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BAR EXAMS IN LABOR AND SOCIAL LEGISLATION

Compiled by: CYRILL ACEBRON – DOCTOR

GENERAL PROVISIONS
2003

Question No. I SOCIAL JUSTICE

2003

May social justice as a guiding principle in labor law be so used by the courts in sympathy
with the working man if it collides with the equal protection clause of the Constitution?
Explain.

SUGGESTED ANSWER:

Yes. The State is bound under the Constitution to afford full protection to Labor; and when
conflicting interests collide and they are to be weighed on the scales of social justice, the law
should accord more sympathy and compassion to the less privileged workingman. However, it
should be borne in mind that social justice ceases to be an effective instrument for the
“equalization of the social and economic forces” by the State when it is used to shield
wrongdoing.

Another Suggested Answer:

No, social justice as a guiding principle in law may not be used by the courts if it collides
with the equal protection clause of the Constitution. Social justice is not a magic wand
applicable in all circumstances. Not all labor cases will be automatically decided in favor of the
worker. Management has also rights which are entitled to recognition and protection; justice
must be dispenses according to facts and law; and social justice is not designed to destroy or
oppress the employer.

Another Alternative Answer:

Social justice as a guiding principle in Labor Law can be implemented side by side with the
equal protection clause of the Constitution.

In implementation of the principle of social justice, the Constitution commands that the
State shall afford protection to labor. Thus Labor Law may be pro-labor in the sense that labor is
given certain benefits not given to management. But this is not necessarily violative of the
equal protection clause of the Constitution because said clause allows reasonable classification.

Question No. XI LABOR REL – LABOR STANDARD 2003

How do the provisions of the law on labor relations interrelate, if at all, with the
provisions pertaining to labor standards?

SUGGESTED ANSWER:
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LABOR RELATIONS LAW - focuses its provisions on the collective aspects of employer-
employee relationship. Its legal provisions deal with employees organizing unions and how
through these unions, employees are able to have collective bargaining with their employer.

On the other hand, LABOR STANDARDS LAW - focuses on the terms and conditions of
employment of employees as individual employees or those legal provisions dealing with wages,
hours of work and other terms and conditions of employment.

There may be instances when the provisions of the labor relations law may interrelate with
provisions of labor standards law. Thus, a CBA which is dealt with in labor relations law may
have provisions that improves upon the minimum terms and conditions of employment
prescribed in labor standards law, like a CBA providing for a higher minimum wage, or for the
computation of a higher overtime pay or the payment of holiday pay not only for regular holidays
but also for certain special holidays.

Question No. XV SEXUAL HARASSMENT - DISCRIMINATION 2003

Can an individual, the sole proprietor of a business enterprise, be said to have violated the
Anti-Sexual Harassment Act of 1985 if he clearly discriminates against women in the adoption
of policy standards for employment and promotions in the enterprise? Explain.

SUGGESTED ANSWER:

When an employer discriminates against women in the adoption of policy standards for
employment and promotion in his enterprise, he is not guilty of sexual harassment. Instead, the
employer is guilty of discrimination against women employees which is declared to be unlawful
by the Labor Code.

For an employer to commit sexual harassment, he – as a person of authority, influence or

moral ascendancy – should have demanded, requested or otherwise required a sexual favor from
his employee whether the demand, request or requirement for submission is accepted by the
object of said act.

In the question, no such act was committed by the sole proprietor.

Question No. XVI PATERNITY LEAVE / BONUS 2002

A. How many times may a male employee go on Paternity Leave? Can he avail himself of
this benefit, for example, 50 days after the first delivery of his wife?

B. The projected bonus for the employees of Suerte Co. was 50% of their monthly
compensation. Unfortunately, due to the slump in the business, the president reduced the
bonus to 5% of their compensation. Can the company unilaterally reduce the amount of bonus?
Explain briefly.
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B. You were asked by a paint manufacturing company regarding the possible employment
as a mixer of a person, aged 17, who shall be directly under the care of the section supervisor?
What advice would you give? Explain briefly.

SUGGESTED ANSWER:

A. A male employee may go on Paternity Leave up to 4 children. SEC 2, RA 8187. On the

question of whether 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 Rules Implementing the Paternity Leave Act says
that the availment should not be later than 60 days after the date of delivery.

B. Yes. The granting of a bonus is a management prerogative, something given in addition

to what is ordinarily received by or strictly due the recipient.

An employer, like Suerte co., cannot be forced to distribute bonuses when it can no longer
afford to pay. To hold otherwise would be to penalize the employer for his past generosity.

