LABOR RELATIONS - refers to the interactions between employer and employees or their

representatives and the mechanism by which the standards and other terms and conditions of
employment are negotiated, adjusted, and enforced.

LABOR STANDARDS - prescribes the conditions of employment that both employers and
employees have to abide by, such as types of employment, working hours, minimum wage,
mandatory benefits, holidays, rest days, and employment rights.

CONSTITUTIONAL PROVISIONS IN RELATION TO LABOR RELATIONS:

Sec. 3, Art. XIII of the Constitution:
Guarantees to all workers, among others, their right to:
1. Self-organization
2. Peaceful concerted activities including the right to strike in accordance with law; and
3. Participate in policy-decision making processes affecting their rights and benefits as
may be provided by law.

The 1987 Constitution enumerates the guaranteed basic rights of workers, namely:
(1) to organize themselves;
(2) to conduct collective bargaining or negotiation with management;
(3) to engage in peaceful concerted activities, including to strike in accordance with law;
(4) to enjoy security of tenure;
(5) to work under humane conditions;
(6) to receive a living wage; and
(7) to participate in policy and decision-making processes affecting their rights and benefits as may
be provided by law.

TEST DETERMINING THE EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP:

"FOUR-FOLD TEST" namely:
(a) the selection and engagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the employer's power to control the employee with respect to the means and methods by which
the work is to be accomplished. It is the so-called "control test" that is the most important element.

TYPES OF EMPLOYMENT:
Regular/Permanent Employment - is when an employee performs activities that are necessary or
desirable to the business/trade of the employer. Regular employees enjoy the benefit of tenure and
cannot be terminated for causes other than those provided by law and only after due process.

Most companies in the Philippines require their new employees to undergo probationary employment
for a maximum of six (6) months to evaluate their skills and performance and determine if they are
able to meet the reasonable standards to become permanent employees.

Casual Employment - is when an employee performs work that is usually not necessary or primarily
related to the employer’s business/trade. The period of employment must be made clear to the
employee at the time they started rendering service.

However, employees that have rendered service for at least one (1) year in the same company,
whether continuous or not, shall be considered regular employees with respect to the activities they
perform and will continue rendering service while such activities exist in the company.
Term/Fixed-Term Employment - is a type of employment that is not determined by the activities that
employees are required to perform but by the commencement and termination of the employment
contract. A fixed-term employee can only render services within the set period of time stipulated in the
employment contract and the employer must terminate his/her employment after such period expires.

Fixed-term employment in the Philippines is highly regulated and subject to the following guidelines:
 be voluntarily agreed upon by the parties without coercion or improper pressure to the
employee.
 employer and employee dealt with each other on more or less equal terms with no dominance
exercised by the former over the latter.

Project Employment - is when an employee is hired for a specific project and the duration of
employment is defined by the scope of work and/or length of the project. A project employee can
acquire the status of a permanent employee if they are continuously rehired to undertake other
projects for the company or the tasks they perform are necessary and indispensable to the usual
operations of the company.

Seasonal Employment - is defined when an employment contract is only for a certain time or season
of the year. This is common practice in service industries, such as Retail, Food and Beverage, and
Hospitality to increase manpower and cover labor demand during peak seasons.

Many companies hire “regular seasonal employees” who are only called to work during peak seasons
(e.g. Christmas season) and are temporary suspended during off-seasons. These employees are not
separated from service but are only on Leave of Absence (LOA) without pay until re-employed.

Probationary employment - is a job where the employee upon his engagement, is made to undergo
a trial period to enable the employer to determine his fitness for regular employment on the basis of
reasonable standards made known to him at the time of engagement.”

Floating Status - is the suspension of employment due to a temporary suspension or cessation of

business which shall not exceed six (6) months unless an agreement has been made between the
employee and an employer that would last up to an additical six (6) months. The term is synonymous
with temporary lay-off, temporary laid-off, temporary off-detail, suspended employment and other
similar terms.
It is considered as a valid management action but subject to compliance with Article 301 (previously
Art. 286) of the Labor Code which states:
ART. 301. When employment not deemed terminated - The bonafide suspension of the operation of a
business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee
of a military or civic duty shall not terminate employment. In all such cases, the employer shall
reinstate the employee to his former position without loss of seniority rights if he indicates his desire
to resume his work not later than one (1) month from the resumption of operations of his employer or
from his relief from the military or civic duty.
Since the lay-off is only temporary, the employment status of the employee is not deemed terminated,
but merely suspended [Dela Cruz v. NLRC, 335 SCRA 932]. Thus, he remains an employee of the
company.
LEGITIMATE CONTRACTING vs. LABOR-ONLY CONTRACTING:
Contracting or Subcontracting as defined in Section 3(c) of Department Order No. 174-
17, refers to an arrangement whereby a principal agrees to farm out to a contractor the performance
or completion of a specific job or work within a definite or predetermined period, regardless of
whether such job or work is to be performed or completed within or outside the premises of the
principal. This arrangement shall only be considered as Legitimate Contracting, if the persons or
entities acting as contractors register it with the Regional Office of the Department of Labor and
Employment where they principally operate. Failure to register, shall give rise to the presumption that
the contractor is engaged in labor-only contracting, as provided under Section 14 of Department
Order No. 174-17.

