LABOR RELATIONS

I. CONTITUTIONAL AND STATUTORY BASIS

DECLARATION OF PRINCIPLES AND STATE POLICIES (art.2)

STATE POLICIES

Section 7. The State shall pursue an independent foreign policy. In its relations with other states,
the paramount consideration shall be national sovereignty, territorial integrity, national interest, and
the right to self-determination.

Section 8. The Philippines, consistent with the national interest, adopts and pursues a policy of
freedom from nuclear weapons in its territory.

Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity
and independence of the nation and free the people from poverty through policies that provide
adequate social services, promote full employment, a rising standard of living, and an improved
quality of life for all.

Section 10. The State shall promote social justice in all phases of national development.

Section 11. The State values the dignity of every human person and guarantees full respect for human
rights.

Section 12. The State recognizes the sanctity of family life and shall protect and strengthen the family
as a basic autonomous social institution. It shall equally protect the life of the mother and the life of
the unborn from conception. The natural and primary right and duty of parents in the rearing of the
youth for civic efficiency and the development of moral character shall receive the support of the
Government.

Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and
protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the
youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Section 14. The State recognizes the role of women in nation-building, and shall ensure the
fundamental equality before the law of women and men.

Section 15. The State shall protect and promote the right to health of the people and instill health
consciousness among them.

Section 16. The State shall protect and advance the right of the people to a balanced and healthful
ecology in accord with the rhythm and harmony of nature.

Section 17. The State shall give priority to education, science and technology, arts, culture, and
sports to foster patriotism and nationalism, accelerate social progress, and promote total human
liberation and development.

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.

Section 19. The State shall develop a self-reliant and independent national economy effectively
controlled by Filipinos.

Section 20. The State recognizes the indispensable role of the private sector, encourages private
enterprise, and provides incentives to needed investments.

BILL OF RIGHTS (art.3)

Section 10. No law impairing the obligation of contracts shall be passed.

Section 18. (1) No person shall be detained solely by reason of his political beliefs and aspirations.

(2) No involuntary servitude in any form shall exist except as a punishment for a crime whereof the
party shall have been duly convicted.

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Social Justice and Human Rights (art. 13)

Labor

SECTION 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law. They shall be
entitled to security of tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.

The State shall promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster industrial peace.

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

Articles 112-117 prohibit a number of practices related to the manipulation of wages paid to
workers, including unfair wage deductions, withholding of wages, coercing or inducing workers to
give up any part of their wages, or making deductions as the basis of a promise of future employment
or retention in employment.
Article 112. Non-interference in disposal of wages.

No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his
wages. He shall not in any manner force, compel, or oblige his employees to purchase merchandise,
commodities or other property from any other person, or otherwise make use of any store or services
of such employer or any other person.

SECTION 2. - Contract of Labor (n)

Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed
with public interest that labor contracts must yield to the common good. Therefore, such contracts
are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours of labor and similar subjects.

Cases:
Legend Hotel Manila owned by Titanium Corp. and Nelson Napud(president) vs Hernani
Realuyo (Joey Roa)

Facts:
- Case for illegal dismissal
- Complaint for alleged unfair labor practice, constructive illegal dismissal,
underpayment/nonpayment of premium pay fo holidays, separation pay, service incentive
leave pay and 13th month pay.
- Roa worked as a pianist at the Legend Hotels Tanglaw Restaurant (September 1992 – July
1999)
o – 400 each nights performance then
o increased to 750/night
o during employment he could not choose the time of performance (7-10pm) 3 – 6
times a week
o required to conform with the venues motif
o subjected to the rules on employees representation checks and chits
- July 9, 1999 managmenrt notified him that his services as a pianist would no longer be
require effective July 30, 1999 as a cost cutting measure.
- Defense: denied existence of of ER-EE rel.
o Only a talent engaged to provide live music
o That the economic crisis that had hit the country constrained management to
dispense with his services.
- Labor Arbiter: dismissed the complaint for lack of merit = No ER-EE rel.
o Addition of the complainant that he was receiving talent fee not salary = received the
talent fee nightly
o Thus absent the power to control with respect to the means and methods mby which
his work was to be accomplished, ther eis no Er-EE rel. bet the parties.
- NLRC: affirmed LA (2001)
- CA: certiorari = (2002)set aside the decision of the NLRC
o Are the elements of ER-EE rel present? YES

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 o Roa was supervised and controlled by respondents resto manager (require himto
perform tagalog songs, wear barong tagalog to conform with the motif, fixed time of
the performance.
o Petitioner is considered a regular employee = job was in furtherance of the resto
business = sheer length of service he had rendered
- Procedural issue: WON petition for certiorari was the proper recourse = yes
- Substantive issues: WON respondent was an employee of petitioner; whether ther is a valid
termination? Yes
- SC ruling: Procedural
o Certiorari was proper recourse
o Section 9 of BP 129 = CA shall have the power to try cases and conduct hearings,
receive evidence and perform any and all acts necessary to resolve factual issues
raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings.
- SC ruling: substantive
o ER-EE rel. exist (question of fact)
o Elements: power to select the employee; payment of employees wages; power
to dismiss the employee; exercise control of the methods and results by which
the work of the employee is accomplished.
o Exercise equity jurisdiction = if there is a conflict bet. The factual findings of the LA
and the NLRC on one hand and that of CA on the other hand.
o Petitioner actually wielded the power of selection = entered into the service
contract; express written recommendation dated jan. 12, 1998by the
manager(Christine velazaco) for increase of his remuneration.
o Any stipulation in writing can be ignored when the employer utilizes the stipulation
to deprive the employee of his security of tenure.
o Respondents remuneration, albeit denominated as talent fes was stil considered as
included in the term of wage (art. 97(f)of the LC) = wage paid to any employee shall
mean the remuneration or earnings = clearly respondent received compensation for
the services he rendered as a pianist in petitioners hotel.
o Art. 83 of the LC = only set a maximum of no. of hours as normal hours of work but
did not prohibit work of less than 8 hours.
o Control test, premised on whether the person for whom the services are performed
reserves the right of control both the end achieved and the manner and means used
to achieve that end.
o Worth remembering is that he employer need not actually supervise the performance
of duties by the employees, forit sufficed that the employer has the right to wield
that power.
o Petitioner has control over roa = he could not chose the time of his performance;
place of performance; require him to conform to the motif; subject to the rules on
employees representation check and chits.
o Roas termination by reason of retrenchment (authorize ccause for the dismissal of
ees, a management prerogative resorted to by the employers to avoid or to minimize
business losses) due to an authorized cause under the LC is inevitable.
o Retrenchment: a. expected losses shall be substantial; b. substantial losses must be
imminent; c. retrenchment must be necessary to prevent the expected losses; d. abc
must be proved by sufficient and convincing evidence.
o There was no valid cause for retrenchment in this cause, burden of proof rest on the
respondent who did not submit evidence of the losses to its business operations.
o Reinstatement is no longer feasible = separation pay and full back wages

Hacienda Leddy vs. Paquito Villegas (2014)

- Paquito is an employee at the Hacienda Leddy (owned by ricardo gamboa sr. succeeded by
his son) since 1960 doing sugar farming job 8 hrs a day, 6 days a week and was paid 45/day
also worked in petitioners coconut lumber business (34/day)
- June 9, 1993 Gamboa informed villegas that his services were no longer needed without
prior notice or valid reason.
- Gamboa denied having dismissed Villegas but admitted the latter worked with the said farm.
– villega ceased in working – villega filed the instatnt complaint to gain leverage so he would
not be eveicted from the land he is occupying – claim for illegal dismissal was merely
fabrication
o Resp. was paid on piece rate basis without supervision
o Job was not necessary and desirable in the business, not a regular employee
o It was villegas who has stopped working
- Villegas was given the benefit of occupying a small portion of the land where his house was
erected.
- Labor Arbiter: there was illegal dismissal
o pay villegas 140,308.84(wag differential, back wages, separation pay)
- NLRC: set aside and vacated LA
- CA: annulled and set aside the NLRC
- SC: denied the petition of hacienda leddy
o Ca affirmed