Another Suggested Answer:

It depends. If there is a legal obligation on the part of Suerte Co. to pay a bonus to its
employees equivalent to 50% of their monthly compensation, because said obligation is included
in a CBA, then Suerte Co. cannot reduce the bonus to 5% of their monthly compensation. But if
the payment of the bonus is not a legal obligation but only a voluntary act on the part of the
employer, said employer, unilaterally, can only reduce the bonus from 50% to 5% of the monthly
compensation of its employees; the employer can, in fact, not give any bonus at all.

SOCIAL SECURITY LAW

2003

Question No. II SSS LAW

2003

Pablo was a farm-hand in a plantation owned by ABC & Co., working approximately 6 days a
week for a good 15 years. Upon Pablo’s death, his widow filed a claim for burial grant and
pension benefits with the SSS. The claim was denied on the ground that Pablo had not been a
registered member-employee. Pablo’s widow filed a petition before the SSS asking that ABC &
Co. be directed to pay the premium contributions of Pablo and that his name be reported for
SSS coverage. ABC & Co countered that Pablo was hired to plow, harrow and burrow, using his
own carabao and other implements and following his own schedule of work hours, without any
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supervision from the company. If proven, would this factual setting advanced by ABC & Co. be
a valid defense against the petition?

SUGGESTED ANSWER:

ABC & Co. has a valid defense.

Pablo should be an employee of ABC & Co. to be under the compulsory coverage of the SSS.
To be an employee, Pablo should be under the control of ABC & Co. as regards his employment.
But the facts show that he was not under the control of ABC & Co. as regards his employment.
Among others, he had his own schedule of work hours, without any supervision from the
company. Thus, he is an independent contractor and not an employee. An independent
contractor is not under the compulsory coverage of the SSS. He maybe covered as a self-
employed person. But then as such, ABC & Co. has no legal obligation to report Pablo for
coverage under the SSS because ABC & Co. is not Pablo’s employer.

Another Suggested Answer:

It is not a valid defense, for Pablo could be considered an employee of ABC & Co. The
elements of hiring, payment of wages, power to dismiss and power to control are presumed from
the fact that Pablo is working 6 days a week, for 15 years now. Pablo’s use of his plow, harrow,
burrow, carabao and other implements and his having his own schedule of work hours without
any supervision from the company do not erase the element of control on the part of ABC &Co.
because under the “control test” it is enough that the employer’s right to control exists. It is
not necessary that the same be exercised by the employer, it is enough that such right to control
exists.

Question No. XII SSS LAW

2002

The owners of FALCON Factory, a company engaged in the assembling of automotive

components, decided to have their building renovated. Fifty (50) persons, composed of
engineers, architects and other construction workers, were hired by the company for this
purpose. The work was estimated to be completed in 3 years. The employees contended that
since the work would be completed after more than one (1) year, they should be subject to
compulsory coverage under the Social Security Law. Do you agree with their contention?
Explain your answer fully.

SUGGESTED ANSWER:

No. Under SEC 8 [j], RA 1161, as amended, employment of purely casual and not for the
purpose of the occupation or business of the employer are excepted from compulsory coverage.

An employment is purely casual if it is not for the purpose of occupation or business of the
employer.

In the problem given, Falcon Factory is a company engaged in the assembling of automotive
components.
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The fifty (50) persons (engineers, architects and construction workers) were hired by Falcon
Factory to renovate its building. The work to be performed by these 50 people is not in
connection with the purpose of the business of the factory. Hence, the employ of these 50
persons is purely casual. They are, therefore, excepted from the compulsory coverage of the
SSS Law.

Another Suggested Answer:

I agree with the contention that the employees hired by the owners of FALCON factory as
construction workers in the renovation of its building should be under the compulsory coverage
of the SSS Law.

It is true that in connection with FALCON factory, which in engaged in the assembling of
automotive components, the construction workers may be considered casual employees because
their employment is not for the purpose of occupation of business of FALCON factory. As such,
in accordance with Section 8 [j] of the SSS Law, they are excepted from the compulsory
coverage of the SSS.

But they could also be considered project employees of FALCON factory and such could be
under the compulsory coverage of the SSS, applying Art 4 of the Labor Code that provides that
all doubts in the implementation and interpretation of the provisions of the Labor Law shall be
resolved in favor of labor. The employees here therefore, should be considered as under the
compulsory coverage of the SSS.

