Critical Issues in Labor Relations by

Dean CD Duka

Labor – the term labor means physical toil. The services performed by
workers for wages as distinguished from those rendered by
entrepreneurs for profits. Labor may refer to a social class comprising
those who do manual labor or work for wages.

Labor Standards Laws – Labor standards refers to the minimum

requirements prescribed by existing laws, rules and regulations
relating to wages, hours of work, cost of living allowance and other
monetary and welfare benefits, including occupational, safety and
health standards (Batong Buhay Gold Mines, Inc. v. Dela Serna, et. al,
G.R. No. 86963, 6 August 1999). They are covered by Books I to Books
IV of the Labor Code.

Labor Relations Laws are the laws, rules and regulations which govern
the relationship between employees and their employers, promote the
right of the employees to self-organization and collective bargaining,
strike and picketing, penalize unfair labor practice, and provide modes
for the settlement of labor disputes such as conciliation, mediation,
grievance machinery, voluntary arbitration and compulsory arbitration.
It is covered by Books V-VII of the Labor Code.

Labor Laws and Social Legislation

Social Legislations are laws, rules, and regulations that promote the
welfare of all sectors of society.

Social Legislation includes laws that provide particular kinds of

protection or benefits to the society, in furtherance of social justice.

Labor laws directly affect employment – employer – employee

relationship. But not all social legislation are labor laws.

2006 Bar Exam Question No. I (1) – What is the purpose of

labor legislation?
- The purpose of labor legislation is to give life into the
Constitutional mandate of providing protection to labor (Section
3, Article XIII, 1987 Constitution)
- by promoting full employment, ensuring equal work opportunities
regardless of sex, race or creed, regulating the relations between
 workers and employers and assuring that the rights of workers to
self-organization, collective bargaining, security of tenure, and
just and humane conditions of work are amply protected.

Constitutional Mandate
- Article II, Section 18 – The State affirms labor as a primary social
economic force. It shall protect the rights of workers and promote
their welfare.
- Article XII, Section 12 – The State shall promote the preferential
use of Filipino labor, domestic materials and locally produced
goods, and adopt measures that help make them competitive.
- Article XIII, Section 3 The State shall:
o Afford full protection to labor, local and overseas, organized
and unorganized,
o Promote full employment and equality of employment
opportunities for all
o guarantee the rights of all workers to self-organizations, and
peaceful concerted activities, including the right to strike in
accordance with law.
o promote the principle of shared responsibility between
workers and employers and
o the preferential use of voluntary modes in settling disputes,
including conciliation, and
o shall enforce their mutual compliance therewith to foster
industrial peace.
All labor laws are social legislations.

Power to assume jurisdiction

- When in his opinion, there exists a labor dispute causing or likely
to cause a strike or lockout in an industry indispensable to the
national interest, the Secretary of Labor may
o assume jurisdiction over the dispute and decide it or
o Certify the same to the Commission for compulsory
arbitration.

Bases of Labor Laws – Social justice is neither communism, nor

depotism, nor atomism, nor anarch, “but the humanization of laws and
equalization of social and economic force by the State so that justice in
its rational and objectively secular conception may at least be
approximated. Based on the time-honored principle of salus populi est
suprema lex. (Calalang v. Williams, December 2, 1940)
Republic Act 9347
Article 220. NLRC
- There shall be a NLRC which shall be attached to the DOLE
SOLELY for program and policy coordination only, composed of a
Chairman and TWENTY-THREE(23) Members.

Caldereon v. Carale, Aprile 23, 1992

- Indubitably, the NLRC Chairman and Commissioners fall within
the second sentence of Section 16, Article VII of the Constitution,
more specifically under the “third groups” of appointees referred
to in Mison, i.e. those whom the President may be authorized by
law to appoint.
- Undeniable, the Chairman and Members of the NLRC are not
among the officers mentioned in the first sentence of Section 16,
Article VII whose appoitnments requires confirmation by the
Commission on Appointments.

Appointments to NLRC need no confirmation from the commission on

appointments -Calderon v. Carale

Art. 224 - Jurisdiction of LA and the commission

1. ULP
2. Termination disputes
3. if accompanied with a claim for reinstatement involving wages,
rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages
arising from the ER-EE relations;
5. Cases arising from any violation of Article 264 (now 279) of this
Code, including questions involving the legality of strikes and lockouts;
and
6. Except claims for;
- EE compensation, (SSS or EE compensation commission)
- Social Security,
- Medicare (Philhealth)
- maternity benefits,
- all other claims arising from ER-EE relations
- Including those persons in domestic or household service,
- involving an amount exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for reinstatement.
RA 10361, Sec. 37. Mechanism for Settlement of Disputes
-All labor-related disputes shall be elevated to the DOLE Regional
Office having jurisdiction over the workplace w/o prejudice to the filing
of civil or criminal action in appropriate cases. The DOLE Regional
Office shall exhaust all conciliation and mediation efforts before a
decision shall be rendered.
-Ordinary crimes or offenses committed under the RPC and other
SPL by either party shall be filed with the regular courts.

