affirmed an NLRC decision awarding wage

differentials amounting P1.4 M to 8b complainant workers. Decision became final and executor, thus the employees asked for a Writ of Execution of the

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decision, but before its issuance, the parties reached a compromise. Both employer and employees filed a Manifestation requesting that the case be terminated “because the award has been complied with to the satisfaction of the complainants.” It also affirmed that employees received P40,000 from the employer.

- Employees filed a Motion for Issuance despite signed affidavit. Employer opposed the motion. Employees countered, that that only received partial payment. Employees filed a manifestation again that they received P320,000; now requesting the case considered closed

- Labor Arbiter recognized the compromise agreement and denied the writ of execution and declared the cases closed. Employees did not stop; they went to NLRC, which sided the employees and said that final and executor judgment could not be altered and that quitclaims and releases are normally frowned upon as contrary to public policy.

- CA reversed the NLRC, that compromise agreement may be entered into even after a final judgment, thus Ee’s release of their Er’s liabilities due to compromise agreement was valid, SC affirmed, assuming that agreement was made knowingly and freely.

Ruling:- Rights may be waived through compromise

agreement, though there was already a final judgment that has settled the rights of the parties. To be binding, compromise must be shown to be voluntarily, freely and intelligently executed by the parties and not contrary to law, morals, good customs and public policy.

- Compromise agreement: contract whereby parties make reciprocal concessions in order to resolve their differences and thus avoid or put an end to a lawsuit; adjust their difficulties in a manner they have a agreed upon disregarding the possible gain and danger of losing in litigation; may be extrajudicial (to prevent litigation) or judicial ( to end litigation)

- No justification to disallow compromise agreement. Validity is determined by compliance with the requisites and principles of contracts, NOT when it was entered into. Compromise agreement must have the following elements

o Consent of the partieso Object-subject matter of compromiseo Cause of the obligation

- Compromise agreement may be entered into pending trial, on appeal and with final judgment; Article 2040 of CC impliedly allowed such agreements; no limitation when should be entered

- Petitioners and respondent complied with the elements of a valid contract, thus compromise agreement is valid.

6.2 Absence of Counsel Remedied

- Labor Arbiter’s absence when waivers were executed was remedied when above procedure is complied. During pre-execution, LA made searching questions to ascertain that petitioners voluntarily and freely executed the waivers. Thus LA’s absence when such waivers were executed does not invalidate them

- Even if contracted without labor officials’ assistance compromise agreements bet. Er and Ee’s are still valid.

6.3 Reiteration

- Magbanua’s Ruling reiterated in Cosmos Bottling v. Nagrama: parties may execute compromise agreement even after finality of decision; not precluded from doing so. Even final and executory judgment may be compromised; as long as such right was exercised by proper party litigants

- Court upheld to compromise prior to the execution of final judgment; final judgment has been novated and superseded by a compromise agreement; compromise agreement notwithstanding a final judgment in which only the amount of backwages was left to be determined is valid

7. OPTIONS WHEN COMPROMISE AGREEMENT IS VIOLATED

- Article 2041 (CC): should a party fail or refuse to comply with the terms of a compromise or amicable settlement other party could either:

o Enforce the compromise by writ of execution

o Regard it as rescinded and so insist with original demand

ART. 228. INDORSEMENT OF CASES TO LABOR ARBITERS (Repealed by BP 230)

ART. 229. ISSUANCE OF SUBPOENAS

The Bureau shall have the power to require the appearance of any person or the production of any paper, document or matter relevant to a labor dispute under its jurisdiction, either at the request of any interested party or at its own initiative.

ARTICLE. 230. APPOINTMENT OF BUREAU PERSONNEL

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The Secretary of Labor and Employment may appoint, in addition to the present personnel of the Bureau and the Industrial Relations Divisions, such number of examiners and other assistants as may be necessary to carry out the purpose of the Code.

ART. 231. REGISTRY OF UNIONS AND FILE OF COLLECTIVE BARGAINING AGREEMENTS.

The Bureau shall keep a registry of legitimate labor organizations. The Bureau shall also maintain a file of all collective bargaining agreements and other related agreements and records of settlement of labor disputes and copies of orders and decisions of voluntary arbitrators. The file shall be open and accessible to interested parties under conditions prescribed by the Secretary of Labor and Employment, provided that no specific information submitted in confidence shall be disclosed unless authorized by the Secretary, or when it is at issue in any judicial litigation, or when public interest or national security so requires.

Within thirty (30) days from the execution of a Collective Bargaining Agreement, the parties shall submit copies of the same directly to the Bureau or the Regional Offices of the Department of Labor and Employment for registration, accompanied with verified proofs of its posting in two conspicuous places in the place of work and ratification by the majority of all the workers in the bargaining unit. The Bureau or Regional Offices shall act upon the application for registration of such Collective Bargaining Agreement within five (5) calendar days from receipt thereof. The Regional Offices shall furnish the Bureau with a copy of the Collective Bargaining Agreement within five (5) days from its submission.

The Bureau or Regional Office shall assess the employer for every Collective Bargaining Agreement a registration fee of not less than one thousand pesos (P1,000.00) or in any other amount as may be deemed appropriate and necessary by the Secretary of Labor and Employment for the effective and efficient administration of the Voluntary Arbitration Program. Any amount collected under this provision shall accrue to the Special Voluntary Arbitration Fund.

The Bureau shall also maintain a file and shall undertake or assist in the publication of all final decisions, orders and awards of the Secretary of Labor and Employment, Regional Directors and the Commission.

REGISTRY UNIONS AND CBAs

- The Bureau: keep a registry of legitimate labor organizations

- The Bureau: also maintain a file of all Collective Bargaining Agreements (CBAs) and other related agreements

- Parties shall submit within 30 days from execution, copies of their CBA directly to the BLR or the Regional Offices of the DOLE for registration. Registration, though is not a requisite for its validity

- Certification of the CBA by the BLR is not required for its validity. Once duly entered and signed by the parties, CBA becomes effective between the parties regardless whether it has been certified by the BLR

- Liberty Flour Mills Case: registration of the CBA is

needed so that the contract-bar rule under Art. 232 may come into play

ART. 232. PROHIBITION ON CERTIFICATION ELECTION.

The Bureau shall not entertain any petition for certification election or any other action which may disturb the administration of duly registered existing collective bargaining agreements affecting the parties except under Articles 253, 253-A and 256 of this Code.

CONTRACT-BAR RULE

- Art. 232 Contract-bar Rule: while a valid and registered CBA is subsisting, the Bureau is not allowed to hold an election contesting the majority status of their incumbent union. The existence of the CBA does not allow, that is, it bars the holding of the inter-union electoral contest. Election is legally allowed (Art. 256), only during the “freedom period” – last 60 days if the fifth year of a CBA.

- Objective of the rule: minimize union politicking until the proper time comes.

- Med-Arbiters in the DOLE regional offices are the ones that hear petitions for the certification election (Art. 256 and 257)

- Issues related to contract-bar rule and freedom period discussed in the chapters on collective bargaining and Ee’s representation (Arts. 253, 253-A 256)

ART. 233. PRIVILEGED COMMUNICATION.

Information and statements made at conciliation proceedings shall be treated as privileged communication and shall not be used as evidence in the Commission. Conciliators and similar officials shall not testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them.

Title IV LABOR ORGANIZATIONS Chapter I: REGISTRATION AND CANCELLATION

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ART 234. REQUIREMENTS OF REGISTRATION.

A federation, national union or industry or trade union center or an independent union shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements:

(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings;

(c) In case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and

(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. (As amended by Batas Pambansa Bilang 130, August 21, 1981 and Section 1, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007).

ART 234-A. CHARTERING AND CREATION OF A LOCAL CHAPTER. 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.

The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the submission of the following documents in addition to its charter certificate:

(a) The names of the chapter’s officers, their addresses, and the principal office of the chapter; and

(b) The chapter’s constitution and by-laws: Provided, That where the chapter’s constitution and by-laws are the same as that of the federation or the national union, this fact shall be indicated accordingly.

The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter and attested by its president. (As inserted by Section 2, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007).

ART. 235. ACTION ON APPLICATION.

The Bureau shall act on all applications for registration within thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the organization, as the case may be, and attested to by its president.

ART. 236. DENIAL OF REGISTRATION; APPEAL.

The decision of the Labor Relations Division in the regional office denying registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of notice thereof.

ARTICLE 237. ADDITIONAL REQUIREMENTS FOR FEDERATIONS OR NATIONAL UNIONS

Subject to Article 238, if the applicant for registration is a federation or a national union, it shall, in addition to the requirements of the preceding Articles, submit the following:

(a) Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly recognized collective bargaining agent in the establishment or industry in which it operates, supporting the registration of such applicant federation or national union; and

(b) The names and addresses of the companies where the locals or chapters operate and the list of all the members in each company involved.

(ART. 238 [Repealed by EO 111, Dec. 24, 1896] Conditions for registration of federation or national unions. – No federation if national union shall be registered to engage in any organizational activity in more than one industry in any area or region, and no fed. or national union shall be registered to engage in any organizational activity in more than one industry all over the country.

Federation or natnl union which meets the reqs and conditions may organize and affiliate locals and chapters w/o registering such locals or chapters with the Bureau

Locals or chapters shall have the same rights and privileges as if they were registered in the Bureau, provided that such fed or ntnl union organizes such locals or chapters w/in its assigned organizational filed of activity prescribed by the Sec. of Labor

Bureau – see to that fed and national unions shall only organize locals and chapters w/in a specific industry or region)

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1. LABOR ORGANIZATION; TWO BROAD PURPOSES

- Workers’ right to self organization: guaranteed under Art 8, of 1987 Constitution; Art 246 of Labor Code maintains that, that right shall not be abridged- That right includes:

o Right to formo R to joino R to assist “labor organizations for the

purpose of collective bargaining”

- “Labor Organization”: any union or association of employees in the private sector which exists in whole or in part for the purpose of collective bargaining, mutual aid, interest, cooperation, protection, or other lawful purposes.

- “Legitimate Labor Organization”: any labor org in the private sector registered or reported with the Dept in accordance with Rule 3 and 4 of these Rules

- “Union”: any labor org in the private sector organized for collective bargaining and for other legitimate purposes

- Every union is “legitimate”; only those properly registered are considered LLO. Non registration does not mean it is “illegitimate”; that it is only unregistered and has no legal personality. Exists legally but does not possess the rights of an LLO

- “Exclusive Bargaining Representative”: legitimate labor union duly recognized or certified as the sole and exclusive bargaining representative or agent of all employees in a bargaining unit

- “Workers’ Association”: an association of workers organized for the mutual aid and protection of its members or for any legitimate purpose other than collective bargaining

- “Legitimate Workers’ Association”: refers to an association of workers organized for mutual and protection of its members or for any legitimates purpose other than collective bargaining registered with the Dept in accordance with Rule 3, Sec 2-C

- “labor organization” not always a union; may be an “association of employees”; purpose not nor necessarily “collective bargaining” but also “dealing with employers concerning terms and conditions of employment”

1.1 Distinction between “Collective Bargaining” and “Dealing with Employer”

- Purpose of labor org: bargain collectively (as a group with the employer, and/or some other lawful purpose

- 2 purposes: (1) collective bargaining; (2) dealing with employer – these are concerned with terms and conditions of employment

- To bargain collectively – right that may be acquired by a labor organization after:

o registering itself with the DOLE; ando after being recognized by DOLE as the

exclusive bargaining rep (EBR) of the employees

- Dealing with employer – generic description of interaction bet Er and Ee concerning grievances, wages and work hours and other terms and conditions of employment; even if Ee’s group not registered with DOLE; this explains why labor org is not always labor union and why Er-Ee collective interactions noy always collective bargaining

- Phrase “dealing with the Employer” – involves bilateral mechanism that entails “a pattern or practice in which a group of Ees, over time, make proposals to management, and management responds to those proposals by acceptance or rejection by word or deed.

Ex. “in-house committee”; employees’ benefits and policy review committees; safety committee and “brainstorming” groups – these are considered a labor orgs whose ideas the management may or may not adopt

- There must be a pattern or practice in which a group of Ee’s makes proposals, overtime, to management, and management responds to such proposals

1.2 Labor Organization Not Necessarily a Union

- Instead of organizing a labor union, workers may opt to form without the formality if a labor union: labor management committee. Medium of Er-Ee interaction in the establishment through which problems or potential disputes may be resolved by consensus, compromise or other constructive voluntary mode.

- The richer the modes of labor-management interactions, the better.

2. CLASSIFICATION OF LABOR ORGANIZATIONS

2.1 At the National Level

- “National Union/Federation” labor organization with at least ten locals/chapters or affiliates each of which must be a duly certified or recognized collective bargaining agent;

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as labor unions in a private establishment organized for collecting bargaining or for dealing with employers concerning terms of employment fir their member unions or for participating the formulation of social and employment policies and programs with the Bureau

- “Industry Union” group of legitimate labor organizations operating within an identified industry, organized for collective bargaining or for dealing with Ers concerning terms and conditions of employment w/in an industry, or for participating in the formulation of social and employment policies, standards and programs in such industry, which is duly registered with the Dept

- “Trade Union Center” group of natnl unions or federations organized for the mutual aid and protection of its members, for assisting such members in collecting bargaining, or for participating in the formulation of social and employment policies, standards and programs

- “Alliance” aggregation of unions existing in one line of industry or in a conglomerate, a group of franchisees, a geographical area, or an industrial center. Different unions or diff feds may form an alliance to help one another in the attainment of a particular purpose. Each member union retains its own organization, structure, and independence. Alliance cannot represent its member unions in CBA negotiations

- “Company-union” labor org which in whole or in part is Er-controlled or Er-dominated. Art 248 (d) prohibits being a company union; it must not be confused with a union (comprised exclusively of the Ees of a given Er, is free from Er-influence and thus legitimate org recognized by law as a bona fide labor union,) Also known as “inside union”

2.2 At the Enterprise Level

- Labor union either:o “independent” if created by independent

registration; or o “chapter” if created through chartering

Independent registration is obtained by the union organizers in an enterprise through their own action instead of through issuance if a charter by a federation or national union.

Independent union has a legal personality of its own not derived from that of a federation; “labor org. operating at the enterprise level that acquired legal personality through independent registration under Art 234 of LC”; it may affiliate with a federation or natnl union, in this case, may be called an affiliate”

- Chartering – when a duly registered federation or natnl union issues a charter to a union in an enterprise and registers the creation of the chapter with the Regional Office where the applicant operates

Union recipient of the charter – called a chapter or local or chartered local; legal personality derived from the federation or national union but it may subsequently register itself independently

2.3 Recent Changes by RA 9481

- Art 234-A authorizes creation of enterprise-level unions, one of the many changes of RA 9481. “An Act Strengthening the Workers’ Constitutional Right to Self-organization

- The following are the changes:

1. No required memberIndependent union – 20% registration requirementLocal Chapter – registerable even in its initial membership is less than 20% of the bargaining unit. Company can be quickly unionized by a very small no of employees

2. Tentative Legal PersonalityLocal chapter – created once federation (same as national union) issues a charter certificate; it acquires legal personality to file a petition for CE. Other union rights will be acquired by submitting the ff aside from the certificate:

a. Names and addresses of the officers and members of the union

b. Chapter’s constitution and by-laws which can be the same as that of the federation

These documents must be certified under oath by the Sec or treasures and attested by the President

3. Specified Grounds of CancellationBLR may cancel a union registration based on grounds under Art. 239

4. PCE Proceeds Despite Petition to Cancel Union Registration.Petition to cancel union reg does not prevent the filing or the hearing of a petition for a CE

5. Only Three Grounds to Cancela. Falsehood about the CBLb. Or about the election of officersc. Voluntary dissolution

6. Cancellation by Action of the Members

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At least 2/3 of the membership may vote to dissolve their organization; this action requires a subsequent “application to cancel” to be submitted by the board of the organization, attested by the President

7. Reportorial RequirementsEvery legitimate labor org has to submit to BLR:

a. Adoption or amendments to constitution and by-laws (CBL)

b. Election of officers, with list of voters to be submitted in 30 days

c. Annual financial reports w/in 30 days from close of fiscal year

d. Annual list of membersNon-submission of these is no longer a ground to cancel registration, but erring officer may be punished even by expulsion

8. Affiliation with Same FederationSupervisors’ union and rank and file union in same company may affiliate with same federation.