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 o Existence of Er-ee rel. raises factual question = SC does not review factual errors,
except when there is conflict among factual findings it is proper in the exercise of
SCs equity jurisdiction to review and re evealuate the factual issues and to look into
the records of the case and re-examine the questioned findings.
o In illegal dismissal cases, the burden of proof is upon the employer to shots that the
employees termination from service is for just and valid cause.
o Worked for 20 years; petitioners length of service is an indication of the regularity
of his employment = he became a regular employee by operation of law one year after
he was employed.
o Article 280 LC = a regular employee is either engaged to perform activities which
are necessary or desirable in the usual business or trade of the employer and those
casual employees who have rendered at least one year of service, whether continuous
or broken with respect to the activity in which he is employed.
o ICPWI vs NLRC = test to determine if the employee is regular is the reasonable
connection between the particular activity performed by the employee in relation to
the usual business or trade of the employer.
o payment by piece rate (just a method of compensation and does not define the
essence of relations.) does not negate regular employment. Art. 97, remuneration or
earnings, capable of being expressed in terms of money whether fixed or ascertained
on a time, task, piece or commission basis.
o Stop working ?= employed for than 20 years and was even given a place as his
home.
o dismissal was without due process. Villegas is entitled to security of tenure (art.
277), art 283, no written notice for termination. = an illegally dismissed employee
should be entitled to either reinstatement if viable, or separation pay(basis is length
of past service) if reinstatement is no longer viable plus back wages(actual period
from prevention of working) in either instance.

VICTO METEORO ET AL VS. CREATIVE CREATURES INC.

- CCI = domestic corp. engaged in production designs in events and television (ABS-CBN)
- Petitioner were artists, carpenters and welders hired by the CCI.
- Feb. and march 1999 (DOLE) filed complaint for non-payment of night shift differential pay,
overtime pay, holiday pay, 13th month etc and unauthorize deduction.
o Labor inspector : inspection in the premise, records were not made available, CCi
claiming the petitioners were contractual/independent workers.
o CCI – dole had no jurisdiction bec. Of absence of ER-EE rel., Petitioners are free-
lace individuals performing special services.
o Petitioners - they were employees of the CCI
- April 1999 – petitioner filed a complaint for illegal dismissal before the NLRC
- Oct. 1999 – DOLE directs the CCI to pay petitioners 2.6m.
- Regional director = Er-EE rel exist (control and supervision; power of dismissal; payment
of wages; selection/engagement of employees) regular employees (worked for more than 1 yr.
- CA – granted the petition of CCI for lack of jurisdiction
- SC – issue: Which body tribunal has jurisdiction over petitioners money claims
o Sustain CA that NLRC has the exclusive jurisdiction over the case
o Dole and authorize rep. have jurisdiction to enforce compliance with labor standards
law under the broad visitorial and enforcement powers conferred by the Art. 128.
o CA applied the exception clause (art. 128b) elements: employer contest the
findings of the labor regulations officer and raises issues thereon; in order to
resolve such issues, there is a need to examine evidentiary matters; such
matters are not verifiable in the normal course of inspection.
o Existence of ER-EE rel. : selection/engagement of the employee; payment of wages;
power of dismissal; employers power to control the employees conduct.

INDOPHIL TEXTILE MILLS VS. ENGR. SALVADOR ADVIENTO (2014)

- ITMI – manufacturing thread for weaving.
- Aug. 1990 hired Salvador to maintain itsfacilities in lambakin, marilao, Bulacan.
- Aug. 2002 salvador consulted physician due to recurring weakness and dizziness –
diagnosed with Chronic Poly Sinusitis and allergic rhinitis (must avoid dust)
- Salvador filed a complaint against ITMI for alleged illegal dismissal(still pending)
o Another complaint in the RTC that he contracted such occupational health disease
by reason of gross negligence of petitioner for ignoring the complaints against the
health hazards attendant in the work place.
o he suffered intense moral suffering for being rejected by the companies he is applying
for new jobs he being the only bread winner in the family.
o ITMI motion to dismiss = RTC has no jurisdiction; there is another action pending
in the NLRC. – denied
- CA petition of ITMI dismissed for lack of merit.
- WON the RTC has jurisdiction over the subject matter
- SC jurisdiction rests on the regular courts
o Not all claims involving employees can be resolved solely by labor courts =
reasonable causal connection rule – if there is a RCC bet the claim asserted and
the Er_EE rel. then the case is within the jurisdiction of the LC and in absence

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 thereof it is the regular courts that have jurisdiction. – in this case theconnection is
NIL
o Art. 2176 (quasi delict)
o Yusen air and sea services inc. vs. villamor & portillo case = cause of action is
based on quasi delict which has no reasonable causal connection with any of the
claims provided forinart.217, jurisdiction over the action is with the regular courts.
o Salvador does not ask for nay relief under the LC, he merely seeks to recover
damages
GEORG GROTJAHN GMBH &CO VS. HON. ISNAN, ROMANA AND TEOFILO LANCHINEBRE
(1994)
- GGGC is a multi national company (federal rep. of germany)
o filed an application with the SEC for the establishment of a regional/area
headquarters In the Phil. (PD 218) – approved on sept. 6, 1983
- romana – a sales representative of petitioner from 1983-1992
o march 1991secured a loan of 25k from GGGC
o march 26 and June 1992 aditional cash advances of 10k
o unpaid = 12k
- July 1992 romana filed before NLRC complaint for illegal suspension, dismissal and non-
payment of commissions
- August 1992 GGGC file a complaint for damages amounting with 120k bef. NLRC
(CONSOLIDATED)
- Sept. 1992 GGGC complaint for collection of sum of money against SPS.
o grant the motion ot dismiss – no jurisdiction such matters fall under the exclusive
jurisdiction of the NLRC
o no averment regarding petitioners capacity to sue and be sued.
- SC – merit to the petition.
o Trial court should not have held itself without jurisdiction to the case.
o Molave motor sales vs. laron(1984) ; medina vs. catro-bartolome ; Singapore
airlines limited vs. paño ; san Miguel corp vs NLRC(1988) = where the claim of
the principal relief sought is to be resolved not by reference to the LC or other labor
relations statute or a collective bargaining agreement but by the general civil law,
the jurisdiction over the dispute belongs to the regular courts of justice not to the
LA and NLRC.
o in the present case of a simple collection of sum of money brought by the GGGC as
creditor against Romana as debtor, the fact that they were employer-employee at the
time of the transaction does not negate the civil jurisdiction of the trial court. It does
not involve adjudication of a labor dispute but recovery of a sum of money based on
our civil laws on obligation and contract.
o Capacity to sue :
o Merrill lynch futures vs. CA = a party is estopped to challenge the personality of a
corpo after having acknowledge the same by entering ino a contract with it.
o Misjoinder of Teofilo = misjoinder of parties is not a ground for dismissal.
o Petition granted.
MATTLING INDUSTRIAL AND COMMERCIAL CORP VS. RICARDO R.COROS (2010)
- NLRC -ricardo filed a complaint for illegal dismissal and suspension on aug. 2000 against
mattling after his dismissal as Vice pres. For Finance and Admin.
o Mattling – complaint pertained to the jurisdiction of the SEC, controversy being
intra-corporate as ricardo is a member of the board of directors.
o Oct. 2000 – LA granted the motion to dismiss - ricardos removal was under the
jurisdiction of the SEC
o NLRC reversed LA – position of VP for finance and admin being held by complainant
is not listed among resp. corporate officer.
- CA – dismissed the petition of mattling
o Vpfor admin and finance was not created by the corporations board of directors byut
only by its president or exec. Vp pursuant to the by laws of the corp.
- WON ricardo was a corpo officer of mattling or not to det. Whether the LA or the RTC had
jurisdiction over his complaint for illegal dismissa.
- SC - Article 217. Jurisdiction of the Labor Arbiters and the Commission. - (a) Except
as otherwise provided under this Code, the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide, within thirty (30) calendar days
after the submission of the case by the parties for decision without extension, even
in the absence of stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and conditions
of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts; and

