The basic policy of labor laws in the Philippines is found in Article 3 of the Labor Code to wit:

ART. 3. Declaration of basic policy. – The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.

The salient features of the Protection to Labor

provision of the Constitution (Sec. 3, Art. XIII, 1987

Constitution) are as follows:

• Extent of Protection – Full protection to labor;

• Coverage of Protection – Local and overseas,

organized and unorganized;

• Employment Policy – Full employment and

equality of employment opportunities for all;

• Guarantees:

Unionism and Method of Determination

Conditions of Employment – Right of all workers

to self-organization, collective bargaining and

negotiations.

Concerted Activities – Right to engage in

peaceful concerted activities, including the

right to strike in accordance with law.

Working Conditions – Right to security of

tenure, humane conditions of work and a living

wage.

Decision Making Processes – Right to participate in policy and decision, making processes affecting their rights and benefits as way to provide by law.

• Share in Fruits of Production – Recognition of

right of labor to its just share in fruits of production.

The state is duty-bound to guarantee the protection of the rights of the workers to:

Self-organization

Collective bargaining

Security of tenure; and 

Just and humane conditions of work.

Explain the principle followed in the construction of labor laws.  

The general rule is that where the law speaks in clear and categorical language, there is no room for interpretation, there is only room for application. Only when the law is ambiguous or of doubtful meaning may the court interpret or construe its true intent.

As provided under the Civil Code, and in the Labor Code itself, when there is doubt as to the interpretation and implementation of labor laws, and labor contracts, all doubts should be construed in favor of labor.

It is in keeping with the Constitutional mandate of promoting social justice and affording protection to labor.

Insofar as overseas employment is concerned, the POEA Standard employment contract, should be construed liberally in favor of the OFW.

In collective bargaining, the employer stands on a higher footing than the employee. Thus, the rule is laid that while a CBA’s terms and conditions constitute the law between the parties, it is not an ordinary contract, as it is impressed with public interest. Therefore, a CBA must be construed liberally, rather than narrowly and technically, giving due consideration to the purpose for which it is intended to serve. 

While the constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will automatically be decided in favor of labor. Management also has its own rights which are entitled to respect and enforcement in the interest of fair play. The policy of social justice is not intended to countenance/support wrongdoing. 

Article 1700 of the New Civil Code provides:

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

When it is clearly shown that the contract is freely and voluntarily without force, duress, or acts tending to vitiate worker’s consent, there is no reason not to honor or give effect to the terms and conditions stipulated therein.

LABOR STANDARDS law is that labor law which prescribes terms and conditions of employment like Book in Book IV, Title I and Book VI of the Labor Code. These Books of the Labor Code deal with working conditions, wages, working conditions for women, minors, househelpers and homeworkers, medical and dental services, occupational health and safety, termination and retirement. On the other hand, 

LABOR RELATIONS law is that labor law which regulates the relations between employers and workers like Book V of the Labor Code which deals with labor organizations, collective bargaining, unfair labor practices and strikes and lockouts.

SOCIAL LEGISLATION is a broad term and may include not only laws that give social security protection, but also those that help the worker secure housing and basic necessities. The Comprehensive Agrarian Reform law could also be considered a social legislation.

The Labor Code provides .. 

Art. 167. Definition of terms.

“Employer” means any person, natural or juridical, employing the services of the employee.

Article 219

(e) “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.

(f) “Employee” includes any person in the employ of an employer. 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.

3. What are the tests in determining the existence of employer employee relationship?  

Under the four-fold test, an employer-employee relationship is determined in the exercise of the power to select, compensate, dismiss, and control the means by which the ends of one’s labor are achieved. The most crucial of these tests is control.

We held in Sevilla v. Court of Appeals that in this jurisdiction, there has been no uniform test to determine the existence of an employer-employee relation. Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relationship.

However, in certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship where several positions have been held by the worker.

There are instances when, aside from the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished, economic realities of the employment relations help provide a comprehensive analysis of the true classification of the individual, whether as employee, independent contractor, corporate officer or some other capacity.

The better approach would therefore be to adopt a two-tiered test involving:

(1) the putative employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished; and

(2) the underlying economic realities of the activity or relationship.

Define Economic realities test?

Economic realities test calls for the determination of the nature of the relationship based on the circumstances of the whole economic activity. Under this test, the proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business.

Explain the Two-tiered test or multi-factor test?  

This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on; and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latter’s employment.

 Two-tier Test in Corporate Officer/Employee issue: 

(1) the status or relationship of the parties; 

(2) the nature of the question that is the subject of the controversy.

Distinction should be made between a labor

controversy and an intra-corporate dispute.

 If the worker was not appointed by the Board of Directors, there is no intra-corporate relationship. If what is involved is termination of employment, it is a labor controversy, and not an intra-corporate dispute.

Employee Employer Relation

Jeepney/taxi Drivers,  

the features which characterize the “boundary system”-namely, the fact that the driver does not receive a fixed wage but gets only the excess of the amount of fares collected by him over the amount he pays to the jeep-owner, and that the gasoline consumed by the jeep is for the account of the driver-are not sufficient to withdraw the relationship between them from that of the employer and employee.

TERMINATION OF EMPLOYMENT

Two-Fold due process requirement

Dismissal of employees requires the observance of the tw0-fold due process requisites, namely:

1) SUBSTANTIVE aspect which means that the dismissal must be for any of the following:

1. just causes or

2. authorized causes; and

2)PROCEDURAL aspect which means that the procedure in the following are observed:

a. statutory due process

b. contractual due process

A dismissal based on a just cause means that the employee has committed a wrongful act or omission;

While a dismissal based on authorized causes means that there exists a ground which the law itself allows or authorizes to be invoked to justify the termination of an employee even if he has not committed any wrongful act or omission, such as installation of labor-saving devices, redundancy, retrenchment, closure or cessation of business or disease.

