CIELONE JASPER P.

NEQUINTO
1705-18

This Questionnaire contains 6 pages including this page. Answer all questions in

3 hours and email it to zosimo.lira@msumain.edu.ph

I.

Japhet (J), Kurt (K), and Carlo (C) were hired as resident-doctors by MM Medical
Center, Inc. In the course of their engagement, J, K, and C maintained specific work
schedules as determined by the Medical Director. The hospital also monitored their
work through supervisors who gave them specific instructions on how they should
perform their respective tasks, including diagnosis, treatment, and management of
their patients.

One day J, K, and C approached the Medical Director and inquired about the non-
payment of their employment benefits. In response, the Medical Director told them
that they are not entitled to any because they are mere "independent contractors" as
expressly stipulated in the contracts which they admittedly signed. As such, no
employer-employee relationship exists between them and the hospital.

(a) What is the control test in determining the existence of an employer-

employee?

In the case of Calamba Medical Center, Inc. v. NLRC, under the

control test, an employment relationship exists between the resident-
doctor and the hospital if the hospital controls both the means and the
details of the process by which the physician is to accomplish his task.

(b) Is the Medical Director’s reliance on the contracts signed by J, K,

and C to refute the existence of an employer-employee relationship
correct? If not, are J, K, and C employees of MM Medical Center,
Inc.? explain.

No. J, K, and C are employees of the hospital.

Asia Steel Corp. v. WCC held that the contract of employment,

whether expressed or implied, marks the beginning of employment.

Thus, J, K, and C, as employees, have the right to employment

benefits.
 II.

Ms. Ruffa, the personal cook in the household of Omar, filed a monetary claim
against her employer, Omar, for denying her service incentive leave pay. Omar
argued that Ms Ruffa did not avail of any service incentive leave at the end of her one
(1) year of service and hence, not entitled to the said monetary claim.

(a) Is the contention of Omar tenable? Explain.

No, Omar's contention is not tenable.

Under Art. 95 (a) of the Labor Code, it is stated that “every employee
who has rendered at least one year of service shall be entitled to a yearly
service incentive leave of five days with pay.”

Thus, Ruffa is still entitled to incentive leave pay.

(b) Assuming that Ruffa is instead a clerk in Omar’s company with at

least 30 regular employees, will her monetary claim prosper? Explain

Yes, her monetary claim will prosper.

Art. 95 (b) states that this provision shall not apply to those employed
in establishments regularly employing less than ten employees.

As such, Ruffa can still claim incentive leave pay.

c) Ms. Rosarie, a sales assistant, is one of the eight (8) workers regularly
employed by ABJ Convenience Store. She was required to report on
December 25 and 30. Should ABJ Convenience Store pay her holiday
pay? Explain.

No, she is not entitled to holiday pay.

Art. 94 (a) of the Labor Code states that “every worker shall be paid his
regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers.”
 There are only eight (8) workers in ABJ Convenience Store, thus, she is
not entitled to holiday pay.

III

Rey, one of the sales representatives of RJ, Inc., was receiving a basic pay of
₱50,000.00 a month, plus a 1% overriding commission on his actual sales
transactions. In addition, beginning three (3) months ago, or in August 2019, Rey was
able to receive a monthly gas and transportation allowance of ₱5,000.00 despite the
lack of any company therefor.

In November 2019, Rey approached his manager and asked for his gas and
transportation allowance for the month. The manager declined his request, saying that
the company had decided to discontinue the aforementioned allowance considering
the increased costs of its overhead expenses. In response, Rey argued that RJ, Inc.’s
removal of the gas and transportation allowance amounted to a violation of the rule on
non-diminution of benefits.

Is the argument of D tenable? Explain

No, Rey's argument is not tenable.

In the case of Vergara v. Coca-Cola, the requisites of diminution of

benefits are enumerated as: (1) the grant or benefit is founded on a policy or
has ripened into a practice over a long period of time; (2) the practice is
consistent and deliberate; (3) the practice is not due to error in the construction
or application of a doubtful or difficult question of law; and (4) the diminution
or discontinuance is done unilaterally by the employer.

Rey's contention did not fall under the umbrella of the said requisites. As
such, there was no violation of the rule on non-diminution of benefits.

