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University of Santo Tomas

Faculty of Civil Law

LABOR LAW
AND SOCIAL
LEGISLATION
Questions Asked More
Than Once
(QuAMTO 2017)

*QUAMTO is a compilation of past bar questions with answers as suggested by


UPLC and other distinct luminaries in the academe, and updated by the UST
Academics Committee to fit for the 2017 Bar Exams.

*Bar questions are arranged per topic in accordance with the bar syllabus
released by the Supreme Court and were selected based on their occurrence
on past bar examinations from 1987 to 2016.
ACADEMICS COMMITTEE
CAMILLE ANGELICA B. GONZALES SECRETARY GENERAL

EMNIE VALERIE B. DURAN


IRVIN L. PALANCA
EXECUTIVE COMMITTEE
LARA NICOLE T. GONZALES
MARIELLA A. MARASIGAN

CAMILLE ANGELICA B. GONZALES LAYOUT AND DESIGN

QUAMTO COMMITTEE MEMBERS

JACKIELYN KRYSTYL NIHAMA BANA


KARL ANTHONY BULAONG
MERVIN MARCOS
KELLY ANN RUBIN
NESTOR FERNANDO SIAZON

ATTY. AL CONRAD B. ESPALDON


ADVISER
QUAMTO (1987-2016)

LABOR LAW QUAMTO


Q: In her State of the Nation Address, the President
stressed the need to provide an investor-friendly
business environment so that the country can compete
Fundamental Principles and Concepts in the global economy that now suffers from a crisis
bordering on recession. Responding to the call,
Congress passed two innovative legislative measures,
LEGAL BASIS namely: (1) a law abolishing the security of tenure
clause in the Labor Code; and (2) a law allowing
1987 Constitution (State policies, Bill of Rights & Social contractualization in all areas needed in the employers
Justice) (1996, 1998, 2009 Bar) business operations. However, to soften the impact of
these new measures, the law requires that all
employers shall obtain mandatory unemployment
Q: What are the salient features of the protection to insurance coverage for all their employees.
labor provision of the Constitution? (1998 Bar)
The constitutionality of the two (2) laws is challenged
A: The salient features of the Protection to Labor provision
in court. As judge, how will you rule? (2009 Bar)
of the Constitution (Article XIII. Section 3} are as follows:
Extent of Protection - Full protection to labor;
A: The first innovative measure, on abolition of the
Coverage of Protection - Local and overseas,
security of tenure clause in the Labor Code, is
organized and unorganized;
unconstitutional as it goes against the entitlement of
Employment Policy - Full employment and equality workers to security of tenure under Section 3, Article XIII
of employment opportunities for all;
of the 1987 Constitution.
Guarantees:
Unionism and Method of Determination Conditions The second innovative measure, on a law allowing
of Employment - Right of all workers to self- contractualization in all areas needed in the employers
organization, collective bargaining and business operations, is legal. Article 106 of the Labor Code
negotiations. already allows the Secretary of Labor and Employment not
to make appropriate distinction between labor-only and
Concerted Activities - Right to engage in peaceful job contracting. This means that the Secretary may decide,
concerted activities, including the right to strike in through implementing regulation, not to prohibit labor-
accordance with law. only contacting, which is an arrangement where the
person supplying workers to an employer does not have
Working Conditions - Right to security of tenure, substantial capital or investment in the form of tools,
humane conditions of work and a living wage. equipment, machineries, work premises, among others,
and the workers recruited and place by such person are
Decision Making Processes - Right to participate in performing activities which are directly related to the
policy and decision, making processes affecting principal business of the employer.
their rights and benefits as way to provide by law.

Share In Fruits of Production - Recognition of right Hence, it would be legal for Congress to do away with the
prohibition on labor-only contracting and allow
of labor to its just share in fruits of production.
contractualization in all areas needed in the employers
business operations. Assuming, of course, that contractual
Q: What are the rights of an employer and an employee? workers are guaranteed their security of tenure.
(1996 Bar)
CONSTRUCTION IN FAVOR OF LABOR (2010, 2009,
A: An employer is a person who employs the services of 1993 BAR)
another and pays for their wages and salaries. As such, Art.
XIII, Sec. 3 of the Constitution provides and guarantees
Q: Clarito, an employee of Juan, was dismissed for
them with the following rights:
allegedly stealing Juans wristwatch. In the illegal
1. Reasonable return of investment
dismissal case instituted by Clarito, the Labor Arbiter,
2. Expansion
citing Article 4 of the Labor Code, ruled in favor of
3. Growth
Clarito upon finding Juans testimony doubtful. On
appeal, the NLRC reversed the Labor Arbiter holding
On the other hand, an employee is a person who works
that Article 4 applies only when the doubt involves
under the employ of another in exchange of a valuable
implementation and interpretation of the Labor
consideration in the form of wages, salaries, benefits, etc.
Code provisions. The NLRC explained that the doubt
Art. XIII, Sec. 3 of the Constitution similarly provides and
may not necessarily be resolved in favor of labor since
similarly guarantees them the following rights:
this case involves the application of the Rules on
Evidence, not the Labor Code. Is the NLRC correct?
1. Security of tenure
Reasons. (2009)
2. Receive a living wage
3. Humane conditions of work
4. Just share in the fruits of production A: The NLRC is not correct. It is a well settled doctrine that
5. Right to self-organization if doubts exist between the evidence presented by the
6. Conduct collective bargaining or negotiation with employer and the employee, the scale of justice must be
management tilted in favor of the latter. It is a time honored rule that in
7. Engage in peaceful concerted activities including strike controversies between laborer and master, doubts
8. Participate in policy and decision making process necessarily arising from the evidence, or in the

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Labor Law and Social Legislation

implementation of the agreement and writing should be Prohibited activities (2015, 2006, 2005, 1991 Bar)
resolved in favor of the laborer.
Q: Rocket Corporation is a domestic corporation
registered with the SEC, with 30% of its authorized
SOCIAL JUSTICE (2003, 1994 BAR)
capital stock owned by foreigners and 70% of its
authorized capital stock owned by Filipinos. Is Rocket
Q: May social justice as a guiding principle in labor law Corporation allowed to engage in the recruitment and
be so used by the courts in sympathy with the working placement of workers, locally and overseas? Briefly
man if it collides with the equal protection clause of the state the basis for your answer. (2015 Bar)
Constitution? Explain. (2003 Bar)
A: No. Article 27 of the Labor Code mandates that
A: Yes. The State is bound under the Constitution to afford pertinently, for a Corporation to validly engage in
full protection to Labor; and when conflicting interests recruitment and placement of workers, locally and overseas,
collide and they are to be weighed on the scales of social at least seventy-five percent (75%) of its authorized and
justice, the law should accord more sympathy and voting capital stock must be owned and controlled by
compassion to the less privileged workingman. (Fuentes v. Filipino citizens. Since only 70% of its authorized capital
NLRC. 266 SCRA 24 119971) However, it should be borne in stock is owned by Filipinos, it consequently cannot validly
mind that social justice ceases to be an effective instrument engage in recruitment and placement of workers, locally
for the equalization of the social and economic forces by and overseas.
the State when it is used to shield wrongdoing. (Corazon
Jamer v. NLRC, 278 SCRA 632 [1997]) Q: Marino Palpak, Eddie Angeles and Jose Berdugo
advertised in the Manila Bulletin the following
information: 20 Teachers wanted for Egypt. Apply at
No. 123 Langit, Manila." Salvacion Inocente applied
Recruitment and Placement and was made to pay minimal fees to cover
administrative expenses and the cost of her passport
and visa. For one reason or another, Salvacion did not
ILLEGAL RECRUITMENT (2010 BAR)
get the job and filed a complaint with the POEA. Marino,
Q: A was approached for possible overseas deployment Eddie and Jose admitted having no license or authority
to Dubai by X, an interviewer of job applicants for Alpha but claimed that they are not covered by the Labor
Code since they are not engaged in the recruitment and
Personnel Services, Inc., an overseas recruitment
agency. X required A to submit certain documents placement for profit and, at any rate, only one
(passport, NBI clearance, medical certificate) and to prospective worker was involved. May Marino, Eddie
pay P25,000 as processing fee. Upon payment of the and Jose be prosecuted? If so, for what specific
said amount to the agency cashier, A was advised to offense/s? (1991 Bar)
wait for his visa. After five months, A visited the office A: Marino, Eddie and Jose can be prosecuted. Recruitment
of Alpha Personnel Services, Inc. during which X told and placement by persons without a license or authority
him that he could no longer be deployed for constitute illegal activities. Marino, Eddie and Jose were
employment abroad. A was informed by the Philippine engaged in recruitment and placement when they
Overseas Employment Administration (POEA) that advertised that 20 teachers were wanted to Egypt.
while Alpha Personnel Services, Inc. was a licensed Advertising for employment is one of the acts considered
agency, X was not registered as its employee, contrary as recruitment and placement in the Labor Code.
to POEA Rules and Regulations. Under POEA Rules and
Regulations, the obligation to register personnel with That they were not engaged in recruitment and placement
the POEA belongs to the officers of a recruitment agency. for profit does not mean that the conditions for a person to
(2010) engage in recruitment and placement found in the Labor
Code are not applicable to them. The Code applies to any
a. May X be held criminally liable for illegal recruitment or placement, whether for profit or not.
recruitment? Explain.
The fact that only one prospective worker was involved
A: No. X performed his work with the knowledge that he does not mean that they were not engaged in recruitment
works for a licensed recruitment agency. He is in no position or placement. They were. The reference in the Code that
to know that the officers of said recruitment agency failed any person who offers employment to two or more
to register him as its personnel (People v. Chowdur, G.R. No. persons as being engaged in recruitment and placement
129577-80, February 15, 2000). The fault not being does not mean that there must be at least two persons
attributable to him, he may be considered to have apparent involved. This reference is merely evidentiary.
authority to represent Alpha in recruitment for overseas
employment. They may be prosecuted for these specific offenses: They
already charged fees even if they have not yet obtained
b. May the officers having control, management or employment for the applicant
direction of Alpha Personnel Services, Inc. be held
criminally liable for illegal recruitment? Explain. Q: Wonder Travel and Tours Agency (WTTA) is a well-
known travel agency and an authorized sales agent of
A: Yes. Alpha, being a licensed recruitment agency, still has the Philippine Air Lines. Since majority of its
obligations to A for processing his papers for overseas passengers are overseas workers, WTTA applied for a
employment. Under Section 6(m) of R.A. 8042, failure to license for recruitment and placement activities. It
reimburse expenses incurred by the worker in connection stated in its application that its purpose is not for profit
with his documentation and processing for purposes of but to help Filipinos find employment abroad. Should
deployment, in cases where the deployment does not the application be approved? (2006 Bar)
actually take place without the workers fault, amounts to
illegal recruitment. A: No. The application should be disapproved. The law
clearly states that travel agencies and sales agencies of

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QUAMTO (1987-2016)
airline companies are prohibited from engaging in the Q: When does the recruitment of workers become an
business of recruitment and placement of workers for act of economic sabotage? (2015 Bar)
overseas employment whether for profit or not. (Article 26,
Labor Code). A: Under Section 6(m) of RA 8042, illegal recruitment is
considered economic sabotage if it is committed by a
In the present case, it is clear that WTTA is the authorized syndicate or is large scale in scope. It is syndicated illegal
sales agency of PAL; and thus falling within the prohibition recruitment if the illegal recruitment is carried out by three
of Art. 26. Furthermore, its intention of providing Filipinos (3) or more conspirators; and it is large scale in scope when
with employment abroad will not hold water to approve its it is committed against three (3) more persons, individually
application no matter how noble it is, because Art. 26 or as a group
provides for an absolute prohibition and does not place any
merit on the intention of the applicant. Q: Discuss the types of illegal recruitment under the
Labor Code. (2007 Bar)
Q: Maryrose Ganda's application for the renewal of her
license to recruit workers for overseas employment A: Under the Labor Code, as amended by Republic Act No.
was still pending with the Philippine Overseas 8042 otherwise known as the Overseas Filipinos and
Employment Administration (POEA). Nevertheless, she Migrant workers Act of 1995, there are two types of illegal
recruited Alma and her three sisters, Ana, Joan and recruitment, particularly simple illegal recruitment and
Mavic, for employment as housemaids in Saudi Arabia. illegal recruitment which is considered as an offense
Maryrose represented "to the sisters that she had a involving economic sabotage. Illegal recruitment as an
license to recruit workers for overseas employment. offense involving economic sabotage is committed under
Maryrose also demanded and received P30, 000.00 the following qualifying circumstances, to wit:
from each of them for her services. However,
Maryrose's application for the renewal of her license When illegal recruitment is committed by a syndicate, that
was denied, and consequently failed to employ the four is when it is carried out by a group of three (3) or more
sisters in Saudi Arabia. persons conspiring and/or confederating with one
another; or
The sisters charged Maryrose with large scale illegal
recruitment. Testifying in her defense, Maryrose When illegal recruitment is committed in large scale, that
declared that she acted in good faith because she is when it is committed against three (3) or more persons
believed that her application for the renewal of her whether individually or as a group.
license would be approved. Maryrose adduced in
evidence the Affidavits of Desistance which the four REGULATION OF RECRUITMENT AND PLACEMENT
private complainants had executed after the ACTIVITIES (2002, 1998 BAR)
prosecution rested its case, In the said affidavits, they
acknowledged receipt of the refund by Maryrose of the Q: Is a corporation, seventy percent (70%) of the
total amount of PI20.000,00 and indicated that they authorized and voting capital of which is owned and
were no longer interested to pursue the case against controlled by Filipino citizens, allowed to engage in the
Maryrose. Resolve the case with reasons. (2005 Bar) recruitment and placement of workers, locally or
overseas? Explain briefly. (2002 Bar)
A. Maryrose is still criminally liable for large scale illegal
recruitment, Good faith is not a defense in illegal A: No. A corporation, seventy percent (70%) of the
recruitment as defined in Sec, 6 of R.A. 8042. Illegal authorized and voting capital stock of which is owned and
recruitment is malum prohibitum. controlled by Filipino citizens cannot be permitted to
participate in the recruitment and placement of workers,
Refund of the P120, 000.00 she received does not likewise locally or overseas, because Art 27 of the Labor Code
extinguish her criminal liability. If at all, it satisfies only her requires at least seventy-five percent (75%).
civil liability. The affidavit of desistance, moreover, does not
bar Maryrose's prosecution. The criminal offense is not Q: A Recruitment and Placement Agency declared
extinguished by such desistance. Besides, affidavit of voluntary bankruptcy. Among its assets is its license to
desistance, as a rule, is frowned upon. engage in business. Is the license of the bankrupt
agency an asset which can be sold in public auction by
Types of illegal recruitment (2015, 2007, 2002 Bar) the liquidator? (1998 Bar)
Q: When is illegal recruitment considered a crime of
A: No, because of the non-transferability of the license to
economic sabotage? Explain briefly. (2002, 2007, 2015
engage in recruitment and placement.
bar)
The Labor Code (in Article 29) provides that no license to
A: According to Art. 28 of the Labor Code, illegal
engage in recruitment and placement shall be used directly
recruitment is considered a crime of economic sabotage
or indirectly by any person other than the one in whose
when committed by a syndicate or in large scale.
favor it was issued nor may such license be transferred,
conveyed or assigned to any other person or entity.
Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons It may be noted that the grant of a license is a governmental
conspiring and/or confederating with one another in act by the Department of Labor and Employment based on
carrying out any unlawful or illegal transaction, enterprise personal qualifications, and citizenship and capitalization
or scheme which is an act of illegal recruitment. requirements. (Arts. 27-28, Labor Code)
Illegal recruitment is deemed committed in large scale if EMPLOYMENT OF NON-RESIDENT ALIENS (2007, 1995)
committed against three (3) or more persons individually
or as a group. Q: AB, a non-resident American, seeks entry to the

3
Labor Law and Social Legislation

country to work as Vice-President of a local gives them the status of regular employees. What
telecommunications company. You are with the determines regularity is not the employment contract but
Department of Labor and Employment (DOLE). What the nature of the job (A.M. Oreta and Co. Inc. v. NLRC, 176
permit, if any, can the DOLE issue so that AB can SCRA 218 [1989]).
assume as Vice-President in the telecommunications
company? Discuss fully. (2007 Bar) Q: Ana Cruz has a low IQ. She has to be told at least three
times before she understands her daily work
A: The Labor Code provides that any alien seeking assignment. However, her work output is at least equal
admission to the Philippine for employment purposes and to the output of the least efficient worker in her work
any domestic or foreign employer who desires to engage section. Is Ms. Cruz a handicapped worker? Explain.
an alien for employment in the Philippines shall obtain an (2000 Bar)
employment permit from the Department of Labor.
A: No, low IQ or low efficiency does not make the worker
handicapped in the contemplation of law. Handicap
The employment permit may be issued to a nonresident means such physical or mental infirmity that impairs
alien or to the applicant employer after a determination of capacity to work. The deficiency may also be due to age or
the non-availability of a person in the Philippines who is injury. (Art. 78, Labor Code).
competent, able and willing at the time of application to
perform the services for which the alien is desired. Equal opportunity (2012, 2006, 1998 Bar)
Thus, AB (or telecommunication company) should be
Q: A lady worker was born with a physical deformity,
issued the above-mentioned alien employment permit so
specifically, hard of hearing, speech impaired and
that AB can assume as Vice President of the
color blind. However, these deficiencies do not impair
Telecommunication Company.
her working ability.
Q: Phil-Norksgard Company. Inc., a domestic corpora- Can the employer classify the lady worker as a handi-
tion engaged in the optics business, imported from capped worker so that her daily wage will only be
Sweden highly sophisticated and sensitive seventy-five percent (75%) of the applicable daily
instruments for its laboratory. To Install the minimum wage? (1998 Bar)
instruments and operate them, the company intends to
employ Boija Anders, a Swedish technician sojourning A. No, the employer cannot classify the lady worker as a
as a tourist in the Philippines. handicapped worker because according to the facts in the
question, her deficiencies do not impair her working ability.
As lawyer of the company, what measures will you If her earning capacity is therefore not also impaired, then
take to ensure the legitimate employment of Boija she cannot be considered a handicapped worker.
Anders and at the same time protect Philippine labor?
Discuss fully. (1995 Bar) Because of the above fact, the employer shall not pay her
less than the applicable daily minimum wage. (Article 78 of
A: To ensure the legitimate employment of Borja Anders, the Labor Code)
a non-resident alien, I will apply at the Department of
Labor and Employment for the issuance of an employment Q: For humanitarian reasons, a bank hired several
permit claiming that there is no one in the Philippines who handicapped workers to count and sort out currencies.
can do the work that Anders is being asked to do. Their employment contract was for six (6) months. The
bank terminated their employment on the ground that
At the same time, to protect Philippine labor, I will see to it their contract has expired prompting them to file with
that Anders will have an understudy who will learn by the Labor Arbiter a complaint for illegal dismissal. Will
working with Anders, how to install and operate the highly their action prosper? (2012 Bar)
sophisticated and sensitive instruments from Sweden.
A: No. Art. 80 provides that in cases of employing
To protect Philippine Labor, the Labor Code provides that handicapped workers, an employment agreement must be
the alien employee shall not transfer to another job or contracted. Art. 80 further provides that such employment
change his employer without prior approval of the agreement shall contain the duration of the employment
Secretary of Labor. period. In the case at bar, the action will not prosper for the
bank cannot be held liable for illegal dismissal for the
TRAINING AND EMPLOYMENT OF SPECIAL WORKERS handicapped employees themselves have agreed that their
term of employment will only be limited to 6 months.
Disabled workers (2006, 2000 Bar)
NOTE: The contract signed by the workers is akin to a
Q: For humanitarian reasons, a bank hired several probationary employment, during which the bank
handicapped workers to count and sort out currencies. determined the employees fitness for the job. If the bank
Their employment contract was for six (6) months. The renewed the contract after the lapse of the six-month
bank terminated their employment on the ground that probationary period, the employees will then become
their contract has expired prompting them to file with regular employees since the task of counting and sorting
the Labor Arbiter a complaint for illegal dismissal. Will bills is necessary and desirable to the business of the bank.
their action prosper? (2006 Bar) (Bernardo et. al. v. NLRC and Far East Bank and Trust Co. G.R.
No. 122917, July 12, 1999).
A: Yes, their action will prosper. They are doing necessary
or desirable jobs and are qualified for the job, and therefore
they should be treated like other qualified able-bodied
employees (Bernardo v. NLRC and Far East Bank, 310 SCRA Labor Standards
186 [1999]). They cannot be terminated simply because of
the expiration of the contract. The nature of their work

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QUAMTO (1987-2016)
CONDITIONS OF EMPLOYMENT Q: A case against an employer company was filed
charging it with having violated the prohibition against
Hours of work (2004, 1997 Bar) offsetting undertime for overtime work on another day.
The complainants were able to show that, pursuant to
Q: Gil Bates, a computer analyst and programmer of the Collective Bargaining Agreement (CBA), employees
Hard Drive Company, works eight hours a day for five of the union had been required to work "overtime" on
days a week at the main office providing customers Saturday but were paid only at regular rates of pay on
information technology assistance. On Saturdays, the thesis that they were not required to complete, and
however, the company requires him to keep his cellular they did not in fact complete, the eight-hour work
phone open from 8:00 A.M. to 5:00 P.M. so that the period daily from Monday through Friday. Given the
Management could contact him in case of heavy work circumstances, the employer contended that the
load or emergency problems needing his expertise. employees were not entitled to overtime compensation,
May said hours on Saturdays be considered i.e., with premium rates of pay. Decide the controversy.
compensable working hours while on call? If so, (2003 Bar)
should said compensation be reported to the Social
Security System? (2004 Bar) A: Art. 88 of the Labor Code provides that undertime work
on any particular day shall not be offset by overtime work
A: Said hours on Saturdays should be considered as on any other day. The CBA, the law between the parties and
compensable working hours "while on call". In accordance the Union has shown that the employees are required to
with the Rules and Regulations Implementing the Labor render overtime work on Saturdays, thus the contention of
Code, an employee who is not required to leave word at his the employer is not tenable. The employer cannot use the
home or with company officials as to where he may be undertime incurred from Monday through Friday to offset
reached is not working while on call. But in the question, Gil the overtime on Saturday. Hence, the employees are
Bates was required to keep his cell phone open from 8:00 entitled to overtime compensation, i.e. premium rates of
A.M. to 5:00 P.M. Therefore, Bates should be considered as pay on Saturday.
working while on call, if he cannot use effectively and
gainfully for his own purpose the time from 8:00 A.M. to Q: After working from 10 a.m. to 5 p.m. on a Thursday
5:00 P.M. on Saturdays when he is required to keep his as one of 5,000 employees in a beer factory, A hurried
cellphone open. home to catch the early evening news and have dinner
with his family. At around 10 p.m. of the same day, the
NORMAL HOURS OF WORK plant manager called and ordered A to fill in for C who
missed the second shift.
Compressed work week (2005 Bar)
a. May A validly refuse the plant managers directive?
Q: Under what conditions may a "compressed work
Explain.
week" schedule be legally authorized as an exception to
the "eight-hour a day" requirement under the Labor
A: Yes. A may validly refuse to fill in for C. A may not be
Code? (2005 Bar)
compelled to perform overtime work considering that the
plant managers directive is not for an emergency overtime
A: "Compressed work week" is resorted to by the employer
work, as contemplated under Article 89 of the Labor Code.
to prevent serious losses due to causes beyond his control,
such as when there is a substantial slump in the demand for
b. Assuming that A was made to work from 11 p.m. on
his goods or services or when there is lack of raw materials
Thursday until 2 a.m. on Friday, may the company
(Explanatory Bulletin on the Reduction of Workdays on
argue that, since he was two hours late in coming to
Wages Issued by DOLE, July 23, 1985). The conditions for an
work on Thursday morning, he should only be paid for
allowable "compressed work week" are the following: the
work rendered from 1 a.m. to 2 a.m.? Explain? (2010
workers agree to the temporary change of work schedule Bar)
and they do not suffer any loss of overtime pay, fringe
benefits or their weekly or monthly take-home pay. (DOLE
A: No. Undertime is not off-set by overtime. (Art. 88, Labor
Explanatory Bulletin on the Reduction of Workdays on Wages
Code).
issued on July 23, 1985).
Q: LKG Garments Inc. makes baby clothes for export. As
Overtime (2015, 2010, 1997, 2003, 2002, 1991, 1987
part of its measures to meet its orders, LKG requires its
Bar)
employees to work beyond eight (8) hours everyday,
from Monday to Saturday. It pays its employees an
Q: Socorro is a clerk-typist in the Hospicio de San Jose,
additional 35% of their regular hourly wage for work
a charitable institution dependent for its existence on
rendered in excess of eight (8) hours per day. Because
contributions and donations from well wishers. She
of additional orders, LKG now requires two (2) shifts of
renders work eleven (11) hours a day but has not been
workers with both shifts working beyond eight (8)
given overtime pay since her place of work is a
hours but only up to a maximum of four (4) hours.
charitable institution. Is Socorro entitled to overtime
Carding is an employee who used to render up to six (6)
pay? Explain briefly. (2002 Bar)
hours of overtime work before the change in schedule.
He complains that the change adversely affected him
A: Yes. Socorro is entitled to overtime compensation. She
because now he can only earn up to a maximum of four
does not fall under any of the exceptions to the coverage of
(4) hours' worth of overtime pay. Does Carding have a
Article 82 (Hours of Work). The Labor Code is equally
cause of action against the company? (2015 Bar)
applicable to non-profit institutions. A covered employee
who works beyond eight (8) hours is entitled to overtime
A: No. A change in work schedule is a management
compensation.
prerogative of LKG. Thus, Carding has no cause of action
against LKG if, as a result of its change to two (2) shifts, he

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Labor Law and Social Legislation

now can only expect a maximum of four (4) hours overtime Holiday pay, 13th month pay (2012, 2005, 2004, 2002,
work. Besides, Art. 87 of the Labor Code does not guarantee 1998, 1994, 1987 Bar)
Carding a certain number of hours of overtime work. In
Manila Jockey Employees Union v. Manila Jockey Club (G.R. Q: Dennis was a taxi driver who was being paid on the
No. 167760, March 7, 2007), the Supreme Court held that "boundary" system basis. He worked tirelessly for
the basis of overtime claim is an employees having been Cabrera Transport Inc. for fourteen (14) years until he
permitted to work. Otherwise, as in this case, such is not was eligible for retirement. He was entitled to
demandable. retirement benefits. During the entire duration of his
service, Dennis was not given his 13th month pay or his
Night shift differential (2002 Bar) service incentive leave pay.

Q: As a tireman in a gasoline station, open twenty four a. Is Dennis entitled to 13th month pay and service
(24) hours a day with only five (5) employees, Goma leave incentive pay? Explain.
worked from 10:00 P.M. until 7:00 A.M. of the following
day. He claims he is entitled to night shift differential. Is A: No. A taxi driver paid under the boundary system is
he correct? Explain briefly. (2002 Bar) not entitled to a 13th month pay and a SIL pay. Hence, his
retirement pay should be computed solely on the basis of
A. Yes. Under Art. 86 of the Labor Code, night shift his salary. Specifically, Sec. 3(e) of the Rules and
differential shall be paid to every employee for work Regulations Implementing P.D. 851 excludes from the
performed between 10:00 oclock in the evening to six obligation of 13th Month Pay Employers of those who are
oclock in the morning. Therefore, Goma is entitled to night paid on xxx boundary basis. On the other hand, Sec. 1(d),
shift differential for work performed from 10:00 pm until Rule V. Book III of the Omnibus Rules provides that those
6:00 am of the day following, but not from 6:00 am to 7:00 employees whose performance is unsupervised by the
am of the same day. employer are not entitled to Service Incentive Leave. A
taxi driver paid under the Boundary System is an
Alternative answer: unsupervised employee.