An employee’s services or employment may be terminated lawfully based on just cause or authorized cause. 

JUST CAUSES

Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes:

Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

Gross and habitual neglect by the employee of his duties; (gross and habitual in character and must be work-related as would make him unfit to work for the employer

Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and

Other causes analogous to the foregoing.

Other just causes found in prevailing jurisprudence:

(Which may constitute serious misconduct or at the very least, conduct analogous to serious misconduct)

• Abandonment is a form of neglect of duty; (employee failed to report for work without valid or justifiable reason; there must have been a clear intention on the part of the employee to sever the employer-employee relationship;

Due process must be observed- twin notice:

1) directing the employee to explain why he should not be declared as having abandoned his job;

2) inform the employee of the employer’s decision to dismiss him on the ground of abandonment;

• Violation of Company rules and regulations or Code of Conduct or Code of Discipline (Valid and lawful, sufficiently known to employee, in connection with employee’s duties)
• Theft of property owned by a co-employee as opposed to theft of property owned by employer which is considered serious misconduct
• Incompetence, inefficiency and ineptitude
• Failure to attain work quota
• Failure to comply with weight standards of employer
• Attitude problem
• Series of irregularities, when put together, may constitute serious misconduct;
• Possession or use of shabu
• Immorality, as a general rule, is not a just ground to terminate employment. The exception is when such immoral conduct is prejudicial or detrimental to the employer.
• Fighting on the part of the aggressor
• Sleeping while on duty
• Sexual harassment

Serious misconduct:

Must be serious, of such grave and aggravated character, not merely trivial;

Must relate to the performance of employee’s duties;

Must show that he has become unfit to continue working for the employer;

Must have been performed with wrongful intent.

Under the Labor Code, AUTHORIZED CAUSES are classified into two (2) classes, namely:

(1) Business-related causes and

(2) Health-related causes.

Business-related causes which are recognized under the said Code are as follows: 

1. Installation of Labor-Saving Device 

The installation of these devices is a management prerogative and the courts will not interfere with its exercise in the absence of abuse of discretion, arbitrariness, or malice on the part of management. Installation of labor-saving device will result in making positions being held by employees who will be adversely affected thereby redundant and unnecessary 

2. Redundancy 

Redundancy exists when the services of an employee are in excess of what is reasonably demanded by the actual requirements of an enterprise. This happens when the position is superfluous because of a number of factors such as over-hiring of workers, decreased volume of business, dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise or phasing out of service activity priorly undertaken by the business.

3. Retrenchment 

Retrenchment has been defined as “the termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations; or during lulls occasioned by lack of work or orders, shortage of materials; or considerable reduction in the volume of employer’s business, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of automation. Proof of losses or possible imminent losses is the distinctive requisite of retrenchment. 

4. Closure or Cessation of Business Operations 

Closure or cessation of business is the complete or partial cessation of the operations or shutdown of the establishment of the employer. It is carried out to stave off the financial ruin or promote the business interest of the employer. 

5. Disease is also of one the authorized causes to terminate employment. However, not all kinds of disease may be considered as a valid ground to terminate employment.

What must be proven:

Art. 284. Disease as ground for termination. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.

MANAGEMENT PREROGATIVE

Employers have the right and prerogative to regulate every aspect of their business, generally without restraint in accordance with their own judgment and discretion.

It refers to the employer’s right to conduct the affairs of its business according to its own discretion and judgement

Exercise of management prerogative is not absolute

Limitations imposed on the exercise of management prerogative

Limitations imposed by

• Law;
• CBA
• Employment contract
• Employer policy
• Employer practice
• General principles of fair play and justice

It is subject to police power

Its exercise should be without abuse of discretion

It should be done in good faith and with due regard to the rights of labor

Management prerogative includes prerogative to instill discipline  among its employees and impose reasonable penalties including dismissal, upon erring employees. The policies, rules, and regulations must be fair and reasonable and the penalties commensurate to the offense.

TRANSFER

Two kinds of transfer (movement of personnel)

1. from one position to another equivalent rank, level or salary, without a break in the service;

2. from one office to another within the same business establishment.

The prerogative to transfer is broad enough to include:

• Prerogative to organize
• Prerogative to promote
• Prerogative to demote

The exercise of management prerogative to transfer or assign employees from one office or area of operation to another is valid provided there is no demotion in rank or diminution of salary, benefits and other privileges.

The transfer should not be motivated by discrimination or made in bad faith or effected as a form of punishment or demotion without sufficient cause.

The court cannot look into the wisdom of the transfer of an employee.

An employee cannot claim any vested right to his position.

Transfer of employee may constitute constructive dismissal when it amounts to involuntary resignation resorted to when the continued employment is rendered impossible, unreasonable, or unlikely, when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility or disdain by the employer becomes unbearable to the employee, leaving him with no option but to forego with his continued employment.

Refusal of the employee to be transferred may be justified if there is a showing that the transfer was directed by employer under questionable circumstances.

An employee who refuses to be transferred when the transfer is valid, is guilty of insubordination or willful disobedience of a lawful order of an employer.

“Bonus” is an amount granted and paid ex gratia to the employee for his industry or loyalty, hence, generally not demandable or enforceable. If there is no profit, there should be no bonus. If profit is reduced, bonus should likewise be reduced, absent any agreement making such bonus part of the compensation of the employees.                                          

On the basis of equitable considerations, long practice, company policy, when the grant is stipulated in the employment contract or CBA, and other peculiar circumstances bonus may become demandable and enforceable.

Consequently, if bonus is given as an additional compensation which the employer agreed to give without any condition such as success of business or more efficient or more productive operation, it is deemed part of wage or salary, hence, demandable.

