Paulino Ungos III

Lawyer | Law Professor | Author

Category: Labor Law

  • Employees of the Principal

    Diamond Farms Agrarian Reform Beneficiaries Multi-Purpose Cooperative (DARBMUPCO) was a multi-purpose cooperative composed of agrarian reform beneficiaries who were awarded portions of the banana plantation of Diamond Farms, Inc. (DFI).

    DARBMUPCO entered into a Banana Production and Purchase Agreement (BPPA) with DFI. Under the BPPA, DARBMUPCO and its members, as owners of the awarded plantation, agreed to grow and cultivate only high grade quality exportable bananas to be sold exclusively to DFI.

    DARBMUPCO was, however, hampered by lack of manpower to undertake the agricultural operation under the BPPA because some of its members were not willing to work. Hence, to assist DARBMUPCO in meeting its production obligations under the BPPA, DFI engaged the services of contractors. Said contractors recruited workers for the agricultural operation under the BPPA.

    The legitimate labor organization representing the workers filed a petition for certification election in the Office of the Med-Arbiter. DARBMUPCO and DFI, however, denied that they were the employers of the workers. They claimed, instead, that the workers were the employees of the contractors.

    A group of workers then filed a case for money claims and attorney’s fees against DFI, DARBMUPCO, and the contractors before the National Labor Relations Commission (NLRC). DARBMUPCO and DFI also averred that they were not the employers of the workers. They asserted that the money claims should be directed against the true employer, the contractors.

    Who among DFI, DARBMUPCO, and the contractors is the employer of the workers?

    Job contracting is permissible if the following conditions are met:

    • The contractor carries on an independent business and undertakes the contract work on his own account, under his own responsibility, according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work, except as to the results thereof; and
    • The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business.

    By contrast, there is labor-only contracting if a person who undertakes to supply workers to an employer:

    • Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials; and
    • The workers recruited and placed by such person are performing activities which are directly related to the principal business or operations of the employer in which workers are habitually employed.

    In this case, the Supreme Court held that DFI was the true employer of the workers and that the contractors were labor-only contractors.

    First, the Court found no evidence showing that herein contractors could be considered as independent contractors. The contractors, DFI, and DARBMUPCO also did not offer any proof that the contractors were not engaged in labor-only contracting.

    Second, the Court found that the contractors also admitted and even insisted that they were engaged in labor-only contracting.

    Record showed it was DFI which hired the contractors, who, in turn, hired their own men to work in the land of DARBMUPCO and in the plantation.

    DFI did not deny that it engaged the services of the contractors. It did not dispute the claims of the contractors that they sent their billing to DFI for payment, and that DFI’s managers and personnel were in close consultation with the contractors.

    DFI admitted that the contractors worked under the direction and supervision of the DFI managers and personnel. DFI paid the contractors for the services rendered in the plantation and the contractors, in turn, paid their workers after the contractors received payment from DFI. DARBMUPCO had nothing to do with the hiring, supervision and payment of the wages of the workers thru the contractors.

    That DFI was the employer of the workers was bolstered by the fact that DFI exercised control over the workers. DFI, through its manager and supervisors, provided for the work assignments and performance targets of the workers. The managers and supervisors also had the power to directly hire and terminate the workers. Evidently, DFI wielded control over the workers.

    During the proceedings before the Office of the Labor Arbiter, the contractors categorically stated that they are “labor-only” contractors who have been engaged by DFI and DARBMUPCO. They admitted that they did not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials, and they recruited workers to perform activities directly related to the principal operations of their employer.

    In their petition before the Supreme Court, the contractors again admitted that they were labor-only contractors by way of the following narration:

