Apprenticeship and Learnership

Question VIII
Differentiate learnership from apprenticeship with respect to the period of
training, type of work, salary and qualifications. (5%)
Answer :
As to type of work, apprentices are hire in highly technical industries and only in
apprenticeable occupations as approved by the Secretary of Labor and Employment,
while learners are hired in semi-skilled and industrial occupation which are not
apprenticeable.
As to period of training, apprentices are hired for more than three(3) months but
not exceed six (6) month, while learners are hired for a period not to exceed three (3)
months.
As to salary, both apprentice and learners are entitled to 75% of the minimum
wage and full payment when employed in piece or incentive-rate jobs during training. In
apprenticeship, the participating enterprise may deduct from its taxable income one-half
of the value of the labor as training expense, while in Learnership, the participating
employer may not deduct the value of its training costs from its taxable income.
As to qualifications, both learners and apprentices must at least be 15 years of
age.
(Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, pp 50)

Attorney’s Fee and Legal Interest

Question XVI
In a case for illegal dismissal and non-payment of benefits, with prayer for
Damages·, Apollo was awarded the following: 1) P200,000.00 as backwages; 2)
P80,000.00 as unpaid wages; 3) P20,000.00 as unpaid holiday pay; 4) PS,000.00 as
unpaid service incentive leave pay; 5) P50,000.00 as moral damages; and 6)
P10,000.00 as exemplary damages. Attorney's fees of ten percent (10%) of all the
amounts covered by items 1 to 6 inclusive, plus interests of 6% per annum from the
date the same were unlawfully withheld, were also awarded.
a. Robbie, the employer, contests the award of attorney fees amounting to 10%
on all the amounts adjudged on the ground that Article 111 of the Labor Code
authorizes only 10% "of the amount of wages recovered". Rule on the issue
and explain. (2.5%)
 b. Robbie likewise questions the imposition of interests on the amounts in
question because it was not claimed by Apollo, and the Civil Code provision
on interests does not apply to a labor case. Rule on the issue and explain.
(2.5%)

Answer :
a. The attorney’s fees should be granted to Robbie. There are two commonly
accepted concepts of attorney’s fees, the so-called ordinary and extraordinary. In
its ordinary concept, an attorney’s fee is the reasonable compensation paid to a
lawyer by his client for the legal services he has rendered to the latter. The basis
of this compensation is the fact of his employment by and his agreement with the
client. In its extraordinary concept, attorney’s fees are deemed indemnity for
damages ordered by the court to be paid by the losing party in a litigation. The
instances where these may be awarded are those enumerated in Article 2208 of
the Civil Code, specifically par. 7 thereof which pertains to actions for recovery of
wages, and is payable not to the lawyer but to the client, unless they have
agreed that the award shall pertain to the lawyer as additional compensation or
as part thereof. The extraordinary concept of attorney’s fees is the one
contemplated in Article 111 of the Labor Code, which provides: Art. 111.
Attorney’s fees.—(a) In cases of unlawful withholding of wages, the culpable
party may be assessed attorney’s fees equivalent to ten percent of the amount of
wages recovered x x x The aforequoted Article 111 is an exception to the
declared policy of strict construction in the awarding of attorney’s fees. Although
an express finding of facts and law is still necessary to prove the merit of the
award, there need not be any showing that the employer acted maliciously or in
bad faith when it withheld the wages. There need only be a showing that the
lawful wages were not paid accordingly. (PCL Shipping Philippines, Inc. vs.
National Labor Relations Commission, 511 SCRA 44, G.R. No. 153031
December 14, 2006)
 b. It is now well-settled that generally, legal interest maybe imposed upon any
unpaid wages, salary differential, merit increases, productivity bonuses,
separation pay, backwages on other monetary claims and benefits awarded
illegally dismissed employees. It’s grant however remains discretionary upon the
courts. (Lim vs. HMR Philippines, Inc., 731 SCRA 576, G.R. No. 201483 August
4, 2014) Legal interest was imposed on all monetary awards by the SC in the
case of Bani Rural Bank, Inc. vs. De Guzman, 709 SCRA 330, G.R. No. 170904
November 13, 2013 thee Court therein declared that imposition of legal interest
in any final and executory judgment does not violated the immutability principle.
The Court ruled that once a decision in a labor case becomes final, it becomes a
judgment for money from which another consequence follows the payment of
interest in case of delay.

