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BAR EXAMS IN LABOR AND SOCIAL LEGISLATION

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BOOK V - TITLE I
POLICY AND DEFINITIONS
ARTICLES 211 - 212
2003, 2002, 1998, 1997, 1996, 1986, 1981, 1978

Question No. V MANAGERIAL & SUPERVISORY 2003

The Labor Code treats differently in various aspects the employment of (i) managerial
employees, (ii) supervisory employee, and (iii) rank-and-file employees. State the basic
distinguishing features of each type of employment.

SUGGESTED ANSWER:

Under Book Three, LC (ART 212 [m]), a MANAGERIAL EMPLOYEE refers to one whose
primary duty consists of the management of the establishment in which he is employed or of a
department or subdivision thereof, and to other officers or members of the managerial staff. A
supervisor and a rank-and-file employee can be considered as members of the managerial staff,
and therefore, a managerial employee if their primary duty consists of work directly related to
management policies; if they customarily and regularly exercise discretion and independent
judgment; regularly and directly assist a proprietor or a managerial employee whose duty
consists of the management of the establishment in which they are employed or a subdivision
thereof; or execute under general supervision work along specialized or technical lines requiring
special training, experience of knowledge; or execute under general supervision special
assignments and tasks; and who do not devote more than 20 percent of their hours worked in a
work-week to activities which are not directly and closely related to the performance of the
work described above. (ART 82, LC, SEC 2 [c], RULE I, BK III, Omnibus Rules Implementing
the Labor Code).

Under BOOK V, LC, “MANAGERIAL EMPLOYEE’ is one who is vested with powers or
prerogatives to lay down, and execute management policies and/or to hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline employees.

A SUPERVISORY EMPLOYEE is one who, in the interest of the employer, effectively

recommends such managerial actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment.

All employees not falling within any of the above definitions are considered RANK-AND-FILE
employees for purposes of this Book. (ART 212 [M], LC).

On the matter of right to self-organization, a managerial employee cannot exercise such

right; while a supervisor or a rank-and-file employee can. (ART 245, 243, LC)

Question No. XVIII MANAGERIAL & SUPERVISORY / COOP 2002

A. Distinguish managerial employees from supervisory employees.

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B. Do employees of a cooperative have a right to form a union? Explain briefly.

SUGGESTED ANSWER:

A. A MANAGERIAL EMPLOYEE is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees.

SUPERVISORY EMPLOYEES, on the other hand, are those who in the interest of the
employer, effectively recommend such managerial actions if the exercise of such authority is not
merely routinary or clerical na nature but requires the use of independent judgment. (ART 212
[m], LC).

In a case, the Supreme Court said: “In the petition before us, a thorough dissection of the
job description of the concerned supervisory employees and section heads indisputably show
that they are not actually managerial but only supervisory employees since they do not lay down
company policies. PICOP’s contention that the subject section heads and unit managers exercise
the authority to hire and fire is ambiguous and quite misleading for the reason that any authority
they exercise is not supreme but merely advisory in character. Theirs not a final determination
of the company policies inasmuch as any action taken by them on matters relative to hiring,
promotion, transfer suspension and termination of employees is still subject to confirmation and
approval by their respective superior. Thus, where such power, is in effect recommendatory in
character, is subject to evaluation, review and final action by the department heads and higher
executives of the company, the same, although present, is not effective and not an exercise of
independent judgment as required by law.

B. Employees who are members of a cooperative cannot form a union because, as members,
they are owners and owners cannot bargain with themselves. However, employees who are not
members of the cooperative can form a union.

Question No. XIX WORK SLOWDOWN - DEF

1998

The day off following the workers’ voluntary return to work, the Company Production
Manage discovered an unusual and sharp drop in worker’ output. It was evidently clear that
the workers are engaged in a work slowdown activity.

Is the work slowdown a valid form of strike activity?

SUGGESTED ANSWER:

A work slowdown is not a valid form of strike activity. If workers are to strike, there should
be temporary stoppage of work by the concerted action of employees as a result of an industrial
or labor dispute. (ART 212 [o], LC)

Another Suggested Answer:

No, a slowdown is not a valid form of strike activity. The Supreme Court in Ilaw at Buklod
ng Manggagawa vs. NLRC, 198 SCRA 586 [1991] ruled -
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“The Court is in substantial agreement with the petitioner’s concept of a

slowdown as a “strike n the installment plan”, as a willful reduction in the rate of
work by concerted action of workers for the purpose of restricting the output of
the employer, in relation to a labor dispute, as an activity by which workers,
without a complete stoppage of work retard production or their performance of
their duties … The Court also agrees that such slowdown is generally condemned
as inherently illicit and unjustifiable, because while the employees “continue to
work and remain at their positions, and accept wages paid to them”, they at the
same time select what part of their allotted tasks they care to perform of their
own volition or refuse openly, or secretly, to the employers damage, to do other
work; in other words, they work in their own terms.”