9. ComminglingCommingling of supervisor and rank and file in one union is not a ground to cancel union registration. The excludibe member is automaticallu deemed removed from the list

10. Non-disclosure even in Unionized CompanyIn an organized (unionized) enterprise the federation who files a Petition for Certification Election (PCE) on behalf of a chapter cannot be required to identify the chapter’s officers and members. PCE does not have to be filed by the local officers.

11. Non disclosure even in Unionized CompanyNon-disclosure rule applies to a federation that files a PCE on behalf of its chapter in an enterprise without yet a union as bargaining agent

12. Employer, a BystanderIn a PCE the Er is a bystander and has no right to oppose the petition. His participation is limited to being informed about the petition and to being required to submit the list of employees if a CE will be held.

Marvin (pp. 185 to 197)

3. REGISTRATION RATIONALELegitimate labor organization(LLO) - one registered with the DOLE. It is clothed with legal personality to claim representational and bargaining rights(Art.242), and the right to strike and picket(Art.255).Unregistered labor organization - not illegimate. It is lawful but no legal personality: a. to demand CBA; b. to petition for a certification of election; and c. to hold a legal strike.PAFLU vs. Sec. of LaborThe registration prescribed xxx is not a limitation to the right of assembly or association which may be exercised with or without said registration. It is only a condition sine qua non for the acquisition of legal personality by labor organizations, associations or unions and the possession of rights and privileges granted by law to legitimate labor organizations.

3.1 Effect of Registration Under the Corporation LawOrganization under the Corporation Law as a non-stock corporation and issued a certificate of incorporation by SEC has only the effect of giving a labor organization juridical personality before regular courts. It does not grant the rights and privileges of an LLO.

4. WHERE TO REGISTERBy independent labor unions, chartered locals, and worker's association

- with the regional office where the applicant principally operates.

By federations, national unions or worker's associations operating in more than one region

- shall be filed with the Bureau or Regional Offices, but shall be processed and acted upon by the Bureau which has national jurisdiction.

5. REGISTRATION REQUIREMENTSUnder Rule III of the Rules Implementing Book V:5.1. Federation of National Union

1. a statement indicating the name of the labor union, its principal address, the names of its officers and their respective addresses;

2. the minutes of the organizational meeting(s) and the list of employees who participated in the said meeting(s);

3. the annual financial reports if the applicant has been in existence for one or more years, unless it has not collected any amount from the members, in which case a statement to this effect shall be included;

4. the constitution and by-laws, minutes of its adoption or ratification, and the list of the members who participated in it. Said list shall be dispensed with if the ratification was done during the organizational meeting(s). In such a case, the factual circumstances of the ratification shall be recorded in the minutes of the said meeting(s);

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5. the resolution of affiliation of at least ten(10) LLO, whether independent unions or chartered locals, each of which must be a duly certified or recognized bargaining agent in the establishment where it seeks to operate; and

6. the name and the addresses of the companies where the affiliates operate and the list of all the members in each company involved.Note: Labor organizations operating within an identified industry may also apply for registration as a federation or national union within the specified industry by submitting the same set of documents.

5.2. Independent Labor Union1. the name of the applicant labor union, its

principal address, the name of its officers and their respective addresses, approximate number of employees in the bargaining unit where it seeks to operate, with a statement that it is not reported as a chartered local of any federation or national union;

2. the minutes of the organizational meeting(s) and the list of employees who participated in the said meeting(s);

3. the name of all its members comprising at least 20% of the employees in the bargaining unit;

4. the annual financial report if it has been in existence for one or more years, unless it has not collected any amount from the members, in which case a statement to this effect shall be included in the application;

5. the constitution and by-laws, minutes of its adoption or ratification, and the list of the members who participated in it. Said list shall be dispensed with where the constitution and by-laws was ratified or adopted during the organizational meeting(s). In such a case, the factual circumstances of the ratification shall be recorded in the minutes of the organizational meeting(s).

5.3.Worker's Association1.the name of the applicant association, its

principal address, the name of its officers and their respective addresses;

2. the minutes of the organizational meeting(s) and the list of members who participated therein;

3. the financial reports of the applicant association if it has been in existence for one or more years, unless it has not collected any amount from the members, in which case a statement to this effect shall be included in the application;4. the constitution and by-laws to which must be attached the list of names of ratifying members, the minutes of adoption or ratification of the constitution and by-laws and the date when ratification was made, unless ratification was done during the organizational meeting(s), in which case such fact shall be reflected in the minutes of the organizational meeting(s).Note: The application for registration of a worker's association operating in more than one region shall be accompanied by a resolution of membership of each

member association, duly approved by its board of directions.

5.4. Chartered LocalHow are unions at the enterprise level created?

1. By Independent Registration; or2. by Chartering.

Note: A union created through chartering is called a local, a chapter, or a chartered local in the employer enterprise where the union officers and members are employees.5.4a. Chartered Local has to be Registered; Requirements

A chartered local has to be registered, not just reported. D.O. No. 40-B-03 redefines a "chartered local" as a labor organization in the private sector operating at the enterprise level that acquired legal personality through registration with the Regional Office on accordance with Rule III, Section 2-E of the Rules.

Accordingly, under Section 2-E, a duly registered federation or national union, directly creating a chartered local shall submit to the Regional Office 2 copies of the following:

1. a charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter;

2. the names of the local chapter's officers, their addresses, and the principal office of the local/chapter; and

3. the local/chapter's constitution and by-laws, provided that where the local/chapter's constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly.Note; All the foregoing shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested by its President.5.4b. Legal personality only to File a PCE

Under Article 234-A, as inserted by R.A. No. 9481, it is stated that a chapter acquires legal personality "on the date it was issued a certificate" by its mother federation or national union. The acquisition of legal personality is automatic, but only for the purpose of filing a petition for certification of election(PCE).5.4c. Submission of Confirming Documents

The above mentioned acquired personality is tentative because it needs to be confirmed by submission of additional documents, otherwise the chapter does not become entitled to the rights and privileges of an LLO. However, the law does not fix a time limit for the submission of the additional documents.5.4d. A Trade union Center cannot Create a Chapter

As held by the SC, which ruling conforms to Section 234-A, only registered federations or national unions may create chapters. (SMCEU vs. SMPPEU; G.R. No. 171153)5.4e. When does a chapter becomes an LLO?

The provisions of D.O. No. 9-1997 which provides that the local/chapter shall acquire legal personality from the date of filing of the complete

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documents enumerated in Section 1 thereof was superseded by D.O. No. 40-03 which states that the labor organization or workers’ association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration.5.4f. Recognition by BLR not a Ministerial Duty

The shift from date of submission to date of issuance of certificate of registration is in line with the court's ruling in 1997 that registration is not a ministerial function.Progressive Development Corp.-Pizza Hut vs. Laguesma, et al., G.R. No. 115077, April 18, 1997FACTS: The union, Nagkakaisang Lakas ng Manggagawa (NLM) - Katipunan, filed a petition for certification of the Progressive development Corporation (Pizza Hut)

Petitioner employer filed a Motion to Dismiss the petition, alleging fraud falsification and misrepresentation in the respondent Union's registration, making it void and invalid. The motion specifically alleged that: a) respondent Union's registration was tainted with false, forged, double or multiple signatures of those who allegedly took part in the ratification of the respondent Union's constitution and by-laws in the election of its officers; xxx thus, there were serious falsities in the dates of issuance of the charter certification and the organization meeting of the alleged chapter. Citing other instances of misrepresentation and fraud, petitioner employer filed a Supplement to its Motion to Dismiss, claiming that : xxx voting was not conducted by secret ballot in violation of Article 241, Section (c) of the Labor Code; and that the constitution and by-laws submitted in support of its petition were not properly acknowledged and notarized.

Petitioner also filed a petition seeking the cancellation of the Union's registration on the grounds of fraud and falsification. Petitioner also filed with the Med-Arbiter a motion requesting suspension of proceedings in the certification election case until after the prejudicial question of the Union's legal personality is determined in the proceedings for cancellation of registration.However, the Med-Arbiter directed the holding of a certification election among petitioner's rank-and-file employees. An appeal to the office of the Secretary of Labor was denied, as well as a motion for reconsideration. In the DOLE Resolution dated December 29, 1993, the suggestion is made that once a labor organization has filed the necessary documents and papers and the same have been certified under oath and attested to, said organization necessarily becomes clothed with character of a LLO. In other words, recognition by the Bureau of Labor Relation becomes merely a ministerial function.ISSUE: WON recognition by the BLR is a ministerial duty.HELD: NO. In the first place, the public respondent's views as expressed in his Resolution miss the entire point behind the nature and purpose of proceedings leading to the recognition of unions as legitimate labor organizations under Article 234 of the Labor Code (LC). The requirements embodied in the said provision are intended as preventive measures against the commission of fraud. After the filing of the necessary documents, it becomes

mandatory for the BLR to check if the requirements under Article 234 have been sedulously complied with. If its application for registration is vitiated by falsification and serious irregularities, especially those appearing on the face of the application and the supporting documents, a labor organization should be denied recognition as a LLO. If a certificate of recognition has been issued, the propriety of the labor organization's registration could be assailed directly through cancellation of registration proceedings in accordance with Articles 238 and 239 of the LC, or indirectly, by challenging its petition for the issuance of an order of certification election.Note: The present rule under R.A. no. 9481, Article 258-A, no longer allows an employer to oppose a petition for CE.5.4g. Requirements Relaxed

The creation of a local does not need subscription by a minimum number of members. The 20% initial membership mentioned in article 234(c) is required to register an independent union but not local. this makes it easier to create a chapter than an independent union, thus expediting the growth of federation or national unions. Such affect records with the objective, stated in Article 211, to foster a strong and united labor movement.

In 1992 the SC, applying the Implementing Rules (IR) at that time, declared that the submission of books of account was required for a local union to be properly registered, otherwise the local could not be considered a LLO.

But in 1997 IR (D.O. No.9) deleted the book of accounts requirement. Expectedly, the SC held in 1999 that since the D.O. no longer required the presentation of books of account, a union could be registered without having to submit such books.Note: The current IR (D.O. No. 40-03) does not revive the books of account requirement in registration.5.5. Union's Legitimacy not Subject to Collateral Attack

Section 8, Rule IV of D.O. No. 40-03 provides that the legal personality of a labor union may be questioned only through an independent petition for cancellation of union registration in accordance with Rule XIV of the IR, and not by way of collateral attack in the petition for CE proceedings under Rule VIII.

6. COLLECTIVE BARGAINING UNIT (CBU)One of the requirements to register an

independent union is that the applicant should have a membership of at least 20 % of the employees "in the bargaining unit where it seeks to operate."Bargaining Unit(BU)

- a group of employees sharing mutual interests within a given employer unit, comprised of all or less than all of the entire body of employees in the employer

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unit or any specific occupational or geographical grouping within such employer unit.Note: A BU is always a group of employees. It may be all the supervisors or all the rank-and-file in the company, but the law does not allow supervisors and rank-and-file to belong to the same BU.

A CBU is different and bigger than a union. Union members come from the CBU and there can be several rival unions within a CBU. While officers lead and represent a union, a union represents a CBU.

7. CONSTITUTION, BY-LAWS, AND REGULATIONSOne of the registration requirements is the

submission of the constitution and by-laws (CBL) of the applicant union.

Like other voluntary associations, labor unions, have the right to adopt constitutions, rules and by-laws within the scope of the lawful purposes of the union and bind their members thereby, provided they are reasonable, uniform, and not discriminatory, and provided they are not contrary to public policy or the law of the land.

A union's constitution and by-laws govern the relationship between and among its members. As in the interpretation of contracts, if the terms are clear and leave no doubt as to the intention of the parties, the literal meaning of the stipulation shall control.J&J labor Union-FFW, et al. vs. Director of Labor Relations, G.R. No. 76427, February 21, 1989FACTS: The union's constitution and by-laws, reads: "A member who has been suspended or terminated without reasonable cause shall be extended a financial aid from the compulsory contributions in the amount of seventy-five centavos from each member weekly.

Oscar, a member of the union, was dismissed by his employer because in his job application form he did not state that he had a relative in the company, in violation of the company policies. When the union refused to provide him the financial aid mentioned in the union's constitution, Oscar filed a complaint against the union. When the BLR ordered the grant of financial aid, the union contended that such order is tantamount to compelling the union to disburse its fund without the authority of the general membership and to collect from its members without the required individual authorizations.ISSUE: WON individual authorizations from the members are still needed for the grant of financial aid.HELD: NO. The nature of the said contribution being compulsory, and the fact that the purpose as stated is for financial aid, clearly indicate that individual payroll authorizations of the union members are not necessary. The union's constitution and by-laws govern the relationship between and among its members. The union can be ordered to release its fund intended for the promotion of mutual assistance in favor of private respondent.

SOME REASONS FOR JOINING A UNION1. Need to improve conditions.2. Discontent with wages.3. Inadequate benefits.4. No feeling of justice.5. Insecurity.6. Poor Supervision.7. Lack of communication.

7.1 Limitations to by-laws1. It must not be intended to commit wrong;2. It must not authorize interference with the

constitutional rights of others; and3. It must be democratically ratified.

7.2 AmendmentsIt may be amended under the laws of the state,

and in the absence of other requirements, it may be amended y a majority vote of the members.

8. PROVISIONS COMMON TO THE REGISTRATION OF LBOR ORGANIZATIONS AND WORKER'S ASSOCIATION8.1. Attestation, Fee, Copies of Documents

The application for registration, notice for change of name, merger, consolidation and affiliation including all the accompanying documents, shall be certified under oath by its Secretary or Treasurer, as the case may be, and attested by its President.

Both shall be issued a certificate of registration upon payment of the prescribed registration fee.

One original copy and two duplicate copies of all documents accompanying the application or notice shall e submitted to the Regional Office or the bureau. 8.2. Action on the Application/Notices

The Regional Office or the Bureau, as the case may be, shall act on all the applications for registration or notice of change of name, affiliation, merger and consolidation within ten days from receipt either by: a) approving the application and issuing the certificate of registration/acknowledging the notice /report; or b) denying the application/notice for failure of the applicant to comply with the requirements for registration/notice.8.3. Denial of Application/Return of Notice

Where the documents supporting the application for registration/notice of change of name, affiliation, merger and consolidation are incomplete or do not contain the required certification and attestation, the Regional Office or the Bureau shall, within five days from receipt of the application/notice, notify the applicant in writing of the necessary requirements and complete the same within thirty days from receipt of notice. Where the applicant fails to comply, the application shall be denied, or the notice of change of name, affiliation, merger and consolidation returned, without prejudice to filing a new application or notice.

