Labor Relations (Policy, NLRC & BLR ) [Arts. 218 - 233]

 Book V

Labor Relations


Title I

Policy and Definitions


Chapter I

Policy

Art. 218. Declaration of Policy.
  • The State policy emphasizes:
    • Promoting free collective bargaining, voluntary arbitration, mediation, and conciliation to settle labor disputes.
    • Supporting free trade unionism to enhance democracy, social justice, and development.
    • Encouraging the voluntary organization of a strong labor movement.
    • Educating workers about their rights and obligations.
    • Establishing efficient administrative mechanisms for quick dispute resolution.
    • Ensuring stable, dynamic, and just industrial peace.
    • Guaranteeing worker participation in decision and policy-making processes.
  • Additionally, the policy prohibits courts or administrative bodies from setting wages, pay rates, work hours, or employment terms through collective bargaining, except as provided by the law.
Suggested Question:

Q: What is the distinction between “labor relations” and “labor standards”?

Labor relations refers to the regulations of the relations between employers and workers.  
  • labor organizations
  • collective bargaining
  • grievance machinery
  • voluntary arbitration
  • conciliation and mediation
  • unfair labor practices,
  • strikes and lockout
Labor standards  prescribes the minimum terms and conditions of employment which the employer is required to grant to its employees.  
  • working conditions
  • wages
  • hours of work,
  • holiday pay and other benefits
  • conditions of employment of women, minors, househelpers and homeworkers
  • medical and dental services
  • occupational health and safety
  • termination of employment 
  • retirement




Art. 219. Definitions
  1. “Commission” 
    • National Labor Relations Commission or any of its divisions (NLRC)
  2. “Bureau” 
    • Bureau of Labor Relations and/or the Labor Relations Divisions (BLR)
  3. “Board” 
    • National Conciliation and Mediation Board (NCMB)
  4. “Council” 
    • Tripartite Voluntary Arbitration Advisory Council (TVAAC)
  5. “Employer”
    • person acting in the interest of an employer, directly or indirectly
    • does not include any labor organization except when acting as employer
  6. “Employee” 
    • person in the employ of an employer
    • not be limited to the employees of a particular employer
    • include any individual whose work has ceased due to labor dispute or unfair labor practice if he has not obtained employment.
  7. “Labor organization” 
    • union or association of employees for the purpose of collective bargaining or of dealing with employers
  8. “Legitimate labor organization” 
    • labor organization duly registered with the Department of Labor and Employment (DOLE)
  9. “Company union” 
    • labor organization whose formation, function or administration has been assisted by unfair labor practice 
  10. “Bargaining representative”
    • legitimate labor organization whether or not employed by the employer
  11. “Unfair labor practice” 
    • unfair labor practice as expressly defined by the Code.
  12. “Labor dispute” 
    • controversy or matter concerning terms and conditions of employment
  13. “Managerial employee”
    • vested with the powers or prerogatives to lay down and execute management policies 
    • authority is not merely routinary or clerical in nature but requires the use of independent judgment.
    • rank-and-file employees
  14. “Voluntary Arbitrator” 
    1. person accredited by the Board as such 
    2. person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator or chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, 
    3. official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement
  15. “Strike” 
    • temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.
  16. “Lockout” 
    • temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.
  17. “Internal union dispute” 
    • all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership
  18. “Strike-breaker” 
    • person who obstructs any peaceful picketing affecting conditions of work or in the exercise of the right of self-organization or collective bargaining
  19. “Strike area”
    • establishment of the employer struck against, as well as the immediate vicinity actually used by picketing strikers


Title II

National Labor Relations Commission


Chapter I

Creation and Composition

Art. 220. National Labor Relations Commission. 
  • Establishment and Composition
    • National Labor Relations Commission (NLRC) attached to the Department of Labor and Employment.
    • Composed of a Chairman and 23 Members.
  • Election of Members
    • Eight members each chosen from workers and employers organizations.
    • Chairman and seven members from the public sector, preferably incumbent labor arbiters.
    • Members must divest themselves of affiliations upon assuming office.
  • Structure and Jurisdiction
    • NLRC may sit en banc or in eight divisions, each with three members.
    • En banc sessions ─ promulgation of rules and regulations and formulating policies
    • Divisions ─ adjudication and all others powers
      • 1st to 6th Division ─ NCR and other parts of Luzon
      • 7th and 8th Division ─ Visayas and Mindanao
    • En banc can transfer cases between divisions on a temporary or emergency basis, ensuring additional workload does not burden litigants
    • Divisions hold exclusive appellate jurisdiction over cases within their respective territorial jurisdictions.
  • Concurrence and Decision Making
    • Two Commissioners of a Division required for judgments or resolutions.
    • If a division lacks the required concurrence, the Chairman can appoint additional Commissioners from other divisions.
    • Division conclusions on a case must be reached through mandatory consultation before assigning a member to write the opinion.
    • A certification, signed by the Presiding Commissioner of the division, is issued and attached to the case record, serving as notice to the involved parties.
  • Presiding Commissioners and Acting Chairman
    • Chairman is the Presiding Commissioner of the first division.
    • Other public sector members are Presiding Commissioners of the remaining divisions.
    • In the Chairman's absence, the Presiding Commissioner of the second division acts as Acting Chairman.
  • Administrative Supervision
    • Chairman, assisted by the Executive Clerk, has exclusive administrative supervision.
    • Supervision extends to regional branches, personnel, and Labor Arbiters.
  • Assistance and Equivalent Functions
    • When sitting en banc, the Commission is assisted by the Executive Clerk.
    • When acting through its divisions:
      • The first division is assisted by the same Executive Clerk.
      • The second to eighth divisions are each assisted by a Deputy Executive Clerk.
    • The Commission and its eight divisions are assisted by Commission Attorneys in appellate and adjudicatory functions.
      • Terms are coterminous with the Commissioners they are assigned to.
      • Must be members of the Philippine Bar with at least one year of experience in labor-management relations.
      • Annual salary = SG 26
      • The number of Commission Attorneys, not exceeding five, is determined based on the needs of the Commission, with a limit of five assigned to the Office of the Chairman and each Commissioner.
Art. 221. Headquarters, Branches and Provincial Extension Units. 
  • Main Office:
    • Commission and its 1st to 6th Divisions ─ Metropolitan Manila
    • 7th and 8th Divisions ─ Cities of Cebu and Cagayan de Oro, respectively.
  • Regional Branches:
    • The Commission will establish regional branches corresponding to the regional offices of the Department of Labor and Employment, along with sub-regional branches or provincial extension units.
  • Number of Labor Arbiters:
    • The number of Labor Arbiters will be determined based on the needs of the Commission for effective and efficient operation.
Art. 222. Appointment and Qualifications. 
  •  Chairman and other Commissioners:
    • Members of the Philippine Bar
    • At least 15 years of practice in Philippine law, with a minimum of 5 years in labor-management relations.
    • Preferably residents of the region where they will hold office.
  • Labor Arbiters:
    • Members of the Philippine Bar, 
    • At least 10 years of law practice, with 5 years in labor-management relations.
  • Term and Age Limit:
    • The Chairman, Commissioners, and Labor Arbiters serve until the age of 65, with the possibility of extension to 70 upon the President's recommendation and Commission en banc approval.
    • Removal can occur for causes provided by law or due to incapacity.
  • Appointment Process:
    • The President appoints the:
      • Chairman
      • Division Presiding Commissioners
      • other Commissioners and
      • Labor Arbiters
    • Vacancies in a specific division are filled from the nominees of the sector that nominated the predecessor.
    • Labor Arbiters are appointed by the President upon the Commission en banc's recommendation, and they are subject to the Civil Service Law.
  • Staff Appointment and Administration:
    • The Chairman of the Commission appoints staff and employees for the Commission and its regional branches.
    • Subject to the Civil Service Law, rules, and regulations.
  • Salaries, benefits, and emoluments are upgraded in accordance with the law and the needs of the service.
Art. 223. Salaries, benefits and other emoluments.
  • Rank and Compensation:
    • The Chairman and members of the Commission have the same rank.
    • Annual Salary = Presiding Justice and Associate Justices of the Court of Appeals, respectively.
  • Allowances, Retirement, and Benefits:
    • They are entitled to the same allowances, retirement, and benefits as the mentioned officials from the Court of Appeals.
  • Labor Arbiters:
    • Labor Arbiters have the same rank as judges of the regional trial courts.
    • Annual salary equivalent to and enjoy the same allowances, retirement, benefits, and privileges = RTC Judges.
  • Protection of Existing Benefits:
    • The provision does not allow for the diminution of existing salaries, allowances, and benefits of the officials mentioned in the article.
The NLRC: Overview
  • It is the principal government agency that hears and decides labor-management disputes ー country's labor court.
  • In deciding cases, the NLRC is independent from DOLE.
    • It is attached to DOLE only for purposes of policy coordination.
  • The NLRC has regional arbitration branchers or RABs.
    • The labor arbiters are the NLRC representatives in the country's various regions. 
    • Lawyers by profession, the arbiters arbitrate and decide disputes between the parties.
    • An arbiter's decision may be brought up or appealed to the NLRC division comprising the arbiter's region. The grounds for appeal are specified in Article 229.
      • LA Decision ➡ NLRC Division in Region
The Commission or a Division
  • The NLRC acts as a body:
    • whole Commission of 24 commissioners; or
    • any of the eight divisions, each with three commissioners.
  • The commission acts as a whole (en banc) in four instances:
    1. to promulgate rules and regulations governing the hearing and disposition of cases;
    2. to formulate policies affecting its administration and operations;
    3. to allow cases within the jurisdiction of any division to be heard and decided by another division
    4. to recommend appointment of a labor arbiter
  • Outside of these four instances, the acts of the commission are done through its divisions, including adjudication, i.e. the hearing and decision of cases.
  • An individual commission has no adjudicatory power.
Appellate and Original Jurisdiction
  • Each division has exclusive appellate jurisdiction over cases appealed from the labor arbiters within their respective territorial jurisdictions.
    • Divisions one to six handle cases from the National Capital Region and other parts of Luzon,
    • Divisions seven and eighth handle cases from Visayas and Mindanao.
  • But the NLRC, i.e., its divisions also possesses original jurisdiction.
    1. petitions for injunction (Art. 225) and 
    2. to certified cases.
      • Certified cases refers to "national interest" labor disputes certified (or referred) to the Commission for compulsory arbitration under Art. 278(g) of the Labor Code. 
Art. 224. Jurisdiction of the Labor Arbiters and the Commission.