Art. 225 - Powers of the Commission (decides cases by 3)

-Promulgate rules and regulations
-Exclusive appellate jurisdiction over cases decided by the DOLE
Regional Director under Art. 129
-Contempt powers both direct and indirect

Instances where commission sit en banc

1. Promulgate rules and regulations
2. To recommend the extension of office of LA or a Commissioner or
Chairman

Contempt Powers
⁃ Under Article 218 of the Labor Code, the NLRC (and the LAs) may
hold any offending party in contempt, directly or indirectly, and impose
appropriate penalties in accordance with law.
⁃ The penalty for direct contempt consists of either imprisonment
or fine, the degree or amount depends on whether the contempt is
against the Commission or the LA.
⁃ The Labor Code, however, requires the LA or the Commission to
deal with indirect contempt in the manner prescribed under Rule 71 of
the Rules of Court. (Robosa v. NLRC, Feb. 2, 2012)

Rubberworld Phils. Inc. v. NLRC, July 26, 2000

⁃ P.D. 902-A is clear that “all actions for claims against
corporations, partnership or associations under management of
receivership pending before any court, tribunal, board or body shall be
suspended accordingly.”
⁃ The law did not make any exception in favor of labor claims.

Jurisdiction over monetary claims of workers in cases of

liquidation
⁃ Once the receivership proceedings have ceased and the
receiver/liquidator is given the imprimatur to proceed corporate
liquidation, the SEC order becomes functus officio.
⁃ Thus, there is no legal impediment for the execution of the
decision of the LA for the payment of separation ay by presenting with
the rehabilitation receiver and liquidator, subject to the rules on
preference of credits. (Alemar’s Sibal and Sons, Inc. v. NLRC 19
January 2000)

Art. 227 Technical Rules Not Binding

⁃ in any proceeding before the Commission or any of the LAs, 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 LAs shall use the every and all
reasonable means to ascertain the fact in each case speedily and
objectively and without regard to technicalities of law or procedure, all
in the interest of due process.

Art. 228 Appearances and Fees

(a) Non-Lawyers may appear before the Commission or any LA only If
he:
(1) represent themselves;
(2) represent their organization or members thereof, with written
authorization from them; or
(3) he is a duly accredited member of any legal aid office duly
recognized by the DOJ or the IBP in cases referred to by the latter
(Kanlaon Construction Enterprises Co., Inc., v. NLRC, 23
September 1997)

Award of Attorney’s fees

⁃ as to the award of attorney’s fees, the same is justified by the
fact that private respondent actually hired the services of a lawyer to
vindicate his right
⁃ Had it not been for the arbitrary denial or petitioners, private
respondent could not have been compelled to hire the services of a
lawyer to pursue his claims in court, for which he is presumed to have
incurred costs (German Marine Agencies Inc. v. NLRC, 30 Jan
2001)

Two concepts of Attorney’s fees

⁃ first - ordinary; the basis of which is employment (engage service
= pay)
⁃ second - extraordinary; the basis of which is the form of damages
(when you when a litigation, you are awarded attorney’s fees)
• whatever it may be, if you are not a lawyer, do not collect
attorney’s fees.

Case flow (refer to minute 19:35-26:20 of Dean Duka’s video of

CRITICAL ISSUES IN LABOR RELATIONS LAW)
• do not file notice of appeal, instead, file memorandum of appeal.

Art. 229 - Posting of Bond

⁃ In case of a judgement involving a monetary award, an appeal by
the employer may be perfected only upon 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
judgement appealed from.

Appeal Fee
⁃ The appellant shall pay an appeal fee of Five Hundred Pesos
(P500.00) 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 Vi, The 2011 Revised Rules of
Procedure of the NLRC)

Art. 229 - Reinstatement

⁃ the reinstatement aspect is immediately be executory, even
pending appeal.
⁃ the employee shall either be admitted back to work under the
same terms and conditions 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

Roquero v. PAL Inc, 22 April 2003

⁃ On the other hand, if the employee has been reinstated during
the appeal period and such reinstatement order is reversed with
finality, the employee is not required to reimburse whatever salary he
received for he is entitled to such, more so if. he actually rendered
services during the period.

Garcia v. PAL, 20 Jan 2009

⁃ The social justice principles of labor law outweigh or render
inapplicable the civil law doctrine of unjust enrichment.
Art. 230 - Execution of decisions, orders or awards
⁃ The Secretary of Labor and Employment or any RD, the
Commission or any LA, or Med-Arbiter or Voluntary Arbitrator may,
motu proprio or on motion of any interested party,
⁃ issue a writ of execution on a judgement within five (5) years
from the date it becomes final and executory,

Olongapo City v. Subic Water Sewerage Co., 6 Aug 2014

⁃ Under Rule 39, Sec. 6, a judgement creditor has to modes in
enforcing the court’s judgement
⁃ Execution may be either through motion or an independent
action.
⁃ Execution by motion is available if the enforcement of the
judgement was sought within five (5) years from the date of its entry.
⁃ On the other hand, execution by independent action is
mandatory if the five-year prescriptive period for execution by
motion had already passed.
⁃ However, for execution by independent action to proper - the
Rules impose another limitation - the action must be filed before it is
barred by the statute of limitations which, under the Civil Code, is ten
(10) years from the finality of the judgement.

Art. 232 - Jurisdiction of the BLR

⁃ the BLR has original and exclusive jurisdiction over the following;
1. “inter-union disputes” or “representation disputes”
2. “Intra-union disputes” or “internal union disputes”
3. (per dean, wala nang jurisdiction ang BLR dito kasi it is now
within the grievance machinery and voluntary arbitrator) All disputes,
grievances or problems arising from or affecting labor-
management relations in all workplaces, except those arising
from the interpretation or implementation of the CBA which are subject
of grievance procedure and/or voluntary arbitration.

