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EMPLOYMENT RELATIONS method. The contractor has an independent

business.
FACTS: A verbally engaged the services of P as an Operations
Manager. A asked her to attend work next day but later on when she Article 4 of the Civil Code and most of the Labor Code will apply
arrived you realized you don’t want her. only if she is an employee. The “Four-fold test” is not in the Labor
Code as it is a jurisprudential animal.
Question:
Jurisprudence provides that no particular form of evidence is required to
1. Is P an employee of A? prove the existence of an employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be
Yes, P is an employee. admitted.

2. Can P file a case for illegal dismissal in the NLRC? The power of control refers merely to the existence of the power. It is not
essential for the employer to actually supervise the performance of duties
Yes, she can file an illegal dismissal case in the NLRC. of the employee; it is sufficient that the former has a right to wield the
power. (SSS vs. CA; 348 SCRA 1)
TIP: Before you go to the level of asking whether she is a manager,
supervisor, or R&F, you should ask first if she is an employee.
4. Is nomenclature important?
3. Is A an employee and not a consultant?
No, what matters is not the designation of the parties but the
She is an employee for two reasons: facts/circumstances of case.

a. EER is a consensual contract and in this case the contract was 5. Is it an issue that there’s no written contract?
perfected
b. The “4 fold test” was present. Even if there is no control exercised No. EE-ER is a consensual contract
here, what matters is the presence of the “right” to exercise such
and not its actual exercise. The right, though not exercised, is still QS: What are the 3 kinds of contracts?
present. The “Four-fold test” elements are:
A. Selection and engagement of the employee, 1. Consensual (i.e. employment contract, contractors)
B. Power to terminate/dismiss, 2. Solemn (i.e. DO18-A, form is required like contracts of donation),
C. Power to give wages/payment of wages, 3. Real contract (i.e. delivery perfects the contract like pledge,
D. Power to control. mutuum)
Control separates an employee from contractor. In
EER, the employer exercises control over the means An employment contract is consensual. If he is an employee, the
and method and the end result, while in an employer gets to control the means and method to achieve the end result
employer-contractor relationship, the former only AND the end result. If he is a contractor, the employer “controls” the end
exercises control on the end result no the means and result only.

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QS: Why is it important to know if one is an employee or consultant? QS: Should the elements in the “Four-fold test” concur? Or is it
sufficient that only control is present?
Employee Consultant
Jurisdiction It is sufficient that only control is present. Absent power of control, no
NLRC has jurisdiction. Regular courts – MTC/RTC EER.
depending on the amount
Security of Tenure The power of control refers to the existence of the power and not
Proper procedure must be followed. No security of tenure. But may necessarily to the actual exercise thereof. It is not essential for the
have a right as long as the contract employer to actually supervise the performance of duties of the employee;
exists. it is enough that the employer has the right to wield that power. (Jo vs.
Rights NLRC; 324 SCRA 437)
Even if you fail to stipulate the All the rights must be stipulated in
terms and conditions of the contract. QS: What if another person selected the employees for A and A is
employment, the Labor Code will not paying these employees, can it be argued correctly that A is the
apply. employer?

In a contracting relation there are usually 3 parties (106-109, mc 12012, No.

do 18a) but it’s possible to only have 2 parties. For contractors, you have
a right over the term. For employees, the term is longer. There are QS: True or False. All the time, the Supreme Court will only use the
instances where contractors are “terminated” then there must be Four Fold Test?
qualification. Trilateral – P can ask C to remove E assigned to him. In
cases of positions in the government, ex. Municipal Office– It is not False. Apart from the “Four-Fold test” there is the “Economic Dependence
covered by Labor Code but Civil Service Law. Had it been a private Test” Whether EE is economically dependent on his line of work. It is a
company then different situation. Two Tiered Test: (1) Control and (2) Economic realities. Helps provide a
comprehensive analysis of the true classification.
QS: A acquired services of an Uber driver, B. While inside B’s car, A
kept telling B how to drive, what route to take, etc. Is B an employee However, in cases where the control test is not sufficient to determine
of A? A engaged B’s services and he will be paid? employer – employee relationship, the two tiered test should be adopted:
The driver is not A’s employee. An UBER rider does not have the power (1) the putative employers power to control the employee with respect to
to dismiss the driver as a driver for UBER the means and methods by which the work is to be accomplished; and (2)
the underlying economic realities of the activity or relationship. (Francisco
TIP: Note that in the bar they won’t ask you if he’s an employee. For vs. NLRC; August 31, 2006)
example, they will ask if X is entitled to overtime pay or if NLRC has
jurisdiction. Bar never asks straight point-blank if a person is an Although, there are instances where the SC gets confused like in the
employee. Learn to spot issues. Francisco Case wherein X is holds employment position and corporate
officer position and the SC was confused in determining whether he is an
QS: What will be your guide here? employee. Economic Dependence Test was used to validate the
relationship. Noteworthy, it is only in 2 or 3 cases where SC used
The guide will be the “Four-Fold test”. As long as the “right” in the “Four- Economic Dependent Test.
fold test” exists there’s a possibility of employment.

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NOTE: Remember employment contract is a consensual contract. Always QS: Is this “premises rule” rebuttable or not?
use the “Four-fold test”. Also take note these are mere rights, so it’s not
required that it is actually exercised. A: Rebuttable. You can still present evidence to contradict the
presumption of the Employee-Employer relationship and there is no
QS: What do you control? Is it enough that you control the end control.
result?
QS: In Rules of Court, how many conclusive presumptions are
No. It should be the means and methods employed and end result. there?

It is sufficient that the power of control is reserved; because not in all There are lots of rebuttable presumptions. But there are only 2 conclusive
instances that the power of control is actually exercised by the employer. presumptions:
As long as the individual or the employee can show that at the very least 1. Involves the tenant scenario where you admit he is the owner
that the power of control is reserved, that individual can successfully say unless he’s a lessee and you’re just a sub-lessee
that he or she is an employee of that company. 2. Estoppel in Pais – whenever a person by act or omission or
declaration made another person to believe that something is true
There is a confirming test in instances wherein the court is genuinely based on the fact, omission, or declaration, you are no longer
confused whether that particular person is an employee or there is allowed to falsify it.
another relationship governing the transaction.
QS: What is the yardstick for employment?

QS: What must be remembered regarding the determination of the The yardstick for Employment Relationship is
relationship? 1. Four-Fold Test and
2. Economic Dependency test.
A. If it is easy to determine whether employee or not = use 4 fold
test. TIP: Never say “he is an employee because his work is necessary to the
B. If it is difficult = use Economic Dependency test also (If X business of the employer”. This is not the yardstick for saying he is an
economically dependent on another like he has no other clients employee or not, that question is a yardstick in the determination of the
then he is dependent). Check if: kind of employee he is.
a. He is economically dependent and he or she has no other
job, and that he is dependent on the job Article 280 is not the yardstick for determining the existence of an
b. If there is control. employment relationship because it merely distinguishes between two
kinds of employees, i.e., regular employees and casual employees, for
NOTE: Re the “4 fold test” control (CASE: Aurora Land); if person is purposes of determining the right of an employee to certain benefits, to
working within the premises of an employer it is rebuttable presumption join or form a union, or to security of tenure. Article 280 does not apply
he is an employee because there is control over the means and method. where the existence of an employment relationship is in dispute. (Singer
He is working under the CONTROL of that employer. Sewing Machine vs. Drilon; 193 SCRA 270).