IV

Gerald Anderson Wang (Wang) is a drama talent hired on a per drama "participation
basis" by Oliver Radio Company. He worked from 8:00 a.m. until 5:00 p.m., six days
a week, on a gross rate of P80.00 per script, earning an average of P20,000.00 per
month. Wang filed a complaint before the Department of Labor and Employment
(DOLE) against Oliver Radio for illegal deduction, non-payment of service incentive
leave, and 13th month pay, among others. On the basis of the complaint, the DOLE
conducted a plant level inspection.
The DOLE Regional Director issued an order ruling that Wang is an employee of
Oliver Radio, and that Wang is entitled to his monetary claims in the total amount of
P30,000.00. Oliver Radio elevated the case to the Secretary of Labor who affirmed
the order. The case was brought to the Court of Appeals. The radio station contended
that there is no employer-employee relationship because it was the drama directors
and producers who paid, supervised, and disciplined him. Moreover, it argued that the
case falls under the jurisdiction of the NLRC and not the DOLE because Wang’s
claim exceeded P5,000.00.

[a] May DOLE make a prima facie determination of the existence of an

employer-employee relationship in the exercise of its visitorial and
enforcement powers?

Yes, DOLE may make a prima facie determination.

In the case of Bombo Radyo v. DOLE Secretary, it was stated that the
amount of Php 5,000 is not a limitation of the enforcement of the enforcement
power granted by Art. 128(b) of the Labor Code but on the adjudicatory or
recovery power provided in Art. 129.

Thus, the jurisdiction is with the DOLE.

C-Cortel Gas Corp. is engaged in the manufacture and distribution to the general
public of various petroleum products. On January 1, 2010, C Gas Corp. entered into a
Service Agreement with JK Manpower Co., whereby the latter undertook to provide
utility workers for the maintenance of the former’s manufacturing plant. Although the
workers were hired by JK Manpower Co., they used the equipment owed by C gas
Corp. in performing their tasks, and were likewise subject to constant checking based
on W gas Corp.’s procedures.

On February 1, 2010, Miranda, one of the utility workers, was dismissed from
employment in line with the termination of the Service Agreement between C Gas
Corp. and JK Manpower Co. Thus, Miranda filed a complaint for illegal dismissal
against C Gas Corp., claiming that JK Manpower Co. is only a labor-only contractor.
In the course of the proceedings, C Gas Corp. presented no evidence to prove Q
manpower Co.’s capitalization.

(a) Is JK Manpower Co. a labor-only contractor? Explain.

Yes, JK Manpower Co. is labor-only contractor.

 Art. 106 paragraph 4 of the Labor Code provides that “There is “labor-
only” 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. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who
shall be responsible to the workers in the same manner and extent as if the
latter were directly employed by him.”

JK Manpower Co. does not have the required substantial capital or

investment. As such, it is classified as labor-only contractor.

(b) Differentiate labor-only vs job contracting.

The difference between labor-only and job contracting are as follows:

(a) in job contracting, no employer-employee relationship exists between

the contractual employees of the job contractor and the principal; while, in
labor-only contracting, an employer-employee relationship is created by
law between the principal and the contractual employees supplied by the
labor-only contractor;

(b) in job contracting, the principal is considered only an "indirect

employer," as this term is understood under Art. 107 of the Labor Code;
while, in labor-only contracting, the principal is considered the "direct
employer" of the contractual employees in accordance with the last
paragraph of Art. 106 of the Labor Code;

(c) in job contracting, the joint and several obligation of the principal and
the legitimate job contractor is only for a limited purpose, that is, to ensure
that the employees are paid their wages. Other than this obligation of
paying the wages, the principal is not responsible for any claim made by
the contractual-employees; while, in labor-only contracting the principal
becomes jointly and severally liable with the manner and extent that the
principal is liable to employees directly hired by him/her, as provided in
Art. 106 of the Labor Code as amended; and

(d) in job contracting, the legitimate job contractor undertakes to perform a

specific job for the principal; while, in labor-only contracting, the labor-
only contractor merely provides, supplies, results and places the personnel
 to work for the principal: In short, the legitimate job contractor provides
services; while the labor-only contractor provides only manpower.

(c) What is trilateral relationship?

Trilateral relationship refers to the relationship in a contracting or

subcontracting arrangement where there is contract for a specific job, work
or service between the principal and the contractor, and a contract of
employment between tl1e contractor and its workers

(d) Who are the parties in a legitimate job contract?