Employers have the freedom and prerogative according to their discretion and best judgment, to regulate and control the time when workers should report for work and perform their respective functions, whenever exigencies of service so require.

Such as when the CBA reserves the right to the management to change work schedule where the adjustment is evidently justified.

BONA FIDE OCCUPATIONAL QUALIFICATION

The general rule is that employment in particular jobs may not be limited to persons that meet certain qualifications such as age, marital status, or physical appearance, unless the employer can show that the same are actual qualifications for performing the job. The qualification is called a bona fide occupational qualification. (exception: Yrasegui v. PAL since the requirement was rationally connected to the performance of the job and is reasonably necessary to the work-related purpose which is adopted by the employer in an honest belief and in good faith)

The policy of not accepting or considering as disqualified from work a woman who contracts marriage runs afoul to the test of and the right against discrimination afforded all women workers by our labor laws and by no less than the Constitution.

In Duncan, the SC ruled that the stipulation in the contract of employment expressly prohibiting an employee from having a relationship with an employee of a competitor company is a valid exercise of management prerogative. The same is reasonable under the circumstances because relationships of such nature may compromise the interests of the company. The employer aims to protect its interest and prevent access to its trade secrets, manufacturing formulas, marketing strategies and other confidential information.

POST EMPLOYMENT PROHIBITIONS

The employer, in the exercise of its prerogative, may insist on an agreement with the employee for certain prohibitions to take effect after the termination of their employer-employee relationship (i.e. non-compete, non-solicitation, non-recruitment/anti-piracy, non-solicitation, IP clause)

The employer and employee are free to stipulate clauses in view of their freedom to contract.

LEGITIMATE JOB CONTRACTING ARRANGEMENT

ELEMENTS:

• The contractor is engaged in a distinct and independent business and undertakes to perform the job or work on its own responsibility, according to its own manner and method.

• The contractor has substantial capital  to carry out the job farmed out by the principal on his account, manner and method, investment in the form of tools, equipment, machineries  and supervision.

• In performing the work farmed out, the contractor is free from control and/or direction of the principal in ALL matters connected with the performance of the work, except as to the result thereto; and

• The service agreement ensures compliance with all the rights and benefits for all employees of the contractor under the labor laws.

• ABSENCE OF ANY OF THE FOREGOING REQUISITES MAKES THE ARRANGEMENT A LABOR-ONLY CONTRACTING ARRANGEMENT.

The amount of “substantial capital” are fixed by the DOLE as follows:

1. in the case of corporations, partnerships, or cooperatives – paid up capital stocks/shares of at least five million pesos;

2. in case of sole proprietorship, a net worth of at least five million pesos;

Sufficiently established with indubitable evidence

Substantial capital and investment in tools, equipment, etc. were complied with leading the Court to declare that the contractor is a legitimate job contractor.

Substantial capital alone, without investment in tools, equipment, premises or machineries, well constitutes one inconvertible proof that a contractor is not engaged in labor-only contracting arrangement.

Jurisprudence says that substantial capital and investment in tools, equipment, machineries and work premises should be treated as two (2) distinct and separate factors in determining whether legitimate job contracting arrangement exists in a certain case.

Lack of substantial capitalization indicates labor only contracting

Example:

A Management Service Consultant engaged in the management of projects, business operations, functions, jobs, and other kinds of business ventures, has sufficient capital and resources to undertake its principal business, provided management services to various industrial and commercial business establishments. It is a registered corporation and its Articles of Incorporation proves that it has sufficient capitalization.

Where the contractor’s employees (weavers, sanders, finishers) are tasked to undertake activities which are usually necessary and desirable to the contracting party’s principal business of furniture manufacturing, the contractor is considered labor only contractor and such employees are considered as regular employees of the principal.

The repeated rehiring of salesmen bolstered the indispensability of their work to the business of the principal.

What are the relationships created in a subcontracting arrangement?  

Trilateral Relationship in contracting arrangements; 

THREE (3) parties:  

PRINCIPAL 

CONTRACTOR  

EMPLOYEES 

In legitimate contracting or subcontracting arrangement there exists: 


(a) An employer-employee relationship between the contractor and the employees it engaged to perform the specific job, work or service being contracted; and 


 (b) A contractual relationship between the 
principal and the contractor as governed by the 
provisions of the Civil Code.

A subcontracting agreement creates the following relationship.

1. The subcontractor is the agent of the principal. Since the act of an agent is the act of the principal, representations made by the subcontractor to the employees will bind the principal;
   
   
2. Employer-employee relationship where the principal will become the employer as if it directly employed the workers engaged to undertake the subcontracted job or service. 

Thus, the principal will be responsible to the workers for all their entitlements and benefits under the labor laws;

3. The principal and the subcontractor will be solidarily treated as the employer.

What are the other prohibited acts that may be considered as similar to labor-only contracting?  




Other Prohibitions. Notwithstanding Section 6 of these Rules, the following are hereby declared prohibited for being contrary to law or public policy: 


 A. Contracting out of jobs, works or services when not done in good faith and not justified by the exigencies of the business such as the following: 


(1) Contracting out of jobs, works or services when the same results in the termination or reduction of regular employees and reduction of work hours or reduction or splitting of the bargaining unit. 


(2) Contracting out of work with a ―Cabo. 

Other Prohibitions. 


Contracting out of a job, work or service through an in- house agency. 


B. Contracting out of jobs, works or services analogous to the above when not done in good faith and not justified by the exigencies of the business. 

What is labor-only contracting? What is the effect of labor-only contracting?  

Labor-only contracting as defined by Article 106 of the Labor Code, is where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. 