Art. 233 - Compromise agreements

⁃ A compromise entered into in good faith by workers and their
employer to resolve a pending controversy valid and binding on the
agreeing parties (San Miguel Corp. v. NLRC, 6 Feb 1996)

2016 Bar Exams Question No. 1

⁃ what are the requisites of a valid quitclaim? (5%)
Answer: Indeed, not all quitclaims are per se invalid or against public
policy, except;
(1) where there is clear proof that the waiver was wrangled from an
unsuspecting or gullible person; or
(2) where the terms of settlement are unconscionable on their faces; in
these cases, the law will step in to annul the questionable transactions.
⁃ Such quitclaims are regarded as ineffective to bar the workers
from claiming the full measure of their legal rights. (Mindoro Lumber
and Hardware v. Bacay, 8 June 2005)

SEnA Dept Oder No. 107 s. 2010

⁃ SEnA is an administrative approach to provide a speedy,
impartial, inexpensive and accessible settlement procedure for all
issues/complaints arising from ER-EE relations to prevent them from
ripening into full blown disputes.
⁃ Under this approach, all labor and employment disputes shall
undergo a 30-day mandatory conciliation-mediation process to effect
settlement among the contending parties.

Contract bar rule

⁃ This provision prohibits the BLR and/or the RD of the DOLE from
entertaining any petition for certification election while a valid CBA is
existing in an industry.
⁃ The exception on is during the freedom period - the period of
sixty (60) days prior to the expiration of the CBA.
⁃ Another exception to the application of the contract bar rules is
when the CBA is not registered with the Regional Office of the
Department of Labor or the BLR

Art. 241 - 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

Report of creation of a chartered local

⁃ the report of creation of a chartered local shall be accompanied
by a charter certificate issued by the federation or national union
indicating the creation or establishment of the chartered local (Rule
III, Sec. 2[E], Department Order 40-03)
Art. 243 - 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.

Art. 244 - Additional Requirements for Federations or National

Unions
(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 (wala
nang kasunod to sa vid, not sure lang kung may binanggit si dean doon
:D)

Art. 247 - 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; and
(c) Voluntary dissolution by the members.

Collateral attack on the legal personality of the union

⁃ after a certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack
⁃ it may be questioned only in an independent petition for
cancellation (Tagaytay Highlands International Golf Club
Incorporated, v. Tagaytay Highlands Enployees Union, 22 Jan
2003)

Voluntary Cancellation of Registration

⁃ The registration of a legitimate labor organization may be
cancelled by the organization itself.
⁃ Provided, that at least two-thirds (2/3) 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.
Check-Off
⁃ Check off is a method of deducting from an employee’s pay at
prescribed period, the amounts due to the union for fees, fines or
assessments for the purpose of raising funds for the union
⁃ 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.

Special Assessment
⁃ Art. 241 (250) has three (3) requisites for the validity of the
special assessment for union’s incidental expenses, attorney’s fees
and representation expenses. These are:
1. authorization y a written resolution of the majority of all the
members at the general membership meeting called for the purpose;
2. secretary’s record of the minutes of the meeting; and
3. individual written authorization for check off duly signed by the
employees concerned
⁃ No deduction can be made from the salaries of the concerned
employees other than those mandated by law. (Gabriel v. Secretary
of Labor and Employment, 16 March 2000)

Agency fees
⁃ the collection of agency fees in an amount equivalent to union
dues and fees, from employees who are not union members, is
recognized by
⁃ No requirement of written authorization from the non-union
employee is imposed.
⁃ the basis is quasi contractual, deriving from the established
principle that non-union employees may not unjustly enrich
themselves by benefiting from employment conditions negotiated by
the bargaining union. (Holy Cross of Davao College, Inc. v.
Joaquin, 18 October 1996)

Employees who do not have the right to self organization

1. High level government employees
- Under Sec. 3 of EO 180, high-level employees whose functions
are normally considered as policy-making or managerial or whose
duties of a highly confidential nature shall not be eligible to join the
organization of rank-and-file government employes.

2. Members of the AFP, PNP, Firemen, jail guards

- Likewise, Sec. 4, of EO 180, expressly prohibits members of the
AFP, including PNP, firemen, and jail guards from exercising the rights
to self organization - joining, forming and assisting in the formation of
labor organizations.

3. Employees of International Organization enjoying

immunity from suits
- Employees of international organizations duly recognized by the
Philippine government and granted immunity from suits under
international law are also ineligible to join, form or assist in the
formation of labor organizations.

