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— BAR EXAM SUGGESTED ANSWERS —

2017 Labor Law Bar Q&A

AUGUST 31, 2018

2017 Labor Law Bar Questions and Answers

I

A.

What are the accepted tests to determine the existence of an employer-employee relationship? (5%)

SUGGESTED ANSWER:

The accepted tests to determine the existence of an employer-employee relationship are the four-fold
test and the economic reality test.

The four-fold test requires the following requisites:

(a) the power to hire employees;

(b) the power of dismissal;

(c) payment of wages;

(d) power to control employee’s conduct, which is the most important requisite.

The economic reality test examines the economic realities prevailing within the activity or between the
parties, taking into consideration the totality of circumstances surrounding the true nature of the
relationship between the parties.

B.

Applying the tests to determine the existence of an employer-employee relationship, is a jeepney driver
operating under the boundary system an employee of his jeepney operator or a mere lessee of the
jeepney? Explain your answer. (3%)

SUGGESTED ANSWER:

The jeepney driver operating under the boundary system is an employee of the jeepney operator.

Applying the four-fold test:

(a) the jeepney operator has the power to choose the jeepney drivers who can drive his vehicles;

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shall be resolved in favor of labor – applied only when the doubt involved the “implementation and interpretation” of the Labor Code. and (d) most importantly. III. (3%) SUGGESTED ANSWER: No. (c) the jeepney driver’s wage is the excess of the boundary. therefore. the jeepney operator exercises control over the jeepney driver. Adjudication of labor disputes. hence. The jeepney driver operating under the boundary system is an employee of the jeepney operator. Feliciano claimed from AMA and Invictus Shipping the payment of his salaries and benefits for the unserved portion of the contract. Procopio was dismissed from employment for stealing his co-employee Raul’s watch. Applying the economic reality test. Upon his repatriation following his premature termination. Was the reversal correct? Explain your answer. since the owner must see to it that the driver follows the route prescribed under the certificate of public convenience. On appeal. Consequently. its foreign principal. the jeepney driver is dependent solely on his income from driving the jeepney operator’s vehicle. including the implementing rules and regulations. is subsumed in the implementation of the Labor Code. Meantime. and. AMA denied liability on the 2 . not the Labor Code. which involved the application of the rules on evidence. which includes appreciation of evidence. II. the NLRC reversed the ruling because Article 4 of the Labor Code – which states that all doubts in the interpretation and implementation of the provisions of the Labor Code. the reversal was not correct. could not necessarily be resolved in favor of Procopio. Andrew Manning Agency (AMA) recruited Feliciano for employment by Invictus Shipping. the doubt should be resolved in favor of Procopio. the doubt. A. any doubt with respect to evidence should also be resolved in favor of labor. The Labor Arbiter ruled in Procopio’s favor on the ground that Raul’s testimony was doubtful. Procopio filed a complaint for illegal dismissal.(b) the jeep operator has the power to dismiss the jeepney driver by refusing to let the latter drive. AMA and Invictus Shipping terminated their agency agreement. Hence. the NLRC’s reversal due to its erroneous interpretation of Article 4 of the Labor Code was not correct.

What are the exceptions? Explain your answer. AMA recruited Feliciano for employment by Invictus Shipping. even if AMA and Invictus had already terminated their agency contract. amendment or modification made locally or in a foreign country.ground that it no longer had an agency agreement with Invictus Shipping. Is AMA correct? Explain your answer. noticing that Phil was a foreigner. AMA remains solidary liable with Invictus for any breach of the Feliciano’s employment contract. (2. a resident alien.5%) SUGGESTED ANSWER: The exceptions to the prohibition on direct hiring of migrant workers are: (a) Those hired by international organizations. (b) Those hired by members of the diplomatic corps.5%) 3 . The employer. As a rule. demanded that he first secures an employment permit from the DOLE. the solidary liability of the principal and the recruitment agency exists for the whole duration of the employment contract and shall not be affected by any substitution. B. Is the employer correct? Explain your answer. (2. Phil. Under Section 10 of RA No. and (c) Name hires or workers who are able to secure overseas employment opportunity with an employer without the assistance or participation of any agency. Here. C. 8042. direct hiring of migrant workers is not allowed. sought employment in the Philippines. Hence. (3%) SUGGESTED ANSWER: AMA is not correct.