The order denying the application for registration/ returning the notice of change of name, affiliation, merger or consolidation shall be in writing, stating in clear terms the reasons for the denial or return.

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8.4. AppealWhere to appeal?

1. The denial of the Regional Office may be appealed to the Bureau and then to the Court of Appeals.

2. If the denial originated at the Bureau itself, the appeal is to the Secretary of Labor. Period:

Should be filed within ten(10) days from receipt of such notice, on the ground of grave abuse of discretion or violation of the rules.Note: The memorandum of appeal shall be filed with the Regional Office or the Bureau that issued the denial/return of notice.

The memorandum together with the records shall be transmitted by the Regional Office to the Bureau, or by the Bureau to the Office of the Secretary, within twenty-four(24) hours from receipt of the memorandum of appeal.

The Bureau or the Office of the Secretary shall decide the appeal within twenty(20) days from receipt of the records of the case.

MALEN- 197(9)-211(1.3)

9. AFFILIATION*An affiliate is an independently registered union that enters into an agreement of affiliation with a federation or national union;- also refers to a chartered local which applies for and is granted an independent registration but does not disaffiliate from its mother federation or national union.Reasons for affiliation:-to secure support or assistance-to utilize expertise in preparing bargaining proposals-to marshal manpower

*A federation or national union ceases as such when it loses its locals. (see Arts. 237 and 238)

*The relationship between a local chapter and a labor federation or national union is generally understood to be that of agency, where the local is the principal and the federation the agent.

*Affiliation by a duly registered local union with a national union or federation does not make the local union lose its legal personality.

9.1 Report of Affiliation; Requirements

*An independently registered union affiliating with a federation or national union is required to report such affiliation. The report shall be filed with the Regional Office that issued its certificate of registration.

*It shall be accompanied by the ff. Documents:a) Resolution of the Board of Directors approving the

affiliation

b) Minutes of general membership meeting approving affiliation

c) Total number of members comprising the labor union and the names of members who approved the affiliation

d) Certificate of affiliation issued by the federatione) Written notice to employer concerned if the

affiliating union is the incumbent bargaining agent.

10. DISAFFILIATION

*The local unions remain the basic units of association, free to serve their own interests subject to the restraints imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into existence.

*In other words, to disaffiliate is a right, but to observe the terms of affiliation is an obligation.

*This right is consistent with the constitutional guarantee of freedom of association.

*The pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation. As the local union had validly disaffiliated, the employer could validly affiliate with another federation. (Skylanders vs. NLRC)

*Neither is the disaffiliation from the federation, alleged as an act of disloyalty, a sufficient ground for dismissal from employment. It may sever its affiliation at any time and such disaffiliation cannot be considered disloyalty in the absence of specific provisions in the federation’s constitution prohibiting disaffiliation. (MSMG-UWP vs. Ramos)

Cases:

Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.Facts: In their CBA, the company recognized the local union, represented by PAFLU, as the sole bargaining agent. While the CBA was still in force, 32 out of 36 members of the union disaffiliated from PAFLU, the mother federation. PAFLU requested the company to terminate the employment of the employees which the company did.

Held: The dismissal from employment was not justified. PAFLU, acting for and in behalf of its affiliate, had the status of an agent while the local union remained the basic unit of the association free to secure the common interest of all its members.

The constitution and by-laws provided that the local union should remain an affiliate as long as 10 or more of the members evidence their desire to continue

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the affiliation. As only 4 did not sign the resolution for disaffiliation, the intent to disaffiliate was manifest.

Tropical Hut Employees Union-CGW, et. al. Vs. Tropical Hut Food Market, Inc. There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU was expressly forbidden to disaffiliate from the federation.

The alleged noncompliance of the local union with the provision in the NATU constitution requiring the service of 3months notice of intention to withdraw did not produce the effect of nullifying the disaffiliation for the ff. grounds:(1)NATU was not a legitimate labor organization and (2) the act of noncompliance with the procedure on withdrawal is premised on purely technical grounds which cannot defeat the fundamental right of self-organization.

*In the absence of enforceable provisions in the federation’s constitution preventing disaffiliation of a local union, a local may sever its relationship with its parent.

10.1 Local Union is the Principal; Federation, the Agent

The NATU possessed the status of an agent while the local union remained the basic principal union which entered into contract with respondent company. When the THEU disaffiliated from its mother federation, the former did not lose its legal personality as the bargaining union under the CBA. (Tropical Hut case)

*Disaffiliation of employees from their mother union and their formation into a new union do not terminate their status as employees of the corporation, as the employees and members of the local union did not form a new union but merely exercised their right to register their local union. A local union when circumstances so warrant is free to disaffiliate from its mother union.

10.2 When to Disaffiliate-only when warranted by circumstances.

*Generally, a labor union may disaffiliate from the mother union to form a local or independent union only during the 60-day freedom period immediately preceding the expiration of the CBA.

*The freedom period refers to the last 60 days of the fifth and last year of a CBA. (see Art. 256)

*But even before the onset of the freedom period, disaffiliation may still be carried out but such disaffiliation must be effected by a majority of the members in the bargaining unit.

>>> Azucena believes that this is only true if the contract of affiliation does not specify the period for possible disaffiliation. If it does, the stipulation must be observed.

10.3 Disaffiliation must be by Majority Decision* Art. 241(d) –it has to be decided by the entire membership through secret balloting.

*A member or any number of members may disaffiliate from their union during the freedom period. BUT disaffiliating the union itself from the mother union must be supported by the majority of members.

If done by a minority, even during the freedom period the act may constitute disloyalty. The minority members breaking away at the wrong time may be expelled from the union and because of the union security clause, may be removed from their employment.

Case:

Villar, et al. vs. InciongHad petitioners (disaffiliating union members)

merely disaffiliated from the Amigo Employees Union-PAFLU, there could be no legal objections thereto for it was their right to do so. But what petitioners did by the very clear terms of their ‘Sama-samang Kapasiyahan’ was to disaffiliate the Amigo Employees Union-PAFLU from the PAFLU, an act which they could not have done with any effective consequence because they constituted the minority in the Amigo Employees Union-PAFLU.

Neither is there merit to petitioners contention that they had the right to present representation issues within the 60-day freedom period. The petition was filed in the name of the Amigo Employees Union which had not disaffiliated from PAFLU, the mother union.

Petitioners being a mere minority of the local union may not bind the majority members of the local union.

10.4 Disaffiliation: Effect on Legal Status

*When a union which is not independently registered disaffiliates from the federation, it is not entitled to the rights and privileges granted to a legitimate labor organization. It cannot file a petition for certification election.

10.5 Disaffiliation: Effect on Union Dues

*The obligation of an employee to pay union dues is coterminous with his affiliation. The employee’s check-off authorization, even if declared irrevocable, is good only as long as they remain members of the union concerned.

10.6. Disaffiliation; Effect on Existing CBA; the ‘Substitutionary’ Doctrine

*The CBA continues to bind the members of the new or disaffiliated and independent union up to the CBA’s expiration date.

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*The SUBSTITUTIONARY DOCTRINE provides that the employees cannot revoke the validly executed collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. The new agent must respect the contract. They can only negotiate with the management for the shortening thereof.

11. REVOCATION OF CHARTER

* A federation may revoke the charter issued to a local by serving on the latter a verified notice of revocation, copy furnished to the Bureau on the ground of disloyalty or other grounds specified in the by-laws.-shall divest the local chapter of its legal personality upon receipt of the notice by the Bureau unless the local chapter has acquired independent registration.

11.1 Effect of Cancellation of Registration of Federation or National Union on Locals/Chapters-shall operate to divest its locals of their status as legitimate labor organizations unless the locals are covered by a duly registered CBA. In the latter case, the locals shall be allowed to register as as independent unions, failing which they shall lose their legitimate status upon the expiration of the CBA.

12. MERGER OR CONSOLIDATION

MERGER of labor organizations- is the process where a labor organization absorbs another, resulting in the cessation of the absorbed labor organization’s existence and the continued existence of the absorbing labor organization.

Effect: to transfer to the absorbing organization all the rights, interest and obligations of the absorbed organization.

CONSOLIDATION of unions- refers to the creation and formation of a new union arising from the unification of the two or more unions.

Effect: the newly created labor organization acquires all the rights, interests and obligations of the consolidating labor organizations.

Distinction:*Consolidation usually occurs between two unions that are approximately the same size, whereas merger often involves larger union merging with a smaller union.

Why do unions merge?-to gain access to greater resources and expertise-to eliminate interorganizational conflicts-to maintain job security and institutional survival.

12.1 Notice of Merger/Consolidation of Labor Organizations; Where to File

*Notice of merger or consolidation of independednt labor unions, chartered locals and workers’ associations-Regional Office that issued the certificate of registration/certificate of creation of chartered local of either the merging or consolidating labor organization.

*Notice of merger/consolidation of federations or national unions-Bureau

12.2. Requirements of Notice of Merger/Consolidation

a) Minutes of convention or general meetings of all merging/consolidating labor organizations with list of members who approved the same

b) Amended constitution and by-laws and minutes of its ratification

12.3. Certificate of Registration-shall bear the registration number of one of the merging labor organizations as agreed upon by the parties.

-shall indicate the ff:a) New nameb) The fact that it is a merger/consolidation of two

or more labor organizationsc) Name of labor organizations that were merged

or consolidatedd) Office or business addresse) Date when each of the labor organizations

acquired legitimate personality

13. CHANGE OF NAME-Notice shall be filed with the Bureau or the Regional Office, accompanied by proof of approval of change of name and amended constitution and by-laws.

13.1 Effect of Change of Name-legal personality is not affected.-all rights and obligations of a labor organization under its old name shall continue to be exercised.

ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate labor organization, whether national or local, may be cancelled by the Bureau, after due hearing, only on the grounds specified in Article 239 hereof."

"ART. 238-A. Effect of a Petition for Cancellation of Registration. - A petition for cancellation of union registration shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition for certification election.

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In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts."

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

(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters;

(c) Voluntary dissolution by the members.

ART. 239-A. Voluntary Cancellation of Registration. - The registration of a legitimate labor organization may be cancelled by the organization itself. Provided, That at least two-thirds of its general membership votes, in a meeting duly called for that purpose to dissolve the organization: Provided, further, That an application to cancel registration is thereafter submitted by the board of the organization, attested to by the president thereof.

1.CANCELLATION OF REGISTRATION; GROUNDS

-Cancellation is the government’s act that divests the organization of its status as legitimate labor organization.- Although it does not cease to exist or become unlawful organization, its juridical personality as well as its statutory rights and privileges is suspended. It loses entitlement to the rights enumerated in Art. 242.

Requisites for THIRD ground: (By the desire of the union members themselves)

1. Desire to dissolve-voted upon through secret balloting

2. Balloting should take place in a meeting duly called for this purpose

3. 2/3 affirmative vote of the general membership, not just of the quorum.

4. Application for cancellation passed and submitted by the union’s governing board which application must be attested to by the president.

1.1 Invalid Grounds-illegal strike-nonrenewal of registration/permit (provided it has juridical personality when it filed the petition and the court acquired jurisdiction)

1.2 ‘Cabo’ and other Grounds Deleted

Cabo- refers to a person or group of persons or to a labor group which, in the guise of a labor organization, supplies workers to an employer, with or without any monetary or other consideration whether in the capacity of an agent of the employer or as an ostensible independent contractor.

Also deleted:*Sweetheart Contract- CBA which provides for terms and conditions of employment below minimum standards established by law.

*Asking for or accepting attornery’s fees or negotiation fees from employer- but this cause of union cancellation still exists because Art.249 prohibits it as ULP.

*Violation of Art.241- if 30% of the members support the petition

*Failure to submit annual documentary reports- taken-up under Art.242-A.

1.3. Administrative Cancellation; The Reportorial Requirements

Failure of the labor organization to submit the ff. reports for 5 consecutive years authorized the Bureau to institute cancellation proceedings upon its own initiative or upon complaint by any party-in-interest:

1. Any amendment to its constitution and by-laws within 30 days from its adoption

2. Annual financial reports within 30 days after the close of each fiscal year or calendar year.

3. Updated list of newly-elected officers together with the appointive officers or agents entrusted with the handling of funds, within 30 days after each regular or special election of officers or from the occurrence of any change in the officers

4. Updated list of individual members of chartered locals, independent unions and workers’ associations, within 30 days after the close of each fiscal year; and

5. Updated list of its chartered locals and affiliates or member organization, CBAs executed and their effectivity period in the case of federations or national unions, within 30 days after the close of each fiscal year, as well as updated list of their authorized representatives, agents or signatories in the different regions of the country.

The fiscal year shall coincide with the calendar year, unless a different period is prescribed in the constitution or by-laws.

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Ramil 211 (2) - 226 (end of Ferrer)

2.) WHO FILES PETITION FOR CANCELLATION OF UNION REGISTRATION

General Rule: Any party-in-interest, example: employer Exception: Violations of Art. 241 which can only be commenced by members of the labor organization concerned.Petition to cancel must be:a.) under oath;b.) state clearly and concisely the facts and grounds; andc.) accompanied by a proof of service.

3.) WHERE TO FILE PETITION

Regional Director- Legitimate independent labor union, chartered

local, and workers association.

Bureau- Federations, national or industry unions and trade

unions upon the filing of an independent complaint or petition for cancellation.

AppealsRegional Director – BLR – CA (through certiorari) BLR- DOLE Sec. – CA (through certiorari)

4.) PROCEDUREArt. 226, 242-A

Article 240. Equity of the incumbent. – All existing federations and national unions which meet the qualifications of a legitimate labor organization and none of the grounds for cancellation shall continue to maintain their existing affiliates regardless of the nature of the industry and the location of the affiliates.