In such cases of labor contracting, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

Case law established that a finding that a contractor is a labor-only contractor, as opposed to permissible job contracting, is equivalent to declaring that there is an employer-employee relationship between the principal and the employees of the supposed contractor, and the labor-only contractor is considered as a mere agent of the principal, the real employer.

Section 5. Prohibition against labor-only contracting. 

Labor-only contracting is hereby declared prohibited. For this purpose, labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are present:

i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal: or

ii) the contractor does not exercise the right to control over the performance of the work of the contractual employee.

OVERSEAS FILIPINO WORKERS

Section 1, Article III of the Constitution guarantees: 

No person shall be deprived of life, liberty, or property without due process of law nor shall any person be denied the equal protection of the law. 

Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without distinction as to place of deployment, full protection of their rights and welfare.

Recruitment and placement refers to the act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not. When a person or entity, in any manner, offers or promises for a fee employment to two or more persons, that person or entity shall be deemed engaged in recruitment and placement.

Article 38(a) of the Labor Code, as amended, specifies that recruitment activities undertaken by non-licensees or non-holders of authority are deemed illegal and punishable by law. 

And when the illegal recruitment is committed against three or more persons, individually or as a group, then it is deemed committed in large scale and carries with it stiffer penalties as the same is deemed a form of economic sabotage. 

To prove illegal recruitment, it must be shown that the accused, without being duly authorized by law, gave complainants the distinct impression that he had the power or ability to send them abroad for work, such that the latter were convinced to part with their money in order to be employed. 

It is important that there must at least be a promise or offer of an employment from the person posing as a recruiter, whether locally or abroad. 

Under POEA Rules and Regulations, the obligation to register personnel with the POEA belongs to the officers of a recruitment agency.

Agency personal A performed his work with the knowledge that he works for a licensed recruitment agency. The obligation to register its personnel with the POEA belongs to the officers of the agency. He is in no position to know that the officers of said recruitment

agency failed to register him as its personnel

(People v. Chowdury, G.R. No. 129577-80, Feb. 15,

2000).

Indubitably, appellant and her co-accused acting together made complainants believe that they were transacting with a legitimate recruitment agency and that Laogo Travel Consultancy had the authority to recruit them and send them abroad for work when in truth and in fact it had none as certified by the POEA.

Absent any showing that the trial court and the CA overlooked or misappreciated certain significant facts and circumstances, which if properly considered, would change the result, we are bound by said findings. 

The crime of illegal recruitment is committed when two elements concur, namely: 

(1) the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and 

(2) he undertakes either any activity within the meaning of “recruitment and placement” defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code. 

Under the first element, a non-licensee or non-holder of authority is any person, corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor, or whose license or authority has been suspended, revoked or cancelled by the POEA or the Secretary. 

Clearly, the creation of the POEA did not divest the Secretary of Labor of his/her jurisdiction over recruitment and placement of activities. The governing rule is still Article 357 of the Labor Code. 

Petitioner was able to convince the private respondents to apply for work in Israel after parting with their money in exchange for the services she would render. The said act of the petitioner, without a doubt, falls within the meaning of recruitment and placement as defined in Article 13 (b) of the Labor Code. 

In People v. Alvarez, this Court ruled that in illegal recruitment cases, the failure to present receipts for money that was paid in connection with the recruitment process will not affect the strength of the evidence presented by the prosecution as long as the payment can be proved through clear and convincing testimonies of credible witnesses. 

It was discussed that: 

In illegal recruitment, mere failure of the complainant to present written receipts for money paid for acts constituting recruitment activities is not fatal to the prosecution, provided the payment can be proved by clear and convincing testimonies of credible witnesses. 

The crime of illegal recruitment is defined and penalized under Sections 6 and 7 of Republic Act (R.A.) No. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995, as follows: 

SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of authority contemplated under Article 13 (f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise include the following acts, x x x: 

x x x x 

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group. 

In order to hold a person liable for illegal recruitment, the following elements must concur:

(1) the offender undertakes any of the activities within the meaning of “recruitment and placement” under Article 13(b)20 of the Labor Code, or any of the prohibited practices enumerated under Article 34 of the Labor Code (now Section 6 of Republic Act No. 8042) and 

(2) the offender has no valid license or authority required by law to enable him to lawfully engage in recruitment and placement of workers. 

In the case of illegal recruitment in large scale, a third element is added: that the offender commits any of the acts of recruitment and placement against three or more persons, individually or as a group. All three elements are present in the case at bar. 

Chua engaged in recruitment when she represented to private complainants that she could send them to Taiwan as factory workers upon submission of the required documents and payment of the placement fee. The four private complainants positively identified appellant as the person who promised them employment as factory workers in Taiwan for a fee of ₱ 80,000. More importantly, Severino Maranan the Senior Labor Employment Officer of the POEA, presented a Certification dated December 5, 2002, issued by Director Felicitas Q. Bay, to the effect that appellant Chua is not licensed by the POEA to recruit workers for overseas employment. 

3. Participation in the recruitment , placement or deployment of any worker under false pretense or false documentation. 

When is recruitment considered as QUALIFIED RECRUITMENT? 

Recruitment is qualified if carried out by a group of 3 or more persons or when there are 3 or more persons recruited individually or as a group. 

The elements of illegal recruitment are as follows: 

a. First element: Recruitment and placement activities. 

… such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed as engaged in such act. 

b. Second element: Non-licensee or non-holder of authority – means any person, corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor and Employment, or whose license or authority has been suspended, revoked or canceled by the POEA or the Secretary of Labor and Employment. 

The penalties for illegal recruitment under RA 10022 substantially increased the fines imposed in the law it amended, particularly RA 8042. 

The recognized liabilities of Local Recruitment Agency and Foreign Employer as provided under RA 10022. 

“SEC. 10. Money Claims. – xxx 

“The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. 

“Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract. 

The difference/s between the definition provided for and given in Article 38 of the Labor Code on the term recruitment, WITH RESPECT TO RA 10022, definition on recruitment. 

Article 38 of the Labor Code defined illegal recruitment as a punishable act by enumerating the recruitment activities which are deemed illegal and punishable. The enumeration of recruitment activities are as follows. 

(a) The following recruitment activities are deemed illegal and punishable as provided herein: 

1. Those undertaken in any form or manner by non-licensees or non-holders of authority; 

2. Participation in the exaction of money, goods and/or services in consideration of employment in an amount exceeding that authorized by law or appropriate regulations; and 

3. Participation in the recruitment , placement or deployment of any worker under false pretense or false documentation. 

With respect to the amendatory law, RA 10022, recruitment is defined in Article 6 in consonance and as an implication because it was under the definition of “Illegal Recruitment” that recruitment was defined.

What is the legal significance of a LICENSE and an Authority? 

Basically, these two documents legitimize the conduct of recruitment and placement activities by recruitment/manning agencies. These are the requirements set forth under our labor laws so much so that the absence of a license or authority will subject any person or entity engaged in the conduct of recruitment activities to penalties and criminal liabilities.

The legal significance of License and Authority is mainly found in their definition as provided in the implementing rules. 

Particularly, Section 1 of Rule II thereof. 

Section 1 

(w) License – refers to the document issued by the Secretary of Labor and Employment authorizing a person, partnership or corporation to operate a private recruitment/manning agency. 

(b) Authority – refers to a document issued by the Secretary of Labor and Employment authorizing the officers, personnel, agents or representatives of a licensed recruitment/manning agency to conduct recruitment and placement activities in a place stated in the license or in a specified place. 

Insofar as to protect the interests of Filipino overseas and migrant workers, R.A. No. 8042 explicitly prohibits the substitution or alteration to the prejudice of the worker, of employment contracts already approved and verified by the DOLE from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the DOLE. 

As RA 10022 provides, the liability of the principal/ employer and the recruitment/placement agency on any and all claims under this Rule shall be joint and several. This liability shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. 

This emphasizes the nature of the liability of the principal and agent in the protection of migrant and overseas Filipino workers. 

In another case, Sameer Overseas Placement Agency v. Cabiles, the Supreme Court Ruled that the provision on joint and several liability in R.A. No. 8042 is in line with the state’s policy of affording protection to labor and alleviating workers’ plight. It assures overseas workers that their rights will not be frustrated by difficulties in filing money claims against foreign employers. Hence, in the case of overseas employment, either the local agency or the foreign employer may be sued for all claims arising from the foreign employer’s labor law violations.

This way, the overseas workers are assured that someone-at the very least, the foreign employer’s local agent-may be made to answer for violations that the foreign employer may have committed. By providing that the -liability of the foreign employer may be “enforced to the full extent” against the local agent, the overseas worker is assured of immediate and sufficient payment of what is due them. The local agency that is held to answer for the overseas worker’s money claims, however, is not left without remedy. The law does not preclude it from going after the foreign employer for reimbursement of whatever payment it has made to the employee to answer for the money claims against the foreign employer. 

Discuss all the prohibited practices in recruitment under Section 6 of R.A. No. 10022: 

Section 6 of R.A. No. 10022 states that in addition to the act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged, the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority:

“(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance; 

“(b) To furnish or publish any false notice or information or document in relation to recruitment or employment; 

“(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA; 

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“(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; 

“(h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; 

“(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the DOLE; 

“(j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of travel agency; 

“(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code and its implementing rules and regulations; 

“(l) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment; 

“(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker’s fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; and 

“(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency. 

CONTRACTING AND SUBCONTRACTING

There is contracting or subcontracting when an employer, referred to as the principal, farms out the performance of a part of its business to another, referred to as the contractor or subcontractor. For the purpose of undertaking the principal’s business that is farmed out, the contractor or subcontractor then employs its own employees.

Contracting and subcontracting are synonymous under Philippine labor law. The term that is more commonly used is subcontracting.

DIFFERENCE BETWEEN AN ORDINARY EMPLOYER-EMPLOYEE RELATIONSHIP AND SUBCONTRACTING

In an ordinary employer-employee relationship, there are only two parties involved – the employer and the employee. This relationship is established through a four-fold test.

The power of control is the most important factor in determining the existence of an employer-employee relationship. The employer need not actually exercise this power. It is enough that the employer retains the right to exercise this power. It is enough that the employer retains the right to exercise it as it may deem necessary or appropriate.

In subcontracting, there are three parties involved:

a. The principal which decides to farm out a job or service to a subcontractor;

b. The subcontractor which has the capacity to independently undertake the performance of the job or service; and

c. The employees engaged by the subcontractor to accomplish the job or service.

In subcontracting, the four-fold test of employer-employee relationship should be satisfied by the subcontractor in relation to the employees it engages to accomplish the subcontracted job or service. In such cases, the subcontractor is also referred to as independent contractor.

If the four-fold test is satisfied not by the subcontractor but by the principal, the principal then becomes the employer of the employees engaged to accomplish the job or service. What exists is not subcontracting but a direct employer-employee relationship between the principal and the employees.

SUBCONTRACTOR vs. A PRIVATE RECRUITMENT AND PLACEMENT AGENCY

A subcontractor directly undertakes a specific job or service for a principal, and for this purpose, employs its own workers. A PRPA cannot be a subcontractor. It simply recruits workers for the purpose of placing them with another employer so that the workers recruited will not become the PRPA’s employees.

A subcontractor is governed by the laws and rules enumerated under Question # 4 below. A PRPA is governed by Articles 25 to 39 of the Labor Code and the rules implementing these articles.