Under the Labor Code. (a) Is the wage order subject to the approval of the National Wages and Productivity Commission before it takes effect? (2%) SUGGESTED ANSWER: No. the employer is not correct. the NWPC only exercises technical and administrative supervision over the RTWPB. Under what circumstances may the Kilusang Walang Takot. Only non-resident aliens who are seeking employment in the Philippines are required to secure first an Alien Employment Permit. Hence. the employer is not correct in demanding that Phil first secure an employment permit from the DOLE. a federation of labor organizations that publicly and openly assails the wage order as blatantly unjust. Phil is a resident alien. initiate the review of the wage increases under the wage order without waiting for the end of the 12-month period? Explain your answer.SUGGESTED ANSWER: No. The Regional Tripartite Wages and Productivity Board (RTWPB) for Region 3 issued a wage order on November 2. (b) The law mandates that no petition for wage increase shall be entertained within a period of 12 months from the effectivity of the wage order. who is exempted from Alien Employment Permit requirement. the wage order is not subject to the approval of the National Wages and Productivity Commission (NWPC) before it takes effect. Here. 4 . IV. 2017 fixing the minimum wages for all industries throughout Region 3. (3%) SUGGESTED ANSWER: Kilusang Walang Takot may initiate the review of wage order without waiting for the end of the 12-month period when there are supervening conditions that demand a review of the minimum wage rates.

whereas an apprentice works for not less than 3 months but not more than 6 months. whereas there is no such possibility. whereas an apprentice trains in a highly technical job. stand-by for emergency work during his meal break. (3%) SUGGESTED ANSWER: Yes. a learner trains in a semi-skilled job. he is correct to demand overtime for work done during his meal periods. Meal break is compensable when the employees are required to stand by for emergency work and is considered overtime work. V. During emergencies.These supervening conditions include: (i) extraordinary increase in prices of petroleum products. Is Percival correct? Explain your answer. (c) As to possibility of regular employment. during meal breaks. he was required to be on stand-by for emergency work. learners become regular employees after the period for learnership. and (ii) extraordinary increase in the cost of basic goods and services. Distinguish a learner from an apprentice. Percival is required to be on. (b) As to period. Percival is correct. He enjoyed a meal break of one hour. Here. He demanded payment of overtime for work done during his meal periods. However. (4%) SUGGESTED ANSWER: The distinctions between a learner and an apprentice are as follows: (a) As to nature. Percival was a mechanic of Pacific Airlines. a learner works for 3 months. A. B. Hence. 5 . he was made to forego his meals or to hurry up eating.

househelpers have security of tenure.(d) As to requirement of TESDA approval. learnership does not require TESDA approval. A. a learner must be compensated. whereas homeworkers work in their own homes. whereas homeworkers are covered by Book III of the Labor Code. househelpers are covered by the Kasambahay Law. C.5%) SUGGESTED ANSWER: No. the policy is not valid. househelpers work in their employers’ homes. (d) As to compensation. 6 . (4%) SUGGESTED ANSWER: As to persons included. As to existence of definite employers. As to place of work. whereas homeworkers include those who work in a system of production under an employer or contractor whose job is carried out at his or her home. (e) As to deductibility of expenses. (2. househelpers work for a definite employer. whereas homeworkers have none. As to applicable law. Is the policy valid? Explain your answer. VI. whereas an apprentice may be uncompensated. and considered as automatically resigned the flight attendants at the moment they got married. Are there differences between a househelper and a homeworker? Explain your answer. a learner’s expenses are not deductible. whereas homeworkers have none. whereas no such requirement exists for apprenticeship. as when apprenticeship is part of OJT required by schools. As to security of tenure. whereas an apprentice’s training expenses are deductible from income tax. househel include those who minister exclusively to the personal comfort and enjoyment of the employer’s family. if DOLE authorizes such. One of Pacific Airline’s policies was to hire only single applicants as flight attendants.