A. Labor Arbiters' Original and Exclusive Jurisdiction:
  • Labor Arbiters possess original and exclusive jurisdiction over various cases related to workers, both agricultural and non-agricultural: (UTT-DSE)
    1. Unfair labor practice cases.
    2. Termination disputes.
    3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;
    4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
    5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and
    6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.
  • Decision: Within thirty (30) calendar days after submission by the parties, without extension, even in the absence of stenographic notes.
B. Exclusive Appellate Jurisdiction of the Commission:
  • The NLRC holds exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
C. Cases Involving Collective Bargaining Agreements and Company Personnel Policies:
  • Cases arising from the interpretation or implementation of collective bargaining agreements and those related to the interpretation or enforcement of company personnel policies shall be referred to the grievance machinery and voluntary arbitration, as stipulated in the respective agreements.
Compulsory Arbitration
  • In labor cases, compulsory arbitration is the process of settlement of labor disputes by a government agency that has the authority to investigate and make an award which is binding on all the parties. 
  • It is the Labor Arbiter who is clothed with the original and exclusive authority to conduct compulsory arbitration under Article 224. 
  • Proceedings after a labor arbiter's decision is brought up to the National Labor Relations Commission cannot be considered as part of the arbitration proceedings. 
Additional Cases
  • To the cases mentioned in this article, the following should be added: 
  1. Money claims arising out of 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;
  2. Wage distortion disputes in unorganized establishments not voluntarily settled by the parties, pursuant to Article 124 of the Labor Code;
  3. Enforcement of compromise agreements when there is non­-compliance by any of the parties, pursuant to Article 233 of the Labor Code;
  4. Other cases as may be provided by law.
Labor Arbiter's Jurisdiction
  • The law prefers or gives primacy to voluntary arbitration instead of compulsory arbitration, and this in turn is the reason the law forbids a labor arbiter from entertaining a dispute properly belonging to the jurisdiction of a voluntary arbitrator. 
  • The cases a labor arbiter can hear and decide are employment-related. 
    • One unifying element runs through all the cases and disputes enumerated in Article 224 — employment connection.
  • Principal relief sought will be resolved by:
    • applying the Labor Code or other labor relations statute or a collective bargaining agreement — labor arbiter or voluntary arbitrator. 
    • applicable law is a general civil law — regular courts, such as the Regional Trial Court. (San Miguel Corp, May 31, 1998)
  1. Unfair Labor Practice
    • Voluntary arbitrator
      • If the employee is CBA-covered and terminated for alleged violation of personnel policy, the dispute should be heard by a voluntary arbitrator. 
    • Labor arbiter
      • If the CBA or personnel policy is not involved, the case should be brought to a labor arbiter.
      • Exception: But even if the employee is not CBA-covered or even if no personnel policy is involved, the parties may and categorical and unequivocal language agreed to bring the case to a voluntary arbiter. Even an ULP case can, by agreement of the parties, be brought before a voluntary arbitrator. (Voluntary rather than compulsory arbitration is the preferred mode of settling labor disputes.)
  2. Termination Disputes
    • Corporate Dispute; Corporate Officer 
    • The SEC jurisdiction over corporate disputes has been transferred to the regular courts by the Securities Regulation Code. (R.A. No. 8799, July 19, 2000)
    • A corporate office derives its character either from the Corporation Code or the corporation's by laws.
      • Under Section 25 of the Corporation Code, the corporate officers are the:
        • president,
        • secretary,
        • treasurer, and 
        • such other officers as may be provided by the by laws. 
    • The dismissal is deemed an intra-corporate dispute and falls within the jurisdiction of a trial court if the complainant is a corporate officer. 
    • He is a corporate officer if the circumstances occur:
      • his position is a creation of the corporate charter or by-law
      • his position is elective
      • his election is by the act of the directors or stockholders
  3. Damages
    • The Labor Arbiter may award the dismissed employee not only the reliefs provided by labor laws, (Art. 294), but also moral and other forms of damages governed by the Civil Code. 
    • Moral damages would be recoverable for example, where the dismissal of an employee was not only effected without authorized cause or due process but also:
      • was attended by bad faith or fraud,
      • constituted an act oppressive to labor, or 
      • was done in a manner contrary to morals, good customs or public policy. 
    • Also within the labor arbiters jurisdiction is an employer's claim for actual damages against an employee.
    1. Issuance of Injunction
      1. Questions relating to legality of strikes or lockout or any form of work stoppage, including their incidents under Article 279, fall within the labor arbiter's jurisdiction.
    2. Overseas Workers 
      • R.A. No. 8042 has transferred from the POEA to the labor arbiters the jurisdiction over claims arising from employer-employee relationship involving Filipino workers overseas.
      • Such claims include termination dispute involving an OFW who work and was dismissed by the employer abroad. 
        • Filipino workers, whether employed locally or overseas, enjoy the protection of Philippine labor laws. For overseas Filipino workers (OFWs), the case may be filed either:
          • where the complainant resides or 
          • where the principal office of the employer is situated.
    Venue
    • Regional Arbitration Branch having jurisdiction over the workplace of the complainant, or petitioner,
    • Overseas Filipino worker shall be filed before the Regional Arbitration Branch:
      • where the complainant resides or 
      • where the principal office of the respondents employers is situated at the option of the complainant.
    Art. 225. Powers of the Commission. 