No. The Omnibus Rules Implementing the Labor Code (In b. Since he was not given his 13th month pay and
Book III, Rule II dealing with night shift differential) service incentive leave pay, should Dennis be paid
provides that its provisions on night shift differential shall upon retirement, in addition to the salary
NOT apply to employees of retail and service equivalent to fifteen (15) days for every year of
establishments regularly employing not more than five (5) service, the additional 2.5 days representing one-
workers. Because of this provision, Goma is not entitled to twelfth (1/12) of the 13th month pay as well as the
night shift differential because the gasoline station where five (5) days representing the service incentive
he works has only five employees. leave for a total of 22.5 days? Explain. (2012 Bar)

Rest periods (1998, 1987 Bar) A: No. Since he is not entitled to 13th month pay and
Service Incentive Leave, his retirement pay should be
Q: A Ladies Dormitory run or managed by a charitable computed solely on the basis of his salary. (R&E Transport
non-profit organization claims that it is exempt from v. Latag, G.R. No. 155214, February 13, 2004)
the coverage of the Weekly Rest Period provision of the
Labor Code. Is the claim valid? (1998 Bar)
Q: During the open forum following your lecture before
members of various unions affiliated with a labor
A: No. The claim is not valid. The provisions on weekly rest federation, you were asked the following question:
periods in the Labor Code cover every employer, whether
operating for profit or not. (Article 91 of the Labor Code) Araw ng Kagitingan and Good Friday are among
Q: Lawyer Antonio Martin recently formed a law the 10 paid regular holidays under Article 94 of
partnership with five other lawyer-friends of his. They the Labor Code. How much will an employee
hired two office secretaries, an accounting clerk- receive when both holidays fall on the same
cashier, one bookkeeper, and two messengers. You are day? (2005 Bar)
among three associate attorneys. The workweek is
Monday to Friday. There is no vacation leave but sick A: The employee will receive 200% of his regular daily wage
leave is 15 days for every year of continuous and when both regular holidays fall on the same day and he does
satisfactory service. not work. The law provides that he shall receive his regular
daily wage for each regular holiday. The employee will
Managing partner Martin is preparing a set of person- receive 100% for Araw ng Kagitingan and 100% for Good
nel policies in terms and conditions of employment for Friday, If he works on that day, he is entitled to 400% of his
the staff and has asked you to give him a brief memo on regular daily wage; otherwise, there will be diminution of
the questions listed below. Should the law firm benefits [Asian Transmission Corp. v. Court of Appeals, 425
schedule a rest day for the employees, including you? SCRA 478 (2004)],
(1987 Bar)
Q: TRX, a local shipping firm, maintains a fleet of
motorized boats plying the island barangays of AP, a
A: There is no need under the Labor Code to schedule a
coastal town. At day's end the boat operators/crew
restday. The Code (in Art. 91) requires an employer to
members turn over to the boat owner their cash
provide each of his employees a weekly rest day after
collections from cargo fees and passenger fares, less the
every six consecutive normal work days. Here, the work
expenses for diesel fuel, food, landing fees and spare
week is such that it is for five days. The Saturdays and
parts.
Sundays when the employees are not required to work
more than satisfy the required weekly rest day. Fifty percent (50%) of the monthly income or earnings
derived from the operations of the boats are given to

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6
QUAMTO (1987-2016)
the boatmen by way of compensation. Deducted from determining employees wages. (Aklan Electric Cooperative,
the individual shares of the boatmen are their cash Inc. v. NLRC, G.R. No.121439, January 25, 2000).
advance and peso value of their absences, if any. Are
these boatmen entitled to overtime pay, holiday pay, Q: Benito is the owner of an eponymous clothing brand
and 13th month pay? (2004 Bar) that is a top seller. He employs a number of male and
female models who wear Benito's clothes in
A: If the boatmen are considered employees, like jeepney promotional shoots and videos. His deal with the
drivers paid on a boundary system, the boatmen are not models is that Benito will pay them with 3 sets of free
entitled to overtime and holiday pay because they are clothes per week. Is this arrangement allowed? (2015
workers who are paid by results. Said workers, under the Bar)
Labor Code are not entitled, among others, to overtime pay
and holiday pay. A: No. The arrangement is not allowed. The models are
In accordance with the Rules and Regulations Benitos employees. As such, their services are required to
implementing the 13th month pay law, however, the be paid only in legal tender, even when expressly requested
boatmen are entitled to the 13th month pay. Workers who by the employee (Art. 102, Labor Code). Hence, no lawful
are paid by results are to be paid their 13th month pay. deal in this regard can be entered into by and between
Benito and his models. The three (3) sets of clothes,
WAGES (2015, 2010, 2008, 1998, 1997, 1992 BAR) regardless of value, are in kind; hence, the formers
compensation is not in the form prescribed by law.
Q: A worked as a roomboy in La Mallorca Hotel. He sued Wage versus salary
for underpayment of wages before the NLRC, alleging
that he was paid below the minimum wage. The Q: Distinguish "salary" from "wages." (1994 Bar)
employer denied any underpayment, arguing that
based on long standing, unwritten policy, the Hotel A: In the case of GAA v. Court of Appeals (G.R. No. L-44169,
provided food and lodging to its housekeeping Dec. 3, 1985), the Supreme Court had the opportunity to
employees, the costs of which were partly shouldered distinguish salary and wages. According to the Supreme
by it and the balance was charged to the employees. The Court, the term wages refer to the compensation given in
employees corresponding share in the costs was thus consideration of manual labor, skilled or unskilled. On the
deducted from their wages. The employer concluded other hand, salary denotes a compensation for a higher
that such valid deduction naturally resulted in the degree of employment.
payment of wages below the prescribed minimum. If
you were the Labor Arbiter, how would you rule? Payment of wages (2004, 1998 Bar)
Explain. (2010 Bar)
Q: TRX, a local shipping firm, maintains a fleet of
A: I will rule in favor of A. Even if food and lodging were motorized boats plying the island barangays of AP, a
provided and considered as facilities by the employer, the coastal town. At days end the boat operators/crew
employer could not deduct such facilities from its workers members turn over to the boat owner their cash
wages without compliance with law (Mayon Hotel & collections from cargo fees and passenger fares, less the
Restaurant v. Adana, 458 SCRA 609 [2005]). expenses for diesel fuel, food, landing fees and spare
parts. Fifty percent (50%) of the monthly income or
earnings derived from the operations of the boats are
In Mabeza v. NLRC (271 SCRA 670 [1997]), the Supreme
given to the boatmen by way of compensation.
Court held that the employer simply cannot deduct the
Deducted from the individual shares of the boatmen
value from the employees wages without satisfying the
are their cash advance and peso value of their absences,
following: (a) proof that such facilities are customarily
if any. Are these boatmen entitled to overtime pay,
furnished by the trade; (b) the provision of deductible
holiday pay, and 13th month pay? (2004 Bar)
facilities is voluntarily accepted in writing by the
employee; and (c) the facilities are charged at fair and
A: No. The boatmen are considered as workers who are paid
reasonable value.
by results. More specifically, they are task workers who are
paid not based on the number of units produced, but are
Q: The rank-and-file union staged a strike in the paid based on the completion of their task, with appropriate
company premises which caused the disruption of deductions based on circumstances such as road and traffic
business operations. The supervisors union of the same conditions. (Adriano Quintos, et al. v. D.D. Transportation Co.,
company filed a money claim for unpaid salaries for the NLRC Case No. RB-IV-20941, May 31, 1979). In the case at bar,
duration of the strike, arguing that the supervisors' the boatmens payment differs depending on conditions
failure to report for work was not attributable to them. such as the increase or decrease of the price of diesel, food
The company contended that it was equally faultless, expenses, landing fees and spare parts.
for the strike was not the direct consequence of any
lockout or unfair labor practice. May the company be In connection, their payment although being direct
held liable for the salaries of the supervisor? Decide remunerations or compensation for their service cannot be
(2008 Bar) considered as wages for they do not partake the nature of
wages as defined by the laws on labor. Instead, their
A: No, I will apply the No work, No pay principle. The payment is considered as commissions; and as held by the
supervisors are not entitled to their money claim for unpaid Supreme Court in the case of King of Kings Transport, Inc. et
salaries, as they should not be compensated for services al. v. Mamac, (GR No. 166208, June 29, 2007), workers who
skipped during the strike of the rank-and-file union. The are paid by commission are not entitled to the 13th month
age-old rule governing the relation between labor and pay.
capital, or management and employee of a fair days wage
for a fair days labor remains as the basic factor in

7
Labor Law and Social Legislation

Non - diminution of benefits (2015, 2006, 2005, 2003,


2002, 1995 Bar) Q: When is there a wage distortion? (2006, 1997, 2009
Bar)
Q: Can an employer and an employee enter into an
agreement reducing or increasing the minimum A: There is wage distortion where an increase in
percentage provided for night differential pay, prescribed wage rates results in the elimination or severe
overtime pay, and premium pay? (2006 Bar) contraction of intentional quantitative differences in wage
or salary rates between and among employee groups in an
A: No, if the agreement is with regards to reduction, Art. 100 establishment as to effectively obliterate the distinctions
provides for the prohibition against elimination or embodied in such wage structure based on skills, length of
diminution of benefits. However, if the agreement seeks to service, or other logical bases of differentiation.
increase the minimum percentage, it is allowed because
there is nothing in the law which prohibits the same. What Wage distortion arises when (4) essential elements are
is expressly prohibited under the law is only reduction.
present:
Q: Far East Bank (FEB) is one of the leading banks in the a. An existing hierarchy of positions with corresponding
country. Its compensation and bonus packages are top salary rates;
of the industry. For the last 6 years, FEB had been b. A significant change or increase in the salary rate of a
providing the following bonuses across-the-board to all lower pay class without a corresponding increase in
its employees: the salary of a higher one;
c. The elimination of the distinction between two groups
a. 13th month pay; or classes; and
b. 14th to 18th month pay; d. The distortion exists in the same region of the country
c. Christmas basket worth P6,000; (Prubankers Association v. Prudential Bank and Trust
d. Gift check worth P4,000; and Co., 302 SCRA 74 [1999]).
e. Productivity-based incentive ranging from a 20%
to 40% increase in gross monthly salary for all Q: How should a wage distortion be settled? (2006,
employees who would receive an evaluation of 1997, 2009 Bar)
"Excellent" for 3 straight quarters in the same year.
A: Any dispute arising from wage distortion shall be
Because of its poor performance over-all, FEB decided resolved through the grievance procedure as provided in
to cut back on the bonuses this year and limited itself to the applicable collective bargaining agreement and, if the
the following: dispute remains unresolved, then through voluntary
arbitration.
a. 13th month pay;
b. 14th month pay; In cases where there are no collective bargaining
c. Christmas basket worth P4,000; and agreements or recognized labor unions, the employers and
d. Gift check worth :P2,000 workers shall endeavor to correct such wage distortions.
Any dispute arising therefrom shall be settled through the
Katrina, an employee of FEB, who had gotten a rating of National Conciliation and Mediation Board and, if it
"Excellent" for the last 3 quarters, was looking forward remains unresolved after ten (10) calendar days of
to the bonuses plus the productivity incentive bonus. conciliation, the issue of wage distortion shall be referred
After learning that FEB had modified the bonus scheme, to the appropriate branch of the National Labor Relations
she objected. Is Katrina's objection justified? Explain. Commission (NLRC).
(2015 Bar)
Q: Can the issue of wage distortion be raised in a
A: Katrinas objection is justified. Having enjoyed the
across-the-board bonuses, Katrina has earned a vested notice of strike? Explain. (2006, 1997, 2009 Bar)
right. Hence, none of them can be withheld or reduced. In
the problem, the company has not proven its alleged losses A: In Ilaw ng Manggagawa v. NLRC, 198 SCRA 586 (1991),
to be substantial. Permitting reduction of pay at the the Supreme Court held that any issue involving wage
slightest indication of losses is contrary to the policy of the distortion shall not be a ground for a strike or lockout. The
State to afford full protection to labor and promote full legislative intent is to solve wage distortion problems
employment. (Linton Commercial Co. v. Hellera, G.R. No. through voluntary negotiation or arbitration.
163147, October 10, 2007).
Q: How should a wage distortion be resolved (1) In case
As to the withheld productivity-based bonuses, Katrina is there is a collective bargaining agreement and (2) in
deemed to have earned them because of her excellent case there is none? Explain briefly. (2002 Bar)
performance ratings for three quarters. On this basis, they
cannot be withheld without violating the Principle of Non- A: According to Art. 124 of the Labor Code, in case there Is
Diminution of Benefits. a collective bargaining agreement, a dispute arising from
Moreover, it is evident from the facts of the case that what wage distortions shall be resolved through the grievance
was withdrawn by FEB was a productivity bonus. Protected machinery provided in the CBA, and if remains unresolved,
by RA 6791 which mandates that the monetary value of the through voluntary arbitration. In case there is no collective
productivity improvement be shared with the employees, bargaining agreement the employers and workers shall
the productivity-based incentive scheme of FEB cannot endeavor to correct such distortions. Any dispute arising
just be withdrawn without the consent of its affected therefrom shall be settled through the National Conciliation
employees. and Mediation Board and if it remains unresolved after ten
calendar days of conciliations, then the dispute is referred
Wage order, Wage Distortion (2009, 2008, 2006, 2002, to the appropriate branch of the National Labor Relations
1997 Bar) Commission.

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8
QUAMTO (1987-2016)
LEAVES Maternity Leave (2010, 2007, 2005 Bar)

Service Incentive Leave (2012, 2010, 1987 Bar) Q: A, single, has been an active member of the Social
Security System for the past 20 months. She became
pregnant out of wedlock and on her 7th month of
Q: Dennis was a taxi driver who was being paid on the
pregnancy, she was informed that she would have to
"boundary" system basis. He worked tirelessly for
deliver the baby through caesarean section because of
Cabrera Transport Inc. for fourteen (14) years until he
some complications. Can A claim maternity benefits? If
was eligible for retirement. He was entitled to
yes, how many days can she go on maternity leave? If
retirement benefits. During the entire duration of his
not, why is she not entitled? (2010 Bar)
service, Dennis was not given his 13th month pay or his
service incentive leave pay.
A: Yes. The SSS Law does not discriminate based on the civil
status of a female member-employee. As long as said female
a. Is Dennis entitled to 13th month pay and service employee has paid at least three (3) monthly contributions
leave incentive pay? Explain. in the twelve-month period immediately preceding the
semester of her childbirth, she can avail of the maternity
A: No. A taxi driver paid under the boundary system is not benefits under the law.
entitled to a 13th month pay and a SIL pay. Hence, his
retirement pay should be computed solely on the basis of Since A gave birth through C-section, she is entitled to one
his salary. Specifically, Sec. 3(e) of the Rules and hundred percent (100%) of her average salary credit for
Regulations Implementing P.D. 851 excludes from the seventy-eight (78) days, provided she notifies her employer
obligation of 13th Month Pay Employers of those who are of her pregnancy and the probable date of her childbirth,
paid on xxx boundary basis. On the other hand, Sec. 1(d), among others (Section 14-A, Rep. Act No. 8282).
Rule V. Book III of the Omnibus Rules provides that those
employees whose performance is unsupervised by the The same maternity benefits are ensured by Sec. 22 (b)(2)
employer are not entitled to Service Incentive Leave. A taxi of the Magna Carta of Women (Rep. Act No. 9710).
driver paid under the Boundary System is an unsupervised
employee. Q: AB, single and living-in with CD (a married man), is
pregnant with her fifth child. She applied for maternity
b. Since he was not given his 13th month pay and leave but her employer refused the application because
service incentive leave pay, should Dennis be paid she is not married. Who is right? Decide (2007 Bar)
upon retirement, in addition to the salary
equivalent to fifteen (15) days for every year of A: AB is right. The Social Security Law, which administers
service, the additional 2.5 days representing one- the Maternity Benefit Program does not require that the
twelfth (1/12) of the 13th month pay as well as the relationship between the father and the mother of the child
five (5) days representing the service incentive be legitimate. The law is compensating the female worker
leave for a total of 22.5 days? Explain. (2012 Bar ) because of her maternal function and resultant loss of
compensation. The law is morality free.
A: No. Since he is not entitled to 13th month pay and Service
Incentive Leave, his retirement pay should be computed Q: Mans Weto had been an employee of Nopolt
solely on the basis of his salary. (R&E Transport v. Latag, G.R. Assurance Company for the last ten (10) years. His wife
No. 155214, February 13, 2004) of six (6) years died last year. They had four (4)
children. He then fell in love with Jovy, his co-employee
Q: A driver for a bus company, sued his employer for and they got married.
non-payment of commutable service incentive leave
credits upon his resignation after five years of In October this year, Weto's new wife is expected to
employment. The bus company argued that A was not give birth to her first child. He has accordingly filed his
entitled to service incentive leave since he was application for paternity leave, conformably with the
considered a field personnel and was paid on provisions of the Paternity Leave Law which took
commission basis and that, in any event, his claim had effect in 1996. The HRD manager of the assurance firm
prescribed. If you were the Labor Arbiter, how would denied his application, on the ground that Weto had
you rule? Explain. (2010 Bar) already used up his entitlement under that law. Weto
argued that he has a new wife who will be giving birth
A: I will grant the prayer of A. Payment on commission basis for the first time, therefore, his entitlement to
alone does not prove that A is a field personnel. There must paternity leave benefits would begin to run anew. Is
be proof that A is left to perform his work unsupervised by Jovy entitled to maternity leave benefits? (2005 Bar)
his employer. Otherwise, he is not a field personnel, thus
entitled to commutable service incentive leave (SIL) credits A: Yes, if Jovy, as a female employee, has paid at least three
[Auto Bus v. Bautista, 458 SCRA 578 [2005]). (3) monthly contributions in the twelve-month period
immediately preceding the semester of her childbirth (Sec,
His action has not yet prescribed. In Auto Bus v. Bautista 14-A, R.A. 1161, as amended); otherwise; she is not entitled
(supra.), the Supreme Court recognized that SIL is such a to the benefit.
unique labor standard benefit, because it is commutable.
An employee may claim his accrued SIL throughout the Paternity Leave (2005, 2002 Bar)
years of his service with the company upon his resignation,
Q: Mans Weto had been an employee of Nopolt
retirement, or termination. Therefore, when A resigned
Assurance Company for the last ten (10) years. His wife
after five years, his right of action to claim ALL of his SIL
of six (6) years died last year. They had four (4)
benefits accrued at the time when the employer refused to
children. He then fell in love with Jovy, his co-employee
pay him his rightful SIL benefits. (Art. 291, Labor Code).
and they got married.

9
Labor Law and Social Legislation

not, why is she not entitled? (2010 Bar)


In October this year. Weto's new wife is expected to give
birth to her first child. He has accordingly filed his A: Yes. The SSS Law does not discriminate based on the civil
application for paternity leave, conformably with the status of a female member-employee. As long as said female
provisions of the Paternity Leave Law which took effect employee has paid at least three (3) monthly contributions
in 1996. The HRD manager of the assurance firm denied in the twelve-month period immediately preceding the
his application, on the ground that Weto had already semester of her childbirth, she can avail of the maternity
used up his entitlement under that law. Weto argued benefits under the law.
that he has a new wife who will be giving birth for the
first time, therefore, his entitlement to paternity leave Since A gave birth through C-section, she is entitled to one
benefits would begin to run anew. Whose contention is hundred percent (100%) of her average salary credit for
correct, Weto or the HRD manager? (2005 Bar) seventy-eight (78) days, provided she notifies her employer
A: The contention of Weto is correct. The law provides that of her pregnancy and the probable date of her childbirth,
every married male is entitled to a paternity leave of seven among others (See Section 14-A, Rep. Act No. 8282).
(7) days for the first four (4) deliveries of the legitimate
spouse with whom he is cohabiting (Section 2, RA6187). The same maternity benefits are ensured by Sec. 22 (b)(2)
Jovy is Weto's legitimate spouse with whom he is cohabiting. of the Magna Carta of Women (Rep. Act No. 9710).
The fact that Jovy is his second wife and that Weto had 4
children with his first wife is beside the point. The SPECIAL GROUPS OF EMPLOYEES
important fact is that this is the first child of Jovy with Weto.
The law did not distinguish and we should therefore not WOMEN
distinguish.
Discrimination (2000, 1998 Bar)
The paternity leave was intended to enable the husband to
effectively lend support to his wife in her period of recovery Q: An airline which flies both the international and
and/or in the nursing of the newly born child (Sec. 3, RA domestic routes requested the Secretary of Labor and
8187). To deny Weto this benefit would be to defeat the Employment to approve the policy that all female flight
rationale for the law. attendants upon reaching age forty (40) with at least
fifteen (15) years of service shall be compulsorily
Q: How many times may a male employee go on retired; however, flight attendants who have reached
Paternity Leave? Can he avail himself of this benefit, for age forty (40) but have not worked for fifteen (15)
example, 50 days after the first delivery by his wife? years will be allowed to continue working in order to
(2002 Bar) qualify for retirement benefits, but in no case will the
extension exceed four (4) years. Does the Secretary of
A: A male employee may go on Paternity Leave up to four Labor and Employment have the authority to approve
(4) children. (Sec. 2, RA 8187) On the question of whether the policy? (1998 Bar)
or not he can avail himself of this benefit 50 days after the
delivery of his wife, the answer is: Yes, he can because the A. Yes, the Secretary of Labor and Employment has the
Rules Implementing Paternity Leave Act says that the authority to approve a policy dealing with the retirement of
availment should not be later than 60 days after the date of flight attendants of airlines. Article 132 (d) of the Labor
delivery. Code provides that the Secretary of Labor and Employment
shall establish standards that will ensure the safety and
Special Leaves for women workers (Magna Carta for health of women employees, including the authority to
Women) (2013 Bar) determine appropriate minimum age and other standards
for retirement or termination in special occupations such
Q: Because of the stress in caring for her four (4) as those of flight attendants and the like.
growing children, Tammy suffered a miscarriage late in
her pregnancy and had to undergo an operation. In the CAVEAT:
course of the operation, her obstetrician further
discovered a suspicious-looking mass that required the It could be argued that Article 132 (d) may be
subsequent removal of her uterus (hysterectomy). unconstitutional because this may constitute discrimi-
After surgery, her physician advised Tammy to be on nation in violation of the spirit of Section 14 of Article XIV
full bed rest for six (6) weeks. Meanwhile, the biopsy of of the Constitution which provides that the State shall
the sample tissue taken from the mass in Tammy's protect working women by providing safe and healthful
uterus showed a beginning malignancy that required working conditions, taking into account their maternal
an immediate series of chemotherapy once a week for functions, and such facilities and opportunities that will
four (4) weeks. What benefits can Tammy claim under enhance their welfare and enable them to realize their full
existing social legislation? (2013 Bar) potential in the service of the nation.
Q: An exclusive school for girls, run by a religious
A: Assuming she is employed, Tammy is entitled to a special order, has a policy of not employing unwed mothers,
leave benefit of two months with full pay (Gynecological women with live-in partners, and lesbians.
Leave) pursuant to RA 9710 or the Magna Carta of Women.
She can also claim Sickness Leave Benefit in accordance a. Is the policy violative of any provision of the Labor
with the SSS Law. Code on employment of women?
Q: A, single, has been an active member of the Social A: No, the policy does not violate the Labor Code. The
Security System for the past 20 months. She became practice is a valid exercise of management function.
pregnant out of wedlock and on her 7th month of Considering the nature and reason for existence of the
pregnancy, she was informed that she would have to school, it may adopt such policy as will advance its laudable
deliver the baby through caesarean section because of objectives. In fact, the policy accords with the
some complications. Can A claim maternity benefits? If constitutional precept of inculcating ethical and moral
yes, how many days can she go on maternity leave? If

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10
QUAMTO (1987-2016)
values in schools. The school policy does not discriminate she filed a complaint against Mam-manu alleging that
against women solely on account of sex (Art. 135, Labor the pre-employment qualifications violate relevant
Code) nor are the acts prohibited under Art. 137 of the provisions of the Labor Code and are against public
Labor Code. policy. Is the contention of lngga tenable? Why? (2012
Bar)
b. The same school dismissed two female faculty
members on account of pregnancy out of wedlock. A: Yes. Man-manus pre-employment requirement cannot
Did the school violate any provision of the Labor be justified as a bona fide occupational qualification,
Code on employment of women? (2000 Bar) where the particular requirements of the job would justify
it. The said requirement is not valid because it does not
A: No, because to tolerate pregnancy out of wedlock will be reflect an inherent quality that is reasonably necessary for
a blatant contradiction of the schools laudable mission a satisfactory job performance. (PT&T v. NLRC, G.R. No.
which, as already stated, accords with high constitutional 118978, May 23, 1997 citing 45A Am. Jur. 2d, Job
precepts. This answer does not contradict the ruling in Discrimination, Sec. 506, p. 486)
Chua-Qua where the teacher merely fell in love with a
bachelor student and the teacher, also single, did not get Sexual Harassment (2009, 2006, 2005, 2004, 2003,
pregnant out of wedlock. 2000 Bar)

Stipulation against marriage (2012, 1998, 1995, 1991 Q: As a condition for her employment. Josephine signed
Bar) an agreement with her employer that she will not get
married, otherwise, she will be considered resigned or
Q: Fil-Aire Aviation Company (FIL-AIRE) is a new separated from the service.
airline company recruiting flight attendants for its
domestic flights. It requires that the applicant be Josephine got married. She asked Owen, the personnel
single, not more than 24 years old attractive, and manager, if the company can reconsider the agreement.
familiar with three (3) major Visayan dialects, viz: He told Josephine he can do something about it,
Ilongo, Cebuano and Waray. Lourdes. 23 years old was insinuating some sexual favors. She complained to
accepted as she possessed all the qualifications. After higher authorities but to no avail. She hires you as her
passing the probationary period. Lourdes disclosed counsel. What action or actions will you take? Explain.
that she got married when she was 18 years old but the (2006 Bar)
marriage was already in the process of being annulled
on the ground that her husband was afflicted with a A: As counsel for Josephine, I will file a complaint for work-
sexually transmissible disease at the time of the related sexual harassment which, as in the case at bar,
celebration of their marriage. As a result of this occurs when a person who has authority, influence or
revelation, Lourdes was not hired as a regular flight moral ascendancy over another demands, requests or
attendant. Consequently, she filed a complaint against otherwise requires any sexual favor from the latter as a
FIL-AIRE alleging that the pre-employment condition for, inter alia, the continued employment of said
qualifications violate relevant provisions of the Labor individual (Sec. 3, RA 7877). I will likewise file a complaint
Code and are against public policy. Is the contention of for illegal dismissal citing Art. 136 of the Labor Code which
Lourdes tenable? Discuss fully. (1995 Bar) provides that it is unlawful for an employer to require as a
condition of continued employment or continuation of
A: The contention of Lourdes is tenable. When she was not employment that a woman employee shall not get married,
hired as a regular flight attendant by FIL-AIRE because she or to stipulate expressly or tacitly that upon getting
disclosed that she got married when she was 18 years old, married a woman employee shall be deemed resigned or
the airline company violated the provision of the Labor separated, or to actually dismiss, discharge, discriminate or
Code which states: otherwise prejudice a woman employee merely by reason
of her marriage.
It shall be unlawful for an employer to require as a
condition of employment or continuation of employment Q: Pedrito Masculado, a college graduate from the
that a woman employee shall not get married, or to province, tried his luck in the city and landed a job as
stipulate expressly or tacitly that upon getting married a utility/maintenance man at the warehouse of a big
woman employee shall be deemed resigned or separated, shopping mall. After working as a casual employee for
or to actually dismiss, discharge, discriminate or otherwise six months, he signed a contract for probationary
prejudice a woman employee merely by reason of her mar- employment for six months. Being well-built and
riage." physically attractive, his supervisor, Mr. Hercules
Barak, took special interest to befriend him. When his
Q: Mam-manu Aviation Company (Mam-manu) is a new probationary period was about to expire, he was
airline company recruiting flight attendants for its surprised when one afternoon after working hours, Mr.
domestic flights. It requires that the applicant be Barak followed him to the men's comfort room. After
single, not more than 24 years old, attractive, and seeing that no one else was around, Mr. Barak placed
familiar with three (3) dialects, viz: llonggo, Cebuano his arm over Pedrito's shoulder' and softly said: "You
and Kapampangan. lngga, 23 years old, was accepted have great potential to become regular employee and I
as she possesses all the qualifications. After passing think I can give you a favorable recommendation. Can
the probationary period, lngga disclosed that she got you come over to my condo unit on Saturday evening so
married when she was 18 years old but the marriage we can have a little drink? I'm alone, and I'm sure you
was already in the process of being annulled on the want to stay longer with the company." Is Mr. Barak
ground that her husband was afflicted with a sexually liable for sexual harassment committed in a work-
transmissible disease at the time of the celebration of related or employment environment? (2004 Bar)
their marriage. As a result of this revelation, lngga was
not hired as a regular flight attendant. Consequently, A: Yes, the elements of sexual harassment are all present:

11
Labor Law and Social Legislation

higher position. It is enough that Atty. Renans act


a. The act of Mr. Barak was committed in a workplace. result in creating an intimidating, hostile or offensive
b. Mr. Barak, as supervisor of Pedrito Masculado, has environment for Miss Maganda.
authority, influence and moral ascendancy over
Masculado. MINORS (2007, 2006, 2004, 2002 BAR)
c. Given the specific circumstances mentioned in the
question like Mr. Barak following Masculado to the Q: Determine whether the following minors should be
comfort room, etc. Mr. Barak was requesting a sexual prohibited from being hired and from performing their
favor from Masculado for a favorable recommendation respective duties indicated hereunder: (2006 Bar)
regarding the latter's employment.
d. It is not impossible for a male, who is a homosexual, to a. A 17-year old boy working as a miner at the
ask for a sexual favor from another male. Walwaldi Mining Corporation.

Q: Can an individual, the sole proprietor of a business A: Yes, he should be prohibited from being hired and
enterprise, be said to have violated the Anti-Sexual from performing the duties of a miner because such
Harassment Act of 1995 if he clearly discriminates constitutes hazardous work under D.O. No. 04 Series of
against women in the adoption of policy standards for 1999. Art. 139 (c) of the Labor Code expressly prohibits
employment and promotions in the enterprise? the employment of persons below 18 years of age in an
Explain. (2003 Bar) undertaking which is hazardous or deleterious in
nature as determined by the Secretary of Labor .
A: When an employer discriminates against women in the
adoption of policy standards for employment and b. An 11-year old boy who is an accomplished singer
promotion in his enterprise, he is not guilty of sexual and performer in different parts of the country.
harassment. Instead, the employer is guilty of
A: No, he should not be prohibited from being hired and
discrimination against women employees which is
from performing as a singer. Under Art. VIII Sec. 12 par.
declared to be unlawful by the Labor Code.
2 of RA 7610 as amended by RA 7658, this constitutes
an exception to the general prohibition against the
For an employer to commit sexual harassment, he - as a
employment of children below 15 years of age,
person of authority, influence or moral ascendancy - should
provided that the following requirements are strictly
have demanded, requested or otherwise required a sexual
complied with: (a) the employer shall ensure the
favor from his employee whether the demand, request or
protection, health, safety and morals of the child; (b)
requirement for submission is accepted by the object of
the employer shall institute measures to prevent the
said act. In the question, no such act was committed by the
childs exploitation or discrimination taking into
sole proprietor.
account the system and level of remuneration, and the
duration and arrangement of working time; and (c) the
Q: Atty. Renan, a CPA-lawyer and Managing Partner of
employer shall formulate and implement, subject to the
an accounting firm, conducted the orientation seminar
approval and supervision of competent authorities, a
for newly-hired employees of the firm, among them,
continuing program for training and skill acquisition of
Miss Maganda. After the seminar, Renan requested
the child. Moreover, the child must be directly under
Maganda to stay, purportedly to discuss some work
the sole responsibility of his parents or guardian and
assignment. Left alone in the training room, Renan
his employment should not in any way interfere with
asked Maganda to go out with him for dinner and
his schooling.
ballroom dancing. Thereafter, he persuaded her to
accompany him to the mountain highway in Antipolo c. A 15-year old girl working as a library assistant in
for sight-seeing. During all these, Renan told Maganda a girls high school.
that most, if not all, of the lady supervisors in the firm
are where they are now, in very productive and A: No, she should not be prohibited from working as a
lucrative posts, because of his favorable endorsement. library assistant because the prohibition in the Labor
Did Renan commit acts of sexual harassment in a work- Code against employment of persons below 18 years
related or employment environment? Reasons. (2009 of age merely pertains to employment in an
Bar) undertaking which is hazardous or deleterious in
nature as identified in the guidelines issued by the
A. Yes. Atty. Renan is guilty of sexual harassment. This DOLE Secretary. Working as a library assistant is not
conclusion is predicated upon the following consideration: one of undertakings identified to be hazardous under
D.O. No. 04 Series of 1999.
a. Atty. Renan has authority, influence or moral
ascendancy over Miss Maganda; d. A 16-year old girl working as model promoting
b. While the law calls for a demand, request or alcoholic beverages.
requirement of a sexual favor, it is not necessary that
the demand, request or requirement of a sexual favor A: Yes, she should be prohibited from working as a
be articulated in a categorical oral or written statement. model promoting alcoholic beverages. RA 7610
It may be discerned, with equal certitude from the acts categorically prohibits the employment of child
of the offender; (Domingo vs. Rayala, 546 SCRA 90 models in all commercials or advertisements
[2008]); promoting alcoholic beverages and intoxicating drinks,
c. The acts of Atty. Renan towards Miss Maganda resound among other things.
with deafening clarity the unspoken request for a
sexual favor, regardless of whether it is accepted or not e. A 17 -year old boy working as dealer in a casino
by Miss Maganda;
d. In sexual harassment, it is not essential that the A: Yes, he should be prohibited from working as a
demand, request or requirement be made as a dealer in a casino, because Art. 140 of the Labor Code
condition for continued employment or promotion to a prohibits the employment of persons below 18 years

UST BAR OPERATIONS


12
QUAMTO (1987-2016)
of age in an undertaking which is hazardous or 94951, April 22, 1991). Here, Linda was hired not to minister
deleterious in nature as identified in the guidelines to the personal comfort and enjoyment of her employer's
issued by the DOLE Secretary. Working as a dealer in a family but to attend to other employees who teach and live
casino is classified as hazardous under D.O. No. 04 inside the campus.
Series of 1999 as it exposes children to physical,
psychological or sexual abuses. Q: The weekly work schedule of a driver is as follows:

Q: You were asked by 3 paint manufacturing company Monday, Wednesday, Friday - Drive the family car to
regarding the possible employment as a mixer of a bring and fetch the children to and from school.
person, aged seventeen (17), who shall be directly
under the care of the section supervisor. What advice Tuesday, Thursday, Saturday - Drive the family van to
would you give? Explain briefly. (2002 Bar) fetch merchandise from suppliers and deliver the same
to a boutique in a mall owned by the family.
A: I will advise the paint manufacturing company that it
cannot hire a person who is aged seventeen (17). Art. 139 Is the driver a househelper? (2012, 1998 Bar)
(c) of the Labor Code provides that a person below
eighteen (18) years of age shall not be allowed to work in A: The driver is a househelper. A person is a househelper or
an undertaking which is hazardous or deleterious in nature is engaged in domestic or household service if he/she
as determined by the Secretary of Labor. Paint renders services in the employer's home which are usually
manufacturing has been classified by the Secretary of Labor necessary or desirable for the maintenance and enjoyment
as a hazardous work. thereof and includes ministering to the personal comfort
and convenience of the members of the employer's
KASAMBAHAY (2015, 2014, 2012, 2009, 2007, 2000, household including the services of family drivers.
1998 BAR)
A family driver who drives the family van to fetch
Q: Soledad, a widowed school teacher, takes under her merchandise from suppliers and delivers the same to a
wing one of her students, Kiko, 13 years old, who was boutique in a mall owned by the family for whom he works
abandoned by his parents and has to do odd jobs in should be paid the minimum daily wage of a driver in a
order to study. She allows Kiko to live in her house, commercial establishment.
provides him with clean clothes, food, and a daily
allowance of 200 pesos. In exchange, Kiko does routine The Labor Code (in Article 143) provides that no
housework, consisting of cleaning the house and doing househelper shall be assigned to work in a commercial,
errands for Soledad. One day, a representative of the industrial or agricultural enterprise at a wage or salary rate
DOLE and the DSWD came to Soledad's house and lower than that provided by law for agricultural or non-
charged her with violating the law that prohibits work agricultural workers.
by minors. Soledad objects and offers as a defense that
she was not requiring Kiko to work as the chores were HOMEWORKERS (2009, 2000, 1988 BAR)
not hazardous. Further, she did not give him chores
regularly but only intermittently as the need may arise. Q. Distinguish briefly, but clearly, a househelper from
Is Soledad's defense meritorious? (2015 Bar) a homeworker. (2009 Bar)

A: Soledads defense is meritorious. Sec. 4(d) of the A. Art. 141 - Domestic Helper - one who performs services
Kasambahay Law (RA 10361) provides that the term in the employers house which is usually necessary or
Domestic Worker shall not include children who are desirable for the maintenance and enjoyment thereof and
under foster family arrangement, and are provided access includes ministering to the personal comfort and
to education and given an allowance incidental to education, convenience of the members of the employers household,
i.e. baon, transportation, school projects and school including the services of a family driver.
activities. Art. 153 - Homeworker -is an industrial worker who works
in his/her home processing raw materials into finished
Q: Linda was employed by Sectarian University (SU) to products for an employer. It is a decentralized form of
cook for the members of a religious order who teach production with very limited supervision or regulation of
and live inside the campus. While performing her methods of work.
assigned task, Linda accidentally burned herself.
Because of the extent of her injuries, she went on Q: Nova Banking Corporation has a resthouse and
medical leave. Meanwhile, SU engaged a replacement recreational facility in the highlands of Tagaytay City
cook. Linda filed a complaint for illegal dismissal, but for the use of its top executives and corporate clients.
her employer SU contended that Linda was not a The resthouse staff includes a caretaker, two cooks
regular employee but a domestic househelp. Decide. and laundrywoman. All of them are reported to the
(2014 Bar) Social Security System as domestic or household
employees of the resthouse and recreational facility
A: The employer's argument that Linda was not a regular and not of the bank.
employee has no merit. The definition of domestic servant
or househelper contemplates one who is employed in the a. Can the bank legally consider the caretaker, cooks
employers home to minister exclusively to the personal and laundrywoman as domestic employees of the
comfort and enjoyment of the employers family. The resthouse and not of the bank?
Supreme Court already held that the mere fact that the
househelper is working in relation to or in connection with A: No, they are not domestic employees. They are bank
its business warrants the conclusion that such househelper employees because the resthouse and recreational facility
or domestic servant is and should be considered as a are business facilities as they are for use of the top
regular employee. (Apex Mining Co., Inc. v. NLRC, G.R. No. executives and clients of the bank. [Art. 141, Labor Code;
Apex Mining Co., Inc. v. NLRC, 196 SCRA 251 (1991)-, Traders

13
Labor Law and Social Legislation

Royal Bank v. NLRC, G.R. No. 127864, December 22, 19991.] employee of Perfect Triangle. Ail that he could claim is he
worked within the premises of Perfect Triangle. Pandoy
b. Mrs. Josie Juan is the confidential secretary of the was NOT engaged as an employee by Perfect Triangle. He
Chairman of the Board of the bank. She is presently was NOT paid wages by Perfect Triangle. Perfect Triangle
on maternity leave. In an arrangement where the does NOT have the power to dismiss him although Perfect
Chairman of the Board can still have access to her Triangle may not continue to allow him to work within its
services, the bank allows her to work in her premises. And most important of all, Pandoy was NOT
residence during her leave. For this purpose, the under the control of Perfect Triangle as regards the work
bank installed a fax machine in her residence, and he performs for customers.
gave her a cellphone and a beeper. Is Mrs. Juan a
homeworker under the law? Explain. (2000 Bar) Q: Malyn Vartan is a well-known radio-N talk show host.
She signed a contract with XYZ Entertainment Network
A: No, she is actually an office worker. She is not an to host a one-hour daily talk show where she interviews
industrial homeworker who accepts work to be fabricated various celebrities on topical subjects that she herself
or processed at home for a contractor, which work, when selects. She was paid a monthly remuneration of
finished, will be returned to or repurchased by said P300.000.00. The program had been airing for almost
contractor. [Art. 155, Labor Code) two years when sponsors' advertising revenues
dwindled, constraining the network to cancel the show
upon the expiration of its latest contract with Ms.
Post Employment Vartan. The talk-show host protested the
discontinuance of her monthly talent fee, claiming that
it was tantamount to her illegal dismissal from the
network since she has already attained the status of a
EMPLOYER-EMPLOYEE RELATIONSHIP regular employee.