The three (3) parties in a legitimate job contract are:

(a) The principal or owner of the project who decides to farm out a job,
work or service contractor;

(b) the job contractor who has the capacity to independently undertake the
performance of the job, work and service; and

(c) the contractual workers engaged by the contractor to accomplish the

job, work or service.

(e) Assuming that Miranda wears I.D containing a logo of C-Gas Corp
together with JK Manpower logo, wherein such ID is essential upon
entering the premises; can he be considered as regular employee? By
whom? Explain.

(f) Assuming without admitting that Miranda directly follows/receive

instructions from Guadalupe, a Supervisor of C-Gas Corp as to the
manner on how to perform the job, will there be changes as to the
status of Miranda? Explain
(g) Will your answer be the same if Miranda, in order to complete his
task, uses the tools and equipment of C-Gas Corp to carry out the
job?

(h) Assuming that Miranda hasn’t received salary from his employer,
where can he invoke such demand? State your basis

(i) In relation to the illegal dismissal case filed by Miranda against C-Gas
Corp, he adduced additional evidence showing insufficiency of
substantial capital by the contractor as well as lack of materials, tools
and machineries to complete the job which is blatant violation of
Department Order 18-A (D.O. 18-A) issued by the Department of
Labor and Employment. C-Gas Corp countered on the other hand
that having substantial capital alone will surpass the requirement D.O
174. Decide.

VI.

(a)

Where and How was sexual harassment be committed? Explain

R.A. No. 7877 or the Anti-Sexual Harassment Act of 1995 provides how
sexual harassment can be committed. To wit:

(a) In a work-related or employment environment, sexual harassment is

committed when:
 (1) The sexual favor is made as a condition in the hiring or in the
employment, re-employment or continued employment of said
individual, or in granting said individual favorable compensation, terms
of conditions, promotions, or privileges; or the refusal to grant the sexual
favor results in limiting, segregating or classifying the employee which
in any way would discriminate, deprive or diminish employment
opportunities or otherwise adversely affect said employee;

(2) The above acts would impair the employee's rights or privileges
under existing labor laws; or

(3) The above acts would result in an intimidating, hostile, or offensive

environment for the employee.

(b) In an education or training environment, sexual harassment is committed:

(1) Against one who is under the care, custody or supervision of the
offender;

(2) Against one whose education, training, apprenticeship or tutorship is

entrusted to the offender;

(3) When the sexual favor is made a condition to the giving of a passing
grade, or the granting of honors and scholarships, or the payment of a
stipend, allowance or other benefits, privileges, or consideration; or

(4) When the sexual advances result in an intimidating, hostile or

offensive environment for the student, trainee or apprentice.

(b)

Ivana Kalahi, a native probinsyana, seeks for a job and landed as clerk at the
hardware supplies in the city. After working as a casual employee for six
months, she signed a contract for probationary employment for six months.
Having a busty chest and physically attractive, her supervisor, Ms. Aiza
Pempengcs, took special interest to befriend her. When her probationary
period was about to expire, she was surprised when one afternoon after
working hours, Ms. Aiza followed her to the women’s comfort room. After
seeing that no one else was around. Ms. Aiza placed her arm over Ivana’s
shoulder and softly whisper to her ears saying: “ I like you. I love your
compassion and dedication and with that I can give you a favourable
recommendation to become a regular employee. Can you come over to my
apartment unit on Saturday evening so we can have a little drink and guitar?
I’m alone, and I’m sure you want to stay longer with the company.”
(a) Is Ms. Aiza liable for sexual harassment committed in a work-related
or employment environment?

Yes, she is liable for sexual harassment.

Sec. 3(a)(1) under R.A. No. 7877 or the Anti-Sexual Harassment Act
of 1995 provides that “sexual favor is made as a condition in the hiring or
in the employment, re-employment or continued employment of said
individual, or in granting said individual favorable compensation, terms of
conditions, promotions or privileges; or the refusal to grant the sexual
favor results in limiting, segregating or classifying the employee which in
any way would discriminate, deprive or diminish employment
opportunities or otherwise adversely affect said employee.”

In this case, Ms. Kalahi is promised a favorable recommendation and

a longer stay in the company by Ms. Pempengcs. Thus, the former is liable
for sexual harassment.

(b) Assuming, Charice, the counterpart of Ivana in doing clerical works,

utter the same words. Saying that she is very close to their manager,
Mr. Omar Wang and that she can highly recommend her to him. Will
your answer be the same?

No.

