URDANETA CITY UNIVERSITY

ACTIVITY # 3: LABOR STANDARDS

(By: Atty. Herbert C. Navarro)

INSTRUCTIONS: Answer the following QUESTIONS AND DIGEST THE

LISTED CASES. You will be graded according to legal application (20%),
presentation (10%), grammar (20%), and logical answers and/or digest (50%).
Observe proper margin and single strike erasures. Quizzes and digested cases
should be handwritten in composition notebooks and record books respectively.
Once done, take clear (per page) photographs of your work and submit via direct
message through a single set of attachment. The activity should be accomplished
for three (3) hours maximum and no submissions will be accepted later than 9:00
PM. Deductions will be made in accordance with the stated percentage and failure
to comply with the foregoing instructions.

What are the elements of an employer-employee relationship? (5%)

II

Gregorio was hired as an insurance underwriter by the Guaranteed

Insurance Corporation (GIC). He does not receive any salary but solely relies on
commissions earned for every insurance policy approved by the company. He hires
and pays his own secretary but is provided a free space in the office of the
company. He is, however, required to meet a monthly quota of twenty (20)
insurance policies, otherwise, he may be terminated. He was made to agree to a
Code of Conduct for underwriters and is supervised by a Unit Manager.
A. If you were the counsel for GIC, how would you argue that Gregorio is not
an employee of GIC? (5%)
B. If you were the counsel for Gregorio, how would you support your
position that Gregorio is an employee of GIC? (5%)
C. Suppose Gregorio is appointed as Unit Manager and assigned to
supervise several underwriters. He holds office in the company premises,
receives an overriding commission on the commissions of his
underwriters, as well as a monthly allowance from the company, and is
 supervised by a branch manager. He is governed by the Code of Conduct
for Unit Managers. Is he an employee of Guaranteed? Explain. (5%)

III

A, B, and C were hired as resident-doctors by MM Medical Center, Inc. In the

course of their engagement, A, B, 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 A, B, 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? (5%)
B. Is the Medical Director’s reliance on the contracts signed by A, B, and C
to refute the existence of an employer-employee relationship correct? If
not, are A, B, and C employees of MM Medical Center, Inc.? explain. (5%)

IV
What are the distinctions between a Legitimate Labor Contracting from a
Labor Only Contracting? (5%)
V

What is the touchstone for determining whether contracting is permissible?

(5%)

VI
W Gas Corp. is engaged in the manufacture and distribution to the general
public of various petroleum products. On January 1, 2010, W Gas Corp. entered
into a Service Agreement with Q 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 q Manpower Co., they used the equipment
owed by W gas Corp. in performing their tasks, and were likewise subject to
constant checking based on W gas Corp.’s procedures.
On February 1, 2010, Mr. R, one of the utility workers, was dismissed from
employment in line with the termination of the Service Agreement between W Gas
Corp. and Q Manpower Co. Thus, Mr. R filed a complaint for illegal dismissal
against W Gas Corp., claiming that Q Manpower Co. is only a labor-only contractor.
In the course of the proceedings, W Gas Corp. presented no evidence to prove Q
manpower Co.’s capitalization.
A. Is Q Manpower Co. a labor-only contractor? Explain. (5%)
B. Will Mr. R’s complaint for illegal dismissal against W Gas Corp. prosper?
Explain. (5%)

VII
The Roheim Corporation, a corporation engaged in resort services, entered
into a business arrangement with ACERPRIME manpower. ACERPRIME is a
business entity primarily engaged in the supply of hotel services manpower.
ACERPRIME has 100 company-uniformed and hotel services-skilled workers under
its employ. All assets of ACERPRIME are capitalized at 10 million pesos. The nature
of the business between ROHEIM and ACERPRIME is for the deployment of 50
personnel who will serve as chefs, chambermaids, bell boys, tour guides and front
desk personnel for the former’s accommodation facilities. It was also agreed at the
outset that the supply of manpower will be for a 2-year period starting on the 1 st of
January 2017 for the contractual amount of 7.5 million per annum. However, after
the period of one year or from January to December 2017, the project stopped
because ACERPRIME suddenly dismissed all employees deployed in Roheim for
having allegedly conspired against it when they attempted to be employed directly
by the Roheim Corporation. As a result, these employees were not given their
salaries for December 2017 which amounted to a total of 1 million pesos including
the 13th month pay. A labor case was thus filed against ACERPRIME and a year
thereafter, the Labor Tribunals ruled in favor of the employees awarding the 1
million pesos unpaid salaries and 13th month pay plus full backwages for the full
year of 2018 amounting to 6,500,000. This decision became final and executory.
ACERPRIME is not registered as an independent contractor with the Department of
Labor and Employment.
A. Is ACERPRIME a Legitimate Labor Contractor? (5%)
B. May the workers proceed against ROHEIM for the unpaid salaries, 13 th
month pay and full amount of backwages awarded? (5%)

VIII

Digest the following cases:

A. South Cotabato Communications Corporation vs. DOLE Secretary Patricia
Sto. Tomas, et.al., G.R. No. 217575, 15 June 2016. (10%)
B. Diamond Farms, Inc. vs. Southern Philippines Federation of Labor (SPFL),
etc., et al., G.R. Nos. 173254-55 and 173263, 13 January 2016. (10%)
C. Babas et al vs. LSC, G.R. No. 18609, December 15, 2010 (10%)
D. Diamond Farms, Inc. v. Southern Phils. Federation of Labor (SPFL)-
Workers Solidarity of DARBMUPCO/Diamond-SPFL, et al. G.R. No. 173254-
55 & 173263, January 13, 2016 (10%)