Tests to determine employer-employee relationship a. As the network's legal counsel, how would you
(2016, 2014, 2006, 2005, 2002, 2001, 1997, 1996, 1993, justify its decision to cancel Ms. Vartan's program
1988, 1987 Bar) which in effect terminated her services in the
process?
Q: Don Luis, a widower, lived alone in a house with a
large garden. One day, he noticed that the plants in his A: As the network's legal counsel, I will argue that no
garden needed trimming. He remembered that Lando, employer employee relationship exists between the
a 17-year old out-of-school youth, had contacted him in network and Ms. Vartan. Reference has to be made to the
church the other day looking for work. He contacted terms and conditions provided under the contract and the
Lando who immediately attended to Don Luiss garden parties shall be governed by the provisions of the New Civil
and finished the job in three days. Is there an employer- Code. In the case of Jay Sonza v. ABS-CBN, 431 SCRA583
employee relationship between Don Luis and Lando? (2004) it was held that a TN and radio talent is not an
(2014 Bar) employee of the network company. Similarly in this case,
Ms. Vartan cannot be considered an employee of the
A: Yes. All the elements of employer-employee relationship network. Under the control test, the network had no control
are present, viz: on the manner and means through which Ms. Vartan will
perform her work. She herself selects the topical subjects in
1. The selection and engagement of the employee; her interviews. She is also paid an extraordinary huge
2. The power of dismissal; amount of P300, 000 for her to be considered a mere
3. The payment of wages; and employee.
4. The power to control the employee's conduct.
b. As counsel for the-talk-show host, how would you
There was also no showing that Lando has his own tools, or argue your case? (2005 Bar)
equipment so as to qualify him as an independent
contractor. A: As counsel for Ms, Vartan, I will argue that an employer-
employee relationship exists, and that she is a regular
Q: Pandoy, an electronics technician, worked within employee of the Network because of the nature of her work
the premises of Perfect Triangle, an auto accessory in relation to the nature of the business of the Network. Her
shop. He filed a complaint for illegal dismissal, work is usually necessary or desirable in the usual, trade or
overtime pay and other benefits against Perfect business of the employer (Art. 280, Labor Code). I will
Triangle, which refused to pay his claims on the invoke the four-fold test of employer-employee
ground that Pandoy was not its employee but was an relationship, i.e. (1) selection and engagement of employee:
independent contractor. It was common practice for (2) payment of wages; (3) power to dismiss; and (4) power
shops like Perfect Triangle to collect the service fees of control.
from customers and pay the same to the independent
contractors at the end of each week. The auto shop Q: Gregorio was hired as an insurance underwriter by
explained that Pandoy was like a partner who worked the Guaranteed Insurance Corporation (Guaranteed).
within its premises, using parts provided by the shop, He does not receive any salary but solely relies on
but otherwise Pandoy was free to render service in the commissions earned for every insurance policy
other auto shops. On the other hand, Pandoy insisted approved by the company. He hires and pays his own
that he still was entitled to the benefits because he was secretary but is provided free office space in the office
loyal to Perfect Triangle, it being a fact that he did not of the company. He is, however, required to meet a
perform work for anyone else. Is Pandoy correct? monthly quota of twenty (20) insurance policies,
Explain briefly. (2002 Bar) otherwise, he may be terminated. He was made to agree
to a Code of Conduct for underwriters and is supervised
A: Pandoy is not correct. He is not an employee because by a Unit Manager.
he does not meet the fourfold test for him to be an

UST BAR OPERATIONS


14
QUAMTO (1987-2016)
achieve his goal. Therefore, the only interest Guaranteed
a. Is Gregorio an employee of Guaranteed? has is in the result of Gregorios work.

A: No, Gregorio is not an employee of Guaranteed. Control Q: Matibay Shoe and Repair Store, as added service to
is the most important element of employer-employee its customers, devoted a portion of its store to a shoe
relationship, which refers to the means and methods by shine stand. The shoe shine boys were tested for their
which the result is to be accomplished. (Avelino Lambo and skill before being allowed to work and given ID cards.
Vicente Belocura v. NLRC and J.C. Tailor Shop and/or Johnny They were told to be present from the opening of the
Co., 375 Phil. 855 [1999] citing Makati Haberdashery, Inc. v. store up to closing time and were required to follow the
NLRC, 259 Phil. 52 [1989]) The requirement of complying company rules on cleanliness and decorum. They
with quota, company code of conduct and supervision by bought their own shoe shine boxes, polish and rags. The
unit managers do not go into means and methods by which boys were paid by their customers for their services but
Gregorio must achieve his work. He has full discretion on the payment is coursed through the stores cashier, who
how to meet his quota requirement, hence, there is no pays them before closing time. They were not
employer-employee relationship between Gregorio and supervised in their work by any managerial employee
Guaranteed. of the store but for a valid complaint by a customer or
for violation of any company rule, they can be refused
ALTERNATIVE ANSWER: Yes, Gregorio is Guaranteeds admission to the store. Were the boys employees of the
employee. The fact that Gregorio was made to agree to a store? Explain. (2016 Bar)
Code of Conduct and was supervised by a Unit Manager are
indicators that he is an employee of Guaranteed by using the A: Yes. The elements to determine the existence of an
control test mention in the Makati Haberdashery case. employment relationship are: (a) the selection and
furthermore, the fact that he was given a quota and can be engagement of the employee; (b) the payment of wages; (c)
terminated if he does not meet it all the more indicated that the employers power to control the employees conduct;
he is indeed an employee of Guaranteed. In Angelina and (d) the power of dismissal.
Francisco v. NLRC Kasei Corporation, G.R. No. 170087, August
31, 2006, the court added another element to ascertain The first element is present, as Matibay Shoe allowed shoe
employer-employee relationship. This is whether or not the shine boys in its shoe shine stand to render services that are
worker is dependent on the alleged employer for his desirable in the line of business of Matibay Shoe. In issuing
continued employment. This was dubbed as the economic IDs to the shoe shine boys, the same signifies that they can
dependence test. The fact that Guaranteed can terminate represent themselves as part of the work force of Matibay
Gregorio if he does not meet the quota of 20 insurance Shoe.
policies a month, mean that the latter is economically
dependent on the former which negates his status as an The second element is also present. Requiring the
independent contractor and proves that he is an employee. customers to pay through the Matibay Shoes cashier
signifies that their services were not engaged by the
b. Suppose Gregorio is appointed as Unit Manager and customers. Equally important, it was Matibay Shoe which
assigned to supervise several underwriters. He gave the shoe shine boys their daily wage.
holds office in the company premises, receives an
overriding commission on the commissions of his The third element is satisfied. Requiring the shoe shine boys
underwriters, as well as a monthly allowance from to be present from store opening until store closing and to
the company, and is supervised by a branch follow company rules on cleanliness and decorum shows
manager. He is governed by the Code of Conduct for that they cannot conduct their activity anywhere else but
Unit Managers. Is he an employee of Guaranteed? inside the store of Matibay Shoe, hence, their means and
Explain. (2016 Bar) methods of accomplishing the desired services for the
customers of Matibay Shoe was controlled by it.
A: Yes, Gregorio is an employee. In fact, he is deemed as a
regular employee. As a unit manager who was tasked to Lastly, the fourth element is made apparent when Matibay
supervise underwriters, he can be said to be doing a task Shoe barred the shoe shine boys from continuing with their
which is necessary and desirable to the usual business of work-related activity inside its establishment.
Guaranteed. Article 295 of the Labor Code provides that
The provisions of written agreement to the contrary ALTERNATIVE ANSWER: No. The elements to determine
notwithstanding and regardless of the oral agreement of the the existence of an employment relationship are: (a) the
parties, an employment shall be deemed to be regular selection and engagement of the employee; (b) the payment
where the employee has been engaged to perform activities of wages; (c) the employers power to control the
which are usually necessary or desirable in the usual employees conduct; and (d) the power of dismissal.
business or trade of the employer, xxx
The first element is absent. The mere issuance of an ID to
ALTERNATIVE ANSWER: Yes. Article 219(m) of the Labor the boys is not conclusive of the power of selection of
Code defines a Managerial employee as one who is vested Matibay Shoe. They may be given IDs merely as a security
with the powers or prerogatives to lay down and execute measure for the establishment
management policies and/or to hire, transfer, suspend, lay-
off, recall, discharge, assign or discipline employees. As Furthermore, using the control test, the boys have exclusive
Gregorio was appointed Unit Manager, the means and power over the means and method by which the shoe
methods of accomplishing his goal come under the shining activity is to be conducted.
guideline laid down by Guaranteed.
KINDS OF EMPLOYMENT
ANOTHER ALTERNATIVE ANSWER: No. Guaranteed did
not define the duties and responsibilities of Gregorio; Probationary (2016, 2006, 2001, 1998, 1995, 1993,
Guaranteed left it to Gregorios discretion as to how he will 1992, 1988, 1987 Bar)

15
Labor Law and Social Legislation

Q: What limitations, if any, do the law and six months with his consent. It was to give him an
jurisprudence impose on an employer's right to opportunity to improve his performance.
terminate the services of a probationary employee?
(2001 Bar). Thus, it was legal for Y Company to terminate Mr. X for his
failure to meet company standard as a probationary
worker. The Labor Code provides that probationary
A: The Labor Code (in Art. 281) provides that the services employment shall not exceed six (6) months. But the
of an employee who has been engaged on a probationary Supreme Court has ruled that said probationary period
basis may be terminated for a just cause or when he fails to could be extended with the consent of the probationary
qualify as a regular employee in accordance with employee lo give him an opportunity to improve his
reasonable standards made known by the employer to the performance. (Art. 281. Labor Code)
employee at the time of his engagement. If the
probationary employee is being terminated for just cause, Q: Amaya was employed as a staff nurse by St. Francis
he must, of course, be given due process before his Hospital (SFH) on July 08 2014 on a probationary
termination. status for six months. Her probationary contract
required, among others, strict compliance with SFHs
Q: During their probationary employment, eight (8) Code of Discipline.
employees were berated and insulted by their
On October 16, 2014, Dr. Ligaya, filed a complaint with
supervisor. In protest, they walked out. The supervisor
the SFH Board of Trustees against Amaya for uttering
shouted at them to go home and never to report back
slanderous remarks against the former. Attached to
to work. Later, the personnel manager required them
the complaint was a letter of Minda, mother of a patient,
to explain why they should not be dismissed from
who confirmed the following remarks against Dr.
employment for abandonment and failure to qualify
Ligaya:
for the positions applied for. They filed a complaint for
illegal dismissal against their employer. As a Labor Bakit si Dr. Ligaya pa ang napili mong pedia
Arbiter, how will you resolve the case? (2006 Bar) eh ang tanda tanda na nun? E makakalimutin
na yun x x x Alam mob a, kahit wala naming
A: I will rule in favor of management. diperensya yung baby, ipinapa-isolate niya?

First of all, there was no abandonment because there was The SFH President asks you, being the hospitals
no intention not to return to work. It was just that the 8 counsel, which of these two (2) options is the legal and
employees were berated and insulted and even told never proper way of terminating Amaya: (a) terminate her
to report back to work. It was but natural for them to feel for a just cause under Art. 228 of the Labor Code
demoralized, but there was never an indication to abandon (termination by Employer); or (b) terminate her for
their employment. violating her probationary contract. Explain (2016
Bar)
The probationary workers could, however, be terminated
for failing to meet probationary standards. If the reasons A: I will advise the President of SFH to terminate Amaya for
for the supervisors berating and insulting behavior were violating her probationary contract. Part and parcel of the
poor or substandard performance on the part of the standards of her employment is to strictly follow the Code
workers, their probationary employment could be legally of Conduct of SFH. The act of defaming Dr. Ligaya is
terminated. certainly a misdemeanor that is usually not acceptable in
any work environment. With such attitude Amaya
displayed, she cannot pass the company standard of SFH.
Q: Mr. X was hired by Y Company on probation for six
months as general utility worker. On the expiration of I will not suggest the dismissal of Amaya under Art. 297.
the probationary period, Mr. X was informed by Y Co. Though she displayed misconduct, the same is not work-
that his work was unsatisfactory and failed to meet the related, as spreading a rumor against a Doctor does not go
required standard. To give him a chance to improve his into the duties and responsibilities of a staff nurse.
performance, Y Co. instead of terminating Mr. Xs serv-
ices, extended, with Xs written consent, the probation ALTERNATIVE ANSWER: I will advise the President of SFH
period for another three months. This extension to terminate Amaya for a just cause under Art. 297 of the
notwithstanding, his performance did not improve, on Labor Code in relation Art. 296. The Labor Code assigns a
account of which, Y Co. terminated Mr. X's services at separate provision, Art. 296, and provides a different set of
the end of the extended period. Mr. X filed a case for grounds for the dismissal of probationary employees.
illegal dismissal contending that he was already
regular at the time of his dismissal pursuant to Art. 281 The law does not preclude the employer from terminating
of the Labor Code, the particular portion of which the probationary employment, if the employer finds that
provides: the probationary employee is not qualified for regular
employment. As long as the termination was made for
reasons provided under Art. 296 of the Labor Code before
xxx. An employee who is allowed to work after a
the expiration of the six-month probationary period, the
probationary period shall be considered a regular em-
employer is well within its rights to sever the employer-
ployee."
employee relationship. (Pasamba v. NLRC, G.R. No. 168421,
Therefore, he could not have been lawfully dismissed June 8, 2007)
for failure to meet company standards as a
probationary worker. Decide with reason. (1993 Bar) Regular (2008, 2007, 2005 Bar)

A: Mr. X could not argue that because his probationary Q: Super Comfort Hotel employed a regular pool of
period was extended beyond six months he was now a extra waiters who are called or asked to report for
regular employee and thus could no longer be terminated duty when the Hotels volume of business is beyond the
except for Just cause or when authorized by law. The fact is capacity of the regularly employed waiters to
that the probationary period of Mr. X was extended beyond undertake. Pedro has been an extra waiter for more

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16
QUAMTO (1987-2016)
than 10 years. He is also called upon to work on operation by law, with respect to the activity in which he is
weekends, on holidays and when there are big affairs employed and his employment shall continue while such
at the hotel. What is Pedros status as an employee activity exists. (Article 280, Labor Code; See also Philippine
under the Labor Code? Why? Explain your answer fully. Geothermal, Inc. v. NLRC, 189 SCRA 211 [1990]); Kimberly
(2008 Bar) Independent Labor Union, etc. v. Drilon, 185 SCRA 190
[1990]).
A: Pedro has acquired the status of a regular employee.
Pedro was engaged to perform activities which are
Contractual (2014, 2013, 2002 Bar)
necessary or desirable in the usual business or trade of the
employer. Q: Lina has been working as a steward with a Miami,
U.S.A.-based Loyal Cruise Lines for the past 15 years.
Moreover, Pedro has been extra waiter for more than 10 She was recruited by a local manning agency,
years. Under the law, any employee who has rendered Macapagal Shipping, and was made to sign a 10-month
service at least one year of service, whether such service is employment contract everytime she left for Miami.
continuous or broken, shall be considered a regular Macapagal Shipping paid for Linas round-trip travel
employee with respect to the activity in which he is expenses from Manila to Miami. Because of a food
employed and his employment shall continue while such poisoning incident which happened during her last
activity exists (Art. 280, Labor Code). cruise assignment, Lina was not re-hired. Lina claims
she has been illegally terminated and seeks separation
Q: Kitchie Tempo was one of approximately 500 pay. If you were the Labor Arbiter handling the case,
production operators at HITEC Semiconductors, Inc., how would you decide? (2014 Bar)
an export-oriented enterprise whose business
depended on orders for computer chips from overseas. A: I will dismiss Lina's complaint. Lina is a contractual
She was hired as a contractual employee four years ago. employee and the length of her employment is determined
Her contracts would be for a duration of five (5) by the contracts she entered into. Here, her employment
months at a time usually after a one-month interval. was terminated at the expiration of the contract (Millares,
Her re-hiring was contingent on her performance for et al. v. NLRC, 385 SCRA 306, 318 [2002]).
the immediately preceding contract.
Q: After thirty (30) years of service, Beta Company
Six months after the expiration of her last contract, compulsorily retired Albert at age 65 pursuant to the
Kitchie went to HITEC's personnel department to company's Retirement Plan. Albert was duly paid his
inquire why she was not yet being recalled for another full retirement benefits of one (1) month pay for every
temporary contract. She was told that her performance year of service under the Plan. Thereafter, out of
during her last stint was "below average." Since there compassion, the company allowed Albert to continue
was no union to represent her, Kitchie seeks your working and paid him his old monthly salary rate, but
advice as labor lawyer about her chances of getting her without the allowances that he used to enjoy.
job back. What will our advice be? (2005 Bar)
After five (5) years under this arrangement, the
A: Kitchies "below average" rating will not matter. She was company finally severed all employment relations with
a regular employee from day 1 of her service as her work Albert; he was declared fully retired in a fitting
was evidently usually necessary or desirable to HITEC's ceremony but the company did not give him any further
usual business. Under par. 1of Art. 280, Kitchie is a regular retirement benefits. Albert thought this treatment
(not casual) employee. Also, Kitchie obtained permanent unfair as he had rendered full service at his usual hours
regular employment when she was repeatedly re-hired by in the past five (5) years. Thus, he filed a complaint for
HITEC. As a permanent regular employee, working for an the allowances that were not paid to him, and for
indefinite period, Kitchie is, entitled to the reliefs of retirement benefits for his additional five (5) working
reinstatement and full backwages as mandated in Art. 279 years, based either on the company's Retirement Plan
of the Labor Code. or the Retirement Pay Law, whichever is applicable.
After Albert's retirement at age 65, should he be
A "below average" rating would matter if Kitchie was made considered a regular employee entitled to all his
to undergo probationary employment, or was a previous salaries and benefits when the company
probationary employee under Art. 281 of the Code. She was allowed him to continue working? (2013 Bar)
not obviously, she was a qualified and competent
production operator; She would not have been repeatedly A: He would be considered a contractual employee, not a
re-hired if she were not that qualified and competent. I will regular employee. His salaries and benefits will be in
thus, advise her to sue for illegal dismissal, with prayer for accordance with the stipulations of the contract he signed
regularization in addition to the reliefs of reinstatement and with the company.
full backwages provided for in Art. 279 of the Labor Code.
The present case is similar to a case decided by the Supreme
Casual (2007, 2005 Bar) Court (Januaria Rivera v. United Laboratories, G.R. No.
155639 [2009]) where the Court held that the company, in
Q: A Carpenter is employed by a private university in employing a retired employee whose knowledge,
Manila. Is the carpenter a regular or a casual employee? experience and expertise the company recognized, as an
Discuss fully. (2007 Bar) employee or as a consultant, is not an illegality; on the
contrary, it is a recognized practice in this country.
A: If the employment of the carpenter is sporadic and brief
in nature or occasional, his employment is casual especially Project (2009, 2005, 2002, 1998, 1994 Bar)
because the work he is performing is not in the usual course
of the schools trade or business. However, if the carpenter Q: How is a project worker different from a casual or
has rendered services for at least one year, whether contractual worker? (2005 Bar)
continuous or broken, he becomes a regular employee by

17
Labor Law and Social Legislation

A: A project worker is employed for a specific project or employment regular applies only to casual employees,
undertaking the completion or termination of which is hence, Mariano does not belong to the bargaining unit of
determined at the time of his engagement. His work need regular employees.
not be incidental to the business of the employer. His
employment may exceed 1 year without necessarily making Q: Design Consultants, Inc. was engaged by the PNCC to
him a regular employee. supervise the construction of the South Expressway
Extension. Design Consultants, Inc. hired Omar as a
A casual employee is engaged to perform a job, work, or driver for two (2) years. After his two-year contract
service which is incidental to the business of the employer; expired, he was extended another contract for nine (9)
moreover, the definite period of his employment is made months. These contracts were entered into during the
known to him at the time of his engagement. His continued various stages and before the completion of the
employment after the lapse of one year makes him a regular extension project. Omar claims that because of these
employee. Under the Social Security Law, employment that repeated contracts, he is now a regular employee of
is purely casual and not for the purpose of occupation or Design Consultants, Inc. Is he correct? Explain briefly.
business of the employer is not under the coverage of the (2002 Bar)
aforesaid law.
A: Yes. The principal test for determining whether a
A "project worker", on the other hand, is a specific term particular employee is a project employee as
used to designate workers in the construction industry distinguished from a regular employee is whether or not
hired to perform a specific undertaking for a fixed period the project employee was assigned to carry out a specific
which is co-terminus with a project or phase thereof project or undertaking, the duration and scope of which
determined at the time of the engagement of the employee were specified at the time the employee was engaged for
(Policy Instruction No, 19. DOLE), and it is mandatorily the projects. In the problem given, there is no showing that
required that a termination report be submitted to the Omar was informed that he was to be assigned to a specific
nearest public employment office upon the completion of project or undertaking. Neither has it been established
the construction project [Aurora Land Projects Corp. v. NLRC. that he was informed of the duration and scope of such
266 SCRA 48 (Jan, 2. 1997)]; There is no such requirement project or undertaking at the time of his engagement.
for an ordinary contractual worker. [Philex Mining Corp. v. NLRC, 312 SCRA 119 (1999)]

Q: Diosdado, a carpenter, was hired by Building Moreover, the re-hiring of Omar is sufficient evidence of
Industries Corporation (BIC), and assigned to build a the necessity or the indispensability of his services to the
small house in Alabang. His contract of employment companys business. [Aurora Land Projects Corp v. NLRC,
specifically referred to him as a project employee, 266 SCRA 48(1997)] Hence, Omar is correct in claiming
although it did not provide any particular date of that he is a regular employee of Design Consultants, Inc.
completion of the project. Is the completion of the
house a valid cause for the termination of Diosdados Fixed-term (2014 Bar)
employment? If so, what are the due process
requirements that the BIC must satisfy? If not, why not? Q: Lucy was one of approximately 500 call center agents
(2009 Bar) at Hambergis, Inc. She was hired as a contractual
employee four years ago. Her contracts would be for a
A: The completion of the house should be valid cause for duration of five (5) months at a time, usually after a
termination of Diosdados employment. Although the one-month interval. Her re-hiring was contingent on
employment contract may not state a particular date, but if her performance for the immediately preceding
it did specify that the termination of the parties contract. Six (6) months after the expiration of her last
employment relationship was to be on a day certain the contract, Lucy went to Hambergis personnel
day when the phase of work would be completed the department to inquire why she was not yet being
employee cannot be considered to have been a regular recalled to work. She was told that her performance
employee (Filipinos Pre-Fabricated Building systems v. during her last contract was below average. Lucy
Puente, 453 SCRA 820 [2005]). seeks your legal advice about her chances of getting her
job back. What will your advice be? (2014 Bar)
To satisfy due process requirement, under DOLE
Department Order No. 19, series of 1993, the employer is A: Lucy cannot get her job back. She is a fixed-term
required to report to the relevant DOLE Regional Office the employee and as such, her employment terminates upon
fact of termination of project employees as a result of the the expiration of her contract. (Rowell Industrial
completion of the project or any phase thereof in which Corporation v. Court of Appeals, 517 SCRA 691 [2007]).
one is employed.
Subcontracting versus Labor-Only Contracting (2016,
Q: Martillo and other similarly-situated project 2015, 2012, 2005, 2004, 2003, 2002, 2000, 1994 Bar)
workers demanded that the increases be extended to
them, inasmuch as they should now be considered Q: What is a labor-only" contract? (1994)
regular employees and members of the bargaining unit.
If you were ABC's legal counsel, how would you respond A: Labor-only" contract is a contract between an employer
to this demand? (2005 Bar) and a person who supplies workers to such employer where
the person supplying workers does not have substantial
A: As legal counsel for ABC, I would argue that the capital or investment in the form of tools, equipment,
employment of Martillo was fixed for a specific project or machineries, work premises, among others, and the
undertaking, the completion or termination of which has workers recruited and placed by such person are perform-
been determined at the time of his engagement. Rendering ing activities which are directly related to the principal
14 months of work does not make him a regular employee, business of such employer. (Art. 106, Labor Code)
when to begin with, he was employed for a specific project,
i.e., which is the construction of a particular 40-storey Q: Distinguish the liabilities of an employer who en-
building. The rule on more than 1 year of service making the gages the services of a bona fide independent

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QUAMTO (1987-2016)
contractor" from one who engages a labor-only" own schedule of work hours, without any supervision
contractor? (1994, 2012 Bar) from the company. If proven, would this factual setting
advanced by ABC & Co. be a valid defense against the
A: A person who engages the services of a bona fide petition? (2003 Bar)
Independent contractor" for the performance of any work,
task, job or project is the indirect employer of the A: ABC & Co. has a valid defense. Pablo should be an
employees who have been hired by the Independent employee of ABC & Co. to be under the compulsory coverage
contractor to perform said work, task, Job or project. of the SSS. To be an employee, Pablo should be under the
control of ABC & Co. as regards his employment. But the
In the event that the independent contractor fails to pay the facts show that he was not under the control of ABC & Co. as
wages of his employees, an indirect employer, in the same regards his employment. Among others, he had his own
manner and extent that he is liable to employees directly schedule of work hours, without any supervision from the
employed by him, is jointly and severally liable with the company. Thus, he is an independent contractor and not an
independent contractor to the employees of the latter to the employee. An independent contractor is not under the
extent of the work performed under the contract. As for the compulsory coverage of the SSS. He may be covered as a
person who engages the services of a "labor only" self-employed person. But then as such, ABC & Co. has no
contractor, the latter is considered merely as.an agent of the legal obligation to report Pablo for coverage under the SSS
former who shall be responsible to the workers hired by the because ABC & Co. is not Pablos employer.
labor only" contractor in the same manner and extent as if
he directly employed such workers. Q: Sta. Monica Plywood Corporation entered into a
contract with Arnold for the milling of lumber as well as
Q: Star Crafts is a lantern maker based in Pampanga. It the hauling of waste wood products. The company
supplies Christmas lanterns to stores in Luzon, Metro provided the equipment and tools because Arnold had
Manila, and parts of Visayas, with the months of August neither tools and equipment nor capital for the job.
to November being the busiest months. Its factory Arnold, on the other hand, hired his friends, relatives
employs a workforce of 2,000 workers who make and neighbors for the job. Their wages were paid by Sta.
different lanterns daily for the whole year. Because of Monica Plywood Corp. to Arnold, based on their
increased demand, Star Crafts entered into a production or the number of workers and the time used
contractual arrangement with People Plus, a service in certain areas of work. All work activities and
contractor, to supply the former with 100 workers for schedules were fixed by the company. Is Arnold a job
only 4 months, August to November, at a rate different contractor? Explain briefly. (2002 Bar)
from what they pay their regular employees. The
contract with People Plus stipulates that all equipment A. No. In two cases decided by the Supreme Court, it was
and raw materials will be supplied by Star Crafts with held that there is job contracting where (1) the contractor
the express condition that the workers cannot take any carries on an independent business and undertakes the
of the designs home and must complete their tasks contract work in his own account, under his own
within the premises of Star Crafts. Is there an employer- responsibility according to his own manner and method,
employee relationship between Star Crafts and the 100 free from the control and direction of his employer or
workers from People Plus? Explain. (2015 Bar) principal in all matters connected with the performance of
the work except as to the results thereof; and (2) the
A: Yes. People Plus is a labor-only-contractor because it is contractor has substantial capital or investment in the form
not substantially capitalized. Neither does it carry on an of tools, equipment, machineries, work premises and other
independent business in which it uses its own investment materials which are necessary in the, conduct of his
in the form of tools, equipment, machineries or work business. [Lim v. NLRC, 303 SCRA 432 (1999); Baguio v.
premises. Hence, it is just an agent or recruiter of workers NLRC, 202 SCRA 465(1991)]
who perform work directly related to the trade of Star
Crafts. Since both the essential element and the conforming In the problem given, Arnold did not have sufficient capital
element of labor-only contracting are present, Star Crafts or investment for one. For another Arnold was not free
becomes the employer of the supplied worker. from the control and direction of Sta. Monica Plywood
Corp. because all work activities and schedules were fixed
As principal, Star Crafts will always be an employer in by the company. Therefore, Arnold is not a job contractor.
relation to the workers supplied by its contractor. Its status He is engaged in labor-only contracting.
as employer is either direct or indirect depending on
whether the contractor is legitimate or not. Thus even if Q: Empire Brands (Empire) contracted the services of
People Plus were a legitimate job contractor, still Star Style Corporation (Style) for the marketing and
Crafts will be treated as a statutory employer for purposes promotion of its clothing line. Under the contract, Style
of paying the workers unpaid wages and benefits. provided Empire with Trade Merchandising
Representatives (TMRs) whose services began on
Q: Pablo was a farm-hand, in a plantation owned by September 15, 2004 and ended on June 6 2007, when
ABC & Co., working approximately 6 days a week for a Empire terminated the promotions contract with Style.
good 15 years. Upon Pablo's death, his widow filed a
Empire then entered into an agreement for manpower
claim for burial grant and pension benefits with the
supply with Wave Human Resources (Wave). Wave
Social Security System (SSS) The claim was denied on
the ground that Pablo had not been a registered owns its condo office, owns equipment for the use by
the TMRs, and has assets amounting to P1, 000, 000.00.
member-employee. Pablos widow filed a petition
Wave provided the supervisors who supervised the
before the SSS asking that ABC & Co. be directed to pay
the premium contributions of Pablo and that his name TMRs, who, in turn, received orders from the
Marketing Director of Empire. In their agreement, the
be reported for SSS coverage. ABC & Co. countered that
parties stipulated that Wave shall be liable for the
Pablo was hired to plow, harrow and burrow, using his
wages and salaries of its employees or workers,
own carabao and other implements and following his