4. Managerial employees as provided by Art. 245 (now 255)

of the Labor Code, managerial employees, are not eligible to join,
assist or form any labor organization.
- On the other hand, supervisory employees shall not be eligible
for membership in a labor organization of the rank-and-file employees
but may join, assist or form separate labor organizations of their own
- These functions of the Dean of Student Affairs Involve exercise
of managerial functions (Cainta Catholic School v. Cainta Catholic
School Employees Union, 4 May 2006)

5. Confidential Employees
- To allow the confidential employees to join the existing Union of
the rank-and-file would be in violation of the terms in the CBA wherein
this kind of employees by the nature of their functions/positions are
expressly excluded (Golden Farms, Inc. v. Ferrer-Calleja, G.R. No.
78755, 19 July 1989)

6. Employees of the cooperative who are members of the

cooperative
- Thus, irrespective of the degree of their participation in the
actual management of the cooperative, all members thereof cannot
form, assist or join a labor organization for the purpose of collective
bargaining. (Benguet Electric Cooperative v. Ferrer-Calleja, 29
December 1989)

Security Guard’s Right to Self Organization

⁃ The security guards and other personnel employed by the
security service contractor shall have the right to form, join, or assist in
the formation of a labor of their own choosing for purposes of collective
bargaining and o engage in concerted activities which are not contrary
to law including the right to strike (Sec. 10, Department Order No.
14 Series of 2001, December 18, 2001) ( Meralco v. Secretary
of Labor, 20 May 1991)

Art. 254 - 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 association for purposes not
contrary to law (As amended by Sec. 6, EO 111, 24 December 1986)

GSIS v. Kapisanan ng mga Manggagawa sa GSIS, 6 December

2006
⁃ For, any collective activity undertaken by government employees
with the intent of effecting work stoppage or service disruption in order
to realize their demands or force concession, economic or otherwise, is
a prohibited concerted mass action and doubtless actionable
administratively.
⁃ In the absence of statute, public employees do not have the right
to engage in concerted work stoppages for any purpose

Public school teachers do not have the right to strike

⁃ The SC declared that the mass actions staged by the public
school teacher from 17 Sept. to 19 Sept 1990, were “to all intents and
purposes a strike,” they constituted a concerted unauthorized
stoppage of, or absence from, work which it was the teachers’ sworn
duty to perform, undertaken for essentially economic reasons it denied
the petition, since the right to strike did not extend to civil service
employees.(MPSTA v. Laguio, Jr., 6 August 1991)

Art. 255 - Ineligibility of Managerial Employees to Join and

Labor Organization; Right to 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 may
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.

Manager
⁃ Managerial employee is one who is vested with powers or
prerogatives to lay down and execute management policies and/or
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees.
⁃ Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the
exercise of such authority is not merely routinary or clerical in nature
but requires the use of independent judgement
⁃ All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.
(Sugbanon Rural Bank, Inc. v. Laguesma, 2 February 2000)

Art. 256 - 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.

Air Philippines Corporation v. BLR, G.R. No. 155395, 22 June

2006
⁃ The legal basis for the petition for cancellation merely prescribed
the requirements for eligibility in joining a union did not prescribe the
grounds for cancellation of union registration
⁃ The inclusion in a union of disqualified employees is not among
the grounds for cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud under the circumstances
enumerated in Sections (a) and (c) of Art. 239 of the Labor Code

Art. 258 - Unfair Labor Practice

⁃ Unfair labor practice refers to acts that violate the workers’ right
to organize
⁃ the prohibited acts are related to the workers’ right to self-
organization and to the observance of a CBA
⁃ Without that element, the acts, no matter how unfair, are not
unfair labor practices (Philcom Employees Union v. Phil. Global
Communication, 17 July 2006)

Aspects of ULP
⁃ Civil aspect can be committed by the officers and agents of the
employers or officers and agents of the labor organization
⁃ This aspect of ULP is cognizable and falls within the jurisdiction of
LA
⁃ The quantum of proof required is only substantial evidence
and the prescriptive period is one year from the accrual of ULP

⁃ Criminal aspect can be committed by the agents and officers of

the employer who participated, authorized and/or ratified the act.
⁃ This aspect of ULP falls within the jurisdiction of the regular trial
courts and the quantum of proof required is beyond reasonable doubt.
⁃ the prescriptive period is one year from the accrual of the act
of ULP

Art. 259 - Unfair labor practices of employers

⁃ A yellow dog contract is an undertaking by the employees that
as a condition for employment they will not join, assist, form or even
attempt to foster a union for the duration of their employment with the
employer.
⁃ This is a void undertaking.
⁃ Yellow, the color of sunshine, hope, and happiness, has
conflicting associations.
⁃ On one hand yellow stands for freshness, happiness, positivity,
clarity, energy, optimism, enlightenment, remembrance, intellect,
honor, loyalty, and joy.
⁃ but on the other, it represents cowardice and deceit
⁃ a dull or dingy yellow represent caution, sickness and jealousy.

Company or “yellow” union

⁃ A company or “yellow” union is a worker organization which is
dominated or influenced by an employer, and is therefore not an
independent trade union
⁃ Company unions are contrary to international labor law (ILO
Convention 98, Art. 2)
Run-away shop
⁃ an industrial plant moved by its owners from one location to
another to escape union, labor regulations or state laws,
⁃ but the term is also used to describe a plant removed to a new
location in order to discriminate against employees at the old plant
because of their union activities
⁃ It is one wherein the employer moves its business to another
location or it temporarily closes its business for anti-union purposes
⁃ A “runaway shop” in this sense, is a relocation motivated by anti-
union animus rather than for business reasons [Complex Electronics
Employees Association (CEEA) v. NLRC, 19 July 1999]

Blue-Sky Bargaining
⁃ Blue-sky bargaining is the act of making exaggerated or
unreasonable proposals (Standard Chartered Bank v. Confesor,
G.R. No. 114974, 16 June 2004)

Boulwareism
⁃ in negotiation, Boulwarism is an offer or counter-offer that is not
meant to be negotiated
⁃ This is a “take it or leave it” strategy named after Lemuel
Boulware a former president of General Electric
⁃ When face with a strike, Boulware is famous for telling the
International Union of Electrical Workers (IUE) at the onset of
negotiations that the company had already evaluated the workers’
needs and was putting forth its “first, last and best offer” on the table.
⁃ boulwareism is prohibited in Philippine Labor laws