Likewise, a slowdown is not a valid form of concerted activity, absent a labor dispute
between the parties. The Labor Code reads -

“ART 212. – xxx

(o) “STRIKE” means any temporary stoppage of work by the

concerted action of employees as a result of an industrial or labor dispute.

Another Suggested Answer:

No. It is prohibited activity. It can be said to be a violation of the duty to bargain

collectively. The union is guilty of bad faith. The workers should resume operations under the
same terms and conditions prevailing prior to the strike.

Question No. 7 LABOR DISPUTE - DEF 1997

On 01 August 1992, Pro-Knit, a corporation engaged in the manufacture of textile

garments, entered into a CBA with the Kamao Union in representation of the rank and file
employees of the
corporation.

The CBA was effective up to 20 June 1995. The contract had an automatic renewal clause
which would allow the agreement after its expiry date to still apply until both parties would
have been able to execute a new agreement.

On 10 May 1995 Kamao Union submitted to Pro-Knit’s management their proposals for the
renegotiation of a new CBA. The next day, Pro-Knit suspended negotiations while Kamao Union
since Pro-Knit had entered into a merger with Eagle Garments, a corporation also engaged in
the manufacture of textile garments. Eagle Garments assumed all the assets and liabilities of
Pro-Knit.

Kamao filed a complaint with RTC for specific performance and damages with a prayer for
preliminary injunction against Pro-Knit and Eagle Garments.

Pro-Knit and Eagle Garments filed a Motion to Dismiss based on lack of jurisdiction. How
would you rule on the Motion to Dismiss?
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ANSWER:

I will grant the Motion to Dismiss. The act of Pro-Knit suspending negotiations with Kamao
Union could be an unfair labor practice. It could be a violation of the duty to bargain
collectively. As such, the case is under the jurisdiction of a Labor Arbiter and not of a regular
Court.

Alternative Answer:

I will deny the Union’s Motion to Dismiss. There is no labor dispute between the parties;
hence, the RTC has jurisdiction over the complaint. ART 212 of the Labor Code, reads –

“LABOR DISPUTE includes any controversy or matter

concerning terms or conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of employment
regardless of whether the disputants stand in the proximate
relations of employer and the employee.”

In addition, the Company can claim that labor contracts are contracts in pesonam and do
not generally bind successors in interest except under special circumstances. In Sundowner
Development Corp. vs. Drilon, 180 SCRA 14, the Court said:

“The rule is that unless expressly assumed, labor contracts

such as xxx collective bargaining agreements are not enforceable
against a transferee of an enterprise, labor contracts being in
personam, thus binding only between the parties.”

Question No. 3 MANAGERIAL & SUPERVISORY EMPLOYEES 1996

1) Who are the managerial, supervisory and rank-and-file employees?

ANSWER:

MANAGERIAL EMPLOYEE is one who is vested with powers or prerogatives to lay down and
execute management policies or to hire, transfer, suspend, layoff, recall, discharge, assign or
discipline employees.

SUPERVISORY EMPLOYEES are those who, in the interest of the employer, effectively
recommend such managerial actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment.

All employees who are neither managerial or supervisory employees are considered RANK-
AND-FILE EMPLOYEES. (ART 212 [m], LC)
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Question No. 3 DEFINITIONS 1986

What do you understand by the following: (a) grievance procedure; (b) labor-only
contracting; (c) contract bar rule; (d) certification election; and (e) constructive dismissal?

ANSWER:

a) GRIEVANCE PROCEDURE – refers to the procedure provided for in a CBA for the
adjustment by the employer or his representative and by the union or its representative
of grievances arising from the interpretation or implementation of a CBA, including
disciplinary actions imposed on members of the bargaining unit.

b) LABOR-ONLY CONTRACTING – refers to that kind of contracting where the person

supplying workers to an employer does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are directly related
to the principal business of such employer.

c) CONTRACT BAR RULE - refers to that rule that operates to prevent a certification
election issue from being entertained if a CBA duly submitted to the BLR exists between
the employer and a legitimate labor organization, except within 60 days prior to the
expiration of the life of such CBA.

d) CERTIFICATION ELECTION - refers to that election by secret ballot that is conducted

by the Ministry of Labor and Employment to ascertain, if there is any reasonable doubt,
the freely chosen collective bargaining representative of the employees concerned for
the purpose of collective bargaining.