19
Labor Law and Social Legislation

including benefits and protection due them, as well as A: Antonio's claim for overtime and other benefits should
remittance to the proper government entities of all be paid by Yosi Cigarette Factory. The Labor Code provides
withholding taxes, Social Security Service, and that in the event that the contractor or subcontractor fails
Philhealth premiums, in accordance with relevant to pay the wages of his employees, the employer shall be
laws. jointly and severally liable to the extent of the work
performed under the contract in the same manner and
As the TMRs wanted to continue working at Empire, extent that he is liable to employees directly employed by
they submitted job applications as TMRs with Wave. his contractor or subcontractor for any violation of any
Consequently, Wave hired them for a term of five (5) provision of the Labor Code.
months, or from June 7, 2007 to November 6, 2007,
specifically to promote Empires products. Q: Manpower Inc. (CMI) had provided janitorial
services to the National Economic Development
When the TMRs 5 month contracts with Wave were Authority (NEDA) since April 1988. Its service contract
about to expire, they sought renewal thereof, but were was renewed every three months. However, in the
refused. Their contracts with Wave were no longer bidding held on July 1992, CMI was disqualified and
renewed as empire hired another agency. This excluded. In 1993, six janitors of CMI formerly assigned
prompted them to file complaints for illegal dismissal, at NEDA filed a complaint for underpayment, of wages.
regularization, non-payment of service incentive leave Both CMI and NEDA were impleaded as respondents for
and 13th month pay against Empire and Wave. Are the failure to comply with NCR Wage Orders Nos. 01 and 02,
TMRs employees of Empire? (2016 Bar) which took effect on November 1, 1990 and January 2,
A: Yes. From the time Empire contracted the services of 1992, respectively.
Style, both engaged in labor-only contracting. In BPI
Should NEDA, a government agency subject to
Employees Union-Davao City FUBU v. BPI, G.R. No. 174912,
budgetary constraints, be held liable solidarity with
July 24, 2013, it was ruled that where any of the following
CMI for the payment of salary differentials due the
elements is present, there is labor-only contracting:
complainants? Cite the legal basis of your answer.
a. The contractor or subcontractor does not have (2004 Bar)
substantial capital or investment which relates to the
job, work or service to be performed and the A: NEDA shall be held solidarity liable with CMI for the payment of
employees recruited, supplied or placed by such salary differentials due to the complainants, because NEDA is the
contractor or subcontractor are performing activities indirect employer of said complainants. The Labor Code provides
which are directly related to the main business of the that xxx (A) person, partnership, association or corporation which,
principal; or not being an employer, contracts with an independent contractor
b. The contractor does not exercise the right to control for the performance of any work, task, job or project" xxx shall be
over the performance of the work of the contractual jointly and severally liable with his contractor or subcontractor to
employee. such employees (of the contractor or subcontractor) to the extent
of work performed under the contract xxx" (Arts. 106 and 107,
The first element is present herein, as Style has no Labor Code)
substantial capital or investment in engaging in the supply
TERMINATION OF EMPLOYMENT (2015, 2004 BAR)
of services contracted out by Empire which is directly
related to the marketing and promotion of its clothing line. Q: Gabriela Liwanag has been working as a bookkeeper
The second element is present as it is inevitable for Empire at Great Foods, Inc. which operates a chain of high-end
to direct the activities of the TMRs to properly market and restaurants throughout the country, since 1970 when it
promote its product line. The subsequent contract of was still a small eatery at Binondo. In the early part of
Empire with Wave did not affect the regular employment the year 2003, Gabriela, who was already 50 years old,
of the TMRs with Empire as, through the Marketing reported for work after a week-long vacation in her
Director of Empire, the TMRs were under the control of province. It was the height of the SARS (Severe Acute
Empire. Thus, the five-month employment contract Respiratory Syndrome) scare, and management
entered into by the TMRs with Wave did not divest them of learned that the first confirmed SARS death case in the
their regular employment status with Empire. In addition, Philippines, a balikbayan nurse from Canada, is a
such scheme undermined the security of tenure of the townmate of Gabriela. Immediately, a memorandum
TMRs which is constitutionally guaranteed, hence, the was issued by management terminating the services of
contract of the TMRs with Wave is void ab initio. Gabriela on the ground that she is a probable carrier of
Solidary liability (2009, 2005, 2004 Bar) SARS virus and that her continued employment is
prejudicial to the health of her co-employees. Is the
Q: Antonio Antuquin, a security guard, was caught action taken by the employer justified? (2004 Bar)
sleeping on the job while on duty at the Yosi Cigarette
Factory, As a result, he was dismissed from A: The employers act of terminating the employment of
employment by the Wagan Security Agency, an Gabriela is not justified. There is no showing that said
independent contractor. At the time of his dismissal, employee is sick with SARS, or that she associated or had
Antonio had been serving as a watchman in the factory contact with the deceased nurse. They are merely
for many years, often at stretches of up to 12 hours, townmates. Furthermore, there is no certification by a
even on Sundays and holidays, without overtime, competent authority that the disease is of such a nature or
nighttime and rest da~ benefits, He thereafter filed a such a stage that it cannot be cured within a period of six
complaint for illegal dismissal and non-payment of months even with proper medical treatment.
benefits against Yosi Cigarette Factory, which he (Implementing Rules, Book VI, Rule 1, Sec. 8, Labor Code).
claimed was his actual and direct employer. As the
Labor Arbiter assigned to hear the case, how would you Q: Rico has a temper and, in his work as Division
correctly resolve Antonio's claim for overtime and Manager of Matatag Insurance, frequently loses his
other benefits, (2005 Bar) temper with his staff. One day, he physically assaults
his staff member by slapping him. The staff member

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QUAMTO (1987-2016)
sues him for physical injuries. Matatag insurance indefinitely. If it lasts for more than six (6) months, RS shall
decides to terminate Rico, after notice and hearing, on be, deemed to have been constructively dismissed thus
the ground of loss of trust and confidence. Rico claims entitling him to separation benefits. (Superstar Security
that he is entitled to the presumption of innocence Agency v. NLRC, 1114 SCRA74, [1990]). On the second issue,
because he has not yet been convicted. Comment on there is no valid exercise of management prerogative. Star's
Matatags action in relation to Ricos argument. (2015 claim of management prerogative in assigning its guards
Bar) cannot be exercised to defeat or circumvent RS' right to
security of tenure.
A: Matatag Insurance does not have to await the result of
the criminal case before exercising its prerogative to Q: Lincoln was in the business of trading broadcast
dismiss. Dismissal is not affected by a criminal case. Under equipment used by television and radio networks. He
the Three-fold Liability Rule, a single act may result in employed Lionel as his agent. Subsequently, Lincoln set
three liabilities, two of which are criminal and up Liberty Communications to formally engage in the
administrative. To establish them, the evidence of the same business. He requested Lionel to be one of the
crime must amount to proof beyond reasonable doubt; incorporators and assigned to him 100 Liberty shares.
whereas, the evidence of the ground for dismissal is Lionel was also given the title Assistant Vice-President
substantial evidence only. In this regard, the company has for Sales and Head of Technical Coordination. After
some basis already for withholding the trust it has reposed several months, there were allegations that Lionel was
on its manager. Hence, Ricos conviction need not precede engaged in under the table dealings and received
the employees dismissal. confidential commissions from Libertys clients and
suppliers. He was, therefore, charged with serious
TERMINATION BY EMPLOYEE misconduct and willful breach of trust, and was given
48 hours to present his explanation on the charges.
Resignation versus Constructive dismissal (2014, 2004, Lionel was unable to comply with the 48-hour deadline
1996 Bar) and was subsequently barred from entering company
premises. Lionel then filed a complaint with the Labor
Q: An accidental fire gutted the JKL factory in Caloocan. Arbiter claiming constructive dismissal. Among others,
JKL decided to suspend operations and requested its the company sought the dismissal of the complaint
employees to stop reporting for work. After six (6) alleging that the case involved an intra-corporate
months, JKL resumed operations but hired a new set of controversy which was within the jurisdiction of the
employees. The old set of employees filed a case for Regional Trial Court (RTC). If you were the Labor
illegal dismissal. If you were the Labor Arbiter, how Arbiter assigned to the case, how would you rule on the
would you decide the case? (2014 Bar) companys motion to dismiss? (2014 Bar)

A: I will rule in favor of the employees. JKL factory merely A: I will deny the motion to dismiss. "Corporate officers" in
suspended its operations as a result of the fire that gutted the context of Presidential Decree No. 902-A are those
its factory. Article 286 of the Labor Code states that an officers of the corporation who are given that character by
employer may bona fide suspend the operation of its the Corporation Code or by the corporation's by-laws.
business for a period not exceeding six (6) months. In such Section 25 of the Corporation Code enumerates three
a case, there would be no termination of the employment of specific officers that in law are considered as corporate
the employees, but only a temporary displacement. Since, officers the president, secretary and the treasurer. Lincoln
the suspension of work lasted more than six months, there is not one of them. There is likewise no showing that his
is now constructive dismissal (Sebuguero v. NLRC, 245 SCRA position as Assistant Vice-President is a corporate officer in
532 [1995]). the company's by-laws. The Labor Arbiter therefore, has
jurisdiction over the case (Art. 217 (a) (2), Labor Code).
Q: RS, a security guard, filed a complaint for illegal
dismissal against Star Security Agency. He alleged he TERMINATION BY EMPLOYER
was constructively dismissed after ten years of service
to the Agency. Having 'been placed on "off detail" and a. Just Causes (2016, 2014, 2013, 2009, 2008, 2004,
"floating status" for 6 months already, he claimed the 2003, 2000, 1996, 1995, 1993, 1989 Bar)
Agency just really wanted to get rid of him because it
required him to take a neuropsychiatric evaluation test
by Mahusay Medical Center. RS said he already Q: Distinguish between dismissal of an employee for
submitted the result of his evaluation test by Brent just cause and termination of employment for
Medical Clinica precondition to a new assignment, but authorized cause. Enumerate examples of just cause
the report was rejected by the Agency. RS added that and authorized cause. (2000 Bar)
Mahusay Medical Center had close ties with Star's
president. It could manipulate tests to favor only those A: Dismissal for a just cause is founded on faults or
guards whom the Agency wanted to retain. Star misdeeds of the employee. Separation pay, as a rule, will
defended its policy of reliance on Mahusay Medical not be paid. Examples: serious misconduct, willful
Center because it has been duly accredited by the disobedience, commission of crime, gross and habitual
Philippine National Police. It is not one of those dubious neglect, fraud and other causes analogous to the foregoing.
testing centers issuing readymade reports. Star cited its (Art. 282, Labor Code).
sad experience last year when a guard ran amuck and
shot an employee of a client bank. Star claimed Termination for authorized causes are based on business
management prerogative in assigning its guards, and exigencies or measures adopted by the employer, not
prayed that RS' complaint be dismissed. What are the constituting faults of the employee. Payment of separation
issues? Identify and resolve them. (2004 Bar) pay at varying amounts is required. Examples: redundancy,
A: On the first Issue, there is constructive dismissal. RS closure, retrenchment, installation of labor saving device
cannot be placed on "off - detail" and "floating status" and authorized cause. [Art. 283-284, Labor Code).

21
Labor Law and Social Legislation

Q: Arnaldo, President of Bisig Union in Femwear Roman was asked to explain. After hearing his expla-
Company, readied himself to leave exactly at 5:00 p.m. nation, Roman was dismissed for willful disobedience.
which was the end of his normal shift to be able to send Roman filed a case for illegal dismissal against the
off his wife who was scheduled to leave for overseas. Double-Ten Corporation with prayer for reinstatement
However, the General Manager required him to render and full back wages without loss of seniority rights,
overtime work to meet the company's export quota. plus moral and exemplary damages and attorney's
Arnaldo begged off, explaining to the General Manager fees. Roman contended that since there was no
that he had to see off his wife who was leaving to work emergency situation and there were other drivers
abroad. The company dismissed Arnaldo for available, his refusal to drive for the manager, and later
insubordination. He filed a case for illegal dismissal. for his supervisor, was not serious enough to warrant
Decide. (2008 Bar) his dismissal. On the other hand, he claimed that he
was being punished because of his activities as a
A: Arnaldo cannot be dismissed for insubordination. This steward of his union. If you were the Labor Arbiter,
is so because one of the requisites for insubordination is would you sustain Roman? Discuss fully. (1995 Bar)
absent. It cannot be said that Arnaldos conduct was
characterized by a wrongful and perverse attitude. A: If I were the Labor Arbiter. I will not sustain Roman. It is
Arnaldo can be said to have been motivated by his honest true that it would be an unfair labor practice for an
belief that the order was unreasonable because he had to employer to discriminate against his employee for the
send off his wife who was scheduled to leave for overseas. latters union activities.

Q: Sergio, an employee of Encantado Philippines, Inc. But in the case, the Corporation is not discriminating
(EPI), was at the company canteen when Corazon, a against Roman because he is a union official. When the
canteen helper, questioned him for his use of Manager of Roman told him to pick up some documents
somebody elses identification card (ID). Sergio flared from a certain bank, this was a lawful order and when
up and shouted at Corazon Wala kang pakialam! Kung Roman did not obey the order, he was disobedient; and
gusto mo. itapon ko itong mga pagkain ninyo! When when he disobeyed a similar request made later in the
Sergio noticed that some people where staring at him afternoon of same day, he was guilty of willful disobedience
rather menacingly, he left the canteen but returned a to do what management asked him to do. This is just cause
few minutes later to remark challengingly Sino ba ang for his termination.
nagagalit" Sergio then began smashing some food
items that were on display for sale in the canteen, after Q: Jose and Erica, former sweethearts, both worked as
which he slapped Corazon which caused her to fall and sales representatives for Magna, a multinational firm
suffer contusions. The incident prompted Corazon to engaged in the manufacture and sale of pharmaceutical
file a written complaint with Gustavo, the personnel products. Although the couple had already broken off
manager of EPI against Sergio. their relationship, Jose continued to have special
feelings for Erica.
Gustavo required Sergio to explain in writing why no
disciplinary action should be taken against him. In his One afternoon, Jose chanced upon Erica riding in the
written explanation, Sergio admitted his misconduct car of Paolo, a co-employee and Erica's ardent suitor;
but tried to explain it away by saying that he was under the two were on their way back to the office from a sales
the influence of liquor at the time of the incident. call on Silver Drug, a major drug retailer. In a fit of
Gustavo thereafter issued a letter of termination from extreme jealousy, Jose rammed Paolo's car, causing
the employment of Sergio for serious misconduct. severe injuries to Paolo and Erica. Jose's flare up also
Sergio now files a complaint for illegal dismissal, argu- caused heavy damage to the two company-owned cars
ing that his acts did not constitute serious misconduct they were driving.
that would justify his dismissal. Decide. (1996 Bar)
a. As lawyer for Magna, advise the company on whether
A: The acts of Sergio constituted serious misconduct. Thus, just and valid grounds exist to dismiss Jose.
there was just cause for his termination. The fact that he
A: Jose can be dismissed for serious misconduct, violation
was under the influence of liquor at the time that he did
of company rules and regulations, and commission of a
what he did does not mitigate instead it aggravates, his
crime against the employers representatives. Article 282 of
misconduct. Being under the influence of liquor while at
the Labor Code provides that an employer may terminate
work is by itself serious misconduct.
an employment for any serious misconduct or willful
disobedience by the employee of the lawful orders of his
Q: Roman had been a driver of Double-Ten Corporation
employer or his representatives in connection with his
for ten (10) years. As early as his fifth year in the
work.
service he was a ready commended as a Model
Employee and given a salary increase. On his seventh Misconduct involves the transgression of some established
year, he became a steward of his labor union. Since and definite rule of action, forbidden act, a dereliction of
then he became disputatious and obstinate and his duty, willful in character, and implies wrongful intent and
performance fell below par. One day his manager told not mere error in judgment. For misconduct to be serious
him to pick up some documents from a certain bank and therefore a valid ground for dismissal, it must be:
which were needed to close a business transaction.
Roman did not obey. He said he had an important 1. of grave and aggravated character and not merely
personal engagement. Moreover, he did not want to trivial or unimportant and;
drive a vehicle that was not airconditioned. When his 2. connected with the work of the employee.
immediate supervisor asked him in the afternoon to
drive an airconditioned car, Roman again refused. He b. Assuming this time that Magna dismissed Jose from
said he did not want to drive as he wanted to leave the employment for cause and you are the lawyer of Jose,
office early. how would you argue the position that Jose's dismissal
was illegal? (2013 Bar)

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QUAMTO (1987-2016)
dismissed for loss of trust and confidence.
A: The offense committed by Jose did not relate to the
performance of his duties. For misconduct or improper Q: Lanz was a strict and unpopular Vice-President for
behavior to be a just cause for dismissal, it (a) must be Sales of Lobinsons Land. One day, Lanz shouted
serious; (b) must relate to the performance of the invectives against Lee, a poor performing sales
employees duties; and (c) must show that the employee has associate, calling him, among others, a brown monkey.
become unfit to continue working for the employer. Hurt, Lee decided to file a criminal complaint for grave
defamation against Lanz. The prosecutor found
On the basis of the forgoing guidelines, it can be concluded probable cause and filed an information in court.
that Jose was not guilty of serious misconduct; Jose was not
Lobinsons decided to terminate Lanz for committing a
performing official work at the time of the incident. potential crime and other illegal acts prejudicial to
(Lagrosas v. Bristol Myers Squibb, G.R. No. 168637/170684 business. Can Lanz be legally terminated by the
[2008]) company on these grounds? (2014 Bar)
Additionally, there was no compliance with the A: No. The grounds relied upon by Lobinsons are not just
rudimentary requirements of due process. causes for dismissal under the Labor Code. Defamation is
not a crime against person which is a ground to dismiss
Q: Oscar Pimentel was an agent supervisor, rising from
under Article 282, now Article 295, (d) of the Labor Code.
the ranks, in a corporation engaged in real estate. In
order to promote the business, the company issued a b. Authorized Causes (2016, 2006, 2004, 2003, 2002,
memorandum to all agent supervisors requiring them 2001, 2000, 1999, 1998, 1994, 1990 Bar)
to submit a feasibility study within their respective
areas of operation. All agent supervisors complied Q: What are the authorized causes for a valid dismissal
except Oscar. Reminded by the company to comply with by the employer of an employee? Why are they distinct
the memorandum, Oscar explained that being a drop- from the just causes? (2004, 2002 Bar)
out in school and uneducated, he would be unable to
submit the required study. The company found the The authorized causes for a valid dismissal are the
explanation unacceptable and terminated his following:
employment. Aggrieved, Oscar filed a complaint for
illegal dismissal against the company. Decide the case. a. installation of labor-saving devices
(2003 Bar) b. redundancy
c. retrenchment to prevent losses
A: For failure to comply with the memorandum to submit a d. the closing or cessation of operation of the
feasibility study on his area of operation, Oscar cannot be establishment or undertaking
terminated (presumably for insubordination or willful
disobedience) because the same envisages the concurrence The authorized causes for a valid dismissal are distinct from
of at least two requisites: (1) the employees assailed just causes because where the dismissal of an employee is
conduct must have been willful or intentional, the based on just causes, these just causes are acts committed
willfulness being characterized by a wrongful and perverse by the employee which provide the basis for his dismissal.
attitude; and (2) the order violated must have been
On the other hand, where the dismissal is based on
reasonable, or lawful, made known to the employee and authorized causes, these authorized causes are the results
must pertain to the duties which he had been engaged to of the proper exercise by the employer of his management
discharge. prerogatives. . If a valid dismissal is based on just causes,
there is no liability on the part of the employer, although
In the case at bar, at least two requisites are absent, namely:
sometimes, financial assistance to be given to the dismissed
(1) Oscar did not willfully disobey the memorandum with a
employee is asked of the employer. If a valid dismissal is
perverse attitude; and (2) the directive to make a feasibility
based on authorized causes, the employer has to pay
study did not pertain to his duties. Hence, the termination
separation pay except In case of closure or cessation of
from employment of Oscar Pimentel is not lawful.
operation due to serious business losses or financial
Q: Domingo, a bus conductor of San Juan reverses.
Transportation Company, intentionally did not issue a
ticket to a female passenger, Kim, his long-time crush. Q: What conditions must prevail and what
As a result, Domingo was dismissed from employment requirements, if any, must an employer comply with to
for fraud or willful breach of trust. Domingo contests justify/effect a valid retrenchment program? (2001
his dismissal, claiming that he is not a confidential Bar).
employee and, therefore, cannot be dismissed from the
service for breach of trust. Is Domingo correct? Reasons. A: In the case of Asian Alcohol Corp. vs. NLRC, G.R. No.
(2009 Bar) 131108, March 25, 1999, the Supreme Court stated that the
requirements for a valid retrenchment must be proved by
A: Domingo as bus conductor holds a position wherein he clear and convincing evidence: (1) that the retrenchment is
was reposed with the employers trust and confidence. In reasonably necessary and likely to prevent business losses
Bristol Myers Squibb (Phils.) v. Baban (574 SCRA 198 [2008]), which, if already incurred, are not merely de minimis, but
the Court established a second class of positions of trust substantial, serious, actual and real or if only expected, are
that involve rank-and-file employees who, in the normal reasonably imminent as perceived objectively and in good
and routine exercise of their functions, regularly handle faith by the employer; (2) that the employer served written
significant amounts of money. A bus conductor falls under notice both to the employees and to the Department of
such second class of persons. This does not mean, however, Labor and Employment at least one month prior to the
that Domingo should be dismissed. In Etcuban v. Sulpicio intended date of retrenchment; (3) that the employer pays
Lines (448 SCRA 516 [2005]), the Court held that where the the retrenched employees separation pay equivalent to one
amount involved is miniscule, an employee may not be month pay or at least one month pay for every year of

23
Labor Law and Social Legislation

service, whichever is higher; (4) that the employer dismissal of Leo be successfully assailed by him? (2003
exercises its prerogative to retrench employees in good Bar)
faith for the advancement of its interest and not to defeat
or circumvent the employees' right to security of tenure; A: Yes. Given the factual setting in the problem, and since
and (5) that the employer used fair and reasonable criteria nothing more (have) been established, the dismissal of
in ascertaining who would be dismissed and who would be Leo can be successfully assailed by him. This is so because
retained among the employees, such as status (i.e., whether the burden of proof is upon the employer to show
they are temporary, casual, regular or managerial compliance with the following requisites for reduction of
employees), efficiency, seniority, physical fitness, age, and personnel:
financial hardship for certain workers.
1. Losses or expected losses should be substantial and not
Q: Hagibis Motors Corporation (Hagibis) has 500 merely de minimis;
regular employees in its car assembly plant. Due to the 2. The expected losses must be reasonably imminent, and
Asian financial crisis, Hagibis experienced very low car such imminence can be perceived objectively and in
sales resulting to huge financial losses. It implemented good faith by the employer.
several cost-cutting measures such as cost reduction 3. It must be necessary and likely to prevent the expected
on use of office supplies, employment hiring freeze, losses. The employer must have taken other measures
prohibition on representation and travel expenses, to cut costs other than labor costs; and
separation of casuals and reduced work week. As 4. Losses if already realized, or the expected losses must
counsel of Hagibis, what are the measures the company be proved by sufficient and convincing evidence.
should undertake to implement a valid retrenchment? (Lopez Sugar Corp. v. Federation of Sugar Workers. 189
Explain. (2016 Bar) SCRA 179 [19901]).

A: For a valid retrenchment, the following requisites must Moreover, the notice requirements to be given by Daisy's
be complied with: (a) the retrenchment is necessary to Department Store to DOLE and the employees concerned
prevent losses and such losses are proven; (b) written 30 days prior to the intended date of termination, as well
notice to the employees and to the DOLE at least one month as the requisite separation pay, were not complied with.
prior to the intended date of retrenchment; and (c)
payment of separation pay equivalent to one-month pay or Q: ABC Tomato Corporation, owned and managed by
at least one-half month pay for every year of service, three (3) elderly brothers and two (2) sisters, has been
whichever is higher. in business for 40 years. Due to serious business losses
and financial reverses during the last five (5) years,
Jurisprudential standards for the losses which may justify they decided to close the business. (2006 Bar)
retrenchment are: firstly, the losses expected should be
a. As counsel for the corporation, what steps will you
substantial and not merely de minimis in extent. If the loss
take prior to its closure?
purportedly sought to be forestalled by retrenchment is
clearly shown to be insubstantial and inconsequential in
character, the bona fide nature of the retrenchment would A: As counsel for the corporation, I will see to it that the
appear to be seriously in question; secondly, the corporation shall serve a written notice on its intended
substantial loss must be reasonably imminent, as such date of closing or cessation of operation on the workers of
imminence can be perceived objectively and in good faith the corporation and the Department of Labor and
by the employer; xxx thirdly, because of the consequential Employment at least one month before the intended date
nature of retrenchment, it must be reasonably necessary of the closure or cessation of operation.
and is likely to be effective in preventing the expected
losses; xxx lastly, alleged losses if already realized, and the b. Are the employees entitled to separation pay?
expected imminent losses sought to be forestalled, must be
proved by sufficient and convincing evidence. (Manatad v. A: The employees of the corporation are not entitled to
Philippine Telegraph and Telephone Corporation, G.R. No. separation pay because Article 283 of the Labor Code
12363, March 07, 2008) expressly provides that if the closure or cessation of
operation of an establishment is due to serious business
Hagibis should exercise its prerogative to retrench losses or financial reverses, the employees are not entitled
employees in good faith. It must be for the advancement of to separation pay.
its interest and not to defeat or circumvent the employees
right to security of tenure. Hagibis should use fair and c. If the reason for the closure is due to old age of the
reasonable criteria such as status, efficiency, seniority, brothers and sisters:
physical fitness, age and financial hardship for certain
workers in ascertaining who would be dismissed and who 1. Is the closure allowed by law?
would be retained among the employees.
A. Yes, the closure is allowed by law. For a bona fide
Q: Daisys Department Store hired Leo as a checker to reason, an employer can lawfully close shop at any time.
apprehend shoplifters. Leo later became Chief of the Just as no law forces anyone to go into business, no law can
Checkers Section and acquired the status of a regular compel anybody to continue the same. It would be
employee. By way of a cost-cutting measure, Daisy's stretching the intent and spirit of the law if the Court
decided to abolish the entire Checkers Section. The interferes with managements prerogative to close or cease
services of Leo, along with those of his co-employees its business operations just because the business is not
working in the same section, were terminated on the suffering from any loss or because of the desire to provide
same day. A month after the dismissal of Leo, Daisys workers continued employment (Alahang Country Club,
engaged the services of another person as an ordinary Inc. vs. NLRC, 466 SCRA 329 [2005]).
checker and with a salary much lower than that which
Leo used to receive. Given the above factual settings Q: Zienna Corporation (Zienna) informed the
(nothing more having been established), could the Department of Labor and Employment Regional

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24
QUAMTO (1987-2016)
Director of the end of its operations. To carry out the [1998 Bar]
cessation, Zienna sent a Letter Request for Intervention A: Assuming that there is a valid ground to terminate
to the NLRC for permission and guidance in effecting employment, the employer must comply with the
payment of separation benefits for its fifty (50) requirement of procedural due process written notice of
terminated employees. intent to terminate stating the cause for termination;
Hearing and Notice of Termination. The Labor Code reads:
Each of the terminated employees executed a Quitclaim
and Release before Labor Arbiter Nocomora, to whom A. Notice and Hearing
the case was assigned. After the erstwhile employees
received their separation pay, the Labor Arbiter Art. 277. Miscellaneous provisions. xxx
declared the labor dispute dismissed with prejudice on
the ground of settlement. Thereafter, Zienna sold all of (a) xxx The employer shall furnish the worker
its assets to Zandra Company (Zandra), which in turn whose employment is sought to be terminated
hired its own employees. a written notice containing a statement of the
causes for termination and shall afford the
Nelle, one of the fifty (50) terminated employees, filed latter ample opportunity to be heard and to
a case for illegal dismissal against Zienna. She argued defend himself with the assistance of his
that Zienna did not cease from operating since the representative if he so desires ...
corporation subsists as Zandra. Nelle pointed out that
aside from the two companies having essentially the The Supreme Court ruled in Salaw v. NLRC, 202 SCRA 7
same equipment, the managers and owners of Zandra (1991)
and Zienna are likewise one and the same.
xxx Not only must the dismissal be for a valid or
For its part, Zienna countered that Nelle is barred from unauthorized cause as provided by law xxx but the
filing a complaint for illegal dismissal against the rudimentary requirements of due process - notice
corporation in view of her prior acceptance of and hearing - must also be observed before an
separation pay. employee must be dismissed.

Is Nelle correct in claiming that she was illegally


B. Two (2) Notice Requirements
dismissed? (2016 Bar)

A: No. In SME Bank v. De Guzman, G.R. No. 184517 and The Supreme Court in Tanala v. NLRC, 252 SCRA 314 (1996),
186641, October 8, 2013, there are two (2) types of and in a long line of earlier cases, ruled:
corporate acquisitions: asset sales and stock sales. In asset
sales, the corporate entity sells all or substantially all of its xxx This Court has repeatedly held that to meet the
assets to another entity. In stock sales, the individual or requirements of due process, the law requires that
corporate shareholders sell a controlling block of stock to an employer must furnish the workers sought to be
new or existing shareholders. Asset sales happened in this dismissed with two written notices before
case; hence, Zienna is authorized to dismiss its employees, termination of employment can be legally effected,
but must pay separation pay. The buyer Zandra, is not that is, (1) a notice which apprises the employee of
obliged to absorb the employees affected by the sale, nor is the particular acts or omissions for which his
it liable for the payment of their claims. The most that dismissal is sought; and (2) subsequent notice,
Zandra may do, for reasons of public policy and social after due hearing, which informs the employee of
justice, is to give preference in hiring qualified separated the employers decision to dismiss him.
personnel of Zienna.
Q: Alfredo was dismissed by management for serious
c. Due Process (2016, 2006, 1999, 1998, 1997, 1995, misconduct. He filed suit for illegal dismissal, alleging
1994, 1990 Bar) that although there may be just cause, he was not
afforded due process by management prior to his
Q: Distinguish between the substantive and the
termination. He demands reinstatement with full
procedural requirements for the dismissal of an
backwages.
employee (1994 Bar)

A: This is the substantive requirement for the valid What are the twin-requirements of due process which
dismissal of an employee: There should be a just cause for the employer must observe in terminating or
the termination of an employee or that the termination is dismissing an employee? Explain. (2009 Bar)
authorized by law.
A: The twin requirements of due process are notice and
This is the procedural requirement: The employer should hearing to be given to the worker. There is likewise a two-
furnish the employee whose employment is sought to be notice requirement rule, with the first notice pertaining to
terminated a written notice containing a statement of the specific causes or grounds for termination and a directive
causes for termination and the employer should afford the to submit a written explanation within a reasonable period.
employee to be terminated ample opportunity to be heard The second notice pertains to notice of termination.
and to defend himself with the assistance of his representa- Pursuant to Perez v. Philippine Telegraph and Telephone
tive if he so desires. (Arts. 279 and 277 (b). Labor Code) Company (G.R. No. 152048, 7 April 2009), the Court held that
a hearing or conference is not mandatory, as long as the
Twin-notice requirement (2009, 2006, 1998 Bar) employee is given ample opportunity to be heard, i.e. any
meaningful opportunity (verbal or written) to answer the
Q: Assuming the existence of valid grounds for charges against him or her and submit evidence in support
dismissal, what are the requirements before an of the defense, whether in a hearing, conference, or some
employer can terminate the services of an employee? other fair, just and equitable way.

