LABOR RELATIONS LAW

1. Post-employment Ban (noninvolvement provision)

2. Right to impose postemployment prohibitions: The
employer, in the exercise of its
prerogative, may insist on an
agreement with the employee for
certain prohibitions to take effect
after termination of their employeremployee relationship.
3. I.e. Non-compete or noninvolvement clause; forfeiture-forcompensation clause or
compensation-for-competition
clause; garden-leave clause;
confidentiality and non-disclosure
clause; non-solicitation clause; nonrecruitment or anti-piracy clause;
inventions assignment clause
(intellectual property clause)
4. Non-compete or noninvolvement clause: Freedom
to contract: The employer and
employee are free to stipulate in an
employment contract prohibiting
the employee within a certain
period from and after the
termination of his employment,
from: (1) starting a similar
business, profession or trade; or
(2) working in an entity that is
engaged in a similar business that
might compete with the employer.
Purpose: to prevent the possibility
that upon an employees
termination or resignation, he
might start a business or work for a
competitor with the full competitive
advantage of knowing and
exploiting confidential and
sensitive information, trade
secrets, marketing plans etc.,
which he acquired and gained from
his former employment. Contracts
which prohibit an employee
from engaging in business in

competition with the employer

are not necessarily void for
being in restraint of trade. e.g.
Covenant Not to Compete (CNC)
or Non-Involvement Provision
clause.
5. Unreasonable when:
6. Ferrazzini vs. Gsell - It was
unreasonable restraint of trade
thus against public policy when
employee was prohibited from
engaging in any business or
occupation in the Philippines for a
period of 5 years after termination
of employment. Indeed this was
limited as to time and space, BUT
was not limited as to trade.
Employee is forced to leave the
country to work if employer shall
not give his permission.
7. Martini v. Glaiserman It is void for
unreasonable restraint of trade,
since EE was prohibited from
engaging in any business similar to
that of his employer for a period of
1 year, when in fact EEs work is
very limited to purchase and export
only the restraint was too broad;
his employment was limited only to
one of its ERs multifarious
activities.
8. Limitation as to time, place, etc.:
9. Conformably then with the
aforementioned pronouncements, a
non-involvement clause is not
necessarily void for being in
restraint of trade as long as there
are reasonable limitations as to
time, trade, and place.
10. The non-involvement clause is
valid when not contrary to public
welfare and not greater than is
necessary to afford a fair and

reasonable protection to
respondent.
11.
12.
Reasonable Causal
Connection Rule
13. Reasonable Causal Connection
Rule: The rule in case of conflict of
jurisdiction between Labor and
Regular Court. Under this rule, IF
there is reasonable causal
connection between the claim
asserted and the employeremployee relations, THEN the case
is within the jurisdiction of labor
courts. In the absence of such
nexus, it is the regular court that
has jurisdiction.
14. Power to determine ER-EE
relationship: Not only the Labor
Arbiters and the NLRC, but also the
DOLE Secretary, DOLE Regional
Directors (in the exercise of its
visitorial & and enforcement power
under Art. 128 (b) of LC); MedArbiter; Social Security
Commission;
15.
16. Jurisdiction and venue of Labor
Arbiters, NLRC and regular courts:
17. LABOR ARBITER: Powers: (1)
adjudicatory power to hear and
decide cases over which they have
jurisdiction; (2) contempt power;
(3) power to conduct ocular
inspection; Jurisdiction: Art. 217:
Original and Exclusive, meaning no
other officer and tribunals can take
cognizance of, or hear and decide,
any of the cases therein
enumerated. Exceptions: (1)
When DOLE Secretary or
President exercises his power
under Art. 263 (g) of the LC to
assume jurisdiction over national
interest cases; (2) When NLRC

exercise its power of

compulsory arbitration over
similar national interest cases that
are certified to it by the DOLE
Secretary; (3) When cases arising
from the interpretation or
implementation of CBA and from
the interpretation or enforcement
of company personnel policies
which must be referred to the
grievance machinery and voluntary
arbitration, as mat be provided in
said agreements; (4) When
parties agree to submit the case
to voluntary arbitration before a
Voluntary Arbitrator or panel of
Voluntary Arbitrators (who have
original & exclusive jurisdiction to
hear and decide cases mutually
submitted to them by the parties,
as under Art. 261, 262 of LC).
18.