    1. Herein respondents, Voltaire Lopez, Jr., et al., were commissioned and contracted by petitioner, Diamond Farms, Inc. (DFI) to recruit farm workers, who are the complaining [respondent-workers] (as represented by Southern Philippines Federation of Labor (SPFL) in this appeal by certiorari), in order to perform specific farm activities, such as pruning, deleafing, fertilizer application, bud inject, stem spray, drainage, bagging, etc., on banana plantation lands awarded to private respondent, Diamond Farms Agrarian Reform Beneficiaries Multi-Purpose Cooperative (DARBMUPCO) and on banana planted lands owned and managed by petitioner, DFI.
    2. All farm tools, implements and equipment necessary to performance of such farm activities were supplied by petitioner DFI to respondents Voltaire Lopez, Jr., et al. as well as to respondents-SPFL, et al. Herein respondents Voltaire Lopez, Jr. et al. had no adequate capital to acquire or purchase such tools, implements, equipment, etc.
    3. Herein respondents Voltaire Lopez, Jr., et al. as well as respondents-SPFL, et al. were being directly supervised, controlled and managed by petitioner DFI farm managers and supervisors, specifically on work assignments and performance targets. DFI managers and supervisors, at their sole discretion and prerogative, could directly hire and terminate any or all of the respondents-SPFL, et al., including any or all of the herein respondents Voltaire Lopez, Jr., et al.
    4. Attendance/Time sheets of respondents-SPFL, et al. were being prepared by herein respondents Voltaire Lopez, Jr., et al., and correspondingly submitted to petitioner DFI. Payment of wages to respondents-SPFL, et al. were being paid for by petitioner DFI thru herein respondents Voltaire Lopez, [Jr.], et al. The latter were also receiving their wages/salaries from petitioner DFI for monitoring/leading/recruiting the respondents-SPFL, et al.
    5. No monies were being paid directly by private respondent DARBMUPCO to respondents-SPFL, et al., nor to herein respondents Voltaire Lopez, [Jr.], et al. Nor did respondent DARBMUPCO directly intervene much less supervise any or all of [the] respondents-SPFL, et al. including herein respondents Voltaire Lopez, Jr., et al.

    According to the Court, the contractors voluntarily pleaded that they were labor-only contractors. Such admissions had bound them.

    Third, the Court ruled that DFI could not argue that DARBMUPCO was the principal of the contractors because it (DARBMUPCO) owned the awarded plantation where contractors and workers were working; and therefore DARBMUPCO was the ultimate beneficiary of the employment of the workers.

    That DARBMUPCO owned the awarded plantation where the contractors and workers were working was immaterial. This did not change the situation of the parties. DFI, as the principal, hired the contractors and the latter, in turn, engaged the services of the workers.

    And fourth, the Court stated that neither could DFI argue that it was only the purchaser of the bananas produced in the awarded plantation under the BPPA, and that under the terms of the BPPA, no employer-employee relationship existed between DFI and the workers, to wit:

    UNDERTAKING OF THE FIRST PARTY

    x x x

    THE FIRST PARTY [DARBMUPCO] shall be responsible for the proper conduct, safety, benefits and general welfare of its members working in the plantation and specifically render free and harmless the SECOND PARTY [DFI] of any expense, liability or claims arising therefrom. It is clearly recognized by the FIRST PARTY that its members and other personnel utilized in the performance of its function under this agreement are not employees of the SECOND PARTY.

    In labor-only contracting, it is the law which creates an employer-employee relationship between the principal and the workers of the labor-only contractor.

    Inasmuch as it is the law that forms the employment ties, the stipulation in the BPPA that workers were not employees of DFI was not controlling, as the proven facts showed otherwise. The Court stressed that the law prevails over the stipulations of the parties. The existence of an employer-employees relation is a question of law and being such, it cannot be made the subject of agreement.

    A finding that a contractor is a labor-only contractor is equivalent to a declaration that there is an employer-employee relationship between the principal, and the workers of the labor-only contractor; the labor-only contractor is deemed only as the agent of the principal.

    Thus, in this case, contractors were found to be labor-only contractors, and DFI was declared the true employer of the workers. Under the law, DFI should be solidarily liable with the contractors for the rightful claims of the workers, to the same manner and extent as if the latter were directly employed by DFI.

    Further reading:

    • Diamond Farms, Inc. v. Southern Philippines Federation of Labor-Workers Solidarity of DARBMUPCO/Diamond-SPFL, G.R. Nos. 173254-55 & 173263, January 13, 2016.

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  • Offer to Pay Monetary Award

    In the present case, the Court of Appeals reversed the decision of the National Labor Relations Commission and reinstated the Labor Arbiter’s dismissal of the complaint.