25
Labor Law and Social Legislation

Q: Inday was employed by Herrera Home the hearing before the Labor Arbiter, SSS proved by
Improvements, Inc. (Herrera Home) as interior substantial evidence JVs misappropriation of company
decorator. During the first year of her employment, she funds and various infractions detrimental to the
did not report for work for one month. Hence, her business of the company. JV, however, contended that
employer dismissed her from the service. She filed his dismissal was illegal because the company did not
with the Labor Arbiter a complaint for illegal dismissal comply with the requirements of due process. Did SSS
alleging she did not abandon her work and that in comply with the requirements of procedural due
terminating her employment, Herrera Home deprived process in the dismissal from employment of J'V?
her of her right to due process. She thus prayed that she Explain briefly (1999 Bar)
be reinstated to her position.
A: In connection with the right to due process in the
Inday hired you as counsel. In preparing the position termination of an employee, the Labor Code (in Article
paper to be submitted to the Labor Arbiter, explain the 277(b)) requires that the employer furnish the worker
standards of due process which should have been whose employment is sought to be terminated a written
observed by Herrera Home in terminating your client's notice containing a statement of the causes for termination
employment. (2006 Bar) and shall afford ample opportunity to be heard and to
defend himself with the assistance of his representative if
A: The Labor Code provides the following procedure to be he so desires.
observed in terminating the services of an employee based SSS did not comply with the above described requirements
on just causes as defined in Art. 282 of the Code:
for due process. The memorandum order was for the
preventive suspension of JV, not a notice for his
a) A written notice must be served on the employee termination and the causes of his termination.
specifying the ground or grounds for termination and
giving him reasonable opportunity within which to 3. Reliefs for Illegal Dismissal (2009, 2007, 2002, 2001,
explain his side: 1997, 1995, 1994 Bar)
b) A hearing or conference shall be conducted during
which the employee concerned, with the assistance of Q: Discuss briefly the instances when noncompliance
counsel if he so desires, is given an opportunity to by the employer with a reinstatement order of an
respond to the charge, present his evidence or rebut illegally dismissed employee is allowed. (2007 Bar)
the evidence presented against him; and
c) A written notice of termination must be served on the A: Despite a reinstatement order, an employer may not
employee indicating that upon due consideration of all reinstate an employee in the following instances: (a) when
the circumstances, grounds have been established to the position or any substantial equivalent thereof no longer
justify his termination. exists; (b) when reinstatement has been rendered moot and
academic by supervening events, such as insolvency of the
2. Hearing; Ample opportunity to be heard (1994, employer as declared by the court or closure of the
1999) business; (c) the existence of strained relations between the
employer and the illegally dismissed employee, provided
Q: Atty. Oliza heads the legal department of Company X the matter is raised before the Labor Arbiter. In the event
with the rank and title of Vice-President. During his that reinstatement is no longer feasible, or if the employee
leave of absence, his assistant took over as acting head chooses not to be reinstated, the employer shall pay him
of the legal department. Upon his return, Atty. Oliza was separation pay in lieu of reinstatement pending Appeal
informed in writing that his services were no longer (Article 223, Labor Code)
needed, it appearing that the Company had lost so many
cases by default due to his incompetence. Atty. Oliza Q: A strike was staged in Mella Corporation because of
filed a case for illegal dismissal. Will his case prosper? a deadlock in CBA negotiations over certain economic
(1994 Bar) provisions. During the strike, Mella Corporation hired
replacements for the workers who went on strike.
A: His case will prosper. He was not given procedural due
Thereafter, the strikers decided to resume their
process. He was not given the required notice, namely, a
employment. Can Mella Corporation be obliged to
written notice containing a statement of the causes for
reinstate the returning workers to their previous
termination, and he was not afforded ample opportunity to
positions? (1997 Bar)
be heard and to defend himself. But if, before the Labor
Arbiter, in a hearing of the case of illegal dismissal that Atty.
A: Yes. Mella Corporation can be obligated to reinstate the
Oliza may have filed, he is found to be grossly incompetent,
returning workers to their previous positions. Workers
this is Just cause for his dismissal. (Art. 277(b), Labor Code)
who go on strike do not lose their employment status except
when, while on strike, they knowingly participated in the
Q: Joseph Vilriolo (JV), a cashier of Seaside Sunshine
commission of illegal acts. The Labor Code expressly
Supermart (SSS), was found after an audit, to have cash
provides: Mere participation of a worker in a lawful strike
shortages on his monetary accountability covering a
should not constitute sufficient ground for termination of
period of about five months in the total amount of P48,
his employment, even if a replacement had been hired by
000.00. SSS served upon JV the written charge against
the employer during such lawful strike.
him via a memorandum order of preventive
suspension, giving JV 24 hours to submit his
Q: Eduardo Santiago, a project worker, was being
explanation. As soon as JV submitted his written
assigned by his employer, Bagsak Builders, to Laoag,
explanation within the given period, the same was
Ilocos Norte. Santiago refused to comply with the
deemed unsatisfactory by the company and JV was
transfer claiming that it, in effect, constituted a
peremptorily dismissed without any hearing.
constructive dismissal because it would take him away
from his family and his usual work assignments in
The day following his termination from employment.
Metro Manila. The Labor Arbiter found that there was
JV filed a case of illegal dismissal against SSS. During
no constructive dismissal but ordered the payment of

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26
QUAMTO (1987-2016)
separation pay due to strained relations between the employee (Melody) under a 20-day suspension,
Santiago and Bagsak Builders plus attorney's fees meanwhile directing her to explain why she should not
equivalent to ten percent (10%) of the value of be dismissed for violation of company's memoranda.
Santiago's separation pay. b. The order for Lyric Theater to pay separation pay has
no factual basis. Separation pay is to be paid to an
a. Is the award of attorney's fees valid? State the employee who is terminated due to the installation of
reasons for your answer. labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation
A: Yes. What Art. 111 (b) prohibits is the demand or of the establishment undertaking. None of these events
acceptance by any person in a judicial or administrative has taken place. Neither is separation pay here in lieu
proceedings for the recovery of wages, attorneys fees of reinstatement applicable because there is just cause
which exceed 10% of the amount of wages recovered. Since if Melody is terminated under the circumstances.
in this case, the amount of attorneys fees is exactly c. The order for Lyric Theater to pay backwages has no
equivalent to the 10% of the separation fee recovered, the factual basis either because there is just cause if she will
award is valid. be terminated after investigation. In this case, there is
wilful disobedience by the employee of the lawful
b. Could the labor arbiter have validly awarded moral orders of her employer in connection with her work.
and exemplary damages to Santiago instead of She did not just violate the lawful order of the
attorney's fees? Why? (2001 Bar) employer, she violated it five times. Melody did not give
any justifiable reason for violating the company's
A: No. In the case of Lirag Textile Mills, Inc. et al. v. Court of memorandum prohibiting the encashment of checks.
Appeals, et al., (GR No. L-30786, April 14, 1975), the Supreme (Jo Cinema Corp. v. Avellana, G.R. No. 32837, June 28,
Court held that when the termination of the services of an 2001).
employee is attended by fraud or bad faith on the part of the
employer as when the latter knowingly made false Q: A, an employee of Company B was found to have
allegations of a supposed valid cause when none existed, been illegally dismissed and was ordered to be
moral and exemplary damages may be awarded in favour of reinstated and paid backwages from the time of
the former. In this case, there was no showing that there dismissal until actual reinstatement. The case was
was a bad faith on the part of the employer. In fact, the bad elevated all the way to the Supreme Court. By the time
faith and false allegations were on the part of the employee the Supreme Courts decision became final and
when he refused to obey the transfer mandated by his executory, B had closed down and was in the process of
employer solely on the shallow basis that he will be away winding up. Nonetheless, B paid A his backwages and
from his family. separation pay. A complained that Bs computation was
erroneous in that As allowances was not included. Is A
Q: What damages can an illegally dismissed employee correct in his claim? For what reasons? (2001 Bar)
collect from his employer? (2001 Bar)
A: A is correct. Article 279 provides that an employee who
A: An illegally dismissed employee may collect from his is unjustly dismissed from work shall be entitled to
employer ACTUAL and COMPENSATORY damages, MORAL reinstatement without loss of seniority rights and other
damages and EXEMPLARY damages, as well as attorneys privileges and to his full backwages, inclusive of allowances,
fees as damages. and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld
Q: Lyric Theater Corp. issued a memorandum from him up to the time of his actual reinstatement. Clearly,
prohibiting all ticket sellers from encashing any check based from the foregoing provision, A is entitled to his
from their cash collections and requiring them instead allowances.
to turn over all cash collections to the management at
the end of the day. In violation of this memorandum, RETIREMENT (2013, 2007, 2005, 2001, 1994 BAR)
Melody, a ticket seller, encashed five (5) checks from
her cash collection. Subsequently the checks were Q: As a rule, when is retirement due? (2007 Bar)
dishonored when deposited in the account of Lyric
Theater. For this action, Melody was placed under a 20- A: Article 287 provides for two types of retirement:
day suspension and directed to explain why she should
not be dismissed for violation of the company's a. optional retirement - which may be availed of by an
memorandum. In her explanation, she admitted having employee reaching the age of 60 years;
encashed the checks without the company's permission. b. compulsory retirement - which may be availed of by an
While the investigation was pending, Melody filed a employee upon reaching the age of 65 years. In both
complaint against Lyric Theater for backwages and instances, the law imposes the minimum service
separation pay. The Labor Arbiter ordered Lyric requirement of 5 years with the establishment.
Theater to pay Melody P115, 420.79 representing
separation pay and backwages. The NLRC affirmed the Q: When is retirement due for underground miners?
ruling of the Labor Arbiter. Is the ruling of the NLRC (2007 Bar)
correct? Explain briefly. (2002 Bar)
A: Pursuant to R.A. 8558, in the absence of a retirement
A: The ruling of the NLRC affirming the Labor Arbiter's plan or other applicable agreement providing for
decision ordering Lyric Theater to pay P115, 420.79 retirement benefits of underground mine employees in the
representing separation pay and backwages is wrong. The establishment, any such employee may retire upon
Labor Arbiter's decision is wrong because: reaching the age of 50 years or more if he has served for at
least 5 years as underground mine employee or in
a. It is premature. There was still no termination. All that underground mine of the establishment.
was done by the employer (Lyric Theater) was to place

27
Labor Law and Social Legislation

Q: Ricky Marvin had worked for more than ten (10) months advance notice as well as notice to DOLE, with
years in 1GB Corporation. Under the terms of the the further advice that each employee may claim his
personnel policy on retirement, any employee who corresponding separation or retirement benefits
had reached the age of 65 and completed at least ten whichever is higher after executing the required
(10) years of service would be compulsorily retired waiver and quitclaim.
and paid 30 days pay for every year of service.
Dino Ramos and his co-employees who have all ren-
Ricky Marvin, whose immigrant visa to the USA had just dered more than 25 years of service, received their
been approved, celebrated his 60th birthday recently. retirement benefits. Soon after, Ramos and others
He decided to retire and move to California where the similarly situated demanded for their separation pay.
son who petitioned him had settled. The company The Company refused, claiming that under the CBA
refused to grant him any retirement benefits on the they cannot receive both benefits. Who is correct, the
ground that he had not yet attained the compulsory employees or the Company? (1994 Bar)
retirement age of 65 years as required by its personnel A: The employees are correct. In the absence of a
policy; moreover, it did not have a policy on optional or categorical provision in the Retirement Plan and the CBA
early retirement. that an employee who receives separation pay is no longer,
entitled to retirement benefits, the employee is entitled to
Taking up the cudgels for Ricky Marvin, the union
the payment of both benefits pursuant to the social justice
raised the issue in the grievance machinery as
policy. (Conrado M. Aquino, et aL v. National Labor Relations
stipulated in the CBA. No settlement was arrived at and
Commission, et al., G.R No. 87653, 11 February 1992)
the matter was referred to voluntary arbitration. If you
were the Voluntary Arbitrator, how would you decide?
Briefly explain the reasons for your award. (2007 Bar)
Management Prerogative (2015, 2014, 2013, 2010,
A: I will grant Ricky Marvin the retirement benefits under 2003, 2002, 1994, 1993, 1989 Bar)
Art. 287 of the Labor Code.

Art. 287 of the Labor Code, as the minimum standard in law, Q: Which takes precedence in conflicts arising between
allows an employee an optional retirement upon reaching employerss MANAGEMENT PREROGATIVE and the
the age of 60 years provided he rendered at least 5 years of employees right to security of tenure? Why? (1993
service - requirements that Ricky Marvin met under the Bar)
facts of the case.
A: The employee's right to security of tenure takes prece-
Q: After thirty (30) years of service, Beta Company dence over the employer's management prerogative. Thus,
compulsorily retired Albert at age 65 pursuant to the an employer's management prerogative includes the right
company's Retirement Plan. Albert was duly paid his to terminate the services of an employee but this man-
full retirement benefits of one (1) month pay for every agement prerogative is limited by the Labor Code which
year of service under the Plan. Thereafter, out of provides that the employer can terminate an employee
compassion, the company allowed Albert to continue only for a just cause or when authorized by law. This
working and paid him his old monthly salary rate, but limitation on management prerogative is because no less
without the allowances that he used to enjoy. than the Constitution recognizes and guarantees an em-
ployees right to security of tenure. (Art. 279. Labor Code:
After five (5) years under this arrangement, the Art. XIII, Sec. 3. Constitution)
company finally severed all employment relations with
Albert; he was declared fully retired in a fitting Q: Harbor View Hotel has an existing Collective
ceremony but the company did not give him any further Bargaining Agreement (CBA) with the union of rank-
retirement benefits. Albert thought this treatment and-file employees consisting, among others, of
unfair as he had rendered full service at his usual hours bartenders, waiters, roomboys, housemen and
in the past five (5) years. Thus, he filed a complaint for stewards. During the lifetime of the CBA, Harbor View
the allowances that were not paid to him, and for Hotel, for reasons of economy and efficiency, decided
retirement benefits for his additional five (5) working to abolish the position of housemen and stewards who
years, based either on the company's Retirement Plan do the cleaning of the hotels public areas. Over the
or the Retirement Pay Law, whichever is applicable. Is protest of the Union, the Hotel contracted out the
he entitled to additional retirement benefits for the aforementioned job to the City Service Janitorial
additional service he rendered after age 65? (2013 Bar) Company, a bona fide independent contractor which
has a substantial capital in the form of janitorial tools,
A: No. He cannot be compulsorily retired twice in the same equipment, machineries and competent manpower. Is
company. the action of the Harbor View Hotel legal and valid?
(1994 Bar)
Q: A Collective Bargaining Agreement (CRA) between
Company A and its employees provides for optimal A: The action of Harbor View Hotel is legal and valid. The
retirement benefits for employees who have served the valid exercise of management prerogative, discretion and
company for over 25 years regardless of age, judgment encompasses all aspects of employment,
equivalent to one-and- one-half months pay per year of including the hiring, work assignments, working methods,
service based on the employees last pay. The CBA time, place and manner of work, tools to be used, processes
further provides that employees whose services are to be followed, supervision of workers, working
terminated, except for cause, shall receive said regulations, transfer of employees, work supervision, lay-
retirement benefits regardless of age or service record off of workers, and the discipline, dismissal and recall of
with the company or to the applicable separation pay workers, except as provided for, or limited by special laws.
provided by law, whichever is higher." The Company,
due to poor business conditions, decided to cease Company policies and regulations, unless shown to be
operations and gave its employees the required one grossly oppressive or contrary to law, are generally

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28
QUAMTO (1987-2016)
binding and valid on the parties and must be complied withdrawn, unless they have been made a part of the wage
with until finally revised or amended unilaterally or or salary or compensation of the employees, a matter which
preferably through negotiation or by competent authority. is not in the facts of the case (American Wire and Cable Daily
(San Miguel Corporation v. Reynaldo R. Ubaldo and Rated Employees Union v. American Wire and Cable Co., Inc.
Emmanuel Noel A. Cruz, Chairman and Member respectively and the Court of Appeals, G.R. No. 155059, April 29, 2005).
of the Voluntary Arbitration Panel, et al, G.R. No. 92859, 1
February 1993) Q: Far East Bank (FEB) is one of the leading banks in the
country. Its compensation and bonus packages are top
TRANSFER OF EMPLOYEES (2015, 1999 BAR) of the industry. For the last 6 years, FEB had been
providing the following bonuses across-the-board to all
Q: Din Din is a single mother with one child. She is its employees:
employed as a sales executive at a prominent
supermarket. She and her child live in Quezon City and a. 13th month pay;
her residence and workplace are a 15-minute drive b. 14th to 18th month pay;
apart. One day, Din Din is informed by her boss that she c. Christmas basket worth P6,000;
is being promoted to a managerial position but she is d. Gift check worth P4,000; and
now being transferred to the Visayas. Din Din does not e. Productivity-based incentive ranging from a 20%
want to uproot her family and refuses the offer. Her to 40% increase in gross monthly salary for all
boss is so humiliated by Din Din's refusal of the offer employees who would receive an evaluation of
that she gives Din Din successive unsatisfactory "Excellent" for 3 straight quarters in the same year.
evaluations that result in Din Din being removed from
the supermarket. Din Din approaches you, as counsel, Because of its poor performance over-all, FEB decided
for legal advice. What would you advise her? (2015 Bar) to cut back on the bonuses this year and limited itself to
the following:
A: I will advise Din Din to sue her boss and the supermarket
for illegal dismissal. Din Din cannot be compelled to accept a. 13th month pay;
the promotion. Her unsatisfactory evaluations as well as her b. 14th month pay;
boss insistence that she should agree to the intended c. Christmas basket worth P4, 000; and
transfer to Visayas are badges of an abuse of management d. Gift check worth P2, 000
prerogative. In Pfizer Inc. v. Velasco (645 SCRA 135), the
Supreme Court held that the managerial prerogative to Katrina, an employee of FEB, who had gotten a rating of
transfer personnel must be exercised without abuse of "Excellent" for the last 3 quarters was looking forward
discretion, bearing in mind the basic elements of justice and to the bonuses plus the productivity incentive bonus.
fair play. Hence, Din Dins dismissal is illegal. After learning that FEB had modified the bonus scheme,
she objected. Is Katrina's objection justified? Explain.
BONUS (2015, 2003, 2002 BAR)
(2015 Bar)
Q: The projected bonus for the employees of Suerte Co.
was 50% of their monthly compensation. A: Katrinas objection is justified. Having enjoyed the
Unfortunately, due to the slump in the business, the across-the-board bonuses, Katrina has earned a vested
president reduced the bonus to 5% of their right. Hence, none of them can be withheld or reduced. In
compensation. Can the company unilaterally reduce the problem, the company has not proven its alleged losses
the amount of bonus? Explain briefly. (2002 Bar) to be substantial. Permitting reduction of pay at the
slightest indication of losses is contrary to the policy of the
A: Yes. The granting of a bonus is a management State to afford full protection to labor and promote full
prerogative, something given in addition to what is employment. (Linton Commercial Co. v. Hellera, 535 SCRA
ordinarily received by or strictly due the recipient. An 434) As to the withheld productivity-based bonuses,
employer, like Suerte Co., cannot be forced to distribute Katrina is deemed to have earned them because of her
bonuses when it can no longer afford to pay. To hold excellent performance ratings for three quarters. On this
otherwise would be to penalize the employer for his past basis, they cannot be withheld without violating the
generosity. [Producers Bank of the Phil. V. NLRC, 355 SCRA Principle of Non-Diminution of Benefits.
489, (2001)]
Moreover, it is evident from the facts of the case that what
Q: Lito was anticipating the bonus he would receive for was withdrawn by FEB was a productivity bonus. Protected
2013. Aside from the 13th month pay, the company has by RA 6791 which mandates that the monetary value of the
been awarding him and his other co-employees a two to productivity improvement be shared with the employees,
three months bonus for the last 10 years. However, the productivity-based incentive scheme of FEB cannot
because of poor over-all sales performance for the year, just be withdrawn without the consent of its affected
the company unilaterally decided to pay only a one employees.
month bonus in 2013. Is Litos employer legally allowed
to reduce the bonus? (2014 Bar) CHANGE OF WORKING HOURS

A: Yes. A bonus is an act of generosity granted by an Q: Inter-Garments Co. manufactures garments for
enlightened employer to spur the employee to greater export and requires its employees to render overtime
efforts for the success of the business and realization of work ranging from two to three hours a day to meet its
bigger profits. The granting of a bonus is a management clients' deadlines. Since 2009, it has been paying its
prerogative, something given in addition to what is employees on overtime an additional 35% of their
ordinarily received by or strictly due the recipient. Thus, a hourly rate for work rendered in excess of their regular
bonus is not a demandable and enforceable obligation, eight working hours.
except when it is made part of the wage, salary or
compensation of the employee. It may, therefore, be Due to the slowdown of its export business in 2012,

29
Labor Law and Social Legislation

Inter-Garments had to reduce its overtime work; at the e. Fiilipinos recruited by foreign-based employers abroad,
same time, it adjusted the overtime rates so that those on voluntary basis
who worked overtime were only paid an additional
25% instead of the previous 35%. To replace the NOTE: Under R.A. 10361 (Kasambahay Law), domestic
workers' overtime rate loss, the company granted a helpers who have rendered at least 1 month of service
one-time 5% across-the-board wage increase. regardless of the amount of their salary shall be covered by
the SSS. Premium payments or contributions shall be
Vigilant Union, the rank-and-file bargaining agent, shouldered by the employer. However, if the domestic
charged the company with Unfair Labor Practice on the worker is receiving a wage of Five thousand pesos
ground that (1) no consultations had been made on who (P5,000.00) and above per month, the domestic worker
would render overtime work; and (2) the unilateral shall pay the proportionate share in the premium payments
overtime pay rate reduction is a violation of Article 100 or contributions, as provided by law. (Sec. 30, R.A. 10361).
(entitled Prohibition Against Elimination or
Diminution of Benefits) of the Labor Code. Is the union Revised GSIS:
position meritorious? (2013 Bar)
Membership in the Government Service Insurance System
A: The allegation of ULP by the Union is not meritorious. (Art. 3, R.A. 8291) shall be compulsory for all employees
The selection as to who would render overtime work is a receiving compensation who have not reached the
management prerogative. compulsory retirement age, irrespective of employment
status, except members of the AFP, PNP, and contractuals
However, the charge of the Union on the diminution of
that have no employer-employee relationship with the
benefits (violation of Article 100 of the Labor Code) appears
agencies that they serve. Employees included are any
to be meritorious. Since three (3) years have already lapsed, person receiving compensation while in the service of
the overtime rate of 35% has ripened into practice and
employers, which includes the national government, its
policy, and cannot anymore be removed. (Sevilla Trading v.
political subdivisions, branches, agencies or
Semana, 428 SCRA 239 [2004]) This is deliberate, consistent
instrumentalities including GOCCs and financial institutions
and practiced over a long period of time.
with original charters, constitutional commissions and
MARRIAGE BETWEEN EMPLOYEES OF COMPETITIOR- judiciary, whether by election or appointment irrespective
EMPLOYERS of status of appointment, including barangay and
sanggunian officials. (Sec. 2 (c) and (d); Sec. 3, Government
Q: A was working as a medical representative of RX Service Insurance System Act of 1997).
pharmaceutical company when he met and fell in love
with B, a marketing strategist for Delta Drug Company, Employees Compensation Act:
a competitor of RC. On several occasions, the
management of RX called As attention to the Coverage in the State Insurance Fund (Art. 168, Labor Code)
stipulation in his employment contract that requires shall be compulsory upon all employers and their
him to disclose any relationship by consanguinity or employees not over sixty (60) years of age; Provided, that
affinity with co-employees or employees of competing an employee who is over (60) years of age and paying
companies in light of a possible conflict of interest. A contributions to qualify for the retirement or life insurance
seeks your advice on the validity of the company policy. benefit administered by the System shall be subject to
What would be your advice? (2010 Bar) compulsory coverage. The employer or employee may
either belong to the public or private sector as covered by
A: The company policy is valid. However, it does not apply their own respective systems. (Art. 168, Labor Code).
to A. As A and B are not yet married, no relationship by
consanguinity or affinity exists between them. The case of SSS LAW
Duncan v. Glaxo Wellcome (438 SCRA 343 [2004]) does not
apply in the present case. Coverage and Exclusions (2015, 2007, 2009, 2010,
2004, 2000, 1997, 1995, 1993, 1989 Bar)

SOCIAL WELFARE LEGISLATION Q: State the respective coverage of (a) the Social
Security Law; x x x (1997 Bar)

A: Coverage of SSS (Sec. 9, RA 8282) shall be compulsory


Q: State the respective coverage of:
upon all employees not over sixty years of age and their
employers. Filipinos recruited in the Philippines by foreign-
a. Social Security Law
based employers for employment abroad maybe covered by
b. Revised Government Service Insurance Act
the SSS on a voluntary basis. Coverage in the SSS shall also
c. Employees Compensation Act. (1997 Bar)
be compulsory upon all self-employed persons earning P1,
800 or more per annum.
A:
Social Security Law:
Q: Luisa is an unwed mother with 3 children from
different fathers. In 2004, she became a member of the
Coverage of SSS includes (Sec. 9 and 9-A, Social Security
Social Security System (SSS). That same year, she
Act of 1997):
suffered a miscarriage of a baby out of wedlock from
a. Employees not over sixty years of age and their
the father of her third child. She wants to claim
employers
maternity benefits under the SSS Act. Is she entitled to
b. Domestic Helpers provided their monthly income shall
claim? (2000, 2007, 2010, 2015 Bar)
not be less than P 1,000
c. Self-employed persons as provided by law and as
A: Yes. Provided, Luisa has reported to her employer her
determined by the Commission
pregnancy and date of expected delivery and paid at least
d. Spouse that is fully devoted to management of household
three monthly contributions during the 12-month period
and family affairs, on voluntary basis

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30
QUAMTO (1987-2016)
immediately preceding her miscarriage then she is entitled A: No. As Titos employer, I am bound by law to remit to
to maternity benefits up to four deliveries. As to the fact that SSS Titos monthly contribution. The SSS law covers any
she got pregnant outside wedlock, as in her past three person natural, juridical, domestic or foreign, carrying in
pregnancies, this will not bar her claim because the SSS is the Philippines trade, business, industry, undertaking or
non-discriminatory. activity and uses the services of another under his order as
regards employment (Sec. 89[c]).
NOTE: The law merely says a female employee. It does not
qualify the term to mean legally married woman. (Sec. 14-A, The compulsory coverage of employers and employees
Social Security Act of 1997). under the SSS law is actually a legal imposition on the
Q: The owners of FALCON Factory, a company engaged employers and employees, designed to provide social
in the assembling of automotive components, decided security to workingmen. Membership in SSS is in
to have their building renovated. Fifty (50) persons, compliance with a lawful exercise of the police power of the
composed of engineers, architects and other State, and may not be Waived by agreement of any party
construction workers, were hired by the company for (Phil. Blooming Mills, Co., Inc. v. SSS, 17 SCRA 1077(1966]).
this purpose. The work was estimated to be completed
in three (3) years. The employees contended that since Q: Can a member of a cooperative be deemed an
the work would be completed after more than one (1) employee for purposes of compulsory' coverage under
year, they should be subject to compulsory coverage the Social Security Act? Explain. (2009 Bar)
under the Social Security Law. Do you agree with their
contention? Explain your answer fully. (2002 Bar) A. Yes, an employee of a cooperative, not over sixty (60)
years of age is, under the SSS Law, subject to compulsory
A: No. Under Section 8 (j) of RA 1161, as amended, coverage. The Section 8 (d) SSS Law defines an employee as
employment of purely casual and not for the purpose of the - Sec. 8 (d ) any person who performs services for an
occupation or business of the employer are excepted from employer in which either or both mental and physical
compulsory coverage. An employment is purely casual if it efforts are used and who receives compensation for such
is not for the purpose of occupation or business of the service, where there is an employer- employee relationship.
employer.
Dependents, beneficiaries (2008, 1992, 1990, 1987
In the problem given, Falcon Factory is a company engaged Bar)
in the assembling of automotive components.
Q: A is an employee of B who in turn registered A with
The fifty (50) persons (engineers, architects and the Social Security System as required by law.
construction workers) were hired by Falcon Factory to Unfortunately, B did not remit As contributions to the
renovate its building. The work to be performed by these System. In the course of his employment, A met a
fifty (50) people is not in connection with the purpose of serious accident requiring his hospitalization.
the business of the factory. Hence, the employ of these fifty
(50) persons is purely casual. They are, therefore, excepted a. Suppose he decides to retire from the firm because
from the compulsory coverage of the SSS law. of the accident, is he entitled to recover retirement
benefits under the System? Explain your answer.
I agree with the contention that the employees hired by the
owners of FALCON factory as construction workers in the A: A is entitled to receive benefits from the Social Security
renovation of its building should be under the compulsory System even if his employer did not remit As contribution
coverage of the Social Security Law. It is true that in to the System because the Social Security Law provides in
connection with FALCON Factory, which is engaged in the Sec. 22(b) that the failure or refusal of the employer to pay
assembling of automotive components, the construction or remit contributions shall not prejudice the right of the
workers may be considered casual employees because covered employee to the benefits of the coverage.
their employment is not for the purpose of occupation of
But A is not entitled to retirement benefits in the form of a
business of FALCON Factory. As such, In accordance with
monthly pension unless at the time of the accident, he has
Section 8(j) of the Social Security Law, they are excepted
reached the age of sixty years and has paid at least 120
form the compulsory coverage of the Social Security
monthly contributions prior to the semester of the accident.
System.
(Sec. 12-B, Social Security Law).
But they could also be considered project employees of b. Suppose that he died because of the accident, are
FALCON Factory and as such could be under the his heirs entitled to death benefits under the
compulsory coverage of the SSS, applying Art 4 of the Labor System? Explain your answer. (1990 Bar)
Code that provides that all doubts in the implementation
and interpretation of the provisions of Labor Law shall be A: The heirs are not entitled, but his primary beneficiaries
resolved in favor of labor. The employees here therefore, or in the absence of primary beneficiaries, his secondary
should be considered as under the compulsory coverage of beneficiaries are entitled.
the SSS.
Benefits (2010, 2007, 2005, 2000 Bar)
Q: Tito Paciencioso is an employee of a foundry shop in
Malabon, Metro Manila. He is barely able to make ends Q: Ms. Sara Mira is an unwed mother with three
meet with his salary of P4, 000.00 a month. One day, he children from three different fathers. In 1999, she
asked his employer to stop deducting from his salary became a member of the Social Security System. In
his SSS monthly contribution, reasoning out that he is August 2000, she suffered a miscarriage, also out of
waiving his social security coverage. If you were Titos wedlock, and again by a different father. Can Ms. Mira
employer, would you grant his request? Why? (2008 claim maternity benefits under the Social Security Act
Bar) of 1997? Reason. (2000 Bar)