who was their employer.000. which. only wages. Tarcisio is not correct. would provide the clinic premises and medical supplies. in turn. Here. AB Hotel and Resort issued directives giving instructions to him on the replenishment of emergency kits and forbidding the clinic staff from receiving cash payments from the guests. Pacific Airline’s policy is not valid. are exempt from garnishment. Here. but the latter refused on the ground that Dr. Dr. Hence. He received a monthly retainer fee of ₱60. Tarcisio was employed as operations manager and received a monthly salary of ₱25. In time. and moved to garnish Tarcisio’s payroll account. SSS contributions and other benefits he undertook to pay. which are the compensation paid for manual skilled or unskilled labor.000. He obtained a loan from Roberto to purchase a car. plus a 70% share in the service charges from AB Hotel and Resort’s guests availing themselves of the clinic’s services. which is not considered as wages. VII. B. (3%) SUGGESTED ANSWER: No. Tarcisio failed to pay Roberto when the loan fell due. Under Article 1708 of the Civil Code.Under the Labor Code. the subject of garnishment is Tarcisio’s salary as a managerial employee. Crisostomo entered into a retainer agreement with AB Hotel and Resort whereby he would provide medical services to the guests and employees of AB Hoteland Resort. whose salaries. Roberto sued to collect.00. Crisostomo. the nurses and the clinic staff claimed entitlement to rights as regular employees of AB Hoteland Resort. Pacific Airline’s policy of automatic resignation of the flight attendants at the moment of marriage is a stipulation against marriage. was an independent contractor. Tarcisio’s salary may be garnished. The clinic employed nurses and allied staff. (4%) 7 . with reasons. Is Tarcisio correct? Explain your answer.00 through his payroll account with DB Bank. Rule. stipulations against marriage are not allowed. Hence. The latter vigorously objected and argued that salaries were exempt from garnishment.

he was re-hired. Here. Here. 8 . which is the most important requirement. Dr.SUGGESTED ANSWER 1: I will rule in favor of the employees. VIII. Seafarers are contractual employees for a fixed term and cannot attain regular status. AB Hoteland Resort exercises the power to control by requiring replenishment of emergency kits and forbidding the clinic staff from receiving cash payments from the guests. As the doctor. dismiss. namely. Hence. Here. Crisostomo pays the medical staff their wages. Crisostomo is the employer of the medical staff. He was hired a third time after another nine months. he also has control over the employees in performing their medical duties. An employer-employee relationship exists when the four-fold test is satisfied. Hence. He now claims entitlement to the benefits of a regular employee based on his having performed tasks usually necessary and desirable to the employer’s business for a continuous period of more than one year. AB Hoteland Resort is correct in arguing that Dr. After nine months. the party with the power to control is considered the employer of the contracted employees. Is Marciano’s claim tenable? Explain your answer. the employees are correct in arguing that they are regular employees of AB Hoteland Resort. SUGGESTED ANSWER 2: I will rule in favor of AB Hoteland Resort. (3%) SUGGESTED ANSWER: No. and control. pay wages. the power to hire. Marciano is a considered a seafarer since he is hired as Chief Engineer on board a vessel. Marciano’s claim is not tenable. His contract of employment was for nine months. In labor contracting. Marciano was hired as Chief Engineer on board the vessel MN Australia.

