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LABOR LAW

Q: Bautista entered into an agreement with Media Times Corp. as account executive whose main responsibility was to solicit advertisements for “The Philippine Star”. His pay consisted of commissions and allowances. The agreement stipulated “You are not an employee of the Media Times Corp. nor does the company have any obligation towards anyone you may employ, nor any responsibility for your operating expenses or for any liability you may incur”. Two months after the contract renewal, the company terminated Bautista's services. The latter sued for illegal dismissal. The company denied any employer-employee relationship, urging that the contract between them was one of lease of service under the Civil Code. Is the claim of the company correct? A: No. The company cannot seek refuge under the terms of the agreement it has entered with Bautista. The law, in defining their contractual relationship, does so, not necessarily or exclusively ipon the terms of their written or oral contract, but also on the basis of the nature of the work Bautista has been called upon to perform. The law affords protection to an employee and it will not countenance any attempt to subvert its spirit and intent. A stipulation in an agreement can be ignored as and when it is utilized to deprive the employee of his security of tenure. (Paguio v. NLRC, et. al., May 9, 2003) Q: When is illegal recruitment considered a crime of economic sabotage? Explain. A: According to Art. 28 of the Labor Code, illegal recruitment is considered a crime of economic sabotage whn committed by a syndicate or in large scale. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme which is an act of illegal recruitment. Illegal recruitment is deemed committed in alrge scale if committed against three (3) or more persons individually or as a group. Q: Distinguish managerial employees from supervisory employees? A: A managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and /or to hire, tranfer, suspend, lay-off, recall, discharge,

assign or discipline employees. Supervisory employees, on the other hand, are those who in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. [Art. 212 (m), Labor Code] Q: Conchita is a clerk-typist in the Hospicio de San Miguel, a charitable institution dependent for its existence on contributions and donations from well wishers. She renders work eleven (11) hours a day but has not been given overtime pay since her place of work is a charitable institution. Is Conchita entitled to overtime pay? Explain. A: Yes. Conchita is entitled to overtime compensation. She does not fall under any of the exceptions to the coverage of Art. 82, under the provisions of Hours of Work. The Labor Code is equally applicable to non-profit institutions. A covered employee who works beyond (8) hours is entitled to overtime compensation. Q: Company “Z” was engaged in the manufacture of goods using the by-products of coconut trees and employed some fifty workers who lived in the coconut plantation in Laguna. The land upon which Z conducted its operation was subjected to land reform under RA 6657 for distribution to the tenants and residents of the land. Consequently, Z had to close operations and dismiss its workers. The union representing the employees demanded that Z pay the dismissed workers separation pay under Art. 283 of the Labor Code that requires, among others, the payment of separation pay to employees in cases of “closing or cessation of operations of the establishment or undertaking”. Is the union claim correct or not? Why? A: The union's claim is incorrect. In the case of National Federation of Labor vs. NLRC, March 2, 2000, the Supreme Court ruled that there is no obligation to pay separation pay if the closure is not a unilateral and voluntary act of the employer. In the case at hand, the closure was brought about not by a unilateral and voluntary act of the employer but due to the act of government in the implementation of the Comprehensive Agrarian Reform Law.

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Q: May a minority union strike? A: No. By law the right to be the exclusive representative of all the employees in an appropriate collective bargaining unit is vested in the labor union “designated or selected” for such purpose “by the majority of employees” in the unit concerned. When a union, after winning in an election, is certified as the exclusive bargaining representative, any other union who participated in the election therebey becomes a minority union. It cannot demand collective bargaining with the employer because such right properly belongs to the union that commands the majority. Moreover, the defeated union cannot lawfully undertake a strike against the employer. No labor dispute can exist between a minority union and an employer in such a case. (United Restauror's Employees and Labor Union-PAFLU vs. Hon. Torres and Delta Development Corp., December 18, 1968) Q: Who are confidential employees? A: Confidential employees assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them. (Philips Industrial Development vs. NLRC, June 25, 1992) Further they cannot even be made to pay agency fees or be subjected to union security clauses since they are not part of the bargaining unit. Q: Federico Santiago was a mason employed by the XYZ Construction Company. Every time thay XYZ had a project, it would enter into an employment contract with Federico for a fixed period that coincided with the need for his services, usually for a duration of three to six months. Since the last project involved the construction of a 30-storey building, Federico was contracted for 15 months. During this period, XYZ granted wage increases to its regular employees, composed mostly of enginners and rank-and-file construction workers as a result of the just concluded CBA negotiations. Feeling aggrieved and discriminated against, Federico and other similarly-situated workers demanded that the increases be extended to them, inasmuch as they should now be considered regular employees and members of the bargaining unit. If you were XYZ's legal counsel how would you respond to this demand? A: As legal counsel for XYZ, I would argue that the employment of Federico was fixed for a