JURISDICTION

19. A. UNFAIR LABOR PRACTICE

CASES (ULP) Art. 247, 248, 249,
261, 263 (c). Jurisdiction is under
L.A. but limited only to the civil
aspect of ULP, the criminal aspect
being lodged to regular courts.
20. B. ILLEGAL DISMISSAL CASES
(ID) original and exclusive
jurisdiction is under L.A., Voluntary
Arbitrators, DOLE Secretary (in
exercise of assumption of national
interest), NLRC (for national
interest cases certified to it for
compulsory arbitration by DOLE
Sec).
21. C. MONEY CLAIMS (MC) original
and exclusive jurisdiction of L.A.
and classified into two: (a) money
claim regardless of amount, with
claim for reinstatement arising
from termination case; (b) money
claim with/out claim for
reinstatement exceeding the
amount of P5, 000.00 per claimant.
If less, not seeking reinstatement,

with EE-ER relationship Reg.

Director of DOLE, or his authorized
representatives (Art. 129). Under
L.A. when arising from law or
contract other than the CBA.
Under Voluntary Arbitrators
when arising from CBA or company
personnel policies.
22. C.1. JURISDICTION OVER
CONTESTED CASES INVOLVING
DOLE SECS VISITORIAL &
ENFORCEMENT POWERS
(INSPECTION OF
ESTABLISHMENTS) Under the
Exception Clause in Art. 128 (b):
DOLE Secretarys Jurisdiction when:
(1) ER-EE relationship still exist; (2)
Findings in question were made in
the course of inspection by labor
inspector; (3) EE have not yet
initiated any claim/complaint with
DOLE R.D. under Art. 129, or L.A.
under Art. 224. EXCEPT in cases
where ER contests the findings of
DOLE/ RD inspection and raises
issues supported by documentary
proofs which were allegedly not
considered during the inspection. In
which case, the jurisdiction lies
with the LABOR ARBITER not to
the DOLE/RD anymore.
23.
24. D. CLAIMS FOR DAMAGES (CFD)
exclusive jurisdiction of L.A., as
well as claim for attorneys fees in
labor cases, as long as the action
primarily involves an ER-EE
relationship.
25. E. LEGALITY OF
STRIKES/LOCKOUTS NOT
AFFECTING NATIONAL
INTEREST Under the jurisdiction
of L.A. employer, in case of strike,
or union, in case of lockout, may
file the proper petition with L.A.
and request declaration of the
illegality thereof.

26. F. STRIKES/LOCKOUTS
AFFECTING INDUSTRIES
INDISPENSABLE TO THE
NATIONAL INTEREST
jurisdiction of DOLE Secretary in
case he assumes jurisdiction, or
with the NLRC, in case DOLE
Secretary certifies it thereto. For
NLRC, the NLRC Division which
acquires jurisdiction over the
principal office of the company
shall have the jurisdiction, unless
the certification otherwise provides.
27. CROSS-JURISDICTIONAL NATURE OF
STRIKE & LOCKOUT
28. 1. Filing of notice to strike or
lockout NCMB
29. 2. Filing of complaint declaring the
illegality of the strike or lockout
L.A. (Art. 217 (a) (5), LC) or
Voluntary Arbitrator (Art. 262, LC)
30. 3. Filing of an injunction petition
NLRC in cases of Art. 264, 218 (e),
LC for purposes of securing a
temporary restraining order (TRO)
and injunction.
31. 4. Assumption of jurisdiction by
DOLE Secretary under Art. 263 (g)
only in national interest cases.
Once he makes assumption, he
shall decide all the issues of the
certification order, thus all pending
case in other tribunals shall be
submitted to him.
32. 5. Assumption of jurisdiction by
President. He is not precluded from
exercising the powers of his alter
ego, the DOLE Secretary, under Art.
263 (g) in settling or terminating
the strike/lockout.
33. 6. Submission of national interest
case to Voluntary Arbitration.
Where parties opt to submit their
dispute to voluntary arbitration,

despite pendency of the assumed

or certified national interest case.
34.
35. G. CRIMINAL CASES ARISING
FROM STRIKES/ LOCKOUTS
Always within the jurisdiction of
regular courts.
36. H. LEGISATED WAGE
INCREASES/DISTORTION IF
with CBA or recognized bargaining
union, THEN RA 6727 vests it upon
Voluntary Arbitration (VA) or panel
of VA to hear and decide, after the
grievance procedure in CBA failed
to settle the same. IF unorganized
establishment, THEN jurisdiction is
with the LA after NCMB failed to
correct the distortion.
37. I. WAGE DISTORTION MADE
SUBJECT OF STRIKE/LOCKOUT
is not a proper a ground to be
invoked in support of strike or
lockout. Such wage orders issued
by the Regional Tripartite Wages
and Productivity Board (RTWPB)
which are alleged in the notice of
strike/lockout should be referred to
L.A. if not settled within 10 days by
the NCMB.
38. J. ANNULMENT OF COMPROMISE
AGREEMENTS jurisdiction is with
the L.A. Compromise Agreements
Art. 227 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
DOLE. NLRC is excluded from
assuming jurisdiction except in
cases of prima facie evidence of
fraud, misrepresentation, or
coercion.
39. K. EXECUTION OF DECISIONS OF
V.A. jurisdiction is with the same