On the other hand, labor-only contract is defined in Section 3(h) of Department Order
No. 174-17, as an arrangement where the contractor or subcontractor merely recruits, supplies or
places workers to perform a job or work for a principal, and this type of contracting is totally
prohibited. Additionally, Section 5 of Department Order No. 174-17 provides for the elements that
must be present in order for a contracting be considered as labor-only contracting, which are as
follows: (a) і. The contractor or subcontractor does not have substantial capital or; ii. The contractor or
subcontractor does not have investments in the form of tools, equipment, machineries, supervision,
work premises, among others, and; iii. The contractor's or subcontractor's employees recruited and
placed are performing activities which are directly related to the main business operation of the
principal; Or (b) The contractor or subcontractor does not exercise the right to control over the
performance of the work of the employee.

Moreover, while in labor-only contracting, the contractor or subcontractor does not have
substantial capital, in legitimate contracting, there is a substantial capital required. In legitimate
contracting, the substantial capital or the paid-up capital stock/shares must be at least Five Million
Pesos (P5,000,000.00) in the case of corporations, partnerships and cooperatives. Then, in the case
of single proprietorship, a net worth of at least Five Million Pesos (P5,000,000.00), is required as a
substantial capital, as all stated in Section 3(l) of Department Order No. 174-17.

MANAGEMENT PREROGATIVE:

“Management prerogative” – refers to the employer’s bundle of rights in relation to all aspects of
employment, from pre-employment to post-employment, and everything in between.

Under the doctrine of management prerogative, every employer has the inherent right to regulate,
according to his own discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, the time, place and manner of work, work supervision, transfer of
employees, lay-off of workers, and discipline, dismissal, and recall of employees. (Rural Bank of
Cantilan, Inc. v. Julve, G.R. No. 169750, 27 February 2007)
ART. 219. [212] DEFINITIONS:
Employer - includes any person acting in the interest of an employer, directly or indirectly. The term
shall not include any labor organization or any of its officers or agents except when acting as
employer.

Employee - includes any person in the employ of an employer. The term shall not be limited to the
employees of a particular employer, unless the Code so explicitly states. It shall include any individual
whose work has ceased as a result of or in connection with any current labor dispute or because of
any unfair labor practice if he has not obtained any other substantially equivalent and regular
employment.

Labor organization - means any union or association of employees which exists in whole or in part
for the purpose of collective bargaining or of dealing with employers concerning terms and conditions
of employment.

Legitimate labor organization - means any labor organization duly registered with the Department
of Labor and Employment, and includes any branch or local thereof.

Bargaining representative - means a legitimate labor organization whether or not employed by the
employer.

Managerial employee - is one who is vested with the powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees. Supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent judgment. All employees not falling
within any of the above definitions are considered rank-andfile employees for purposes of this Book.
Lockout - means any temporary refusal of an employer to furnish work as a result of an industrial or
labor dispute.

Art. 250. Rights and Conditions of Membership in a Labor organization - xxx Any violation of the
above rights and conditions of membership shall be a ground for cancellation of union registration or
expulsion of officers from office, whichever is appropriate.

Q: What are the rules on Cancellation of Registration?

ANS: The following are the rules on cancellation of registration:

2018 BAR EXAM QUESTION:
Nayon Federation issued a charter certificate creating a rank-and-file Neuman Employees Union. On
the same day, New Neuman Employees Union filed a petition for certification election with the
Department of Labor and Employment (DOLE) Regional Office, attaching the appropriate charter
certificate.

(a) The employer, Neuman Corporation, filed a motion to dismiss the petition for lack of legal
personality on the part of the petitioner union. Should the motion be granted? (2.5%)

Suggested Answer:
No. For the limited purpose of filing a petition for certification election, a charter has the legal
personality even before it can formally be issued a certificate of registration (Art. 241, LC). Moreover,
a certification election is a mode of verification only. Being investigative in character, which does not
initiate a litigation between the union and the employer, the latter cannot move to dismiss the petition
because it is just a standby.