Rank-and-file employees includes those which do not fall under the classification of managerial or supervisory employees. IX. and rank-and-file. (2. Supervisory are allowed to organize and form unions. lay-off. X. Section 255 (245) of the Labor Code recognizes three categories of employees. (a) Give the characteristics of each category of employees. Applying the doctrine of necessary implication. supervisory. and state whether the employees in each category may organize and form unions. and who act in a confidential capacity or have access to confidential matters being handled by persons exercising managerial functions in the field of labor relations form. or join labor unions? Explain your answer. assign or discipline employees. (5%) SUGGESTED ANSWER: Managerial employees is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire. confidential employees to managerial employees may not form. Managerial employees cannot organize and form labor unions since their managerial duties present a conflict of interest with that of a union member or officer. or assist. Explain your answer. The policy of the law is not to place confidential employees in a position involving a conflict of interest because of their access to matters handled by managerial employees whom they assist. recall. (b) May confidential employees who assist managerial employees. confidential employees are also covered by the prohibition on joining or forming unions imposed on managerial employees. Supervisory employees are those who. discharge. 9 . effectively recommend such managerial actions if the exercise of such functions is not merely routinary or clerical in nature but requires the use of independent judgment.5%) SUGGESTED ANSWER: No. namely: managerial. assist or join labor unions. Marciano’s claim that he is a regular employee is not tenable.Hence. A. Rank-and-file employees are allowed to organize and form unions. in the interest of the employer. transfer.

and has substantial capital or investment. or when the contractor has insufficient capital and performs activities directly related to the business of the principal. There is labor-only contracting when the principal retains the power to control the contracted employees. Explain your answers. and is solidarily liable with the contractor for the wages and other benefits of the contracted employees. What are the grounds for validly terminating the services of an employee based on a just cause? (5%) Under Article 296 of the Labor Code.The labor sector has been loudly agitating for the end of labor-only contracting. (d) commission of a crime or offense against the person of the employer. and give the effect of a finding that one is a labor-only contractor. (4%) SUGGESTED ANSWER: There is job contracting if a contractor carries on a distinct and independent business free from the control of the principal in all matters except as to the results thereof. and (e) any analogous causes. the following are just causes for terminating the services of an employee: (a) serious misconduct or willful disobedience in connection with employee’s work. (b) gross and habitual negligence by the employee of his duties. his immediate family. B. C. 10 . as distinguished from job contracting. A finding that there is labor-only contracting makes the principal the direct employer of the contracted employees. or his duly authorized representative. (c) fraud or willful breach of turst by the employee. Explain these two kinds of labor contracting.

(2. He also argued that his position was not listed as among the corporate offices in Mercedes Corporation’s by-laws. determine the exclusive bargaining agent through secret ballot. (a) Request for SEBA recognition is the process of certifying a labor union as the exclusive bargaining agent when there is only one legitimate labor union in an unorganized establishment. (b) Certification election is the process by which an employer or the employees file a petition with the med-arbiter to determine the exclusive bargaining agent through secret ballot. Marcel countered that he had only been removed as Vice President for Finance and Administration. voluntarily by agreement. Marcel was the Vice President for Finance and Administration and a member of the Board of Directors of Mercedes Corporation.5%) 11 . (4%) SUGGESTED ANSWER: NOTE: Voluntary recognition has been repealed by DO 40-I-15. which moved to dismiss the complaint on the ground that the complaint pertained to the jurisdiction of the RTC due to the controversy being intra-corporate based on his positions in the corporation. Is the argument of Marcel correct? Explain your answer. a notice should be served on the employee indicating the termination of his services. A. series of 2015. (c) Consent election is the process by which the employees. (b) certification election. Explain how they differ from one another. XI. He brought a complaint for illegal suspension and illegal dismissal against Mercedes Corporation. a notice should be served on the employee specifying the grounds for termination. B. The modes of determining the exclusive bargaining agent of the employees in a business are: (a) voluntary recognition. with or without the DOLE’s intervention. First. and replaced with Request for SEBA recognition. not as a member of the Board of Directors. The employee should be given reasonable opportunity to explain his side Second.Give the procedure to be observed for validly terminating the services of an employee based on a just cause? (4%) Termination of an employee based on just causes requires compliance with the twin-notice requirement. and (c) consent election.