31
Labor Law and Social Legislation

A: Yes, she can claim maternity benefit. Entitlement peace-keeping mission. Therefore, his death is
thereto is not dependent on the claimants being legally compensable.
married. (Sec. 14-A, Social Security Act of 1997).
Dependents, beneficiaries (1999, 1997, 1991 Bar)
GSIS LAW
Q: Pitoy Mondero was employed as a public school
Coverage and Exclusions (2015, 2009, 2005, 2004, teacher at the Marinduque High School from July 1,
1983 until his untimely demise on May 27, 1997. On
1999 Bar)
April 27, 1997, a memorandum was issued by the
Q: Odeck, a policeman, was on leave for a month. While school principal, which reads: "You are hereby
resting in their house, he heard two of his neighbors designated to prepare the MODEL DAM project, which
fighting with each other. Odeck rushed to the scene will be the official entry of our school in the
intending to pacify the protagonists. However, he was forthcoming Division Search for Outstanding
shot to death by one of the protagonists. Zhop, a Improvised Secondary Science Equipment for Teachers
housemaid, was Odeck's surviving spouse whom he had to be held in Manila on June 4, 1997. You are hereby
abandoned for another woman years back. When she instructed to complete this MODEL DAM on or before
learned of Odeck's death, Zhop filed a claim with the the scheduled date of the contest." Mondero complied
GSIS for death benefits. However, her claim was denied with his superior's instruction and constructed an
because: (a) when Odeck was killed, he was on leave; improvised electric microdam, which he took home to
and (b) she was not the dependent spouse of Odeck enable him to finish it before the deadline. On May 27,
when he died. 1997, while working on the MODEL DAM Project in his
house, he came to contact with a live wire and was
Resolve with reasons whether GSIS is correct in electrocuted. He was immediately brought to a clinic
denying the claim. (2005 Bar) for emergency treatment but was pronounced dead on
arrival. The death certificate showed that he died of
A: Yes, because under the law, a dependent is one who is a cardiac arrest due to accidental electrocution. Pepay
legitimate spouse living with the employee (Art. 167 [i], Palaypay (Pitoy Mondero's common-law wife for more
Labor Code). In the problem given, Zhop had been than twenty years) and a Pitoy Mordero Jr. (his only
abandoned by Odeck who was then living already with son) filed a claim for death benefits with the
another woman at the time of his death. Moreover, Odeck Government Service Insurance System (GSIS), which
was on leave when he was killed. The 24-hour duty rule was denied on the ground that Pitoy Mordero's death
does not apply when the policeman is on vacation leave. did not arise out of and in the course of employment
(Employees Compensation Commission v. CA, G.R. No. and therefore not compensable because the accident
121545, November 14, 1996). Taking together jurisprudence occurred in his house and not in the school premises. Is
and the pertinent guidelines of the ECC with respect to Pepay Palaypay entitled to file a claim for death
claim for death benefits, namely: benefits with the GSIS? Why?

a. That the employee must be at the place where his work A: The beneficiaries of a member of the GSIS are entitled to
requires him to be; the benefits arising from the death of said member. Death
b. That the employee must have been performing his benefits are called survivorship benefits under the GSIS Law.
official functions; and Pepay Palaypay is not entitled to receive survivorship
c. That the injury is sustained elsewhere, the employee benefits since she is not a beneficiary being a common-law
must have been executing an order for the employer. wife and not a legal dependent spouse. (Sec. 2(g), GSIS Act of
1997).
It is not difficult to understand then why Zhops claim was
denied by the GSIS (Tancinco v. GSIS, G.R. No. 132916, Is the cause of death of Pitoy Mordero (cardiac arrest
November 16, 2001). In the present case, Odeck was resting due to accidental electrocution in his house)
at his house when the incident happened; thus, he was not compensable? Why? (1999 Bar)
at a place where his work requires him to be. Although at
the time of his death Odeck was performing a police A: Yes. To be compensable under the GSIS Law, the death
function, it cannot be said that his death occurred elsewhere need not be work connected.
other than the place where he was supposed to be because
he was executing an order for his employer. NOTE: As long as the decedent-member was a) in service;
b) rendered 3 years of service and at least paid 36 monthly
Q: Luis, a PNP officer, was off duty and resting at home contributions within the five-year period immediately
when he heard a scuffle outside his house. He saw two preceding his death; or c) paid a total of at least 180
of his neighbors fighting and he rushed out to pacify monthly contributions prior to his death.
them. One of the neighbors shot Luis by mistake, which
resulted in Luis's death. Marian, Luis's widow, filed a Benefits
claim with the GSIS seeking death benefits. The GSIS
Q: Atty. CLM, a dedicated and efficient public official,
denied the claim on the ground that the death of Luis
was the top executive of a government owned and
was not service-related as he was off duty when the
controlled corporation (GOCC). While inspecting an
incident happened. Is the GSIS correct? (2015 Bar)
ongoing project in a remote village in Mindanao, she
A: No. The GSIS is not correct. Luis, a policeman, just like a suffered a stroke and since then had been confined to a
soldier, is covered by the 24-Hour Duty Rule. He is deemed wheelchair. At the time she stopped working because of
on round-the clock-duty unless on official leave, in which her illness in line of duty, Atty. CLM was only sixty years
case his death outside performance of official peace- old but she had been an active member of the GSIS for
thirty years without any break in her service record.
keeping mission will bar death claim. In this case, Luis was
What benefits could she claim from the GSIS? Cite at
not on official leave and he died in the performance of a
least five benefits. (2004 Bar)

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32
QUAMTO (1987-2016)
A: TB is listed under Sec. 32-A of the POEA-SEC as a work-
A: related disease. It was also either contracted or aggravated
1. Separation Benefit (Sec. 11-12, GSIS Act of 1997) during the effectivity of Victors contract. Having shown its
2. Retirement Benefits (Sec. 13-14, GSIS Act of 1997) manifestations on board, Victor should have been medically
3. Permanent Disability Benefits (Sec. 15-17, GSIS Act of repatriated for further examination and treatment in the
1997) Philippines. This obligation was entirely omitted in bad
4. Temporary Disability Benefits (Sec. 18-19, GSIS Act of faith by the company when it waited for his contract to
1997) expire on him before signing him off. On this basis, Victor is
5. Survivorship Benefits (Sec. 20-22, GSIS Act of 1997) entitled to medical reimbursement, damages and attorneys
6. Funeral Benefits (Sec. 23, GSIS Act of 1997) fees.
7. Life Insurance Benefits (Sec.24-27, GSIS Act of 1997)
b. Due to his prolonged illness, Victor was unable to
PORTABILITY LAW (2014, 2005 BAR) work for more than 120 days. Will this entitle him
to claim total permanent disability benefits? (2015
Q: How are the "portability" provisions of Republic Act Bar)
No. 7699 beneficial or advantageous to SSS and GSIS
A: No. Victors TB is work-related and it developed on
members in terms of their creditable employment
board, thereby satisfying the twin requisites of
services in the private sector or the government, as the
compensability. However, despite his knowledge of his
case may be, for purposes of death, disability or
medical condition, he failed to report to his manning agent
retirement? Please explain your answer briefly. (2005
within three days from his arrival as required by Sec. 20-
Bar)
B(3) of the POEA-SEC. Since he already felt the
manifestations of TB before his sign-off, he should have
A: Portability provisions of R.A. No. 7699 shall benefit a
submitted to post-employment medical examination
covered worker who transfers employment from one sector
(Jebsens Maritime Inc. v. Enrique Undag, 662 SCRA 670). The
to another or is employed in both sectors, whose creditable
effect of his Coastal Safeway Marine Services, Inc. v. Elmer T.
services or contributions in both systems credited to his
Esguerra, 655 SCRA 300omission is forfeiture by him of
service or contribution record in each of the system and
disability benefits (). In effect, the 120-day rule has no
shall be totalized for purposes of old-age, disability,
application at all.
survivorship and other benefits (Sec. 3, R.A. No. 7699). In the
event the employees transfer from the private sector to the
public sector, or vice versa, their creditable employment
LABOR RELATIONS
services and contributions are carried over and transferred
as well.

Q: Luisito has been working with Lima Land for 20 RIGHT TO SELF-ORGANIZATION
years. Wanting to work in the public sector, Luisito
applied with and was offered a job at Livecor. Before Who may/may exercise the right (2014, 2012, 2010,
accepting the offer, he wanted to consult you whether 2009, 2004, 2003, 2002, 2000, 1999, 1996 Bar)
the payments that he and Lima Land had made to the
Social Security System (SSS) can be transferred or Q: Solar Plexus Bar and Night Club allowed by tolerance
credited to the Government Service Insurance System fifty (50) Guest Relations Officers (GRO) to work
(GSIS). What would you advice? (2014 Bar) without compensation in its establishment under the
direct supervision of its Manager from 8:00 p.m. to 4:00
A: Yes. Under RA 7699, otherwise known as the Portability a.m. every day, including Sundays and holidays. The
Law, one may combine his years of service in the private GROs, however, are free to ply their trade elsewhere at
sector represented by his contributions to the Social anytime but once they enter the premises of the night
Security System (SSS) with his government service and club, they are required to stay up to closing time. The
contributions to the GSIS. The contributions shall be GROs earned their keep exclusively from commissions
totalized for purposes of old-age, disability, survivorship for food and drinks, and tips from generous customers.
and other benefits in case the covered member does not In time, the GROs formed the Solar Ugnayan ng mga
qualify for such benefits in either or both Systems without Kababaihang Inaapi (SUKI), a labor union duly
totalization. registered with DOLE. Subsequently, SUKI filed a
petition for certification election in order to be
EMPLOYEES COMPENSATION COVERAGE AND WHEN recognized as the exclusive bargaining agent of its
COMPENSABLE members. Solar Plexus opposed the petition for
certification election on the singular ground of absence
Q: Victor was hired by a local manning agency as a of employer-employee relationship between the GROs
seafarer cook on board a luxury vessel for an eight- on one hand and the night club on the other hand.
month cruise. While on board, Victor complained of
chronic coughing, intermittent fever, and joint pains. May the GROs form SUKI as a labor organization for
He was advised by the ship's doctor to take complete purposes of collective bargaining? Explain briefly.
bed rest but was not given any other medication. His (2012, 1999 Bar)
condition persisted but the degree varied from day to
day. At the end of the cruise, Victor went home to Iloilo A: The GROs may form SUKI as a labor organization for
and there had himself examined. The examination purposes of collective bargaining. There is an employer-
revealed that he had tuberculosis. employee relationship between the GROs and the night
club.
a. Victor sued for medical reimbursement, damages
and attorney's fees, claiming that tuberculosis was The Labor Code (in Article 138) provides that any woman
a compensable illness. Do you agree with Victor? who is permitted or suffered to work, with or without
Why or why not?

33
Labor Law and Social Legislation

compensation, in any night club, cocktail lounge, massage time basis. Third, he has less than ten (10) employees
clinic, bar or similar establishment, under the effective in the establishment. Which reason or reasons is/are
control or supervision of the employer for a substantial tenable? Explain briefly. (2002 Bar)
period of time as determined by the Secretary of Labor,
shall be considered as an employee of such establishment A: None. First, Mang Bally's shoe business is a commercial
for purposes of labor and social legislation. enterprise, albeit a service establishment. Second, the mere
fact that the workers are paid on a piece-rate basis does not
In the case at bar, it is clearly stated that the women once negate their status as regular employees. Payment by piece
they enter the premises of the night club would be under is just a method of compensation and does not define the
the direct supervision of the manager from 8:00 p.m. to essence of the relation. (Lambo v. NLRC, G.R. No. 111042,
4:00 a.m. everyday including Sundays and holidays. Such is October 26, 1999). Third, the employees' right to self-
indicative of an employer-employee relationship since the organization is not delimited by their number. The right to
manager would be exercising the right of control. self-organization covers all persons employed in
commercial, industrial and agricultural enterprises and in
Q: How does the government employees right to self religious, charitable, medical, or educational institutions
organization differ from that of the employees in the whether operating for profit or not. (Art. 243, Labor Code).
private sector? (1996 Bar)
Q: Philhealth is a government-owned and controlled
A: There is no substantial difference of the right of self corporation employing thousands of Filipinos. Because
organization between workers in the private sector and of the desire of the employees of Philhealth to obtain
those in the public sector. In the public sector, Executive better terms and conditions of employment from the
Order No. 180, the purpose of self-organization is stated as government, they formed the Philhealth Employees
"for the furtherance and protection of their interest." In the Association (PEA) and demanded Philhealth to enter
private sector, Art. 243 of the Labor Code states "for the into negotiations with PEA regarding terms and
purpose of collective bargaining", and "for the purpose of conditions of employment which are not fixed by law.
enhancing and defending their interests and for their Are the employees of Philhealth allowed to self-
mutual aid and protection." Furthermore, no less than the organize and form PEA and thereafter demand
Constitution itself guarantees that ALL workers have the Philhealth to enter into negotiations with PEA for
right to self-organization. (Sec. 3, Article 13, 1987 better terms and conditions of employment?(2014 Bar)
Constitution).
A: Yes. Employees of Philhealth are allowed to self-organize
Q: Do workers have a right not to join a labor under Section 8, Article III and Section 3, Article XIII of the
organization? (2000 Bar) Constitution which recognize the rights of all workers to
self-organization. They cannot demand, however, for better
A: Yes. The constitutional right to self-organization has two terms and conditions of employment for the same are fixed
aspects, the right to join or form labor organizations and the by law (Art. 244, Labor Code), besides, their salaries are
right not to join said organization (Victoriano v. Elizalde standardized by Congress. (Art. 276, Labor Code).
Rope Workers Union, G.R. No. L-25246, September 12, 1974).
Moreover, if they are members of a religious group whose BARGAINING REPRESENTATIVE
doctrine forbids union membership, their right not to be
compelled to become union members has been upheld. Q: The Ang Sarap Kainan Workers Union appointed
However, if the worker is not a "religious objector" and Juan Javier, a law student, as bargaining representative.
there is a union security clause, he may be required to join Mr. Javier is neither an employee of Ang Sarap Kainan
the union if he belongs to the bargaining unit. (Reyes v. Company nor a member of the union. Is the
Trajano, G.R. No. 84433, June 2, 1992). appointment of Mr. Javier as a bargaining
representative in accord with law? Explain. (2000 Bar)
Q: Do the following workers have the right to self-
organization? Reasons/basis: A: Yes, the law does not require that the bargaining
representative be an employee of the company nor an
a. Employees of non-stock, non-profit organizations? officer or member of the union. (Art 212 (j), Labor Code).
b. Alien employees? (2000)
Determination of representation status (2016, 2014,
A: 2009, 2007, 2006, 2005, 2004, 1999, 1998, 1996, 1993,
a. Even employees of non-stock non-profit organizations 1992, 1990 Bar)
have the right to self-organization. This is explicitly
provided for in Art. 243 of the Labor Code. A possible Q: The modes of determining an exclusive bargaining
exception, however, are employee members of non- agreement (agent) are:
stock, non-profit cooperatives.
b. ALIEN EMPLOYEES with valid work permits may a. voluntary recognition
exercise the right to self-organization on the basis of b. certification election
parity or reciprocity, that is, if Filipino workers in the c. consent election
aliens' country are given the same right. (Art. 269, Labor
Code). Explain briefly how they differ from one another.
(2006, 2005, 2000, 1989 Bar)
Q: Mang Bally, owner of a shoe repair shop with only
nine (9) workers in his establishment, received A:
proposals for collective bargaining from the Bally Shoe
Union. Mang Bally refused to bargain with the workers a. There is voluntary recognition when in an unorganized
for several reasons. First, his shoe business is just a establishment with only one legitimate labor
service establishment. Second, his workers are paid on organization, the employer voluntarily recognizes the
a piecework basis (i.e., per shoe repaired) and not on a representation status of such a union. Within thirty

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34
QUAMTO (1987-2016)
(30) days from such recognition, the employer and c. Should Union A be declared the winner?
union shall submit a notice of voluntary recognition
with the Regional Office of the Department of Labor and A: No. The Labor Code provides that the Labor Union
Employment which issued the recognized labor unions receiving the majority of the valid votes cast shall be
certificate of registration or certificate of creation of a certified as the exclusive bargaining agent of all the workers
chartered local. in the unit (Article 256, now Article 266, of the Labor Code).
b. Certification election refers to the process of Here, the number of valid votes cast is 490; thus, the
determining through secret ballot the sole and winning union should receive at least 246 votes. Union A
exclusive representative of the employees in an only received 200 votes.
appropriate bargaining unit for purposes of collective
d. Suppose the election is declared invalid, which of
bargaining or negotiation. A certification election is
the contending unions should represent the rank-
ordered by the Department of Labor and Employment,
and-file employees?
while a consent election is voluntarily agreed upon by
the parties, with or without the intervention by the A: None of them should represent the rank-and-file
Department. employees (Article 255, now Article 265, of the Labor Code).
c. When the process of determining through secret ballot
the sole and exclusive representative of the employees e. Suppose that in the election, the unions obtained
in an appropriate bargaining unit is not ordered by the the following votes: A-250; B-150; C-50; 40 voted
Department of Labor and Employment, but has been no union; and 10 were segregated votes. Should
voluntarily agreed upon by the parties with or without Union A be certified as the bargaining
the intervention of the Department of Labor and representative?
Employment, then the process is a consent election.
A: Yes. The Labor Code provides that the Labor Union
Q: There are instances when a certification election is receiving the majority of the valid votes cast shall be
mandatory. What is the rationale for such a legal certified as the exclusive bargaining agent of all the workers
mandate? (2005 Bar) in the unit (Article 256, now Article 266, of the Labor Code).
Here, the number of valid votes cast is 490. Thus, the
A: According to the Labor Code, in any establishment where winning union should receive at least 246 votes; Union A
there is no certified bargaining agent, a certification received 250 votes.
election shall automatically be conducted by the Med-
Arbiter upon the filing of a petition by a legitimate labor Q: Samahang East Gate Enterprises (SEGE) is a labor
organization. In the above-described situation, a organization composed of the rank-and-file employees
certification election is made mandatory because if there is of East Gate Enterprises (EGE), the leading
no certified bargaining agent as determined by a manufacturer of all types of gloves and aprons. EGE was
certification election, there could be no collective later requested by SEGE to bargain collectively for
bargaining in the said unorganized establishment. better terms and conditions of employment of all the
rank-and-file employees of EGE. Consequently, EGE
Q: Liwayway Glass had 600 rank-and-file employees. filed a petition for certification election before the
Three rival unions A, B, and C participated in the Bureau of Labor Relations (BLR).
certification elections ordered by the Med-Arbiter. 500
During the proceedings, EGE insisted that it should
employees voted. The unions obtained the following
participate in the certification process. EGE reasoned
votes: A-200; B-150; C-50; 90 employees voted no
that since it was the one who filed the petition and
union; and 10 were segregated votes. Out of the
considering that the employees concerned were its own
segregated votes, four (4) were cast by probationary
rank-and-file employees, it should be allowed to take
employees and six (6) were cast by dismissed
an active part in the certification process. Is the
employees whose respective cases are still on appeal.
contention of EGE proper? Explain. (2014 Bar)
(2014 Bar)
A: No. Under Article 258-A of the Labor Code, an employer
a. Should the votes of the probationary and dismissed is a mere bystander in certification elections, whether the
employees be counted in the total votes cast for the petition for certification election is filed by said employer or
purpose of determining the winning labor union? a legitimate labor organization. The employer shall not be
A: Yes. Rule IX, Section 5 of DOLE Department Order 40-03 considered a party thereto with a concomitant right to
provides that [a]ll employees who are members of the oppose a petition for certification election.
appropriate bargaining unit sought to be represented by the
Q: Among the 400 regular rank-and-file workers of
petitioner at the time of the issuance of the order granting
MNO Company, a certification election was ordered
the conduct of a certification election shall be eligible to
conducted by the Med-Arbiter of the Region. The
vote. An employee who has been dismissed from work but
contending parties obtained the following votes:
has contested the legality of the dismissal in a forum of
appropriate jurisdiction at the time of the issuance of the 1. Union A 70
order for the conduct of a certification election shall be 2. Union B 71
considered a qualified voter, unless his/her dismissal was 3. Union C 42
declared valid in a final judgment at the time of the conduct 4. No union 180
of the certification election. 5. Spoiled votes - 4
b. Was there a valid election? There were no objections or challenges raised by any
party on the results of the election.
A: Yes. To have a valid election, at least a majority of all
eligible voters in the unit must have cast their votes (Article
a. Can Union B be certified as the sole and exclusive
256, now Article 266, of the Labor Code). In the instant case,
collective bargaining agent among the rank-and- file
500 out of 600 rank-and-file employees voted.

35
Labor Law and Social Legislation

workers of MNO Company considering that it garnered aid benefits and that the deduction was made pursuant
the highest number of votes among the contending to a board resolution of the directors of the union. Can
unions? Why or why not? Rogelio object to the deduction? Explain briefly. (2002
Bar)
A: No. To be certified as bargaining agent, the vote required
is majority of the valid votes cast. There were 396 valid A: Yes. In order that the special assessment (death aid
votes cast, the majority of which is 199. Since Union B got benefit) may be upheld as valid, the following requisites
only 71 votes, it cannot be certified as the sole and exclusive must be compiled with: (1) Authorization by a written
bargaining agent of MNOs rank-and- file workers. resolution of the majority of all the members at the general
membership meeting duly called for the purpose; (2)
b. May the management or lawyer of MNO Company Secretary's record of the meeting; and (3) Individual
legally ask for the absolute termination of the written authorization for the check-off duly signed by the
certification election proceedings because 180 of the employee concerned. [ABS-CBN Supervisors Employees
workers a clear plurality of the voters have Union Members v. ABS-CBN Broadcasting Corp, and Union
chosen not to be represented by any union? Reasons. Officers, G.R. No. 106518, March 11, 1999; Art. 241(n) and (o),
Labor Code] In the problem given, none of the above
A: No, because 216 workers want to be represented by a requisites were complied with by the union. Hence, Rogelio
union as bargaining agent. Only 180 workers opted for No can object to the deduction made by the union for being
Union. Hence, a clear majority is in favor of being invalid.
represented by a union. NOTE: Substantial compliance of the requirements is not
enough in view of the fact that the special assessment will
c. If you were the duly designated election officer in diminish the compensation of union members. (Palacol v.
this case, what would you do to effectively achieve the Ferrer-Calleja, G.R. No. 85333, February 26, 1990).
purpose of certification election proceedings? Discuss.
(2009 Bar) Q: Atty. Facundo Veloso was retained by Welga Labor
Union to represent it in the collective bargaining
A: I will conduct a run-off election between the labor negotiations. It was agreed that Atty. Veloso would be
unions receiving the two highest number votes. To have a paid in the sum of P20, 000.00 as attorney's fees for his
run-off election, all the contending unions (3 or more assistance in the CBA negotiations. After the conclusion
choices required) must have garnered 50% of the number of the negotiations Welga Labor Union collected from
of votes cast. In the present case, there are four (4) its individual members the sum of P100.00 each to pay
contending unions and they garnered 216 votes. There for Atty. Veloso's fees and another sum of P100.00 each
were 400 vote cast. The votes garnered by the contending for services rendered by the union officers. Several
unions is even more than 50% of the number of vote cast. members of the Welga Labor Union approached you to
Hence, a run-off election is in order. seek advice on the following matters.

Q: The Construction and Development Corporation a. Whether or not the collection of the amount assessed
has a total of one thousand and one hundred (1,100) on the individual members to answer for the attorney's
employees. In a certification election ordered by the fees was valid?
Bureau of Labor Relations to elect the bargaining
representative of the employees, it was determined A: The assessment for attorneys fees is not valid. The Labor
that only one thousand (1,000) employees are eligible Code prohibits the payment of attorneys fees when it is
voters. In the election a total of nine hundred (900) effected through forced contributions from the workers
ballots was cast. There were fifteen (15) spoiled from their own funds as distinguished from the union funds
ballots and five (5) blank ballots. A total of four [Art. 222(b), Labor Code]. The obligation to pay the
hundred (400) votes was cast for ABC Labor Union, a attorneys fees belongs to the union and cannot be shunted
total of two hundred forty (240) votes was cast in favor to the workers as their direct responsibility. (Bank of the
of JVP Labor Union, and a total of two hundred and Philippine Islands Employees Union vs. NLRC, G.R. Nos.
forty (240) votes was in favor of RLG Labor 69746-47, March 31, 1989).
Organization. Is there a valid certification election?
Why? (1990 Bar) b. Whether or not the assessment of P100.00 from the
individual members of the Welga Labor Union for
A: There is a valid certification election. In the facts of the services rendered by the union officers in the CBA
case in question, there is no bar to the holding of the negotiations was valid? (1997 Bar)
certification election.
A: The assessment for negotiation fees is not valid. The
Labor Code prohibits negotiation fees and other similar
The Labor Code provides (in Art. 256) that to have a valid
charges of any kind arising from any collective bargaining
certification election, at least a majority of all eligible
negotiations to be imposed on any individual member of the
voters in the bargaining unit must have cast their votes in
contracting union. (Art. 222(b), Labor Code)
the election. In the facts of the case in the question, 1, 000
employees are eligible voters and 900 voters, which is very
NOTE: Special assessments may be allowed like attorneys
much more than the majority (501) of the eligible voters
fees and negotiation fees provided that there be strict
cast their votes.
compliance with the requisites of a valid special assessment.
(Art. 241 (n) and (o), Labor Code).
RIGHTS OF LABOR ORGANIZATION
Q: What requisites must a Union comply with before it
Check off, Assessment, Agency fees (2002, 2001, 1997 can validly impose special assessments against its
Bar) members for incidental expenses, attorney's fees,
representation expenses and the like? (2001, 2002 Bar)
Q: The union deducted P20.00 from Rogelio's wages for
January. Upon inquiry he learned that it was for death

UST BAR OPERATIONS


36
QUAMTO (1987-2016)
A: In order that the special assessment may be upheld as A: An APPROPRIATE BARGAINING UNIT is a group of
valid, the following requisites must be compiled with: (1) employees of a given employer comprised of all or less than
Authorization by a written resolution of the majority of all all of the entire body of employees, which the collective
the members at the general membership meeting duly interest of all the employees, consistent with the interest of
called for the purpose; (2) Secretary's record of the the employer, indicated to be the best suited to serve
meeting; and (3) Individual written authorization for the reciprocal rights and duties of the parties under the
check-off duly signed by the employee concerned. [ABSCBN collective bargaining provisions of the law. (See University
Supervisors Employees Union Members v. ABS-CBN of the Philippines v. Ferrer-Calleja, G.R. No. 96189, July 14,
Broadcasting Corp, and Union Officers, G.R. No. 106518, 1992).
March 11, 1999; Art. 241(n) and (o), Labor Code]
COLLECTIVE BARGAINING AGREEMENT (CBA)
COLLECTIVE BARGAINING
Mandatory provisions of CBA (2008, 1999 Bar)
Duty to bargain collectively (2010, 2009, 2008, 2001,
1999, 1996, 1992, 1991 Bar) Q: Jenson & Jenson (J & J) is a domestic corporation
engaged in the manufacturing of consumer products.
Q: ABC company and U labor union have been Its rank-and-file workers organized the Jenson
negotiating for a new Collective Bargaining Agreement Employees Union (JEU), a duly registered local union
(CBA) but failed to agree on certain economic affiliated with PAFLU, a national union. After having
provisions of the existing agreement. In the meantime, been certified as the exclusive bargaining agent of the
the existing CBA expired. The company thereafter appropriate bargaining unit, JEU-PAFLU submitted its
refused to pay the employees their midyear bonus, proposals for a Collective Bargaining Agreement with
saying that the CBA which provided for the grant of the company. In the meantime, a power struggle
midyear bonus to all company employees had already occurred within the national union PAFLU between its
expired. Are the employees entitled to be paid their National President, Manny Pakyao, and its National
midyear bonus? Explain your answer. (2010 Bar) Secretary General, Gabriel Miro. The representation
issue within PAFLU is pending resolution before the
A: Yes, under Article 253 of the Labor Code, the parties are Office of the Secretary of Labor. By reason of this intra-
duty-bound to maintain the status quo and to continue in union dispute within PAFLU, J & J obstinately and
full force and effect the terms and conditions of the existing consistently refused to offer any counterproposal and
CBA until a new agreement is reached by the parties. to bargain collectively with JEUPAFLU until the
Likewise, Art. 253-A provides for an automatic renewal representation issue within PAFLU shall have been
clause of a CBA. Although a CBA has expired, it continues to resolved with finality. JEU-PAFLU filed a Notice of Strike.
have legal effects as between the parties until a new CBA The Secretary of Labor subsequently assumed
has been entered into. jurisdiction over the labor dispute.

The same is also supported by the principle of holdover, a. Will the representation issue that has arisen
which states that despite the lapse of the formal effectivity involving the national union PAFLU, to which the duly
of the CBA, the law stills considers the same as continuing registered local union JEU is affiliated, bar collective
in force and effect until a new CBA shall have been validly bargaining negotiation with J & J? Explain briefly.
executed (MERALCO v. Hon. Sec. of Labor, 337 SCRA 90
[2000] citing National Congress of Unions in the Sugar A: The representation issue that has arisen involving the
Industry of the Philippines v. Ferrer-Calleja, 205 SCRA 478 national union PAFLU should not bar collective bargaining
[1992]). The terms and conditions of the existing CBA negotiation with J and J. It is the local union JEU that has the
remain under the principle of CBA continuity. right to bargain with the employer J and J, and not the
national union PAFLU. It is immaterial whether the
representation issue within PAFLU has been resolved with
Q: What jurisdictional pre-conditions must be present finality or not. Said squabble could not possibly serve as a
to set in motion the mechanics of a collective
bar to any collective bargaining since PAFLU is not the real
bargaining? (1996 Bar)
party-in interest to the talks; rather, the negotiations are
confined to the corporation and the local union JEU. Only
A: To set in motion the mechanics of collective bargaining, the collective bargaining agent, the local union JEU,
these jurisdictional pre-conditions must be present, possesses the legal standing to negotiate with the
namely:
corporation. A duly registered local union affiliated with a
1. The employees in a bargaining unit should form a labor national union or federation does not lose its legal
organization; personality or independence. (Adamson and Adamson, Inc. v.
2. The labor organization should be a legitimate labor The Court of Industrial Relations and Adamson and Adamson
organization; Supervising Union (FFW), G.R. No. L-35120, January 30,1984).
3. As such legitimate labor organization, it should be
recognized or certified as the collective bargaining
b. Can the Secretary of Labor decide the labor dispute
representative of the employees of the bargaining unit; by awarding the JEU CBA Proposals as the Collective
and
Bargaining Agreement of the parties? Explain briefly.
4. The labor organization as the collective bargaining
(1999 Bar)
representative should request the employer to bargain
collectively. (See Arts. 243, 234, 255 and 250 of the Labor
A: Yes, the Secretary of Labor can decide the labor dispute
Code). by awarding the JEU CBA proposals as the Collective
Bargaining Agreement between the parties because when
Q: What is an appropriate bargaining unit for purposes the Secretary of Labor (under Art. 263 [g]) assumes
of collective bargaining? (1999 Bar) jurisdiction over a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to the

37
Labor Law and Social Legislation

national interest, the Secretary of Labor exercises the administrative proceeding. During the pendency of such
power of compulsory arbitration over the labor dispute, administrative proceeding, the running of the period for
meaning, that as an exception to the general rule, the prescription of the criminal offense herein penalized shall
Secretary of Labor now has the power to set or fix wages, be interrupted. The final judgment in the administrative
rates of pay, hours of work or terms and conditions of proceeding shall not be binding in the criminal case nor be
employment by determining what should be the CBA of the considered as evidence of guilt but merely as proof of
parties. (See Divine Word University v. Secretary of Labor, G.R. compliance of the requirements set forth by law. (Article
No. 91915, September 11, 1992) 247, Labor Code)