    Complainant moved to reconsider the decision of the Court of Appeals, arguing that respondent’s offer to pay the monetary award granted by the National Labor Relations Commission was a compromise agreement that “operates to end litigation and put the case to rest.” The Court of Appeals denied the motion for reconsideration, after which the complainant went to the Supreme Court.

    Has respondent’s offer to pay the monetary award of the National Labor Relations Commission constituted a compromise agreement that should have ended the present case?

    No.

    The Supreme Court held that respondent’s offer to pay the said amount was not in the nature of a compromise agreement.

    The Court found that the reason for the offer of payment was complainant’s move to execute the decision of the National Labor Relations Commission, that then left respondent with no recourse but to pay. Such payment was in compliance with the writ of execution issued by the Commission.

    The Rules of Procedure of the National Labor Relations Commission provides that its decisions, resolutions or orders shall become final and executory after ten (10) calendar days from receipt thereof. It also states that a writ of execution may be issued motu proprio or on motion, upon a decision or order that has become final and executory. The execution of the final and executory decision or resolution of the Commission shall proceed despite the pendency of a petition for certiorari, unless it is restrained by the proper court.

    Since the Court of Appeals issued no temporary restraining order or writ of injunction against the decision of the National Labor Relations Commission, such judgment became final and executory after ten calendar days from its receipt by counsel or party. Consequently, the petitioner moved for the issuance of the writ of execution. Respondent avers that the issuance of the writ of execution and notice of garnishment forced it to pay the monetary award of the National Labor Relations Commission to avoid its bank account being frozen and to prevent the cessation of its operations.

    The Supreme Court thus found no intent on the part of the respondent to enter into a compromise agreement to put an end to this dispute. According to the Court, if such was the case, then the respondent could have simply moved to withdraw its petition before the Court of Appeals, specifically manifesting the execution by the parties of a compromise agreement. On the contrary, respondent was found to have pursued its case before the Court of Appeals and vigorously opposed the petition the Supreme Court.

    Further reading:

    • Quiro–Quiro v. Balagtas Credit Cooperative & Community Development, Inc., G.R. No. 209921, January 13, 2016.

  • Med-Arbiter’s Ruling on the Existence or Non-existence of Employer-employee Relationship

    On 1 July 2007, complainants formed a union and registered it with the Department of Labor and Employment (DOLE). On 24 August 2007, the union filed a petition for certification election before the DOLE.

    In September 2007, complainants were terminated from their employment on the ground of cessation of business operations by the contractor-growers of Hijo Resources Corporation (HRC). On 19 September 2007, complainants, represented by the union, filed a case for unfair labor practices, illegal dismissal, and illegal deductions with a prayer for damages and attorney’s fees before the National Labor Relations Commission (NLRC).

    On 19 November 2007, the DOLE Med-Arbiter issued an Order dismissing the union’s petition for certification election because no employer-employee relationship existed between the complainants and HRC. Complainants did not appeal the Med Arbiter’s Order but pursued the illegal dismissal case they filed.

    Is the Labor Arbiter in the illegal dismissal case bound by the ruling of the Med-Arbiter regarding the existence or non-existence of employer-employee relationship between the parties in the certification election case?

    No.

    The Supreme Court applied Sandoval Shipyards, Inc. v. Pepito 1G.R. No. 143428, June 25, 2001, 412 PHIL 148-157, which cited Manila Golf & Country Club, Inc. v. Intermediate Appellate Court 2G.R. No. 64948, September 27, 1994, 307 PHIL 219-230, and reiterated the nature of a certification proceeding.

    A decision in a certification election case regarding the existence of an employer-employee relationship does not foreclose all further dispute between the parties as to the existence or non-existence of such relationship.

    It is well settled that for res adjudicata, or the principle of bar by prior judgment, to apply, the following essential requisites must concur:

    (1) there must be a final judgment or order;

    (2) said judgment or order must be on the merits;

    (3) the court rendering the same must have jurisdiction over the subject matter and the parties; and

    (4) there must be between the two cases identity of parties, identity of subject matter and identity of cause of action.