A subcontractor does not need authority from the Department of Labor and Employment (DOLE) to undertake a subcontracted job or service. A PRPA needs an authority or license from DOLE to legally undertake a recruitment and placement activities.

WHAT LAW OR RULES GOVERN SUBCONTRACTING?

The basic law governing subcontracting is the Labor Code, particularly Articles 106 to 109. These provisions prescribe the conditions for regulating subcontracting and the rights and obligations of parties to this arrangement.

a. Article 248 (c) which disallows contracting out of services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization;

b. Article 280. which classifies employees into regular, project or seasonal employees;

c. Article 2180 of the Civil Code, under which the principal, in a civil suit for damages instituted by an injured person, can be held liable for any negligent acts of the employees of a labor-only contractor;

d. Republic Act No. 5487 and its implementing rules, which regulate the operation of security agencies;

e. Jurisprudence interpreting the foregoing laws;

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h. Contractual stipulations provided these are not in conflict with Labor Code provisions and jurisprudence.

In two recent cases decided by the Supreme Court, the definition of legitimate subcontracting in D. O. No. 10 is favorably cited as follows:

Contracting shall be legitimate if the following conditions concur:

a. the contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility, according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof;

b. the contractor or subcontractor has substantial capital or investment;

c. The agreement between the principal and the contractor or subcontractor assures the contractual employees entitlement to all occupational safety and health standards, free exercise of the right to self organization, security of tenure, and social and welfare benefits.

WHAT IS SUBSTANTIAL CAPITAL?

Substantial capital refers to such investment, whether in the form of money, facilities, tools, equipment, machineries, work premises, or subscribed capital stock that would indicate the subcontractor’s capacity to undertake the subcontracted work or service independently. For example, a subcontractor with a capital stock of P1 Million which is fully subscribed and paid for has been deemed by the Supreme Court to be a highly capitalized venture which satisfies the requirement of substantial capital.

Where a subcontractor is highly capitalized, the Supreme Court has held that it need not show evidence that it has investment in the form of tools, equipment, machineries, work premises, among others, to be considered legitimate. However, it is still necessary for it to show that it has the capacity to be an independent contractor, That is, it can undertake the performance of the contract according to its own manner and method, free from the supervision of the principal in all matters except as to the results of the work.

A legitimate subcontracting is different from labor-only contracting because the former is allowed and the latter is illegal and prohibited.

Section 2 of D. O. No. 3 states that there is labor-only contracting where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and the following elements are present:

a. The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility; and

b. The employees recruited, supplied or placed by such contractor or subcontractors are performing activities directly related to the main business of the principal.

WHAT IS THE BASIS OF THE STATE IN PROHIBITING LABOR-ONLY CONTRACTING? WHAT IS THE OBJECTIVE OF THE PROHIBITION?

The bases of the State in prohibiting labor-only contracting are:

a. The Constitution, which mandates that the State shall protect labor and promote its welfare, and shall guarantee basic labor rights including just and humane terms and conditions of employment and the right to self-organization.

b. Article 106 of the Labor Code, which allows the Secretary of Labor to distinguish between labor-only contracting and job contracting to prevent any violation or circumvention of the Labor Code.

The objective of the State in prohibiting labor-only contracting is to ensure that labor laws are followed and to prevent exploitation of workers. A labor-only contractor is one which presents itself as an employer even if it does not have capital to run a business or capacity to ensure that its workers are paid their wages and other benefits as prescribed by law.

As such, it cannot independently undertake to perform a subcontracted job or service. To allow a labor-only contractor to operate is to give it an opportunity to circumvent the law and to exploit workers.

WHAT WILL BE THE EFFECT OF A LABOR-ONLY CONTRACTING ARRANGEMENT?

The following are the effects:

a. The subcontractor will be treated as the agent of the principal. Since the act of an agent is the act of the principal, representations made by the subcontractor to the employees will bind the principal.

b. The principal will become the employer as if it directly employed the workers engaged to undertake the subcontracted job or service. It will be responsible to them for all their entitlements and benefits under the labor laws.

c. The principal and the subcontractor will be solidarily treated as the employer.

d. The employees will become employees of the principal, subject to the classifications of employees under Article 28 of the Labor Code.

If the labor-only contracting activity is undertaken by a legitimate labor organization, a petition for cancellation of union registration may be filed against it, pursuant to Article 239(e).

IF A LEGITIMATE SUBCONTRACTOR CANNOT PAY THE WAGES OF THE EMPLOYEES IT ENGAGED TO PERFORM THE JOB OR SERVICE, WILL THE PRINCIPAL AUTOMATICALLY BECOME THE EMPLOYER OF SUCH EMPLOYEES?

No.

Under Article 106, a principal has two types of liability in relation to the employees of the subcontractor. The first type of liability is limited, and is governed by the first two paragraphs of Article 106. Thus, mere inability of the subcontractor to pay wages will not automatically make the principal the direct employer. It will only make the principal jointly and severally liable with the subcontractor for payment of the employees’ wages to the extent of the work performed under the contract.

The second type of liability, which arises from the third and fourth paragraphs of Article 106, is absolute and direct. This liability arises when there is labor-only contracting as defined in D. O. No. 3. In such cases, the principal shall be responsible to the workers in the same manner and extent as if it directly employed these workers.

The constitution has laid down the following rights of Labor: 

Right to self-organization, 

Right to collective bargaining and negotiations, 

Rights peaceful concerted activities, including the right to strike in accordance with law. 

State at least FIVE (5) (complete) constitutional provisions that specifically apply to labor.

Section 3 Art. XIII the State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. 