    Art. 226. Ocular inspection. 

    • Rule-making Authority:
      • Power to promulgate rules and regulations for hearings, disposition of cases, internal functions, and other necessary under the Code.
    • Administrative Powers:
      • Administer oaths, 
      • Summon parties,
      • Issue subpoenas for witnesses and documents material to a just determination of the matter under investigation
      • Testify in any investigation or hearing conducted in pursuance of the Code
    • Investigative and Determination Powers:
      • Conduct investigations to determine questions, matters, or controversies within its jurisdiction
      • Proceed to hear and determine disputes even in the absence of summoned parties.
      • Conduct proceedings, either in public or private
      • Adjourn hearings to any time and place
      • Refer technical matters or accounts to an expert
      • Accept expert reports as evidence after hearing the involved parties upon due notice
      • Direct parties to be joined or excluded from the proceedings.
      • Correct, amend, or waive errors, defects, or irregularities in substance or form
      • Give all necessary or expedient directions in dispute determination.
      • Dismiss matters or refrain from further hearing or determining disputes or parts deemed trivial or unnecessary/undesirable.
    • Contempt Powers:
      • Authority to hold individuals in contempt, directly or indirectly, with the ability to impose fines or imprisonment, depending on the nature of contempt.
      • Direct Contempt:
        • Misbehavior in the presence of or near the:
          • Chairman, 
          • Commission members, or 
          • Labor Arbiter.
        • Actions include:
          • obstruction or interruption of proceedings,
          • disrespect, 
          • offensive personalities, 
          • refusal to be sworn or answer as a witness, when required
          • refusal to be subscribe an affidavit or disposition, when required
      • Penalty (Commissioner):
        • Fine not exceeding P500 or 
        • Imprisonment not exceeding 5 days, or both.
      • Penalty (Labor Arbiter):
        • Fine not exceeding P100 or 
        • imprisonment not exceeding 1 day, or both.
      • Appeals for Direct Contempt by LA:
        • NLRC
        • Execution of judgment is suspended during the appeal if the person files a bond agreeing to abide by the Commission's judgment if the appeal is decided against them.
        • Judgment of the Commission on direct contempt is immediately executory and unappealable.
      • Indirect Contempt:
        • Indirect contempt is addressed by the Commission or Labor Arbiter following the rules in Rule 71 of the Revised Rules of Court.
    • Injunction and Restraint:
      • Purpose of Injunction:
        • The Commission has the authority to enjoin or restrain any actual or threatened commission of prohibited or unlawful acts in labor disputes.
      • Conditions:
        • No temporary or permanent injunction can be issued without a hearing that includes:
          • Testimony of witnesses, with cross-examination, supporting the complaint made under oath.
          • Testimony in opposition, if offered.
          • A finding of fact by the Commission.
      • Criteria:
        • Injunction can only be issued if:
          1. Prohibited or unlawful acts have been threatened and will be committed and continued unless restrained.
          2. Substantial and irreparable injury to the complainant's property will follow.
          3. Denial of relief would cause greater injury to the complainant than granting relief would inflict on the defendants.
          4. Complainant has no adequate remedy at law.
          5. Public officers responsible for protecting the complainant's property are unable or unwilling to provide adequate protection.
      • Notice and Hearing Requirements:
        • Hearing should be held after due and personal notice, served as directed by the Commission, to all known persons against whom relief is sought.
        • Notice also provided to the Chief Executive and other public officials of the relevant province or city charged with protecting complainant's property.
      • Temporary Restraining Order (TRO):
        • TRO may be issued without notice if complainant alleges substantial and irreparable injury to their property.
        • Effective for a maximum of twenty (20) days and becomes void afterward.
      • Conditions:
        • Issuance is conditional on the complainant filing an undertaking with adequate security.
        • The undertaking includes:
          • Adequate security in an amount determined by the Commission.
          • Compensation for those enjoined, covering all reasonable costs.
          • Reasonable attorney’s fees.
          • Expenses of defense against the order or the granting of injunctive relief subsequently denied by the Commission.
        • The undertaking is considered an agreement between the complainant and the surety.
        • It serves as the basis for rendering an order in the same suit or proceeding against the complainant and surety.
      • Assessment of Damages and Remedy:
        • A hearing is held to assess damages based on the undertaking.
        • The presence of the undertaking does not prevent any party with a claim or cause of action from pursuing their ordinary remedy by suit at law or in equity.

      • Delegation of Evidence Reception:

        • The Commission may delegate the reception of evidence for the application of a writ of injunction to any of its Labor Arbiters.
        • Labor Arbiters conduct hearings in accessible places, submit recommendations to the Commission.
    • Ocular Inspection
      • Authority:
        • The Chairman, any Commissioner, Labor Arbiter, or their duly authorized representatives have the authority to conduct ocular inspections.
      • Scope of Inspection:
        • Inspections can be conducted on any establishment, building, ship, vessel, place, or premises.
        • This includes any work, material, implement, machinery, appliance, or object within the specified locations.
      • Timing of Inspection:
        • Ocular inspections can take place at any time during working hours.
      • Inquiry Authority:
        • Those conducting the inspection have the right to ask any employee, laborer, or person for information or data related to the matter or question under investigation.
    Powers of the NLRC
    • Under Articles 225 and 226, the NLRC has the power to:
      1. make rules and regulations pertaining to its functions;
      2. administer oaths and issue subpoenas and summons; 
      3. investigate, hear and decide disputes within its jurisdiction; 
      4. hold persons in contempt;
      5. issue restraining orders and injunctions;
      6. conduct ocular inspection; and
      7. decide appealed cases.
    Injunctive Power
    • An order or writ of injunction commands a person to do or not to do a particular act.
    • Where the trial court (now NLRC) did not follow in observe the procedure in issuing the injunction the writ is illegal and void.
    • The issuance of a temporary restraining order ex parte (no notice to the other party) is not per se prohibited.
      • Its issuance, however, should be characterized by care and caution.

    Art. 227. Technical rules not binding and prior resort to amicable settlement.
    • Rules of Evidence:
      • The prevailing rules of evidence in courts of law or equity are not controlling.
    • Spirit and Intention of the Code:
      • The spirit and intention of the Labor Code emphasize that the Commission, its members, and Labor Arbiters shall:
        • use every and all reasonable means 
        • to ascertain the facts in each case speedily and objectively and
        • without regard to technicalities of law or procedure,
        • all in the interest of due process
    • Proceedings:
      • Parties in Commission or Labor Arbiter proceedings may have legal counsel.
      • The Chairman, Presiding Commissioner, Commissioner, or Labor Arbiter has the duty to exercise complete control over the proceedings at all stages.
    • Amicable Settlement:
      • Labor Arbiters shall exert all efforts towards the amicable settlement of a labor dispute within their jurisdiction on or before the first hearing.
      • The same rule applies to the Commission in the exercise of its original jurisdiction.
    Procedural Rules
    • Administrative agencies like the National Labor Relations Commission and the Labor Arbiters are not bound by strict rules of evidence and of procedures (mostly found in the Rules of Court). 
    • When confronted with conflicting versions of factual matters it is for them in the exercise of discretion to determine which party deserves credence on the basis of evidence received.
    • A formal or trial type hearing is not all times essential to due process. 
      • Its requirements are satisfied when parties are afforded fair and reasonable opportunity to explain their sides of controversy.
      • Labor cases can be decided on the basis of position papers and other documents submitted by the contending parties.
    • It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing should be resolved in the favor of the laborer. 
    Dismissal of Complaint Based on Prescription
    • When the plaintiffs own allegations in the complaint show clearly that the action has prescribed, i.e., the time to file the complaint has lapsed, the court may dismiss the case, on the ground of prescription. 
    • The NLRC Rules of 2011 state that on or before the date set for the conciliation/mediation conference, the respondent may file a motion to dismiss based only on any of the following grounds: 
      • lack of jurisdiction over the subject matter
      • improper venue
      • prescription, and 
      • forum shopping. 
    • Denial of the motion or deferment of its resolution is not appealable.
    Amicable Settlement
    • Settlement of disputes through compromise is an accepted, even desirable and encouraged. Through compromise, the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced.
    • The NLRC Rules of Procedure requires the labor arbiter to call and preside over a mandatory conciliation and mediation conference:
      • to try to amicably settle the case, 
      • to define and simplify the issues, or 
      • thresh out other preliminary matters. 
    • If the conciliation conference fails, the labor arbiter may proceed to require the parties to file their position papers, with supporting documents, within 10 calendar days. 
    • All labor or employment issues are subject to mandatory conciliation-mediation. (See Art. 234.) 
    • Attorneys and other representatives of parties 
      • ✅have authority to bind their clients in all matters of procedure. 
      • ❌cannot without a special power of attorney or express consent, enter into a compromise agreement with the opposing party in full or partial discharge of a client's claim. 
    Decision of the Labor Arbiter 
    • General Rule: Within 30 calendar days, without extension, after submission of the case by the parties for decision.
    • Exception: Cases involving Overseas Filipino Workers = within 90 calendar days after the filing of the complaint.
    • If the decision calls for reinstatement of a dismissed employee, the employer must comply and submit a report of compliance within ten days from receipt of the decision even if he he intends to appeal the the decision.