Surface bargaining
⁃ Surface bargaining is defined as “going through the motions of
negotiating” without any legal intent to reach an agreement.
⁃ It involves the question of whether an employer’s conduct
demonstrates an unwillingness to bargain in good faith or is merely
hard bargaining (Standard Chartered Bank v. Confesor, 16 June
2004)

Featherbedding
⁃ It is in the nature of exaction, for services which are not
performed or not to be performed, as when a union demands that the
employer maintain personnel in excess of the latter’s requirements.
⁃ It is an unfair labor practice of the union through coercive
means for exacting or attempting to exact from employers for services
not rendered or not intended to be rendered.
⁃ However, there is no featherbedding if the paid work is
performed made no matter how unnecessary or useless it may be to
the employer.

Sweetheart’s Contract
⁃ The contract or the CBA is considered as a “sweetheart
contract” or sweetheart’s deal because it does not substantially
improve the employees’ wages and benefits.
⁃ Worst, the contract may even provide for benefits are far below
those that are provided by law.

2009 Bar Exam Question No. XVIII (b): Explain the impact of
the union security clause to the employees’ right to security of
tenure (2%)
⁃ Answer. Purpose of Union Security Clauses; Protection to shield
union members from whimsical and abusive exercise of management
prerogatives.
⁃ Union security clauses grant benefits in the sense that additional
union membership will insure additional source of income to the union
from union dues and special assessment.
⁃ It is also a means of self-preservation because it strengthens
the union through selective acceptance of new members on the basis
of commitment a(n)d loyalty.

2015 Bar Exam Question No. XVII(b): Distinguish between

“closed shop” clause and a “maintenance of membership”
clause. (2%)
1. Closed shop agreement - it is an agreement whereby an
employer binds himself to hire only members of the contracting
union who must continue to remain members of the union in good
standing for the duration of the agreement as a condition for continued
employment.

2. Maintenance of membership clause - It does not require non-

members to join the union but provides that those who do join must
maintain their membership for the duration of the union
contract, under penalty of discharge.

Union shop agreement

 - It is a clause in a CBA whereby the employer enjoys the right to
hire persons without regard to their membership or
nonmembership in the labor union that represents the
employees, with the provision that the person so hired must become
a member of the union after a specified period must and
maintain his membership therein in good standing for the duration
of the agreement

Agency shop
⁃ It is an arrangement that requires an employee, as a condition of
employment to pay the contracting union a service fee known as
agency fee for the benefits these employees receive from the
collective bargaining agreement as a result of the efforts of the
contracting union.
⁃ A limited exemption to the Agency Shop requirement exists for
employees with bonafide religious objections to joining a labor union.
⁃ It is also known as the anti-free rider or hitchhiker.

Preferential shop agreement

⁃ It recognizes the right of the employer to select his employees
but requires him to give preference to members of the contracting
union who are qualified.

Non-membership due to religious beliefs

⁃ Members of religious groups may not be compelled to join labor
organizations if their religions prohibit their members from joining such
organizations (Victoriano v. Elizalde Rope Workers Union, 12
Sept 1974 and Reyes v. Trajano, 2 June 1992)

Valid termination of employment pursuant to union security

clause
⁃ In terminating the employment of an employee by enforcing the
union security clause, the employer needs only to determine and prove
that:
(1) the union security clause is applicable;
(2) the the union is requesting for the enforcement of the union
provision in the CBA; and
(3) there is sufficient evidence to support the unions decision to expel
the employees from the union.
⁃ These requisites constitute just cause for terminating an
employee based on the CBAs union security provision (Alabang Town
and Country Club v. NLRC, 14 February 2008)
Art. 261 - CBA
⁃ A CBA is “a contract executed upon request of either the
employer or the exclusive bargaining representative
incorporating the agreement reached after negotiations with
respect to wages, hours of work and all other terms and
conditions of employment, including proposals for adjusting an
grievance or questions arising under such agreement.”
⁃ The primary purpose of a CBA is the stabilization of labor-
management relations in order to create a climate of a sound and
stable industrial peace. (Rivera v. Espiritu, 23 Jan 2002)

Purpose of Collective Bargaining

⁃ Precisely, the purpose of collective bargaining is the acquisition
of attainment of best possible covenants or terms relating to economic
and non-economic benefits granted by employers and due to
employees. (Union of Filipro Employees - Drug, Food and Allied
Industries Unions - Kilusang Mayo Uno v. Nestle Philippines,
Incorporated, 22 Aug 2006)

Good Faith bargaining

⁃ There is no per se test of good faith in bargaining.
⁃ Good faith or bad faith is an inference to be drawn from the facts,
to be precise, the crucial question of whether or not a party has met
his statutory duty to bargain in good faith typically turns on the facts of
the individual case. (Union of Filipro Employees - Drug, Food and Allied
Industries Unions - Kilusang Mayo Uno (UFE-FA-KMU) v. Nestle
Philippines Incorproated, 22 August 2006)

Jurisdictional preconditions in collective bargaining

1. possession of the status of majority representation of the
employees’ representative in accordance with any of the means of
selection or designation provided for by the Labor Code;
2. Proof of majority representation; and
3. a demand to bargain under Art. 251 par. (a) of the New Labor
Code (Kiok Loy doing business under the name and style
Sweden Ice Cream Plant v. NLRC, 22 Jan 1986)