ARTICLE II of the 1987 Constitution on the Declaration of Principles and State Policies, are as follows: 

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

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

Additionally, in particular to Labor Relations, Article XIII of the Constitution entitled Social Justice and Human Rights, provides: 

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

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

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

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

The Right to Self Organization with respect to Labor Relation. 

Under Art. 243 of the Labor Code, provides that the right to organize refers also to forming, joining or assisting a labor organization. Connected to Art. 246 this right carries with it the right to engage in group action, provided it is peaceful, to support the organization’s objective which is not necessarily bargaining but, simply, to aid and protect its members. But this kind of group action must be differentiated from strike which, because it is work stoppage, must observe certain regulation; otherwise, the strike may be declared illegal and its leaders may be thrown out of their jobs. 

Article 243. Coverage and employees’ right to self-organization. – 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. 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. 

The rights to organize and to bargain, in a general sense, are given not exclusively to employees. Even workers who are not employees of any particular employer may form their organizations to protect their interests. 

Who may exercise the Right to Self Organization? Is this an absolute Rule? Any exception.

The right to form, join or assist a labor organization is granted to all kinds of employees of all kinds of employers—public or private, profit or non-profit, commercial or religious. Their usual form of organization is a union and the usual purpose is collective bargaining with their employers. 

But the seemingly all-inclusive coverage of “all persons” in Article 243 actually admits exceptions. 

Under Art. 245, for instance, managerial employees, regardless of the kind of organization where they are employed, may not join, assist or form any labor organization, meaning a labor union.

Accordingly, managerial employees cannot, in the absence of an agreement to the contrary, be allowed to share in the concessions obtained by the labor union through collective negotiation. Otherwise, they would be exposed to the temptation of colluding with the union during the negotiations to the detriment of the employer. However, there is nothing to prevent the employer from granting benefits to managerial employees equal to or higher than those afforded to union members. Supervisors are allowed to organize, but they cannot for, join or assist a rank-and-file union. 

Are employees in the public service entitled to exercise their Right to Self-Organization? Explain with legal basis. 

Yes, employees in the public service are entitled to exercise their Right to Self-Organization. 

Article 244. Right of employees in the public service. – 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 

Discuss the “CONFIDENTIAL EMPLOYEE” doctrine. 

A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer’s property. While Art. 245 of the Labor Code singles out managerial employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary implication, confidential employees are similarly disqualified. The doctrine of necessary implication means that what is implied in a statute is as much a part thereof as that which is expressed. 

Labor Organizations in the Philippines are classified into two (2) types or sectors: 

PUBLIC and PRIVATE

PUBLIC SECTOR UNION or PUBLIC EMPLOYEES ORGANIZATION refers to any organization, union or association of employees in the agencies of government which exist in whole or in part for the purpose of collective negotiations or mutual aid, interest, cooperation and protection. 

PRIVATE SECTOR UNION or LABOR ORGANIZATION refers to any union or association of employees in the private sector which exist in whole or in part for the purpose of collective bargaining or mutual aid, interest, cooperation, protection or other lawful purposes. 

Certification election is a process of determining through secret ballot the sole and exclusive bargaining agent (SEBA) of all the employees in an appropriate bargaining unit for the purpose of collective bargaining.  

Employer bystander doctrine 

The employer shall not be considered a party to a petition for certification election, whether it is filed by an employer or a legitimate labor organization, and shall have no right to oppose it. Its participation shall be limited only to being notified or informed of petition for certification election and submitting the certified list of employees or where necessary, the payrolls 

Explain the cardinal rights of an employee in relation to labor law. What rights have direct significance to Labor Relations. 

The cardinal rights of an employee are as follows: 

1. Right to Self-Organization 

2. Collective Bargaining and Negotiations 

3. Peaceful concerted activities including the right to strike in accordance with law 

4. Security of tenure 

5. Humane conditions of work 

6. Living wage 

7. Participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. 

State what is an industrial or labor dispute. 

“Labor dispute” includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee. 

Yellow-dog doctrine 

A yellow dog contract is an illegal agreement that an employer makes with an employee wherein the employee agrees not to join up with the company’s labor union.

Globe doctrine 

The doctrine states that in determining whether a group or category of employees constitute an appropriate bargaining unit, the desire of the employees is taken into consideration. 

Community of interest doctrine 

The rule states that in determining the constituency of an appropriate bargaining unit, the mutuality or community of interests is taken into consideration. Employees sharing mutual interests belong to one bargaining unit, whether they belong to the same branch of an establishment or to different branches. 

REMEDIES

The existence of employer-employee relationship between the parties-litigants, or a reasonable causal connection to such relationship is a jurisdictional pre-requisite for the exercise of jurisdiction over a labor dispute by the Labor Arbiter or any other labor tribunals.

The cause of action must arise from the employer-employee relationship, if it did not arise out of or was not incurred in connection with the employer-employee relationship, Labor Arbiters have no jurisdiction thereover.

The determination by the DOLE Regional Director and the DOLE Secretary of the existence of the employer-employee relationship in the exercise of their visitorial and enforcement power under Art. 128(b) of the Labor Code is to the exclusion of the Labor Arbiter and the NLRC.

The Med Arbiter also has the same power as it is necessary and indispensable in the exercise of his jurisdiction.

In cases of OFW’s, Labor Arbiters may exercise jurisdiction even absent the employment relationship; i.e. a seafarer who signed a POEA approved employment contract was not deployed, hence, there is no employment relationship, yet he may file his money claims with the Labor Arbiter.

In establishments where there are existing CBA’s or certified sole and exclusive bargaining agents, the law vests upon the Voluntary Arbitrators the jurisdiction to hear and decide wage distortion cases, after the grievance procedure in the CBA failed to settle the same. Otherwise, the LA have jurisdiction to hear and decide after the parties and the NCMB failed to correct the wage distortion.