    Art. 222. Appearances and Fees.
    • Representation by Non-Lawyers:
      • Non-lawyers can appear before the Commission or any Labor Arbiter only under two conditions:
        1. If they represent themselves.
        2. If they represent their organization or members.
    • Restriction on Fees:
      • No attorney’s fees, negotiation fees, or similar charges from any collective bargaining agreement can be imposed on individual members of the contracting union.
    • Exception for Attorney’s Fees:
      • Attorney’s fees may be charged against union funds, but the amount must be agreed upon by the parties.
    • Invalidity of Contrary Agreements:
      • Any contract, agreement, or arrangement contrary to the specified conditions shall be null and void.
    Notes:
    • The obligation to pay the attorney's fees belongs to the union and cannot be shunted to the individual workers as their direct responsibility. 
    • The 10% negotiation fee which covers attorney's fees, agency and the like is based on the amount of backwages receivable under the CBA which is beyond what the law grants.
    • The union president, a nonlawyer, is not entitled to attorney's fees due a lawyer who negotiated the CBA. 
      • An agreement where the union officer shares the lawyer's fee is immoral and violates Canon 34 of Legal Ethics: "No division of fees for legal services is proper, except with another lawyer based upon a division of service or responsibility." 
    Nonlawyer
    • Under the 2011 NLRC Rules, Section 6, Rule III, a nonlawyer may appear before the Commission or Labor Arbiter only if:
      1. he represents himself as party to the case;
      2. he represents a legitimate labor organization, which is a party to the case;
      3. he represents a member or members of a legitimate labor organization existing in the employer's establishment who are parties to the case;
      4. he is duly accredited member of any legal aid office duly recognized by the Department of Justice or Integrated Bar of the Philippines;
      5. he is the owner or president of a corporation or establishment which is party to the case. 
    • He needs to present:
      1. a certification under oath that he is so authorized, and
      2. a copy of the resolution of the board of directors of the corporation granting him such authority.

     

    Chapter III

    Appeal

    Art. 229. Appeal. 
    • Finality of LA Decision:
      • Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission within ten (10) calendar days.
    • Grounds of Appeal:
      1. Prima facie evidence of LA abuse of discretion.
      2. Decision secured through fraud, coercion, graft, or corruption.
      3. Purely on questions of law.
      4. Serious errors in findings causing grave or irreparable damage or injury.
    • Appeal for Monetary Award:
      • Employer's appeal for a monetary award requires posting a cash or surety bond equivalent to the judgment's monetary amount.
    • Reinstatement:
      • Labor Arbiter's decision on reinstating a dismissed employee is immediately executory, even pending appeal.
      • Reinstatement involves returning to work or being reinstated in the payroll at the employer's option.
    • Penalties for Frivolous or Dilatory Appeals:
      • Reasonable penalties, including fines or censures.
    • Appeal Procedure:
      • Appellant shall furnish a copy of the memorandum to the other party.
      • Respondent must file an answer within ten (10) calendar days from receipt.
    • NLRC Decision:
      • The Commission must decide all cases within twenty (20) calendar days from receipt of the answer.
      • Commission decision becomes final and executory ten (10) calendar days after receipt.
    • Enforcement Authority:
      • Any law enforcement agency may be deputized for enforcing decisions, awards, or orders by the Secretary of Labor and Employment or the Commission.
    Appeal
    • "Appeal" means the elevation by an aggrieved party of any decision, order or award of a lower body to a higher body, by means of a pleading which includes the assignment or enumeration of errors, the supporting arguments and the reliefs or assistance prayed for.
    Requisites for Perfection of Appeal
    • The appeal should be: 
      1. Filed within the reglementary period, or the time limit specified by law;
      2. Verified by appellant himself in accordance with Section 4, Rule 7 of the Rules of Court;
      3. In the form of a memorandum of appeal in three legibly typewritten copies which shall state:
        • the grounds relied upon,
        • the supporting arguments,
        • the relief prayed for and
        • the date the appellant received the appealed decision, resolution or order.
      • The appeal memorandum should be accompanied by a:
        • certificate of non-forum shopping
        • proof of service on the other party
        • proof of payment of the appeal fee
        • cash or surety bond
    Periods
    • The ten-day period provided in Article 229 refers to 10 calendar days, not working days. 
      • Exception: If the tenth day to perfect an appeal from the decision of the Labor Arbiter to the NLRC falls on a Saturday, Sunday or holiday, the appeal shall be made on the next working day.
    Perfection of Appeal Requires Posting of Bond on Time.
    • The appeal from the Labor Arbiter's decision is not perfected if cash or surety bond is not posted within the 10-day appeal period. 
    • "McBurnie Guidelines," Motion to reduce the bond:: 
    1. The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the following conditions: 
      1. There is meritorious ground; and 
      2. A bond in a reasonable amount is posted;
    2. For purposes o compliance with condition no. (2), a motion shall be accompanied by the posting o a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject of the appeal, exclusive o damages and attorney's fees;
    3. Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;
    4. The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount o bond that shall be posted by the appellant, still in accordance with the standards o meritorious grounds and reasonable amount; and
    5. In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount of the provisional bond, the appellant shall be given a fresh period o ten (10) days from notice of the NLRC order within which to perfect the appeal by posting the required appeal bond.
    Effect of Appeal from Arbiter to NLRC
    • Labor Arbiter Ioses jurisdiction over the case – it's out of his hands.
    • General Rule: The perfection of appeal to the NLRC shall stay (or suspend) the execution of the decision of a Labor Arbiter. 
    • Exception:
      • For order of reinstatement of a dismissed employee, the Labor Arbiter shall immediately issue a partial writ of execution even pending appeal. 
      • The writ (order or instruction) shall direct the employer to immediately reinstate the dismissed employee either actually or only in the payroll and to pay the corresponding salaries as a consequence of the reinstatement within 10 days from receipt of the decision the employer should submit to the arbiter a report of compliance; otherwise, he may be cited for contempt.
    • Actual reinstatement – the employee goes back to work;
    • Payroll reinstatement – the employee does not work but still gets paid regularly.
    Issues on Appeal; Remedies
    • Those which are not raised shall be final and executory, i.e., ready for implementation. 
    • The issues raised on appeal, however, shall be open for review, that is, the NLRC is legally authorized to decide or take action on the questions brought up on appeal
    Extraordinary Remedies
    • A party is allowed to file with the NLRC a petition, assailing not just the order of the LA but his alleged abuse of discretion.
    • The petition which should be filed within 10 calendar days from receipt of the assailed order or resolution may be entertained by the Commission, if it is based on any of the following grounds:
    1. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter.
    2. If serious errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable damage or injury to the petitioner.
    3. If a party by fraud, accident, mistake or excusable negligence has been prevented from taking an appeal;
    4. If made purely on questions of law; or
    5. If the order or resolution will cause injustice if not rectified.
    • The petition may seek an order to suspend or stop the execution of the labor arbiter's order or resolution. 
    • The Commission may require the petitioner to put up a bond.
    Prima facie – minimum evidence acceptable to support a charge