Stages in Collective Bargaining

4. Publication - posting of the agreement - two copies of the
signed CBA shall be posted for at least five (5) days prior to the
day of ratification in two conspicuous areas in each workplace of
the employer units concerned.
5. Ratification by the majority of all the workers in the
bargaining unit represented in the negotiation. Said CBA shall affect
only those employees in the bargaining units who have ratified it.
6. Registration - the CBA shall be registered with the BLR

Non-posting of the CBA is a fatal defect

⁃ Specifically, the CBA was not posted for at least five days in two
conspicuous places in the establishment before ratification, to enable
to workers to clearly inform themselves of its provisions.

Posting of CBA is employer’s responsibility

⁃ In the first place, the posting of copies of the CBA is the
responsibility of the employer which can easily comply with
the requirement through a mere mechanical act. (Associated
Labor Unions (ALU) v. Ferrer-Calleja, 5 May 1989)

Effects of non-registration of the CBA

⁃ A CBA that is not registered remains valid and binding between
the parties (employer and the union)
⁃ However, it may not be used to apply the contract bar rule
and prevent any legitimate labor union from filing a petition for
certification election)

Contract Bar Rule

⁃ When there is an existing CBA, neither the employer nor the
union may terminate nor modify the CBA during its lifetime
⁃ the parties are mandated by law to keep the status quo and
to continue with full force and effect the terms and conditions of
the existing CBA
⁃ this is known as the contract bar rule - the existence of the CBA
(a contract between the employer and the union) bars the modification
or termination of the CBA except during the freedom period.

Automatic Renewal Clause

⁃ No petition for certification election for any representation issue
may be filed after the lapse of sixty-day freedom period.
⁃ The old CBA is extended until a new one is signed.
⁃ the rule is that despite the lapse of the formal effectivity of the
CBA the law still considers the same as continuing in force and effect
until a new CBA shall have been validly executed.
⁃ Hence, contract bar rule still applies.
⁃ The purpose is to ensure stability in the relationship of the
workers and the company by preventing frequent modifications of any
CBA earlier entered into by them n good faith and for the stipulated
original period (Colegio De San Juan De Letran v. Association of
Employees and Facutly of Letran, 18 Sept 2000)

Art. 265 - Lifetime of the CBA

⁃ The representation issue or the status of the union who entered
into the CBA has a lifetime of five (5) years from the time of its
effectivity.
⁃ while the other provisions (economic) shall be effective for a
period of three(3) years from its execution.

CBA extended to ten years - valid

⁃ the acts of public respondents in sanctioning the 10-year
suspension of the PAL-PALEA CBA did not contravene the “protection
to labor” policy of the Constitution.
⁃ Under the principle of inviolability of contracts guaranteed by the
Constitution, the contract must be upheld (Rivera, et al. v. Espiritu,
23 Jan 2002)

The Exclusive Bargaining Status Cannot Go Beyond Five Years

⁃ in other words, despite an agreement for a CBA with a life of
more than five years, either as an original provision or by amendment,
the bargaining union’s exclusive bargaining status is effective
only for five years and can be challenged within sixty (6) days prior
to the expiration of the CBA’s first five year (FVC Labor vs. Sama-
Samang Nagkakaisang Manggagawa Sa FVC, 27 November
2009)

Freedom period example

⁃ The CBA was executed and made effective on 9 June 2015. Its
Exp date is 9 June 2020. The Economic provision expired on 9 June
2018. The FREEDOM PERIOD is 9 April 2020 to 9 June 2020 (60 days)

What can be done during freedom period

1. a petition questioning the majority status of the incumbent
bargaining agent may be entertained and a certification election
shall be conducted by DOLE (BLR)
2. a labor union may disaffiliate from the mother union to form
a local or independent union during the freedom period.
3. Any petition filed before or after the sixty-day freedom period
shall be dismissed outright (Port Workers Union of the Philippines
(PWUP) v. Laguesma, 18 March 1992)

Automatic Retroaction of CBA

⁃ the CBA expired on 9 June 2018
⁃ the parties agreed to pay P20/day wage increase
⁃ the agreement was finalized on 9 November 2018, this is five
months after the expiration of the CBA
⁃ the effectivity of the agreement would retroact to 10 June 2018
which is the day after the expiration of the CBA

2001 Bar Q: Company A and Union B had a 3-year CBA that

expired on June 12, 1990. Negotiations proved futile so the
unresolved issues were referred to an Arbitrator who rendered
a decision on March 15, 1992 retroactive to December 14,
1990. Is the Arbitrator’s decision proving for retroactivity
tenable or not? why? (5%)
⁃ Effectivity of Arbitral Award: On the other hand, if the CBA is a
result of arbitration (arbitral award) the date of effectivity of the said
CBA will be based on the arbitral award.
⁃ Therefore in the absence of the specific provision of law
prohibiting retroactivity of the effectivity of the arbitral awards issued
by the Secretary of Labor… Public respondent is deemed vested with
plenary powers to determine the effectivity thereof. (LMG Chemicals
Corporation. Secretary of Dole, 17 April 2001)