Question No. XIII SS LAW 2001

b) In 1960, Juan hired Pablo to drive for the former’s lumber company. In 1970, Pablo got
sick and was temporarily laid-off. In 1972, Pablo recovered and resumed working for the same
lumber company, now run by Juan’s wife since Juan had already passed away. In 1996, Pablo
retired. When Pablo applied for retirement benefits with the SSS that same year, he
discovered that the lumber company never enrolled him as an employee, much less remitted his
contributions that were deducted from his salary. The lumber company agreed to pay for
Pablo’s contributions plus penalties prescribed under Article 1150 of the Civil Code. (Art 1150
provides “The time for prescription of all kinds of actions, when there is no special provisions
which ordains otherwise, shall be counted from the day they may be brought.”) Is the Lumber
company’s contention correct? Why?

SUGGESTED ANSWER:

The lumber company’s contention is not correct.

The SSS Law (SEC 22 [b]) provides that the right to institute the necessary action
against an employer may be commenced within 20 years from the time the delinquency is known
or the assessment is made by the SSS, or from the time the benefit accrues, as the case may be.

Question No. 3 SSS LAW 1993

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Seventy (70) private security guards of TAPANG SECURITY AGENCY CORP., assigned to guard
the mining area of DAVAO GOLD CORP., filed a complaint against both their direct employer,
TAPANG SECURITY, and their indirect employer, DAVAO GOLD, when they discovered they could
not avail of the benefits of the SSS law for the failure of respondents TAPANG or DAVAO GOLD
to remits its contributions to the System.

By way of answer to the complaint, TAPANG claims that there is no employer-employee

relationship, since it has only 2 office employees whose duties are to monitor their assignment
and hours of work and to pay the salaries under the agency contract of the security guards from
the funds remitted by DAVAO GOLD, keeping a certain percentage of the amount for office
expenses and supervisory fees, the true and real employer being DAVAO GOLD. On the other
hand, DAVAO GOLD maintains that it has no employer-employee relationship with TAPANG’s
security guards assigned to secure its mining area since it has no control over hiring/dismissal
of its guards. TAPANG is a duly licensed security agency and a bona fide independent
contractor.

1) Who is deemed an “employee” for purposes of coverage under the SSS law?

2) Under the above facts whose duty is it to bring the security guards for compulsory
coverage pursuant to the SSS law? Discuss.

ANSWER:

1) A person is deemed an “EMPLOYEE” for purposes of coverage under the SSS Law if such
person performs services for an employer in which either or both mental and physical efforts are
used and who received compensation for such services, where there is an employer-employee
relationship. Also, self-employed person is both an employee and employer at the same time,
(SEC 8[d], SSS LAW).

2) It is the duty of Tapang Security Agency Corp. to bring the security guards for compulsory
coverage pursuant to the SSS Law. Said law expressly provides that employees of bona fide
independent contractors shall not be deemed employees of the employer engaging the services
of said contractors. (SEC 8 [j], SSS LAW)

Alternative Answer:

a) The SSS Law defines an employer as one who uses the services of another person who is
under his orders as regards the employment. Under the facts of the case, it is very clear
that it is Davao Gold that has control of the security guards. The security guards are
under the orders of Davao Gold as regards their employment, meaning how they perform
their work. It could be said that Tapang Security Agency Corp. was acting only like a
labor-only contractor and thus, was just an agent of Davao Gold who is the real
employer. (SEC 8[e], SS Law and ART 106, LC).

b) If a company enters into a contract of services with a security agency whereby the latter
hired security guards to work with the said company, then that company becomes the indirect
employer of the guards hired by said security agency. The company and the security agency
becomes jointly and severally liable to the security guards. Hence, it is the duty, of both the
direct and indirect employer to bring the security guards for compulsory coverage pursuant to
the SSS Law.
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Question No. 16 SSS LAW 1992

Eduardo Serangco, an SSS member for 20 years, died on May 1, 1992. The records of the
SSS show that Serangco designated as his beneficiaries Marietta Uy, wife; Gloria Serangco,
daughter, born June 30, 1979; and Jose Serangco, son, born July 16, 1981. On May 10, 1992,
the SSS granted Marietta Uy funeral benefits. On May 16, 1992, Josefa Costa filed a claim for
death benefits alleging that she was married to the late Eduardo Serangco on October 15, 1982
and depended upon him for support. She attached to her claim, copy of a marriage contract
duly certified and sealed by the civil registrar of Pasig, Rizal. Marietta Uy opposed Josefa’s
claim, contending that she and her children, Gloria and Jose Serangco, are entitled to death
benefits because they were the primary beneficiaries designated by the deceased Serangco.