(b) The employer likewise filed a petition for cancellation of union registration against New Neuman
Employees Union, alleging that Nayon Federation already had a chartered local rank-and-file union,
Neuman Employees Union, pertaining to the same bargaining unit within the establishment. Should
the petition for cancellation prosper? (2.5%)

Suggested Answer:
No. The existence of another chartered local under the same federation within the same bargaining
unit is not among the grounds to cancel union registration under Article 247 LC, as amended by RA
9481.

REQUIREMENTS FOR VOLUNTARY CANCELLATION:

1. At least 2/3 of its general membership votes, in a meeting duly called for that purpose.
2. Application to cancel registration by the board and attested by the president.

SUMMARY OF RIGHTS AND CONDITIONS OF MEMBERSHIP under ARTICLE 250

Note: Any violation of the above rights and conditions of membership shall be a ground for the
cancellation of the union registration or expulsion of an officer from office, whichever is appropriate.
However, with RA 9481 amending and limiting the grounds for cancellation of registration, this should
also be deemed amended.
ART. 251. [242] Rights of Legitimate Labor Organizations. – A legitimate labor organization shall
have the right:
(a) To act as the representative of its members for the purpose of collective bargaining;
(b) To be certified as the exclusive representative of all the employees in an appropriate bargaining
unit for purposes of collective bargaining;
(c) To be furnished by the employer, upon written request, with its annual audited financial
statements, including the balance sheet and the profit and loss statement, within thirty (30)
calendar days from the date of receipt of the request, after the union has been duly recognized by
the employer or certified as the sole and exclusive bargaining representative of the employees in
the bargaining unit, or within sixty (60) calendar days before the expiration of the existing
collective bargaining agreement, or during the collective bargaining negotiation; 211 As amended
by Sec. 17 of R.A. No. 6715 (1989)
(d) To own property, real or personal, for the use and benefit of the labor organization and its
members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit the organization and its members, including
cooperative, housing, welfare and other projects not contrary to law.

Notwithstanding any provision of a general or special law to the contrary, the income and the
properties of legitimate labor organizations, including grants, endowments, gifts, donations and
contributions they may receive from fraternal and similar organizations, local or foreign, which are
actually, directly and exclusively used for their lawful purposes, shall be free from taxes, duties and
other assessments. The exemptions provided herein may be withdrawn only by a special law
expressly repealing this provision.

ART. 252. [242-A] Reportorial Requirements. – The following are documents required to be
submitted to the Bureau by the legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification of the constitution and by-laws within thirty (30) days
from adoption or ratification of the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from
election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.

Failure to comply with the above requirements shall not be a ground for cancellation of union
registration but shall subject the erring officers or members to suspension, expulsion from
membership, or any appropriate penalty.

ART. 253. [243] - COVERAGE OF THE RIGHT TO SELF-ORGANIZATION

SECTION 1. Policy. — It is the policy of the State to promote the free and responsible exercise of the
right to self-organization through the establishment of a simplified mechanism for the speedy
registration of labor unions and workers associations, determination of representation status and
resolution of inter/intra-union and other related labor relations disputes. Only legitimate or registered
labor unions shall have the right to represent their members for collective bargaining and other
purposes. Workers' associations shall have the right to represent their members for purposes other
than collective bargaining.

SECTION 2. Who may join labor unions and workers' associations. — All persons employed in
commercial, industrial and agricultural enterprises, including employees of government owned or
controlled corporations without original charters established under the Corporation Code, as well as
employees of religious, charitable, medical or educational institutions whether operating for profit or
not, shall have the right to self-organization and to form, join or assist labor unions for purposes of
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 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.

For purposes 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.

Right to Self-Organization: A Fundamental Right:

Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor
Code. Employees have the right to form, join or assist labor organizations for the purpose of collective
bargaining or for their mutual aid and protection. [UST Faculty Union v. Bitonio, G.R. No. 131235
(1999)]

Who May or May Not Exercise the Right:

a. All employees
b. Government employees of corporations created under the Corporation Code
c. Supervisory Employees
d. Aliens with valid working permits
e. Security personnel

(a) All Employees

All persons employed in commercial, industrial and agricultural enterprises and in religious,
charitable, medical or educational institutions, whether operating for profit or not, shall have the right
to self-organization and to form, join or assist labor organizations of their own choosing for purposes
of collective bargaining.