Wage distortion is not a proper ground to be invoked in support of a strike or lockout.

CONSTITUTIONALITY OF LABOR CONTRACT STIPULATIONS

It is not the LA but the regular court which has jurisdiction to rule on the constitutionality of labor contracts such as a CBA. A special civil action with a prayer for TRO and Injunction is an action beyond the jurisdiction of the LA.

The issues cannot be resolved solely by applying the Labor Code, but requires the application of the Constitution, labor laws, laws on contracts and the CEDAW.

As to Anya, the injunctive power of the NLRC is ancillary in nature; hence, it requires a principal case, which is absent.

Besides, the dispute between her and PNN is not resolvable solely through the application of Labor Code, other labor statutes, CBA or employment contract (Reference to Labor Law Rule).

As to jurisdiction, the Labor Arbiter can hear and resolve cases under Art. 217 [now 224] of the Labor Code, money claims under Sec. 7 of R.A. 10022; and referred wage distortion disputes in unorganized establishments, as well as the enforcement of compromise agreements pursuant to the 2011 NLRC Rules of Procedure, as amended. On the other hand, the NLRC reviews decisions rendered by the LA; decisions or orders rendered by the RD under Art. 129 of the Labor Code; and conducts compulsory arbitration in certified cases.

As to the power to issue a labor injunction, the NLRC can issue an injunctive writ. On the other hand, the Labor Arbiter cannot issue an injunctive writ.

A labor dispute falls under the jurisdiction of a voluntary arbitrator or a panel of voluntary arbitrator if a labor dispute arises from an unresolved grievance which in turn arises from the interpretation of implementation of a Collective Bargaining Agreement or of company personnel policies.

Upon agreement of parties, a voluntary arbitrator

or panel of voluntary arbitrators may also hear and decide all other labor disputes including unfair labor practices and bargaining deadlock.

The following are QUASI-JUIDICIAL bodies which exercises jurisdiction over LABOR cases and the corresponding laws which grant them jurisdiction over Labor cases. 

Articles 217(c) and 261 of the Labor Code state that voluntary arbitrators have jurisdiction over cases arising from the interpretation or implementation of collective bargaining agreements. When the dispute clearly involves the interpretation or implementation of the CBA, the specific or special provisions of the Labor Code govern and the issue must be brought before the voluntary arbitrators. 

Under the Migrant Workers’ Act, a special law that governs overseas Filipino workers, the Labor Arbiter has jurisdiction to hear and decide claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. 

Articles 217(c) and 261 of the Labor Code are very specific in stating that voluntary arbitrators have jurisdiction over cases arising from the interpretation or implementation of collective bargaining agreements.

The Philippine Overseas Employment Administration (POEA) shall exercise original and exclusive jurisdiction to hear and decide disciplinary action on cases, which are administrative in character, involving or arising out of violations of recruitment laws, rules and regulations involving employers, principals, contracting partners and Filipino seafarers.” 

The requisites for perfection of appeal from decisions of the Labor Arbiter to the NLRC are:

a. the appeal should be filed within the reglementary period;

b. the Memorandum of Appeal should be under oath;

c. payment of appeal fee;

d. posting of cash or surety bond, if judgment involves monetary award; and

e. proof of service to the adverse party.

Exclusive Original Jurisdiction of the NLRC

Claims arising out of an employer employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment

including claims for actual, moral, exemplary and other forms of damage.

In on case,  the Supreme Court held that a reinstated employee need not refund the backwages and other benefits paid pursuant to an order of reinstatement by the Labor Arbiter. The rationale is to help the employee make both ends meet during the pendency of the appeal and to prevent a situation where the dismissed employee will not spend the reinstatement wages for fear of refunding the same if the decision of Labor Arbiter is subsequently reversed.

Exclusive Appellate Jurisdiction of the NLRC

a. All cases decided by the Labor Arbiters

b. Cases decided by the Regional Offices of DOLE in the exercise of its adjudicatory function.

POWERS OF THE DOLE SECRETARY:

a. Power to inspect employer’s records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the Labor Code and of any labor law, wage order or rules and regulations issued pursuant thereto. (Art. 128[a], Labor Code)

b. Power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection.

(Art. 128[b], Labor Code)

c. Power to issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. (Art. 128[b], Labor Code)

d. Power to order stoppage of work or suspension of operations of any unit or department of an establishment when noncompliance with the law or implementing rules and regulations poses grave and

imminent danger to the health and safety of workers in the workplace. (Art. 128[c], Labor Code)

e. Assumption of Jurisdiction and/or Certification to the NLRC for Compulsory Arbitration in labor disputes causing or likely to cause a strike or lockout in an industry indispensable to the national interest. (Art. 278[g], Labor Code; Art. 128[a], Labor Code)

Pursuant to Art. 128(b) of the Labor Code, the DOLE may make a prima facie determination of the existence of an employer-employee relationship in the exercise of its visitorial and enforcement powers where the prima facie determination of employer-employee relationship is for the exclusive purpose of securing compliance with labor standards provisions of said Code and other labor legislation.

The DOLE, in the exercise of its visitorial and enforcement powers, somehow has to make a determination of the existence of an employer-employee relationship.

Such determination, however, cannot be co-extensive with the visitorial and enforcement power itself. Indeed, such determination is merely preliminary, incidental and collateral to the DOLE’s primary function of enforcing labor standards provisions.

Termination cases arising in or resulting from the interpretation and implementation of collective bargaining agreements, and interpretation and enforcement of company personnel policies which were initially processed at the various steps of the plant-level Grievance Procedures under the parties collective bargaining agreements, fall within the original and exclusive jurisdiction of the voluntary arbitrator pursuant to Art. 217(c) [now 224(c)] and Art. 261 [now 274] of the Labor Code.