V.A. under Art. 262-A. BUT in the

absence of the V.A. who rendered
the decision, the writ of execution
may be issued by the L.A. in the
region where the winning party
resides,
40. L. OFW CASES IF money claims
L.A. (RA 8042) ; IF money
claims with CBA between foreign
ER and bargaining union of EE
V.A. ; IF administrative, arising
from viol. of rules & regulations
relating to licensing, recruitment,
employment agencies, refund of
fees, viol. of condition of license to
recruit; disciplinary action cases
POEA
41. M. OTHER CASES: EE of GOCC
without original charters, Alien
parties, priest/ministers on nonecclesiastical affairs, domestic
workers/kasambahay if claim
exceeds 5000php, ER of
cooperatives limited to money
claims and illegal dismissal,
counter-claims of ER against EE
L.A. ; EE of GOCC with original
charters Civil Service
Commission.
42.

CLAIMS NOT UNDER LA

JURISDICTION:

43.(a)
Claims for damages arising
from breach of a non-compete clause
and
other
post-employment
prohibitions; COURTS
44. (b)Claims
for
payment
of
cash
advances, car, appliance and other
loans of employees; COURTS
45. (c) Dismissal of corporate officers and
their monetary claims; RTC. An intracorporate dispute. Matling Doctrine*
46.(d)Issues
involving
suspension
of
payment
of
debts
(rehabilitation
receivership); RTC
47.(e)Cases involving entities immune from
suit; shall not prosper
48. (f) Cases falling under the doctrine of
forum non conveniens;
49. (g)Quasi-delict or tort cases;

50. (h)
Criminal and civil liabilities
arising from violations of certain
provisions of the Labor Code;
51. (i) Constitutionality of CBA provisions.
52. All the foregoing issues or cases are
discussed below seriatim.
53. *MATLING DOCTRINE - Under this
doctrine, the following rules should
be observed:
(1) The dismissal of regular employees
falls under the jurisdiction of Labor
Arbiters; while that of corporate
officers falls within the jurisdiction of
the regular courts.
(2) The term corporate officers refers
only to those expressly mentioned in
the Corporation Code and By-Laws; all
other officers not so mentioned therein
are deemed employees.
(3) Corporate officers are elected or
appointed
by
the
directors
or
stockholders, and those who are given
that character either by the Corporation
Code or by the corporations by-laws.
(4) The
Corporation
Code
specifically
mentions only the following corporate
officers, to wit: president, secretary
and treasurer and such other officers
as may be provided for in the by-laws.
(5) The Board of Directors can no
longer create corporate offices
because the power of the Board of
Directors to create a corporate
office
cannot
be
delegated.
Therefore,
the
term
corporate
officers should only refer to the above
and
to
no
other.
A
different
interpretation can easily leave the way
open for the Board of Directors to
circumvent
the
constitutionally
guaranteed security of tenure of the
employee by the expedient inclusion in
the By-Laws of an enabling clause on
the creation of just any corporate officer
position.
(6) Distinction between a corporate
officer and an employee. - An
office is created by the charter of the
corporation
and
the
corporate
officer is elected by the directors or
stockholders. On the other hand, an
employee occupies no office and
generally is employed not by the action
of the directors or stockholders but by
the managing officer of the corporation

who also determines the compensation

to be paid to such employee.
(7) Because of the Matling doctrine, the
rulings in Tabang and Nacpil, are no
longer controlling because they are too
sweeping and do not accord with
reason, justice, and fair play.
(8) The status of an employee as
director and stockholder does not
automatically convert his dismissal
into an intra-corporate dispute.
(9) Two (2) elements to determine
whether
a
dispute
is
intracorporate or not.
54. (a)
The status or relationship of
the parties; and
55. (b)
The nature of the question
that
is
the
subject
of
their
controversy. (Nature
of
controversy
test).
56.
In the absence of any one of
these factors, the RTC will not have
jurisdiction.
(10) The criteria do not depend on
the services performed but on the
manner of creation of the office.
57.
In Matling, respondent Corros
was supposedly at once an employee, a
stockholder, and a Director of Matling.
The circumstances surrounding his
appointment to office must be fully
considered to determine whether the
dismissal constituted an intra-corporate
controversy or a labor termination
dispute. It must also be considered
whether his status as Director and
stockholder had any relation at all to his
appointment and subsequent dismissal
as Vice President for Finance and
Administration.
58.
Obviously
enough,
the
respondent was not appointed as Vice
President for Finance and Administration
because of his being a stockholder or
Director of Matling. He had started
working for Matling on September 8,
1966,
and
had
been
employed
continuously for 33 years until his
termination on April 17, 2000. His first
work as a bookkeeper and his climb in
1987 to his last position as Vice
President for Finance and Administration
had been gradual but steady. Even
though he might have become a
stockholder of Matling in 1992, his