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QS: Can an individual be an employee and a contractor at the same
time? Rules which serve as general guidelines towards the achievement of the
mutually desired result are not indicative of the power of control. … The
No. There is something in the EE-ER relationship that should not be there main determinant therefore is whether the rules set by the employer are
in a valid contracting arrangement and that is the power to control. meant to control not just the results of the work but also the means and
method to be used by the hired party in order to achieve such results.
In all valid contracting arrangement there is no power to control on the (Orozco vs. CA Fifth Division; 562 SCRA 36)
part of the principal to the contractor.
Guidelines indicative of labor law "control” should not merely relate to the
QS: How can the principal ensure that the contractor will be able to mutually desirable result intended by the contractual relationship; they
produce the result if the former cannot control the latter? Is the must have the nature of dictating the means or methods to be employed
principal allowed to control the contractor? If yes to what extent? in attaining the result, or of fixing the methodology and of binding or
restricting the party hired to the use of these means. (Tongko vs.
If you are a contractor you have an independent business you have this Manufacturer’s Life Assurance Company; G.R. 167622).
supposed expertise to perform the function, your principal is not allowed
to control your means and methods but of course the principal can tell the
contractor the end results because the former pays the latter. That is the QS: In the Bar Examination if there is a set of guidelines imposed
big difference between an EE—ER relationship and a contracting upon an individual, what should be your thought process in
arrangement. determining whether that an individual is an employee or a
contractor?
QS: There are cases wherein the principal or the employer sets out
guidelines or set of rules to follow. What is the rule with respect to If there are guidelines, do not jump into a conclusion that the person is an
the guidelines? Is it just because there are guidelines, the individual employee. Check first the guidelines. If the guidelines control the means
subject to it is automatically considered as an employee? and methods, then the individual is an employee.
No. Jurisprudence tells us that such guidelines are the standards for the If the guidelines are only meant to control a desired outcome or result,
business and it does not mean that the set of rules are the means and then the person is just a contractor.
methods employed by the employer to control the employee.
OTHER CASE DOCTRINES
In the case of Inquirer, the employer has to control over how the writer
writes the article. The employer can only control the outcome, or based on The jeepney owner/operator-driver relationship under the boundary
the column, what subject or topic he could write. However, the employer system is that of employer-employee. The existence of an employment
cannot control the writer on how to write his article (means & method). relationship does not depend on how the worker was paid but on the
presence or absence of control over the means and method of the
Independent contractors often present themselves to possess unique employee’s work. (Villamaria vs CA; G.R. No. 165881)
skills, expertise or talent to distinguish them from ordinary employees
(Sonza v. ABS-CBN, GR 138051, June 10, 2004).
Where the company and the physician practically agreed on every term
A radio broadcast specialist who works under minimal supervision is an and condition of the latter’s engagement, the same negates the element
independent contractor (Sonza v. ABS-CBN, GR 138051, June 10, 2004).

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of control in their relationship. (Phil. Global Communications vs. De Vera; KINDS OF EMPLOYEE
G.R. 157214)
After determining that the person is an employee, you may now
An independent contractor is "one who exercises independent determine what kind of employee he is. You connect the work done
employment and contracts to do a piece of work according to his own of the employee and the employer’s business.
methods and without being subject to control of his employer except as to
the result of the work". (Mafinco vs. Ople; 70 SCRA 139) QS: Why is it important to determine the type of employee?

Because of the concept of security of tenure.

Kinds of Elements
Employee
Regular Element (1): Usual necessary or desirable work to the
usual Business or Trade of the employer

Two types of regular EE:

1. Regular EE by nature of work
Can only be terminated upon just cause
Regular Employee from day 1
2. Regular EE by period
1. Regular Casual – As long as the work
activity or exist, the ER has no right to
hire another person to do it and
termination must be for just and
authorize causes.
2. Regular Seasonal

NOTE:
Regular employee after 1 year/after 2 seasons,
as the case may be
The regular status is only with respect to the
activity as long as the activity exists they
cannot be terminated by the employer.

NOTE: If the element is present, there is a possibility

that the employee might be a regular employee. “Might”
because a seasonal EE, project EE, fixed-term EE, or
probationary EE may perform work that is usually
necessary or desirable to the trade or business of the

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employer. The difference is that in these other kinds of seasonal employee.

employment, there are additional elements that must be
present. The moment that those elements are not Exception: Mercado case (Mercado vs. NLRC; G.R.
present, the default is that the EE is a regular EE. No. 79869)
Summary: The workers were hired more than twice for
Casual Element (1): Performing work that is merely incidental the same season for the same work but the SC did not
to the business of the employer classify them as regular seasonal EE because the
hacienda was so small that the workers can complete
REGULAR CASUAL- performing work that is incidental their work in a season and even if the season is not yet
to the business for a period of 365 days, whether over, they can transfer to another hacienda (employer)
continuous or broken during the same season. The SC held that the
circumstances in the Mercado case were so peculiar
Ex. Barber shop, the gardener is not a regular EE, the that that instance would give an exception to the general
work done is incidental. rule that if you hire a season employee more than once
for the same function, for the same season, he would
Seasonal Elements (2): become a regular employee.
1. Are performing work that are seasonal
2. The work is performed during the entire season Project Elements (2):
(either wet or dry season) 1. There is a specific project or undertaking
2. End of the project (term) must be made known to
Ex. Planting of rice the EE at the time of the engagement and that the
end is determinable or determined
If off season, the employer is not obligated to hire the
employee when the season again arrives unless the EE ex. Construction workers – one building, one project.
acquired the regular seasonal status.
Probationary Elements (3):
REGULAR SEASONAL – If a worker is hired more than 1. Hired for a trial period which is usually 6 months
once in the same season for the same work. The (180 days)
employer is obligated to hire the EE. NOTE:
The SC did not state whether consecutive or The EE is not entitled to remain on his employment
successive for the entire 6 months. This period is where the ER
is evaluating whether the EE is worthy of the
What if EE was hired during dry and wet season employment. So even if before 6 months, the ER
(different season) – The EE is already considered as can dismiss.
regular season EE Should the 6-month period be counted as 180 days
or calendar month stated in the Civil Code? 180
Effect: The effect is that as long the season arrives, and days (Mitsubishi case).
there is an activity for that season, the employee must
be hired because he attained the status of regular Exceptions:

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a. If the position is highly-technical in nature and 6 Ex. Doctor, lawyer, high-position managers
months is not enough to evaluate the worker
whether he is at par for regular EE, the EE can
be a probationary for more than 6 months CASE DOCTRINES:
b. Employer’s act of compassion (extension)
● Extension must happen within 180 days. Re: Regular Employees
● The EE requested for an extension
because he wants to have more time to An employment is deemed regular when the activities performed by the
show his worth. employee are usually necessary or desirable in the usual business of the
○ In court, the ER must be able to employer. However, any employee who has rendered at least one year of
prove that within the 6-month service, even though intermittent, is deemed regular with respect to the
period, the EE should have been activity performed and while such activity actually exists. (The Peninsula
dismissed but because of act of Manila vs. Alipio; June 17, 2008)
compassion, his employment was
extended beyond the period. The primary standard for determining regular employment is the
● The extension must happen during the 6- reasonable connection between the particular activity performed by the
month period. employee vis--vis the usual trade or business of the employer. This
connection can be determined by considering the nature of the work
2. Reasonable standards for regularization must be performed and its relation to the scheme of the particular business or
made known at the time of engagement (1st day) trade in its entirety. (Benares vs. Pancho; April 29, 2005)
nd
(a) If the standards were given 2 day or after
the month, the EE is already considered as Re: Project Employees
regular EE.
3. May be terminated through Just and Authorized A project employee is one whose employment has been fixed for a
Cause or failure to meet the standards for specific project or undertaking the completion or termination of which has
regularization. been determined at the time of the engagement of the employee or where
the work or services to be performed is seasonal in nature and the
Must be terminated before lapse of 180 days, otherwise employment is for the duration of the season. (FILSYSTEMS vs.
he/she will be a REGULAR employee Puentes; March 18, 200
The principal test for determining whether particular employees are
Fixed Term Elements (3): project employees as distinguished from regular employees, is whether or
1. The is hired for a fixed term; not the project employees were assigned to carry out a specific project or
2. There must be no force, or duress. undertaking, the duration and scope of which were specified at the time
The EE entered in a fixed-term contract the employees were engaged for that project. (Poseidon Fishing vs.
intelligently and voluntarily NLRC; February 20, 2006)
This is the most important element
3. The ER and EE must be in the same bargaining Re: Fixed-Term Employees
position (on equal footing)
The acid test in considering fixed-term contracts as valid is: if from the
circumstances it is apparent that periods have been imposed to preclude