(Presumes an employer-employee relationship)

Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without
any definite employers may form labor organizations for their mutual aid and protection. [Art. 253]

Any employee, whether employed for a definite period or not, shall, beginning on his first day of
service, be considered an employee for purposes of membership in any labor union. [Art. 292(c)]

Employees of non-profit organizations are now permitted to form, organize or join labor unions of their
choice for purposes of collective bargaining [FEU-Dr. Nicanor Reyes Medical Foundation Inc. v.
Trajano, G.R. No. 76273 (1987)

(b) Government employees of corporations created under the Corporation Code

The right to self-organization shall not be denied to government employees. [Sec. 2(5), Art. IX-B,
Constitution]
Employees of government corporations established under the Corporation Code shall have the right
to organize and to bargain collectively with their respective employers. All other employees in the civil
service shall have the right to form associations for purposes not contrary to law. [Art. 254]

(c) Supervisory Employees

Supervisory employees are those who, in the interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. [Art. 219(m)]

(d) Aliens with valid working permits

General Rule: All aliens, natural or juridical… are strictly prohibited from engaging directly or
indirectly in all forms of trade union activities. [Art. 284]

Exception: Aliens may exercise the right to self-organization and join or assist labor unions for
purposes of collective bargaining, provided the following requisites are fulfilled:
1. With valid working permits issued by the DOLE; and
2. They are nationals of a country which grants the same or similar rights to Filipino workers [Art.
284]
a. As certified by DFA; OR
b. Has ratified either ILO Conventions No. 87 and 98 [Sec. 2, Rule II, Book V, IRR]

(e) Security personnel

The security guards and other personnel employed by the security service contractor shall have the
right:
1. To form, join, or assist in the formation of a labor organization of their own choosing for purposes
of collective bargaining and
2. To engage in concerted activities which are not contrary to law including the right to strike.

Only the following employees are given the right to form, join or assist in the formation of a
labor organization:
1. Rank-and-file employees; and
2. Supervisory Employees

Who are Disqualified from Forming or Joining a Labor Organization?

1. Managerial employees;
2. Confidential Employees who have access to labor relations matters;
3. Employees-members of cooperatives;
4. Government Employees;
5. Employees of GOCCs with original charters; and
6. Workers who are intermittent, itinerant or without definite employers

Confidential Employees:
Are those who:
1. By the nature of his functions, assist or act in a confidential capacity, in regard to persons who
formulate, determine policies; and
2. Assists the person who effectuate management policies, specifically in the field of labor relations.

Because of such fiduciary role, he has necessary access to confidential information in the area of
labor relations.

Confidential employees, by reason of their position or nature of work are required to assist or act in a
fiduciary manner to managerial employees, they are likewise privy to sensitive and highly confidential
records. (Standard Chartered Bank Union v. Standard Chartered Bank, G.R. No. 161933, 2008)
Confidentiality Must be Related to Labor Relations, and Not a Business Standpoint:
An employee must assist or act in a confidential capacity and obtain confidential information relating
to labor relations policies. Exposure to internal business operations of the company is not per se a
ground for the exclusion in the bargaining unit. Article 254 of the Labor Code does not directly prohibit
confidential employees from engaging in union activities. However, under the doctrine of necessary
implication, the disqualification of managerial employee rule justifies exclusion of confidential
employees.

Employees-Members of Cooperatives:
An employee of a cooperative who is a member and co-owner thereof cannot invoke the right to
collective bargaining, for certainly, an owner cannot bargain with himself or his co-owners.

However, insofar as it involves cooperatives with employees who are not members or co-owners
thereof, such employees are entitled to exercise the rights of all workers to organization, collective
bargaining negotiations and others. (San Jose Electric Service Cooperative v. Ministry of Labor, G.R.
No. 77231, 1989)

Employee-Members of cooperatives cannot invoke the right to collective bargaining due to the fact of
ownership but they are allowed to form an association for their mutual aid and protection as
employees. (Planters Products, G.R. No. 78524, 1989; Benguet Electric, G.R. No. 79025, 1989)
Government Employees Note: The prohibition/s are not absolute. Employees of government
corporations established under the Corporation Code shall have the right to organize and to bargain
collectively with their respective employers.

All other employees of the civil service shall have the right to form associations for purposes not
contrary to law. (Art. 254, Labor Code)

Commingling or Mixed Membership:

A commingling or mixture of membership is the inclusion as union members of employees outside the
bargaining unit. It also refers to any mingling between supervisory and rank-and-file employees in its
membership in a legitimate organization. (Samahang Mangagawa Charter Chemical Solidarity of
Unions in the Philippines for Empowerment and Reforms (SMCC-SUPER) v. Charter Chemical and
Coating Corporation, GR. No. 169717, 16 March 2021.)

Effect If Some Union Members Do Not Belong the Bargaining Unit:

Union membership of employees who are not covered by the collective bargaining unit, cannot be
invoked as a ground for cancellation of the registration of the union. The said employees will merely
be deleted from the list of union members.

