May the Executive Department Handle the Certification Election of Judiciary?

ISSUE
We are asked in this petition to ascertain the power, if any, of the Department of Labor and Employment (DOLE), more specifically the Bureau of Labor Relations (BLR), to supervise the activities of government employees; in this case, unions of judiciary personnel who serve in the Court of Appeals.

The question of power is quite significant. Hitherto, the BLR has concentrated on labor relations in the private sector. Its enforcement machinery and the mass of law and jurisprudence governing its functions are entirely geared to the handling of the peculiar problems arising in private employment. In this case, the BLR has tasked itself to intervene not only in a quarrel between two groups of government employees but more important, in a quarrel between employees working for an independent branch of government, the Judiciary.

The issue of what governs and who supervises unions of government employees is of more than passing concern especially when those who organize and hope to engage in certain forms of concerted action are court employees.

What is the law which governs certification elections in the Court of Appeals?

RULING:  YES

All this does not mean that the separation of powers doctrine requires us to supervise the details of self-organization activities in the courts. In the same way that CSC validly conducts competitive examinations to grant requisite eligibilities to court employees, we see no constitutional objection to DOLE handling the certification process in the Court of Appeals, considering its expertise, machinery, and experience in this particular activity. Executive Order No. 180 requires organizations of government employees to register with both CSC and DOLE. This ambivalence notwithstanding, the CSC has no facilities, personnel, or experience in the conduct of certification elections. The BLR has to do the job.

Executive Order No. 180 states that certificates of registration of the legitimate employee representatives must be jointly approved by the CSC Chairman and the DOLE Secretary. Executive Order No. 180 is not too helpful in determining whose opinion shall prevail if the CSC Chairman and the DOLE Secretary arrive at different conclusions. At any rate, we shall deal with that problem when it occurs. Insofar as power to call for and supervise the conduct of certification elections is concerned, we rule against the petitioner.

References:

Association of Court of Appeals vs Ferrer - Calleja (Union of Concerned Employees of the Phils.)
GR 94716 (1991, Third Division)

Executive Order No. 180 issued on June 1, 1987
"Providing Guidelines for the Exercise of the Right to Organize of Government Employees; Creating a Public Sector Labor-Management Council; and for Other Purposes."

Do the Government Employees Enjoy the Right to Form and Join Union?

Yes. There is no question that government employees may organize provided the purposes behind such organization are legitimate.

While the Labor Code is silent, the 1987 Philippine Constitution under Article 3 - Bill of Rights provides :

Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

Note: 
Employee Association is to Public Sector as Labor Organization or Union to Private Sector


References:

Executive Order No. 180 issued on June 1, 1987
"Providing Guidelines for the Exercise of the Right to Organize of Government Employees; Creating a Public Sector Labor-Management Council; and for Other Purposes."

Section 2. All government employees can form, join or assist employees’ organizations of their own choosing for the furtherance and protection of their interests. They can also form, in conjunction with appropriate government authorities, labor-management committees, works councils and other forms of workers’ participation schemes to achieve the same objectives.

Association of Court of Appeals vs Ferrer - Calleja (Union of Concerned Employees of the Phils.)
GR 94716 (1991, Third Division)

ISSUE
We are asked in this petition to ascertain the power, if any, of the Department of Labor and Employment (DOLE), more specifically the Bureau of Labor Relations (BLR), to supervise the activities of government employees; in this case, unions of judiciary personnel who serve in the Court of Appeals.

The question of power is quite significant. Hitherto, the BLR has concentrated on labor relations in the private sector. Its enforcement machinery and the mass of law and jurisprudence governing its functions are entirely geared to the handling of the peculiar problems arising in private employment. In this case, the BLR has tasked itself to intervene not only in a quarrel between two groups of government employees but more important, in a quarrel between employees working for an independent branch of government, the Judiciary.

The issue of what governs and who supervises unions of government employees is of more than passing concern especially when those who organize and hope to engage in certain forms of concerted action are court employees.

What is the law which governs certification elections in the Court of Appeals?

RULING
On BLR authority:

All this does not mean that the separation of powers doctrine requires us to supervise the details of self-organization activities in the courts. In the same way that CSC validly conducts competitive examinations to grant requisite eligibilities to court employees, we see no constitutional objection to DOLE handling the certification process in the Court of Appeals, considering its expertise, machinery, and experience in this particular activity. Executive Order No. 180 requires organizations of government employees to register with both CSC and DOLE. This ambivalence notwithstanding, the CSC has no facilities, personnel, or experience in the conduct of certification elections. The BLR has to do the job.

Executive Order No. 180 states that certificates of registration of the legitimate employee representatives must be jointly approved by the CSC Chairman and the DOLE Secretary. Executive Order No. 180 is not too helpful in determining whose opinion shall prevail if the CSC Chairman and the DOLE Secretary arrive at different conclusions. At any rate, we shall deal with that problem when it occurs. Insofar as power to call for and supervise the conduct of certification elections is concerned, we rule against the petitioner.

Do the Government Employees Enjoy the Right to Strike?