    Conciliation and Mediation
    • Even at the appeal stage of a labor arbiter's decision, amicable settlement is a preferred mode. 
    NLRC Decision
    • The decision of the Commission shall be final and executory after 10 calendar days from receipt by the parties. 
    • The losing party is allowed to file a motion for reconsideration of any order, resolution or decision of the Commission based on palpable or patent errors, provided that the motion is under oath and filed within 10 calendar days from receipt of the order, resolution or decision.
    • A party who failed to appeal on time from the decision of Labor Arbiter may still file a motion for reconsideration of the NLRC decision. 
    • A party may file only for one motion for reconsideration.
      • The NLRC Rules do not allow a second motion of reconsideration.
      • If the NLRC entertains such a motion, it violates its own rules and therefore commits grave abuse of discretion. 
    • Remedy:
      1. Motion for Reconsideration within 10 days; or
      2. Certiorari under Rule 65, if acted without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion.
    Where to File Petition; The St. Martin Ruling 
    • From the NLRC, the case may go to the Court of Appeals. 
    • The Supreme Court has ruled in the St. Martin case that both the Supreme Court and the Court of Appeals have the power to review NLRC decisions. However, the petition for writ of certiorari should initially be filed with the Court of Appeals, in line with the principle of hierarchy of courts. 
    • NLRC or Labor Secretary ➡ Court of Appeals.
    Effect on NLRC's Decision 
    •  A petition for certiorari filed with the Court of Appeals or the Supreme Court shall not stay (or suspend) the execution of the assailed decision of the NLRC unless a restraining order is issued by the Court of Appeals or the Supreme Court. 
    • This is in contrast to the case of appeal from the labor arbiter to NLRC where, as we have seen the appeal suspends the execution of the arbiter's decision, except the reinstatement of an employee.
    Certified True Copy of NLRC Decision 
    • Since the Labor Arbiter's decision is not the questioned ruling, it does not have to be certified. What needs to be certified is the NLRC Decision. 
    Findings of Facts, Final
    • Quasi-judicial agencies like the NLRC have acquired the expertise because their jurisdiction is confined to specific matters. Hence, their findings of facts are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence.
    • Exceptions:
        1. the conclusion is a finding grounded on speculations, surmises and conjectures; 
        2. the inferences made are manifestly mistaken, absurd, or impossible; 
        3. there is a grave abuse of discretion; 
        4. there is a misapprehension of facts; 
        5. the court in arriving at its findings went beyond the issues of the case and the same are contrary to the admissions of the parties or the evidence presented; 
        6. where respondent commission has sustained irregular procedures and through the invocation of summary methods, including rules on appeal, has affirmed an order which tolerates a violation of due process and
        7. where the rights of a party were prejudiced because the administrative findings, conclusions or decision were in violation of constitutional provisions, in excess of statutory authority, or jurisdiction, made upon irregular procedure, vitiated by fraud, imposition or mistake, not supported by substantial evidence adduced at the hearing or contained in the records or disclosed to the parties, or arbitrary, or capricious. 
    Effect of Failure to Appeal a CA Decision  
    • If the CA decision is reversed, the reversal does not benefit the party that did not appeal.

    Art. 224. Execution of decisions, orders or awards.
    • (a) Writ of Execution on Judgments:
      • Who can issue a writ of execution on a judgment?
        1. The Secretary of Labor and Employment, 
        2. Regional Directors,
        3. Commission,
        4. Labor Arbiters,
        5. Med-Arbiters, or
        6. Voluntary Arbitrators 
      • How?
        • motu proprio or 
        • on motion of any interested party
      • When?
        • Within five years of it becoming final and executory.
      • What is required to execute or enforce final decisions, orders or awards?
        • sheriff or 
        • duly deputized officer
      • The responsible officer is obligated to furnish immediately the counsels of record and the parties with copies of said decisions, orders or awards.
      • Failure to fulfill duty: Administrative sanctions 
    • (b) Designation of Special Sheriffs and Compliance Measures:
      • The Secretary of Labor and Employment and the Chairman of the Commission have the authority to designate special sheriffs.
      • They are empowered to take any necessary measures, as per existing laws, to ensure compliance with their decisions, orders, or awards, as well as those of Labor Arbiters and Voluntary Arbitrators.
      • Administrative fines for non-compliance: P500.00 to P10,000.00
    Execution
    • A writ of execution is issued to enforce an order:
      • upon motion of the winning party, or 
      • upon the initiative of the labor arbiter or the NLRC division that issued the decision or order
    • Prescription: 
      • Five years from the date the decision or order become final and executory.
      • If not executed within that period, the judgment will become dormant and may only be enforced through an independent action within 10 years from finality of the decision. 
    • If the decision or order has been properly appealed, it is not final and cannot be executed.
      • But an order to reinstate an illegally dismissed employee, even if appealed, is immediately executory, as explained under Article 229.
    Injunction Against NLRC from a Regular Court
    • General Rule: Regular courts have no jurisdiction to act on labor cases or their incidents including the execution of decisions awards or order.
    • Exception: When third party claimant is involved.
      • When a third party or a stranger to the action asserts a claim over the property levied upon, the claimant may be vindicate his claim by an independent action in the proper civil court, which may stop the execution of the judgment on property not belonging to the judgment debtor.
      • A separate civil action for recovery upon a claim and prima facie showing of ownership by the petitioner cannot be considered as interference.

    Third Party Claim Under the NLRC Rules of 2011
    • Under Rule XI of the NLRC Rules of 2011:
      1. A third party claim should be filed within five days from the last day of posting or publication of the notice of execution sale; other wise, the claim is forever barred. 
      2. The third party claimant has to file with the commission or labor arbiter an affidavit stating his title to the property or right to possess it with supporting evidence. 
      3. Receipt of such claim automatically suspends the execution over the property. 
      4. The third party claimant may be required to post a bond equal to the amount of his claim; the party seeking the execution may file a counter-bond. The labor arbiter shall resolve the third party claim within 10 working days following the submission of the claim for resolution.
    Art. 225. Contempt powers of the Secretary of Labor. 
    In the exercise of his powers under this Code, the Secretary of Labor may hold any person in direct or indirect contempt and impose the appropriate penalties therefor.


    Art. 232. Bureau of Labor Relations. 