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acquisition of tenurial security by the employee, they should be INDEPENDENT CONTRACTORS AND LABOR-ONLY
disregarded for being contrary to public policy. (Poseidon Fishing vs.
NLRC; February 20, 2006)
CONTRACTORS

Contracting out of work is a proprietary right of the employer in the

exercise of an inherent management prerogative. The company can
determine in its best business judgment whether it should contract out the
performance of some of its work for as long as the employer is motivated
by good faith, and contracting out must not have been resorted to
circumvent the law or must not have been the result of malicious or
arbitrary action (MERALCO v. Quisumbing 302 SCRA 173, 1999).

A party cannot dictate, by the mere expedient of a unilateral declaration in

a contract, the character of its business, i.e., whether as labor-only
contractor or job contractor, it being crucial that its character be measured
in terms of and determined by the criteria set by statute (San Miguel
Corporation v. Aballa, GR 149011, June 28, 2005).

QS: True or False there will be no contracting arrangement if there

are only two parties? Does it have to be always a trilateral
relationship?

False. It is possible that the contracting arrangement could only have two
parties. (See Inquirer and Sonza case)

The only implication is that DO 18-A will not be applicable in cases

wherein it only involves 2 parties.

DO-18-A intends to protect the employees of the contractor. If the

relationship is merely bilateral there are no persons that are intended to
be protected and therefore the purpose of DO-18-A would no longer
apply.

QS: In a trilateral relationships who are the parties involved?

- Principal
- Contractor
- Contractor’s Employee

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There exists an EE-ER relationship between the contractor and his 4. Business Process Outsourcing (BPO) / Knowledge Process
employees. In this instance, the Labor Code governs the relationship. Outsourcing (KPO) Industries
DO-18-A does not expressly state the reason why the BPO’s are
While there exists a contractual relationship between the contractor and excluded.
the principal. Civil Code governs the relationship. BPOs/KPOs sell an entire business process, not a generic or
specific activity or service.
QS: What is the role of the contractor in so far as the principal is NOTE: At the creation of D.O. 18-A, this was the only industry
concerned? that lobbied for an exemption. They threatened to leave the
country, resulting to a great financial loss to the Philippine
The role of the contractor is to provide services, skilled workers, economy. But still, exemptions are generally frowned upon by the
temporary workers, or a combination of services to the principal under a DOLE.
Service Agreement.
5. If the entire business is contracted out, DO-18-A will not apply
QS: What is the role of the Labor Secretary? because DO-18-A only covers generic and specific activity or service
for example repair of aircon, photocopying, janitorial services. Sa
The Secretary can define what is prohibited labor contracting BPO, the entire back-office operations is contracted out.
arrangement. He can set stringent requirements that are close to
prohibiting contracting arrangements. 6. If the contract between the parties are sales contract and sales of
goods DO-18-A will not apply.
NOTE: DO-18-A constricts contracting arrangement but prohibits labor- Civil Code will apply.
only contracting. Article 106 to 109 does not prohibit it only gives the Examples:
Labor Secretary the power prohibit or to restrict contracting out of work If A has a business and wishes to engage service of persons to
and that power was exercised by issuing DO 18-A. cook for his cafeteria, DO-18A will apply because this speaks of
service. But the momey the food is delivered, there is a contract of
QS: What are those arrangements not included or covered by DO 18- sale and GO-18-A will not apply.
A? But if the entire business is contracted (BPO), there is already a
contract of sales. The services rendered by the calle agents is
Memorandum Circular 1-12 excluding certain industries from the immaterial.
coverage of DO 18-A:
Hiring a painter to create an artwork: service - 18-A applies
Buying an artwork from a gallery: sale of good - 18-A does not
1. If it does not involve a generic or specific activity/process
apply
2. Bilateral Relationships
QS: What is the effect of registration?
3. Construction Industry
The presence of registration raises a rebuttal presumption that the
Construction industry is beyond the expertise of DOLE
contractor is a legitimate contractor.
The Philippine Contractors Accreditation Board (PCAB) possesses
licensing and regulatory powers over the construction industry. However, even if there is registration, there is still a disputable
presumption that one is a legitimate labor contractor.

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QS: Is registration mandatory? within a definite or predetermined period, regardless of whether such
job, work, or service is to be performed or completed within or outside
No. Although Section 4 of DO 18-A provides that there must be the premises of the principal.
registration, but it is not stated in Sec. 6 of the same order hence it is still
disputable. QS: How much is the substantial capital?

Section 4 of DO-18-A provides the requisites of a Legitimate Contractor For corporations, partnerships, and cooperatives paid-up
which includes registration. To reconcile that “mandatory” registration is capital stocks/shares of at least Three Million Pesos
only a presumption refer to Section 6 of the same Order which defines For single proprietorship net worth of at least Three Million
labor only contracting. It is not stated in Section 6 that the lack of Pesos
registration will make a contractor a labor-only contractor. For investments case-to-case basis, the courts will decide.

QS: Who is a Labor-Only Contractor? QS: What is the difference between paid-up and subscribed
capital?
Section 6 of DO No. 18-A provides:
a. The contractor does not have substantial capital or investments in Paid-up capital: All shares are paid.
the form of tools, equipment, machineries, work premises, among
others and the employees recruited and placed are performing Subscribed capital: The shares are not yet fully paid
activities which are usually necessary or desirable to the
operation of the company, or directly related to the main business QS: True or False. If the contractor does not have a substantial
of the principal within a definite or predetermined period, capital, the contractor automatically is a labor-only contractor?
regardless of whether such job, work, or service is to be
performed or completed within or outside the premises of the False. Even if the contractor does not have substantial capital, it is
principal; possible that the contractor may have a sufficient investment in the
OR form of tools, equipment, machineries, and work premises.
b. The contractor does not exercise the right to control over the
performance of the work employee QS: True or False. All contractors without substantial capital or
investment are considered as labor-only contractor?
For labor-only contracting to exist, Section 5 of D.O. No. 18-02 which
requires any of two elements mentioned above to be present. Stated False. It is still possible to consider that contractor as a legitimate
otherwise, even if only one of the two elements is present then, there is labor contractor because that element must be coupled with the fact
labor-only contracting (Philippine Airlines v. Ligan, 547 SCRA 181, 2008). that the workers are performing operations that are necessary or
desirable or directly related to the business of the employer. Both
Discuss. elements must exist.

A. The contractor does not have substantial capital or investments in the The contractor still has the chance to prove that even if there is no
form of tools, equipment, machineries, work premises, among others substantial capital or investment he is not a labor-only contractor by
and the employees recruited and placed are performing activities proving that the workers are only performing incidental operations of
which are usually necessary or desirable to the operation of the the principal.
company, or directly related to the main business of the principal

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QS: Who is the true employer if the employees are recruited by In terms of liability, it is not limited or qualified to wages, OT, holiday pay,
the contractor to perform incidental functions of the principal’s that were unpaid but it also extends to other benefits being received by
business but the latter exercises control over the employees? your regular employees.