The professional/technical employees of petitioner should be excluded in the union consists of

supervisory employees, because they are not supervisory but are classified as Rank and File
employees. (Philippine Phosphate v. Torres)

Meaning of the Duty to Bargain Collectively:

1. The performance of a mutual (employer and the exclusive bargaining agent) obligation to meet
and convene,
2. Promptly and expeditiously in good faith
3. For the purpose of negotiating an agreement with respect to wages, hours of work and all other
terms and conditions of employment, including proposals for adjusting any grievances or
questions arising under such agreement, and
4. Executing a contract incorporating such agreements, if requested by either party. (Labor Code,
Art. 263)
Parties to Collective Bargaining:
1. Employer.
2. Employees, represented by the exclusive bargaining agent.

The duty to bargain collectively arises only between the employer and its employee. (Allied Free
Workers Union v. Compania Maritima, G.R. Nos. L-122951-52, 1967)

Jurisdictional Pre-Conditions of Collective Bargaining:

1. Status of majority representation of the employees’ representative;
2. Proof of majority representation; and
3. Demand to bargain under Art. 261(a) (Kiok Loy v. NLRC, G.R. No. 54334, 1986).

Pending Petition for Cancellation of Union Registration:

Pendency of a petition for cancellation of union registration does NOT preclude collective bargaining.
It shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition
for certification election (Sec. 3, Rule XI of D.O. 40-03) Purpose of Collective Bargaining Purpose of
collective bargaining is the reaching of an agreement resulting in a contract binding on the parties; but
the failure to reach an agreement after negotiations have continued for a reasonable period does not
establish a lack of good faith. The statutes invite and contemplate a collective bargaining contract, but
they do not compel one. The duty to bargain does not include the obligation to reach an agreement
(Union of Filipro Employees v. Nestle Phils., G.R. 158930-31, 2008)

It is one of the democratic frameworks under the Labor Code, designed to stabilize the relation
between labor and management and to create a climate of sound and stable industrial peace. It is a
mutual responsibility of the employer and the Union and is characterized as a legal obligation. (Kiok
Loy v. NLRC, GR L-54334, January 22, 1986)

When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that
neither party shall terminate nor modify such agreement during his lifetime. (LC, Art. 264)

In the absence of agreement or other voluntary arrangement providing for a more expeditious manner
of collective bargaining, it shall be the duty of the employer and the representatives of the employees
to bargain collectively. (LC Art 262)

Certification Year:
If the jurisdictional preconditions are present, the collective bargaining should begin within 12 months
following the determination and certification of the employee’s exclusive bargaining representative.
This period is known as the “certification Year”. (Azucena, supra at 382)

Note: Absent unusual circumstances, an employer commits ULP by refusing to bargain with the
Union during the certification year, notwithstanding the repudiation of the Union by a majority of its
employees before expiration of the 1-year period 92 Azucena, supra at 382).

Collective Bargaining Agreement:

Is a contract by and between an employer and its employees concerning wages, hours of work, and
other terms and conditions of employment.
Limitations to the Duty to Bargain:
The duty to bargain does not compel any party to agree to a proposal or to make any concession
(Labor Code, Art. 263).

No duty to agree even on mandatory subjects:

The law speaks of a duty to bargain but not of an obligation to agree. The law does not compel
agreements between employers and employees, and neither party is legally obligated to yield even
on a mandatory bargaining subject. (Azucena, 2016)

Automatic Renewal Clause:

At the expiration of the freedom period, the employer shall continue to recognize the majority status of
the incumbent bargaining agent where no petition for certification election is filled. It shall be the duty
of both parties to keep the status quo and to continue in full force and effect the terms and conditions
of the existing agreement during the 60- day period and/or until a new agreement is reached by the
parties. (Labor Code, Art. 264)

NOTES:
General Rule: When there is a CBA, the duty to bargain also means that neither party shall terminate
nor modify such agreement during its lifetime.

Exception: 60 days before the CBA expires, either party may notify the other in writing that it wants
to terminate or modify the agreement. The CBA remains in full force and effect during the 60 day
period and until a new agreement is reached.

A “no strike, no lockout” provision in the CBA is a valid stipulation, although the clause may be
invoked by an employer only when the strike is economic in nature or one which is conducted to force
wage or other concessions from the employer that are not mandated to be granted by the law itself.

Effectivity of the CBA:

1. First CBA - Effectivity date depends upon the agreement of the parties.

NOTE: The determining point is the date the parties agreed, not the date they signed.

2. Renegotiated CBA - If within six (6) months from the expiry date of the old CBA, then the new CBA
starts to take effect on the date following such expiry date. If beyond six (6) months, the
retroaction date will have to be agreed upon by the parties.

Effectivity of an Arbitral Award:

Collective Bargaining Agreement arbitral awards granted after six months from the expiration of the
last Collective Bargaining Agreement shall retroact to such time:
(1) agreed upon by both employer and the employees or their union;
(2) in the absence of such an agreement as to retroactivity, to the first day after the six-month period
following the expiration of the last day of the Collective Bargaining Agreement should there be
one; or
(3) In the absence of a Collective Bargaining Agreement, the Secretary’s determination of the date of
retroactivity as part of his discretionary powers over arbitral awards shall control.