or Panel of Voluntary Arbitrators in labor disputes? (4%) SUGGESTED ANSWER: Under the Labor Code. A. (b) the interpretation or enforcement of company personnel policies. hence. the argument of Marcel is correct.SUGGESTED ANSWER: Yes. it directed his payroll reinstatement and paid his full backwages and other benefits even as it appealed to the NLRC. Here. the jurisdiction of the Voluntary Arbitrator or Panel of Voluntary Arbitrators include disputes involving: (a) unresolved grievances arising from the interpretation or implementation of a collective bargaining agreement. The reversal ultimately became final. and secretary. (c) all labor disputes. and corporate officers listed as such in the by-laws of the corporation. Marcel was suspended and dismissed as the Vice President for Finance and Administration. State the jurisdiction of the Voluntary Arbitrator. the removal of corporate officers. Marcel’s dismissal and suspension are not intra-corporate disputes. upon agreement of the parties. See Matling Industrial and Commercial Corp. and ordered his immediate reinstatement with full backwages and without loss of seniority and other benefits. which is not a corporate officer as it is not one of those enumerated in the Corporation Code or in the by-laws of Mercedes Corporation. A few months later. The Labor Arbiter decided in his favor. namely the corporate president. 12 . Mandarin Company did not like to allow him back in its premises to prevent him from influencing his co-workers to move against the interest of the company. among others. the NLRC reversed the ruling of the Labor Arbiter and declared that Juanito’s dismissal was valid. XII. Coros (2010) C. Juanito initiated a case for illegal dismissal against Mandarin Company. Hence. v. including unfair labor practices and bargaining deadlock. A dispute is intra-corporate when it involves. treasurer.

5%) SUGGESTED ANSWER: The legal dependents of Gene under the Social Security Law are as follows: (i) legitimate. died. Mandarin Company may not recover the backwages and other benefits paid to Juanito.May Mandarin Company recover the backwages and other benefits paid to Juanito pursuant to the decision of the Labor Arbiter in view of the reversal by the NLRC? Rule. (2%) SUGGESTED ANSWER: 13 . hence. or legally adopted child. Gene is a married regular employee of Matibay Corporation. or over 21 years of age but congenitally incapacitated and incapable of self-support. Inc. Philippine Airlines.5%) SUGGESTED ANSWER: No. The employees and Matibay Corporation had an existing CBA that provided for funeral or bereavement aid of ₱15. and (iii) the legitimate parents wholly dependent on the employee for support. who had been living with him and his family for many years. the Supreme Court held that a reinstated employee need not refund the backwages and other benefits paid pursuant to an order of reinstatement by the Labor Arbiter.00 in case of the death of a legal dependent of a regular employee. In Garcia v. not gainfully employed. (ii) the legitimate spouse dependent for support from the employee. (2.000. he claimed the funeral aid. with reasons. and not over 21 years or age. B. legitimated.. (a) Who may be the legal dependents of Gene under the Social Security Law? (2. (b) Is Gene entitled to the funeral aid for the death of his widowed mother? Explain your answer. Matibay Corporation denied the claim on the basis that she had not been his legal dependent as the term legal dependent was defined by the Social Security Law. who is unmarried. The rationale is to help the employee make both ends meet during the pendency of the appeal and to prevent a situation where the dismissed employee will not spend the reinstatement wages for fear of refunding the same if the decision of Labor Arbiter is subsequently reversed. His widowed mother.

C. the definition of legal dependent in the Social Security Law. Rosa’s serious disease is not compensable. Upon her return. insisting that she had contracted the disease while serving the interest of her employer. She accepted the request because the errand would be important to the company and Zimbabwe was anyway in her itinerary. For an occupational disease to be compensable. it must be an illness accepted as occupational disease by the Employees’ Compensation Commission or otherwise shown that the risk of contracting the disease is increased by the working condition. she filed a claim for compensation.Yes. which includes a legitimate parent dependent on the employee for support.5%) SUGGESTED ANSWER 1: No. Rosa was granted vacation leave by her employer to spend three weeks in Africa with her family. the CBA is silent about the coverage of the term “legal dependent. to be compensable. Is the serious disease Rosa contracted during her trip to Africa compensable? Explain your answer. Here. the Supreme Court held that term “legal dependent” as used CBA should be construed as similar to the meaning that contemporaneous social legislations have set if the CBA is silent about it. Here. v.” Hence. It appears that she contracted a serious disease during the trip. In Philippine Journalists. Hence. Gene is entitled to the funeral aid for the death of his widowed mother. (2. Journal Employees Union. Prior to her departure. should be used. or caused by employment subject to proof that the risk of contracting the same is increased by working conditions. must have resulted from an illness either definitely accepted as an occupational disease by the Employees’ Compensation Commission. Rosa failed to present proof that there is increased risk of contracting the disease because of the General Manager’s request for her to visit a client’s plant. 14 . Under the Labor Code. the serious disease Rosa contracted during her trip to Africa is not compensable. the General Manager of the company requested her to visit the plant of a client of the company in Zimbabwe in order to derive best manufacturing practices useful to the company. the sickness or death of an employee. Inc.