Another way of defining a certification election: The process of determining the sole
and exclusive bargaining agent of the employees in an appropriate collective bargaining
unit, for purposes of collective bargaining.

e) CONSTRUCTIVE DISMISSAL - refers to an act of any employer that is not actually an

outright dismissal of an employee but has the same effect as a dismissal. Illustrating
this would be cases where the employee is made to work under intolerable conditions as
to leave him no choice but to quit from his job as when an employee is reassigned or
transferred to work in a place where he finds it impossible to go to or is unjustly
demoted to a position that the employee cannot be refuse to accept.

Question No. 10 TYPES OF EMPLOYEES

1986

Procopio, Balbino, Esteban, Belshazzar and Marikit work for the Blue Chips Corp., a
manufacturer of micro-chips and other electronic items. Procopio is the production manager,
Balbino, whose appointment papers issued two years ago still designated him as “casual”, has
been regularly driving the company car assigned to Procopio.

Esteban was hired three months ago to undergo probationary training for possible
assignment to Blue Chips, Inc. in Saudi Arabia, which recruits its skilled workers through Blue
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Chips in the Philippines. Belshazzar was hired on a daily basis to paint the walls and ceilings of
the corporation’s warehouse and told to finish the job in 8 months time. Depending on the
quality of his work, Belshazzar was assured of employment afterwards in the Pambato Interior
Decorators, Inc. owned by Procopio’s wife.

Marikit is a lady physician who has a contract with the corporation to screen, at her
downtown clinic, workers leaving for Saudi Arabia for sexually transmitted diseases and other
ailments that may disqualify them from the rigorous desert work overseas. Blue Chips also
refers other employees for examination and treatment to Dr. Marikit. Because of so many
referrals, practically the entire time of Dr. Marikit is taken up by Blue Chips personnel.

Explain the constitutional right to security of tenure of (1) Procopio; (2) Balbino; (3)
Esteban; (4) Belshazzar; and (5) Marikit.

ANSWER:

1. Procopio is a managerial employee. A managerial employee also has security of tenure.

Thus, he can be terminated only for a just cause or when authorized by law. He may be
terminated for loss of confidence but there should be a concrete basis for such loss of
confidence.

2. Balbino may still be designated as “casual” but having been employed for two years, he
is actually with a regular employment and thus can be terminated only for a just cause
or when authorized by law.

3. Esteban is a probationary employee but as such he also has security of tenure because
the Labor Code (ART 282) provides that probationary employees may be terminated only
for a just case or when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his
engagement.

4. Belshazzar is an employee whose employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of
his engagement. After he finishes the job in 8 months time, his employment expires.
The employer has no legal obligation to continue Belshazzar in his employment because
his job has been finished.

5. Marikit is an independent contractor. As such, there is no employer-employee

relationship between her and the Corporation because she is not under the order of the
Corporation as regards her employment on how she is to do her work. Thus, one could
not say that Marikit has security of tenure.

Question No. 9 EMPLOYER - DEF 1981

Upon the recommendation of Mayor Garcia of the municipality where his factory was
located, employer Mr. Santos hired three ward leaders of the Mayor. Three months after their
employment, these three workers organized a labor union.
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Upon learning of this, Mayor Garcia, without the knowledge of Mr. Santos, coerced and
intimidated the three workers into abandoning the union.

The union filed charges under the Labor Code against Mayor Garcia and Mr. Santos. What
is the liability, if any, of either Mayor Garcia or Mr. Santos? Explain.

ANSWER:

The Committee suggests the following alternative answers:

A) Insofar as Mayor Garcia is an employer as suggested by the phrase, “Mayor Garcia of the
municipality where his factory was located”, Mayor Garcia is liable for unfair labor practices as
an employer.

Additionally, even if Mayor Garcia may not be a direct employer of the three workers
involved he can be held liable as an employer under ART 212, subsection [c] which states:

“EMPLOYER includes any person acting in the interest of an employer, directly or

indirectly. The term shall not include any labor organization or any of its officers or
agents except when acting as an employer.”

The act of Mayor Garcia in forcing and intimidating the three workers to abandon the union
is clearly in the interest of Mr. Santos, hence, Mayor Garcia may be deemed an employer. A
specific intent to protect the interest of the employer may be inferred from the friendly
relations between Mayor Garcia and employer Santos.

In the case of Mr. Santos, he has no liability since he has no knowledge of the acts of Mayor
Garcia, hence, he could not have participated, consented or ratified such acts.

Question No. I-a LABOR ORGANIZATION – DEF 1977

Define Labor Organization.

ANSWER:

LABOR ORGANIZATION means any union or association of employees which exists in whole
or in part for the purpose of collective bargaining or dealing with employers concerning terms
and conditions of employment. (ART 212)

Question No. I-b LEGITIMATE LABOR ORGANIZATION - DEF 1977

What is a legitimate labor organization?

ANSWER:

LEGITIMATE LABOR ORGANIZATION means any labor organization duly registered with the
Department of Labor and Employment and includes any branch or local thereof. (ART 212 [f])
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