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 6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with
a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all
cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements. (As amended
by Section 9, Republic Act No. 6715, March 21, 1989).
Conformably with Section 25, a position must be expressly mentioned in the By-
Laws in order to be considered as a corporate office. Thus, the creation of an office pursuant
to or under a By-Law enabling provision is not enough to make a position a corporate office.
Guerrea v. Lezama, the first ruling on the matter, held that the only officers of a corporation
were those given that character either by the Corporation Code or by the By-Laws; the rest
of the corporate officers could be considered only as employees or subordinate officials.
It is relevant to state in this connection that the SEC, the primary agency
administering the Corporation Code, adopted a similar interpretation of Section 25 of the
Corporation Code in its Opinion dated November 25, 1993, to wit:
Thus, pursuant to Section 25 of the Corporation Code, whoever are the corporate
officers enumerated in the by-laws are the exclusive Officers of the corporation and the Board
has no power to create other Offices without amending first the corporate By-laws. However,
the Board may create appointive positions other than the positions of corporate Officers, but
the persons occupying such positions are not considered as corporate officers within the
meaning of Section 25 of the Corporation Code and are not empowered to exercise the
functions of the corporate Officers, except those functions lawfully delegated to them. Their
functions and duties are to be determined by the Board of Directors/Trustees.
Moreover, the Board of Directors of Matling could not validly delegate the power to
create a corporate office to the President, in light of Section 25 of the Corporation Code
requiring the Board of Directors itself to elect the corporate officers. Verily, the power to elect
the corporate officers was a discretionary power that the law exclusively vested in the Board
of Directors, and could not be delegated to subordinate officers or agents. The office of Vice
President for Finance and Administration created by Matling’s President pursuant to By Law
No. V was an ordinary, not a corporate, office.
To emphasize, the power to create new offices and the power to appoint the officers
to occupy them vested by By-Law No. V merely allowed Matling’s President to create non-
corporate offices to be occupied by ordinary employees of Matling. Such powers were
incidental to the President’s duties as the executive head of Matling to assist him in the daily
operations of the business.

II. GENERAL PRINCIPLES OF LABOR LAW

- Labor law:
- Labor standards: provides for pay and other legal benefits of workers, while at work, is
entitled to receive from his employer. Example: law providing for minimum rates of pay to
which workers are entitled for a days of work.
- Labor relations: those intended to stabilize relations of employees and their employers,
adjust differences between them thru collective bargaining and settle labor disputes through
conciliation, mediation and arbitration. Example: Book V of the LC and arts. 217 to 277 of
the LC.
- Construction of labor code: the time of the promulgation and enactment of the labor code
of the Philippines by Pres. Marcos was on May 1, 1974. It was promulgated as PD No. 442.
It took effect on Nov. 1, 1974 – six months after its promulgation.
As a ratifying state of International Labor Organization Convention 88, the Phil. Is
mandated to create and maintain a free employment service which shall consist of a national
system of employment offices under the discretion of national authority. This mandate is
religiously carried out by the DOLE through Bureau of Labor Employment, thus the creation
of PD No. 442.
The draft of labor code was formulated and approved by the first national tripartite
congress on employment conducted on April 26-28 1973 where prominent leaders of the
country were gathered.
The wisdom of the then secretary of labor former Sen. Blas Ople(father of LC),former
ILO President and doyen(leader) of labor ministers throughout the world, had contributed
immensely in the formulation of principles and norms which are now enshrined in the
provisions of the present code.
- Applicability of the labor code: under Art. 6 of the LC – all rights and benefits granted to
workers under this code shall, except as may otherwise be provided herein, apply alike to all
workers, whether agricultural or non-agricultural. Labor code also applies to a government
corporation which has been incorporated under the corp. code.
Other classes of workers: apprentice, learners, handicapped workers; managerial
employees; workers paid by result; women, minors, house helpers and
homeworkers; regular, casual and probationary employees.

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 - Definition of Employers and Employees:
o Employer: (218E) includes any person acting in the interest of an employer, directly
or indirectly. It shall not include any labor organization or any of its officers o agents
except when acting as employer.
o Employee: includes any person in the employ of an employer. The term shall not be
limited to the employees of a particular employer unless the code so explicitly states.
It shall include any individual whose work has ceased as a result of or in connection
with any current labor dispute or because of any unfair labor practice if he has not
obtained any other substantially equivalent and regular employment.
- Employer-Employee Relationship : The employer-employee relationship is contractual in
character. It arises form the agreement of the parties. But such relationship is so impressed
with pubic interest that labor contracts must yield to the common good.
An ER-EE Relationship exist where the person for whom the services are performed
reserves the right to control not only the end to be achieved but also the means to be used
in reaching such end.
No particular form of evidence is required to prove the existence of ER-EE
relationship. Any competent and relevant evidence to prove such relationship may be
admitted. This may entirely be testimonial.
Under Sec. 3 of Art. 13, the state may regulate the relationship between the ER and
EE – the state is mandated to regulate the relations between the workers and employers –
speedily settle controversies or disputes – exercise the power of compulsory arbitration.
Another feature of ER-EE rel.id that it is in personam, meaning it involves the
rendition of personal service by the employee and partakes of master and servant rel.

Elements to determine the existence of ER-EE relationship:

- Selection of engagement of employee;
- Payment of wages;
- Power of dismissal;
- Employers power to control the employee with respect to the means and
methods by which the work is to be accomplished.
The importance to determine the relationship between the parties (ER-EE orprincipal
and Independent Contractor) is to determine what laws will govern the rights and liabilities
of the parties and what tribunal or court will have jurisdiction over their disputes.
Er-EE – Labor Laws and NLRC
Principal and Independent Contractor – Obligations and Contracts – regular court.
- Commencement of ER-EE rel.:
Test to Determine ER-EE Relationship: Control test (is, whether the employer controls or has
reserved the right to control the employee not only as to the result of the work to be done but also
as to the means and methods by which the same is to be accomplished. Stated otherwise, an ER-
EE rel. exist where the person for the services are performed reserves the right to control not only
the end to be achieved but also the means to be used in reaching such end. It is essentially the
relationship of master and servant.); Economic realty test is a test to determine the existence of
employer employee relationship by inquiring into whether or not the supposed employee has no
means fo financial support other than his employment with the company where he devotes most of
his time. (Francisco vs. nlrc); Two-Tiered Test (); Four Fold Test ()
-
- Elements of ER-EE Rel.: control and supervision; power of dismissal; payment of wages;
selection/engagement of employees

