iii. Assumption of Jurisdiction or Certification of Disputes in Industries of National Interest

LA vs. DOLE Secretary/NLRC Jurisdiction

General Rule: LA has jurisdiction (NCMB Primer on Strike, Picketing, and Lockout, No. 22)

Exception: In labor disputes involving industries indispensable to the national interest, the DOLE Secretary (if there is an assumption of jurisdiction) or NLRC (if certified by the Secretary) has jurisdiction.

Industries Indispensable to the National Interest

• Hospital sector;
• Electric power industry;
• Water supply services, to exclude small water supply services such as bottling and refilling stations;
• Air traffic control; and
• Such other industries as may be recommended by the National Tripartite Industrial Peace Council.
• ALL OTHER CLAIMS ARISING FROM EER INVOLVING AN AMOUNT EXCEEDING P5,000 REGARDLESS OF WHETHER ACCOMPANIED BY A CLAIM FOR REINSTATEMENT EXCEPT CLAIMS FOR ECC, SSS, MEDICARE, & MATERNITY BENEFITS

Monetary claims arising from EER which do not exceed Php5,000 fall within the jurisdiction of the DOLE Regional Director. (LC, Art. 129)

NOTE: A kasambahay’s claim, regardless of the amount, falls within the jurisdiction of the DOLE Regional Office, and not the NLRC. (Batas Kasambahay, Sec. 37)

Art. 306 provides that money claims arising from EER generally prescribe in 3 years from the time the cause of action accrued; they must be filed before the tribunal or official with jurisdiction over the particular claim. (LC, Arts. 129, 224 [217], 306 [291])

But this prescriptive period is subject to interruption through:

• Filing of an action;
• Written extrajudicial demand;
• Written acknowledgement of indebtedness. (IBC v. Panganiban, G.R. No. 151407, 2007)

A judgment in the form of a wage order for money claims which has become final and executory prescribes in 10 years, pursuant to Art. 1144 of the Civil Code on prescription of judgments. (JK Mercado & Sons v. Sto Tomas, G.R. No. 158084, 2008)

DOLE certification that all mandatory wage increases and other monetary benefits were all complied with by the employer is not sufficient proof to conclude payment of the monetary claims of the employee, especially if the certification was issued based only on documents submitted by the employer. (Dansart Security v. Bagoy, G.R. No. 168495, 2010)

• WAGE DISTORTION CASES IN UNORGANIZED ESTABLISHMENTS

Note: In Organized Establishments: The Voluntary Arbitrator (VA) has jurisdiction

• ALL MONETARY CLAIMS OF OFWS ARISING FROM EER 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 (RA 8042)

For the LA to have jurisdiction over money claims of OFWs, a EER is not necessary, as the article also refers to “law” or “contract.” (see Santiago v. C.F. Sharp, G.R. No. 162419, 2007)

In order for the LA to assume jurisdiction over the money claim, the OFC must have a certification from the POEA (PNB v. Cabansag, G.R. No. 157010, 2005)

• ENFORCEMENT OF COMPROMISE AGREEMENTS WHEN THERE IS NONCOMPLIANCE BY ANY OF THE PARTIES PURSUANT TO ART. 233 OF THE CODE (SEC. 1, RULE V, 2005 NLRC RULES)

ASSUMPTION OF JURISDICTION BY SECRETARY OF LABOR AND EMPLOYMENT

Nature

Art. 278(g) is both an extraordinary and a preemptive power to address an extraordinary situation – a strike or lockout in an industry indispensable to the national interest. The secretary of Labor is empowered to:

• Assume jurisdiction over the dispute and decide it, or
• Certify the dispute to the NLRC for compulsory arbitration, in which case, NLRC shall hear and decide

The intent of the law is to give the Labor Secretary full authority to resolve all matters within the dispute that gave rise to or which arose out of the strike or lockout; it includes and extends to all questions and controversies arising from or related to the dispute, including cases over which the labor arbiter has exclusive jurisdiction.