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Chapter IIRIGHTS AND CONDITIONS OF MEMBERSHIP

Article 241. Rights and conditions of membership in a labor organization. – The following are the rights and conditions of membership in a labor organization:(a) No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed;(b) The members shall be entitled to full and detailed reports from their officers and representatives of all financial transactions as provided for in the constitution and by-laws of the organization;(c) The members shall directly elect their officers, including those of the national union or federation to which they or their union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirements for candidacy to any position shall be imposed other than membership in good standing in subject labor organization. The secretary or any other responsible union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with the appointive officers or agents who are entrusted with the handling of funds, within thirty (30) calendar days after the election of officers or from the occurrence of any change in the list of officers of the labor organization; (As amended by Section 16, Republic Act No. 6715, March 21, 1989).(d) The members shall determine by secret ballot, after due deliberation, any question of major policy affecting the entire membership of the organization, unless the nature of the organization or force majeure renders such secret ballot impractical, in which case, the board of directors of the organization may make the decision in behalf of the general membership;(e) No labor organization shall knowingly admit as members or continue in membership any individual who belongs to a subversive organization or who is engaged directly or indirectly in any subversive activity;(f) No person who has been convicted of a crime involving moral turpitude shall be eligible for election as a union officer or for appointment to any position in the union;(g) No officer, agent or member of a labor organization shall collect any fees, dues, or other contributions in its behalf or make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws;(h) Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt signed by the officer or agent making the collection and entered into the record of the organization to be kept and maintained for the purpose;(i) The funds of the organization shall not be applied for any purpose or object other than those expressly provided by its constitution and by-laws or those expressly authorized by written resolution adopted by the majority of the members at a general meeting duly called for the purpose;

(j) Every income or revenue of the organization shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization.Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual financial report to the Department of Labor and Employment or from the date the same should have been submitted as required by law, whichever comes earlier: Provided, That this provision shall apply only to a legitimate labor organization which has submitted the financial report requirements under this Code: Provided, further, that failure of any labor organization to comply with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization; (As amended by Section 16, Republic Act No. 6715, March 21, 1989).(k) The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly authorized representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the organization;(l) The treasurer of any labor organization and every officer thereof who is responsible for the account of such organization or for the collection, management, disbursement, custody or control of the funds, moneys and other properties of the organization, shall render to the organization and to its members a true and correct account of all moneys received and paid by him since he assumed office or since the last day on which he rendered such account, and of all bonds, securities and other properties of the organization entrusted to his custody or under his control. The rendering of such account shall be made:(1) At least once a year within thirty (30) days after the close of its fiscal year;(2) At such other times as may be required by a resolution of the majority of the members of the organization; and(3) Upon vacating his office.The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the Secretary of Labor.(m) The books of accounts and other records of the financial activities of any labor organization shall be

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open to inspection by any officer or member thereof during office hours;(n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members in a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president.(o) Other than for mandatory activities under the Code, no special assessments, attorney’s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction; and(p) It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under existing labor laws.For this purpose, registered labor organizations may assess reasonable dues to finance labor relations seminars and other labor education activities.Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or expulsion of officers from office, whichever is appropriate. At least thirty percent (30%) of the members of a union or any member or members specially concerned may report such violation to the Bureau. The Bureau shall have the power to hear and decide any reported violation to mete the appropriate penalty.Criminal and civil liabilities arising from violations of above rights and conditions of membership shall continue to be under the jurisdiction of ordinary courts.

1.) DEMOCARATIZATION OF UNIONS

The aim of unionism is to install industrial democracy, the unions themselves must be democratic. This is the rationale behind Art. 241.

2.) NATURE OF RELATIONSHIP BETWEEN UNION AND ITS MEMBERS

The relationship is fiduciary in nature and arises out of two factors: one is the degree of dependence of the individual employee on the union organization and the other is the comprehensive power vested in the union with respect to the individual. 

2.1 Duty of Court to Protect Laborers from Unjust Exploitation by Oppressive Employers and Union Leaders

The Court must be vigilant to protect the individual interest of the union members.

3. RIGHTS OF UNION MEMBERS

1.) Political right- right to vote and be voted for;2.) Deliberation and decision making right- right to participate in deliberations on major policy questions and decide them by secret ballot.3.) Rights over money matters- the member’s right against excessive fees; right against unauthorized collection of contribution or unauthorized disbursements; right to require adequate records of income and expenses and right of access to financial records; right to vote on officers’ compensation; right to vote on proposed special assessments and be deducted a special assessment only with the members’s written authorization.4.) Right to information- right to be informed about the organization’s constitution, by-laws, collective bargaining agreement and labor laws.5.) Right to present grievances to the employer at any time.

3.1 Eligibility for Membership

An employee is already qualified for union membership starting on his first day of service. An employees’ membership in a union, does not necessarily mean coverage of the CBA, if one exists. Inclusion in the CBU depends on the determination of its appropriateness under Art. 234 and Art. 255. Inclusion or membership in a union depends on the union constitution and by-laws, without prejudice to Art. 277 (c ). Inclusion or coverage in the CBA depends on the stipulation in the CBA itself.

4. ELECTION OF UNION OFFICERS

Election is through secret ballot. It takes place at a 5 year interval. What positions to fill up, where, and how the election should be done are matters left by law to the union’s constitution and by-laws or to agreement among members. Only in the absence thereof will the Implementing Rules of Book V apply. Under the Rules, the incumbent president is required to create an election committee within 60 days before expiration of the incumbent officer’s term. If the officers with expired term do not call an election, the remedy is for at least 30% of the members to file a petition with the DOLE Regional Office.

UST Faculty Union, et al. vs. Bitonio, Jr., et al., G.R. No.131235, November 16. 1999

Facts: Petitioners claim numerous anomalies allegedly committed by the union officers impelled them to elect a new set of USTFU officers before the end of the term of the incumbents. They assert that such was pursuant to their right to self-organization.The Med-Arbiter of DOLE declared the election null and void on the ground that the election was initiated and

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conducted not in accordance with the union’s constitution and by-laws. On appeal, the BLR Director upheld the Med-Arbiter‘s decision.Issue: Whether or not the petitioner’s election of a new set of officer before the end of term of the incumbents is a proper exercise of their right to self organization?

Ruling: No. Petitioners' frustration over the performance of private respondents, as well as their fears of a "fraudulent" election to be held under the latter's supervision, could not justify the method they chose to impose their will on the union. Director Bitonio aptly elucidated: 

The constitutional right to self-organization is better understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to Organize), to which the Philippines is signatory. Article 3 of the Convention provides that workers' organizations shall have the right to draw up their constitution and rules and to elect their representatives in full freedom, free from any interference from public authorities. The freedom conferred by the provision is expansive; the responsibility imposed on union members to respect the constitution and rules they themselves draw up equally so. The point to be stressed is that the union's CBL is the fundamental law that governs the relationship between and among the members of the union. It is where the rights, duties and obligations, powers, functions and authority of the officers as well as the members are defined. It is the organic law that determines the validity of acts done by any officer or member of the union. Without respect for the CBL, a union as a democratic institution degenerates into nothing more than a group of individuals governed by mob rule

4.1 Eligibility of Voters

-Only members of the union can participate in the election of union officers.-A member in good standing is any person who has fulfilled the requirements for membership in the union and who has neither voluntarily withdrawn from membership nor had been expelled or suspended from membership after appropriate proceedings consistent with lawful provision of the union’s constitution and by-laws.Rights of a labor organization in the eligibility of voters:1.) The labor organization may prescribe reasonable rules and regulations with respect to voting eligibility.2.) A labor may condition the exercise of the right to vote on the payment of duesReason: since paying dues is a basic obligation of membership.Rules to be followed: a.) any rule denying dues-delinquent members the right to vote must be applied uniformly; 2.)members must be afforded a reasonable opportunity to pay dues, including a grace period during which dues may be paid without any loss of rights.

The question of eligibility is the applicable payroll period and the employee’s status during the applicable period. It is the payroll of the month preceding the labor dispute in case of regular employees and the payroll period at or near the peak of operations in case of employees in seasonal industries.If none of the contending unions insisted on the use of the payroll period-list as voting list, the act of the nonunion employees of joining the election by casting their votes is a clear manifestation of their intention to join a union. Members can vote in the election of unions officers even if their name is not submitted to the BLR.

4.2 Union Officer Must Be an Employee

Art. 241 ( c) provides that xxx no qualification requirements for candidacy to any position shall be imposed other than membership in good standing in subject labor organization.An individual who is a member of a subversive organization or engaged directly or indirectly in subversive activity cannot be a union member.

4.3 Disqualification of Union Officers

A union member is disqualified to run as union officer if he is convicted of a crime of moral turpitude.A crime of moral turpitude is one characterized by ‘an act of baseness, vileness or depravity in the private or social duties which a man owes his fellowmen, or to society in general, contrary to accepted and customary rule of right and duty between man and man, or conduct contrary to justice, honesty, modesty, or good morals.

4.4 Union Election Protest; Proclamation of Winners

Provided under Rule XI of D.O. No. 40-03.

5. ACTION AGAINST UNION OFFICERS

Past malfeasance or misfeasance of a union officer after his election is not a ground for expulsion from the union.The remedy against erring union officers is not referendum but union expulsion. The reason is that where the people have elected a man to office, it must be assumed that they did this with the knowledge of his life and character and that they disregarded or forgave his faults or misconduct if he had been guilty of any.

6. DUE PROCESS IN IMPEACHMENT

Litton Mills Employees Association- Kapatiran vs. Ferrer-CallejaThe impeachment of a union officer is provided under Section 2, Article XV of the petitioner-union’s constitution and by-laws provided the procedure to be followed:

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1.) Impeachment should be initiated by petition signed by at least 30% of all bona fide members of the union, and addressed to the Chairman of the Executive Board;2.) A general membership meeting shall be convened by the Board Chairman to consider the impeachment of an officer;3.) Before any impeachment vote is finally taken, the union officer against whom impeachment charges have been filed shall be given ample opportunity to defend himself;4.) A Majority of all the members of the union shall be required to impeach or recall union officers.

7.) EXPULSION OF MEMBERS

A member is entitled to due process.

Ferrer, et al. vs. NLRC, G.R. No. 100898, July 5, 1993

Facts: Petitioner and companions filed with the Department of Labor a complaint seeking the expulsion from SAMAHAN of its officers headed by president Capitle allegedly because the officers failed to attend to the economic demands of the workers. Petitioner and companions then elected a new set of officers which was objected by the FFW, the federation. The employer did nit remit any dues to the officers led by Capitle. As a result, the union headed by Capitle expelled Ferrer, et al, from the union and demanded from the company the termination of their employment. At the time they were dismissed they had been regular OFC employees for 10 years.Ferrer and his four companions turned to the Federation of Democratic Labor Unions (FEDLU) and requested that they be represented (“katawanin”) by said federation before the DOLE in the complaint which they intended to file against the union (SAMAHAN), the FFW, and the company.

Issue: Whether or not Ferrer and his four companions were illegally dismissed without due process of law?

Held: Yes. In the first place, the union has a specific provision for the permanent or temporary "expulsion" of its erring members in its constitution and by-laws ("saligang batas at alituntunin"). No hearing ("pandinig") was ever conducted by the SAMAHAN to look into petitioners' explanation of their moves to oust the union leadership under Capitle, or their subsequent affiliation with FEDLU. While it is true that petitioners' actions might have precipitated divisiveness and, later, showed disloyalty to the union, still, the SAMAHAN should have observed its own constitution and by-laws by giving petitioners an opportunity to air their side and explain their moves. If, after an investigation the petitioners were found to have violated union rules, then and only then should they be subjected to proper disciplinary measures.

TINA (pp.226-239)

8. RELIEF WITHIN THE UNION GR: relief must first be sought within the union itself

in accordance with its constitution and by-laws. In the case of Diamonon v. DOLE where a complaint

filed by the union VP against the president and treasurer of 2 unions was filed directly with DOLE instead of being presented to the national convention as required by the union by-laws, the SC ruled that the action was premature for the party’s failure to comply with the remedy for intra-union dispute provided for in its Constitution and by-laws.

A party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief but, but also pursue it to its appropriate conclusion before seeking judicial intervention.

If intra-union remedies have failed to correct any violation of the internal labor organization procedures, a case can then be filed with the Bureau of Labor Relations.

8.1. Exceptions Where the exhaustion of administrative remedies

within the union itself would amount to a denial of justice or would be illusory or vain.

When there is a violation of due process (ex: when union members have been suspended without the benefit of a formal charge).

9. CONSEQUENCE OF VIOLATON OF RIGHTS Violation of rights of members may result in the

cancelation of the union registration of the expulsion of culpable officers (see last paragraph of Art. 241).

Under D.O. No. 40-03, any complaint or petition with allegations of mishandling, misappropriation or non-accounting of funds in violation of Art 241 shall be treated as an intra-union dispute and shall be heard ad resolved by the Med-Arbiter.

9.1. Exception: When 30% NOT Required Art. 241 specifically requires 30% of the members to

report a violation of the labor organization procedures.

However, when such violation directly affects only 1 or 2 members, then only 1 or 2 members would be enough to report such violation.

The 30% requirement provided for in Art. 241 is NOT mandatory because of the use of the permissive word “MAY”

Furthermore, Art. 226 of the Labor Code provides that the Bureau of Labor Relations shall have original and exclusive jurisdiction over “all inter-union ad intra-union conflicts and disputes, grievances or problems arising from or affecting labor management relations,” making NO reference whatsoever to any such 30% support requirement.

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Finally, the officials mentioned in Art. 22 are given the power to act on such disputes “upon request of either parties” or “at their own initiative.”

10. VISITORIAL POWER The SOLE or his duly authorized representative is

given visitorial power under Art. 274 to inquire into the financial activities of any labor organization to determine compliance with the law and to aid in the prosecution of any violation thereof.

11. CHECK-OFFS AND ASSESSMENTS Check-off method of deducting from an employee’s

pay at prescribed period, the amounts due the union for fees, fines or assessments.

The union’s right to collect union dues is recognized under Art. 277(a).

Union dues is one of the lawful deduction sanctioned y law under Art. 113, but such dues must be REASONABLE.

The amount and collection of union dues effect the entire membership and should thus be approved by the members themselves.

11.1. Assessments, like Dues, may also be Checked Off DUES payments to meet the union’s general and

current obligations. The payment must be regular, periodic and uniform.

Assessment refer to payments used for a special purpose, especially if required only for a limited time.

See Art. 241 (no special assessment fees, attorney’s fees etc. may be checked off from any amount due an employee w/o individual written authorization signed by the employee).

Attorneys fees may NOT be deducted or checked’ off from any amount due an employee w/o his written consent EXCEPT for MANDATORY ACTIVITIES under the Code.

Mandatory Activity judicial process of settling dispute laid down by law.

Deductions for union service fee are authorized by law and needs no check-off authorizations.

Individual written authorizations are required to deduct from member’s salary the attorney’s fee for concluding a CBA through compulsory arbitration.

PALACOL v. PURA-FERRA CALLEJA (GR NO. 85333Facts: Union President submitted to the company the

ratification by the union members of the new CBA. He also submitted an authorization for the company to

deduct union dues of P10 every payday & 10% as special assessment, from the CBA lump sum pay granted to the union members.

672 members initially authorized 10% special assessment while 173 opposed it. Subsequently, 528 members submitted documents stating that they are

withdrawing or disauthorizing thee deduction of any amount from their CBA lump sum.

They argue that the 10& special assessment is violative of Art. 214(o) in relation to Art. 222(b).

Ruling: The Union’s failure to STRICTLY comply with the

requirements set forth by aw invalidates the special assessment when it failed to comply with Art. 241(n) requiring a general membership meeting, and NOT local membership meetings on separate occasions.

There can be NO valid check-off considering that the majority of the union members had already withdrawn their individual authorizations. Such withdrawal is equivalent to NO authorization at all.

11.2. Three Requisites to Collect Special Assessment

a) Authorization by written resolution of the majority of all the members at the general membership meeting duly called for the purpose

b) Secretary’s record of the minutes of the meetingc) Individual written authorization for check-off duly

signed by the employee

11.2a. Article 241 (n & o): Authorization Should Proceed from Free Consent In a case, the union officers who negotiated the CBA

w/c grants P42M benefits package required the union members to sign an authorization for the deduction or check-off of P42.M from the P42M package.

Such authorization embodied in the ratification of the employer-employee union memo of agreement is a VITIATED authorization because it could be assumed that the union members felt it difficult to turn down the substantial and lucrative award of P42M.

Thus, such situation militated against the legitimacy or genuine consent that should characterize the authorization.

11.3. Check-off of Agency Fee Agency fee is an allowable deduction from

employer’s wage. This is an amount equivalent to union dues which a

non-union ember pays to the union because he benefits from the CBA negotiated by it.

Allowed under Art. 248(e).

11.4. Illegal Check-off Ground for Cancellation Illegal check-off may give rise to a charge of illegal

deduction in violation of Art. 113.