III. RIGTH TO SELF ORGANIZATION

- Meaning:
- Accorded: accorded to all kinds of employees who are working in any type of establishment,
whether, commercial, industrial, agricultural, religious, charitable, medical or educational
institutions, operating for profit or not.
Art. 243 giveth life to the policy of the constitution and the law to encourage
unionism in all areas to enable workers and employees to bargain with their employer on a
more or less equal footing.
- Implications and Limitations: carries with it the right to: a. Choose which union he would
join; b. Cancel his union membership anytime; c. Abstain from joining a union. Right to
abstain and cancel is not absolute, it cannot be exercised as a general rule, where labor
union and an employer have agreed on a union security arrangement.
- Who are qualified to form or join: the right to form or join a labor organization Is available
only to persons who enjoy employee status. The existence of ER-EE Rel. is a condition sine
quo non for the exercise for the constitutional right to join or form a labor organization. NOT
being employees of the company, they have no collective bargaining rights.
o All persons employed in commercial, industrial and agricultural enterprises,
including employees of GOCC without original charters established under the
corporation code, as well as employees of religious, charitable, medical or
educational institutions whether operating for profit or not, shall have the right to
self-organization and to form or assist labor organizations for purposes of collective
bargaining; provided however, that the supervisory employees shall not be eligible
for membership in a labor org. of the rank-and-file employee but may form join or

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 assist separate labor organization of their own. Managerial employees shall not be
eligible to form join or assist any labor org. for purposes of CBA. Alien employees
with valid working permits issued by the dept. may exercise the right to self-
organization,
Eliglble: only rank-and-file and supervisory employees in commercial, industrial
and agri. Enterprises and in religious, charitable, medical, or educational
institutions, whether operating for profit or not, can form or join a union for collective
bargaining purposes. Security guards. Alien employees with valid working
permits, if they are nationals of a country which grants the same or similar rights to
Fil. Workers as certified by the DFA.
- Disqualified to form/join:
o Managerial employees : reason = conflict of interest of their position, union can
become company dominated (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.) characteristics:
 Not subject to rigid observance of reg. office hours
 Requires the onsistent exercise of discretion and judgement
 Output cannot be standardized in rel. to a given period of time
 Manages a customarily recognized department
 Authority to hire/fire employees
 Neither paid hourly wages nor subj. to max. hours of work`
o Confidential employees who have access to labor relations matters: reason =
conflict of interest, they could be governed by their own motives than the interest of
the employers., they might jeopardize that interest they are duty bound to protect,
may become source of undue advantage-act as spy. They become aware of
management policies relating to labor relations.
o Employees-members of cooperatives: reason = bec. Memebers are co owners of
the cooperative, they cannot bargain with themselves.
o Government employees (bec. The terms and conditions of gov. employment are
fixed by law, only congress can modify the terms and conditions of their
employment. - governed by Civil Service Law
 Can GOCC employee join a labor org. ? = it depends. 1. With original
charters cannot form, join or assist, because they are governed by the civil
service law; 2. Those established under the Corporation Code can form, join
or assist, bec. They enjoy the same right as private employees
o Employees of gocc with original charters governed by the Civil Service Law Art.
281
o Workers who are ambulant, intermittent, itinerant and those without definite
employers, self-employed people, rural workers and those without any definite
employers cannot form a labor organization because collective bargaining is
not feasible for them.

IV. UNION SECURITY AGREEMENT

- Definition of USA: the phrase union security clause is a stipulation in the CBA whereby the
management recognizes that the membership of employees in the union which negotiated
said agreement should be maintained and continued as a condition for employment or
retention of employment. The obvious purpose id to safeguard and ensure the continued
existence of the union.
- Validity: without this clause, existence of a union is always a subj. to uncertainty as its
members may resign anytime, thus resulting in the decimation of its rank.
Authorized by aRt. 253(e),
- Effects: employee must join the union and maintain his membership in good standing in
order to retain his employment. He can resign only during the freedom period.
- Limitations: it cannot be enforced against employees who:
o Already members of another union at the time of signing of the CBA
o Refused admission by the union itself without reasonable ground thereof
o Members of religious sect which prohibit them from joining.
- Types of USA:
o Closed shop agreement – employer binds himself to hire only members of the
contracting union who must continue to remain members in good standing to keep
their jobs.
o Maintenance of membership agreement – requires members to maintain their
membership in good standing during the lifetime of the CBA as a condition of
continued employment.
o Union shop agreement – ER is allowed to hire non-member
o Modified union shop agreement
o Exclusive bargaining agreement
o Bargaining for members only agreement
o Agency shop agreement – does not require union membership but only support
from the employees within the bargaining unit in the form of agency fees.
o Preferential hiring agreement – members are given preference in engagement, all
circumstances being equal

8
V. UNFAIR LABOR PRACTICE
- Definition: any unfair labor practice as expressly defined by the LC relating to the acts
enumerated in Art. 248 and 249 thereof.
Elements: Exist an ER-EE rel. bet the offended and offender ; act complained of
must be expressly mentioned and defined in the LC as constitutive of ULP.
Unfair labor practice may only be committed in connection with the right to self-
organization and collective bargaining by employees.
- Essence: acts that violate the right of employees to self-org.
- Nature: it is also a violation of criminal offenses against the state.
complaint for ULP is a no ordinary dispute, it requires more thorough analysis,
evaluation and appreciation of the factual and legal issues involved.
- Prosecution of ULP
o Who can commit: by an employer or by a labor organization. On the part of the
employer, only the officers and agents of corp. associations, or partnership who
have actually participated in, authorized or ratified ulp shall be held crim. Liable.
On the part of the union, only the officers, members of governing boards, rep. or
agents or members of labor associations or org. who have actually participated
in, authorized or ratified ulp shall be held crim. Liable. If committed by a corp., trust,
firm, part., assoc.,or any other entity, the penalty shall be imposed upon the guilty
officer
o Against whom can be committed: only against the employee who exercises of has
exercised his right to self-organization
o Jurisdiction over ULP complaints: LA – by express provision of law - have original
and exclusive jurisdiction to hear and decide ULP cases.
o Criminal prosecution: cannot be prosecuted during the pendency of the
administrative proceedings, only when there is a final judgement in the admin.
Proceedings declaring that unfair labor practice has been committed can the crim.
Pros. Be commenced. Nevertheless, it is not binding in the crim. Case – it cannot be
considered as an evidence ofguilt but merely a proof of compliance
o Who are criminally liable? – only the officers/agents of the business entity and the
union officers who actually participated in.
o Prescriptive period: - should be file within 1 year from accrual of such unfair labor
practice, otherwise barred (art. 295)
in crim. Aspect – begin only when a final judgement has been rendered in
the admin. Proceedings. This is bec. Prescriptive period does not run during
the pendency of the admin. Proceedings.
o Administrative aspect:
o Criminal aspect: may only be instituted after the final judgement finding that an
unfair labor practice was indeed committed, is obtained in administrative
proceedings. Absent such final judgement (finally disposes of the action or
proceedings), no criminal prosecution may be instituted against the offender.

- ULP practices of EMPLOYERS:

o (1) To interfere with, restrain or coerce employees in the exercise of their rights
guaranteed in section three;
 Examples: attempting to bribe the strikers, offering them comfortable cots,
free coffee and occasional movies, overtime pay etc (insular life assurance
vs. insular life)
 Subjecting an employee to a series of questioning regarding membership to
the union(acotys dept. store vs. micaller)
 Interrogating and investigating its employees to see if they indeed joined a
union (philsteam vs pmog)
 Removing the time cards of employees from the rack, and were not allowed
to work – dismissing the employees merely bec. They solicited signatures
needed or the formation of the union (judric caning vs. inciong)
 Totality of Conduct Doctrine – culpability of an employers remark are to
be evaluated not only on the basis of their implications, but should be
appraised against the background of and in conjunction with collateral
circumstances.
o (2) To require as a condition of employment that a person or an employee shall not
join a labor organization or shall withdraw from one to which he belongs;
 Yellow dog contract – agreement which requires a condition of employment
that a person or employee ( declare that he is not a member of a labor
organization; refrain from joining a labor org.; withdraw his membership in
a labor org. ; quit his employment upon joining a labor org.)
 Case: Vistranco vs CIR = guilty of ulp for requiring the 139 employees to
sever their connection to the UWFA as a condition for the continued
employment. Velez vs. pav watchmens union = PV bade x employee to
resign from the union to test its loyalty also y employee otherwise he would
have no work assignment. Guilty of ULP, as a condition for their continued
employment. Visayan Bicycle vs. NLU = company is guilty of ULP. X & y
responsible for the affiliation of their union were warned that will be
dismissed if they will not withdraw the affiliation. They were dismissed bec.