Certification Election

Question X
Lazaro, an engineer, organized a union in Garantisado Construction Corporation
(Garantisado) which has 200 employees. He immediately filed a Petition for Certification
Election, attaching thereto the signatures of 70 employees. Garantisado vehemently
opposed the petition, alleging that 25 signatories are probationary employees, while 5
are supervisors. It submitted the contracts of the 25 probationary employees and the job
description of the supervisors. It argued that if 30 is deducted from 70, it gives a balance
of 40 valid signatures which is way below the minimum number of 50 signatories
needed to meet the alleged 25% requirement. If you are the Director of Labor Relations,
will you approve the holding of a Certification Election. Explain your answer. (5%)

Answer :
Yes, I will allow the certification election. What is required for a certification
election is that at least 25 per cent of the bargaining unit must sign the petition. Since 25
percent of 200 is 50 then the fact that there were   70 signatories who signed means
that it should be allowed. Note that out of the70 signatories only the supervisors should
be excluded. Article 254 of the Labor Code allows supervisory employees to form, join,
or assist separate labor organizations but they are not eligible for membership in a
Labor organization of the rank-and-file. Thus, they are the only ones, that should be
disqualified. As to the probationary employees, they should be included. The fact that
an employee is given a classification such as beginner, trainee, or probationary
employee, and the fact that contemplation of permanent tenure is subject to satisfactory
completion of an initial trial period, are insufficient to warrant such employees' exclusion
from a bargaining unit. Moreover the eligibility of probationary employees does not turn
on the proportion of such employee who, willingly or not, fails to continue to work for the
employer throughout the trial period."

Visitorial and Enforcement of Power : DOLE

Question III
Inggo is a drama talent hired on a per drama “participation basis” by DJN 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. Inggo filed a complaint
before the Department of Labor and Employment (DOLE) against DJN Radio for illegal
deduction, non-payment of service incentive leave, and 13 th 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 Inggo is an employee of
DJN Radio, and that Inggo is entitled to his monetary claims in the total amount of
P30,000.00. DJN 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 Inggo’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? (2.5%)
 b. If the DOLE finds that there is an employee-employer relationship, does the
case fall under the jurisdiction of the Labor Arbiter considering that the claim
of inggo is more than P5,000.00. Explain. (2.5%)
Answer :
a. Yes. The DOLE, through its visitorial and enforcement powers, may
determine the prima facie existence of the employer-employee relationship for
porpuses of securing the employer’s compliance with the labor standards and
other labor legislation. In fact, the law does not limit DOLE’s’ power, and the
guidelines (control test) used by the court in determining the existence of the
relationship is also the same test used by the former.
(Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, pp 302)

b. No. The case still falls under the jurisdiction of the DOLE. The expanded
power of the Secretary of Labor, or its duly authorized representative, under
R.A. 7730 has removed the Php5,000 limitation on the amount of money
claims. It allows the DOLE Secretary, or its duly authorized representative, to
exercise. Its visitorial and enforcement powers even of the amount of the
claims exceeds P5,000.
(Bombo Radyo Phils., Inc. vs. The Secretary of the Department of Labor and
Employment, G.R. No. 179652, March 6, 2012, 667 SCRA 538, Velasco, J.)
(Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, pp 302)

Employee-Employer Relationship

Question II
Gregorio was hired as an insurance underwriter by the Guaranteed Insurance
Corporation (Guaranteed). 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 free office 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. Is Gregorio an employee of Guaranteed? Explain. (2.5%)
b. 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. (2.5%)

Answer :
a. No. Gregorio is not an employee of Guarantee. Result-wise, Guaranteed
Insurance Corporation can impose production quotas to Gregorio or any of its
agents to management policy decisions that the element of control under labor
law cannot reach. The company’s code of conduct, all of which do not intrude
into Gregorio’s means and manner of conducting his sales and only control him
as to the desired results is not the concept of control contemplated under the
labor law. The court held that a commitment to abide by the rules and regulations
of an insurance company does not ipso facto make the insurance agent an
employee. Neither do guidelines somehow restrictive of the insurance agent’s
conduct necessarily indicate "control" as this term is defined in
jurisprudence. Guidelines indicative of labor law "control," as the first Insular Life
case tells us, should not merely relate to the mutually desirable result intended
by the contractual relationship; they must have the nature of dictating the means
or methods to be employed in attaining the result, or of fixing the methodology
and of binding or restricting the party hired to the use of these means. In fact,
results-wise, the principal can impose production quotas and can determine how
many agents, with specific territories, ought to be employed to achieve the
company’s objectives. These are management policy decisions that the labor law
element of control cannot reach.
 (Gregorio Tongko vs. Manulife and Renato Vergel De Dios, G.R. No. 167622,
June 29, 2010, 570 SCRA 503, Brion, J.)
(Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, pp 50)