To whom shall the SSS award death benefits? Why?

SUGGESTED ANSWER:

Under the Social Security Law, death benefits are to be paid to the primary beneficiaries of
the deceased employee. If there are no primary beneficiaries, then to the secondary
beneficiaries.

The primary beneficiaries of a deceased employee are the dependent spouse until he/she
remarries and dependent children.

On the other hand, a dependent spouse is the legitimate spouse dependent for support the
employee and dependent children are legitimate, legitimated or legally adopted children, who
are unmarried, not gainfully employed and not over 21 years of age, or over 21 years of age,
provided that they are congenitally incapacitated and incapable of self-support. (ART 8[e], [k],
SS Law)

Considering the above provisions of the SSL, Gloria and Jose Serangco are dependent
children because they are still not over 21 years of age, assuming that they are also unmarried
and are not gainfully employed.

The legitimate wife of the deceased is Marietta Uy and not Josefa Costa. The marriage of
the deceased employee to Costa is bigamous. Thus, Marietta is primary beneficiary together
with her children Gloria and Jose. As such primary beneficiaries, the SSS should award to them
the death benefits arising from the death of Eduardo Serangco.

Alternative Answer:

The designation of Marietta Uy as wife is only presumed to be correct. (ART 214 [a], SS
Law.

If Uy was not legally married to Serangco, then her children are illegitimate and are not
primary beneficiaries. Also, Costa, who has a marriage contract is the only primary beneficiary.

Question No. 16 SSS LAW 1992

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Eduardo Serangco, an SSS member for 20 years, died on May 1, 1992. The records of the
SSS show that Serangco designated as his beneficiaries Marietta Uy, wife; Gloria Serangco,
daughter, born June 30, 1979; and Jose Serangco, son, born July 16, 1981. On May 10, 1992,
the SSS granted Marietta Uy funeral benefits. On May 16, 1992, Josefa Costa filed a claim for
death benefits alleging that she was married to the late Eduardo Serangco on October 15, 1982
and depended upon him for support. She attached to her claim, copy of a marriage contract
duly certified and sealed by the civil registrar of Pasig, Rizal. Marietta Uy opposed Josefa’s
claim, contending that she and her children, Gloria and Jose Serangco, are entitled to death
benefits because they were the primary beneficiaries designated by the deceased Serangco.

To whom shall the SSS award death benefits? Why?

SUGGESTED ANSWER:

Under the Social Security Law, death benefits are to be paid to the primary beneficiaries of
the deceased employee. If there are no primary beneficiaries, then to the secondary
beneficiaries.

The primary beneficiaries of a deceased employee are the dependent spouse until he/she
remarries and dependent children.

On the other hand, a dependent spouse is the legitimate spouse dependent for support the
employee and dependent children are legitimate, legitimated or legally adopted children, who
are unmarried, not gainfully employed and not over 21 years of age, or over 21 years of age,
provided that they are congenitally incapacitated and incapable of self-support. (ART 8[e], [k],
SS Law)

Considering the above provisions of the SSL, Gloria and Jose Serangco are dependent
children because they are still not over 21 years of age, assuming that they are also unmarried
and are not gainfully employed.

The legitimate wife of the deceased is Marietta Uy and not Josefa Costa. The marriage of
the deceased employee to Costa is bigamous. Thus, Marietta is primary beneficiary together
with her children Gloria and Jose. As such primary beneficiaries, the SSS should award to them
the death benefits arising from the death of Eduardo Serangco.

Alternative Answer:

The designation of Marietta Uy as wife is only presumed to be correct. (ART 214 [a], SS
Law.

If Uy was not legally married to Serangco, then her children are illegitimate and are not
primary beneficiaries. Also, Costa, who has a marriage contract is the only primary beneficiary.

Question No. 3 SSS LAW 1991

Pedro Tortilla and his employer were covered by the Social Security System. Tortilla was
legally married to Orpha dela Cruz, a plain housewife with whom he had two minor, unmarried
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and unemployed children. But for two years, he had been living with his common-law wife,
Dora Tea, with who he had two minor, unmarried and unemployed children. His jobless father
stayed with him. In his SSS record, he designated as beneficiary his best friend, a 20-year old
student who was totally dependent on his for support. In a car accident, Tortilla, Orpha dela
Cruz and their tow children died.

Who are entitled to the death benefits?