The true employer is the principal. For example, If the principal’s (“real”) employees performing the same
function are receiving Php20,000 and the supposed contractor’s
QS: What type of employees are they? employees are only receiving Php 10,000, if it is found that there is a
labor-only contracting arrangement, the principal will not just be held liable
The employees are considered as casual employees (since they are to Php 10,000 as wages but the entire Php 20,000 (includes the Php
performing incidental functions) but if they work for one year, 10,000 difference received by the “real” employees)
continuous or broken, they will be become regular casual employees
(regular employee by period). The principal could still collect from the contractor, because of unjust
enrichment because in the contract, you represented that you are a
The law does not require both substantial capital and investment in legitimate contractor, and no court would not allow you to benefit from
the form of tools, equipment, machineries, etc. This is clear from the your own wrong
use of the conjunction "or". If the intention was to require the
contractor to prove that he has both capital and the requisite In labor-only contracting, the person or intermediary shall be considered
investment, then the conjunction "and" should have been used" (New merely as “an agent of the employer” who shall be responsible to the
Golden Builders v CA, GR 154715, 11 December 2003). workers in the same manner and extent as if the latter were directly
employed by him (Polyfoam-RGC International, Corporation and Precilla
B. The contractor does not exercise the right to control over the A. Gramaje vs. Edgardo Concepcion GR 172349, June 13, 2012).
performance of the work employee
A labor-only contractor is solidarily liable with the employer, then the
Refer to the employer-employee relationship discussion re: right to releases, waivers and quitclaims in favor of contractor will redound to the
control. benefit of employer. On the other hand, if a labor-only contractor is not
solidarily liable with the employer, the latter being directly liable, then the
NOTE: The right to control is found/based in Jurisprudence and not releases, waivers and quitclaims in favor of contractor will not extinguish
in the Labor Code. This right is what separates a contracting the liability of employer (Vigilla, et al., v. Philippine College of Criminology,
relationship to that of an employee-employer relationship. GR 200094, 10 June 2013

--------- QS: What is the implication if it is found that a legitimate labor

contracting exist? Will the employees still have recourse from the
QS: What is the implication if it is found that the contractor is a principal?
labor-only contractor?
Yes. In a legitimate arrangement, the real employer is the contractor
In a legitimate labor contracting arrangement, the principal’s liability is
limited. In a labor only contracting, then the real employer is the principal The Labor Code provides that the principal has a liability with the
All employment claims will be directed against the principal. In this case, employees particularly it is joint and solidarity liable with the contractor
the contractor will be considered as an agent of the principal. when there are claims that the contractor fails to pay the wages of the
employees. The principal cannot raise the defense that it has already paid

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the contractor. In addition, the jurisprudence has extended the principal’s RIGHT TO SELF-ORGANIZATION
liability in money claims that are not punitive in nature e.g. overtime pay,
holiday pay, nigh-deferential. QS: Are all employees allowed to self-organize?
For money claims that are punitive in nature (e.g. moral, exemplary, etc.), General Rule: Yes. Right to Self-organization is a constitutional right.
the principal will only be liable if it is proven that the principal participated All employees have the right to form, join, and assist labor
in the commission of the wrongful act. organizations for the purpose of collective bargaining through
representative of their own choosing.
QS: In DO 18-A, what is the effect of the failure to have a written
contract of the Service Agreement? All persons employed in commercial, industrial and agricultural
enterprises, including employees of government-owned or controlled
It must be written because there is a penalty. Although there is already a corporations without original charters established under the Corporation
contract through the presence of consent, it must be written because the Code, as well as employees of religious charitable, medical or educational
failure to write the Service Agreement between the principal and institutions whether operating for profit or not, shall have the right to self-
contractor and the employment contract between the contractor and organization and to form, join or assist labor unions for purposes of
employee, the penalty is as if labor-only contracting is present. collective bargaining. Provided, however, that supervisory employees
shall not be eligible for membership in a labor union of the rank-and-file
employees but may form, join, or assist separate labor unions of their
own, Managerial employees shall not be eligible to form, join, or assist
any labor unions for the purposes of collective bargaining.

Alien employees with valid working permits issued by the

Department may exercise the right to self-organization and join or assist
labor unions for purposes of collective bargaining if they are nationals of a
country which grants the same or similar rights to Filipino workers, as
certified by the Department of Foreign Affairs, or which has ratified either
ILO Convention No. 87 and ILO Convention No. 98.

For the purpose of this Section, any employee, whether employed

for a definite period or not, shall beginning on the first day of his/her
service, be eligible for membership in any labor organization.

All other workers, including ambulant, intermittent and other

workers, the self-employed, rural workers and those without any definite
employers may form labor organizations for their mutual aid and
protection and other legitimate purposes except collective bargaining
(Section 2, Rule 2, Book Five, Rules to Implement the Labor Code).

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Exceptions: Conditions - Managerial employees, if they meet all of the following
conditions:
Except for managers and employees whose work is intermittent, 1. Their primary duty consists of the management of the
ambulant, and also non-employees, etc. but they may form an association establishment in which they are employed or of a department or
for mutual aid and protection or any other legitimate purpose other than sub-division thereof;
collective bargaining. 2. They customarily and regularly direct the work of two or more
employees therein; and
What is the reason? 3. They have the authority to hire or fire employees of lower rank; or
their suggestions and recommendation as to hiring and firing and
They are not allowed to form a union for collective bargaining because as to the promotion or any other change of status of other
they do not have a permanent employer to negotiate with. employees, are given particular weight (Section 2 (b), Rule 1,
Book Three, Rules to Implement the Labor Code)
Summary of the employees’ right to self-organization for the
purpose of collective bargaining: QS: If A is a manager as stated in the employment contract but
he is a one-man team with no employees under him, is A
1. Managers - X considered as a manager? Is it required that there be employees
under A to be considered as a manager?
Managers are absolutely disqualified in forming, joining, and assisting
labor organizations for the purposes of collective bargaining. However A is not a manager. Stated in the IRR, one of the conditions required
they may still form for purposes other than collective bargaining. to be considered as a manager is that he customarily and regularly
direct the work of two or more employees. In this case, A is a one-
Reasons: man team. Hence, he cannot be considered as a manager.

a. Managerial employees are the alter ego of the employers and 2. Supervisors - QX
thus they are supposed to be on the side of the employer to act
as its representatives, and to see to it that its interests are well Supervisors are qualified prohibited in forming, joining, and assisting
protected. labor organizations for the purposes of collective bargaining on their
b. The union can also become company-dominated with the own but not with the rank-and-file employees (Section 2, Rule 2, Book
presence of managerial employees in union membership. Five, Rules to Implement the Labor Code).

The labor union might not be assured of their loyalty to the union in Definition: Supervisory employees are those who, in the interest of
view of the evident conflict of interest (United Pepsi Cola vs. the employer, effectively recommends such managerial actions if the
Laguesma, 288 SCRA 15, 1998). exercise of such authority is not merely routinary or clerical in nature
but require the use of independent judgment (Art 219 [m] of the Labor
Definition: Managerial Employee is one who is vested with powers or Code).
prerogatives to lay down and execute management policies and/or to
hire, transfer, suspend, layoff, recall, discharge, assign or discipline NOTE: The supervisors’ union and rank-and-file’s union operating
employees (Art 219 [m] of the Labor Code). within the same establishment may join the same federation or
national union (As amended by R.A. 9461).