    Clearly implicit in these requisites is that the action or proceedings in which is issued the ‘prior Judgment’ that would operate in bar of a subsequent action between the same parties for the same cause, be adversarial, or contentious, ‘one having opposing parties; (is) contested, as distinguished from an ex parte hearing or proceeding . . . of which the party seeking relief has given legal notice to the other party and afforded the latter an opportunity to contest it.’ and a certification case is not such a proceeding x x x

    A certification proceeding is not a ‘litigation’ in the sense in which this term is commonly understood, but a mere investigation of a non-adversary, fact-finding character, in which the investigating agency plays the part of a disinterested investigator seeking merely to ascertain the desires of the employees as to the matter of their representation. The court enjoys a wide discretion in determining the procedure necessary to insure the fair and free choice of bargaining representatives by the employees. (Emphasis, mine.)

    Further reading:

    • Hijo Resources Corp. v. Mejares, G.R. No. 208986, January 13, 2016.

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  • Continuing Need and Desirability of Services

    The Supreme Court did not give credence to the claim that Mr. L was not OH, Inc.’s regular employee.

    The Labor Code of the Philippines1Under Article 295 (formerly Article 280) provides:

    Art. 295. Regular and casual employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking, the completion or termination of which has 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 employment is for the duration of the season.


    An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

    In this case, the Court found that Mr. L was under the continuous employ of OH, Inc. since 3 March 1995 until the latter placed him on floating status in February 2000.

    OH, Inc. was engaged in the business of managing residential and commercial condominium units at the OE Residences, a condominium hotel building in Makati City. Its business required that it maintained a pool of housekeeping staff to ensure that the premises remain an uncluttered place of comfort for the occupants.

    OH, Inc. continuously employed Mr. L precisely because of the indispensability of his services to its business.

    According to the Court, his uninterrupted employment by OH, Inc., that spanned more than a year, manifested the continuing need and desirability of his services, which characterize regular employment.

    Further reading:

    • Olympia Housing, Inc. v. Lapastora, G.R. No. 187691, January 13, 2016.

  • Defiance of Assumption/Certification Orders

    Once the Secretary of Labor assumes jurisdiction over a labor dispute, a strike, whether actual or intended, is automatically enjoined. If a strike has been declared, the strikers must return to work even if they filed a motion for reconsideration of the assumption order.1ARTICLE 278. (Formerly 263) Strikes, Picketing, and Lockouts. — x x x (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. x x x

    The moment a striker defies a return-to-work order, he is deemed to have abandoned his job. It is already in itself knowingly participating in an illegal act. Considering that an illegal act was committed, all strikers, whether union officers or plain members, may be declared to have lost their employment status.2ARTICLE 279. (Formerly 264) Prohibited Activities. — (a) x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status x x x

    In this case, the Airline Pilots Association of the Philippines (ALPAP) filed a Notice of Strike on June 5, 1998 and staged a strike against the Philippine Airlines (PAL) on the same day at around 5:30 in the afternoon. The Secretary of the Department of Labor and Employment (DOLE) issued a Return-to-Work Order on 7 June 1998 after failing to to amicably settle the dispute between them. The said order stated:

    “WHEREFORE, FOREGOING PREMISES CONSIDERED, all striking officers and members of ALPAP are hereby ordered to return to work within twenty-four (24) hours from receipt of this Order and for PAL management to accept them under the same terms and conditions of employment prior to the strike.


    “Our directive to both parties to cease and desist from committing any and all acts that will exacerbate the situation is hereby reiterated.”

    ALPAP was served a copy of the Return-to-Work Order on 8 June 1998. Thus, the ALPAP strikers had 24 hours, or until 9 June 1998, to comply with said Order. However, the strikers only reported back to work on 26 June 1998. As a result of their defiance of the DOLE Secretary’s Return-to-Work Order, the strikers lost their employment status as of 9 June 1998.

    One pilot, Ruderico C. Baquiran, filed a complaint claiming that he was illegally dismissed from employment. The Supreme Court, however, disagreed for it found no evidence that he complied, or at least, attempted to comply with the Return-to-Work Order. Neither was there a showing that he reported back for work with the other ALPAP members on 26 June 1998. According to the Court, Baquiran cannot be in a better position than the other ALPAP members who belatedly reported for work on 26 June 1998 and were still deemed to have lost their employment. Baquiran simply abandoned his job.