ALTERNATIVE ANSWER: Q: Differentiate surface bargaining from blue-sky


bargaining. (2010 Bar)
What is involved in the case is a corporation engaged in the
manufacturing of consumer products. If the consumer A: SURFACE BARGAINING is defined as going through the
products that are being manufactured are not such that a motions of negotiating without any legal intent to reach
strike against the company cannot be considered a strike in an agreement. The determination of whether a party has
an industry indispensable for the national interest, then the engaged in unlawful surface bargaining is a question of the
assumption of jurisdiction by the Secretary of Labor is not intent of the party in question, which can only be inferred
proper. Therefore, he cannot legally exercise the powers of from the totality of the challenged partys conduct both at
compulsory arbitration in the labor dispute. and away from the bargaining table. It involves the
question of whether an employers conduct demonstrates
Q: Explain the automatic renewal clause of collective an unwillingness to bargain in good faith or is merely hard
bargaining agreements. (2008 Bar) bargaining (Standard Chartered Bank Employees Union
(NUBE)v. Confesor, 432 SCRA 308 [2004]).
A: The automatic renewal clause of Collective Bargaining
Agreements means that although a CBA has expired, it BLUE-SKY BARGAINING is defined as unrealistic and
continues to have legal effects as between the parties until unreasonable demands in negotiations by either or both
a new CBA has been entered into (Pier 8 Arrastre & labor and management, where neither concedes anything
Stevedoring Services, Inc. v. Roldan-Confessor, 241 SCRA 294 and demands the impossible (Standard Chartered Bank
[1995]). This is so because the law makes it a duty of the Employees Union (NUBE) v. Confesor, supra.).
parties to keep the status quo and to continue in full effect
the terms and conditions of the existing agreement until a By employers (2010, 2009, 2004, 2001, 1999, 1996,
new agreement is reached by the parties (Art. 253, Labor 1992, 1991, 1990 Bar)
Code).
Q: Article 248(d) of the Labor Code states that it shall
UNFAIR LABOR PRACTICE be unlawful for an employer to initiate, dominate,
assist in or otherwise interfere with the formation or
Nature, aspects (2010, 2009, 2007, 2005 Bar) administration of any labor organization. Including
the giving of financial or other support to it or to its
Q: Is the commission of an unfair labor practice by an organizers or officers.
employer subject to criminal prosecution? (2005 Bar)
X Company, Inc. has been regularly contributing
A: Yes. The second paragraph of Art. 247 of the Labor Code money to the recreation fund of the labor union
expressly so provides. The last paragraph of Art. 247 representing its employees. This fund, including the
provides that no criminal prosecution for unfair labor financial assistance given by the employer, is used for
practice maybe made without a prior final judgment in an refreshment and other expenses of the labor union
unfair labor practice administrative case (filed before the whenever the employees go on a picnic, on an
Labor Arbiter of the NLRC pursuant to Art. 217(a)(1) of the excursion, or hold a Christmas party. Is the employer
Labor Code). And even with such final judgment in an liable for unfair labor practice under Article 248(d) of
administrative case, still, the final judgment would not be the Labor Code? Explain your answer. (1990 Bar)
binding in the criminal case. Neither would such final
judgment be considered as evidence in the criminal case. At A: No. If the contributions of the employer benefit all the
best, it would only serve as proof of compliance of the employees and there is no employee discriminated against,
required prior exhaustion of administrative complaint. there is no unfair labor practice. The contributions, may be
considered a fringe benefit given by the employer.
Q: Discuss in full the jurisdiction over the civil and
criminal aspects of a case involving an unfair labor Q: Company "A" contracts out its clerical and janitorial
practice for which a charge is pending with the services. In the negotiations of its CBA, the union
Department of Labor and Employment. (2007 Bar) insisted that, henceforth, the company may no longer
engage in contracting out these types of services, which
A: Unfair labor practices are not only violations of the civil services the union claims to be necessary in the
rights of both labor and management but are also criminal company's business, without prior consultation. Is the
offenses against the State. union is stand valid or not? For what reason(s)? (2001
Bar)
The civil aspect of all cases involving unfair labor practices,
which may include claims for actual, moral, exemplary and
A: The union's stand is not valid. It is part of management
other forms of damages, attorneys fee and other
prerogative, to contract out any work, task, job or project
affirmative relief, shall be under the jurisdiction of the
except that it is an unfair labor practice to contract out
Labor Arbiters.
services or functions performed by union members when,
However, no criminal prosecution shall be instituted such will interfere with, restrain or coerce employees in the
without a final judgment, finding that an unfair labor exercise of their rights to self- organization. (Art. 248(c) of
practice was committed, having been first obtained in the the. Labor Code)

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38
QUAMTO (1987-2016)
Q: Give three (3) examples of unfair labor practices on d. To cause or attempt to cause an employer to pay or
the part of the employer and three (3) examples of deliver or agree to pay or deliver any money or other
unfair labor practices on the part of the labor union. things of value, in the nature of an exaction, for services
(1996 Bar) which are not performed or not to be performed,
including the demand for fee for union negotiations;
A. Any three (3) from the following enumeration in the e. To ask for or accept negotiations of attorney's fees
Labor Code: from employers as part of the settlement of any issue
in collective bargaining or any other dispute; or
ART. 248. Unfair labor practices of employers. It shall be f. To violate a collective bargaining agreement.
unlawful for an employer to commit any of the following
unfair labor practice: Q: Around 100 workers of a mill in a coconut plantation
organized themselves for the purpose of promoting
a. To interfere with, restrain or coerce employees in the their common interest and welfare. The workers
exercise of their right to self-organization; association prepared a petition for increasing the daily
b. To require as a condition of employment that a person pay of its members in compliance with minimum wage
or an employee shall not join a labor organization or rates for their sector in the region and for granting
shall withdraw from one to which he belongs; benefits to which they are entitled under the law.
c. To contract out services or functions being performed
by union members when such will interfere with, However, the workers became restless and anxious
restrain or coerce employees in the exercise of their after the owner-manager threatened them with mass
rights to self-organization; lay-off if the association would press for their demands.
d. To initiate, dominate, assist or otherwise interfere with Most of its members have worked in the mill for 10 to
the formation or administration of any labor organiza- 15 years with no improvement in working conditions
tion, including, the giving of financial or other support and monetary benefits.
to it, or its organizations, or supporters;
e. To discriminate in regard to wages, hours of work, and The leaders of the workers' association approached
other terms and conditions of employment in order to you and asked: What legal steps could they take to
protect their security of tenure? What advice could you
encourage or discourage membership in any labor
organization. Nothing in this Code or in any other law give them? (2004 Bar)
shall stop the parties from requiring membership in a A: I would advise them to register the workers association
recognized collective bargaining agent as a condition with the Department of Labor and Employment. Then, have
for employment, except those employees who are the workers' association file a ULP case against the
already members of another union at the time of the employer.
signing of the collective bargaining agreement.
Provided, that the individual authorization required
Q: A is employed by XYZ Company where XYZ
under Article 241, paragraph (o) of this Code shall not
Employees Union (XYZ-EU) is the recognized exclusive
apply to the non-members of the recognized collective
bargaining agent. Although A is a member of rival
bargaining agent;
union XYR-MU, he receives the benefits under the CBA
f. To dismiss, discharge, or otherwise prejudice or
that XYZ-EU had negotiated with the company.
discriminate against an employee for having given or
being about to give testimony under this Code;
XYZ-EU assessed A a fee equivalent to the dues and
g. To violate the duty to bargain collectively as prescribed
other fees paid by its members but A insists that he has
by this Code;
no obligation to pay said dues and fees because he is
h. To pay negotiation or attorney's fees to the union or its
not a member of XYZ-EU and he has not issued an
officers or agents as part of the settlement of any issue
authorization to allow the collection. Explain whether
in collective bargaining or any other dispute; or
his claim is meritorious. (2010 Bar)
i. To violate a collective bargaining agreement.
A: No. The fee exacted from A takes the form of an AGENCY
Any three (3) from the following provisions of the Labor
FEE. This is sanctioned by Article 248 (e) of the Labor Code.
Code:

ART. 249. Unfair labor practices of labor organizations. It The collection of agency fees in an amount equivalent to
shall be unfair labor practice for a labor organization. Its union dues and fees from employees who are not union
officers, agents or representatives: members is recognized under Article 248(e) of the Labor
Code. The union may collect such fees even without any
a. To restrain or coerce employees in the exercise of their written authorization from the non-union member
rights to self-organization. However, a labor organiza- employees, if said employees accept the benefits resulting
tion shall have the right to prescribe its own rules with from the CBA. The legal basis of agency fees is quasi-
respect to the acquisition or retention of membership; contractual (Del Pilar Academy v. Del Pilar Academy
b. To cause or attempt to cause an employer to dis- Employees Union, 553 SCRA 590 [2008]).
criminate against an employee, including
discrimination against an employee with respect to Q: Pablo works as a driver at the National Tire Company
whom membership in such organization has been (NTC). He is a member of the Malayang Samahan ng
denied or to terminate an employee on any ground Manggagawa sa NTC, the exclusive rank-and-file
other than the usual terms and conditions under which collective bargaining representative in the company.
membership or continuation of membership is made The union has a CBA with NTC which contains a union
available to other members; security and a check-off clause. The union security
c. To violate the duty, or refuse to bargain collectively clause contains a maintenance of membership
with the employer, provided it is the representative of provision that requires all members of the bargaining
the employees; unit to maintain their membership in good standing

39
Labor Law and Social Legislation

with the union during the term of the CBA under pain of A: LFEUs claim that Libra Films committed ULP based on
dismissal. The check-off clause on the other hand its violation of the CBA is not correct. For violation of a CBA
authorizes the company to deduct from union to constitute ULP, the violation must be violation of its
members' salaries defined amounts of union dues and economic provisions. Moreover, said violation must be
other fees. Pablo refused to issue an authorization to gross and flagrant. Based on the allegation of the union,
the company for the check-off of his dues, maintaining what was violated was the maintenance of membership
that he will personally remit his dues to the union. clause which was a political or representational provision;
hence, no ULP was committed. (BPI Employees Union-Davao
(a) Would the NTC management commit unfair labor City v. BPI, 702 SCRA 42).
practice if it desists from checking off Pablo's union
dues for lack of individual authorization from Pablo? By Labor organizations

A. No. Under Article 9481, violation of the Collective Q: A labor union lawyer opined that a labor
Bargaining Agreement, to be an unfair labor practice, must organization is a private and voluntary organization;
be gross in character. It must be a flagrant and malicious hence, a union can deny membership to any and all
refusal to comply with the economic provisions of the CBA. applicants. Is the opinion of counsel in accord with law?
[1998 Bar]
ALTERNATIVE ANSWER:
A: No, the opinion of counsel is not in accord with law. The
No. Check-offs in the truth impose an extra burden on the Labor Code [in Article 249 (a and b)] provides that a labor
employer in the form of additional administrative and organization has the light to prescribe its own rules for the
bookkeeping costs. It is a burden assumed by management acquisition or retention of membership, but it is an unfair
at the instance of the union and for its benefit, in order to labor practice act for a labor organization to restrain or
facilitate the collection of dues necessary for the latters life coerce employees in the exercise of their right to self-
and sustenance. But the obligation to pay union dues and organization. Thus, a labor organization cannot
agency fees obviously devolves not upon the employer, but discriminate against any employee by denying such
the individual employee. It is a personal obligation not employee membership in the labor organization on any
demandable from the employer upon default or refusal of ground other than the usual terms and conditions under
the employee to consent to a check-off. The only obligation which membership or continuation of union membership is
of the employer under a check-off is to effect the deductions made available to other members.
and remit the collections to the union. (Holy Cross of Davao
College v. Joaquin, G.R. No. 110007 [1996]) PEACEFUL CONCERTED ACTIVITIES

(b) Can the union charge Pablo with disloyalty for BY LABOR ORGANIZATION
refusing to allow the check off of his union dues and, on
this basis, ask the company to dismiss him from Strike (2010, 2008, 2002, 2000, 1998 Bar)
employment? (2013 Bar)

A. No. The check-off clause in the CBA will not suffice. The Q: The day following the workers' voluntary return to
law prohibits interference with the disposition of ones work, the Company Production Manager discovered an
salary. The law requires individual written authorization unusual and sharp drop in workers' output. It was
to deduct union dues from Pablos salaries. For as long as he evidently clear that the workers are engaged in a work
pays union dues, Pablo cannot be terminated from slowdown activity. Is the work slowdown a valid form
employment under the union security clause. As a matter of of strike activity? (1998 Bar]
fact, filing a complaint against the union before the
Department of Labor for forcible deduction from salaries A: A work slowdown is not a valid form of strike activity. If
does not constitute acts of disloyalty against the union. workers are to strike, there should be temporary stoppage
(Tolentino v. Angeles, 52 O.G. 4262) of work by the concerted action of employees as a result of
an industrial or labor dispute (See Article 212(o) of the
Q: The Collective Bargaining Agreement (CBA) between Labor Code)
Libra Films and its union, Libra Films Employees' Union
(LFEU), contains the following standard clauses: Q: Eaglestar Company required a 24-hour operation
and embodied this requirement in the employment
1. Maintenance of membership; contracts of its employees. The employees agreed to
2. Check off for union dues and agency fees; and work on Sundays and Holidays if their work schedule
3. No strike, no lock-out. required them, to do so for which they would be paid
additional compensation as provided by law. Last
While Libra Films and LFEU are in re-negotiations for March 2000, the union filed a notice of strike. Upon
an extension of the CBA, LFEU discovers that some of its Eaglestars petition, the Secretary of Labor certified
members have resigned from the union, citing their the labor dispute to the NLRC for compulsory
constitutional right to organize (which includes the arbitration. On April 20, 2000 (Maundy Thursday),
right NOT to organize). LFEU demands that Libra Films while conciliation meetings were pending, the union
institute administrative proceedings to terminate officers and members who were supposed to be on
those union members who resigned in violation of the duty did not report for work. Neither did they report
CBA's maintenance of membership clause. Libra Films for work on April 21 (Good Friday) and on April 22
refuses, citing its obligation to remain a neutral party. (Black Saturday), disrupting the factorys operations
As a result, LFEU declares a strike and after filing a and causing it huge losses. The union denied it had
notice of strike and taking a strike vote, goes on strike. gone on a strike because the days when its officers and
The union claims that Libra Films grossly violated the members were absent from work were legal holidays.
terms of the CBA and engaged in unfair labor practice. Is the contention of the union correct? Explain briefly.
Are LFEU's claims correct? Explain. (2015 Bar) (2002 Bar)

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QUAMTO (1987-2016)
A: The contention of the union is NOT correct. temporary stoppage of work by the concerted action of
employees, as a result of a labor or industrial dispute, is
In the case, it is clear that the employees agreed to work on clearly a case of strike.
Sundays and Holidays if their work schedule required
them to do so for which they would be paid additional Q: What is the rationale for the State regulation of
compensation as provided by law. strike activity and what are the interests involved that
the State must balance and reconcile? (2000 Bar)
The above-mentioned agreement that the employees
A: The first rationale is the constitutional provision that
voluntarily entered into is valid. It is not contrary to law. It
the right to strike is to be exercised in accordance with
is provided in the agreement that if they will work Sundays
law. Another rationale is the Civil Code provision that the
or Holidays that they will be paid additional compensation
relations between employer*and employee are imbued
as provided by law. Neither is the agreement contrary to
with public interest and are subject to the provisions of
morals, good customs, public order or public policy.
special law. A third rationale is the police power of the
state.
Thus, when the workers did not report for work when by
agreement they were supposed to be on duty, there was a The interests to be balanced are the rights of the workers,
temporary stoppage of work by the concerted action of the as primary socio-economic force, to protection of the law,
employees as a result of an industrial or labor dispute to security of tenure, to concerted activities, etc. These
because they were on strike. (See Interphil Laboratories should be balanced with the right of the employer to
Employees Union-FFW v. Interphil Laboratories Inc., CR No. reasonable return on investment and to expansion and
142924, December 19, 2001) growth. General welfare or the general peace and progress
of society should also be considered. This is why
Q: On the day that the Union could validly declare a assumption of jurisdiction and certification to NLRC are
strike, the Secretary of Labor issued an order assuming allowed in national interest" cases. [Art. 263, Labor Code:
jurisdiction over the dispute and enjoining the strike, Ilaw at Buklod rig Manggagawa v. NLRC, 198 SCRA 586
or if one has commenced, ordering the striking (1991); Lapanday Workers Union u. NLRC, 248 SCRA 96
workers to immediately return to work. The return-to- (1995)].
work order required the employees to return to work
within twenty-four hours and was served at 8 a.m. of Q: Cite two (2) examples on how the law regulates the
the day the strike was to start. The order at the same use of tire strike as a form of concerted activity. (2000
time directed the Company to accept all employees Bar)
under the same terms and conditions of employment
prior to the work stoppage. The Union members did A: Examples: (1) procedural requirements should be
not return to work on the day the Secretarys observed, namely, filing of notice of strike, observance of
assumption order was served, nor on the next day; cooling-off period, taking of strike note, and report of the
instead, they held a continuing protest rally against the strike vote; (2) use of violence, intimidation or coercion
companys alleged unfair labor practices. Because of and blockade of ingress-egress are not allowed. [Art 263
the accompanying picket, some of the employees who (b) (c) (f) (g), Labor Code]
wanted to return to work failed to do so. On the 3rd day,
the workers reported for work, claiming that they do Q: Johnny is the duly elected President and principal
so in compliance with the Secretarys return-to-work union organizer of the Nagkakaisang Manggagawa ng
order that binds them as well as the Company. The Manila Restaurant (NMMR), a legitimate labor
Company, however, refused to admit them back since organization. He was unceremoniously dismissed by
they had violated the Secretarys return-to-work order management for spending virtually 95% of his
and are now considered to have lost their employment working hours in union activities. On the same day
status. Johnny received the notice of termination, the labor
union went on strike.
The Union officers and members filed a complaint for
illegal dismissal arguing that there was no strike but a
Management filed an action to declare the strike
protest rally which is a valid exercise of the workers
illegal, contending that:
constitutional right to peaceable assembly and
freedom of expression. Hence, there was no basis for a. The union did not observe the cooling-off period
the termination of their employment. mandated by the Labor Code; and
b. The union went on strike without complying with
You are the Labor Arbiter to whom the case was raffled. the strike-vote requirement under the Labor Code.
Decide, ruling on the following issues: Was there a (2009 Bar)
strike? (2008 Bar)
Rule on the foregoing contentions with reasons.
A: Yes, there was a strike. No matter how they call it, the
continuing protest rally against the companys alleged a. A: Yes. The conduct of a strike action without
unfair labor practices constitutes a temporary stoppage observing the cooling-off period is a violation of one of
of work by the concerted action of employees as a result of the requirements of law which must be observed. The
an industrial or labor dispute - a case of strike as defined cooling- off periods required by Articles 263 (c) and
in Art. 212(o) of the Labor Code. 263 (f) of the Labor Code are to enable the DOLE to
exert efforts to amicably settle the controversy, and
Recently, in Santa Rosa Coca-Cola Plant Employees Union, et for the parties to review and reconsider their
al. v. Coca-Cola Bottlers Phils., Inc. (512 SCRA 437 [2007]), respective positions during the cooling-off periods.
the Supreme Court clarified that a strike comes in varied But the Labor Code also provides that if the dismissal
forms, from slowdowns, mass leaves, sit downs to other constitutes union busting, the union may strike
similar activities. A protest rally which results in immediately.

41
Labor Law and Social Legislation

b. A: Yes. The conduct of the strike action without a valid because of the refusal of the company to
strike vote violates Art. 263 (f) - In every case, the discuss the economic provisions of the CBA. Rule on
union or the employer shall furnish the [DOLE] the the contention.
results of the voting at least seven days before the
intended strike... to enable the DOLE and the parties A: The Unions contention is wrong. A strike may be
to exert the last effort to settle the dispute without declared only in cases of deadlock in collective bargaining
strike action. negotiations and unfair labor practice [Article 263(c) Labor
Code; Section 1, Rule V, NCMB Manual of Procedures]
Q: A is a member of the labor union duly recognized as
the sole bargaining representative of his company. The proposal of the company to discuss political provisions
Due to a bargaining deadlock, 245 members of the pursuant to the ground rules agreed upon does not
500-strong union voted on March 13, 2010 to stage a automatically mean that the company refuses to discuss
strike. A notice of strike was submitted to the National the economic provisions of the CBA, or that the company
Conciliation and Mediation Board on March 16, 2010. was engaged in surface bargaining in violation of its duty
Seven days later or on March 23, 2010, the workers to bargain, absent any showing that such tend to show that
staged a strike in the course of which A had to leave the company did not want to reach an agreement with the
and go to the hospital where his wife had just delivered Union. In fact, there is no deadlock to speak of in this case.
a baby. The union members later intimidated and
barred other employees from entering the work The duty to bargain does not compel either party to agree
premises, thus paralyzing the business operations of to a proposal or require the making of a concession. The
the company. parties failure to agree which to discuss first on the
bargaining table did not amount to ULP for violation of the
A was dismissed from employment as a consequence of duty to bargain.
the strike. Was the strike legal? Explain (2010 Bar)
Besides, the mass leave conducted by the union members
A: No. The strike was not legal due to the unions failure to
failed to comply with the procedural requirements for a
satisfy the required majority vote of union membership
valid strike under the Rules, without which, the strike
(251 votes), approving the conduct of a strike [See Art.
conducted taints of illegality
263(f), Labor Code; Section 11, Rule XXII, Dept. Order No. 40-
.
03]. Also, the strike was illegal due to the non-observance
c. Union member AA, a pastor who headed the prayer
of the 30-day cooling off period by the union [Art. 263(c),
rally, was served a notice of termination by
Labor Code]. rights of employees to self-organization (Club
management after it filed the petition for
Filipino, Inc. v. Bautista, 592 SCRA 471 [2009]).
assumption of jurisdiction. May the company
validly terminate AA? Explain. (2010 Bar)
Q: On the first day of collective bargaining negotiations
between rank-and-file Union A and B Bus Company, the
former proposed a P45/day increase. The company A: No. The company cannot terminate AA because the
insisted that ground rules for negotiations should first Labor Code provides mere participation of a worker in a
be established, to which the union agreed. After strike shall not constitute sufficient ground for termination
agreeing on ground rules on the second day, the union of his employment.
representatives reiterated their proposal for a wage
increase. When company representatives suggested a Valid versus Illegal strikes (2010, 2007, 2004, 2003,
discussion of political provisions in the Collective 2000, 1994 Bar)
Bargaining Agreement as stipulated in the ground
rules, union members went on mass leave the next day Q: Discuss the legal requirements of a valid strike.
to participate in a whole-day prayer rally in front of the (2007 Bar)
company building.
A. The legal requirements of a valid strike are as follows:
a. The company filed a petition for assumption of
jurisdiction with the Secretary of Labor and 1. No labor union may strike on grounds involving inter-
Employment. The Union opposed the petition, union and intra-union disputes.
arguing that it did not intend to stage a strike. 2. In cases of bargaining deadlocks, the duly certified or
Should the petition be granted? Explain. recognized bargaining agent may file a notice of strike
with the Department of Labor and Employment at least
A: Yes. There was a strike. What the union engaged in was 30 days before the intended date thereof. In cases of
actually a work stoppage in the guise of a protest rally. unfair labor practice, the period of notice shall be 15
Article 212(o) of the Labor Code defines strike as a days and in the absence of a duly certified or recognized
temporary stoppage of work by the concerted action of bargaining agent, the notice of strike may be filed by
employees as a result of an industrial or labor dispute. The any legitimate labor organization in behalf of its
fact that the conventional term "strike was not used by members. However, in case of dismissal from
the striking employees to describe their common course employment of union officers duly elected in
of action is inconsequential. What is controlling is the accordance with the union constitution and by-laws,
substance of the situation, and not its appearance. The which may constitute union busting where the
term "strike encompasses not only concerted work existence of the union is threatened, the 15-day
stoppages, but also slowdowns, mass leaves, sit-downs, cooling-off period shall not apply and the union may
attempts to damage, destroy or sabotage plant equipment take action immediately.
and facilities, and similar activities (Santa Rosa Coca- Cola 3. A decision to declare a strike must be approved by a
Plant Employees Union, Donrico v. Sebastian, et al. v. Coca- majority of the total union membership in the
Cola Bottlers Phils., Inc., 512 SCRA 437 [2007]). bargaining unit concerned, obtained by secret ballot in
meetings or referenda called for that purpose.
b. The Union contended that assuming that the mass 4. In every case, the union shall furnish the Department of
leave will be considered as a strike, the same was Labor and Employment the voting at least seven days

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42
QUAMTO (1987-2016)
before the intended strike subject to the cooling-off c. Cause The cause of a strike must be a labor or
period herein provided. industrial dispute. [Art. 212(o], Labor Code]
5. No labor organization shall declare a strike without
first having bargained collectively; without first having Compliance with all legal requirements are meant to be and
filed the notice required or without the necessary should be mandatory. (National Federation of Sugar
strike vote first having been obtained and reported to Workers v. Ovajera, 114 SCRA354 [1982])
the Department of Labor and Employment.
6. No strike shall be declared after assumption of Q: On the first day of collective bargaining
jurisdiction by the President or the Secretary or after negotiations between rank-and-file Union A and B Bus
certification or submission of the dispute to Company, the former proposed a P45/day increase.
compulsory or voluntary arbitration or during the The company insisted that ground rules for
pendency of cases involving the same grounds for the negotiations should first be established, to which the
strike. union agreed. After agreeing on ground rules on the
7. In a strike, no person engaged in picketing should second day, the union representatives reiterated their
commit any act of violence, coercion or intimidation or proposal for a wage increase. When company
obstruct the free ingress to or egress from the representatives suggested a discussion of political
employers premises for lawful purposes, or obstruct provisions in the Collective Bargaining Agreement as
public thoroughfares. stipulated in the ground rules, union members went
on mass leave the next day to participate in a whole-
Q: A division manager of a company taunted a union day prayer rally in front of the company building.
officer two days after the union submitted to the
Department of Labor and Employment (DOLE) the a. The company filed a petition for assumption of
result of the strike vote. The division manager said: jurisdiction with the Secretary of Labor and
Your union threat of an unfair labor practice strike is Employment. The Union opposed the petition, arguing
phony or a bluff. Not even ten percent (10%) of your that it did not intend to stage a strike. Should the
members will join the strike.' To prove union member petition be granted? Explain.
support for the strike, the union officer immediately
instructed its members to cease working and walk out. A. Yes. There was a strike. What the union engaged in was
Two hours after the walkout, the workers voluntarily actually a work stoppage in the guise of a protest rally.
returned to work.
Article 212(o) of the Labor Code defines strike as a
a. Was the walkout a strike? And if so, was it a valid temporary stoppage of work by the concerted action of
activity? employees as a result of an industrial or labor dispute. The
fact that the conventional term "strike was not used by the
A: Yes, it was a strike because there was a work stoppage striking employees to describe their common course of
by concerted action and there is an existing labor dispute. action is inconsequential. What is controlling is the
It was not a valid activity because the requisites for a valid substance of the situation, and not its appearance. The
strike were not observed. [Art. 212, (o), (i) Labor Code]. term "strike encompasses not only concerted work
stoppages, but also slowdowns, mass leaves, sit-downs,
b. Can the union officer who led the short walk-out, attempts to damage, destroy or sabotage plant equipment
but who likewise voluntarily led the workers back and facilities, and similar activities (Santa Rosa Coca- Cola
to work, be disciplined by the employer? (2000 Plant Employees Union, Donrico v. Sebastian, et al. v. Coca-
Bar) Cola Bottlers Phils., Inc., 512 SCRA 437 [2007]).
A: Yes, the employer may discipline the union officer. An b. The Union contended that assuming that the mass
Illegal strike is a cause for the union officer to be declared leave will be considered as a strike, the same was valid
to have lost his employment status. [Art. 263 (c), (d),( e)-(j); because of the refusal of the company to discuss the
Art. 264 (a), Labor Code]. economic provisions of the CBA. Rule on the contention.
(2 0 1 0 B a r )
Q: What are the statutory requisites for a valid strike by
the workers? Should these requisites be complied with A: The Unions contention is wrong. A strike may be
substantially or strictly? (2004 Bar) declared only in cases of deadlock in collective bargaining
negotiations and unfair labor practice [Article 263(c),
A: Statutory Requirements for a Valid Strike Labor Code; Section 1, Rule V, NCMB Manual of Procedures]
a. Status of Striking Union For a ULP strike or bargaining
The proposal of the company to discuss political provisions
deadlock strike, only a duly certified or recognized
pursuant to the ground rules agreed upon does not
bargaining representative may declare such strike.
automatically mean that the company refuses to discuss
b. Procedural Requirements:
the economic provisions of the CBA, or that the company
i. Notice of Intent. Filing of Notice of Intent to Strike was engaged in surface bargaining in violation of its duty
to bargain, absent any showing that such tend to show that
with NCMB.
the company did not want to reach an agreement with the
ii. Cooling off Period Observance of Cooling-off
Union. In fact, there is no deadlock to speak of in this case.
Period.
(a) ULP - 15 days before intended date of strike
The duty to bargain does not compel either party to agree
(b) Bargaining Deadlock - 30 days before
to a proposal or require the making of a concession. The
intended date of strike.
parties failure to agree which to discuss first on the
bargaining table did not amount to ULP for violation of the
iii. Strike Vote and Filing of the same with the NCMB
duty to bargain.
and the observance of the seven (7) days strike
ban. [Art. 263 (c-f). Labor Code].

43
Labor Law and Social Legislation

Besides, the mass leave conducted by the union members for a valid cause? Was due process observed? (2004
failed to comply with the procedural requirements for a Bar)
valid strike under the Rules, without which, the strike
conducted taints of illegality. A: There is a valid cause for the dismissal of FX, but due
process was not observed.
Picket (2016, 2004, 2000, 1992, 1991 Bar)
Peaceful picketing is part of the constitutional freedom of
Q: Following a deadlock in collective bargaining, the AC- speech. The right to free speech, however, has its limits, and
AC Labor Union filed a notice of strike with the picketing as a concerted activity is subject to the same
Department of Labor and Employment and, thirty (30) limitations as a strike, particularly as to lawful purpose and
days later, went on strike and picketed the gates of the lawful means. But it does not have to comply with the
UP-UP Company, paralyzing its operations. The procedural requirements for a lawful strike, like the notice
company is engaged in telecommunications, including of strike or the strike vote. However in the problem given,
the supply of cellular phone equipment, with a picketing became illegal because of unlawful means, as
nationwide network of facilities. In a petition with the barricades blocked the employees' entry to the mill, and
DOLE, the company questioned the legality of the strike violence, ensued when FX threw stones at the guards. There
and asked for compulsory arbitration. The Secretary of was thus, valid cause for the dismissal of FX, however, due
the DOLE certified the dispute to the NLRC for process was not observed because SSI did not comply with
compulsory arbitration and ordered the company to the twin requirements of notice and hearing.
readmit the workers pending the arbitration. The
workers returned and were readmitted by the Q: The workers engaged in picketing activity in the
company but five (5) technicians were temporarily re- course of a strike.
assigned to the warehouse while five (5) others were
reinstated on payroll only. The company justified its a. Will picketing be legal if non-employees of the
strike-bound employer participate in the activity?
acts as an exercise of management prerogative.
A. Yes, the picketing is legal even though non-employees
During the strike, may the striking union picket the
join it. Picketing is a form of the exercise of freedom of
company's outside outlets although they are not
speech. Picketing, provided it is held peacefully, is a
company-owned but independent dealers? (1991 Bar)
constitutional right. The disputants in a legal dispute need
not be employer-employee of each other. [De Leon v.
A: Peaceful picketing conducted by employees in a strike National Labor Union, 100 Phil. 789 (1957); Cruz v. Cinema
area during any labor controversy is given protection by Stage, etc.101 Phil. 1259 (1957)].
the Labor Code.
b. Can picketing activity be curtailed when illegal acts
Thus, if the place being picketed is a strike area which is are committed by the picketing workers in the
defined by the Labor Code as the establishment, course of the activity? (2000 Bar)
warehouses, depots, plants or offices, including the sites or
premises used as runaway shops, of the employer struck A: No, the picketing activity itself cannot be curtailed. What
against, as well as the immediate vicinity actually used by can be curtailed are the illegal acts being done in the course
picketing strikers in moving to and fro before all points of of the picket. However, if this is a national interest" case
entrance to and exit from said establishment, then the under Art. 263(g), the strike or work stoppage may be
picketing is protected, if it is peaceful. stopped by the power of assumption of jurisdiction or
certification of the case to the National Labor Relations
In the question given, however, since the striking union is Commission. [Nagkakaisang Mangagawa sa Cuison Hotel v.
picketing the company's outside outlets who are not Libron, 124 SCRA 448 (1983); Free telephone Workers Union
company owned but independent dealers, the picketing is u. PLOT. 113 SCRA 662 (1982)].
not in a strike area, thus the picketing is not protected by
the Code. BY EMPLOYER
Q: President FX, head of a newly formed labor union Lockout
composed of 1/3 of the total number of rank-and-file
employees in Super Stores, Inc., agitated his fellow Q: Fifty percent (50%) of the employees of Grandeur
employees to demand from management pay increases Company went on strike after negotiations for a
and overtime pay. His supervisor summoned him to collective bargaining agreement ended in a deadlock.
explain his tardiness and refusal to obey regulations. Grandeur Company, being a public utility, immediately
Feeling threatened, he gathered 20 of his members and petitioned the Secretary of Labor and Employment to
staged a 2-day picket in front of the shopping mall. assume Jurisdiction and certify the case to the NLRC. On
Security staff arrived and dismantled the placards and the fourth day of the strike and before the DOLE
barricades blocking the employees' entry to the mall. In Secretary could assume jurisdiction or certify the case
retaliation, FX threw stones at the guards, but the other to the NLRC, the strikers communicated in writing their
striking workers just stood by watching him. Seven offer to return to work. Grandeur Company refused to
days after the picket, FX who had gone absent without accept the offer of the strikers because it realized that
leave returned to the mall and announced that he had they were not at all capable of paralyzing the
filed a complaint for illegal dismissal and unfair labor operations of the company. The strikers accused
practice against SSI. Grandeur Company of illegal lockout.
SSI learned that FX's group was not registered. No Has Grandeur Company committed the act charged by
strike vote and strike notice were filed prior to the refusing to accept the offer of the strikers to return to
picket. The guards were told not to allow FX entry in the work? Discuss fully. (1995 Bar)
company premises as management considered him
effectively terminated. Other union members were A: There is no law that prohibits strikers to decide not to
accepted back to work by SSI. Was the dismissal of FX continue with a strike that they have started.