Is the sympathetic strike valid? Explain your answer. 15 . (1%) SUGGESTED ANSWER: No. (4%) SUGGESTED ANSWER: For union officers. A strike is not valid if there is no labor dispute between the employer and the employees. which is done in the interest of Rosa’s employer. not collective. participation in an illegal strike is a just cause for termination of their employment. participation in an illegal strike results in loss of employment only if they committed illegal acts during the strike. For union members. the serious disease Rosa contracted during her trip to Africa is compensable. A sympathetic strike is stoppage of work to make common cause with other strikers in another establishment or business. the risk of contracting the serious disease is increased by the request of the General Manager for Rosa to visit a client’s plant.SUGGESTED ANSWER 2: Yes. A. it must be an illness accepted as occupational disease by the Employees’ Compensation Commission or otherwise shown that the risk of contracting the disease is increased by the working condition. Hence. Here. This is because the union officers have the duty of leading their unions to comply with the law in staging their strikes. Rosa’s serious disease is compensable. For an occupational disease to be compensable. a sympathetic strike is not valid. Explain your answer. state when the participating union officers and members may be terminated from employment because of the illegal strike. XIII. Given that the liability for an illegal strike is individual. B.

some of the affected employees staged a strike. the Secretary of Labor is justified to assume jurisdiction over a labor dispute. Pursuant to his power under Sec.5%) SUGGESTED ANSWER: Under Article 278(g) of the Renumbered Labor Code. the striking retrenched employees are still entitled to separation pay despite the illegality of their strike. they are entitled to separation pay as retrenched employees. Are the striking retrenched employees still entitled to separation pay under Sec. C. Opposing the retrenchment. XIV. in his opinion. there is no labor dispute in the employees’ work since they are merely making common cause with strikers in another establishment. the Secretary of Labor assumed jurisdiction over the 3-day old strike in Armor Steel Plates.. there is no evidence that the retrenched employees committed illegal acts during the strike. Eventually. and ordered all the striking employees to return to work. Inc. 16 . hence. Hence. were declared to have lost their employment status. the leaders of the strike. Union members who participate in an illegal strike do not lose their employment if they did not commit illegal acts during the strike. Here. including the retrenched employees. Hence. one of the country’s bigger manufacturers of steel plates. a sympathetic strike is not valid.In a sympathetic strike. there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. 298 (283) of the Labor Code despite the illegality of their strike? Explain your answer. (2%) SUGGESTED ANSWER: Yes. and the strike was declared illegal. The striking employees ignored the order to return to work. (a) What conditions may justify the Secretary of Labor to assume jurisdiction? (2. 278(g) (263(g)) of the Labor Code. Due to business recession. Ballistic Company retrenched a part of its workforce. when. the retrenchment was found to be justified.

Disobedience of the return-to-work order results in automatic loss of employment status of the disobedient employee. – NOTHING FOLLOWS – 17 .(b) What are the consequences of the assumption of jurisdiction by the Secretary of Labor. (2. The employer is required to reinstate the striking employees to their former positions before the strike. or if one has already been staged. and of the disobedience to the return to work? Explain your answer.5%) SUGGESTED ANSWER: The assumption of jurisdiction by the Secretary of Labor enjoins the taking place of any strike. requires the employees to cease striking and return to their work.