11.5 Employer’s Liability in Check-off Arrangements The law does not make the employer directly liable

for the payment to labor organization of union dues & assessments that the former failed to deduct from

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its employee’s salaries pursuant to the check-off stipulation.

The employers failure to deduct may constitute a violation of a contractual commitment for which it may incur liability for unfair labor practice.

But the employer does NOT, by that omission, incur liability for the aggregate of dues uncollected from the union members.

CHECK-OFF imposes an extra burden to the employer in the form of bookkeeping and administrative costs. It is a burden assumed by the management at the instance of the union and for its benefit, in order to facilitate the collection of dues necessary for the latter’s life and sustenance.

The employee’s obligation to pay union dues and agency fees is NOT demandable from the employer upon default or refusal of the employee.

The employer’s only obligation under a check-off is to EFFECT the deductions and remit the collections to the union.

11.6. Jurisdiction over Check-off Disputes Regional Director of DOLE because the complaint of

union members against a union resolution checking off 10% of their CBA benefits is NOT a money claim against the employers, even if the employer is named as respondent.

It is a complaint against the union.

CHAPTER III

RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS

ART. 242. Rights of legitimate labor organizationsA legitimate labor organization shall have the right:a. To act as the representative of its members for the

purpose of collective bargaining;b. To be certified as the exclusive representative of all

the employees in an appropriate collective bargaining unit for purposes of collective bargaining;

c. To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within 30 calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within 60 calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation;

d. To own property, real or personal, for the use and benefit of the labor organization and its members;

e. To sue and be sued in its registered name; andf. To undertake all other activities designed to benefit

the organization and its members, including cooperative, housing, welfare and other projects not contrary to law.

 Notwithstanding any provision of a general or special law to the contrary, the income and the properties of legitimate labor organizations, including grants, endowments, gifts, donations and contributions they may receive from fraternal and similar organizations, local or foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free from taxes, duties and other assessments. The exemptions provided herein may be withdrawn only by a special law expressly repealing this provision.

1. NOT ANY L.L.O The first 3 rights mentioned do NOT pertain to just

any union but only to the union that has been selected as the employee’s representative in the bargaining unit.

This article must be read in relation to Art. 225.

2. RIGHT OF UNION TO REPRESENT ITS MEMBERS Function of Labor Union to represent its

members against the employer’s unfair labor practices.

The labor union can file an action in their behalf without the procedure of joining each and every member as a separate party.

A labor union has a separate personality to sue on its members’ behalf for their individual money claims.

Even if the records are NOT clear that the union is a registered organization, but considering that it filed a

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petition with the SOLE, such union has the requisite personality to sue in its own name.

The union and its lawyer should be allowed to participate in making compromise settlements with employees who are union members.

2.1. Members Doubting Their Union The union’s authority to act as its members’

representatives for the purpose of collective bargaining includes the power to represent the members in the enforcement of the CBA.

When a union files a case “for and in behalf of its members,” a member or several members won’t be permitted to file the same case.

However, the INTERVENTION may be allowed hen there is suggestion of FRAUD or COLLUSION or that the representative will NOT act in GOOD FAITH for the protection of the union.

3. COMPROMISE BINDING UPON MINORITY MEMBERS OF UNION; EXCEPTION A compromise agreement between the Labor Union

and the company, pursuant to which a ULP case has been withdrawn, is BINDING upon the minority members of the union.

However, in one case, the Court ruled that the union had NO authority to bind the minority members since the latter did NOT consent to such settlement. Thus, they are NOT bound by the terms of the settlement.

4. COMPROMISE OF MONEY CLAIMS Money claims due to laborers cannot be the subject of

a compromise effected by a union or its counsel without the specific INDIVIDUAL CONSENT of each member concerned.

The union to which they belong to can only ASSIST them, NOT decide fro them.

The union officers’ authority to compromise must be presented in evidence.

Under the philosophy of collective bargaining, an employer who bargains in good faith should be entitled to rely upon the promises and agreements of the union representatives with whom he must deal under compulsion of law.

The union’s authority to waive or quitclaim all or part of the judgment award in favor of the workers must be expressly granted.

5. RIGHT TO BE FURNISHED WITH FINANCIAL STATEMENT Four instances when the union may ask in writing for

financial statements:a) After the union has been recognized by the

employer as the sole bargaining representative of the employees in the bargaining unit

b) After the union is certified by DOLE as such sole bargaining representative

c) Within the last 60 days of the life of a CBA

d) During the collective bargaining agreement The audited financial statements, including the

balance sheet and the profit & loss statement should be provided by the employer within 30 calendar days after receipt of the union’s request.

6. RIGHT TO COLLECT DUES This right is mentioned under Art. 241 and is

explicitly recognized under Art. 271 (a).

Carlo 239 (242 A) – 254 (end of 1.4)

ART. 242-A. Reportorial Requirements. - The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned:

(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and by-lam or amendments thereto;

(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election;

(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and

(d) Its list of members at least once a year or whenever required by the Bureau.

Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty." (Inserted by RA 9481, effective June 14, 2007)

TITLE V – COVERAGE

Art. 243. COVERAGE AND EMPLOYEES’ RIGHT TO SELF-ORGANIZATION. – All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection.

1. Organizing in general. – The rights to organize and to bargain, in a general sense, are given not only to employees. Even workers who are not employees of any particular employer (ex: movie actors) may organize to protect their interests. The organization enjoys protection in the Bill of

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Rights. Under Art. 243, the right to organize refers also to forming, joining or assisting a labor organi-zation. Connected to Art. 246 this carries with it the right to engage in group action, provided it is peaceful, to support the organization’s objective which is not necessarily collective bargaining but, simply, to aid and protect its members. This must be differentiated from strike which is work stop-page, must observe regulations; otherwise, the strike may be declared illegal and its leaders thrown out of their jobs.1.1.Coverage of the right to organize; excep-

tions. – The right to form, join or assist a labor organization is granted to all kinds of employ-ees of all kinds of employers—public or pri-vate, profit or nonprofit, commercial or reli-gious. Their usual form of organization is a union and the usual purpose is collective bar-gaining with their employers.

Exceptions: Managerial employees, regardless of the kind of organization where they are employed, may not join, assist or form any labor organization, meaning a labor union. Supervisors are allowed to organize but they cannot form, join or assist a rank-and-file union.

2. Right to organize cannot be bargained away. – The right to self-organization must be upheld in the absence of an express provision of law to the contrary. It cannot be curtailed by a collective bar-gaining agreement.

3. Employees of nonprofit institutions. – Rank-and-file employees of nonprofit medical institutions are permitted to form, organize or join labor unions of their choice for purposes of collective bargain-ing.

4. Exception: employee-members of a coopera-tive. – An employee of such a cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining, for certainly an owner cannot bargain with himself or his co-own-ers. However, insofar as it involves cooperatives with employees who are not members or co-own-ers thereof, such employees are entitled to exer-cise the rights of all workers to organization and collective bargaining. It is the fact of ownership of the cooperative, and not involvement in the man-agement thereof, which disqualifies a member from joining any labor organization within the co-operative.4.1 Exception to exception: association, not union. – The law does not prohibit members of cooperative who are also its employees from forming an association for their mutual aid and protection or for any legitimate purpose other than collective bargaining.

5. Exception: international organizations. – A cer-tification election cannot be conducted in an inter-national organization which the Philippine Govern-

ment has granted immunity from local jurisdic-tion. The grant of such immunity is a political question.

Int’l Catholic Migration Commission v. Hon. Calleja. “International Organization” – an organization set up by agreement between 2 or more states, endowed with international legal personality, conducts general international business which member states have an interest. “Specialized Agencies” – international organizations having functions in particular fields. The reason for these immunities is the assurance of unimpeded performance of their functions by the agencies concerned. The immunity of the Int’l Catholic Migration Commission and the Int’l Rice Research Institution from local jurisdiction by no means deprives labor of its basic rights.5.1. Waiver of immunity. – waive of immunity is discretionary to IRRI. Without such express waiver the NLRC or its LAs have no jurisdiction over IRRI even in cases of alleged dismissal of any of its employees.5.2. Foreign workers. – Foreigners, natural or juridical as well as foreign corps are strictly prohibited from engaging directly or indirectly in all forms of trade union activities. However, aliens working in the country with valid work permits may exercise the right of self-organization if they are nationals of a country that grants the same or similar right to Filipino workers.

6. Exception: religious objectors; Iglesia ni Cristo members. – RA 3350 was passed to ex-empt from compulsory union membership the followers of any religious sect whose teachings forbid membership in labor unions.

Victoriano v. Elizalde Rope Workers’ Union. – What the exception provides, therefore, is that members of said religious sects cannot be compelled or coerced to join labor unions even when said unions have closed shop agreements with the employers; that in spite of any closed shop agreement, members of said religious sectors cannot be refused employment or dismissed from their jobs on the sole ground that they are not members of the collective bargaining union.

1.1. Does the exemption still stand? – Even if the exemption under RA 3350 is not found in the Labor Code, still the exemption can be invoked under the freedom of religion clause in the Constitution’s Bill of Rights.

1.2. Iglesia ni Kristo members may form and join own union. – The right of members of the Iglesia sect not to join a labor union for being contrary to their religious beliefs does not bar the members of that sect from forming their own

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union. INK members have the right to vote in a certification election.

Art. 244. Right of employees in the public service. Employees of government corporations established under the Corporation Code shall have the right to organize and to bargain collectively with their respective employers. All other employees in the civil service shall have the right to form associations for purposes not contrary to law.

1. Government employees’ right to organize; limitations. – The highest law of the land guarantees to government employees the right to organize and to negotiate, but not the right to strike. The Constitution declares that “the right to self-organization shall not be denied to government employees;” that the State “shall guarantee the rights of all workers to self-orga-nization, collective bargaining and negotia-tions, and peaceful concerted activities, includ-ing the right to strike in accordance with law.”1.1.Limited purpose. – The right of Govern-

ment employees to “form, join or assist employees’ organizations of their own choosing” under EO 180 is not regarded as existing or available for “purposes of collective bargaining,” but simply “for the furtherance and protection of their inter-est.” Excluded from negotiation by Gov-ernment employees are the “terms and conditions of employment xxx that are fixed by law,” it being only the terms and conditions not otherwise fixed by law that may be subject of negotiation between the duly recognized employees’ organizations and appropriate government authorities.”

1.2. No signing bonus. – Employees and of-ficers of SSS are not entitled to signing bonus provided for in collective negotiation agreement because the process of collec-tive negotiations in the public sector does not encompass terms and conditions of employment requiring the appropriation of public funds.

1.3. Excepted employees. – Excepted from EO 180 are members of the AFP, police officers, policemen, firemen and jail guards. For reasons of security and safety, they are not allowed to unionize.

EO 180 also declares that “high level employees whose functions are normally considered as policy making or managerial, or whose duties are of a highly confidential nature shall not be eligible to join the organization of rank-and-file government employees.”

High level employee – one whose functions are normally considered policy determining, managerial or one whose duties are highly confidential in nature.

Managerial function – refers to exercise of powers such as 1. To effectively recommend such managerial actions, 2. To formulate or execute management policies and decisions, 3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees.

In the private sector the three levels of positions, for purposes of unionization, are managerial, supervisory, and rank-and-file. The latter two can unionize. In government, the levels are only two: high level and rank-and-file. High level employees cannot unionize.

1.3.A. Professors as rank-ad-file employees. – Professors at the UP who are not exercising managerial or highly confidential functions are rank-and-file employees and may unionize separately from the non-academic personnel.

UP v. Ferrer-Calleja. – UP seeks the nullification of the Order of the director of the Bureau of Labor Relatios holding that professors of the UP are rank-and-file employees and that they should be represented by only one labor organization together with the so-called non-academic employees.

Issue 1: WON professors, associate profs, assistant profs are high level or rank-ad-file employees? – Rank-and-file. It is the University Academic Personnel Committee, composed of deans, assistant for academic affairs, chief of personnel, which formulates the policies, rules and standards respecting selection etc of members of the academic staff.

Issue 2: WON profs and employees performing academic functions should comprise a bargaining unit distinct from that of the non-academic employees? – Yes. The community or mutually of interests which justifies the formation of a single collective bargaining unit is wanting between the academic and non-academic personnel of UP.1.4.Right to strike. – EO 180 concedes to

government employees the right to en-gage in concerted activities, including the right to strike, but must be exercised in accordance with law, subject to Civil Service Law and legislation by Con-gress. The resolution of complaints,

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grievances and cases involving govern-ment employees is not ordinarily left to collective bargaining or other related con-certed activities, but to Civil Service Law and labor laws and procedures whenever applicable.

Diana (254 – 267)

2. REGISTRATIONGov’t employees organizations shall register with the CSC and the DOLE.- Applications shall be filed with the Bureau of Labor

Relations of the DOLE- or may also be filed with the Regional Offices of the

DOLE – will transmit the applications to the Bureau of Relations w/n 3 days from receipt thereof.

- Upon approval of the application, a registration certificate shall be issued (recognizing it as a legitimate employee’s organization with the right to represent its members).

Certificate of registration shall be jointly approved by the chairman of the CSC and Secretary of DOLE.

3. CERTIFICATION ELECTION IN GOVERNMENT CORPORATIONA certification election to choose the union that will represent the employees may be conducted by the Bureau of Labor Relations in a government corporation, whether governed by the Labor Code or the Civil Service Rules.

Case: Trade Union of the Phils. v. National Housing Corp.

Facts: Respondent NHC is a corporation organized in 1959 under EO 399, known as the Uniform Charter of Government Corporations. Its shares of stock are and have been 100% owned by the gov’t from its incorporation under act 459, the former corporation law.

Ruling: The 1987 Constitution declares that “the civil service embraces all braches, subdivisions, instrumentalities and agencies of the government, including GOCCs with original charters.”

Consequently, the civil service now covers only GOCCs with original charters – those created by an act of congress and not those incorporated pursuant to a general legislation.

No impediment to the holding of a certification election among the workers of NHC for it is clear that they are covered by the Labor Code, the NHC being a GOCC without an original charter.

Whether the employees of NHC are covered by the Labor Code or by the civil service laws, a certification election may be conducted.

3.1 ELECTION OF OFFICERS IN GOVERNMENT UNIONSQ: Does the BLR have jurisdiction to call for and conduct the election of officers of an employee’s association in the public sector such as that of the MWSS?

A: Yes. Article 226 of the Labor Code – BLR (Bureau of Labor Relations) has the original and exclusive jurisdiction on all inter-union and intra-union conflicts. The subject of the case at bar, which is the election of the officers and members of the board KMKK-MWSS is clearly an intra-union conflict, being within or inside a labor union. It is well within the powers of the BLR to act upon.

4. WHEN PSLMC MAY RULE ON LEGALITY OF DISMISSAL

The Public Sector Labor-Management Council (EO 180) – has jurisdiction to hear charges of unfair labor practice filed by the government employees against their employer (e.g. the Pamantasan ng Lungsod ng Maynila)

In deciding the ULP charge the PSLMC may also rule on the complainants’ dismissal if the two issues – ULP and dismissal – are unavoidably interlinked.

The CSC may adopt the findings of the PSLMC and order the employer to reinstate the dismissed employees.

5. UNION-BUSTING IN A GOVERNMENT AGENCY, ULP

Case: PLM v. CSCThe CSC adopted the finding and conclusion of the PSLMC.

Facts: In the arbitration proceedings, the PSLMC found that PLM committed ULP when it terminated the services of the complainants. The PLM management did not renew the appointments of these members of the faculty with temporary contracts but those who were hired as replacements possess even lesser qualifications that the complainants.