ANSWER:

The SSS defines beneficiaries as “the dependent spouse until he remarries and dependent
children, who shall be primary beneficiaries. In their absence, the dependent parents and,
subject to the restrictions imposed on dependent children, the legitimate descendants and
illegitimate children who shall be the secondary beneficiaries. In the absence of any of the
foregoing, any other person designated by the covered employee as secondary beneficiary.”

Applying the above provision, when Tortilla died, he died with the persons who are his
primary beneficiaries.

Thus, Tortilla’s secondary beneficiaries, namely, his dependent and jobless father and
illegitimate children who were minor, unmarried and unemployed are entitled to death benefits
under the SSS Law.

Under the law, the common law wife is not among those who could be a beneficiary, either
as primary or secondary beneficiary.

As for the 20-year old student who was Tortilla’s best friend, because he was designated by
Tortilla s beneficiary, he could have been entitled to death benefits, in the absence of either
primary and secondary beneficiaries, which is not the case, however, in the question given.

Question No. 4 SSS LAW 1991

Don Jose, a widower, owns a big house with a large garden. One day, his househelper and
gardener left after they were scolded. For days, Don Jose, who lives alone in compound to look
for someone who could water the plants in the garden and clean the house. He chanced upon
Mang Kiko on the street and asked him to water the plants and clean the house. Without asking
any question, Mang Kiko attended to the plants in the garden and cleaned the house. He
finished the work in two days.

a) Is there an employer-employee relationship between Don Jose and Mang Kiko?

ANSWER:

There is an employer-employee relationship between Don Jose and Mang Kiko because Mang
Kiko, assuming payment of compensation, was rendering services for Don Jose and was under the
orders of Don Jose as regards employment.

b) Are they compulsorily covered by the SSS?

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ANSWER:

No. In their employer-employee relationship, Don Jose and Mang Kiko are not compulsory
covered by the SSS because Mang Kiko is rendering domestic services in a private home which is
one of the kinds of employment excluded from the compulsory coverage of the SSS.

Question No. 8 SSS LAW 1990

A is an employee of B who in turn registered A with the SSS as required by law.

Unfortunately, B did not remit A’s contributions to the System. In the course of his
employment, A met a serious accident requiring his hospitalization.

1) Suppose he decides to retire from the firm because of the accident, is he entitled to
recover retirement benefits under the System? Explain your answer.

2) Suppose that he died because of the accident, are his heirs entitled to death benefits
under the System? Explain your answer.

ANSWER:

1) A is entitled to receive benefits from the SSS even if his employer did not remit A’s
contribution to the System because the SSS Law provides (SEC 22 [b]) that the failure or refusal
of the employer to pay or remit contributions shall not prejudice the right of the covered
employee to the benefits of the coverage.

But A is not entitled to retirement benefits in the form of a monthly pension unless at the
time of the accident, he has reached the age of 60 years and has paid at least 120 monthly
contributions prior to the semester of the accident. (SEC 12-B, SSL)

2) The heirs are not entitled, but his primary beneficiaries or in the absence of primary
beneficiaries, his secondary beneficiaries are entitled.

Question No. 15 SSS LAW 1989

Sapatilya Company, a manufacturer of wooden shoes, started its operations on January 1,

1989. As of June 15, 1989, the company had in its payroll a general manager, an assistant
general manager, 3 supervisors and 40 rank and file employees, all of whom started with the
company on January 1, 1989. On July 1, 1989, the company also had ten casual employees who
had been with the company since February 16, 1989 and 12 contractual employees whose
contracts of employment with the company is for the period from August 1, 1989 to September
30, 1989. Who among the aforementioned employees are under coverage of the SS Law? When
did their coverage under the said law take effect?

ANSWER:

All of the foregoing employees are covered by the SS Law, except the 10 casual employees.
The coverage of the SSS is very comprehensive; it covers “all” employees not over 60 years of
age except, among others those whose “employment is purely casual and not for the purpose of
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occupation or business of the employer.” But the casual employees in the question may not
even be casual under the SS Law because they have been with the company since February 16,
1989. How could they be with the Company that long if their employment is not for the purpose
of occupation or business of the employer?

The coverage of the SS Law takes effect on the day of the employment of the employee.

Question No. 16 SSS 1987

Philippine Daily News prints and publishes The Daily News, copies of which are circulated
through dealers in Metro Manila. These dealers, who are single proprietors exclusively
distributing the Daily News but handling competing dailies for a fixed amount per copy sold,
engaged the services of newsboys. These newsboys are given a specified number of copies to
sell every day within a six hour period in the morning. After this period, the newsboys are free
to sell other newspapers or go to school or engage in other activities. Each newsboy is paid
fifty centavos for every copy sold.