    By contrast, the Court reached a different conclusion with regard to another pilot, Gladys L. Jadie, also a complainant in the illegal dismissal case. The Court found that Jadie was on maternity leave during the strike. She did not join the strike and could not be reasonably expected to report back for work by 9 June 1998 in compliance with the Return-to-Work Order. PAL’s act of terminating her employment was accordingly declared illegal.

    Further reading:

    • Rodriguez v. Philippine Airlines, Inc., G.R. Nos. 178501 & 178510, January 11, 2016.

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  • Transfer versus Promotion

    Somido and Cortes were engaged as a Warehouse Checker and Forklift Operator, respectively.

    The employer in this case dismissed these employees for insubordination. It explained that it merely transferred the latter to the Delivery Section to work as a Delivery Supervisor/Coordinator without any change in ranks, status and salaries. Since said employees arrogantly refused to comply with its directive, they were consequently dismissed from employment for valid cause.

    The Supreme Court disagreed.

    The Court examined the positions of Warehouse Checker and Forklift Operator and found that they were classified as rank-and-file employees. On the other hand, the Court found that the job of a Delivery Supervisor/Coordinator required the exercise of discretion and judgment from time to time. Specifically, a Delivery Supervisor/Coordinator

    • assigned teams to man the trucks;
    • oversaw the loading of goods;
    • checked the conditions of the trucks;
    • coordinated with account specialists in the outlets regarding their delivery concerns; and
    • supervised other personnel about their performance in the warehouse.

    A Delivery Supervisor/Coordinator’s duties and responsibilities were apparently not of the same weight as those of a Warehouse Checker or Forklift Operator. Despite the fact that no salary increases were effected, the Court viewed the employees’ assumption of the post of a Delivery Supervisor/Coordinator as a promotion. The employees’ refusal to accept the same was therefore valid.

    An employee is not bound to accept a promotion, which is in the nature of a gift or reward. Refusal to be promoted is a valid exercise of a right. Such exercise cannot be considered in law as insubordination, or willful disobedience of a lawful order of the employer, hence, it cannot be the basis of an employee’s dismissal from service.

    Further reading :

    • Echo 2000 Commercial Corp. v. Obrero Filipino-Echo 2000 Chapter-CLO, G.R. No. 214092, January 11, 2016.

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  • Proving Involuntary Resignations

    It is incumbent upon an employee to prove that his or her resignation is not voluntary.

    The overseas Filipino worker in this case maintained that she was threatened and coerced by her employer to write the resignation letter, to accept the financial assistance and to sign the waiver and settlement. She insisted that her act of resigning was involuntary and thus concluded that she has been illegally dismissed from employment.

    Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether in fact, he or she intended to sever from his or her employment.

    In this case, the Supreme Court was not convinced of complainant’s assertions, for it was unable to find proof supporting the same.

    First, in illegal dismissal cases, the employer has the burden of proving that the employee’s dismissal was legal. However, to discharge this burden, the employee must first prove, by substantial evidence, that he had been dismissed from employment. Here, the Court found no competent evidence to prove that her employer used force and threat before she wrote the resignation letter.

    For intimidation to vitiate consent, the following requisites must be present:

    • that the intimidation caused the consent to be given;
    • that the threatened act be unjust or unlawful;
    • that the threat be real or serious, there being evident disproportion between the evil and the resistance which all men can offer, leading to the choice of doing the act which is forced on the person to do as the lesser evil; and
    • that it produces a well-grounded fear from the fact that the person from whom it comes has the necessary means or ability to inflict the threatened injury to his person or property.

    In this case, the Supreme Court ruled that the worker had failed to prove the existence of the essential requisites. Thus, it concluded that the worker’s bare allegations of threat or force did not constitute substantial evidence to support a finding of forced resignation.

    And second, the following circumstances of the resignation led the Court to rule-out a finding of involuntariness:

    • The worker executed a resignation letter in her own handwriting;
    • She also accepted the amount of P35,000.00 as financial assistance and executed an Affidavit of Release, Waiver and Quitclaim and an Agreement, as settlement and waiver of any cause of action against her employer; and
    • The affidavit of waiver and the settlement were acknowledged/subscribed before a Philippine Labor Attache, and duly authenticated by the Philippine Consulate. The Agreement likewise bears the signature of a conciliator-mediator.