b. No. Gregorio is not an employee of Guaranteed. As a matter of Insurance

practice, an agency relationship prevails in the insurance industry and not an
employer-employee relationship. A commitment to abide by the Code of Conduct
for Unit Managers does not “ipso facto” make a Unit Manager, like Gregorio, an
employee. Guidelines indicative of labor law “control” must have the nature of
dictating Gregorio’s means and methods in attaining his desired result or of fixing
or restricting his methodology in settling the insurance, which, unfortunately, is
absent in this case.
(Gregorio Tongko vs. Manulife and Renato Vergel De Dios, G.R. No. 167622,
June 29, 2010, 570 SCRA 503, Brion, J.)
(Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, pp 50-51)

Question XIII
Matibay Shoe and Repair Store, as added service to its customers, devoted a
portion of its store to a shoe shine stand. The shoe shine boys were tested for their skill
before being allowed to work and given ID cards. They were told to be present from the
opening of the store up to closing time and were· required to follow the company rules
on cleanliness and decorum. They bought their own shoe shine boxes, polish, and rags.
The boys were paid by their customers for their services but the payment is coursed
through the store's cashier, who pays them before closing time. They were not
supervised in their work by any managerial employee of the store but for a valid
complaint by a customer or for violation of any company rule, they can be refused
admission to the store. Were the boys employees of the store? Explain. (5%)

Answer :
Yes. The boys were employees of the store. Employee-employer relationship is
determined by the following elements, namely:
 (a) the selection and engagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the power of control the employee’s conduct or the so-called “control test”.
The existence of the first three elements are supported by the following
circumstances, respectively: (1) they were provided with their ID cards and allowed to
occupy a portion of the store to be their shoe stand; and (2) the cashier pays their
salaries out of the payments made by the customers; and (3) they can be barred entry
into the store for violation of company rules.
Lastly, the fourth element which is the power of control is likewise present when the
store required the boys not only to be present commencing from its opening up to the
closing time, but also to follow the company rules and proper decorum.
(Bar Reviewer Labor and Social Legislation, Caingat Jr., 2020, pp 28)

Question XV
Jim is the holder of a certificate of public convenience for a jeepney. He entered
into a contract of lease with Nick, whereby they agreed that the lease period is for one
(1) year unless sooner terminated by Jim for any of the causes laid down in the
contract. The rental is thirty thousand pesos (P30,000.00) monthly. All the expenses for
the repair of the jeepney, together with expenses for diesel, oil and service, shall be for
the account of Nick. Nick is required to make a deposit of three (3) months to answer for
the restoration of the vehicle to its good operating condition when the contract ends. It is
stipulated that Nick is not an employee of Jim and he holds the latter free and harmless
from all suits or claims which may arise from the implementation of the contract. Nick
has the right to use the jeepney at any hour of the day provided it is operated on the
approved line of operation.
After five (5) months of the lease and payment of the rentals, Nick became
delinquent in the payment of the rentals for two (2) months. Jim, as authorized by the
contract, sent a letter of demand rescinding the contract and asked for the arrearages.
Nick responded by filing a complaint with the NLRC for illegal dismissal, claiming that
the contract is illegal and he was just forced by Jim to sign it so he can drive. He claims
he is really a driver of Jim on a boundary system and the reason he was removed is
because he failed to pay the complete daily boundary , of one thousand (P1,000.00) for
2 months due to the increase in the number of tricycles.
a. Jim files a motion to dismiss the NLRC case on the ground that the regular
court has jurisdiction since the agreement is a lease contract. Rule on the
motion and explain. (2.5%)
b. Assuming that Nick is an employee of Jim, was Nick validly dismissed?