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It is the nature of the employee’s functions and not the nomenclature

or title given to his job which determines whether he he has rank-and- The two criteria are cumulative, and both must be met if an employee
file, supervisory, or managerial status (Samson vs. NLRC, 330 SCRA is to be considered as a confidential employee - that is, the
460, 2000). confidential relationship must exist between the employee and his
superior officer; and that officer must handle the prescribed
3. Rank-and-File Employees - ✓ responsibilities relating to labor relations. Sugbuanon Rural Bank Inc.,
Definition: All employees not falling within the definitions of vs. Laguesma, 277 SCRA 370, 1997).
managerial and supervisory employees shall be considered rank-and-
file employees. However, even if an employee has access to confidential labor
relations information but such is merely incidental to his duties and
Rank-and-file employees are eligible in forming, joining, and assisting knowledge thereof is not necessary in the performance of such duties,
labor organizations for the purposes of collective bargaining. said access does not render the employee a confidential employee
(San Miguel Corp. Supervisors and Exempt Union vs. Laguesma,
Exception: If these rank-and-file employees are performing functions August 15, 1997).
of a confidential employee, which are not incidental, are disqualified to
form, join, and assist labor organizations for the purposes of collective With regard to right-self organization for the purposes of collective
bargaining. bargaining, the confidential employee to be prohibited, (1) must hold a
position of trust and (2) must have access to information relating to
4. Confidential Employees – X labor relations.

Confidential employees regardless of his/her rank are absolutely 5. Security Guards - ✓

disqualified to form, join, and assist labor organizations for the
purposes of collective bargaining. General Rule: Yes

Reason: Under the doctrine of necessary implication, the Security guards may now freely join a labor organization of the rank-
disqualification of managerial employees to form, join, and assist and-file, or that of the supervisory union, depending on their rank
labor organizations for the purposes of collective bargaining equally (Manila Electric Co. vs. Secretary of Labor and Employment, 197
applies to confidential employees. SCRA 275).

Confidential employees should be excluded from the bargaining unit The implementing rules of R.A. 6715, in so far as they disqualify
and disqualified from joining any union: employees should not be security guards from joining rank-and-file organization, are null and
placed in a position involving a potential conflict of interest (University void, for being not germane to the object and purposes of EO 111 and
of the Immaculate Concepcion vs. Secretary; UIC Teaching; et al., R.A. 6715.
GR No. 178085-178086, September 14, 2015).
Exception: If the security guard is a manager or supervisor. If that is
Definition: Confidential employees are those who: the case, the rule on manager/supervisor will apply.
1. Assist or act in a confidential capacity, in regard
2. To persons who formulate, determine, and effectuate
management policies in the field of labor relations

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6. Members of Cooperative - X members of that sect from forming their own union (Kapatiran sa Meat
and Canning Division vs. Ferrer-Calleja, 162 SCRA 367)
The right to collective bargaining is absolutely prohibited to an
employee of a cooperative who at the same is a member and co- In other words, the law does not coerce them to join, neither does the
owner thereof. law prohibit them from joining, and neither may the employer or labor
union compel them to join (Victoriano vs. Elizalde Workers Union, 59
Certainly an owner cannot bargain with himself or his co-owners SCRA 54, 1994).
(Benguet Electric Cooperative vs. Ferrer-Calleja, 180 SCRA 740).
9. Government Employees - ✓ with qualifications
Even if you only have one share, you cannot join a union for the
purpose of collective bargaining General Rule: All government employees can form, join, or assist
employee’s organizations of their own choosing for the furtherance
NOTE: For Social Security Benefits issue, the cooperative is different and protection of their interest. They can also form labor-management
from its owners and therefore the cooperative has the obligation to committees, work councils and other forms of workers’ participation
pay SSS of its employee-members. schemes to achieve the same objectives.

7. Shareholders who are also employees - ✓ Exceptions:

High-level employees whose functions are normally
QS: A Shareholder in a company owning 50%, who at the same considered as policy-making or managerial or whose duties
time is an employee thereof and now is considered as a Board of are of highly confidential in nature (E.O. No. 180, Sec. 3); and
Director, can he form, join, and assist labor organizations for the Member of Armed Forces of the Philippines, including police
purposes of collective bargaining? officers, policemen, firemen, and jail guards (E.O. No. 180,
Sec. 4).
Jurisprudence provides that if a mere shareholder, they are allowed to
form, join, and assist labor organization for the purposes of collective The terms and conditions of employment or improvements in
bargaining, provided their position allows. However, if an employee is government services may be the subject of negotiations between duly
a majority shareholder of a corporation, he may not join a union for recognized employees’ organizations and appropriate government
the purpose of collective bargaining because he might be bargaining authorities, except those terms and conditions of employment that are
with himself. fixed by law (E.O. No. 180, Sec. 13).

8. Members of Iglesia ni Cristo or other Religious Sect - ✓ Re: strike – Government employees are not allowed to strike

There is no prohibition that members of Iglesia ni Cristo sect from 10. Aliens / Foreigners - ✓with qualification
affiliating with any labor union. It still leaves to said members the
liberty and the power to affiliate, or not to affiliate, with labor union. Two conditions in order to be allowed for form or join a union for the
purpose of collective bargaining:
The right of members of the Iglesia ni Cristo sect not to join a labor a. There must be a valid working permit; and
union for being contrary to their religion belief does not bar the b. If they are nationals of a country that grants the same right to
Filipino workers (principle of reciprocity)

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The rules on managers and supervisor employees still apply. BARGAINING UNIT
11. Employees of International Organizations – X (absolute prohibition)
QS: What is the next step after identifying the types of employees
who can form a union for collective bargaining?
ALL Employees of International organization regardless of the
position are prohibited from joining an organization for the purpose of
The next step is to form a union.
collective bargaining not because of the nature of their employment
but because of the immunity.
QS: What is the objective to form a union?
Employees of International Organizations with immunities such as The objective is for the union to be a representative a certain group. But
United Nations, International Rice Research Institute, and you have to determine first who you want to represent and that is called a
International Catholic Migration Commission are not granted the right Bargaining Unit.
to self-organization (International Catholic Migration Commission vs.
Ferre-Calleja, 190 SCRA 130). QS: What is a bargaining unit?

Reason: An appropriate bargaining unit may be defined as a group of

It cannot file a case against the international organization employees of a given employer, comprised of all or less than all of the
because of the immunity. entire body of employees, which the collective interest of all the
What is the use of exercising the right if it cannot be enforced. employees, consistent with equity to the employer, indicate to be best
suited to serve the reciprocal rights and duties of the parties under the
The immunity of International Organization is a comprehensive collective bargaining provisions of the law
immunity.
A unit to be appropriate must effect a grouping of employees who have
12. Non-employees - X substantial, mutual interests in wages, hours, working conditions and
other subjects of collective bargaining.
All other workers, including ambulant, intermittent and other workers,
the self-employed, rural workers and those without any definite Geographical location can be completely disregarded if the communal or
employers may form labor organizations for their mutual aid and mutual interests of the employees are not sacrificed. (San Miguel Corp v.
protection and other legitimate purposes except collective bargaining Laguesma 236 SCRA 595).
(Section 2, Rule 2, Book Five, Rules to Implement the Labor Code).
QS: Is union membership the same as bargaining unit?

No. The bargaining unit is bigger.

QS: In the bargaining unit, can it be ALL employees or can it be

composed of just some of them?

Both. Can be all or some of the employees.