As counsel for Philippine Daily News, would you advise your client to report the dealers and
the newsboys as its employees pursuant to the Social Security Act?

ANSWER:

I would advise Philippine Daily News that there is no need to report the dealers and
newsboys as its employees pursuant to the Social Security Act.

Under the Social Security Act (SEC 8 [c]) an employer is a person who uses the services of
another person who is under his orders under as regards the employment.

In the case, the dealers and newsboys are not under the control of Philippine Daily News as
regards how the newspaper is distributed by the dealers and how the newspapers are sold by the
newsboys. It may also be noted: the dealers as single proprietors distribute competing dailies;
the services of newsboys are engaged by the dealers, not by the Philippine Daily News.

But the dealers and the newsboys may be covered under the Social Security Act as self-
employed persons.

Question No. 17 SSS LAW 1987

Union Drug Company has a sick leave policy, contained in a CBA requiring the accumulation
of 5 days of the 15 days sick leave earned annually. Thus, an employee could use only 10 days
of earned sick leave every year. The accumulated leave is convertible into cash when
employment is terminated for any cause but may be used upon prior application with and
approval by the company.

Pedro San Juan, an employee of the company, applied for sickness benefits under the Social
Security Act when he fell ill of pneumonia and his ten-day company sick leave had been
exhausted. The System denied the application.
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Decide.

ANSWER:

The System should not have denied the application for sickness benefits under the Social
Security Act.

The Act (SEC 14 [b]) provides that sickness benefits shall begin to be paid only after all sick
leaves of absence with full pay to the credit of the employee shall have been exhausted.

In the case, such sick leaves with full pay to the credit of the employee were exhausted
when the 10-day company sick leaves were exhausted.

The remaining five days of the 15-day sick leave under the CBA were to be accumulated and
convertible into cash when employment is terminated for any cause although the accumulated
sick leaves may be used upon prior application with and approval of the Company. These
conditions means that the 5-day sick leaves cannot be automatically used. Thus, it could not be
first exhausted before the payment of sickness benefits under the Social Security Act.

Question No. 18 SSS LAW 1987

Mona Lim, married employee of Realty Corporation, is paid a basic salary and in addition,
a monthly living allowance separate from the statutory cost of living allowance. She receives
quarterly bonuses, which are purely discretionary grants by the management; and, as part of
company policy, gets reimbursements for all transportation expense she incurs in connection
with her sales duties. Her daily meal allowance is a fixed amount regardless of place of
assignment.

The company has been reporting Mona’s basic monthly salary as her compensation, which is
less than one thousand pesos. When the SSS learned that Mona was receiving other forms of
income, it assessed the company for everything paid or granted to the employee as part of her
compensation.

If you were consulted by the company, what advice would you give your client?

ANSWER:

We will advise Realty Corporation that pursuant to Exec. Order No. 102, compensation is
now defined as including all actual remuneration for employment, including the mandated cost
of living allowance, as well as the cash value of any remuneration paid in any medium other than
cash, except that part of remuneration in excess of three thousand pesos received during the
month.

Given the above very comprehensive definition of compensation, the SSS correctly assessed
the company for everything it paid to the employee as part of compensation, including not only
the basic salary, but also the monthly living allowance, the statutory cost of living allowance,
quarterly bonuses and daily allowance which is a fixed amount regardless of place of assignment.
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But the reimbursement for all transportation expenses incurred by the employee in
connection with her sales duties is not part of compensation.

Question No. 19 SSS LAW 1987

Leonardo Marasigan started working for Madrid Development Corporation in August 1984
when it was being organized and had no fixed offices. The company did not ask for his SS
registration number, nor did it report him to the SSS. He died a year later, and his widow filed
a claim for death benefits with SSS. While following up the claim, the widow discovered that it
was only in November 1985 when he was reported by his employer to the SSS and the premiums
covering the entire period from August 1984 were remitted.

Leonardo’s widow came to you for assistance. What would your legal advice be?

ANSWER:

I will advise Leonardo’s widow that as the primary beneficiary, she is entitled to receive the
death benefits from the SSS.

Leonardo may have died in August 1985, and it was only in November 1985 when he was
reported by his employer to the System. But premiums covering the entire period from August
1984 when remitted. Besides, according to the Social Security Act (SEC 24) the fat that the SSS
has not previously received a report about an employee from his employer or a contribution paid
in his name by his employer, is not fatal to his right to benefits.