Answer:
a. Jim’s motion to dismiss must be denied. The relationship between Jim as jeep
owner and Nick as jeepney driver is that of employer-employee and not of lessor
lessee. The existence of employer-employee relationship is determined by law
and not by the agreement of parties. Even if Nick takes material possession of
the jeep, Jim, as the holder of certificate of public convenience, is entitled to
exercise supervision and control over his drivers by seeing to it that they follow
the route as prescribed by law. Moreover, Nick has been engaged to perform an
activity which is usually necessary or desirable in the usual trade or business of
Jim. (Paguio Transport Corporation vs. NLRC and Wilfredo Melchor, G.R. No.
119500, August 28, 1998, 294 SCRA 657, Panganiban, J.)
b. Yes, Nick’s dismissal was valid the default on the part of Nick to pay Jim two (2)
monthly rentals is a just cause for termination. Their contract would be of no
force and effect should Nick simply disregard his monthly obligation to Jim to the
prejudice of the latter’s business. Nick’s conduct is analogous to serious
misconduct which is a just cause of dismissal. (Villamaria, Jr., vs. Court of
Appeals, 487 SCRA 571, G.R. No. 165881, April 19, 2006, Callejo, Sr., J. with
reference to Cosmos Bottling vs. Wilson Fermin, G.R. No. 193676, June 20,
2012, Sereno, J.)
(Bar Reviewer Labor and Social Legislation, Caingat Jr., 2020, pp 37)

Job Contracting : Labor Only Contracting

Question XVIII
 Empire Brands (Empire) contracted the services of Style Corporation (Style) for
the marketing and promotion of its clothing line. Under the contract, Style provided
Empire with Trade Merchandising Representatives (TMRs) whose services began on
September 15, 2004 and ended on June 6, 2007, when Empire terminated the
promotions contract with Style.
Empire then entered into an agreement for manpower supply with Wave Human
Resources (Wave). Wave owns its condo office, owns equipment for the use by the
TMRs, and has assets amounting to Pl,000,000.00. Wave provided the supervisors who
supervised the TMRs, who, in tum, received orders from the Marketing Director of
Empire. In their agreement, the parties stipulated that Wave shall be liable for the
wages and salaries of its employees or workers, including benefits, and protection due
them, as well as remittance to the proper government entities of all withholding taxes,
Social Security Service, and Philhealth premiums, in accordance with relevant laws.
As the TMRs wanted to continue working at Empire, they submitted job
applications as TMRs with Wave. Consequently, Wave hired them for a term of five (5)
months, or from June 7, 2007 to November 6, 2007, specifically to promote Empire's
products.
When the TMRs' 5-month contracts with Wave were about to expire, they sought
renewal thereof, but were refused. Their contracts with Wave were no longer renewed
as Empire hired another agency. This prompted them to file complaints for illegal
dismissal, regularization, non-payment of service incentive leave and 13th month pay
against Empire and Wave.
[a] Are the TMRs employees of Empire? (2.5%)
[b] Were the TMRs illegally dismissed by Wave? (2.5%)
Answer :

a. Yes from the moment Empire contracted the services of Style both
engaged in a Labor-Only Contract. The following elements are present: i)
The contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed and
the employees recruited, supplied or placed by such contractor or
 subcontractor are performing activities which are directly related to the
main business of the principal; or ii) The contractor does not exercise the
right to control over the performance of the work of the contractual
employee.

b. No. As the TMRs are employees of Empire, Wave did not have
the power of dismissal; thus, even if Wave dismissed the TMRs the same
has no consequence.