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QS: What is the determining tests in delineating the bargaining unit? was immaterial that the three plants have different locations
as they did not impede the operations of a single bargaining
The factors in determining the appropriate collective bargaining unit are representative. [San Miguel Foods v. San Miguel Corp.
(1) the will of the employees (Globe Doctrine); (2) affinity and unity of the Supervisors and Exempt Union, August 1, 2011]
employees’ interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions (Substantial Mutual The basic test of an asserted bargaining unit's
Interests Rule); (3) prior collective bargaining history; and (4) similarity of acceptability is whether or not it is fundamentally the
employment status (International School Alliance of Educators v. combination which will best assure to all employees the
Quisimbing, G.R. No. 128845) exercise of their collective bargaining rights. Not much
reflection is needed to perceive that the community or
Discuss the Four Tests. mutuality of interests which justifies the formation of a single
1. Commonality or Mutuality of interest test collective bargaining unit is wanting between the academic
As a group, they share the same concern, needs, and and non-academic personnel of the university. On the
demands. contrary, the dichotomy of interests, the dissimilarity in the
You have to have the same interest to effectively nature of the work and duties as well as in the compensation
represent the employees if you know their issues and and working conditions of the academic and non-academic
concerns. personnel dictate the separation of these two categories of
employees for purposes of collective bargaining. The
It is the most important test.
formation of two separate bargaining units, the first consisting
of the rank-and-file non-academic personnel, and the second,
A unit to be appropriate must effect a grouping of employees of the rank-and-file academic employees, is the set-up that
who have substantial, mutual interests in wages, hours,
will best assure to all the employees the exercise of their
working conditions and other subjects of collective bargaining. collective bargaining rights. [University of the Philippines v.
Although they belong to three different plants, they perform Ferrer-Calleia]
work of the same nature, receive the same wages and
compensation, and most importantly, share a common stake
in concerted activities. [San Miguel Corp. v. Laguesma]
2. Globe Doctrine
In SMF v SMC Supervisors and Exempt Union, the Court Considered how the employees want/desire to be
explained that the employees of San Miguel Corporation grouped.
Magnolia Poultry Products Plants of Cabuyao, San Fernando, The determination of the will of the employees is usually
and Otis constitute a single bargaining unit, which is not manifested through referendum.
contrary to the one-company, one-union policy. The Court
declared that the employees belonging to the three different 3. Prior collective bargaining history
plants of San Miguel Corporation Magnolia Poultry Products If there is a bargaining unit before and the will of the
Plants in Cabuyao, San Fernando, and Otis, having employees are already present, what change in the
community or mutuality of interests, constitute a single circumstances will it show that there is no more status
bargaining unit. They perform work of the same nature, quo?
receive the same wages and compensation, and most
importantly, share a common stake in concerted activities. It 4. Employment Status Doctrine

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Employees of the same kind can form their own union. [Philippine Scout Veterans Security and Investigation Agency v.
Equal status of employment is important in the forming of Secretary; 224 SCRA 682]
a union because of the same similar needs and concerns.
Pop Quiz: What are the requirements for request of SEBA
QS: If there are group of employees in Makati City and a group of Certification?
employees in Laguna, can they form a single bargaining unit?
Section 2 of DO No. 40-I-15. The requirements for certification shall
No. They can form a single bargaining unit. The rationale of this is to be include:
able to have a larger scope to represent (“power”). a. The name and address of the requesting legitimate labor
organization;
If the bargaining unit can be consolidated, if possible, allow it even if they b. The name and address of the company where it operates;
are located in the different locations so that there union will be stronger. c. The bargaining unit sought to be represented;
Unless the other parties e.g. rival unions, can show that there is a distinct d. The approximate number of employees in the bargaining unit; and
interest in the bargaining unit. the statement of the existence/non-existence of other labor
organization/ CBA
NOTE: The determination of the appropriate bargaining unit is from case-
to-case basis also.

QS: If there are 2 companies with their own group of employees with
the same work e.g. factory workers, can they form a single unit to
negotiate with their respective employers?

The general rule is, if the 2 companies are separate entities it cannot form
a single bargaining unit because each company would have to
deal/negotiate with their respective employers. The exception is the
doctrine of piercing of the corporate veil wherein the courts will rule that
there is no distinct and separate personality between the companies.

In Philippine Scout Veterans Security and Investigation Agency v.

Secretary, the veil of corporate fiction of the three agencies was lifted for
the purpose of allowing the employees of the three agencies to form a
single labor union. As a single bargaining unit, the employees therein
need not file three separate petitions for certification election. All of these
could be covered in a single petition. Accordingly, the Court ruled that the
security agencies concerned do not exist and operate separately and
distinctly from each other with different corporate directions and goals. On
the contrary, all the cross-linking of the three agencies' command, control
and communication systems indicate their unitary corporate personality.

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REGISTRATION AND CANCELLATION employees in the bargaining unit where it seeks to

operate;
QS: After forming the union what is the next step?
QS: What is the purpose why there is need for 20%?
The next step is the registration of the union.
To be a representative, the union must be able to show that it
has a chance in winning in the petition for certification election
QS: True or False. If you are registered union, you are considered a
and be an Exclusive Bargaining Representative (EBR).
legitimate labor organization?

True. If the applicant has been in existence for one or more

years, copies of its annual financial reports; and
QS: True of False. The unions that are not registered are considered Four copies of the constitution and by-laws of the
as illegitimate labor organization? applicant union, minutes of its adoption or ratification and
the list of the members who participated in it.
False.
It is only under Article 234 (c) that requires the names of all its
QS: What is the effect when you fail to register the organization? members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate.
The unions that fail to register cannot bargain collectively. There are Clearly, the 20% minimum requirement pertains to the
certain rights provided in the Labor Code that is granted only to Legitimate employees’ membership in the union and not to the list of
Labor Organization. Registration will vest the labor organization of those workers who participated in the organizational meeting.
rights. (TAKATA vs. BLR; G.R. 196276)

b. The federation, national union or industry or trade union

center or an independent union shall acquire legal personality
QS: What are the two kinds in acquiring personality of the labor and shall be entitled to the rights and privileges grated by the
organization? law to legitimate labor organizations upon the issuance of the
certificate of registration. (Art. 240, LC)
1. Independent Registration The date of the certificate of registration is the date the
a. Article 240 of the Labor Code (LC) provides the requirements union becomes a legitimate labor organization and can
of registration: avail the rights provided by the LC.
Fifty pesos registration fee; Rights of a Legitimate Labor Organization: (Article 251 of
The names of its officers, their addresses, the principal LC)
address of the labor organization, the minutes of the i. To act as the representative of its members for the
organizational meetings and the list of the workers who purpose of collective bargaining;
participated in such meetings; ii. To be certified as the exclusive representative of all
In case the applicant is an independent union, he names the employees in an appropriate bargaining unit for
of all its members comprising at least 20% of all the purposes of collective bargaining;