    The Court clarified that an affidavit of waiver duly acknowledged before a notary public is a public document which cannot be impugned by mere self-serving allegations. Proof of an irregularity in its execution is absolutely essential.

    Furthermore, the signatures of these officials sufficiently proved that the worker was duly assisted when she signed the waiver and settlement. The presumption of regularity of official acts may be rebutted by affirmative evidence of irregularity or failure to perform a duty. The Court, however, remarked that no such evidence was presented.

    A waiver or quitclaim is a valid and binding agreement between the parties, provided that it constitutes a credible and reasonable settlement, and that the one accomplishing it has done so voluntarily and with a full understanding of its import.

    Since there was no extant and clear proof of the alleged coercion and threats the worker allegedly received from her employer that, in turn, led her to terminate her employment relations with her employer, the Court concluded that the worker resigned voluntarily.

    Further reading:

    • Iladan v. La Suerte International Manpower Agency, Inc., G.R. No. 203882, January 11, 2016.

  • Strikes and Good Faith

    To be lawful, a strike must have a lawful purpose and should be executed through lawful means.

    The union in this case asserted that it conducted a strike in good faith. It claimed to have had a sincere belief that its employer had committed an unfair labor practice. Also, it hoped that the said employer would be willing to negotiate the economic aspects of their collective bargaining agreement that was to expire soon. The union further insisted that all it did was to conduct an orderly, peaceful, and moving picket.

    The Supreme Court disagreed.

    The union’s disregard of the procedural requirements for conducting a valid strike had negated its claim of good faith. If such a claim were to be upheld, it was not enough for the union to believe that the employer was guilty of unfair labor practice. It must also sufficiently show that the strike complied with the law.

    Under the procedural requirements1Article 263 of the Labor Code specifies the limitations on the exercise of the right to strike, viz.:

    Article 263. Strikes, picketing, and lockouts. . . .

    xxx xxx xxx

    (c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employers may file a notice of lockout with the [Department] at least 30 days before the intended date thereof. In cases of unfair labor practices, the period of notice shall be 15 days and in the absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day cooling off period shall not apply and the union may take action immediately.

    (d) The notice must be in accordance with such implementing rules and regulations as the [Secretary] of Labor and Employment may promulgate.

    (e) During the cooling-off period, it shall be the duty of the [Department] to exert all efforts at mediation and conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice, the labor union may strike or the employer may declare a lockout.

    (f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The [Department] may, at its own initiative or upon request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the [Department] the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided.

    xxx xxx xxx     for a valid strike, the following should be present:

    • a notice of strike filed with the Department of Labor and Employment at least 30 days before the intended date thereof, or 15 days in case of unfair labor practices;
    • a strike vote approved by the majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in a meeting called for that purpose; and
    • a notice of the results of the voting at least seven days before the intended strike given to the Department of Labor and Employment.

    These requirements are mandatory, such that non-compliance therewith by the union will render the strike illegal.

    In the present case, the Court found that the employees failed to:

    • file the notice of strike with the Department of Labor and Employment;
    • observe the cooling-off period; and
    • submit the result of the strike vote.

    In addition, although the union conducted a strike vote, the same was done by open, not secret, balloting.

    Significantly, the strike was far from orderly and peaceful. When the strike started, the union had on several instances obstructed the ingress into and egress from the employer’s offices. Record revealed evidence that depicted the acts of obstruction, violence and intimidation committed by the union during the picketing. Record even bared proof that the union forced the employer’s officers to resort to unusual means of gaining access into its premises at one point.

    The Court concluded that although the claim of good faith may have attached in so far as the union’s grounds for the strike, the same cannot be said as regards its conduct of the strike. The union should therefore bear the consequence of its non-compliance with the legal requirements.

    Further reading:

    • Hongkong & Shanghai Banking Corp. Employees Union v. National Labor Relations Commission, G.R. No. 156635, January 11, 2016.

  • Prove That An Employer-Employee Relationship Exists

    If you find yourself in a situation where the other party denies having an employer-employee relationship with you, make sure that you prove the following:

    • it had the power to select you to be an employee;
    • it paid your wages;
    • it had the power to dismiss you; and
    • it exercised control of the methods and results by which the your work is accomplished.