Duration of the CBA:

1. With respect to the representation aspect, the same lasts for 5 years.
No petition questioning the majority status of the incumbent bargaining agent shall be
entertained and no certification election shall be conducted by the DOLE outside the 60-day
period immediately prior to the expiration of such 5-year term of the CBA.

2. With respect to all other provisions (economic and non-economic other than representational), of
the CBA, it shall be renegotiated not later than 3 years after its execution. (LC, Art. 265).

Freedom Period:
Is the 60-day period immediately preceding the expiration of the representation period of 5 years in
the CBA.

Substitutionary Doctrine:
Where there occurs a shift in the employee’s union allegiance after the execution of a collective
bargaining contract with the employer, the employees can change their agent (the labor union); but
the collective bargaining contract which is still subsisting continues to bind the employees up to its
expiration date. They may, however, bargain for the shortening of said expiration date.

Bargaining Unit:
A group of employees sharing mutual interests within a given employer unit, comprised of all or less
than all of the entire body of employees in the employer unit or any specific occupational or
geographical grouping within such employer unit. (D.O. No. 40-03, Sec. 1[d], Rule I, Book V)

Summary: Signification of Determining the Bargaining Unit:

1. In a Certification Election, the voters are the whole bargaining unit, whether union or nonunion
members (Labor Code, Arts. 267);
2. In a CBA Ratification, the voters are the whole bargaining unit, and not just the union members
(Labor Code, Art 237); and
3. In Strike Voting, the voters are the members of the union, not the whole bargaining unit. (Labor
Code, Art. 278[f])

Exclusive Bargaining Representative:

Any legitimate labor organization duly recognized or certified as the sole and exclusive bargaining
representative or agent of all the employees in a bargaining unit. (IRR of LC, Book V, Rule 1, Sec. 1
as amended by D.O. 40-03)
Methods to Determine the Bargaining Representative:
a) Request for SEBA Certification
b) Certification Election
c) Run-off Election
d) Consent Election
e) Re-Run Election

a) Request for SEBA Certification:

The process whereby the DOLE recognizes a labor organization as the exclusive bargaining
representative of the employees in the bargaining unit.

Voluntary recognition was repealed and replaced by a Request for the Sole and Exclusive Bargaining
Agent Certification (D.O. No. 40-I-15 Series of 2015).

SEBA Certification may be issued if it is proved that the following concur:

1. The bargaining unit is not ununionized;
2. The requesting union is the only union in that bargaining unit; and
3. The CBU majority are members of the union

Where to File:
Regional Office which issued the legitimate labor organization’s certificate of registration or certificate
of creation of chartered local.

Requirements for Request of SEBA Certification: The request shall indicate:

1. The name and address of the requesting legitimate labor organization;
2. The name and address of the company where it operates;
3. The bargaining unit sought to be represented;
4. The approximate number of employees in the bargaining unit; and
5. The statement of the existence/nonexistence of other labor organization/CBA.
6. List of employees who support the certification, numbering at least majority of the CBU.

The certificate of registration or certification of creation as duly certified by the president of the
requesting union or of the federation of the local, respectively, shall be attached to the request.

Action on the Request:

Within 1 day from the submission of the request, the Regional Director shall:
1. Determine whether the request is compliant with the rules and whether the bargaining unit sought
to be represented is organized or not
2. Request a copy of the payroll for purposes of SEBA certification

If he/she finds it deficient, the Regional Director shall advise the requesting union or local to comply
within 10 days from notice. Failure to comply is deemed a withdrawal of the request.

Effects of Certification:
1. Upon the issuance of the certification as SEBA, the certified union or local shall enjoy the rights
and privileges of an exclusive bargaining agent of all the employees in the covered bargaining
unit.
2. The certification shall bar the filing of a petition for certification by any labor organization for a
period of 1 year from the date of its issuance. Upon expiration of this 1- year period, any legitimate
labor organization may file a petition for certification election in the same bargaining unit
represented by the certified labor organization, unless a CBA between the employer and the
certified labor organization was executed and registered with the Regional Officer in accordance
with Rule XVII of this rules. (D.O. 40-i-15)

b. CERTIFICATION ELECTION:
It is the process of determining through secret ballot the sole and exclusive representative of the
employees in an appropriate bargaining unit, for purposes of CB or negotiation. (Sec. 1(h), Rule I,
Book V, IRR)