Question XX
Mario Brothers, plumbing works contractor, entered into an agreement with Axis
Business Corporation (Axis) for the plumbing works of its building under construction.
Mario Brothers engaged the services of Tristan, Arthur, and Jojo as plumber, pipe fitter,
and threader, respectively. These workers have worked for Mario Brothers in numerous
construction projects in the past but because of their long relationship, they were never
asked to sign contracts for each project. No reports to government agencies were made
regarding their work in the company.
During the implementation of the works contract, Axis suffered financial
difficulties and was not able to pay Mario Brothers its past billings. As a result, the three
(3) employees were not paid their salaries for two (2) months and their 13th month pay.
Because Axis cannot pay, Mario Brothers cancelled the contract and laid off Tristan,
Arthur, and Jojo. The 3 employees sued Mario Brothers and Axis for illegal dismissal,
unpaid wages, and benefits.
[a] Mario Brothers claims the 3 workers are project employees. It explains that
the agreement is, if the works contract is cancelled due to the fault of the client,
the period of employment is automatically terminated. Is the contractor correct?
Explain. (2.5%)
 [b] Can Axis be made solidarily liable with Mario Brothers to pay the unpaid
wages and 13th month pay of Tristan, Arthur, and Jojo? Explain. (2.5%)
Answer :
a. No, the contractor is not correct. A project employment arrangement exists
only when the project employees were assigned to carry out specific
project or undertaking. The duration and the scope of which is specified at
the time the employees were engaged for that project. The absence of a
written contract setting forth among others, the specific project its duration
or the scope of the work negates the existence of project employment. It is
also required that the employer must submit a termination report to the
DOLE everytime a project is completed. The fact that Tristan, Arthur and
Jojo have been engaged by Mario Brothers in the past for numerous
projects without the latter submitting any termination report to the DOLE is
indicative that they are not project but regular employees. (GMA Network
vs. Carlos Pabriga, et. al., G.R. No. 176419, November 27, 2013, 710
SCRA 690, Leonardo-De Castro, J. and DOLE Department Order No. 19)
b. Yes. Axis shall be treated as the indirect employer which shall be jointly
and solidarily liable with Mario Brothers with respect to the money claims
of Tristan, Arthur and Jojo under the contract. (Article 106, Labor Code, as
amended)
(Bar Reviewer Labor and Social Legislation, Caingat Jr., 2020, pp 248)

Maternity Leave

Question XIV
Tess, a seamstress at Marikit Clothing Factory, became pregnant. Because of
morning sickness, she frequently absented herself from work and often came to the
factory only four (4) days a week. After two (2) months, the personnel manager told her
that her habitual absences rendered her practically useless to the company and, thus,
asked her to resign. She begged to be retained, citing her pregnancy as reason for her
absences. Tess asked for leave of absence but her request was denied. She went on
leave nevertheless. As a result, she was thus dismissed for going on leave without
permission of management.
Tess filed a complaint for illegal dismissal. The company's defense: she was
legally dismissed because of her numerous absences without leave and not because of
her pregnancy. On the other hand, Tess argues that her dismissal was an act of
discrimination, based as it was on her pregnancy which the company treated as a
disease. Whose position is meritorious-the company's or Tess'? Explain. (5%)

Answer :
The position of Tess is meritorious because the dismissal was based on the
alleged failure of Tess to file a leave of absence. She filed the said leave but was
denied by Mariit Clothing Factory. Under the present law, a pregnant worker is entitled
to go on a maternity leave. She asked for leave of absence only to be denied and yet
she was terminated for absence without leave. This is an act that flagrantly violates
Tess’ right which translates to discrimination.

Misconduct

Question XI
Dion is an Accounting Supervisor in a trading company. He has rendered
exemplary service to the company for 20 years. His co-employee and kumpadre, Mac,
called him over the phone and requested him to punch his (Mac's) daily time card as he
(Mac) was caught in a monstrous traffic jam. Dion acceded to Mac's request but was
later caught by the Personnel Manager while punching. Mac's time card. The company
terminated the employment of Dion on the ground of misconduct. Is the dismissal valid
and just? Explain. (5%)

Answer :
Yes. The dismissal is valid and just. Dion’s act of punching Mac’s timecard while
the latter is not present is a form of dishonesty which is grave and aggravated in
character. Supervisory employee, like Dion, is outside the protective mantle. Of the
principle of social justice concealing the truth from the company is clear disloyalty to the
company which has long employed him. Dion’s exemplary performance for twenty (20)
years is not a valid justification not to implement the dismissal because the longer an
employee stays in the service, the greater is his/her responsibility for compliance with
the code of disciple in the company. (Visayan Electric Company Union vs. Visayan
Electric Company and Reynaldo Hayan Moya vs. First Solid Rubber Industries)