Ruling: Had complainants not been among those active officers and/ or members of the PLMFO (Faculty Organization), and had their qualifications, training, experience and performance rating not been impressive, the Commission would have agreed that the termination of the contracts of complainants does not constitute ULP. But the records reveal otherwise.

5.1 EVEN TEMPORARY EMPLOYEES MAY ORGANIZE

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When the clear intent of PLM Management in terminating the services of these employees is to abridge their constitutional right to self-organization, the Commission has the duty to give them protection and uphold their basic right.

The constitutional right of the employees is superior to the right of management not to renew the temporary appointment of its employees.

When the exercise of discretion by the management is calculated to bust the union as what PLM Management had done, the Commission has no choice but to declare it as a grave abuse of discretion.

Art 277 (c) of the Labor Code, “any employee, whether employed for a definite period or not, shall beginning on his first day of service, be considered an employee for purposes of membership in any labor union.

Art. 245. INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN ANY LABOR ORGANIZATION; RIGHT OF SUPERVISORY EMPLOYEES

Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file employees but my join, assist or form separate collective bargaining units and / or legitimate labor organizations of their own. The rank-and-file union and the supervisors’ union operating within the same establishment may join the same federation or national union. (the last sentence was added by R.A. 9481)

Art.245-A. EFFECT OF INCLUSION AS MEMBERS OF EMPLOYEES OUTSIDE THE BARGAINING UNIT

The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union. (inserted by R.A. 9481)

1.CATEGORIES OF EMPLOYEESBook V Article 212 – Managerial, supervisory, and rank-and-file

Three-tiered classification (popularized by the Herrera-Veloso law). This law provides that although “supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees”, they may, however “join, assist or form separate labor organization of their own.” 2. INELIGIBILITY OF MANAGERS

2.1. TYPES OF MANAGERIAL EMPLOYEES

Manager – generally refers to “anyone who is responsible for subordinates and other organizational resources”

3 levels of Pyramid1. Top management2. Middle management3. First-line management (also called as

supervisor)

First-line Managers – the lowest level in the organization at which individuals are responsible for the work- Direct operating employees only- They do not supervise other managers- E.g. foreman or production supervisor in a

manufacturing plant, technical supervisor in a research department

- Are often called supervisors

Middle managers – direct the activities of other managers and sometimes also those of operating employees.- To direct the activities that implement their

organizations’ policies - To balance the demands of their superiors with the

capacities of their subordinates.- Example: a plant manager in an electronic firm

Top Managers – composed of comparatively small group of executives- Responsible for the over-all management - It establishes operating policies and guides the

organization’s interactions with its environment.- Typical titles: CEO, president, senior vice president

Distinction between managers and supervisors (both are managerial employees)

Managers (top and middle managers) – those who have authority to devise, implement and control strategic and operational policies;

Supervisors (First-level managers) – those whose task is simply to ensure that such policies are carried out by the rank-and-file employees. What distinguishes them from rank-and file employees is that they act in the interest of the employer in supervising such rank-and-file employees.The route managers of Pepsi-Cola are managerial employees who are ineligible for union membership according to the first sentence of Article 245. The court held that: unlike supervisors who basically merely direct operating employees in line with set tasks assigned to them, route managers are responsible for the success of the company’s main line of business through management of their sales teams. Such

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management necessarily involves the planning, direction, operation and evaluation of their individual teams and areas which the work of supervisors does not entail.

2.2 CONSTITUTIONALITY OF THE PROHIBITION

The question is whether the 1st sentence of Article 245, prohibiting managerial employees from forming, assisting or joining any labor organization, is constitutional in the light of Article III, Sec8 w/c provides:“The right of the people, including those employed in the public & private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

In the case of United Pepsi-Cola Supervisory Union vs. Laguesma and Pepsi-Cola Products:

The present Article 245 is the result of the amendment of the Labor Code in 1989 by R.A. No. 6715, otherwise known as the Herrera-Veloso Law.

Unlike the Industrial Peace Act or the Provisions of the Labor Code which it superseded, R.A. 6715 provides separate definitions of the terms “managerial” and “supervisory employees”

The right guaranteed in Art. III Sec.8 is subject to the condition that its exercise should be for purposes “not contrary to law” – In the case of 245, there is a rational basis for prohibiting managerial employees from joining or forming labor organizations.

Reason: 1. Because if these managerial employees would

belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests.

2. Union can also become company-dominated with the presence of managerial employees in Union membership.

2.2a OTHER OPINIONSChief Justice (Davide, Jr.)

He agrees that route managers are managerial employees

He believes that Article 245 is unconstitutional, as it abridges sec.8, Art III of the 1987 Constitution.

Mr. Puno He clarifies that Article 245 does not absolutely

disqualify managerial employees from exercising their right of association. What it prohibits is merely the right to join labor organizations.

Mr. Justice Vitug

Partially agrees with the majority and with Mr. Puno that Article 245 is not unconstitutional.

But the route managers are not managerial employees, they are supervisors.

3.EVOLUTION OF SUPERVISORS’ RIGHT TO ORGANIZESupervisors CAN UNIONIZE.

3.1.FIRST PERIOD: Under the Industrial Peace Act (1953-1974)- during this period supervisors could unionize separately from rank-and-file workers - under this period : in a case (Filoil), “that in relation to his employer, a foreman or a supervisor is an employee within the meaning of this act, for this reason supervisors are entitled to engaged in Union activities. - the problem is that IPA failed to define a “managerial employee”-In the Caltex case (decided 1 month after Filoil), included managers in the term supervisor thus allowing to unionize. The ruling disturbed the businessmen.

3.2.SECOND PERIOD: Under the Labor Code before Amendment by R.A, 6715- At this time, the Labor code dropped the old term “supervisor” but replaced it with “managerial employee”-The Bulletin case: included “supervisors” among “managerial employees” who could not unionize.-this time it was the labor groups that rose in protest.

3.3.THIRD PERIOD: Under the Labor Code as Amended by R.A. 6715 - R.A. 6715 presents a compromise formula: retain the ineligibility of managerial employees but revive the right of supervisory employees to unionize.

4.DEFINITIONS OF MANAGER AND SUPERVISOR

Manager – makes policy decisions or people decision or both

Supervisor –recommends those decisions. The power to recommend must not be merely routinary or clerical in nature but requires the use of independent judgment (1. Discretion or judgment, 2. Independent, 3. Effective)

5.TEST OF SUPERVISORY STATUS The test of supervisory or managerial status

depends on whether a person possesses authority to act in the interest of his employer and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment.

The fact alone that a supervisor makes recommendations by itself does not make one a managerial employee. It is more a question of how effective the recommendation is.

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It is the nature of an employee’s functions and not the nomenclature or title given to his job which determines whether he has a rank-and-file or managerial status.

Characteristics of a managerial rank1. He is not subject to the rigid observance of regular

office hours2. His work requires the consistent exercise of

discretion and judgment in its performance3. The output produced cannot be standardized in

relation to a given period of time4. He manages a customarily recognized department

or subdivision of the establishment5. He either has the authority to hire or discharge

employees or his suggestions or recommendations as to hiring or discharging employees are given particular weight

6. As a rule, he is not paid hourly wages nor subjected to maximum hours of work

5.1.THE POWER TO RECOMMENDThe power to recommend, in order to qualify an employee as a supervisor, must not only be effective but should require the use of independent judgment. (it must not be subject to evaluation of other department heads or executives of the company)

5..2.EXAMPLES OF INNEFECTIVE OR CLERICAL RECOMMENDATIONThe assistant principal and general supervisor admitted that the recommendations of the area supervisors are subject to evaluation, review and final approval of the principal.

Reason: because the preparation of program of supervision by area supervisors is not indicative that they are supervisors, their activities being merely routinary, as for instance, the checking of the formal themes, notebooks, survey of textbooks and regulating the number of students in a class.

5.3.MANAGERS OR SUPERVISORS: UNDER THE ILO CONVENTION It is not necessarily incompatible with the ILO convention on Freedom of Association to deny managerial or supervisory employees the right to belong to the same trade union as other workers, provided that 2 conditions are met:

1. That such workers have the right to form their own association to defend their interest

2. That the categories of such staff are not defined so broadly as to weaken the organization of other workers in the enterprise or branch of activity by depriving them of a substantial portion of their present or potential membership.

CRUZ (267-280)

6. SEGREGATION OF RANK-AND-FILE SUPERVISORS- Art. 245 allows supervisory employees to form, join or assist separate labor organizations of their own but they are not eligible for membership in a labor organization of the rank-and-file employees.- Rank and file employees may not join a union of supervisors.- Reason for the policy: detrimental to the employer if the supervisors and the rank-and-file employees could take a common stand against the employer. - supervisors as alter ego of the management and may influence the workers under his supervision.

7. CONFIDENTIAL EMPLOYEES- do not constitute a distinct category of employees for purposes of the right to self-organize. - confidentiality is not a matter of official rank, it is a matter of job content and authority.- every managerial position is confidential- one does not become a manager without having gained the confidence of the appointing authority.- but not every confidential employee is managerial, he may be supervisory or rank-and-file.

7.1 1st swing: Inclusion among rank-and-file (Southern Phil.Federation of Labor v. Calleja)- SC upheld that the confidential rank-and-file employees should be included in the bargaining unit.- if confidential employees are not managers, they can unionize and no CBA provision can take away that right.

7.2. 2nd swing: exclusion from rank-and-file - SC upheld the validity of the agreement of the parties excluding confidential employees from the CBA coverage. The SC observed that confidential employees such as accounting personnel, radio and telegraph operators, having access to confidential information, may become the source of undue advantage.

7.3. 3rd swing: inclusion among supervisors (Phil. Phosphate Fertilizer Corp. V. Torres)- ISSUE: wON the professional/technical and confidential employees may validly join PMPI union which was composed of supervisors- HELD: SC ruled for the exclusion of prof/technical but did not stop the inclusion of the confidential employees. These professional/technical employees cannot effectively recommend managerial actions with the use of independent judgment because they are under the supervision of superintendents and supervisors.

7.4. 4th swing: inclusion among monthly paid rank and file (Golden Farms case)- issue: won the monthly-paid rank-and-file employees can constitute a bargaining unit separate from the

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existing bargaining unit of its daily-paid rank-and-file employees- held: YES. The monthly-paid are being separated as bargaining unit form the daily-paid on the ground that they have different interest to protect.

7.4.a Limited Exclusion. Doctrine of Necessary Implication- While Art 245 of the Labor Code singles out managerial employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary implication, confidential employees are similarly disqualified.- Doctrine of Necessary Implication: means that what is implied in a statute is as much a part thereof as that which is expressed.

7.4.b The Metrolab and Meralco Summations: Exclusion from bargaining unit and closed-shop clause- Confidential employees should be exempted not only form the closed-shop provision of the CBA but also from membership in the rank-and-file bargaining unit.

CASE: Metrolab Industries, Inc v. Hon. Nieves

Facts: The Union of Metrolab represents rank-and-file employees. The renegotiations of a new CBA was caught in a deadlock so the Union filed a notice of strike.

The Sec. Of Labor intervened and ordered the parties to execute a new CBA. But Metrolab laid off its rank-and-file employees, which dismissal was nullified by the Sec of Labor. Sec. Also ruled that executive secretaries were part of the bargaining unit of rank-and-file employees.

Metrolab argued that the executive secretaries (Gen Mngr., Quality Assurance Mngr, HR Mngr etc) who were all members of the company’s Management committee, should not only be exempted from the closed-shop provision but should also be excluded from membership in the bargaining unit of the rank-and-file employees because those exec.sec were confidential employees having access to vital labor organizations.

Held: Although art 245 of the Labor Code limits the ineligibility to join, form, and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees.

By the very nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons whi exercise managerial functions in the field of labor relations.

7.4.c. Who are confidential employees?- They assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations.- are those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and higly confidential records.

7.4.d The Labor nexus- Confidentiality of the positions should relate to labor relations matters

CASE: San Miguel Corp. Supervisors and Exempt Union v. Hon. Laguesma

HELD: Confidential employees are those who:1. Assist or act in a confidential capacity2. To persons who formulate, determine and effec-

tuate management policies in the field of labor relations.

- Two criteria are cumulative, and both must be met if an employee is to be considered a confi-dential employee.

- Exclusion of confidential employees from bar-gaining units: employees should not be placed in a position involving a potential conflict of inter-est.

7.4.e New CBA may include employees excluded from old CBA; expired CBA may be modified, not just renewed.

8. SECURITY GUARDS MAY JOIN RANK-AND-FILE OR SUPERVISORY UNION- Under RA 6715, security gurads may now freely join a labor org of the rank-and-file or that of the supervisory union, depending on their rank.

9. WORKERS IN EXPORT PROCESSING ZONES - epzs are part of the phil. Territory- consti. Guarantees the workers’ right to organize, to strike and so forth- ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy: “ Where governments of host countries offer special incentives to attract foreign investments, these incentives should not include any limitations on the workers’ freedom of association or the right to organize and bargain collectively”

ART.246: NON-ABRIDGMENT OF RIGHT TO SELF-ORGANIZATION- Unlawful for any person to restrain, coerce, dis-

criminate against or unduly interfere with em-ployees and workers in their exercise of the right to self-organization

- Include the right to form, join, or assist labor or-ganizations for the purpose of collective bargain-ing through representatives of their own choos-ing and to engage in lawful concerted activities for the same purpose or for their mutual aid and protection, subject to the provisions of art.264 of this code.

- Labor organization entitled to protection does not have to be a registered organization nor be a bargaining union.

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Glenn (281-294)

Art. 247 Concept of Unfair Labor Practice and Procedure for Prosecution thereof

*Concept of Unfair Labor Practice (ULP)-Self-organization is a pre-requisite of industrial democracy, the right to self organize has been enshrined in the constitution and any act intended to weaken or defeat the right is regarded by law as an offense and it is technically called “unfair labor practice”.

-The offender can either be an employer of a labor organization.

-Art. 246 is the conceptual mother of unfair labor practice. It declares that it is unlawful for any person to restrain, coerce, discriminate against or unduly interfere with the exercise of the right to self-organization.

-Victim not workers only but also the State. Thus, the attack to this constitutional right is considered a crime which carries with it both civil and criminal liability.

*Elements(1) ER-EE Relationship between the offender and

the offended.(2) The act done is expressly defined in the Code as

an act of unfair labor practice. (Art. 248 and 261 for employer, 249 for labor organization)

*Prejudice to public Interest not an element of ULP

-In the case of National Labor Union v. Insular-Yebana Tobacco Corporation, the SC ruled that a showing of a prejudice to public interest is not a requisite for ULP charges to prosper.

*Prosecution of ULP-ULP has civil and criminal aspects. Civil aspects may include liability for damages and may passed upon by a labor arbiter.-To prosecute ULP as criminal offense, there must be, first, a finding that an ULP has been committed. The finding must be based on a judgement held in a labor case. However, such judgement in a labor case will not be evidence in the criminal offense.-The criminal case must be proved independently of the labor case.

NOTE: In cases in the NLRC where a labor case is filed, only preponderance of evidence is needed. However, proof beyond reasonable doubt is needed to convict in the criminal case of ULP.

-The criminal charge falls under the concurrent jurisdiction of the MTC or RTC. Penalty of fine or imprisonment. (Art. 288)

-Penalty shall be imposed upon guilty officers of a corporation, partnership, association or entity. If committed by a labor org, the parties liable are those mentioned under Art. 249.