    • The Bureau of Labor Relations and Regional Labor Relations Divisions
      • original and exclusive authority for:
        • inter-union conflicts
        • intra-union conflicts
        • problems arising from or affecting labor-management relations
          • except implementation or interpretation of collective bargaining agreements 
            • subject of grievance procedure and/or voluntary arbitration.
    • Action:
      • within fifteen (15) working days, extendable by mutual agreement
    Notes:
    • Mediator-arbitrator (familiarly called "med-arb") 
      • officer in the DOLE Regional Office or in the Bureau of Labor Relations who is authorized to hear and decide representation cases, inter/intra-union disputes and related labor relations disputes, except cancellation of union registration cases.
    • Representation cases 
      • proceedings intended to determine which one, among rival unions, should be officially designated or as certified the exclusive representative of the employees in bargaining collectively their employer. 
    • "Inter-Union Dispute"
      • any conflict between legitimate labor unions involving representation questions for purposes of collective bargaining or
      • any dispute between legitimate labor unions.
    • "Intra-Union Dispute" 
      • any conflict between members of a union.
        • If the dispute is between unions, it is inter-union; 
        • "Intra' if confined to a union.
    • "Other related labor relations disputes." 
      • These include any conflict between a labor union and the employer or any individual, entity or group that is not a labor organization or workers' association; such dispute include:
        • cancellation of registration of a labor organization and 
        • interpleader.
      • It has to be related to inter-or intra-union disputes; 
    Filing of Complaint
    • In inter/intra-union dispute, the complaint may be filed by:
      • legitimate labor organization (LLO) or 
      • its members.
        • If the issue involves the entire membership, the complaint shall be supported by at least 30% of the membership.
    • In a "related labor relations dispute," the complaint may be fIled by:
      • a party-in-interest who is not necessarily a union or union member
    • The complaint shall be filed with the:
      • DOLE Regional Office where the labor organization is registered  if it involves:
        • an independent union, 
        • a chartered local, or 
        • a workers' association
      • BLR if the complaint involves:
        • a federation or 
        • an industry/national union
    Appeal
    • Med-Arbiter and Regional Director Decision ➡ Bureau of Labor Relations
      • by any of the parties within 10 days from receipt.
    • Bureau Director in the exercise of his original jurisdiction ➡ Office of the Secretary 
      • by any party within 10 days from receipt.
    Art. 233. Compromise agreements. 
    • Compromise Settlement
      • voluntarily agreed upon by the parties 
      • with the assistance of the Bureau or the regional office of the Department of Labor.
    • NLRC
      • General Rule: shall not assume jurisdiction over issues involved therein
      • Except:
        • non-compliance
        • prima facie evidence that the settlement was obtained through:
          • fraud,
          • misrepresentation, or 
          • coercion.
    Compromise; Release and Quitclaim
    • A compromise is a contract where the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. . 
    • Compromise agreements involving labor standards cases must be:
      1. reduced to writing and signed 
      2. in the presence of the Regional Director or his duly authorized representative.
    • The law believes the worker is protected if a DOLE representative assists him.
    • A judgment rendered in accordance with a compromise agreement is not appealable and is immediately executory, unless a motion is filed to set aside the agreement on the ground of fraud, mistake, or duress, in which case appeal may be taken against the order denying the motion.
    • A compromise agreement may be valid and binding only if the agreement is:
      1. voluntarily entered into and 
      2. represents a reasonable settlement of the claims. 
      • It may be invalidated if the amount purportedly received by the complainant is unreasonably lower than what is legally due.
    • A compromise agreement by union officers must be authorized by the union members. The authority to compromise cannot lightly be presumed and should be duly established by evidence. 
    "Dire necessity"
    • Dire necessity is not an acceptable ground for annulling the releases, especially if it is not shown that the employees had been forced to execute them, or that the considerations for the quitclaims were unconscionably low and that the employees had been tricked into accepting them.

    Art. 234. Mandatory Conciliation and Endorsement of Cases.
    • Mandatory Conciliation 
      • All issues arising from labor and employment shall be subject to mandatory conciliation-mediation
      • Except:
        • as provided in Title VII-A, Book V (Grievance Machinery)
        • as may be excepted by the Secretary of Labor and Employment
    • Endorsement
      • Only endorsed or referred cases by the duly authorized officer shall be entertained
    • Pre-terminate the conciliation-mediation
      • Any or both parties involved in the dispute may pre-terminate and:
        • request referral or endorsement to the appropriate DOLE agency
        • refer the unresolved issues to voluntary arbitration.
    Art. 235. Issuance of subpoenas. 
    • Power To Issue Subpoenas
      • The Bureau shall have the power to require:
        • the appearance of any person (subpoena ad testificandum) or 
        • the production of any paper, document or matter relevant to a labor dispute (subpoena duces tecum)
      • either at the request of:
        • any interested party or 
        • at its own initiative.
    Art. 236. Appointment of bureau personnel.
    • Appointment of bureau personnel.
      • Who?
        • Secretary of Labor and Employment 
      • What?
        • examiners and other assistants as may be necessary
    Art. 237. Registry of unions and file of collective bargaining agreements. 
    • Registry of unions and file of collective bargaining agreements. 
      • The Bureau maintains a registry of legitimate labor organizations and a file containing collective bargaining agreements, settlement records, and voluntary arbitrator decisions.
      • Access to this file is regulated by the Secretary of Labor and Employment, ensuring confidentiality of confidential information unless in specific situations:
        • unless authorized by the Secretary, or 
        • when it is at issue in any judicial litigation, or 
        • when public interest or national security so requires.
    • Collective bargaining agreements.
      • Collective Bargaining Agreements (CBAs) must be submitted within 30 days of execution, accompanied by proof of posting and worker ratification, for registration by the Bureau or Regional Offices.
      • The Bureau or Regional Offices process CBA registrations within five calendar days of submission.
      • Employers are charged a registration fee for each Collective Bargaining Agreement, aiding the Voluntary Arbitration Program through the Special Voluntary Arbitration Fund.
        • not less than one thousand pesos (P1,000.00) or in any other amount as may be deemed appropriate
    • Other files
      • The Bureau also maintains a file and assist the publication of final decisions, orders, and awards by the:
        • Secretary of Labor and Employment, 
        • Regional Directors, and
        • Commission.

    Art. 232. Prohibition on certification election. 
    • Prohibition on certification election. 
      • General Rule: Shall not entertain any:
        • petition for certification election or 
        • any other action which may disturb the administration of duly registered existing collective bargaining agreements
      • Except:
        • Art. 264 — Duty to bargain collectively when there exists a collective bargaining agreement
        • Art. 265 — Terms of a collective bargaining agreement.
        • Art. 266 — Representation issue in organized establishments
     Notes
    • Article 238 speaks of the "contract-bar rule" 
      • which means that while a valid and registered CBA is subsisting, the Bureau is not allowed to hold an election contesting the majority status of the incumbent bargaining union. 
    • The existence of the CBA does not allow, that is, it bars, the holding of the interunion electoral contest. 
    • The election is legally allowed, says Article 268, only during the "freedom period" which refers to the last 60 days of the fifth year of a CBA.

    Art. 233. Privileged communication. 

    • Privileged communication. 
      • Information and statements made at conciliation proceedings shall not be used as evidence in the Commission.
      • Conciliators and similar officials shall not testify regarding any matters taken up at conciliation proceedings conducted by them.
    Notes
    • "Privileged communication"
      • is any statement of such privacy that the law exempts the person receiving the information from the duty to disclose it.


    Additional Cases:

    • The question of venue essentially relates to the trial and touches more upon the convenience of the parties, rather than upon the substance and merits of the case. 
    • Section 1, Rule IV of the NLRC Rules allows cases to be filed in the Regional Arbitration Branch having jurisdiction the workplace of the complainant/petitioner., using the word "may," indicating permissiveness for a different venue if substantial justice demands it.
    •  It has been held that an "office'' is created by the charter of the corporation and the officer is elected by the directors or stockholders.
    • On the other hand, an "employee" usually occupies no office and generally is employed not by action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee. 
    Topic: Intra-corporate Dispute, Tabang should no longer be controlling.
    • A position must be expressly mentioned in the By-Laws in order to be considered as a corporate office.
    • Thus, the creation of an office pursuant to or under a By-Law enabling provision is not enough to make a position a corporate office. A different interpretation can easily leave the way open for the Board of Directors to circumvent the constitutionally guaranteed security of tenure of the employee by the expedient inclusion in the By-Laws of an enabling clause on the creation of just any corporate officer position.
    • In order to determine whether a dispute constitutes an intra-corporate controversy or not, the Court considers two elements instead, namely: 
      1. the status or relationship of the parties; and 
      2. the nature of the question that is the subject of their controversy. 
    • Not every conflict between a corporation and its stockholders involves corporate matters that only the SEC can resolve in the exercise of its adjudicatory or quasi-judicial powers.
    • In order that the SEC (now the regular courts) can take cognizance of a case, the controversy must pertain to any of the following relationships:
      1. between the corporation, partnership or association and the public;
      2. between the corporation, partnership or association and its stockholders, partners, members or officers;
      3. between the corporation, partnership or association and the State as far as its franchise, permit or license to operate is concerned; and
      4. among the stockholders, partners or associates themselves.
    • The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. 
    • Corporate officers are elected or appointed by the directors or stockholders, and are those who are given that character either by the Corporation Code or by the corporation’s by-laws. True, the By-Laws of provides that there shall be a College Director. However, the position of Dean does not appear to be the same as that of a College Director. 
    • Petitioner is not a College Director and she is not a corporate officer but an employee of respondent. 
    Topic: Intra-corporate Dispute, Appeal Bond
    • While the procedural rules strictly require the employer to submit a genuine bond, an appeal could still be perfected if there was substantial compliance with the requirement. Despite their failure to collect on the appeal bond, petitioners do not deny that they were eventually able to garnish the amount from respondents' bank deposits. This fulfills the purpose of the bond, that is, "to guarantee the payment of valid and legal claims against the employer[.]"
    • Respondents are considered to have substantially complied with the requirements on the posting of an appeal bond.
    • Petitioner Malcaba was an incorporator of the corporation and a member of the Board of Directors. Respondent corporation's By-Laws creates the office of the President.
    • Finding that petitioner Malcaba is the President of respondent corporation and a corporate officer, any issue on his alleged dismissal is beyond the jurisdiction of the Labor Arbiter or the National Labor Relations Commission.
    • While it is true that private respondent company received a copy of the decision dated January 19, 1994 of the Labor Arbiter . . . and filed its appeal on February 14, 1994, it is undisputed that the tenth day within which to file an appeal fell on a Saturday, the last day to perfect an appeal shall be the next working day. If the 10th day . . . falls on a Saturday, Sunday or a Holiday, the last day to perfect the decision shall be the next working day.
    • Money claims of workers which now fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims which have some reasonable causal connection with the employer-employee relationship.
    • The petitioner's Innovation Program is an employee incentive scheme offered and open only to employees of petitioner Corporation, more specifically to employees below the rank of manager. The money claim of private respondent Vega in this case, therefore, arose out of or in connection with his employment relationship with petitioner.
    • Thus, whether or not an enforceable contract, albeit implied arid innominate, had arisen between petitioner Corporation and private respondent Vega in the circumstances of this case, and if so, whether or not it had been breached, are preeminently legal questions, questions not to be resolved by referring to labor legislation and having nothing to do with wages or other terms and conditions of employment, but rather having recourse to our law on contracts.
    1. The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the following conditions: 
      1. there is meritorious ground; and 
      2. a bond in a reasonable amount is posted;
    2. For purposes o compliance with condition no. (2), a motion shall be accompanied by the posting of a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject o the appeal, exclusive o damages and attorney's fees;
    3. Compliance with the foregoing conditions shall suffice to suspend the running o the 10-day reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;
    4. The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount o bond that shall be posted by the appellant, still in accordance with the standards o meritorious grounds and reasonable amount; and
    5. In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount of the provisional bond, the appellant shall be given a fresh period of ten (10) days from notice o the NLRC order within which to perfect the appeal by posting the required appeal bond.
    • The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the employer is underscored by the provision that an appeal may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it perfectly clear that the lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive means by which an employer’s appeal may be considered completed. The word "may", on the other hand refers to the perfection of an appeal as optional on the part of the defeated party, but not to the posting of an appeal bond, if he desires to appeal.
    • The requirement that the employer post a cash or surety bond to perfect its/his appeal is apparently intended to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. It was intended to discourage employers from using an appeal to delay, or even evade, their obligation to satisfy their employees’ just and lawful claims.

    • The current policy is not to strictly follow technical rules but rather to take into account the spirit and intention of the Labor Code.
    • We reiterate this policy which stresses the importance of deciding cases on the basis of their substantive merit and not on strict technical rules. In the case at bar, the judgment involved is more than P17 million and its precipitate execution can adversely affect the existence of petitioner medical center
    • The belated presentation of the evidence notwithstanding, respondent commission should have considered them just the same. Technical rules of evidence are not binding in labor cases.
    • The Court is, therefore, of the considered opinion that ever since appeals from the NLRC to the Supreme Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC.
    • Consequently, all such petitions should hence forth be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired.
    • The third party may avail himself of alternative remedies cumulatively, and one will not preclude the third party from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. Thus, a third party may avail himself of the following alternative remedies:
      • File a third party claim with the sheriff of the Labor Arbiter, and
      • If the third party claim is denied, the third party may appeal the denial to the NLRC. 
    • The filing of a third party claim with the Labor Arbiter and the NLRC did not preclude the petitioner from filing a subsequent action for recovery of property and damages with the Regional Trial Court. And, the institution of such complaint will not make petitioner guilty of forum shopping.
    • A third-party claim on a levied property does not automatically prevent execution. Under Rule 39 of the Revised Rules of Court, execution is a remedy afforded by law for the enforcement of a judgment, its object being to obtain satisfaction of the decision on which the writ is issued.
    • When a third-party claim is filed, the sheriff is not bound to proceed with the levy of the property unless the judgment creditor or the latter's agent posts an indemnity bond against the claim. 
    • Where the bond is filed, the remedy of the third-party claimant is to file an independent reivindicatory action against the judgment creditor or the purchaser of the property at public auction. The NLRC should not have automatically lifted the levy and restrained execution, just because a third-party claim had been filed.
    • We find no reason for the union members to enter into a compromise when the decision of NLRC ordering their reinstatement is more advantageous to them than their being dismissed from their jobs under said Compromise Agreement.
    • The Compromise Agreement does not apply to private respondents who did not sign the Compromise Agreement, nor avail of its benefits.

    Suggested Q&A

    1. Explain the extent of the jurisdiction of the Labor Arbiters.
    As substantially provided in Article 224 of the Labor Code, the Labor Arbiters have original and exclusive jurisdiction in the following cases:
    1. Unfair labor practice cases;
    2. Termination disputes;
    3. Cases filed by workers involving labor standards and conditions of employment, if accompanied with a claim for reinstatement;
    4. Actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
    5. Cases arising from any violation of Article 264 of the Labor Code, including the legality of strikes and lockouts; and
    6. 6Claims arising from employer-employee relations, involving more than five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement, except claims for Employees Compensation and related benefits
    In addition to the list, the following cases may be added:
    1. Money claims involving Overseas Filipino Workers;
    2. Wage distortion disputes in cases, where there is no collective bargaining agreements or recognized labor union, which have not voluntarily settled;
    3. Enforcement of a compromise agreement; and
    4. Other cases as provided by law.
    However, only cases which are employment-related may be heard and decided by a Labor Arbiter. The common denominator of the cases cognizable by the Labor Arbiter is that they arise out of or in connection with an employee-employer relationship. The question is whether the reliefs sought by the complainant are relevant to the Labor Code or require the application of the Labor Code.

    2. Differentiate the ruling of the Supreme Court in the following cases:
    1. Tabang v. NLRC
    2. Matling Industrial v. RR Coros
    3. Prudential Bank v. Reyes

    All the three cases involve determination of intra-corporate dispute.

    In Tabang v. NLRC (1997), it was held that offices may be created by the charter or by-laws of the corporation or such charter or by-laws may empower the board of directors to create additional offices. A case involving a corporate officer, being an intra-corporate dispute, falls within the jurisdiction of the Security and Exchange Commission (SEC) and not the labor courts.

    In this case, the Court affirmed the jurisdiction of the SEC since the petitioner was deemed an officer of the corporation and a corporate officer’s dismissal is always considered as an intra-corporate dispute, without distinction.

    In Matling Indurstial v. RR Coros (2010), it was held that the ruling in Tabang that there is no distinction among intra-corporate disputes was too sweeping. In determining the existence of an intra-corporate dispute, two elements must be considered: (1) The status or relationship of the parties; and (2) the nature of the question that is the subject of the dispute. 

    In this case, the Court affirmed the jurisdiction of the labor courts since the respondent was deemed an employee of the petitioner, considering the nature and length of his service. It held that not all conflict involving corporate matters is always considered as an intra-corporate dispute falling within the jurisdiction of the SEC (now RTC).