9
 Of their union activities and not bec. Of their violation of a company rule
against figts in the premises or during work hours.
o (3)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.
 Contracting out does not per se constitutes ULP, only when there is
interference. – bec. Contracting out services is an exercise of a management
prerogative, the determination whether services should be performed by its
personnel or contracted outside agencies belongs to the employer.
 Case: De Ocampo vs. NLRC = 3 mechanics were terminated and were
replaced by the services of Genmac Machineries. Valid. The determination
whether the services of the mechanics are no longer necessary or
sustainable was an exercise of business judgement on the part of BMC -it is
not subject to discretionary review of the LA.
o (4) To initiate, dominate, assist in or interfere with the formation or administration
of any labor organization or to contribute financial or other support to it, including
the giving of financial and other support to its or its organizer, supporter;
 Company union/ company-dominated union – the
formation/administration of a labor org. has been initiated or assisted by
the employer
 Company type union – kind of labor org. composed of employees in the
same company.
 Disestablishment – an order requiring an employer to withdraw its
recognition of a company union as collective bargaining agent, and a
bonafide notice and sufficient communication to the employees about the
withdrawal of recognition.
 Complaint against the union charging the alleged control and aid of the
employer is a prejudicial question in a cert. election proceeding – ULP case
should first be decided before conducting Cert. election = prevent the
selection of the company dominated union.
 Case: Oceanic vs. CIR = union Y is a company dominated union for the
employers forced the 2auditors and 2 board members to resign from union
x and joined the Union Y. velez vs. Pav Watchmens union = ER guilty of
ULP – er talked to his sec. regarding formation of another union in the
company, employer promised to help in securing the certificate of
registration.
o (5) To discriminate in regard to hire or tenure of employment of any term or condition
of employment to encourage or discourage membership in any labor organization:
 Becomes ULP only when it is intended to encourage ordiscourage
membership in any labor org.
 Can be done against employees and union. Ex. – Er extends privileges to a
union and denies the same to the other union
 ER deciding an Officer unfit for registration is not a discrimination.
 Objective of labor code – ensure a stable but dynamic and just industrial
peace, the dismissal of undesirable labor leaders is valid and justified.
 Cases: Wise & co. inc. vs. W&C employees union = no discrimination, bec.
The situation of the employees covered by the CBA is different and distinct
from the employees not covered by the CBA. Rizal Cement vs. Madrigal =
the refusal on the part of the company to allow the union members to work
and the requirement that they stay out of the premises in the meantime was
borne out of the companys justified apprehension and fear that sabotage
might be committed in the warehouse where the products machinery and
spare part were stored – For discrimination by reason of union membership
to be considered ULP, the same must have been committed to encourage or
discourage such membership in the union. Insular Life Assurance
employees vs. Insular life = company is guilty of ulp by discrimination.
The union act. Of the hired strikers has been less prominent than that of
the strikers who were denied reinstatement. The mere act of placing the
power of reinstatement in the hands of persons hostile to the strikers, is
form of discrimination in re-hiring.

Provided, That nothing in this Act or in any other Act or statute of the Republic of
the Philippines shall preclude an employer from making an agreement with a labor
organization to require as a condition of employment membership therein, if such
labor organization is the representative of the employees as provided in section
twelve;

o (6) To dismiss, discharge, or otherwise prejudice or discriminate against an employee

for having filed charges or for having given or being about to give testimony under
this Act;
 ULP= testimony should relate to matters involving the exercise of the right
to self org.

10
  Case: PACC factory workers union vs. PACC =art. 253(f) applies not only
to dismissal of an employee who has given or is about to give testimony
against the employer – it also applies to an employee who was dismissed
because his brother has given testimony against the employer. Itogon-
Suyoc Mines vs. Baldo . =
o (7) To violate the duty to bargain collectively.
 DBC = performance of a mutual obligation to meet and convene promptly
and expeditiously in good faith for purpose of negotiating an agreement with
respect to wages, hours work, etc.
 Examples of violation:
 Declaring lock out without first bargaining collective
 Ignoring the CBA proposals of the union
 Surface bargaining (either party goes through the motions of
negotiating without nay legal intent to reach an agreement.
 Take-it-or-leave-it-bargaining (either party offers the other a
contract on a take it or leave it basis)
 Blue sky bargaining (a party presents proposals or demands that
are unreasonable or impossible to meet)
 Dismissing union members pending resolution of the petition
for certification election. (reason – it is a scheme to avoid
bargaining with the union)
 Attempting to negotiate with individual employees
o (8) to pay negotiation or attorneys fees to the union or its officers or agents as part
of the settlement of any issue in collective bargaining or any other dispute.
 Comprises the right of the employees to bargain collectively under an
atmosphere of freedom and mutual respect.
o (9)to violate collective bargaining agreement
 It must be gross (flagrant or malicious refusal to comply with the econ.
Provision.
 If arose from honest mistake it is not a breach of CBA.

- ULP practices of LABOR ORGANIZATION:

o Restraint and coercion – there is a restraint on the right to self-organization bec.
It seeks to deprive the employee of his employment despite the fact that the
resignation was done during freedom period (60day period prior to the expiration of
CBA). – during freedom period, a union member is free to exercise his right to self
org. ; labor org commits ULP if it expels a union member who initiates a petition for
audit of union funds.
o Discrimination – LO invokes the closed shop agreement to pressure an employer to
dismiss an employee whom ot refused to re admit as member without any reasonable
ground.
o Violate Duty to bargain collectively – asking for the modification of the CBA before
the freedom period is a violation of the duty to bargain collectively.
o Featherbedding / extortion – act of causing or attempting to cause an employer to
pay or deliver any money or other things of value for services which were not
performed or not to be performed.
o Negotiation or attorneys fees –
o Violation of CBA – must be gross in character

5. Test to determine ULP

De Leon et al v. NLRC|gr 112661 |2001 F:
1. Fortune Tobacco Corporation (FTC) and Fortune Integrated Services, Inc. (FISI) entered
into a
contract for security services to provide guards. Then, FISI change its name to Magnum
Integrated
Services, Inc. (MISI).
2. To enforce the guards’ rightful benefits under Labor Standards, petitioners formed a
union which
was later certified as bargaining agent of all the security guards.
3. FTC terminated it service contract with FISI/MISI which resulted the displacement of
582 security
guards. The complainants filed a case for ID and ULP1
4. LTofDeLeonetal:
a. They were regular employees of FTC. They performed duties under the supervision of
FTC.
b. FTC’s veil of corporate fiction must be pierced; FISI/MISI is an instrumentality of FTC.
5. LT of FTC:
1. No EE Rel between FTC and complainants
2. MISI was a separate and distinct corp. Hence, no cause of action against FTC.
6. LT of FISI/MISI:

11
a. No ID and ULP because complainants were not dismissed but were merely placed on floating
status pending re-assignment to other posts. The temporary displacement was due to
pretermination of FTC of the contract service.
7. LA: Guilty of union busting and ID.
1. Single Eer Principle: FTC and FISI are liable and should be considered as
single employer having
same stockholders, same business address, same owner (Lucio Tan). FISI’s
client was only FTC.
2. There is EE Rel, since FISI was a mere alter ego of FTC.
8. NLRC: set aside LA. Doctrine of piercing the corporate veil is inapplicable
9. SC: LA is correct.
I: WON FTC is guilty of Union Busting, ID and ULP. YES WON there is EE rel. YES
R:
1. Guilty of UB, ID and ULP
1. There is sufficient ground to conclude that respondents were guilty of interfering
with the right of petitioners to self-organization which constitutes unfair labor
practice under Article 248 of the Labor Code.
2. After the security guards formed their labor union, FTC preterminated its service
contract with MISI without any reason. This fact indicate FTC’s effort to remove
the complainants from the company and abate the growth of the union to block
the enforcement of Labor Standards law.
3. Termination of petitioners’ services was without basis and therefore illegal.
2. There is EE rel.
a. Labor Arbiter correctly applied the doctrine of piercing the corporate veil. Effects:
i. FTC (Principal) and MISI (Service Contractor)
ii. All respondents liable for unfair labor practice and illegal termination of
petitioners’ employment

6. ULP of Employers

Hacienda Fatima et al v National Federation of Sugarcane Workers-Foodland General Trade |GR

149440| 2003
F:
1. After the union was certified, the workers staged a strike because they were not given work
for 1
month. Then a Conciliation Meeting was conducted to conciliate the Er and the Ees. However,
the Er
reneged/go back on its commitment. The workers filed for ID and ULP.
2. Er claimed that the workers refused to work or were choosy in their work.
LT of Er:
a. Workers are seasonal Ees only not regular under A. 280 LC
b. Management prerogative
3. LA: no illegal dismissal
4. NLRC: set aside LA; guilty of ULP
5. CA: upheld NLRC
a. While the work of the Ees are seasonal in nature, they were considered to be merely on
leave during the off-season and were therefore still employed
b. As they enjoy the security of tenure, any infringement upon this right is tantamount to ID.
6. SC: Ees are regular; guilty of ULP
I:
WON the Ees are regular . YES
WON the Er is guilty of ULP. YES
R:
1. Ees are regular .
a. Two conditions to be a seasonal Ee:
i. They perform work that are seasonal in nature.
ii. They are employed only for the duration of one season.
The Ees repeatedly worked as sugarcane workers for several years—for more than one season.
Hence, they are regular Ees.
b. Read #5a
c. The action of Er is not a valid exercise of management prerogative because the sudden
changes
in work assignments reeked of bad faith. These changes came when the Ees formed a
union.
Union members were deprived of their jobs. This action amounts to ID.
d. The burden is on the employer to prove that the termination was for a valid and authorized
cause.
2. Er is guilty of ULP
a. Because of its interference in the right to self-organization. Er’s refusal to bargain, to
their acts of economic inducements resulting in the promotion of those who withdrew

12
 from the union, the use of armed guards to prevent the organizers to come in, and the
dismissal of union officials and members, one cannot but conclude that respondents did
not want a union in their hacienda—a clear interference in the right of the workers to
self- organization.

7. ULP of Labor Organizations

Salunga v CIR and SMB et al| GR L-22456 | 1967 F:
1. Salunga was an Ee of SMB. He became a member of union. The CBA in its closed-shop
provision
requires employees not to resign from the UNION for any cause other than voluntary
resignation of
non payment of union dues by said employee.
2. He tendered his resignation from the Union and submitted a copy in SMB. SMB informed
him that
his resignation will result to his termination from employment. So, he tried to withdraw
his
resignation.
3. However the union asked SMB to implement the CBA and dismiss Salunga from his
employment.
Salunga was subsequently dismissed by the Company.
4. He charged the union and the SMB with ULP.
LT of Salunga:
a. The Union acted arbitrarily for refusing to allow him without just cause to continue his
membership.
5. LT of Union:
a. Salunga’s critical attitude is disloyalty to the Union
6. CIR: guilty of ULP
7. CIR en banc: no ULP; dismissed the case
8. SC: Company is not guilty of ULP; Union is guilty of ULP
I:
WON the SMB and Union are guilty of ULP. NO, only the Union is guilty R:
1. Union is guilty of ULP because it arbitrarily refused to admit Salunga without just cause.
1. GR: the State may not compel voluntary association like Unions to admit any
individual because membership is a matter of privilege
XPN: State may compel if the Labor Union holds a monopoly in the supply of
labor using a closed-shop agreement.
2. A closed shop, a union shop, or maintenance of membership clauses
cause the administration of discipline by unions to be affected with the public
interest. Closed shop clause is allowed but cannot be used arbitrarily to exclude
qualified applicants for membership.
2. SMB is not guilty of ULP because it was reluctant to discharge Salunga.
1. When company was not guilty of unfair labor practice.—In the case at bar, the
company was
reluctant—if not unwilling—to discharge petitioner. When the union first
informed it of petitioner’s resignation and urged implementation of Section 3 of
the bargaining contract, the company advised petitioner of its provisions,
thereby intimating that he had to withdraw his resignation in order to keep his
employment. Besides, the company notified the union that it would not take any
action on the case and would consider petitioner still a member of the union.
When the latter, thereafter, insisted on petitioner’s discharge, the company still
demurred and explained that it was not taking sides and that its stand was
prompted merely by “humane” considerations, springing from the belief that
petitioner had resigned from the union without realizing its effect upon his
employment. And, as the union reiterated its demand, the company notified
petitioner that it had no other alternative but to terminate his employment, and
dismissed him from the service, although with “regret”. Under the
circumstances, the company was not “unfair” to petitioner.
2. Right of employee dismissed from service due to unfair labor practice.—Having
been dismissed from the service owing to an unfair labor practice on the part of
the union, petitioner is entitled to reinstatement as member of the union and to
his former or substantially equivalent position in the company, without prejudice
to his seniority and/or rights and privileges, and with back pay, which back pay
shall be borne exclusively by the union. In the exercise of its sound judgment
and discretion, the lower court may, however, take such measures as it may
deem best, including the power to authorize the company to make deductions
for petitioner’s benefit, from the sums due to the union by way of check off or
otherwise.

13
8. ULP of Labor Organizations
Manila Mandarin Employees Union v NLRC and Beloncio | gr 76989 | 1987
F:
1. Melba Beloncio worked in Manila Mandarin Hotel as the assistant head waitress of its coffee
shop. 2. Her Union expelled her membership for alleged inimical acts to the Union’s interests.
The Union
demanded the dismissal of her employment on the basis of Union Security Clause of the CBA.
The Hotel was compelled to put her on forced leave because the Union filed a notice of strike on
the issue of ULP.
3. After her forced leave, she filed a complaint for ULP and ID against the Union and the Hotel.
4. LT of Union:
a. LA, NLRC has no jurisdiction because the dispute is an intraunion dispute.
5. LT of Beloncio
6. LA: Union is guilty of ULP; dismissed the charge against the hotel
7. NLRC: modified LA; Union is guilty; Hotel must reinstate her
8. SC:
I:
1. WON the Hotel and the Union is guilty of ULP. NO, only the Union is guilty.
2. WON NLRC has jurisdiction. YES, dispute is not purely intraunion but involves the
interpretation of
CBA whether there was illegal dismissal.
R:
1. The Hotel is not guilty of ULP. It put her on forced leave only upon the Union’s insistence. 2.
Union is guilty of ULP.
1. Union security clauses cannot be used by union officials against an employer, much less
their own members, except with a high sense of responsibility and fairness.
2. CONDITION OF CLOSED-SHOP: A closed-shop agreement governed by law and by
principles of justice, fair play, and legality. Union security clauses cannot be used by
union officials against an employer, much less their own members, except with a high
sense of responsibility, fairness, prudence, and judiciousness.
3. MEANING OF CLOSED-SHOP: A closed-shop agreement is an 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. It is "the most prized
achievement of unionism." It adds membership and compulsory dues. By holding out to
loyal members a promise of employment in the closed-shop, it welds group solidarity.
4. VALIDITY OF CLOSED-SHOPA closed-shop is a valid form of union security, and such a
provision in a collective bargaining agreement is not a restriction of the right of freedom
of association guaranteed by the Constitution.