Substitutionary Doctrine
⁃ When there occurs a shift in employees’ union allegiance after
the execution of a bargaining contract with their employer, merely
states that even during the effectivity of a CBA executed between
employer and employees thru their agent, the employees can change
said agent but the contract continues to bind them up to its
expiration date.
⁃ They may bargain however for the shortening of said expiration
date (Benguet Consolidated, In.c v. BCI Employees and Workers
Union-PFLU, 30 April 1968)

2009 Bar Examination Q No. 1 (d)

T or F
⁃ In the law on labor relations, the substitutionary doctrine
prohibits a new collective bargaining agent from repudiating an
existing CBA

Substitutionary Doctrine
⁃ Union X is the collective bargaining agent in Company B
⁃ On the 2nd year of the existing of the CBA, Union Z filed a
petition for cancellation of registration of Union X based on Art. 247
⁃ the BLR cancelled Union X’s registration and it became final.
⁃ In a certification election held thereafter Union Q won.
⁃ Union Q will be the substitute union
⁃ Union Q may not repudiate the existing CBA but may request for
that its lifetime be shortened

Art. 266 - Injunction prohibited

⁃ No temporary or permanent injunction or restraining order in any
case involving or growing out of labor disputes shall be issued by any
court or other entity, except as otherwise provided in Articles 218(225)
and 264(279) of this Code (As amended by BP 227, June 1 1982

Halaguena v. PAL, 2 Oct 2009

⁃ The dispute concerns the terms and conditions of petitioners’
employment in PAL, specifically their retirement age
⁃ The said issue cannot be resolved solely by applying the Labor
Code
⁃ Rather, it requires the application of the Constitution, labor
statutes, law on contracts and the Convention on the Elimination of All
Forms of Discrimination Against Women, and the power to apply and
interpret the constitution and CEDAW is within the jurisdiction of trial
courts, a court of general jurisdiction.

Art. 267 - Bargaining Unit

⁃ Bargaining Unit refers to a group of employees sharing mutual
interests within a given employer unit, compromised of all or less than
all of the entire body of employees in the employer unit or any specific
occupational or geographical grouping within such employer unit.
(Dept. Order 40-03, Rule I, Section 1[d])

2007 Bar Exam Q No. IV: Explain: a) The Globe Doctrine b) The
Community of Interest Rule.
Suggested Answer:
a) The Globe Doctrine was enunciated in the case in Re: Globe Machine
and Stamping Company [(3 NLRC 294) 1973] which says that in
determining the proper bargaining unit the express will or
desire of the employees shall be considered, they should be
allowed to determine for themselves what union to join or
form. The best way to determine their preference is through a
referendum

b) The Community of Interest Rule simply states that the

community of affinity of employees’ Interest, such as
substantial similarity of work and duties, or similarity of
compensation and working conditions in a unit is the
determining factor whether or not these employees belong to
one bargaining unit.

Test in determining the appropriate bargaining unit;

(1) will of the employees (Globe Doctrine);
(2) affinity and Unit of employees’ interest, such as substantial
similarity of work and duties, or similarity of compensation and working
conditions;
(3)prior collective bargaining history; and
(4) employment status, such as temporary, seasonal, and probationary
employees. (International School Alliance of Educators v.
Quisumbing, 1 June 2000)

Art. 268 - Representation Issue in Organized Establishments

⁃ In organized establishments, when a verified petition questioning
the majority status of the incumbent bargaining agent is filed by any
legitimate labor organization before the DOLE within sixty (60)-day
period before the expiration of the CBA, the Med-Arbiter shall
automatically order an election by secret ballot. The verified petition
is supported by the written consent of at least twenty-five
percent(25%) of all the employees in the bargaining unit.

Certification election
⁃ Certification election refers to the process of determining
through secret ballot the sole and exclusive representative of
the employees in an appropriate bargaining unit for purposes of
collective bargaining or negotiation.
⁃ A certification election is ordered by the DOLE (Dept. Order 40-
03, Rule I, Section 1[h])
Double Majority Rule
⁃ it is well-settled that under the so-called “double majority rule,”
for there to be a valid certification election, majority of the bargaining
unit must have garnered voted and the winning union must have
garnered majority of the valid votes cast. (National Union of
Workers in Hotels - Manila Pavilion v. SOLE, 31 July 2009)

Example of Double Majority Rule

⁃ 100 employees in the bargaining unit
⁃ at least 51 must have case their votes (50% plus 1)
⁃ Union A - 15 votes
⁃ Union B - 9 votes
⁃ Union C - 7 votes
⁃ No Union - 20 votes
⁃ Total of 51 votes
⁃ There is NO winner (kasi walang naka 26)

Failure of Election
⁃ Where the number of votes cast in a certification or consent
election is less than the majority of the number of eligible
voters and there are no materially challenged votes, the Election
Officer shall declare a failure of election in the minutes of the election
proceedings (Section 17, Rule IX, D.O. 40-03)

⁃ A failure of election shall not bar the filing of a motion for the
immediate holding of another certification or consent election within
six (6) months from the date of declaration of failure of election
(Section 17, Rule IX, D.O. 40-03)

Run-off Election
⁃ In a certification or consent election with three(3) or more
choices,
⁃ where such a certified or consent election results in none of the
three(3) or more choices receiving the majority of the valid votes cast;
⁃ the labor unions receiving the two (2) highest number of votes
⁃ provided that the total number of votes for all contending
unions is at least (50%) of the number of votes cast. (Section
1(ss), Rule I, D.O. 40-03)