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iii. To be furnished by the employer, upon written NOTE: The union does not necessarily have to be
request, with its annual audited financial statements, an EBR as long as it is a LLO.
including the balance sheet and the profit and loss
statement, within 30 calendar days from the request vii. The income and the properties of LLO including
After the union has been duly recognized by the grants, endowments, gifts, donations, and
employer or certified as the sole and exclusive contributions they may receive from fraternal and
bargaining representative of the employees in the similar organizations, local or foreign, which are
bargaining unit; actually, directly, and exclusively used for their
Within 60 calendar days before the expiration of lawful purposes, shall be free from taxes, duties and
the existing collective bargaining agreement other assessments.
During the collective bargaining negotiation Exception: The exemptions provided may be
withdrawn only by a special law expressly
NOTE: repealing (As amended by Sec. 17 R.A. No.
The unit must be the EBR to avail this right. 6715)
To know the financial standing of the
company and know if the union’s demands 2. Chartering
are reasonable
QS: Why would the union decide to be registered via chartering?
iv. To own property, real or personal, for the use and
benefit of the labor organization and its members; There are requirements under the Labor Code under independent
registration that cannot be fulfilled by the union.
What would happen if the union was registered under 20% support: However, in practice, the federation would
the Corporation Code? Would the union still be able to usually not support the union if it does not have a substantial
own property? amount of support from the employees.
In independent registration, the union is required to disclose
Yes. It has the personality to acquire and sell property. the list of members, however under chartering disclosure is
not required. Under chartering, there is a “secret registration”.
It is the registration of the organization with the BLR and not o Rationale: There are instances wherein the employer
with the SEC which made it a legitimate labor organization would conduct a union bust to prevent the employees
with rights and privileges granted under the Labor Code. from forming a union.
(CSAI vs. Ferrer-Calleja; 212 SCRA 50)
Acquiring limited/tentative personality
v. To sure and be sued in its registered name; and
vi. To undertake all other activities designed to benefit Article 241 (par1) of LC. Chartering and Creation of Local Chapter. A
the organization and its members, including duly registered federation or national union may directly create a local
cooperative, housing, welfare, and other projects not chapter by issuing a charter certificate indicating the establishment of
contrary to law. the local chapter. The chapter shall acquire legal personality only for
the purposes of filing a petition for purposes of filing a petition for
certification election from the date it was issued a charter certificate.

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NOTE: Trade Unions cannot issue charter certificate for local If the union disaffiliates with the federation, without the independent
charters registering, it will automatically be dissolved. Its existence depends on the
federation. The “borrowed” personality will be taken away. But if the union
Trade union center, is not allowed to directly create a local or already registered independently, it can already disaffiliate subject to the
chapter, and thus it has no power to create a local or chapter. stipulations entered.

Department Order No. 9 defines a trade union center as any group A local union, being a separate and voluntary association, is free to serve
of registered national unions or federations organized for the mutual the interests of all its members including the freedom to disaffiliate or
aid and protection of its members; for assisting such members in declare its autonomy from the federation which it belongs when
collective bargaining; or for participating in the formulation of social circumstances warrant, in accordance with the constitutional guarantee of
and employment policies, standards, and programs, and is duly freedom of association.
registered with the DOLE (SMCEU-PTGWO vs. SMPPEU-PDMP;
Septemder 12, 2007) The sole essence of affiliation is to increase, by collective action, the
common bargaining power of local unions for the effective enhancement
Acquiring full personality and protection of their interests. The local unions remain the basic units of
association, free to serve their own interests subject to the restraints
Article 241 (par 2) of LC: The chapter shall be entitled to all other imposed by the constitution and by-laws of the national federation, and
rights and privileges of a LLO only upon the submission of the free also to renounce the affiliation upon the terms laid down in the
following documents in addition to its chapter certificate: agreement which brought such affiliation into existence (National Union of
a. The names of the chapter’s officers, their addresses, and the Bank Employees vs. PEMA; G.R. No. 174287).
principal office of the chapter; and
b. The chapter’s constitution and by-laws; Provided, that where QS: What would happen if the federation dissolves?
the chapter’s constitution and by-laws are the same as that of
the federation or the national union, this fact shall be The union that is not registered independently will also be dissolved.
indicated accordingly.
QS: What are the grounds to cancel the union registration?
NOTE: There is no need to wait for the issuance of certificate to have
full personality. The determination lies on the submission of Article 247 of the LC: The following may constitute grounds for
documents to DOLE. cancellation of union registration:
a. Misrepresentation, false statement or fraud in connection with the
QS: Must the federation where the union is registering via chartering adoption or ratification of the constitution and by-laws or
have at least already 10 unions that are EBR? amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;
Yes. The union registering is considered as an “additional” to the b. Misrepresentation, false statements or fraud in connection with
member-unions that are already EBR. the election of officers, minutes of the election officers, and the list
of voters;
QS: What would happen if the union registering via charter c. Voluntary dissolution by the members.
disaffiliates with the national federation without it registering
independently? QS: What is the required number of votes for voluntary
dissolution?

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2/3 affirmative vote of the general membership not quorum.

For fraud and misrepresentation to be grounds for cancellation of union

registration under Article 239 of the Labor Code, the nature of the fraud
and misrepresentation must be grave and compelling enough to vitiate the
consent of a majority of union members. (Takata Philippine Corporation
vs. BLR; G.R. No. 196276)

The pendency of a petition for cancellation of union registration does not

preclude collective bargaining. As such, an order to hold a certification
election is proper despite the pendency of the petition for cancellation of
the union’s registration. This is so because at the time the respondent
union filed its petition, it still had the legal personality to enjoy all the rights
conferred to a legitimate labor organization. (Legend International Resorts
Limited vs, Kilusan Manggagawa ng Legenda; G.R. 169754)

Once a labor organization is registered, any subsequent comingling of

supervisory and rank-and-file employees will not affect its status as a
legitimate labor organization, unless such comingling was brought about
by misrepresentation, false statements, or fraud. (Holy Child Catholic
School vs. Sto. Tomas; G.R. 179146)

OTHER CASE DOCTRINES:

Once a labor union attains the status of a legitimate labor organization, it

continues as such until its certificate of registration is cancelled or revoked
in an independent action for cancellation. In addition, the legal personality
of a labor organization cannot be collaterally attacked. (Coastal Subic,
etc. vs. DOLE; 507 SCRA 300)

A local union does not owe its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members. Mere affiliation does not divest the
local union of its own personality, neither does it give the mother
federation the license to act independently of the local union. (Coastal
Subic, etc. vs. DOLE; 507 SCRA 300)

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BARGAINING AGENT, CERTIFICATION ELECTION b) Certification under oath by the president of the requesting
union or local that all documents submitted are true and
PROCEEDINGS correct based on his/her personal knowledge
There are 3 modes on how to be an EBR: QS: What is the effect of having the certification?
1. Consent Election
2. Request for Sole and Exclusive Bargaining Agent (SEBA) The union will be the EBR upon the issuance of the certificate.
Certification
3. Petition for Certification Election (PCE) NOTE: Under this mode, there is no election because there is
evidence that it is supported by the majority. That is why DOLE
NOTE: Voluntary recognition is not a mode anymore. can issue certification.
A. Consent Election 2. An unorganized establishment with more than one LLO
It is like a certification election but there is consent between the Section 5 (par 1) of Department Order No. 40-I-15:
rival unions. If the Regional Director finds the establishment unorganized with
It may happen with or without the intervention/participation of the more than one LLO, he/she shall refer the same to the election
Med-Arbiter. officer for the conduct of certification election.
Upon the filing of the PCE one union, all the unions will be called.
During the meeting, the unions will agree who to vote, when the 3. There is an existing collective bargaining representative and more
election will take place, etc. At the end of the discussion, all than one LLO
unions will sign in the minutes signifying their consent.
Certification Election will also take place but before that there
B. Request for Sole and Exclusive Bargaining Agent (SEBA) Certification must be a determination first that there exist no bar in the
(Department Order No. 40-I-15) certification election.

NOTE: Unorganized means there is no incumbent EBR. C. Petition for Certification Election (PCE)

QS: What are three scenarios under this mode? QS: What are the grounds for the denial of the PCE?