The Anti-Sexual Harassment Act of 1995 only applies when the

offender is a person having authority, influence or moral ascendancy over
another in a work or training or education environment.

Charice, as a mere clerk, has no authority over Ms. Kalahi. Thus,

Charice is not liable for sexual harassment.

(c) Supposing that Mr. Omar Wang already knew what happen to Ivana
but opted to continue his passion for biking and guitar instead of
listening to her problems. Can he be held liable? Explain

Yes, he can be held liable.

R.A. No. 7877 states that “any person who directs or induces another
to commit any act of sexual harassment as herein defined, or who
 cooperates in the commission thereof by another without which it would
not have been committed, shall also be held liable under this Act.”

Mr. Omar Wang’s silence is tantamount to cooperation with the

offender. As such, he is liable.

VII

Kathlyn Jenner has 5 children. She suffered a miscarriage late in her pregnancy and
had to undergo an operation. In the course of the operation, her obstetrician further
discovered a suspicious-looking mass that required the subsequent removal of her
uterus (hysterectomy). After surgery, her physician advised Kathlyn to be on full bed
rest for six (6) weeks. Meanwhile, the biopsy of the sample tissue taken from the mass
in Tammy's uterus showed a beginning malignancy that required an immediate series
of chemotherapy once a week for four (4) weeks. What can BB GAnda, KAthlyn's
2nd husband and the father of her two (3) younger children - claim as benefits
under the circumstances?

Under R.A. No. 8187 or the Paternity Act of 1996, the husband is entitled to a
seven-day leave before, during or after the delivery by his wife. However, this benefit
can only be availed of not later than 60 days after the delivery date and the same is not
convertible to cash.

VIII

Mans Weto had been an employee of Nopolt Assurance Company for the last ten (10)
years. His wife of six (6) years died last year. They had four (4) children. He then fell
in love with Jovy, his co-employee, and they got married. In October this year,
Weto’s new wife is expected to give birth to her first child. He has accordingly filed
his application for paternity leave, conformably with the provisions of the Paternity
Leave Law which took effect in 1996. The HRD manager of the assurance firm
denied his application, on the ground that Weto had already used up his entitlement
under that law. Weto argued that he has a new wife who will be giving birth for the
first time, therefore, his entitlement to paternity leave benefits would begin to run
anew.

(a) Whose contention is correct, Weto or the HRD manager?

HRD manager’s argument is correct.

 R.A. No. 8187 or the Paternity Act of 1996 provides that only the “first
four (4) deliveries of the legitimate spouse with whom he is cohabiting.”

As a father having his 5th child, Mr. Weto shall not be entitled for a
paternity leave anymore. The law does not reset the number of paternity leave
a male employee is entitled to if he is remarried to a second legitimate spouse.

(b) Is Jovy entitled to maternity leave benefits?

Yes, she is entitled to maternity leave benefits.

Unlike the Paternity Act of 1996, Art. 14-A of R.A. 8282 or the Social
Security Law does not provide limitations on the number of pregnancies for a
beneficiary to be entitled to such benefits.

As such, Jovy has the right for maternity leave benefits.

IX

Upon a review of the wage rate and structure pertaining to its regular rank and file
employees, Q Corporation found it necessary to increase its hiring rates for employees
belonging to the different job classification levels to make their salary rates more
competitive in the labor market.

After the implementation of the new hiring salary, Union X, the exclusive bargaining
agent of the rank and file employees, demanded a similar salary adjustment for the old
employees. It argued that the increase in hiring rates resulted in wage distortion since
it erased the wage gap between the new and old employees. In other words, new
employees would enjoy almost the same salary rates as K Corporation’s old
employees.

(a) What is wage distortion?

Wage distortion is a situation where an increase in prescribed wage rates

results in the elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such
wage structure based on skills, length of service, or other logical bases of
differentiation. (R.A. No. 6727)
(b) Did a wage distortion arise under the circumstances which legally
obligated Q Corporation to rectify the wages of its old employees?
Explain.

A wage distortion did not arise.

The case of Prubankers Association v. Prudential Bank enumerated the

elements of wage distortion as: (1) an existing hierarchy of positions with
corresponding salary rates; (2) a significant change in the salary rate of a
lower pay class without a concomitant increase in the salary rate of a higher
one; (3) the elimination of the distinction between the two levels; and (4) the
existence of the distortion in the same region of the country.

Q Corp. only increased the pay of the new employees which does not
result to wage distortion.

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