-The offense prescribes in one year.

Art. 248- Unfair Labor Practices of Employers

*Conditions Precedent to ULP charge- Before an employee may be considered aggrieved by

an alleged unfair labor practice by an employer, the

following must exist:

(1) the injured party comes within the definition of “employee” under the Code(2) the ULP must fall under Art. 248 and/or Art.249.

*Mariano vs. Royal Interocean Lines-Ms. Mariano was dismissed from her job due to her letter alleging that her employer was “inconsiderate and untactful attitude” toward the employees.

The SC held that since the dismissal is not connected with or necessarily arising from union activities the dismissal did not constitute an ULP. The employer still retains his inherent rights to discipline his employees.

*Historical Evidence of the Link -Our unfair labor practice and workers right derive from USA

*ILO Convention 98-Without using the term “unfair labor practice” convention 98 of the ILO frowns upon anti-union discrimination and interference. (Provided under the said convention).

*No ULP: Illustrative Instances of Valid Exercise of Management Rights-Employer is still capable o his fundamental rights to prescribe and enforce such rules as he honestly believes to be necessary to the proper, productive and profitable operation of the business.

-The only condition imposed upon this control is that it must not be exercised as to effect a violation of the Act and its several prohibitions.

*Personnel Management-As a rule, it is the prerogative of the company to promote, transfer or even demote its employees to other position when an interest of the company reasonably demands it.

-Should be exercised within the boundaries of law.

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-No ULP in the exercise of an option by the employer provided in the CBA

*Acceptance of Mass resignation-Acceptance of a voluntary resignation. Does not constitute ULP.

-Since it is voluntary, and the company accepted it, such cannot be said to be an ULP because they (employees) voluntarily filed it. (PAL case)

Migs [PP. 295-308]DETERMINATION OF VALIDITY:-The NLRC has the authority to determine the employer’s expressed motive and its effect on the employees of the management’s otherwise equivocal act.-While an employer may be free to interact with his employees without having to show proof of good faith in such dealings, attendant circumstances such as the history of his conduct coupled with an intimate connection between employer’s action and the union affiliations of the particular employees, if the former failed to ascribe good reasons therefore, can constitute interference.

1. INTERFERENCEArticle 248. It shall be unlawful for a employer to

commit any of the following unfair labor practices…(a) to interfere with, restrain, or coerce employees in the exercise of their right to self-organization.

Dabuet, et, al v Roche Pharmaceuticals:

Facts: Several officers of Roche expressed their grievance for the previous dismissal of their union’s president and vice-president. They contained said grievances in a letter prepared by the counsel for the labor union and at the same time, seeking a conference with the general manager. At the meeting, the general manager berated the employees (petitioners) and called their letter ‘stupid’. The counsel who prepared the letter then filed a case for grave slander against the general manager while the general manager and respondent company responded with a suit for perjury alleging false statements on the affidavit of petitioners. Furthermore, Roche dismissed the petitioners on the basis that the execution of the affidavit was a breach of trust and inimical to the interest of the company.

Issue: Was there a valid dismissal?

Held: None. The court found that the company’s act in dismissing the petitioners, who constituted the entire officialdom of the company union just in time when the CBA was about to the re-negotiated, was interference and thus, an unfair labor practice. The letter written by the petitioners involved terms that they wish to bring up in the renegotiation of the CBA and it is expected that the employees recognize said terms as for the mutual aid and protection of the employees concerned.

Interrogation:-Persistent interrogation of an employee about his union activities may be considered as interference. -In order that a questioning of an employer be not deemed as coercive, he must apprise the employee questioned of the purpose of the questioning, assure him that no reprisal would take place, and that it is only on a voluntary basis.

Can an employer commit an unfair labor practice when there was yet no union?-Yes. Paragraph D of Article 248 prohibits the employer from interfering with the formation or administration of a labor organization.

Prohibiting organizing activities:-Solicitation of union membership cannot be prohibited. Thus, a non-employee union member may be allowed within the premises of the company for the purpose of solicitation of membership, if the employees live within the said premises.

CLLG E.G. Gochangco Workers Union v NLRC

Facts: Several employees sought permission from management on 26 Febrauary 1980, to attend a pre-certification election conference before the med-arbiter, which was to be conducted the day after. The management did not grant such permission but the employees nevertheless attended the conference. A day thereafter, an order of suspension was imposed upon said employees, which led to their subsequent dismissal on the ground of abandonment of work.

Issue: Was there a valid dismissal?

Held: None. The petitioners were in the middle of a certification election preliminary when the order of termination was imposed. The exercise of a certification election was well within the petitioner’s right to which the respondent company cannot interfere. The termination order was a clear effort of the management to punish the petitioners for their union duties.

Violence or Intimidation-Whenever violence or intimidation is employed upon employees, it can be taken into account as a circumstance that can warrant a finding for interference.

Example:1. An employer pointed a gun at his two

employees after informing the former that they were in the company premises to vote in the representation election.

2. An employer provoking two union officers to fight in the workplace where the same was prohibited, so as to find cause for their dismissal.

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Espionage and Surveillance-When an employer engages in surveillance or takes steps leading his employees to believe it is going on, a violation results because the employees come under threat of economic coercion or retaliation for their union activities.

Economic Inducements-It is a well-settled rule that while a representation election is pending, the conferral of employee benefits for the purpose of inducing the employees to vote against the union is unlawful.

Totality of Conduct Doctrine:-The culpability of the employer’s remarks was to be evaluated not only on the basis of their implications, but against the background of and in conjunction with collateral circumstances. While a word spoken by the employer be deemed innocent per se, it can be considered culpable depending on the circumstance where it was uttered.

The Insular Life Assurance Co. Employees Association v The Insular Life Assurance Co.

Facts: The company president sent individual letters to striking employees urging them to abandon their strike in exchange for comfortable cots, free coffee, occasional movies, overtime pay, offer of a Christmas bonus and other benefits. He also warned them that whoever fails to return to work shall be replaced. When the strike was over, those who went with the strike were no longer admitted back to work.

Issue: Did the letter constitute interference?

Held: Yes. Under the totality of conduct doctrine, the letters should be read in light of the preceding and subsequent circumstances. There is interference as in this case, where the employer engaged in a conduct which may reasonably interfere with the free exercise of employees rights. This act of solicitation tends to undermine the concerted activity of the employees to which the employer had an obligation to respect.

Mass Layoff Amounting to ULP-A company’s capital reduction efforts to camouflage that it has been making profits, and to justify the mass lay-off of union members, are considered as ULPs.

Madrigal and Company v Zamora

Facts: The company union of Petitioner Company sought a renewal of its CBA with petitioner with a proposal to increase the wage by P200 a month, together with other additional benefits. Thereafter, the company through a board resolution, reduced its capital stock from 765,000 shares to 267,366 shares, through the distribution of marketable securities to stockholders. This was used as

the reason for the mass lay-off of employees, particularly union members.

Issue: Was there an ULP?

Held: Yes. The petitioner’s capital reduction efforts were all just a deception to hide the fact that it has been earning money throughout the years, and likewise to justify the mass termination of employees. They were nothing but a premature distribution of assets in order to obviate a just sharing to labor of the vast profits obtained. This practice can never be countenanced nor condoned.

Lockout or Closure Amounting to ULP-An honest closing of one’s plant is not an ULP. However, if the cessation of operations were used by the employer to influence the employees from pursuing their union activities, then such a closure can amount to an ULP. However, proof of the said state of mind of employer is necessary.

Sale in Bad Faith

Moncada Bijon Factory v CIR and Moncada United Worker’s Union

Facts: Kim, the owner of the factory called the workers and the members of the union to meeting in order to request them to resign from the union, revert to their normal work, and withdraw all their overtime claims from the CIR. These requests were rejected. Four days later, a deed purporting to convey all of Kim’s interest in the company to Yu Guat was executed. As a result thereof, the members of the union were dismissed while those who chose to resign from the union were retained under the new management.

Issue: Were the dismissals unlawful?

Held: Yes. The sale of the factory to Kim’s agent Yu Guat was simulated and a device resorted merely to get rid of the employees who were members of the union.

Cruz v PAFLU

Facts: The workers in a factory formed a union which they duly registered with DOLE. The company claimed to have an existing CBA with another union PTGWO, a claim which resulted in holding a certification election where PAFLU won. As PAFLU finalized the CBA with the management, the factory was sold to Cruz and as a result thereof, members of PAFLU were dismissed.

Issue: Was the sale of the factory an ULP?

Held: Yes. The sale of a business enterprise to avoid the legal consequences of an unfair labor practice is necessarily attended with bad faith and both the vendor

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and the vendee continue to be liable to the affected workers. Even if Cruz was only the buyer who purports to have entered the sale in good faith, he cannot escape liability as being the successor-in-interest; he becomes responsible for the obligations of his predecessor.

Assumption of Obligations by New Company

Philippine Land-Air-Sea Labor Union v Sy Indong Rice and Corn Mill

Facts: Petitioner contends that Sy Indong discriminated against their members by refusing to admit them to work on account of their affiliation with the union. This prompted the complaints for reinstatement against respondent. While the case was pending, Sy Indong sold its assets to Sen Chiong who organized the new company on the very same day as that of the sale. The new company and the old company both share the same managing partners. Sy Indong contends that his company is in a state of bankruptcy.Issue: Was the sale an ULP?

Held: Yes. The fact that the new company was formed on the same day, the presence of common partners in both companies, the fact that the case has been pending for 18 months prior to the sale, all point to the conclusion that the sale was a means to relieve Sy Indong from liability. Moreover, Sen Chiong cannot be said to be fully aware of the present situation of the company in relation to the ULP suit by some of its employees. He has acquired the assets herein at his own risk by having to bear the liabilities that said litigation may eventually entail. As such, it is proper that the judgement be enforced against the new company also.

Successor Employer-When the closure of a company is employed in order to defeat the worker’s organizational right, the successor company shall be deemed to have only taken the place of it’s predecessor.

Piercing the Corporate Veil-Means that while the corporation cannot be generally held liable for acts or liabilities of its stockholders or members, and vice versa because a corporation has a personality separate and distinct from its members or stockholders, however, the corporate existence is disregarded under this doctrine when the corporation is formed or used for illegitimate purposes, particularly, as a shield to perpetuate fraud, defeat public convenience, justify wrong, evade a just and valid obligation or defend a crime.

The test in determining the applicability of the doctrine of piercing the veil of corporate fiction is as follows:1. Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so

that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own;2. Such control must have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiff's legal rights; and 3.The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.The absence of any one of these elements prevents 'piercing the corporate veil.' In applying the 'instrumentality' or 'alter ego' doctrine, the courts are concerned with reality and not form, with how the corporation operated and the individual defendant's relationship to that operation." (CONCEPT BUILDERS, INC. VS. NLRC) 

H. Aronson Co. Inc. v Associated Labor UnionFacts: The labor union proposed a CBA with the management. When the management rejected the CBA, the union members launched a strike which forced the former to concede to the terms. However, as an act of revenge, the management dissolved the company and formed two new corporations with the same corporate purposes and capitalization as of their predecessor. The non-union members were retained while the union members were dismissed.

Issue: Did the formation of the new companies constitute ULP?

Held: The facts established by evidence lead to no other conclusion than that the dissolution of the petitioner corporation and the subsequent incorporation of he two new corporations were part and parcel of a plan to accomplish the dismissal of the employees. First, the capitalization and corporate function were the same. The new corporation started business a day after the dissolution of the old one, and the controlling stockholders of the old corporation maintained their control over the board in the new corporation. Thus, by not rehiring the labor members, it is clear that the dissolution was a device to stop the legitimate activities of the union.

2. YELLOW DOG CONDITIONArticle 248 Paragraph (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 where he belongs

Yellow-Dog contract- 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.

Usual Stipulations:

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a. representation that employee is not a member of any union

b. promise that the employee will not be joining a labor union

c. promise that should the employee join a labor union, he will quit his employment.

In the Philippines, such a contract is an ULP.

3. CONTRACTING OUTArticle 248 Paragraph (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 right to self-organization.

-An employer contracting out of work is considered an ULP when it is motivated by a desire to prevent his employees from organizing and selecting a collective bargaining representative, rid himself of union men, or escape his statutory duty to bargain collectively with his employees bargaining representative.

Princess (309-320)

7.1 Contracting Out Restricted by CBA

CASE: Shell Oil Workers’ Union v. Shell Company of the Philippines, Ltd

Facts:- Shell company dissolved its security guard section and

replaced it with an outside agency, claiming that it was a valid exercise management prerogative.

- Union argued relying on the CBA provision assuring the continued existence of a security guard section at least during the lifetime of the collective agreement

Issue:- Whether the then existing CBA running for 3 years

from Aug 1 1966 to Dec 31 1969 constituted a bar to such a decision reached by management

Held:- YES. There was specific coverage concerning the

security guard section in the CBA. It is found not only in the body thereof but in the two appendices concerning wage schedules as well as the premium pay and the night compensation to which the personnel in such section were entitled. It was an assurance of security of tenure during the lifetime of agreement. The terms of which should be binding on both parties; should continue during the existence of the contract

7.2 Runaway Shop

- Resorting to Runaway is ULP.

Runaway – industrial plant moved by its owners from one location to another to escape union labor regulations or state laws; a plant removed to a new location in order to discriminate against employees at the old plant because of their union activities; where a plant removal is for business reasons but the relocation is hastened by anti-union motivation, the early removal is an ULPImmaterial that the relocation is accompanied by a transfer of title to a new employer.

- Employer may legitimately blunt the effectiveness of an anticipated strike by stockpiling inventories, readjusting contract schedules or transferring work from one plant to another though he thereby makes himself virtually strikeproof

- Runaway – business relocation animated by anti-union animus. Sameness of business is not enough reason to show runaway shop to pierce the veil of separate corporate entity

CASE: Complex Electronic Employees Assoc. v. NLRC

Facts:- Complex Electronics Corp was a subcontractor of

electronic products where its customers gave their job orders, sent their own material and consigned their equipment to it. Customers were foreign-based companies with different product lines requiring the employment of workers with specific skills for each product line.

- The rank and file of Complex compromised the union.

- Complex received a message from Lite-On Phil requiring it lower its price by 10 %. Such was not possible for accdg to Complex, they were already incurring losses. Complex informed employees that it had to close down the operations of the Lite On Line. Company promised in giving the one month retrenchment pay

- Union demanded a retrenchment of 1 year month salary for every year. Complex refused.

- Complex filed a notice of foreclosure- Union filed a notice of strike and conducted a strike

vote- Machinery, equipment and materials being used fir

production of Complex were pulled out from the company premises and transferred premises of Inonic Circuit. Next day Complex closed it operation

- Union filed complaint for ULP, illegal closure/illegal lockout and money claims. Pull out of machineries etc were against the Labor Code and the CBA. Ionics were impleaded

- Union averred that Complex and Ionic have the same President and Board of Director; that business has not ceased at Complex but was merely transferred to Ionics, a runaway shop. To prove, that

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out of 80,000 shares compromising the increased capital stock, Complex owns them.

Ruling:- A “runaway shop” is defined as an industrial plant

moved by its owners from one location to another to escape union labor regulations or state laws; also used to describe a plant removed to a new location in order to discriminate against employees at the old plant because of the union activities. One where employer movies its business to another location or it temporarily closes its business for anti-union purposes. A relocation motivated by anti-unioun animus rather than business reasons.