Two unions with highest votes

⁃ 100 employees in the bargaining unit
⁃ at least 51 must have case their votes (50% plus 1)
⁃ Union A - 15 votes*
⁃ Union B - 9 votes*
⁃ Union C - 7 votes
⁃ No Union - 20 votes
⁃ Total of 51 votes

No union is not a choice in a run-off election

⁃ but “no union” shall not be a choice in the run-off election (Sec.
1, Rule X, D.O. No. 40-03)

A dismissed employee can vote

⁃ an employee who has been dismissed from work but has
contested the legality of the dismissal in a forum of appropriate
jurisdiction at the time of the issuance of the order for the conduct of a
certification election (Yokohama Tire Philippines, Inc. v..
Yokohama Employees Union, 10 December 2007)

Consent election
⁃ Consent election is the process of determining through secret
ballot the sole and exclusive representative of the employees in an
appropriate bargaining unit for purposes of collective bargaining
negotiation.

⁃ A consent election is voluntarily agreed upon by the parties, with

or without the intervention by the Dept. (Section 1(h), Rule I, D.O.
40-03)

Re-run election
⁃ when a certification, consent or run-off election results to a tie
between the two choices, the election officer shall immediately notify
the parties of a re-run election.
⁃ the election officer shall cause the posting of a notice of a re-run
election within five (5) days from the certification, consent or run-off
election, shall be conducted within ten (10) days after the posting of
notice. (Sec. 16, D.O. 40-1-15)

Voluntary Recognition (REPEALED) *Just in case*

- Voluntary Recognition refers to the process by which a
legitimate labor union is recognized by the employer as the
exclusive bargaining representative or agent in a bargaining unit,
reported with the Regional Office in accordance with Rule VII,
Section 2, D.O. 40-03 (D.O. No. 40-03, Rule, 1, Section 1)
Sole and Exclusive Bargaining Agent (SEBA)
⁃ any legitimate labor organization may file a request for SEBA
Certification in the Regional Office which issued its certificate of
registration or certificate of creation of chartered local.
⁃ Statement of the existence/non existence of other labor
organizations/CBA (Section 1, Rule VII, D.O. 40-1-15)

One-year bar rule

⁃ Entry of voluntary recognition shall bar the filing of a petition for
certification election by any labor organization for a period of one (1)
year from the date of entry of voluntary recognition.
⁃ Upon expiration of this one-year period, any legitimate labor
organization may file a petition for certification election in the same
bargaining unit represented by the voluntarily recognized union,
⁃ unless a CBA between the employer and voluntarily recognized
labor union was executed and registered with the Regional Office
(Section 4, Rule VII, D.O. 40-03)

Negotiation Bar Rule

⁃ Once negotiation for a new CBA has been commenced pursuant
to Art. 261, a petition for certification election may no longer by validly
entertained by the DOLE.

Deadlock bar rule

⁃ The Deadlock Bar Rule simply provides that a petition for
certification election can only be entertained if there is no pending
bargaining deadlock submitted to conciliation or arbitration or had
become the subject of a valid notice of strike or lockout (National
Congress of Unions in the Sugar Industry of the Philippines -
TUCP v. Trajano, 10 April 1992)

Appeal bar rule

⁃ The filing of the memorandum of appeal from the order or
decision of he Med-Arbiter stays the holding of any certification
election (D.O. 40-03, Rule VIII, Section 21)

Art. 271 - Employer as bystander

⁃ In all cases, whether the petition for certification election is filed
by an employer or a legitimate labor organization, the employer shall
not be considered a party thereto with a concomitant right to oppose a
petition for certification election.
⁃ The employer’s participation in such proceedings shall be limited
to:
(1) being notified or informed of petitions of such nature; and
(2) submitting the list of employees during the pre-election conference
should the Med-Arbiter act favorably on the petition

Bystander rule
⁃ In petitions for certification election, the employer is a mere
bystander and cannot oppose the petition or appeal the Med-Arbiter’s
decision (Sta. Lucia East Comm. Corp v. Sec. of Labor, 14
August 2009)

Period to File an Appeal

⁃ The order granting the conduct of a certification election may be
appealed to the Office of the Secretary within ten (10) days from
receipt thereof. (Section 17, Rule VIII, D.O. 40-03)

Grievance
Grievance refers to any question by either the employer or the union
regarding the interpretation or implementation of any provision of the
CBA or interpretation or enforcement of company personnel policies
(D.O. 40-03, Rule I, Section 1 [1])

Establishment of grievance machinery

⁃ the parties to a CBA shall establish a machinery for a expeditious
resolution of grievances arising from the interpretation or
implementation of the CBA and those arising from the interpretation or
enforcement of company personnel policies (D.O. No. 40-03, Rule
XIX, Section 1)
⁃ In the absence of applicable provision in the CBA, a grievance
committee shall be created within ten (10) days from signing of the
CBA.
⁃ The committee shall be composed of at least two (2)
representatives each from the members of the bargaining unit and the
employer, unless otherwise agreed upon by the parties.
⁃ The representatives from among the members of the bargaining
unit shall be designated by the union (D.O. No. 40-03, Rules XIX,
Section 1)

Case: Santuyo v. Remerco Garments, 22 March 2010

⁃ Moreover, Art. 260 of the LC clarifies that such disputes must be
referred first to the grievance machinery and if unresolved within
seven days, the shall automatically be referred to voluntary arbitration.