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44
QUAMTO (1987-2016)
incident of the labor dispute including the issue as to
Thus, the company committed an illegal lockout in refusing whether or not a strike is legal.
to accept the offer of the strikers to return to work. Under
the set of facts in the question, the Company did not give the Q: Employees of ABC declared a strike after filing a
required notice to lockout, much less did it observe the Notice of Strike with the DOLE. They barricaded
necessary waiting period, nor did it take a needed vote on company gates and damaged vehicles entering
the lockout. Thus, the lockout is illegal. company premises. On the second day of the strike,
ABC filed a petition with the DOLE Secretary to
ASSUMPTION OF JURISDICTION intervene through the issuance of an assumption of
jurisdiction order that the Secretary may issue when a
Nature (2004, 1998, 1997, 1996, 1994, 1992, 1991 Bar) strike or lock-out will adversely affect national
interest. ABC furnished the Secretary with evidence to
Q: Calabarzon Transportation Company (CTC) and the show that company vehicles had been damaged; that
Calabarzon Workers Union (CWU) are parties to a electric power had been cut off; and equipment and
collective bargaining agreement (CBA), which is materials were damaged because electric power was
effective until December 31, 1992. The CBA provides not immediately restored. ABC forecast that the
for among others, a bipartite committee composed of countrys supply of chlorine for water treatment
CTC and CWU representatives to evaluate all positions (which die company produces) would be affected
in the CTC and determine adjustment of wages and adversely if ABCs operations were closed down by the
allowances. The Committee members having failed to strikers.
agree on the adjustments, the CWU filed a notice of
strike. Conciliation efforts by the National Conciliation Could the DOLE Secretary intervene, assume
and Mediation Board failed. The CWU then declared a jurisdiction and issue a TRO (Temporary Restraining
strike. The Secretary of Labor and Employment Order)? Briefly justify your answer. (2004 Bar)
assumed jurisdiction over the dispute and after
proceedings issued an order (a) awarding certain A: Yes, the Secretary of Labor and Employment can assume
monetary benefits to the strikers, (b) declaring the jurisdiction over the dispute because ABC could be
strike legal on the ground that CWU complied with all considered as an industry indispensable to the national
the requirements for a valid strike, and (c) restraining interest since it produces the countrys supply of chlorine
CTC from taking retaliatory actions against the officers for water treatment.
and members of CWU who were responsible for the
strike. The assumption of jurisdiction by the Secretary of Labor
and Employment has the effect of ending the strike. The
a. As lawyer for CTC what action should you take?
strikers will be subject to a return to work order by the
Secretary of Labor and Employment upon her assumption
A: As lawyer of CTC, I will first file with the Secretary of
of jurisdiction
Labor and Employment a Motion for Reconsideration. If
this Motion is denied, then I will file with the Supreme
Effects of assumption of jurisdiction (2010, 2008, 2003,
Court a petition for certiorari under Rule 65 of the Rules of 1998, 1997, 1991 Bar)
Court. I will assail the issuance by the Secretary of Labor of
his Order, and his refusal to reconsider said Order as a
Q: Following a deadlock in collective bargaining, the
grave abuse of discretion amounting to lack or excess of
AC-AC Labor Union filed a notice of strike with the
jurisdiction.
Department of Labor and Employment and, thirty (30)
b. Was the assumption of the labor dispute by the days later, went on strike and picketed the gates of the
Secretary of Labor and Employment valid? UP-UP Company, paralyzing its operations. The
company is engaged in telecommunications, including
A: It is valid. Under the Labor Code, [in Article 263 (g)] the the supply of cellular phone equipment, with a
Secretary of Labor has the power to assume jurisdiction nationwide network of facilities. In a petition with the
over a labor dispute causing or likely to cause a strike or DOLE, the company questioned the legality of the strike
lockout in an industry indispensable to the national and asked for compulsory arbitration. The Secretary of
interest. CTC, as a transportation Company, is in an the DOLE certified the dispute to the NLRC for
industry indispensable to the national interest. compulsory arbitration and ordered the company to
readmit the workers pending the arbitration. The
c. Was the Secretarys order granting monetary workers returned and were readmitted by the
benefits, declaring the strike of CWU legal and company but five (5) technicians were temporarily re-
restraining the CTC from penalizing CWU assigned to the warehouse while five (5) others were
members valid? Reasons. (1992 Bar) reinstated on payroll only. The company justified its
acts as an exercise of management prerogative.
A: The Secretary's order declaring the strike of CWU legal
and restraining the CTC from penalizing CWU members on a. Was the certification of the dispute for compulsory
the basis of the finding of the Secretary that the strike is arbitration proper?
legal, is illegal. He is acting in excess of his jurisdiction. It is
a Labor Arbiter, not the Secretary of Labor that has the A: The certification of the dispute for compulsory
jurisdiction to determine the legality of a strike. (Article arbitration was proper.
217, Labor Code; Philippine Airlines, Inc. v. Secretary of
Labor and Employment et al., 193 SCRA 223) but in The dispute was causing a strike in an industry indis-
International Pharmaceuticals v. Secretary of Labor, 205 pensable to the national interest. The company was
SCRA 65, (Jan. 9, 1992), the Supreme Court that the engaged in telecommunication including the supply of
Secretary of Labor, when he assumes jurisdiction under cellular equipment, with a nationwide network of facilities.
Article 263(g) of the Labor Code could deal with all the

45
Labor Law and Social Legislation

All these activities are at present indispensable to the indispensable to the national interest. Moreover, the
national interest. grounds relied upon by SDS, to wit: eyesore and disruptive
of its business, betrays the weakness of its case.
b. Were the temporary reassignment and payroll
reinstatement valid? (1991 Bar) Q: Several employees and members of Union A were
terminated by Western Phone Co. on the ground of
A: No. The temporary re-assignment and payroll rein- redundancy. After complying with the necessary
statement are not valid. According to the Labor Code, requirements, the Union staged a strike and picketed
when the Secretary of Labor assumes Jurisdiction, such the premises of the company. The management then
assumption has the effect of automatically enjoining the filed a petition for the Secretary of Labor and
strike that is taking place and all striking employees shall Employment to assume jurisdiction over the dispute.
immediately return to work as the employer shall Without the benefit of a hearing, the Secretary issued
immediately resume operations and readmit all workers an Order to assume jurisdiction and for the parties to
under the same terms and conditions prevailing before the revert to the status quo ante litem.
strikes.
a. Was the order to assume jurisdiction legal? Explain.
Q: In a labor dispute, the Secretary of Labor issued an
"Assumption Order" Give the legal implications of A: Yes. The Secretary of Labor and Employment has
such an order. (2003 Bar) plenary power to assume jurisdiction under Article 263(g)
of the Labor Code. When in his opinion, there exists a labor
A: Under Art. 263(g) of the Labor Code, such assumption dispute causing or likely to cause a strike or lockout in an
shall have the effect of automatically enjoining the
industry indispensable to the national interest, the
intended or impending strike or lockout as specified in the
Secretary of Labor may assume jurisdiction over the
assumption order. If one had already taken place at the dispute and decide it or certify it to the NLRC for
time of assumption, all striking or lockout employees shall
compulsory arbitration (Art. 263[g], Labor Code). This
immediately return to work and the employer shall
extraordinary authority given to the Secretary of Labor is
immediately resume operations and re-admit all workers aimed at arriving at a peaceful and speedy solution to
under the same terms and conditions prevailing before the
labor disputes, without jeopardizing national interests
strike or lockout. The Secretary of Labor and Employment (Steel Corporation v. SCP Employees Union, 551 SCRA 594
may seek the assistance of law enforcement agencies to
[2008]). Such assumption shall have the effect of
ensure compliance with this provision as well as with such
automatically enjoining an impending strike or lockout, or
orders as he may issue to enforce the same. The mere an order directing immediate return to work and resume
issuance of an assumption order by the Secretary of Labor
operations, if a strike already took place, and for the
automatically carries with it a return-to-work order, even employer to re-admit all employees under the same terms
if the directive to return to work is not expressly stated in
and conditions prevailing before the strike or lockout [Art.
the assumption order. Those who violate the foregoing
263(g), Labor Code; Sec. 15, Rule XXII, Dept. Order No. 40-G-
shall be subject to disciplinary action or even criminal 03]
prosecution. Under Art. 264 of the Labor Code, no strike or
lockout shall be declared after the assumption of
b. Under the same set of facts the Secretary instead
jurisdiction by the Secretary.
issued an Order directing all striking workers to
return to work within 24 hours, except those who
Q: Savoy Department Store (SDS) adopted a policy of
were terminated due to redundancy. Was the
hiring salesladies on five-month cycles. At the end of a
Order legal? Explain. (2010 Bar)
salesladys five-month term, another person is hired
as replacement. Salesladies attend to store customers,
A: No. The Secretary of Labors order will be inconsistent
wear SDS uniforms, report at specified hours, and are
with the established policy of the State of enjoining the
subject to SDS workplace rules and regulations. Those parties from performing acts that undermine the
who refuse the 5-month employment contract are not
underlying principles embodied in Article 263(g) of the
hired.
Labor Code.
The day after the expiration of her 5-month
engagement, Lina wore her SDS white and blue In this case, excepting the employees terminated due to
uniform and reported for work but was denied entry redundancy from those who are required to return- to-
into the store premises. Agitated, she went on a hunger work, which was the very labor dispute that sparked the
strike and stationed herself in front of one of the gates union to strike, the Secretary of Labor comes short of his
of SDS. Soon thereafter, other employees whose 5- duty under Article 263(g) to maintain status quo or the
month term had also elapsed joined Linas hunger terms and conditions prevailing before the strike. In fact,
strike. the Secretary could be accused of disposing of the parties
labor dispute without the benefit of a hearing, in clear
The owner of SDS considered the hunger strike staged derogation of due process of law.
by Lina, et al., an eyesore and disruptive of SDS
business. He wrote the Secretary of Labor a letter
asking him to assume jurisdiction over the dispute and
enjoin the hunger strike. What answer will you give if Jurisdiction and Remedies
you were the Secretary of Labor? (2008 Bar)

A: I will deny the letter-request of SDS because its business LABOR ARBITER
is not indispensable to the national interest. Although the
Secretary of Labor has a wide latitude of discretion in Jurisdiction (2015, 2014, 2008, 2001, 1995, 1991, 1990
deciding whether or not to assume jurisdiction over a labor Bar)
dispute or certify the same to the NLRC for compulsory
arbitration, SDSs business is clearly not one which is

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46
QUAMTO (1987-2016)
Q: Lincoln was in the business of trading broadcast After one year, the business is so successful that they
equipment used by television and radio networks. He were able to declare dividends. Mario is so happy with
employed Lionel as his agent. Subsequently, Lincoln set Carlo's work that he assigns 100 shares of stock to Carlo
up Liberty Communications to formally engage in the as part of the latter's bonus.
same business. He requested Lionel to be one of the
incorporators and assigned to him 100 Liberty shares. Much later on, it is discovered that Carlo had engaged
Lionel was also given the title Assistant Vice-President in unethical conduct which caused embarrassment to
for Sales and Head of Technical Coordination. After the company. Mario is forced to terminate Carlo but he
several months, there were allegations that Lionel was does so without giving Carlo the opportunity to explain.
engaged in under the table dealings and received Carlo filed a case against Mario and the company for
confidential commissions from Libertys clients and illegal dismissal. Mario objected on the ground that the
suppliers. He was, therefore, charged with serious Labor Arbiter had no jurisdiction over the case as it
misconduct and willful breach of trust, and was given would properly be considered as an intracorporate
48 hours to present his explanation on the charges. controversy cognizable by the RTC. Further, Mario
Lionel was unable to comply with the 48-hour deadline claimed that because Carlo's dismissal was a corporate
and was subsequently barred from entering company act, he cannot be held personally liable.
premises. Lionel then filed a complaint with the Labor
Arbiter claiming constructive dismissal. Among others, a. As the Labor Arbiter assigned to this case, how would
the company sought the dismissal of the complaint you resolve the jurisdiction question.
alleging that the case involved an intra-corporate
controversy which was within the jurisdiction of the A: The Labor Arbiter has jurisdiction over Carlos illegal
Regional Trial Court (RTC). If you were the Labor dismissal complaint as he was hired by Mario on a salary
Arbiter assigned to the case, how would you rule on the and commission basis. In Grepalife v. Judico (G.R. No. 73887,
companys motion to dismiss? (2014 Bar) December 21, 1989) it was held that a worker who is paid on
a salary plus commission basis is an employee. While
A: I will deny the motion to dismiss. "Corporate officers" in regular courts have jurisdiction over Marios corporate act
the context of Presidential Decree No. 902-A are those of severing ties with Carlo, the Labor Arbiter, pursuant to
officers of the corporation who are given that character by Art. 217 A-(2) of the Labor Code, has jurisdiction over
the Corporation Code or by the corporation's by-laws. Carlos illegal dismissal complaint.
Section 25 of the Corporation Code enumerates three
specific officers that in law are considered as corporate ALTERNATIVE ANSWER:
officers the president, secretary and the treasurer. Lincoln
is not one of them. There is likewise no showing that his Carlo is party to a joint-venture. Hence, he is not related to
position as Assistant Vice-President is a corporate officer in Mario as an employee. As a business organization, the
the company's by-laws. The Labor Arbiter therefore, has affairs of that joint-venture are not governed by Labor Law,
jurisdiction over the case. [Art. 217 (a) (2), Labor Code] except in relation to its employees. Any issue arising from
that affair, therefore, must be brought to the RTC. Thus, the
Q: Company A and Union B had a 3-year CBA that NLRC has no jurisdiction because the matter did not arise
expired on June 12, 1990. Negotiations proved futile so from employer-employee relationship and the issue
the unresolved issues were referred to an Arbiter who between the disputants is not resolvable solely through the
rendered a decision on March 15, 1992 retroactive to application of Labor Law.
December 14, 1990. Is the Arbiter's decision providing
for retroactivity tenable or not? Why? (2001 Bar) b. What is the rule on personal liability of corporate
officers for a corporate act declared to be unlawful?
A: The referral of the unresolved issues of the collective (2015 Bar)
bargaining negotiations to an Arbiter is not within the
jurisdiction of the Arbiter. But assuming that the A: Corporate officers are not, as a general rule, personally
unresolved issues in the collective bargaining negotiations liable for the corporate acts they performed in behalf of the
were properly referred to the Arbiter pursuant to the corporation they represent. They are, however, personally
provision of the Labor Code (Art. 262) that states that a liable for their corporate acts if they acted with malice or
Voluntary Arbitrator may hear and decide any labor dispute, bad faith (Girly Ico v. Systems Technology Institute, Inc., G.R.
including bargaining deadlocks, the Arbiter's decision No. 185100, July 9, 2014).
providing for retroactivity is tenable. Exercising his
compulsory arbitration power, the Arbiter could decide the NATIONAL LABOR RELATIONS COMMISSION (NLRC)
issue of retroactivity in any way which is not contrary to law,
morals, good customs, public order or public policy. But in Jurisdiction (2015, 2001, 1997, 1996, 1995 Bar)
the case Manila Electric Co vs. Secretary of Labor Leonardo
Quisumbing (G.R. No. 127598, February 22, 2000), the Q: Philippine News Network (PNN) engages the services
Supreme Court said that an arbitral award shall retroact to of Anya, a prominent news anchor from a rival station,
the first day after the six-month period following the National News Network (NNN). NNN objects to the
expiration of the last day of the CBA that was being re- transfer of Anya claiming that she is barred from
negotiated. working in a competing company for a period of three
years from the expiration of her contract. Anya
Q: Mario comes from a family of coffee bean growers. proceeds to sign with PNN which then asks her to
Deciding to incorporate his fledgling coffee venture, he anchor their nightly newscast. NNN sues Anya and PNN
invites his best friend, Carlo, to join him. Carlo is before the National Labor Relations Commission
hesitant because he does not have money to invest but (NLRC), asking for a labor injunction. Anya and PNN
Mario suggests a scheme where Carlo can be the Chief object claiming that it is a matter cognizable by a
Marketing Agent of the company, earning a salary and regular court and not the NLRC.
commissions. Carlo agrees and the venture is formed.

47
Labor Law and Social Legislation

a. Is NNN's remedy correct? Why or why not? forthwith may cause grave or irreparable damage
to any party;
A: The NLRC has no jurisdiction. As to PNN, there is no c. Injunction in strikes or lockouts under Art. 264 of
employer-employee relationship between itself and NNN; the Labor Code;
hence, the NLRC cannot hear and resolve their dispute d. Contempt cases;
(Reasonable Causal Connection Rule). As to Anya, the e. Claims arising out of an employer employee
injunctive power of the NLRC is ancillary in nature; hence, relationship or by virtue of any law or contract
it requires a principal case, which is absent. Besides, the involving Filipino workers for overseas
dispute between her and PNN is not resolvable solely deployment including claims for actual, moral,
through the application of Labor Code, other labor statutes, exemplary and other forms of damage.
CBA or employment contract. (Reference to Labor Law
Rule) 2. Exclusive Appellate Jurisdiction
a. All cases decided by the Labor Arbiters [Sec.
b. What are the grounds for a labor injunction to 217(b), Labor Code]
issue? b. Cases decided by the Regional Offices of DOLE in
the exercise of its adjudicatory function. (Art. 129,
A: The NLRC may issue an injunctive writ to enjoin an illegal Labor Code)
activity under Art. 264 (old) of the Labor Code; as an
ancillary remedy to avoid irreparable injury to the rights of BUREAU OF LABOR RELATIONS (BLR)
a party in an ordinary labor dispute pursuant to Rule X,
2011 NLRC Rules of Procedure, as amended; and to correct Jurisdiction (2001, 1998, 1996 Bar)
the Labor Arbiters grave abuse of discretion pursuant to
Rule XII of the 2011 NLRC Rules of Procedure, as amended. Q: Can the Bureau of Labor Relations certify a union as
Moreover, for labor injunction to issue, it must be proven the exclusive bargaining representative after showing
under Art. 218(e) Labor Code: proof of majority representation thru union
membership cards without conducting an election?
a. That the prohibited or unlawful acts have been (1998 Bar)
threatened and will be committed and will be
continued unless restrained; A: The Bureau of Labor Relations cannot certify a union as
b. That substantial and irreparable injury to the the exclusive collective bargaining representative after
complainants property will follow; showing of proof of majority representation thru union
c. That greater injury will be inflicted upon complainant membership cards without conducting a certification
by the denial of relief than will be inflicted upon election. The Labor Code (in Arts. 256, 257 and 258)
defendants by the granting of relief; provides only for a certification election as the mode for
d. That complainant has no adequate remedy at law; and determining the exclusive collective bargaining
e. That public officers charged with the duty to protect representative if there is a question of representation in an
complainants property are unable or unwilling to appropriate bargaining unit.
furnish adequate protection.
Q: Some disgruntled members of Bantay Labor Union
c. Distinguish the jurisdiction of a Labor Arbiter from filed with the Regional Office of the DOLE a written
that of the NLRC. (2015 Bar) complaint against their union officers for
mismanagement of union funds. The Regional Director
A: As to jurisdiction, the Labor Arbiter can hear and resolve did not rule in the complainants' favor. Not satisfied,
cases under Art. 217 (old) of the Labor Code, money claims the complainants elevated the Regional Director's
under Sec. 7 of R.A. 10022; and referred wage distortion decision to the NLRC. The union officers moved to
disputes in unorganized establishments, as well as the dismiss on the ground of lack of Jurisdiction. Are the
enforcement of compromise agreements pursuant to the union officers correct? Why? (2001 Bar).
2011 NLRC Rules of Procedure, as amended. On the other
hand, the NLRC reviews decisions rendered by the LA; A: Yes. NLRC has no jurisdiction over the appealed ruling
decisions or orders rendered by the RD under Art. 129 of since the appellate authority over decisions of the Regional
the Labor Code; and conducts compulsory arbitration in director involving examination of union accounts is
certified cases. expressly conferred upon the Bureau of Labor Relations of
DOLE by the Rule of Procedure on Mediation Arbitration.
As to the power to issue a labor injunction, the NLRC can (Barles vs. Bitonio, G.R. No. 120270, June 16, 1999).
issue an injunctive writ. On the other hand, the Labor
Arbiter cannot issue an injunctive writ. DOLE REGIONAL DIRECTORS (2009, 2008, 1996 BAR)

Recovery/Adjudicatory power
Q: What is the jurisdiction of the National Labor
Relations Commission? (1995 Bar) Q: Savoy Department Store (SDS) adopted a policy of
hiring salesladies on five-month cycles. At the end of a
A: salesladys five-month term, another person is hired as
1. Exclusive Original Jurisdiction: replacement. Salesladies attend to store customers,
a. Certified labor disputes causing or likely to cause a wear SDS uniforms, report at specified hours, and are
strike or lockout in an industry indispensable to subject to SDS workplace rules and regulations. Those
national interest, certified to it by the Secretary of who refuse the 5-month employment contract are not
Labor or the President for compulsory arbitration; hired.
b. Injunction in ordinary labor disputes to enjoin or
restrain any actual or threatened commission of The day after the expiration of her 5-month
any or all prohibited or unlawful acts or to require engagement, Lina wore her SDS white and blue uniform
the performance of a particular act in any labor and reported for work but was denied entry into the
dispute which, if not restrained or performed store premises. Agitated, she went on a hunger strike

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48
QUAMTO (1987-2016)
and stationed herself in front of one of the gates of SDS. others. On the basis of the complaint, the DOLE
Soon thereafter, other employees whose 5-month term conducted a plant level inspection.
had also elapsed joined Linas hunger strike.
The DOLE Regional Director issued an order ruling that
Assume that no fixed-term worker complained, yet in a Inggo is an employee of DJN Radio, and that Inggo is
routine inspection a labor inspector of the Regional entitled to his monetary claims in the total amount of
Office of the DOLE found the 5-month term policy of P30, 000.00. DJN Radio elevated the case to the
SDS violative of the Labor Codes security of tenure Secretary of Labor who affirmed the order. The case
provisions and recommended to the Regional Director was brought to the Court of Appeals. The radio station
the issuance of a compliance order. The Regional contended that there is no employer-employee
Director adopted the recommendation and issued a relationship because it was the drama directors and
compliance order. Is the compliance order valid? producers who paid, supervised, and disciplined him.
Explain your answer. (2008 Bar) Moreover, it argued that the case falls under the
jurisdiction of the NLRC and not the DOLE because
A: No, the Compliance Order is not valid. The Regional Inggos claim exceeded P5, 000.00
Director only exercises both visitorial and enforcement
powers over labor standard cases, and empowered to a. May the DOLE make a prima facie determination of
adjudicate uncontested money claims of persons still the existence of an employer-employee
employed. The Regional Director has no jurisdiction to rule relationship in the exercise of its visitorial and
on SDS 5-month term policy. enforcement powers?

Q: AB, a non-resident American, seeks entry to the A: Yes. Pursuant to Art. 128(b) of the Labor Code, the DOLE
country to work as Vice-President of a local may do so where the prima facie determination of
telecommunications company. You are with the employer-employee relationship is for the exclusive
Department of Labor and Employment (DOLE). What purpose of securing compliance with labor standards
permit, if any, can the DOLE issue so that AB can assume provisions of said Code and other labor legislation.
as Vice-President in the telecommunications company?
Discuss fully. (1995, 2007 Bar) The DOLE, in the exercise of its visitorial and enforcement
powers, somehow has to make a determination of the
A: Art. 40 of the Labor Code states that Any alien seeking existence of an employer-employee relationship. Such
admission to the Philippines for employment purposes and determination, however, cannot be co-extensive with the
any domestic or foreign employer who desires to engage an visitorial and enforcement power itself. Indeed, such
alien for employment in the Philippines shall obtain an determination is merely preliminary, incidental and
employment permit from the Department of Labor. The collateral to the DOLEs primary function of enforcing labor
employment permit may be issued to a nonresident alien or standards provisions. (Peoples Broadcasting Bombo Radyo
to the applicant employer after a determination of the non- Phils., Inc. v. Secretary of Labor, G.R. No. 179652, May 8, 2009)
availability of a person in the Philippines who is competent,
able and willing at the time of application to perform the b. If the DOLE finds that there is an employee-
services for which the alien is desired. Thus, AB should be employer relationship, does the case fall under the
issued the abovementioned employment permit so that AB jurisdiction of the Labor Arbiter considering that
can assume as Vice President of the Telecommunication the claim of Inggo is more than P5, 000.00. Explain.
Company. (2016 Bar)

DOLE SECRETARY A: No. As held in the case of Meteoro v. Creative Creatures,


Inc., G.R. No. 171275, July 13, 2009, the visitorial and
Visitorial and enforcement powers (2016, 2008, 2001, enforcement powers of the Secretary, exercised through his
1999 Bar) representatives, encompass compliance with all labor
standards laws and other labor legislation, regardless of the
Q: Under what conditions may the Secretary of Labor or amount of the claims filed by workers; thus, even claims
his duly authorized representative inquire into the exceeding P5, 000.00
financial activities or legitimate labor organizations?
(2001 Bar). VOLUNTARY ARBITRATOR

A: The Labor Code authorizes the Secretary of Labor and Jurisdiction (2010, 2005, 1997, 1995 Bar)
Employment or his duly authorized representative to
Q: State the cases when a labor dispute would fall
inquire into the financial activities of any labor organization
under the jurisdiction of voluntary arbitrators or
on the basis of a complaint under oath, supported by 20%
panel of voluntary arbitrators. (1997 Bar)
of the membership in order to determine compliance or
noncompliance with the law and to aid in the prosecution of A: A labor dispute falls under the jurisdiction of a volun-
any violation thereof. (Art. 274, Labor Code) tary arbitrator or a panel of voluntary arbitrator if a
labor disputes arises from an unresolved grievance
Q: Inggo is a dram talent hired on a per drama which in turn arises from the Interpretation or
participation basis by DJN Radio Company. He implementation of a Collective Bargaining Agreement or
worked from 8:00am until 5:00pm, six days a week, on of company personnel policies. (Art. 261)
a gross rate of P80.00 per script, earning an average of
P20, 000.00 per month. Inggo filed a complaint before Upon agreement of parties, a voluntary arbitrator or
the Department of Labor and Employment (DOLE) panel of voluntary arbitrators may also hear and decide
against DJN Radio for illegal deduction, non-payment of all other labor disputes including unfair labor practices
service incentive leave, and 13 th month pay, among and bargaining deadlock. (Art. 262)

49
Labor Law and Social Legislation

Q: Company C, a toy manufacturer, decided to ban the fifth and the last step of the grievance machinery.
use of cell phones in the factory premises. In the
pertinent Memorandum, management explained that A filed an action for illegal dismissal with the
too much texting and phone-calling by employees Arbitration Branch of the NLRC on November 25, 1983.
disrupted company operations. Two employees- The Company immediately filed a Motion to Dismiss on
members of Union X were terminated from the ground of prescription, invoking Article 290 of the
employment due to violation of the memorandum- Labor Code. If you were the Labor Arbiter, how would
policy. The union countered with a prohibitory you resolve the Companys Motion to Dismiss? (1994
injunction case (with prayer for the issuance of a Bar)
temporary restraining order) filed with the Regional
Trial Court, challenging the validity and A: As the Labor Arbiter. I will deny the Motion to Dismiss.
constitutionality of the cell phone ban. The company Where an employee was dismissed and the matter of his
filed a motion to dismiss, arguing that the case should dismissal was then referred to the grievance machinery
be referred to the grievance machinery pursuant to an pursuant to the provision in the existing collective
existing Collective Bargaining Agreement with Union X, bargaining agreement, and the grievance machinery had a
and eventually to Voluntary Arbitration. Is the final meeting after quite a long while thereafter, the
company correct? Explain. (2010 Bar) complaint for illegal dismissal was then filed, the action
was not barred by laches, as the pendency of the matter
A: Yes. Termination cases arising in or resulting from the before the grievance machinery affected the ripeness of the
interpretation and implementation of collective bargaining cause of action for illegal dismissal. [Radio Communications
agreements, and interpretation and enforcement of of the Philippines, Inc. (RCPI), v. National Labor Relations
company personnel policies which were initially processed Commission, et al. G.R No. 102958. 25 June 1993]
at the various steps of the plant-level Grievance Procedures
under the parties collective bargaining agreements, fall Alternative Answer:
within the original and exclusive jurisdiction of the
voluntary arbitrator pursuant to Article 217 (c) and Article If I were the Labor Arbiter, I will deny the motion to dismiss
261 of the Labor Code. because the action for illegal dismissal has not yet
prescribed. The prescriptive period for an action for illegal
PRESCRIPTION OF ACTIONS dismissal is four (4) years. (Callanta vs. Carnation, 145 SCRA
268)
Money claims (2013, 2010 Bar)
Q: The general manager of Junk Food Manufacturing
Q: A driver for a bus company, sued his employer for Corporation dismissed Andrew Tan, a rank-and-file
non-payment of commutable service incentive leave employee on the ground of insubordination. The
credits upon his resignation after five years of general manager served on Andrew Tan the letter of
employment. The bus company argued that A was not termination effective upon receipt which was on 08
entitled to service incentive leave since he was March 1992. Shocked by his unexpected dismissal.
considered a field personnel and was paid on Andrew Tan confronted the general manager and hit
commission basis and that, in any event, his claim had the latter on the head with a leap pipe.
prescribed. If you were the Labor Arbiter, how would
you rule? Explain. (2010 Bar) Junk Food Manufacturing filed a complaint in court
against Andrew Tan for less serious physical injuries.
A: The money claim as cause of action has prescribed Somehow, Andrew Tan was acquitted by the court
because the claim was filed after five (5) years from date of assigned to hear the criminal case. A few days following
negotiation. Art. 291 of the Labor Code provides that all his acquittal, or on 01 March 1996, Andrew Tan filed
money claims arising from employer-employee relations complaint against the company for illegal dismissal,
occurring during the effectivity of the Code shall be filed reinstatement and the payment of backwages and
within three (3) years from that time the cause of action has damages. Was the complaint filed by Andrew Tan for
accrued, otherwise, they shall be forever barred. illegal dismissal within the reglementary period
granted by law? (1997 Bar)
Q: Chito was illegally dismissed by DEF Corp. effective
A: Yes. The complaint was filed within four (4) years from
at the close of business hours of December 29, 2009. If
the date Andrew Tan was dismissed by his employer. Illegal
he has money claims against DEF Corp., he can make the
dismissal, as a cause of action, prescribes after four (4)
claim without any legal bar within _________. (2013 Bar)
years from the time the cause of action, namely, illegal
dismissal took place. This is pursuant to the Civil Code
A: three (3) years. [Basis: Article 297 (formerly 291) of the which provides that actions upon an injury to the rights of a
Labor Code] person should be initiated within four years from the time
the right of the action accrues. (Art. 1146 of the Civil Code)
Illegal dismissal (2002, 1997, 1994, 1991 Bar)
Q: State your agreement or disagreement with the
Q: On October 30, 1980, A, an employee, was served following statement and explain your answer briefly: A
notice of dismissal allegedly for gross dishonesty. criminal case filed against an employee does not have
Forthwith, the Union to which A was a member raised the effect of suspending or interrupting the running of
As dismissal with the grievance machinery as provided
the prescriptive period for the filing of an action for
for in its Collective Bargaining Agreement (CBA). At illegal dismissal. (2002 Bar)
that point, negotiations for a new CBA was in progress.
Hence, both the Union and the Company had very little A. I agree. The two (2) cases, namely: the criminal case
time to address As grievance. In fact, said grievance, as where the employee is the accused; and the case for illegal
it were, slept the sleep of the dead, being resolved only dismissal, where the employee would be the complainant,
with finality on November 23, 1983 when the General are two (2) separate and independent actions governed by
Manager of the Company affirmed As dismissal on the different rules, venues, and procedures. The criminal case is

UST BAR OPERATIONS


50
QUAMTO (1987-2016)
within the jurisdiction of the regular courts of law and
governed by the rules of procedure in criminal cases. The
action for the administrative aspect of illegal dismissal
would be filed with the NLRC and governed by the
procedural rules of the Labor Code.

51