9. When not ULP

General Santos Coca-cola Plant Free Workers Union-TUPAS v Coca-cola Gen San et al | gr
178647 | 2009
F:
1. In the late 1990s, Cocacola experienced decline in profitability due to Asian economic
crisis. To curb
the negative effects on the company, it implemented three (3) waves of an Early
Retirement
Program. Many Ees availed the early retirement program. As a result vacancies were
created.
2. Meanwhile Cocacola sent an inter-office memo to stop hiring Ees. Because of the freeze
hiring
directive, Cocacola-Gen San engaged the services of JLBP to provide for man power.
3. The Union filed a notice of strike against Cocacola Gen San for contracting-out services
regularly
performed by union members (“union busting”). The dispute was submitted to NLRC for
arbitration.
4. LT of the Union:
a. Violation of Art. 248c
“ART. 248. UNFAIR LABOR PRACTICE OF EMPLOYERS.—It shall be unlawful for an employer to
commit any of the following unfair labor practices:
xxx
(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;
5. NLRC: Cocacola Gen San was not guilty of ULP for contracting out jobs to JLBP.
a. The Union failed to prove by substantial evidence that the action of Coca-cola Gen
San was
meant to curtail the right to self-organization of petitioner’s members—an essential
element of
ULP.
6. CA: affirmed NLRC

14
 a. The service contract was not a labor-only contracting. JLBP was an independent
contractor
b. The decision of coca cola to contract out jobs was a valid exercise of management
prerogative
to meet exigent circumstances
7. SC: affirmed CA
I:
WON Coca-cola Gen San is guilty of ULP. NO because there was no prevention of the exercise of
the right to self-organization
R:
1. Coca-cola Gen San did not commit prohibited acts are related to the workers’ right to self-
organization and to the observance of a CBA. Without that element, the acts, even if unfair, are
not unfair labor practices
1. It was the Union that had the burden of adducing substantial evidence to support its
allegations
of unfair labor practice,17 which burden it failed to discharge.
2. MEANING OF ULP: 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 Collective Bargaining Agreement (CBA)

VI. LABOR ORGANIZATIONS

- Definition: a LO is a union or association of employees which exist in whole or in part for

the purpose of CB or dealing with employers concerning terms and conditions of
employment. Different from workers association(mutual aid and protection of members)
- Kinds of LO:
o National union/Federation

15
 o Local unions
o Chartered local
o Affiliate
o Independent union
o Industrial union
o Craft union
o Company-type union
o Company union
- Qualified to form or join LO - the right to form or join a labor organization Is available only
to persons who enjoy employee status. The existence of ER-EE Rel. is a condition sine quo
non for the exercise for the constitutional right to join or form a labor organization. NOT
being employees of the company, they have no collective bargaining rights.
o All persons employed in commercial, industrial and agricultural enterprises,
including employees of GOCC without original charters established under the
corporation code, as well as employees of religious, charitable, medical or
educational institutions whether operating for profit or not, shall have the right to
self-organization and to form or assist labor organizations for purposes of collective
bargaining; provided however, that the supervisory employees shall not be eligible
for membership in a labor org. of the rank-and-file employee but may form join or
assist separate labor organization of their own. Managerial employees shall not be
eligible to form join or assist any labor org. for purposes of CBA. Alien employees
with valid working permits issued by the dept. may exercise the right to self-
organization,
o Eliglble: only rank-and-file and supervisory employees in commercial, industrial
and agri. Enterprises and in religious, charitable, medical, or educational
institutions, whether operating for profit or not, can form or join a union for
collective bargaining purposes. Security guards. Alien employees with valid
working permits, if they are nationals of a country which grants the same or
similar rights to Fil. Workers as certified by the DFA.
- Disqualified from forming or joining LO
o Managerial employees
o Confidential employees who have access to labor relations matters
o Employees-members of cooperatives: reason
o Government employees (bec. The terms and conditions of gov. employment are fixed
by law, only congress can modify the terms and conditions of their employment. -
governed by Civil Service Law
 Can GOCC employee join a labor org. ? = it depends. 1. With original
charters cannot form, join or assist, because they are governed by the civil
service law; 2. Those established under the Corporation Code can form, join
or assist, bec. They enjoy the same right as private employees
o Employees of gocc with original charters
o Workers who are ambulant, intermittent, itinerant and those without definite
employers, self-employed people, rural workers and those without any definite
employers cannot form a labor organization because collective bargaining is not
feasible for them.
- Registration of LO:
o Independent union = file an application for reg. with the Regional Office of DOLE
where it operates. Requirements (1. Name, address, officers, no. of employees &
statement stating they are not reg. as chartered local; 2. Minutes of meeting and
participants; 3. Names of all members comprising at least 20%; 4. Annual financial
report; 5. Constitution and by laws)
o Federation/National Union = file an application for reg. before the Bureau of Labor
Relations. Requirements (1. Name, address, officers; 2. Minutes; 3. Annual
financial report; 4. Constitution and by laws; 5. Reso of affiliation of at least 10
legit labor org. whether indep. Or chartered locals, each must be reg. or certified; 6.
Names, address of companies where affiliates operates.
o Certification and attestation
- Purpose of Registration = protect both labor and public against abuses, fraud or
impostors who pose as organizers. It afforded a measure of protection to unsuspecting
employees who may be lured unto joining unscrupulous or fly by night unions(control
union funds or use the labor org. for the illegitimate ends).
- Constitutionality of the registration requirement = a valid exercise of police power,
considering that the activities in which labor org. are engaged directly affecting the public
interest. Registration is merely a condition sine quo non for the acquisition of legal
personality.
- Denial of registration = registration may be denied by the RODOLE/ BLR on the following
grounds:
o Falsification in the supporting docs, or serious irregularities
o Noncompliance with the requirements esp. the certification and attestation req.
o Failure to complete within 30 days period fr. Notice
- Remedies when denied
o Refused despite compliance with requirements = mandamus to compel the
registration