    In one case, the Supreme Court did not grant the claims of the complainants because they were not able to prove the existence of the mentioned elements. It said:


    “It must be recalled that when Belleza was the canteen concessionaire from 1993 to 1996, herein petitioners Daisog and Dimalanta were and continuously working thereat. When Catalan took over the management thereof in May 1997 they also continued their employment thereat.

    “However, when private respondent Ma. Theresa Ayuson took over the canteen management on April 29, 1999, she offered to Daisog and Dimalanta to continue working under her new management but the latter refused and they did not accept the separation pay being offered to them.

    “Based on the foregoing factual backdrop, it could be deduced that petitioners Daisog and Dimalanta’s employers if at all were Belleza and Catalan and not herein private respondent Ma. Theresa Ayuson.

    “However, Belleza and Catalan could not be held liable since they were not impleaded to the complaint. Neither was there evidence which directly established that petitioners Daisog and Dimalanta were employees of private respondent Cainta Coliseum which is managed by co-private respondent Ken K.C. Yu. Likewise, the record is bereft of any evidence which showed that private respondents Cainta Coliseum and/or Ken K.C. Yu and Maria Theresa Ayuson were the one who hired petitioners Daisog and Dimalanta; neither did it prove that private respondents have the power to control the conduct of petitioners. As also found out by public respondent which read:


    “‘Contrary to the allegation of complainants, the alleged payrolls do not bear the name of respondent Kenneth Yu, their alleged employer. Respondents denied that there was a signature of Kenneth Yu on the supposed payrolls. What is established in the records is that complainants are employees of canteen concessionaires operating in the respondent coliseum.’ x x x

    x x x

    “Admittedly petitioners Daisog and Dimalanta miserably failed to show by convincing evidence that there exists an employer-employee relationship between them and private respondents.”

    (Emphasis, mine.)

    Further reading:

    • Carmelita V. Dimalanta and Arturo C. Daisog v. Caita Coliseum, Inc. Ken K.C. Yu, Owner/President/General Manager, and Maria Theresa Ayuson as responsible officers, and National Labor Relations Commission, G.R. No. 161058, July 30, 2014.

  • Not Every Form of Control is Indicative of Employer-Employee Relationship

    If a real estate agent’s performance is subject to company rules, regulations, code of ethics, and periodic evaluation, does this mean that it has passed the control test for determining the existence of employer-employee relationship?

    The Supreme Court in a case said no. “Not every form of control is indicative of employer-employee relationship. A person who performs work for another and is subjected to its rules, regulations, and code of ethics does not necessarily become an employee.”

    In this case, it was found that the said rules, regulations, code of ethics, and periodic evaluation were found to not involve any control over the means and methods by which the real estate agent was to perform his job. In other words, the real estate company’s acts of:

    • Fixing prices;
    • Imposing requirements on prospective buyers;
    • Laying down the terms and conditions of the sale, including the mode of payment, which the independent contractors must follow;
    • Allocating inventories among its independent contractors;
    • Determining who has priority in selling the same;
    • Granting commission or allowance based on predetermined criteria; and
    • Regularly monitoring the result of their marketing and sales efforts

    do not pertain to the means and methods of how the said real estate agent was to perform and accomplish his task of soliciting sales. Neither do they dictate upon him the details of how he would solicit sales or the manner as to how he would transact business with prospective clients.

    Furthermore, it was likewise found that the said agent did not even cite specific rules, regulations or codes of ethics that supposedly imposed control on his means and methods of soliciting sales and dealing with prospective clients. Except for soliciting sales, the real estate company did not assign other tasks to him. He had full control over the means and methods of accomplishing his tasks as he can “solicit sales at any time and by any manner which deem appropriate and necessary.” He performed his tasks on his own account free from the control and direction of real estate company in all matters connected therewith, except as to the results thereof.

    The Court in declaring the absence of employer-employee relationship between them concluded: “As long as the level of control does not interfere with the means and methods of accomplishing the assigned tasks, the rules imposed by the hiring party on the hired party do not amount to the labor law concept of control that is indicative of employer-employee relationship.”

    Further reading:

    • Royale Homes Marketing Corporation v. Fidel P. Alcantara, G.R. No. 195190, July 28, 2014.