1. An unorganized establishment with only one LLO 1. Certification Year Bar

QS: What are the requirements that have to be submitted? What is the purpose? A union cannot file a PCE anytime
because the intention of the law if to ensure industrial peace.
Section 4. of Department Order No. 40-I-15
a) The names of the employee in the covered bargaining unit A rival union cannot file a PCE if this bar is present. This bar is
who signify their support for the certification, provided that present one year from the time of election or the date of the
said employees comprise at least majority of the number of SEBA certification.
employees in the collective bargaining unit
2. Negotiation Year Bar

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There is a bar if the current EBR and company are negotiation. 6. Lack of Support (25%)

What if there is a negotiation within the one-year period NOTE: In independent registration, 20% is needed.
(within the Certification Year Bar), is it considered as a
Negotiation bar? No. Although it is still a bar by virtue of As long as there is 25%, the Med-Arbiter has the ministerial duty
Certification Year Bar. Negotiation bar is only relevant after the to order PCE.
one-year period.
If the 25% is not met, the Med-Arbiter has the discretion to order
It is noteworthy that the negotiation must happen during the one- PCE.
year period and as so long as it is sustained in good faith; there is
a bar after the one-year period by virtue of Negotiation Bar. 7. No Employee-Employer Relationship
When the duly certified union has commenced and sustained
negotiations in good faith with the employer in according with Reason: No relationship, there is no business to negotiate.
Article [256] of the LC within one year period (Certification
Year Bar). [Sec. 8(b) Rule VIII, Book V of the Omnibus Rules QS: What if there is 25% support but it was found that a
Implementing the LC] portion of the supporting employees are independent
contractors (no employee-employer relationship), will the
3. Deadlock Bar petition be dismissed?

QS: When is there a deadlock bar? No. Stated in the IRR, in this ground, ALL “employees” do not
have relationship with the employer.
There is no deadlock bar unless the parties will be able to prove:
1. That the dispute is subject to notice of strike; or 8. Non-appearance
2. The dispute is s already being heard in a mediation or
arbitration in the NCNB. Non-appearance of two consecutive times in the proceedings.

4. Contract Bar QS: What is the purpose of the four identified bars?

The contract bar is the entirety of the CBA except the last 60 days As long as there is the presence of the bar, the PCE will be dismissed
of the fifth year, which is called the freedom period. The freedom outright.
period is the political aspect of the period.
QS: If there is no ground for dismissal what will happen?
The freedom period is the only period in which the rival union can
question the incumbent Any PCE filed before or after the 60-day A conference will take place. Med-Arbiter will meet all the unions to settle
period shall be dismissed outright. the issues. If the issues are not settled, the elections will proceed. If there
are contentions with regard the employee’s vote, such vote will be
5. Unregistered Union/ No Charter segregated in a separate envelop. Those votes will only be opened if the
number is material to the determination of the winner.
If the union is not an LLO, it does not have a basis of filing a PCE.

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QS: When will there be a valid election?
Tally of Votes:
When there are 50% + 1 eligible voters who voted. Union A 150
Union B 10
QS: What if 50% + 1 requirement is not met, what type of election Union C 70
would that be? No Union 70

It is considered as a failure of election. Certification Year Bar will not Questions:

apply. Within 6 months from the failure of election, the union may file a 1. How many votes does the winner need to obtain? 151 votes
mere motion (not necessary a petition) to conduct election. If beyond 6 2. Is there a valid election? Yes
months, it must be a petition already. 3. Is there a winner? No. No union obtained the necessary 151
votes.
QS: If there is a valid lection, how will the winner-union be 4. What is this situation called? Run-off election
determined? 5. Run-off election between? Union A and C, the union who will
get the highest votes will win.
The winner must obtain the 50% + 1 of the valid votes cast. 6. What is the 50% of the valid vote cast? 50% of 400 (valid and
invalid) which is
FACTS:
Total number of members - 600 No. invalid votes - 51 QS: When is there is a run-off election?
No. of members who voted- 301 No. Segregated votes - 10
No. of valid votes - 250 There is a run-off election if the following are present:

Tally of Votes: a. There is a valid election

Union A 200 b. There is no winner
Union B 30 c. If you add all (valid and invalid) of those who voted for a union, it
Union C 30 will be 50% of the votes cast voted.
No Union 41
NOTE: No Union will be disregarded in the run-off election. The intention
Questions: is in favor of unionism.
1. Is there a valid election? Yes. 50% + 1 eligible voters voted
(301) A run-off election refers to an election between the labor unions receiving
2. How many votes does the winner need? 50%+1 of the valid the two (2) highest number of votes in a certification or consent election
votes, hence 126 votes. with three (3) or more choices, where such a certified or consent election
3. Who is the winner? Union A results in none of the three (3) or more choices receiving the majority of
the valid votes cast; provided that the total number of votes for all
FACTS: contending unions is at least fifty percent (50%) of the number of votes
Total number of members - 600 No. invalid votes - 100 cast. (National Union of Workers in Hotels, Restaurant and Allied
No. of members who voted- 400 No. Segregated votes - 0 Industries- Manila vs. Secretary of Labor; July 31, 2009).
No. of valid votes - 300

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4. Who will fight in the re-run election? Union A and Union C.
FACTS: Even if No Union obtained the second highest vote.
Total number of members - 600 No. invalid votes - 0
No. of members who voted- 600 No. Segregated votes - 0 What if:
No. of valid votes - 0
Tally of Votes:
Tally of Votes: Union A 90
Union A 300 Union B 60
Union B 0 Union C 60
Union C 300 No Union 80
No Union 0
Question:
QS: What is this type of election? Who will fight in the run-off election? Unions A, B, and C.

Re-run Election. In cases wherein there are segregated votes:

NOTE: FACTS:
o Re-run is not found in the Labor Code but only in the Total number of members - 600 No. invalid votes - 0
Implementing Rules. No. of members who voted- 350 No. Segregated votes - 50
o Re-run election is a mere administrative creation, while a No. of secret ballots - 300 Total number of valid votes 350
run-off election is a statutory creation. Note: open the secret ballots first

FACTS: Tally of Votes:

Total number of members - 600 No. invalid votes - 100 Union A 50
No. of members who voted- 400 No. Segregated votes - 0 Union B 151
No. of valid votes - 300 Union C 29
No Union 20
Tally of Votes:
Union A 90 Questions:
Union B 70 1. Is there a valid election? Yes
Union C 60 2. How many votes needed for a winner? At least 176 (50% + 1 of
No Union 80 350)
3. Should the segregated number of votes be open? Yes
1. Is there a valid election? Yes because the winner needs 176. In this situation, the opening of
2. Did anyone win? No. No union got 126 the segregated ballot will determinative of the winner.
3. Is there a re-run election? Yes. No. of votes is beyond the 50%
of the votes cast (which is 400). In this case total number of votes What if same facts but the no. of segregated ballots is 5:
for Unions A, B, and C is FACTS:
Total number of members - 600 No. invalid votes - 0

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No. of members who voted- 350 No. Segregated votes - 5
No. of secret ballots - 345 Total number of valid votes 305

Tally of Votes:
Union A 150
Union B 30
Union C 35
No Union 130

Should we still open the 5 segregated ballots? No need. Because it is

clear that no one will obtain the 176. But in case there will be a run-off
selection, there will still be segregate voting.

CASE DOCTRINES:

Mere signing of the authorization in support of the Petition for Certification

Election of a union before the freedom period, is not sufficient ground to
terminate the employment. (PICOP Resources, Inc. vs. Taneca; August
9,2010).

Except when it is requested to bargain collectively, an employer is a mere

bystander to any petition for certification election; such proceeding is non-
adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their
collective bargaining with the employer. The choice of their representative
is the exclusive concern of the employees; the employer cannot have any
partisan interest therein; it cannot interfere with, much less oppose, the
process by filing a motion to dismiss or an appeal from it; not even a mere
allegation that some employees participating in a petition for certification
election are actually managerial employees will lend an employer legal
personality to block the certification election. The employer's only right in
the proceeding is to be notified or informed thereof. (Samahang
Manggawa sa Charter Chemical vs Charter Chemical and Coarting Corp;
March 16, 2011)

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