Purpose:
The ascertainment of the wishes of the majority of the employees in the appropriate bargaining unit:
to be or not to be represented by a labor organization, and in the affirmative case, by which particular
labor organization. (Reyes v. Trajano, G.R. No. 84433, 1992)

Whenever there is doubt as to whether a particular union represents the majority of the rank-and-file
employees, in the absence of a legal impediment, the holding of a certification election is the most
democratic method of determining the employees’ choice of their bargaining representative. It is the
appropriate means whereby controversies and disputes on representation may be laid to rest, by the
unequivocal vote of the employees themselves. (Philippine Airlines Employees’ Association (PALEA)
v. Ferrer-Calleja, G.R. No. 76673, 1988)

Issues Involved in a Certification Election:

1. Proper composition and constituency of the bargaining unit; and
2. Veracity of membership claims of the competing unions so as to identify the union that will serve
as the bargaining representative of the entire bargaining unit

Note: The questions to be resolved in a Certification Election:

1. Whether the employees want to be represented
2. By whom should they be represented

Pending Petition for Cancellation of Registration is not a Bar for a Certification Election:
An order to hold a certification election is proper despite the pendency of the petition for cancellation
of the registration certificate of the respondent union because at that time the union filed its petition, it
still had the legal personality to perform such act absent an order directing the cancellation (Legend
International Resorts Limited v. Kilusang Manggagawa ng Legenda, G.R. 169754, 2006).

Certification Election in UNORGANIZED Establishment:

Unorganized establishment is an establishment without a bargaining representative.
Who May File:
Any legitimate labor organization including:
1. A national union or federation which has already issued a charter certificate to its local/chapter
participating in the certification election or a local/chapter which has been issued a charter
certificate by the national union or federation. (Labor Code, Art. 269)
2. An employer may file a Petition for Certification Election when: a. Requested to bargain
collectively; and b. No bargaining agent nor a registered CBA exists in the unit. (Labor Code, Art.
270)

Requisites for holding a certification election in an unorganized establishment (Labor Code,

Art. 269):

Once a petition is filed by a legitimate labor organization, the Med-Arbiter shall automatically order the
conduct of a certification election.

When to File: Any time, except within 12 months of a previous election (if any).

Certification Election in ORGANIZED Establishment:

Organized Establishment is an enterprise where there exists a recognized or certified sole and
exclusive bargaining agent. (Sec. 1(11) Rule I, Book V, Rules Implementing the Labor Code)

Who May File Any:

Legitimate labor organization, including:
1. A national union or federation which has already issued a charter certificate to its local chapter
participating in the certification election. (Labor Code, Art. 268) (National union or federation shall
not be required to disclose the names of the local/chapter’s officers and members, but shall attach
to the petition the charter certificate it issued to its local/chapter Sec. 1, Rule VIII of D.O. 40- I15)
2. A local chapter which has been issued a charter certificate by the national union or federation
before the DOLE within the 60- day freedom period. (Labor Code, Art. 268)

Requisites:
1. a verified petition has been filed,
2. by a legitimate labor organization,
3. within the freedom period (60-day period prior to the expiry of the CBA)
4. supported by the written consent of at least 25% of all the employees in the bargaining unit

25% Consent Not Necessary:

When an employer files a petition for certification election, it is not necessary to support the petition
with the consent of 25% of the employees within the bargaining unit.

The requisite written consent of at least 20% (now 25%) of the workers in the bargaining unit applies
to certification election only, and not to motions for intervention. (PAFLU v. Calleja, G.R. No. 79347,
1989)
When to file:
The proper time to file a petition for C.E. depends on whether the bargaining unit has a CBA or not.

If it has no CBA, the petition may be filed anytime except within 12 months of a previous election (if
any). If the bargaining unit has a CBA, the petition can be filed only within the “freedom period” which
is the last 60 days of the 5th year of the CBA.

Bar Rules:
No certification election may be held under the following rules:
1. Certification year bar rule;
Under this rule, a petition for certification election may not be filed within one (1) year from the date a
valid certification, consent, run-off, or re-run election has been conducted within the bargaining unit.
This is also called as the 12-month Bar rule.

vis. Statutory Bar Rule:

Bars the filing of the PCE within a period of 1 year from the date of a valid conduct of a certification,
consent, run-off or re-run election where no appeal on the results thereof was made (Sec. 14(d), Rule
VIII Book V of the IRR Labor Code)

Note: The 1-year period for “statutory bar” begins to run on the actual date of the prior election, not
from the date the SEBA was certified, which is the reckoning date for another rule – the “certification
year bar”. If prior election results in a vote for “No Union”, the 1 year period runs from the date of
election

2. Negotiations bar rule;

Under this rule, no petition for certification election should be entertained while the sole and exclusive
bargaining agent and the employer have commenced and sustained negotiations in good faith within
the period of one (1) year from the date of a valid certification, consent, run-off, re-run, or from the
date of voluntary recognition.
3. Bargaining deadlock bar rule; or
If the collective bargaining negotiations resulted in a deadlock and the deadlock has been submitted
to conciliation or arbitration or had become the subject of a valid notice of strike or lockout, filing a
petition for certification election by any union is barred.