8. FOURTH ULP: COMPANY-DOMINATION OF UNION (ARTICLE 248 [d])- Domination of labor union usually manifests in the ff

forms:a. Initiation of the company union idea.

i. Outright information by the employer or his representatives;

ii. Employee formation on outright demand or influence by employer;

iii. Managerially motivated formation by employees

b. Financial support to the union. Employer defrays the union expenses or pays the attorney’s fees to the attorney who drafted the constitution and by-laws of the union

c. Employer encouragement and assistance. Immediately granting the union exclusive recognition as a bargaining agent w/o determining whether the union represents the majority of employees is an illegal form of assistance

d. Supervisory assistance. Soliciting membership, permitting union activities during working time or coercing employees to join union by threats of dismissal or demolition

- Er unlawfully aided a union – by assisting its attempt to secure authorization cards from Ees and by executing a contract w/ such union when it was not the authorized representative pf the Ees

- Labor union is company-denominated – where it appears that key officials of the company have been forcing Ees belonging to a rival labor union to join the former under pain of dismissal should the refuse to do so

CASE: Progressive development Corp. v. CIR

FACTS:- Araneta Coliseum Employees Association in behalf of

its 48 members filed a ULP case against Progressive Devlpt Corp, its officers and the Progressive Employees Union

- Complainants alleged that they were dismissed because they refused to resign from the ACEA and to affiliate with the PEU which was being aided and abetted by PDC.

- PDC argued that they had nothing to do with the formation of PEU, but was not supported by the facts of records

RULING:- Dismissal of employees because of union activities

and not because of the company’s alleged losses was adequately proven. It constitutes ULP.

9. FIFTH ULP: DISCRIMINATION (ART. 248[e])

- Law prohibits discrimination to encourage or discourage membership in a labor organization. Where the purpose is to influence union activities to employees, discrimination is unlawful. Discrimination is not the same as differentiation or classification.

- To constitute ULP: discrimination committed by the employer must be in regard to the ‘hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization.’

- Discouraging membership in a labor organization includes not only discouraging adhesion to a union membership but also discouraging participation in union activities such as legitimate strike

9.1 Discrimination in Work Quota

- Increase of sales quota of the union president to 400% while other field reps only 98%

- Uneven application of its marketing plan by the company is patently an act of discrimination considered as ULP

9.2 Discrimination in Bonus Allocations or Salary Adjustments

- There is unfair and unjust discrimination in the granting of salary adjustments where evidence shows:

o Management paid the employees unionized branch

o Where salary adjustments were granted to employees of one of its nonunionized branches although it was losing in its operations

o The total salary adjustments given every ten of its unionized employees would not even equal the salary adjustments given one employee in the nonunionized branch

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9.3 Discrimination in Layoff or Dismissal

- Even where business conditions justified a layoff of employees, ULP practices in the form of discriminatory dismissal were found where only unionists were permanently dismissed while nonunionists were not

CASE: Bataan Shipyard and Engineering Co., v. NLRC

Facts:- The National Federation of Labor Unions (NAFLU) is a

labor org in petitioner BASECO dusly registered with DOLE. Company has around thousand employees and more than hundred belong to the said labor org.

- Company filed with the NLRC an application for retrenchment of 285 of its employees due to heavy losses. Meanwhile, some employees who had been on sick leave earlier were considered retrenched. All those so happened to be officers and member s of NAFLU

Ruling:- Retrenchment is valid. However, manner in which the

prerogative is exercised should not be tainted with abuse if discretion. While the right of an employer to dismiss an employee is conceded in a valid retrenchment, the right differs from and should not be confused with the manner in which such right is exercised. It should not be oppressive and abusive.

- Company has indeed been discriminatory in selecting the employees who were to be retrenched.

9.4 Discrimination in Regularization

- Complainants could not be extended permanent appointments because of the absence of vacant positions

- Only reason that can be advanced for indifferent attitude towards complainants is the fact that they are affiliated with the complainant union which apparently does not have sympathy of their employer

9.5 Discrimination by Blacklisting

- Blacklist – a list of persons marked out for special avoidance, antagonism or enmity on the part of those who prepare the list, or those among whom it is intended to circulate, as where a trade union ‘blacklists’ workmen who refuse to conform to its rules or where a list of insolvent or untrustworthy persons is published by commercial agency or mercantile association.

- When resorted by a combination of employers to prevent employment of employees for union activities – may constitute ULP

9.6 Indirect Discrimination

- Sec 4 (a)(5) RA 875 (now Art 248 (f) of the Code) – it shall be ULP for an Er to dismiss or discriminate against an Ee having filed charges or for having given or being about to give testimony under said Act.

- Legislative intends to give absolute freedom of the employees to establish labor org. and unions and to proper charges for violations of the labor laws.

- Following acts are ULPa. Dismissal of laborer on account of union

activities of his brotherb. Discharge of an Ee due to union activities of the

wifec. Discharge of wife due to union activities of the

husband

9.7 Test of Discrimination

- It is necessary that the underlying reason for discharge be established. The fact that a lawful cause of discharge is available is not a defense where the employee is actually discharged because of his union activities. If the discharge is actually motivated by a lawful reason, the fact that the employee is engaged in union activities will not lie against the employer

- An inference that the discharge of an employee was motivated by his union activity must be based upon evidence, direct or circumstantial, not upon mere suspicion

9.8 Constructive Discharge

- Employer prohibits employees from exercising their rights under the Act, on pain discharge, and the employee quits as a result of the prohibition, a constructive discharge occurs – may be remedied in an ULP proceeding

- Constructively discharged when she quit her job due to discriminatory assignment to tasks the employer knew she cannot perform

9.9 Discharge Due to Union Activity, A Question of Fact

- Whether an employee was discharged because of his union activities is essentially a question of fact as to which the Court on Industrial Relations are conclusive and binding if supported by substantial evidence considering the record as a whole.

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- Industrial Court – governed by the rule of substantial evidence not preponderance of evidence

- Substantial evidence –relevant evidence as a reasonable mind might accept a adequate to support a conclusion; evidence which affords a substantial basis from which the fact in issue can be reasonably inferred.

9.10 Valid Discrimination: Union Security Clause

- There is a form of encouragement of union membership which is not considered ULPWhere Management and Union enter unto a contract bargaining agreement containing union security clauseUnion security clause – requires membership in the union so that an employee may retain his job and the union’s existence is assured

- “Union security” generic term to “ closed shop” “union shop” “maintenance of membership” or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employmentCompulsory union membership whose objective is to assure continued existence of the union; no discrimination when certain employees are obliged to join a particular unionDiscrimination, favoring unionism; valid kind of discrimination

- Employer not guilty of ULP – merely complies in good faith with the request of the certified union for the dismissal of employees expelled from the union pursuant to union security clause in the CBA

9.10a Kinds of Union Security Arrangements

- Closed shop: only union members can be hired by the company and they must remain as union members to retain employment in the company

- Union shop: nonmembers may be hired but to retain employment must become union members after certain period. Requirement applies to present and future employees

- Modified Union Shop: employees who are not union members at the time of signing the contract need not join the union, but all workers hired thereafter mus join

- Maintenance of membership shop: no employee is compelled to join the union, but all present or future members must, as a condition of employment, remain in good standing in the union

- Exclusive Bargaining Shop: union is recognized as the exclusive bargaining agent for all employees in the bargaining unit, whether union members or not

- Bargaining for Members Only: Union is recognized as the bargaining agent only for its own members

- Agency shop: agreement whereby employees must either join the union or pay the union as exclusive bargaining agent a sum equal to that paid by the members; directed against “free rider” employees who benefit from the union activities w/o contributing financially to union support; prevents situation where non members enrich themselves at the expense if union members

9.10b Validity of Closed-Shop Agreement

- Closed shop is a valid form of union security and such provision in a CBA is not a restriction of the right of freedom of association

- Policy of the state to promote unionism to enable the workers to negotiate with management on the same level and with more persuasiveness than if they were individually and independently bargain for the improvement of their respective conditions

- A closed shop agreement – whereby an employer binds himself to hire only members of the contracting union who must continue to remain members in good standing to keep their jobs; “most prize achievement of unionism”. Add membership and compulsory dues. Wield group solidarity – promise of employment to loyal members; very effective form of union security agreement

- Reason for enforcing the closed-shop agreement: principle of sanctity or inviolability if contracts guaranteed by the Constitution.

Provisions of Industrial Peace act granting freedom to employees to organize and select reps for enetering bargaining agreements should be subordinated to the constitutional provision protecting sanctity of contracts

- Closed-shop valid under Sec.4 RA 875.

Kal (323 to 336)

9.10c Advantages and Disadvantages of Closed-Shop Agreement

Advantages of Closed-shop Agreement: SPICE FE1. Increase strength and bargaining power of labor

organization2. Sharing of benefits and obligations3. Prevent weakening of labor organizations by dis-

crimination against union members

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4. Eliminate decrease of standards due to competi-tion with nonunion workers

5. Enable effective enforcement of collective agree-ments by labor orgs

6. Facilitate collection of dues and enforcement of union rules

7. Creates harmonious relations between the em-ployer and employee

Disadvantages: FRICED1. Results in monopolistic domination of employment

by labor orgs2. Interfere with freedom to contract and personal lib-

erty of individual worker3. Compel employers to discharge nonunion workers

regardless of efficiency etc4. Facilitate use of labor orgs by unscrupulous union

leaders for extortion, restraint of trade etc5. Deny equal opportunity for employment to

nonunion workers6. Enable union to charge exorbitant dues and fees

9.10d Valid Dismissal Because of Application of Union Security Clause

Union security clauses in CBA, if freely and voluntary entered into, are valid and binding. Thus, dismissal of an employee by the company pursuant to a labor union’s demand in accordance with a union security agreement is not ULP.

Tanduay Distillery Labor Union v. NLRC

Facts: TDI and TDLU entered into a CBA where part of such agreement provides as a condition for continued employment, members must maintain good standing membership in the union. Later some members joined KAMPIL (another union) and asked for representation in TDI. TDLU demanded explanation from erring members as to their act and were later terminated by TDI as request by TDLU.

Issue: WON such termination was valid.

Ruling: Yes. The employer just put the agreement in force. Although members are entitled to disaffiliation… to form a new organization of their own, must, however, suffer the consequences of their separation from the union under the security clause of the CBA.

9.10e Dismissal pursuant to Closed-shop Clause Must Clearly Appear in Contract

In order to validly dismiss an employee by force of the union security clause, there should be a clear and unequivocal statement that the loss of the status of a

member of good standing in the union shall be the cause for dismissal.

Union shop, as with closed-shop provisions, should be strictly construed against the existence of union shop.

9.10f Due Process Required in Enforcing Union Security Clause; Intraunion Matter becomes Termination Dispute with Employer

Although a union security clause in a CBA may be validly enforced and dismissal pursuant thereto may likewise be valid, this does not erode the fundamental requirement of due process. The reason behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot override one’s right to due process.

9.10g Liability of Union to Pay Wages and Fringe Benefits of Illegally Dismissed Employee

Where the employer compelled the employee to go on forced leave upon recommendation of the union for alleged violation of the employee of the closed-shop agreement, the NLRC correctly ordered the reinstatement of the employee and directed the union to pay the wages and fringe benefits which the employee failed to receive as a result of her forced leave and to pay attorney’s fees.

9.10h Employer in Good Faith Not Liable

Where the employer dismissed his employees in the belief in good faith that such dismissal was required by the closed-shop provisions of the CBA contract with the union, he may not be ordered to pay back compensations to such employees although their dismissal is found to be illegal.

9.10i Closed-shop, To Whom Not Applicable

1. Any employee who at the time the closed shop agreement takes effect is a bona fide member of religious org which prohibits its members from joining labor unions on religious grounds;

2. Employees already in the service and already members of a labor union or unions other than the majority union at the time the closed-shop agreement took effect;

3. Confidential employees who are excluded from the rand-and-file bargaining unit;

4. Employees excluded from the closed shop by express terms of the agreement

In the absence of a manifest intent to the contrary, closed-shop provisions in a CBA apply only to persons to be hired or to employees who are not yet members of

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any labor organization and that it is not applicable to those already in the service at the time of it execution.

9.19j Agency Fee Instead of Union Membership

The employees who are benefitting from the CBA without being members of the bargaining union, may be required to pay an agency fee.

A nonmember should contribute toward the cost of collective bargaining and should not be allowed to benefit from collective bargaining process without supporting it financially.

10 Sixth ULP: Discrimination Because of Testimony Article 284f

The law protects not only the employees’ right to form, join or assist labor organizations but also their right to testify on matters covered by the Code.

An employee acting alone in pursuing a group interest may be said to be doing a concerted activity which the employer may not curtail.

10.1 Refusal to Testify

Mabeza v. NLRC

Facts: Employer asked employee to sign a statement that they were receiving legal wage but when asked to swear it before the prosecutor, the latter refused. The employer asked the employee to surrender the keys to the quarters and dismissed said employee, charging her with abandonment and stealing company property.

Issue: WON there was ULP.

Ruling: Yes. There was evident bad faith and deliberate malice petitioner’s summary termination from employment. Art. 248(f) of the Labor Code provides that it s ULP to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony.

10.2 Labor Standards Violation May Lead to Strike

Art 118 is limited to matters abt wages Title I Book IIIArt 248 subject testified to is any issue covered by the Code

If labor standards are violated and the employer does not retaliate against the employees who reported the violations, there are no ULP and no strikeable situation.

If the employer retaliates, ULP is committed, creating thereby a strikeable situation.

11 Seventh ULP: Violation of the Duty to Bargain Art 248g

Duty to bargain defined in Arts 252 and 253

12 Eighth ULP: Paid Negotiation Art 248h

It is a punishable act of ULP for the employer to pay the union or any of its officers or agents any negotiation fee or attorney’s fee as part of settlement in collective bargaining or any labor dispute.

13 Ninth ULP: Violation of the CBA Art248i

Noncompliance with the agreement is non-observance of good faith in bargaining; therefore the noncompliance amounts to ULP.

14 Relief in ULP Cases

14.1 Cease and Desist Order

To support a cease and desist order, the record must show that the restrained misconduct was an issue in the case; that there was a finding of fact of said misconduct and such finding of fact was supported by evidence.

14.2 Affirmative Order

Full reinstatement of the discharged employees to their substantially equivalent position without prejudice to their seniority and other rights and privileges.

14.3 Order to Bargain; Mandated CBA

When an employer has refused /failed to bargain with the proper bargaining agent of his employees, the Court may issue and affirmative order to compel the respondent to “bargain” with the bargaining agent.

14.4 Disestablishment

An order requiring an employer to disestablish a company-dominated union does not necessarily impose upon the employer the duty of dissolving and liquidating the structure and organization of the objectionable union.

15 ULP Not Subject to Compromise

The relation between capital and labor are so impressed with public interest that labor contracts must yield to the common good.

16 ULP In A Given Period Should Be Included In Single Charge

The union should not be allowed to split its cause of action and harass the employer with subsequent

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charges, based upon acts committed during the same period of time.

17 Employer’s Responsibility For ULP Acts Done By Subordinate Officials

Where the facts in the case made doubtful the propriety or equity of imputing to the employer responsibility for the acts of a particular employee, the ff considerations were often employed in deciding the issue:

1. Knowledge by the employer of the employee’s acts;

2. Continuity of improper conduct by employee;3. Employer’s past policy and attitude.

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