Leonardo had 12 monthly contributions in the 12 months that he was covered by the System
before he died. He, therefore, has not paid at least 36 monthly contributions prior to the
semester of death which under the SS Act (SEC B) would have entitled the widow according to
the same provision of the Act, the widow, as primary beneficiary, is entitled to a lump sum
benefit equivalent to 35 times the monthly pension.

GSIS LAW
2003

Question No. 2 GSIS 1991

Juan Sipay was elected councilor of the municipality of San Felipe. On the second year of
his term, he left his legitimate wife, Josefa Asuwa, and their three minor, unmarried and
unemployed children and lived with a common-law wife, Maria Makupad, with whom he had
two minor, unmarried and unemployed children. Immediately after he completed his term,
Juan was appointed cashier in the office of the municipal treasurer of San Felipe. He was
dishonorably discharged from the service upon being convicted of malversation of public funds.
A year later, he died.
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Who are entitled to the GSIS survivorship benefits?

ANSWER:

None. When Sipay was dishonorably discharged from the service, having been convicted of
malversation of public funds, he automatically forfeited his right to the benefits that he or his
beneficiaries could have been entitled to received from the GSIS. Thus, Sipay’s death did not
give rise to any right to survivorship benefits.

Question No. 15 GSIS 1988

a) If Pascual were covered by GSIS, who would be his dependents?

b) Who are Pascual’s (a) primary, and (b) secondary beneficiaries under PD No. 1146, the
Revised GSIS Act of 1977?

ANSWER:

a) His dependent would be the legitimate children (Pedrito and Marita) and the illegitimate
child (Pascualito) who are not over 21 years of age, if they are unmarried, or not gainfully
employed, and the legitimate parents (Juan and Maria) who are wholly dependent upon Pascual
for support.

Damiana, the legal spouses is not a dependent because she is not living with Pascual and
could therefore be considered as not dependent for support on Pascual.

b) The primary and secondary beneficiaries listed for Pascual under SSS, will be the same
beneficiaries of Pascual, if he is covered by the GSIS, except that Pascualito, the illegitimate
child, will be a primary beneficiary and not just secondary beneficiary.

Question No. 20 GSIS 1987

Gregorio Reposo, a 59-year old government employee and member of the GSIS could not
wait for his retirement benefits and though of enjoying them in advance of his retirement at
age 60 by borrowing 80% of the retirement benefits from a friendly money lender, assigning to
him the entire amount of his expected benefits. He obtained the approval of the assignment
from the GSIS.

Reposo spent the proceeds on a business venture that failed. A supplier sued Reposo for
unpaid materials and attempted to proceed against his retirement benefits.

Reposo seeks your assistance in an effort to shield his retirement benefits. What legal
advice would you give?
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ANSWER:

I will advise him that because he had assigned the entire amount to his expected benefits to
a money lender from whom he borrowed money representing 80% of his retirement benefits, and
had obtained the approval of the assignment from GSIS, said benefits are now duly assigned to
said lender.

The Revised GSIS Act (SEC 33) provides that the benefits granted by the Act shall not be
subject, among others, to attachment, garnishment, levy or other processes. This, however,
shall not apply to obligations of the member to the System, or to the employer, or when the
benefits granted herein are assigned by the member with the authority of the System.

But a the above provision of the Act states, the retirement benefit is not subject to
attachment, garnishment, levy or other processes that the supplier may ask for.

AGRARIAN REFORM LAW

2003

Question No. 1 (A) AGRARIAN REFORM PROGRAM 1991

What is the foundation of the agrarian reform program under the 1987 Constitution? Who
are the direct beneficiaries of the program?

ANSWER:

The 1987 Constitution enunciates in Article II as one of the state policies as one of the state
policies that “the State shall promote comprehensive rural development and agrarian reform.”

In Article XII of the Constitution, in dealing with the national economy and patrimony, it is
also stated that “the State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform. X x x ”

Then in Article XIII of the Constitution, in dealing with social justice and human rights, there
is this provision, among others: “The State shall, by law, undertake an agrarian reform program
founded on the right of framers and regular farm-workers, who are landless, to own directly or
collectively the lands they till or in the case of other farm-workers, to receive a just share of the
fruits thereof. To this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the Congress may
prescribe, taking into account ecological, developmental, or equity considerations, and subject
to the payment of just compensation. In determining the retention limits, the State shall
respect the right of small landowners. The State shall further provide incentives for voluntary
landsharing.”
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Taken together, the above provisions could be considered as the foundation of the agrarian
reform program.