4. Contract bar rule.

A duly registered CBA will bar any union from filing a petition for certification election, except during
the 60-day period immediately before the expiry of the five-year term of the CBA.

Double Majority Rule:

For there to be a certification of a union, the following must be present:
1. Majority of the bargaining unit must have voted; AND
2. The winning union must have garnered majority of the valid votes cast. (National Union of
Workers In Hotels, Restaurant and Allied Industries-Manila Pavilion Hotel Chapter v. Secretary of
Labor, G.R. No. 181531, 2009)

Note: An election is valid even without a winning union. The double majority rule is for certification of
a union, not for validity of the elections. As long as the majority of the eligible voters voted, the
election is valid.

Note: Spoiled ballots are not reckoned to determine majority (PAFLU v. BLR, G.R. No. L43760, 1976)
Valid votes are those not challenged, damaged, etc.

c) RUN-OFF ELECTION:
Run-Off Election is proper when:
1. an election conducted when in a certification election with at least three (3) choices;
2. none of the choices obtained a majority of the valid votes cast;
3. the total number of votes for all the contending unions is at least 50% of the total number of votes
cast;
4. there are no challenged ballots which can materially alter the results.

Note: A run-off election will be conducted between the labor unions receiving the two (2) highest
number of votes in such certification election or consent election. The third union and the others, if
any, will no longer be allowed to participate in such election. And for obvious reason, the choice of
“No Union” should no longer be included in the run-off election.

ABSTENTION - refers to a blank or unfilled ballot validly cast by an eligible voter. It is not considered
as a negative vote but is considered a valid vote in determining a valid election. (Sec. 1[a], Rule I,
D.O. No. 40-I-15).

SPOILED BALLOT - refers to a ballot that is torn, defaced, or contains marking which can lead
another to clearly identify the voter who casts such vote (Sec. 1[ww], Rule I, D.O. No. 40-I-15).
d) CONSENT ELECTION:
Is an election that is voluntarily agreed upon by the parties with or without the intervention of DOLE
for the purpose of determining the SEBA.

Note: If done as part of a certification election case, i.e., with the intervention of the DOLE, a consent
election shall have the same legal effect as a certification election.

Procedure in Consent Elections if Agreed in the Course of Proceeding of Petition for

certification Election:
1. In case the contending unions agree to a consent election, the Med-Arbiter shall not issue a
formal order calling for the conduct of certification election, but shall enter the fact of the
agreement in the minutes of the hearing.
2. The minutes of the hearing shall be signed by the parties and attested to by the Med-Arbiter.
3. The employer may be required to submit the certified list of employers in the bargaining unit or
where necessary, the payrolls at the time of filing of the petition. (Sec. 2, Rule IX)
4. The Med-Arbiter shall, immediately thereafter, forward the records of the petition to the Regional
Director or his/her authorized representative for the determination of the Election Officer by the
contending unions through raffle.
5. The first pre-election conference shall be scheduled within 10 days from the date of entry consent
election agreement. (See Annex G) (Sec. 11, Rule VIII of D.O. 40-03).

Effects of Consent Election:

Where a petition for certification election is filed, and upon the intercession of the Med-Arbiter, the
parties agreed to hold a consent election, the results shall constitute a bar to the holding of a
certification election for one year from the holding of such consent election.

Where an appeal has been filed from the results of the consent election, the running of the one-year
period shall be suspended until the decision on appeal has become final and executory. Where no
petition for certification election was filed but the parties themselves agreed to hold a consent election
with the intercession of the Regional Office, the results thereof shall constitute a bar to another
petition for certification election. (Sec. 25 Rule VIII of D.O. 40-03).

e) RE-RUN ELECTION:
“Re-run Election” refers to an election conducted to break a tie between contending unions, including
between “no union” and one of the unions. It shall likewise refer to an election conducted after a
failure of election has been declared by the election officer and/or affirmed by the mediator-arbiter.

When a certification, consent or run-off election results to a tie between the two (2) choices, the
Election Officer shall immediately notify the parties of a re-run election. The Election Officer shall
cause the posting of the notice of re-run election within five (5) days from the certification, consent or
run-off election. The re-run election shall be conducted within ten (10) days after the posting of notice.

The choice receiving the highest votes cast during the re-run election shall be declared the winner
and shall be certified accordingly.
COMPUTATION IN THE REVIEWER!!!