16
 o denied on grounds other than failure to submit complete req. = appeal the order of
denial
 BLR – denied by RO DOLE
 Office of Sec. of Labor and employment – denied by BLR
- Legitimate labor organization = a union or any branch or local thereof duly registered
with the DOLE
- Local Chapter = (chartered local) a LO without an independent reg. whose legal personality
is derived form its mother union or federation, upon issuance of a charter cert.
- Who can create local chapter?
o Only duly registered federation or national union (art. 239-A)
o Trade union cannot – not stated in the law
- When? Acquisition of legitimacy and legal personality of LC:
o Only upon submission of all the doc. Req. To the BLR
 Chrter cert.
 Names and address of charter officers
 Principal office
 Constitution and by laws
 Additional supporting : certified by sec./treasure and attested by pres.
- Affiliation
o Affiliates – independently reg. unions, hence they have a legal personality of their
own, separate and distinct from that of their mother union.
o Yes! Affiliation of indep. Union with a fed.
 Approval of the majority of the union members
 Resolution of affiliation from board
 Report of Affiliation ( minutes; members approved the affiliation; reso of
affiliation; cert of affiliation by Fed. Written notice for incumbent
bargaining agent)
- Nature of relationship bet. Fed and local union =
o Principal – agent relationship
o Local union (affiliate) is the principal
o Federation is the agent
o Exists even if the the local union is independently registered.
o Thus, in CBA, principal (local union) while Federation(agent)
- Disaffiliation
o A local union, being a separate and voluntary association, is free to serve the
interest of all its members including the freedom to disaffiliate when circumstances
warrant. – this is consistent with the guarantee of freedom of association.
o When a local union disaffiliates from one federation to join another fed. – exercise
right to self organization – effective enhancement and protection of common
interest. = not an act of disloyalty.
o Right is primarily dependent upon the constitution and bylaws of the fed. –
absence of such provision the local union my sever its rel. with its parent.
o May be done only in the freedom period. Exception – there is substantial shift of
allegiance on the part of the majority of the members of the union.
- Time of disaffiliation = generally, may disaffiliate during the 60 day freedom period
immediately proceeding the expiration of the cba. Exceptionally, may be carried out on the
onset of the freedom period, if there is substantial shift of allegiance on the part of the
majority of the members of the union.
- Effects of disaffiliation
o Rel. bet local union and fed. = severs the rel. bet. The local union and fed. Divest
the fed. The power to act in representation of the local union; right to exact fed.
Dues ceases; and termination of its obligation to check off fd
o On the cba = does not disturb enforceability and administration of the CBA bet
employeer and fed. ; no change of administration of contract, no amendment, =
bec. Local union continues to represent the ES notwithstanding the
disqualification.
o On the legal personality of the local union = an indep. Union does not lose its legal
personality its bec. It has its own registration. ; a chartered local loses it legal
personality bec. It has no registration of its own, hence it must reg. its self in order
to retain legal personality.
- Cancellation of Registration
o Cert of reg. may be cancelled by the Bureau, after due hearing, only on the
grounds specified in Art. 239(now 244).
o Can only be done through a direct action(petition) for cancellation reg. = bec. It is
equivalent to snuffing out the life of the labor org. hence it requires notice, hearing
and proof by substantial evidence.
- Grounds for cancellation (art. 244), manner:
o Misrepresentation, false statement, fraud in connection with the adoption or
ratification of the constitution and bylaws or amendments thereto, the minutes of
the ratification
o Misrepresentation, false statement, fraud in connection with the election of
officers, minutes of the election of officers and the list of voters
o Voluntary dissolution by its members

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 o Art. 246 – violation of the rights and conditions of union membership.
- Proper party to file petition for cancellation
o Any party of interest
o Except if the ground for cancelation is based on a violation of the rights and
conditions of union membership. – can only be filed by the members of the labor
org. (30%)
- Where to file?
o DOLE Regional Office = if what is sought to be cancelled is the reg. of an indep.
Union or local chapter
o Bureau of Labor Relations = sought to be cancelled is te reg. of the fed., national
union, industry union, trade charters
- Effect of Cancellation Proceedings:
o During the proceedings LO continues to enjoy all the rights accorded to a legit
labor org.
o Still can file a petition for certification election; intervene in the said
election; negotiate a CBA
o Only a final order of cancellation can strip labor org. rights of its rights.
- Remedy = appeal within 10 days from receipt of order of cacellaton
o BLR – case was decided by DOLE RO
o Sec. of Labor and employment – decided by BLR in the exercise of its orig.
jurisdiction.
- Voluntary cancellation (244-A)
o Gen. membership meeting for dissolving LO
o 2/3 of the member must concur
o Application for cancellation filed with the DOLE RO/BLR
 Signed by the BOD and attested by the union pres.
- Merger or consolidation
o filed a notice of M and C with DOLE RO (indep union) or BLR (federation/nationl
union)
 requirements (minutes; list of members approved the m&C; amended
constitution and by laws)
 Effects
 Merger – one org. absorbs the other, legal existence of the
absorbed org. ceases – rights, interests and obligations of the
absorbed org. are transferred to the absorbing org.
 Consolidation – 2 or more unions are unified and a new org. is
created – legal existence of all the consolidated labor org. ceases. –
newly created LO acquires/assumes all the rights, interests and
obli of the consolidated LO.
- Change of name: file a notice of change of change of name accompanied by amended
consti and by-laws, proof that the change of name was ratified.

RIGHTS AND CONDITIONS OF MEMBERSHIP

Rights of LLO
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
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 thirty (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 sixty (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; and
f. 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. (As amended by Section 17, Republic Act No. 6715, March 21,
1989)

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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.

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 m. The books of accounts and other records of the financial activities of any labor organization
shall be 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.

- Authority to collect assessments and fees (art 282)

o Reasonable membership fees, union dues, assessments and fines, contribution for
labor educ, research, mutual death and hospitalization benefits, welfare fund,
strike fund credit and coop undertaking.
o Limitations = not excessive; collection be done only by those authorized; payment
must be evidence by receipt.
o Requisites of a valid levy of special assessments and extraordinarily fees =
 Gen. membership meetings
 Assessment approved by the majority of members thru written reso.
 Minutes recorded and attested (list of members present, votes cast,
purpose special assessment, recipient)
- Check-Off = method of deducting from the employees pay at prescribed periods the
amount for fees, fines or assessments
- Union Funds = fees, dues, other contribution to be collected only by the authorized agent;
shall not be applied for any purpose other than those expressly provided; payments shall
be evidence by receipts; every income or revenue shall be evidenced by the record
- Remedy in case of violation of the rights and conditions of union membership =
o Complaint may be filed by at least 30% of all members of the union.
o If the violation affects only a particular member, the 30% req. is not necessary –
the affected member can file a necessary complaint.
- Consequences of violation of the rights and conditions of union membership
o Ground for cancellation of union registration
o Ground for expulsion of the union officer from office

ELECTION OF UNION OFFICERS

- Shall be elected by the union members directly, by secret ballot, at intervals of five years
- 5 year term expired and the union officers refuse, fail or neglect to call for an election of new
officers or not provided in the constitution and by law , a petition for election of officers may
be filed by at least 30% of the union members.
- Unlike certification alection where all members of the CBU are qualified to vote, only union
members are qualified to vote in an election of union officers

- Who are qualified to run

o Candidate must be employed in the company
o In good standing as member of the LO
o Free from conviction of a crime involving moral turpitude,
o If convicted – granted absolute pardon

- Qualified to vote – only members of the union; eligibility is usually determined by the payroll
of the month proceeding the labor dispute(regular employees), payroll period at or near the
peak operations (seasonal employees)

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- How election should conducted

o By secret ballot at intervals of 5 years

o Absence agreement
 60 days before expiration of the term of the incumbent officers – pres. Of LO
shall constitute a committee on election (3 members not running for nay
position)
 Members shall Elect chairman of the committee, disagreement = pres.
Designate
 10 days from constitution, Committee:
 Set the date time venue
 Prescribe rules on qualification and eligibility
 Prepae and post voters list
 Accredit the authorize rep of contending parties
 Supervise the actual conduct of election
 Canvass the votes
 Keep the minutes
 Be the Final arbiter of all election protest
 Proclaim the winners
 Prescribe other rules

- Expulsion or impeachment
o BLR has the power to expel or remove a union officer from office on the
following grounds:
o Violation of the rights and conditions of membership
o Commission of irregularities in the approval of the resolution regarding
compensation of union officers
o Membership in another labor org.
o Culpable violation of the constitution and by law
o

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