Under the Comprehensive Agrarian Reform Law, the lands covered by the Comprehensive
Agrarian Reform Program shall be distributed as much as possible to landless residents of the
same barangay, on in the observance thereof, landless residents of the same municipality in the
following order of priority:

a) agricultural lessees and share tenants;

b) regular farmworkers;
c) seasonal farmworkers;
d) other farmworkers;
e) actual tillers or occupants of public lands;
f) collectives or cooperatives of the above beneficiaries; and
g) others directly working on the land.

The children of landowners, who are qualified to be awardees of not more than 3 hectares,
shall be given preference in the distribution of the land of their parents. Actual tenant-tillers in
the landholding shall not be ejected or removed therefrom.

Beneficiaries under PD No. 27 who have culpably sold, disposed of, or abandoned their land
are disqualified to become beneficiaries under the CARP.

A basic qualification of a beneficiary shall be his willingness, aptitude, and ability to

cultivate and make the land as productive as possible. The DAR shall adopt a system of
monitoring the record or performance of each beneficiary, so that any beneficiary guilty of
negligence or misuse of the land or any support extended to him shall forfeit his right to
continue as such beneficiary. The DAR shall submit periodic reports on the performance of the
beneficiaries to the CARP.

If, due to the landowner’s retention rights or to the number of tenants, lessees, or workers
on the land, there is not enough land to accommodate any or some of them, they may be
granted ownership of other lands available for distribution under the CARL, at the option of the
beneficiaries.

Farmers already in place and those not accommodated in the distribution of privately-owned
lands will be given preferential rights in the distribution of lands from the public domain.

Question No. 1 (B) AGRARIAN REFORM LAW 1991

Distinguish just compensation under the Comprehensive Agrarian Reform Law of 1988 from
just compensation under the Bill of Rights? How it is determined under the former?

ANSWER:

In the Bill of Rights, it is provided that private property shall not be taken for public use
without just compensation.
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In the provision of the 1987 Constitution on agrarian reform, it is provided that in just
distribution of all agricultural lands, the same shall be subject, among others, to the payment of
just compensation.

The concepts of just compensation in the Bill of Rights and in agrarian reform are similar in
the sense that in both situations, the person who is deprived of his property should be given the
fair and full equivalent value of the property that is taken from him. In both situations,
ultimately, it is the courts which may determine ultimately just compensation.

Under the CARL, however, the Land Bank of the Philippines shall compensate the landowner
in such amount as may agreed upon by the landowner and the Department of Agrarian Reform
and the LBP.

Also, under the CARL, compensation could be in cash and in government financial
instruments like the LBP bonds. At the option of the landowner, the compensation may be in
shares of stock in government owned and controlled corporations, or in tax credits. The
Comprehensive Agrarian Reform Law provides that in determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use of income, the
sworn valuation by the owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits contributed by the farmers and
the farmworkers and by the Government to the property as well as the non-payment of taxes or
loans secured from any government financing institution on the said land shall be considered as
additional factors to determine its valuation.

Question No. 1 (C) AGRARIAN REFORM LAW 1991

Don Emilio owns 57 hectares of land, 50 hectares of which are planted to citrus trees and 7
hectares are devoted to rice. Taking into account the Comprehensive Agrarian Reform Law,
how many hectares of his property may Don Emilio retain? May he choose the area to be
retained by him?

ANSWER:

Under SEC 6, RA 6657, Don Emilio may retain only 5 hectares for himself. But children of
landowners who on June 15, 1988 are actually tilling the land or is directly managing it may
retain 3 hectares for each child.

However, those ricelands retained under PD No. 27 before RA 6657 took effect shall retain
the said land of 7 hectares under the said Presidential Decree which continues to be in force and
in effect.

As for the 50 hectares of his land devoted to citrus trees, such being a commercial farm as a
fruit farm, the same shall be subject to immediate compulsory acquisition and distribution only
after 10 years from the effectivity of the CARL in 1988.

Don Emilio may choose the are to be retained by him. The CARL provides that the right to
choose the area to be retained, which shall be compact or contiguous, shall pertain to the
landowner. In case the area selected for retention by the landowner is tenanted, the tenant
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shall have the option to choose whether to remain therein or be a beneficiary in the same or
another agricultural land with similar or comparable features. In case the tenant chooses to
remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a
beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural
land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must
exercise this option within a period of 1 year from the time the landowner manifests his choice
of the area for retention.