    In Prudential Bank v. Reyes (2001), it was held that the standard in determining regular employment is the existence of a reasonable connection between the activities performed by the employee and the ordinary business of the employer. An employee is deemed to be regular due to the nature and length of his service, and not due to the circumstances of hiring.

    In this case, the Court also affirmed the jurisdiction of the labor courts since the respondent was deemed an employee of the petitioner, considering the nature and length of her service.

    3. In the case of San Miguel vs NLRC, what is the rule provided by the Supreme Court in determining whether money claims fall within the jurisdiction of the NLRC or the Courts?

    In San Miguel v. NLRC (1988), the Supreme Court ruled that in determining the jurisdiction of money claims of workers, the existence of the reasonable connection with the employer-employee relationship must be established. 

    Money claims are only cognizable by labor courts if they arise out of or in connection with an employee-employer relationship. Additionally, the principal reliefs sought by the complainant must be relevant to the Labor Code or must require the application of the Labor Code.

    In the absence of the employment connection and application of the labor laws and principles, the claim must be filed with a regular court.

    4. What are the grounds for an appeal from the Labor Arbiter to the NLRC? 

    The following are the grounds for an appeal from the Labor Arbiter to the NLRC, as substantially provided by Article 229 of the Labor Code:
    1. Prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
    2. The decision was secured through fraud or coercion, including graft and corruption;
    3. Questions of law; and
    4. Serious errors would cause grave or irreparable damage or injury to the appellant.
    5. What are the conditions for the issuance of an ex-parte TRO by the NLRC? 

    The following are the conditions for the issuance of an ex-parte temporary restraining order by the NLRC: 
    1. Hearing that includes the testimony of witnesses, testimony in opposition, and finding of fact by the NLRC;
    2. Actual or threated commission of prohibited acts;
    3. Unavoidable substantial and irreparable injury to the complainant’s property;
    4. Denial of relief would cause greater injury;
    5. No other adequate remedy;
    6. Public officers are unwilling to provide protection;
    7. Undertaking filed by the complainant with adequate security; and
    8. The TRO shall expire after twenty days.
    6. What are the requisites for perfection of an appeal from the Labor Arbiter to the NLRC?
    The following are the requisites for perfection of an appeal from the Labor Arbiter to the NLRC:
    1. Filed within the time specified by law;
    2. Verified by the appellant;
    3. n accordance with the form of memorandum of appeal in three legibly typewritten copies which contains the:
      1. Grounds relied upon;
      2. Supporting arguments;
      3. Relief prayed for; and
      4. Date of receipt of the appealed decision, resolution or order
    4. Certificate of non-forum shopping
    5. Proof of service to the other party
    6. Proof of payment of appeal fee
    7. Cash or surety bond posted on time
    7. What are the McBurnie Guidelines on Appeal Bond Reduction? 

    The McBurnie Guidelines on Appeal Bond Reduction are:
    1. The reduction of the appeal bond must be upon (1) meritorious ground and (2) there is a reasonable amount of bond posted;
    2. The filing of the motion to reduce appeal bond must be accompanied by a bond equivalent to 10% of the monetary award;
    3. Compliance with the provided conditions shall suspend the running of the 10-day period specified to perfect appeal; 
    4. The NLRC has the authority to resolve the motion and determine final amount of bond; and
    5. If case the motion is denial, or additional bond is required, the NLRC shall give additional ten days to perfect the appeal
    8. How do you appeal from the NLRC decision? Explain the rationale of the ruling of the Supreme Court in St. Martin vs NLRC. 

    The decision of the NLRC may be appealed via certiorari under Rule 65 of the Rules of Court, either to the Court of Appeals or the Supreme Court. However, considering the doctrine of Hierarchy of Courts, it should be initially filed with the Court of Appeals.

    In St. Martin v. NLRC, the Supreme Court ruled that since appeal from the NLRC to the Supreme Court was eliminated upon the amendment of Section 9 of B.P. 129, the intention was to retain the special civil action of certiorari in exercising judicial review of the NLRC. 

    However, considering the number of labor cases elevated to the Supreme Court and the increased number of divisions of the Court of Appeals, the latter court is much capable to initially handle the cases, also in consonance with the doctrine of Hierarchy of Courts.

    9. What is the rule when reinstatement is ordered by the Labor Arbiter and the said Decision was appealed to the NLRC?

    As provided in the Article 229 or the Labor Code, the decision of the Labor Arbiter ordering the reinstatement of a dismissed employee is immediate executory, notwithstanding the appeal. The employee may be reinstated back to work or in payroll, at the option of the employer.

    10. What are the remedies of a third party claimant from an execution of a decision involving their property? (Explain)  

    A third-party claim from an execution of a decision may be filed within five days from the last day of publication of execution.

    The claimant shall execute an affidavit stating his right to possession supported by evidence with the Sheriff and the Arbiter who issued the execution. All proceedings shall be suspended upon receipt of the claim.

    If denied, the third party may appeal the denial to the NLRC.

    The third party may also file an independent action for recovery and damages in the proper civil court. Such separate action shall not be considered as an interference to with the powers of the labor courts or constitute forum shopping.

    11. Explain the case of Tanongon vs Samson (G.R No. 140889, May 9, 2002) 

    In Tanongon v. Samson, the Supreme Court ruled that a simulated sale with a third-party claimant of a property levied by court is void ab initio.

    The general rule that a third-party claim prevents an execution is not applicable if the contract was simulated or fictitious. 

    In this case, the Labor Arbiter issued a writ of execution against the company's property, including a motor tanker in which a third-party claim was filed. Since the tanker was acquired by the third-party after the NLRC decision, the buyer was not considered as a buyer in good faith and the act of selling by the company was considered as an attempt to evade payment of the judgment debt.

    12. What is the jurisdiction of the Bureau of Labor Relations? Explain inter-union and intra-union disputes. 

    The Bureau of Labor Relations have original and exclusive jurisdiction over the following:
    1. Inter-union conflicts;
    2. Intra-union conflicts; and
    3. Problems arising from or affecting labor-management relations, except in the implementation or interpretation of collective bargaining agreements which are subject of grievance procedure and/or voluntary arbitration.
    An Inter-Union Dispute is a conflict between legitimate labor unions regarding representation matters for collective bargaining purposes or any conflict between such unions.

    An Intra-Union Dispute is a conflict within the union itself, as between or among the members on the union. These may involve disagreements over the union's constitutional provisions and by-laws. 

    13. What are the formal and substantive requisites of a compromise agreement?  

    The following are the formal requisites of a compromise agreement:
    1. It must be in writing; and
    2. It must be signed in the presence of the Regional Director or his duly authorized representative.
    The following are the substantive requisites of a compromise agreement:
    1. It must be voluntarily entered into; 
    2. It must represent reasonable settlement of claims; and
    3. It must be authorized by members if entered into by the union.
    14. What is the ruling of the Supreme Court in the case of Jag and Hagger Jeans and Sportswear Corp vs NLRC relative to compromise agreements?

    In Jag and Hagger Jeans and Sportswear Corp v. NLRC, the Supreme Court ruled that a compromise agreement does not apply to employees who were not signatories thereto. The authority to enter into a compromise agreement cannot be presumed and must be established by evidence.

    In this case, the remaining employees of the union who preferred the execution of the NLRC decision than the compromise agreement are not bound by such agreement if they deemed the former to be more advantageous between the two. 

    15. What are the instances when a non-lawyer may appear before the Labor Arbiter or NLRC?  

    A non-lawyer may appear before the Labor Arbiter or NLRC, in any of the following instances:
    1.  If he represents himself, as party to the case;
    2.  If he represents a legitimate labor organization, which is a party to the case;
    3.  If he represents members of a legitimate labor organization, who are parties to the case;
    4.  If he is duly accredited member of any legal aid office recognized by Department of Justice or Integrated Bar of the Philippines; or
    5.  If he is the owner or president of an establishment, which is a party to the case. 

    Discussion:


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