RULING:

In contrast, other labor experts and delegates to the 1971 Constitutional Convention enlightened the members of the Committee on Labor on the divergent situation of government workers under the 1935 Constitution, and called for its rectification. Thus, in a Position Paper dated November-22, 1971, submitted to the Committee on Labor, 1971 Constitutional Convention, then Acting Commissioner of Civil Service Epi Rev Pangramuyen declared:

It is the stand, therefore, of this Commission that by reason of the nature of the public employer and the peculiar character of the public service, it must necessarily regard the right to strike given to unions in private industry as not applying to public employees and civil service employees. It has been stated that the Government, in contrast to the private employer, protects the interests of all people in the public service, and that accordingly, such conflicting interests as are present in private labor relations could not exist in the relations between government and those whom they employ.

REFERENCE:
Alliance of Government Workers vs Minister of Labor and Employment
GR L-60403 (1983, En Banc)

Is the Government Considered An Employer With Regard to 13th Month Pay?

ISSUE:

Are the branches, agencies, subdivisions, and instrumentalities of the Government, including government owned or controlled corporations, included among the 4 "employers"" under PD 851 which are required to pay their employees receiving a basic salary of not more than P1,000 a month, a thirteenth (13th) month pay not later than December 24 of every year?

RULING:
"It is an old rule of statutory construction that restrictive statutes and acts which impose burdens on the public treasury or which diminish rights and interests, no matter how broad their terms do not embrace the Sovereign, unless the Sovereign is specifically mentioned. (See Dollar Savings Bank v. United States, 19 Wall (U.S.) 227; United States v. United Mine Workers of America, 330 U.S. 265). The Republic of the Philippines, as sovereign, cannot be covered by a general term like "employer" unless the language used in the law is clear and specific to that effect."


REFERENCES:

Alliance of Government Workers vs Minister of Labor and Employment
GR L-60403 (1983, En Banc)

DOLE's FAQs on 13th Month Pay

1987 Philippine Constitution, Article 9 (b) Civil Service:

Section 5. The Congress shall provide for the standardization of compensation of government officials and employees, including those in government-owned or controlled corporations with original charters, taking into account the nature of the responsibilities pertaining to, and the qualifications required for their positions.

Sonza Case: Employee or Independent Contractor?

G.R. No. 138051             June 10, 2004

JOSE Y. SONZA, petitioner,
vs.
ABS-CBN BROADCASTING CORPORATION, respondent.

SC Ruling: WHEREFORE, we DENY the petition.

The present controversy is one of first impression. Although Philippine labor laws and jurisprudence define clearly the elements of an employer-employee relationship, this is the first time that the Court will resolve the nature of the relationship between a television and radio station and one of its "talents." There is no case law stating that a radio and television program host is an employee of the broadcast station.

Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished.1

4-Fold Test #1 - Selection Test (Emphasis provided)

Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABS-CBN would not have entered into the Agreement with SONZA but would have hired him through its personnel department just like any other employee.

4-Fold Test #2 - Wage Test (Emphasis provided)

SONZA’s talent fees, amounting to ₱317,000 monthly in the second and third year, are so huge and out of the ordinary that they indicate more an independent contractual relationship rather than an employer-employee relationship. ABS-CBN agreed to pay SONZA such huge talent fees precisely because of SONZA’s unique skills, talent and celebrity status not possessed by ordinary employees 

4-Fold Test #3 - Dismissal Test (Emphasis provided)

For violation of any provision of the Agreement, either party may terminate their relationship. SONZA failed to show that ABS-CBN could terminate his services on grounds other than breach of contract, such as retrenchment to prevent losses as provided under labor laws. 

4-Fold Test #4 - Control Test (Emphasis provided)

Applying the control test to the present case, we find that SONZA is not an employee but an independent contractor. To perform his work, SONZA only needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside ABS-CBN’s control. SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify the program format and airtime schedule "for more effective programming." ABS-CBN’s sole concern was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise control over the means and methods of performance of SONZA’s work.

SONZA claims that ABS-CBN’s power not to broadcast his shows proves ABS-CBN’s power over the means and methods of the performance of his work. Although ABS-CBN did have the option not to broadcast SONZA’s show, ABS-CBN was still obligated to pay SONZA’s talent fees... Thus, even if ABS-CBN was completely dissatisfied with the means and methods of SONZA’s performance of his work, or even with the quality or product of his work, ABS-CBN could not dismiss or even discipline SONZA. All that ABS-CBN could do is not to broadcast SONZA’s show but ABS-CBN must still pay his talent fees in full.

Clearly, ABS-CBN’s right not to broadcast SONZA’s show, burdened as it was by the obligation to continue paying in full SONZA’s talent fees, did not amount to control over the means and methods of the performance of SONZA’s work. ABS-CBN could not terminate or discipline SONZA even if the means and methods of performance of his work - how he delivered his lines and appeared on television - did not meet ABS-CBN’s approval. This proves that ABS-CBN’s control was limited only to the result of SONZA’s work, whether to broadcast the final product or not. In either case, ABS-CBN must still pay SONZA’s talent fees in full until the expiry of the Agreement.

Different Tax Treatment of Talents and Broadcasters

The National Internal Revenue Code ("NIRC") in relation to Republic Act No. 7716, as amended by Republic Act No. 8241, treats talents, television and radio broadcasters differently. Under the NIRC, these professionals are subject to the 10% value-added tax ("VAT") on services they render. Exempted from the VAT are those under an employer-employee relationship. This different tax treatment accorded to talents and broadcasters bolters our conclusion that they are independent contractors, provided all the basic elements of a contractual relationship are present as in this case.