specific project or undertaking, the completion or termination of which has been determined at the time of his engagement. Rendering 15 months of work does not make him a regular employee, when to begin with, he was employed for a specific project, i.e., which is the construction of a particularly 30-storey building. The rule on more than 1 year of service making the employment regular applies only to casual employees, hence, Federico does not belong to the bargaining unit of regular employees. Q: Josefa Escoda has been working as a bookkeeper at Delicious Foods, Inc. which operates a chain of high-end restaurants throughout the country, since 1970 when it was a small eatery at Binondo. In the early part of 2009, Gabriela who was already 50 years old, reported for work after a week-long vacation in her province. It was the height of the AH1N1 Virus scare, and management learned that the first confirmed AH1N1 death case in the Philippines, a “balikbayan” nurse from Canada, is a townmate of Josefa. Immediately, a memorandum was issued by management terminating the services of Josefa on the ground that she is a probable carrier of AH1N1 virus and that her continued employment is prejudicial to the health of her co-employees. Is the action taken by the employer justified? A: No. The employer's act of terminating the employment of Josefa is not justified. There is no showing that said employee is sick with AH1N1, or that she associated or had contact with the deceased nurse. They are merely townmates. Furthermore, there is no certification by a competent public health authority that the disease is of such a nature or such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. (Implementing Rules, Book VI, Rule 1, Sec. 8, Labor Code). Q: Is wage distortion a ground for staging a strike? A: No. Art. 124, as amended by RA 6727, states that if wage or salary distortion results from the implementation of a wage order, the employer and the union shall negotiate to correct the distortion. The distortion dispute should be resolved through the grievance procedure or voluntary arbitration, or in the absence of CBA, through the NCMB or a Labor Arbiter. In the case of Ilaw at Buklod ng Manggagawa vs. NLRC, June 27, 1991 the court ruled that the legislative intent that solution of the problem of wage distortion shall not be resolved by strikes,

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lockouts or other concerted activities of the employees or management, is made clear in the rules implementing RA 6727 which declares that “any issue invovling wage distortion shall not be a ground for a strike/lockout.” Q: When is job contracting permissible? A: Job contracting is permissible only if the following conditions are met: 1. the contractor carries on an independent

business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and

2. the contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of the business (Lakas vs. Burlingame Corp (2007)).

Q: The affected members of the rank and file elevated a labor arbiter’s decision to the NLRC via a petition for review filed after the lapse of the ten-day reglementary period for perfecting an appeal. Should the NLRC dismiss the petition outright or may the NLRC take cognizance thereof? A: The NLRC should dismiss the appeal outright because the same was filed beyond the reglementary period of appeal. Article 223 of the Labor Code reads: “Decisions, awards, or orders of the Labor Arbiter are final and executor unless appealed to the Commission by any or both parties within (10) calendar days from receipt of such decisions, awards or orders.” Another suggested answer: The NLRC could dismiss outright the appeal for being filed out of time. But if there are good reasons that may justifiably explain why there was a delay in the filing of the appeal, substantial justice may be the basis for the NLRC to take cognizance of the appeal. Q: What rights are subsumed in the right to self organization? A: The following are deemed included in the right to self-organize: 1. The right not to exercise it which means the

right not to join, affiliate with or assist any union (Reyes v. Trajano)

2. The right to raise issues in behalf of the organization (Union of Supervisors v. Sec. of Labor)

3. The right to withdraw from the organization (Central Negros Electric Cooperative v. Sec. of Labor)

4. Right to choose one’s leaders (Pan-Am World Airways v. Pan-Am Employees Association)

Q: A lady worker was born with a physical deformity, specifically, hard of hearing, speech impaired and color blind. However, these deficiencies do not impair her working ability. Can the employer classify the lady worker as a handicapped worker so that her daily wage will only be seventy-five (75%) of the applicable daily minimum wage? A: No, the employer cannot classify the lady worker as a handicapped worker because according to the facts in the question, her deficiencies do not impair her working ability. If her earning capacity is therefore not also impaired, then she cannot be considered a handicapped worker. Because of the above fact, the employer shall not pay her less than the applicable daily minimum wage. (Art. 78 of the Labor Code) Q: What is the nature of the right of disaffiliation? A: A local union, being a separate and voluntary association, is free to serve the interests of all its members. It has the right to disaffiliate or declare its autonomy from the federation to which it belongs when circumstances warrant, in accordance with the constitutional guarantee of freedom of association, and such disaffiliation cannot be considered disloyalty. (Malayang Samahan ng mga Manggagawa vs. Ramos, 2000) Q: How is the enumeration of unfair labor practices in the Labor Code construed? A: The Labor Code does not undertake the impossible task of specifying in precise and unmistakable language each incident which constitutes an unfair labor practice. Rather, it leaves to the court the work of applying the law’s general prohibitory language in light of infinite combinations of events which may be charged as violative of its terms. (HSBC Employee Union vs. NLRC, 1997) Q: What is the test in determining if an employee is a field personnel? A: Field personnel are employees whose time and performance is unsupervised by the employer (Salazar vs. NLRC, 1996). In deciding whether or not an employee’s actual working hours in the field can be determined with reasonable certainty, query must be made as to

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whether or not such employee’s time and performance is constantly supervised by the employer. (Union of Filipro Employees v. Vivar, 1992) Q: In 1990, Joey Sotto was hired by the International Labor Organization (ILO) Office in Manila as a clerk for five years. On February 23, 1994 he was advised that his services were being terminated for loss of confidence. Sotto questioned his dismissal as arbitrary and without benefit of due process. If you were counsel for ILO, what defense/s should you put up? A: The defense that I will put up will be to claim that being an international agency, the ILO enjoys immunity, namely functional independence and freedom from control of the state in whose territory its office is located and is thus beyond the jurisdiction of the Labor Arbiter. (Southeast Asian Fisheries Development Center – Aqua Culture Department, et. al. vs. NLRC, February 14, 1992) Q: What matters may be taken up by the NLRC En Banc? A: The NLRC shall sit en banc only for purposes of promulgating rules and regulations governing the hearing and disposition of cases before any of its divisions and regional branches and formulating policies affecting its administration and operations. (Art. 213, Labor Code) Q: Differentiate the legal effect of legitimate job contracting with labor-only contracting. A: In legitimate job contracting, no employer-employee relation exists between the principal and the job contractor's employees. The principal is responsible to the job contractor's employees only for the proper payment of wages. But in labor-only contracting, an employer-employee relation is created by law between the principal and the labor-only contractor's employees, such that the former is responsible to such employees, as if he or she had directly employed them (Philippine Airlines, Inc. vs. NLRC, 1998).