The authority of the Secretary to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest includes and extends to all questions and controversies arising from such labor dispute. The power is plenary and discretionary in nature to enable him to effectively and efficiently dispose of the dispute. (Philcom Employees Union v. Philippine Global Communications, G.R. No. 144315, 2006)

As held in International Pharmaceuticals, Inc. v. Secretary of Labor, the Labor Secretary has jurisdiction over all questions and controversies arising from an assumed dispute, including cases over which the labor arbiter has exclusive jurisdiction. (G.R. Nos. 92981-83, 1992)

• INDUSTRY INDISPENSABLE TO THE NATIONAL INTEREST

What Constitutes a National Interest Case

The Labor Code vests upon the Secretary of Labor the discretion to determine what industries are indispensable to national interest. Thus, if a labor dispute causes or is likely to cause a strike or lockout in an industry the Secretary of Labor considers indispensable to the national interest, the Secretary may assume jurisdiction over the dispute or certify it to the NLRC under Art. 278(g) [263(g)]. (Philtread Workers Union v. Confesor, G.R. No. 117169, 1997).

A Police Power Measure

The assumption of jurisdiction is in the nature of police power measure. This is done for the promotion of the common good considering that a prolonged strike or lockout can be inimical to the national economy. The Secretary of Labor acts to maintain industrial peace. Thus, his certification for compulsory arbitration is not intended to impede the workers' right to strike but to obtain a speedy settlement of the dispute. (Philtread Workers Union v. Confesor, G.R. No. 117169, 1997).

What are Considered “National Interest” Cases

Under Labor Code Art. 278(g) [263(g)], the Secretary of Labor may assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, or certify the dispute to the NLRC for compulsory arbitration.

Industries Indispensable to the National Interest

• Hospital Sector
• Electric Power Industry
• Water Supply Services, to exclude small water supply such as bottling and refilling stations
• Air traffic control
• Such other industries as maybe recommended by the National Tripartite Industrial Peace Council (NTIPC) (DO No.40-H-13)

Examples of “National Interest” disputes:

• Nestle Philippines, Inc. is engaged in an undertaking affected with public interest being one of the largest manufacturers of food products. (Union of Filipro v. NLRC, G.R. No. 91025, 1990 )
• Academic institutions (Philippine School of Business Administration v. Noriel, G.R. No. 80648, 1988)
• A company supplying the sulfate requirements of MWSS
• Banking is expressly classified by the General Banking Law as an industry indispensable to the national interest.
• However, the Court ruled that the production of telephone directories is not an industry affecting the national interest. (GTE Directories Corp v. Sanchez, G.R. No. 76219, 1991)

EFFECTS OF ASSUMPTION OF JURISDICTION

• On intended or impending strike or lockout – Automatically enjoined (Labor code, Art. 278(g))
• On actual strike or lockout (already taken place) – all striking or locked-out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout(Labor code, Art. 278(g))
• On cases already filed and may be filed – considered subsumed or absorbed by assumed or certified case, except where certification or assumption order states otherwise (Guagua National Colleges v. Guagua National Colleges Faculty Labor Union, G.R. No. 204693, 2016)
• On other pending cases – Parties are required to inform their counsels and the DOLE Secretary/ NLRC Division concerned of all pending cases that are related or incident to the assumed/certified case.(Par 2, Sec. 3(b), Rule VIII, 2011 NLRC Rules of Procedure)

Such assumption or certification has the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order

If one has already taken place at the time of the assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. In such case, the assumption/certification results to a return-to-work of all striking workers even if the Secretary has not issued a Return to Work Order (RTWO). (Labor code, Art. 278 (g))

Upon assumption or certification, the parties should revert to the status quo ante litem which refers to the state of things as it was before the labor dispute or the state affairs existing at the time of the filing of the case. (Overseas Workers’ Welfare Administration v. Chavez, G.R. No. 169802, 2007).

The assumption or certification also has the effect of regulating the management prerogative of determining the assignment or movement of EEs.