promotion to the position of Vice

President for Finance and Administration
in 1987 was by virtue of the length of
quality service he had rendered as an
employee of Matling. His subsequent
acquisition
of
the
status
of
Director/stockholder had no relation to
his promotion. Besides, his status of
Director/stockholder was unaffected by
his dismissal from employment as Vice
President
for
Finance
and
Administration.
59. 3. SIGNIFICANT CASES DECIDED
BASED
ON
THE
MATLING
DOCTRINE.
60.
a.
Cosare
v.
Broadcom Asia, Inc.
61.
In this 2014 case, the
Supreme Court ruled that the Labor
Arbiter, not the regular courts, has
original jurisdiction over the illegal
dismissal case filed by petitioner
Cosare who was an incorporator of
respondent Broadcom and was
holding the position of Assistant Vice
President for Sales (AVP for Sales)
and
Head
of
the
Technical
Coordination at the time of his
termination.
The
following
justifications were cited in support of
this ruling:
62.
(1)
The mere fact that a
person was a stockholder and an
officer of the company at the time
the subject controversy developed
does not necessarily make the
case an intra-corporate dispute.
63.
(2)
A person, although an
officer of the company, is not
necessarily a corporate officer
thereof.
64.
(3)
General
Information
Sheet (GIS) submitted to SEC
neither governs nor establishes
the nature of office.

67. INVALIDITY OF STIPULATION

AGAINST MARRIAGE Art. 136,
LC, considers unlawful a stipulation
to require as a condition of
employment that a woman EE shall
not get married or to stipulate
expressly or tacitly that upon
getting married, a woman EE shall
be deemed resigned or separated.
Also invalid is to actually dismiss,
discharge, discriminate or prejudice
a woman EE merely by reason of
her marriage.
68. Reasonable Business Necessity
Rule invalid for violating the
standard of reasonableness which
is being followed in our jurisdiction.
E.g. stipulation of not allowing an
applicant related within third
degree of consanguinity to an
employee; two employee to get
marry. BUT VALID IN CASES
WHERE, the stipulation is, You agree
to disclose to management any existing or future
relationship you may have, either by consanguinity or
affinity with co-employees or employees of competing
drug companies. Should it pose a possible conflict of
interest in management discretion, you agree to resign
voluntarily from the Company as a matter of Company
policy

65. (4)
The Nature of the Controversy
Test: The mere fact that a person was
a stockholder at the time of the filing
of the illegal dismissal case does not
make the action an intra-corporate
dispute.

69. Zialcita v. Philippine Airlines, Inc.

- In this case decided by the Office of
the President, the provision in a
contract between an airline company
and a flight attendant which states
that flight attendant-applicants
must be single and that they shall be
automatically separated from
employment in the event they
subsequently get married was
declared as a null and void provision;
hence, cannot be enforced for being
contrary to Article 136 of the Labor
Code and the protection-to-labor
clause in the Constitution. Rule on
determination of age and benefits
for retirement

66.

70.

Rule on Marriage

71.
a. Exception to the rule of
retirement
72. Termination or illegal dismissal
(Art. 299 in re of Art. 396 of NCC)
73. Money claims before PD 2442,
effect after effectivity accruing
after activity
a. Promisserial doctrine,
money claims prescribed in
3 years
b. If due and payable but not
yet paid from the last
commitment or promise
begins the counting of
prescriptive period
c. Art. 280 fixed term contract
(PNOC-STC vs. NLRC)
74. Entrust on the obligation that has
not been paid
75. Principle on disqualification of
union members who are appointive
or elective. Moral turpitude as
ground for disqualification for

elective and appointive. In order to

be disqualified, there must be
conviction.
76. Strike and lockout effect of
assumption over the labor dispute
by the President or the DOLE
Secretary only valid if there is
industry struck or about to have
industry struck, indispensable to
national economy.
77. Defiance after the Office of the
President or DOLE Secretary
ordered the assumption, when it is
ground for termination of a union
member. (Art. 264, 272 & 288)
78. Cancellation of unions registration,
voluntary dissolution (Art. 239,
245, 280)
79. Recruitment
a. Migrant Workers Act,
benefits due to OFW when
repatriated due to issues.
80. Pregnancy as ground for
termination of employment, valid
or not.