Thus, in one case, the Court held the layoff of 94 EEs pending the resolution of the dispute is illegal as it was violative of the assumption order. (Metrolab v. Roldan-Confesor, G.R. No. 108855, 1996)

When May the Secretary Assume Jurisdiction Over a Case or Certify it to the NLRC

Under the law, when in his opinion there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary [of Labor] may:

• Assume jurisdiction over the dispute and decide it, or
• Certify the same to the NLRC for compulsory arbitration

Note: Power of DOLE Secretary to assume jurisdiction over a labor dispute is limited to strikes or lockouts adversely affecting the national interest. (Free Telephone Workers Union v. Hon. Minister of Labor and Employment, G.R. L-58184, 1981)

Rule on Strikes and Lockouts in Hospitals, Clinics and Medical Institutions (Labor code, Article 278 (g) (par.2))

GR: Strikes and lockouts in these institutions must be avoided

But in case a strike or lockout is staged:

• It shall be the duty of the striking union or locking-out employer to provide and maintain an effective skeletal workforce of medical/ other health personnel whose services shall be unhampered and unrestricted to insure the proper and adequate protection of life and health of its patients for the duration of the strike/lockout
• DOLE Secretary shall immediately assume, within 24 hours from knowledge of the occurrence of the strike/lockout, jurisdiction over the same or certify it to NLRC for compulsory arbitration

Assumption of Jurisdiction: Prior Notice Not Required

The discretion to assume jurisdiction may be exercise by the Secretary without the necessity of prior notice or hearing given to any of the parties.

The rationale for his primary assumption of jurisdiction can justifiably rest on his own consideration of the exigiency of the situation in relation to the national interests. (Capitol Medical Center v. Trajano, G.R. No. 155690, 2005).

Return-to-Work-Order (RTWO)

The moment the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to national interest, such assumption shall have the effect of automatically enjoining the intended or impending strike. It was not even necessary for the Secretary of Labor to issue another order directing a return to work. The mere issuance of an assumption order by the Secretary of Labor automatically carries with it a return-to-work order, even if the directive to return to work is not expressly stated in the assumption order. (Steel Corporation of the Philippines v. SCP Employees Union, G.R. 169829-30, 2008)

Note:

• It is always part of the assumption OR certification order even if not expressly stated.
• RTWO is compulsory in character

Certification to NLRC

“Certified labor disputes” are cases certified [or referred] to the NLRC for compulsory arbitration

A “national interest” dispute may be certified to the NLRC even before a strike is declared since the Labor Code does not require the existence of a strike, but only of an industrial dispute.

When sitting in a compulsory arbitration certified to by the DOLE Secretary, the NLRC is not sitting as a judicial court but as an administrative body charged with the duty to implement the order of the Secretary. In such a case, the NLRC does not have the power to amend the Secretary’s order. (GSISEA v. CIR, G.R. No. L-18734, 1961)

Effects of Defiance of Assumption or Certification

Non-compliance with the certification order of the Secretary shall be considered an illegal act committed in the course of the strike or lockout, and shall authorize the NLRC to enforce the same under pain of immediate disciplinary action, including loss of employment status or payment by the locking-out ER of backwages or damages, even criminal prosecution against the liable parties.

Defiant Strikers, Whether Officer or Ordinary Members of the Striking Union, are Deemed Dismissed

Defiant Strikers, Whether Union Officers or Ordinary Members, May Lose Employment Status

Once DOLE Sec assumes jurisdiction over a labor dispute or certifies it to NLRC for compulsory arbitration, such jurisdiction should not be interfered with by the application of coercive processes of a strike or lockout.

Any defiance thereof is a valid ground for the loss of employment status regardless of whether the defiant worker is an officer or an ordinary member of the union Defiance of the assumption order or a return-to work order by a striking employee, whether a union officer or a member, is an illegal act and, therefore, a valid ground for loss of employment status. (Manila Hotel Employees Association v. Manila Hotel Corp., G.R. No. 154591, 2007)

Certification to the NLRC makes the continuation of the strike illegal, provided that the parties are duly notified of the certification order. Notice is a prerequisite even if the order states that it is “immediately executory.”

Refusal to Receive the Assumption of Jurisdiction Order Amounts to Defiance

Refusal to receive the Assumption of Jurisdiction Order (AJO) amounts to defiance of the order, which makes the continuation of the strike an illegal act, thus subjecting the strikers to possible termination of employment.

The strikers should resume work immediately upon receipt or constructive receipt of the order. A grace period may be given but that is not required by the law. (Azucena Vol. II-A, 9th ed., 2016, p. 646)