Question XII
Amaya was employed as a staff nurse by St. Francis Hospital (SFH) on July 8,
2014 on a probationary status for six (6) months. Her probationary contract required,
among others, strict compliance with SFH's Code of Discipline.
On October 16, 2014, Dr. Ligaya, filed a Complaint with the SFH Board of
Trustees against Amaya for uttering slanderous remarks against the former. Attached to
the complaint was a letter of Minda, mother of a patient, who confirmed the following
remarks against Dr. Ligaya:
"Bakit si Dr. Ligaya pa ang napili mong 'pedia' eh ang tandatanda na n'un? E
makakalimutin na yun xx x Alam mo ba, kahit wala namang diperensya yung
baby, ipinapa-isolate nya?"
The SFH President asks you, being the hospital's counsel, which of these two (2)
options is the legal and proper way of terminating Amaya: a) terminate her for a just
cause under Article 288 of the Labor Code (Termination by Employer); or b) terminate
her for violating her probationary contract. Explain. (5%)

Answer:
I will recommend the termination of Amaya for her dishonesty and disloyalty to SFH
which is considered a serious misconduct under Article 297 of the Labor Code. A
probationary employee like Amaya, maybe terminated for just and authorized causes,
and for failure to meet the standards set by the employer.
SFH is engaged in a business whose actual survival is dependent on the reputation
of its medical practitioners. Amaya’s acts on imputing unethical behavior and lack of
professionalism to Dr. Ligaya are considered misconduct which is a just cause of
dismissal.
An employer may dismiss an employee on the following just causes:
a) serious misconduct;
b) willful disobedience;
c) gross and habitual neglect of duty;
d) fraud or breach of trust;
e) commission of a crime or offense against the employer, his family or
representative;
f) other similar causes.
The other grounds are authorized causes:
a) installation of labor-saving devices;
b) redundancy;
c) retrenchment to prevent losses;
d) closure and cessation of business; and
e) disease / illness.
(Bar Reviewer Labor and Social Legislation, Caingat Jr., 2020, pp 657)

Quitclaim
Question I
What are the requisites of a valid quitclaim? (5%)
Answer :
Requisites of a valid quitclaim.
Cases abound where the Court gave effect to quitclaims executed by the
employees when the employer is able to prove the following requisites:
1. the employee executes a deed of quitclaim voluntarily;
2. there is no fraud or deceit on the part of any of the parties;
3. the consideration of the quitclaim is credible and reasonable; and
4. the contract is not contrary to law, public order, public policy, morals or goods
customs, or prejudicial to a third person with a right recognized by law.
(Luis Doble, Jr. vs. ABB, Inc., G.R. No. 215627, June 5, 2017, Peralta, J.)
Remedies : Appeal Bond
Filmore Corporation was ordered to pay P49 million to its employees by the
Labor Arbiter. It interposed an appeal by filing a Notice of Appeal and paid the
corresponding appeal fee. However, instead of filing the required appeal bond
equivalent to the total amount of the monetary award, Filmore filed a Motion to Reduce
the Appeal Bond to P4,000,000.00 but submitted a surety bond in the amount of P4.9
million. Filmore cited financial difficulties as justification for its inability to post the appeal
bond in full owing to the shutdown of its operations. It submitted its audited financial
statements showing a loss of P40 million in the previous year. To show its good faith,
Filmore also filed its Memorandum of Appeal.
The NLRC dismissed the appeal for non-perfection on the ground that · posting
of an appeal bond equivalent to the monetary award is indispensable for the perfection
of the appeal and the reduction of the appeal bond, absent any showing of meritorious
ground to justify the same, is not warranted. Is the dismissal of the appeal correct?
Explain. (5%)

Answer :
No, the appeal’s dismissal is incorrect. The bond requirement on appeals may be
relaxed when there is substantial compliance with the NLRC Rules of Procedure or
when the appellant shows willingness to post a partial bond.
Filmore’s timely filing of a motion to reduce bond accompanied with the posting of a
provisional surety bond of P4.9 Million, which is at least 10% of the judgment awards,
excluding damages and attorney’s fee, will stop the running of the 10-day reglementary
period to perfect the appeal. The NLRC then will proceed to resolve the motion to
reduce bond and determine the final amount of bond taking into consideration the
reasonable amount and the merits of the case.
Should the NLRC deny the motion to reduce bond or if it requires Filmore to post a
bond that exceeds the provisional bond, he shall be given a fresh period of ten (10)
days from notice of the NLRC’s order by posting the required bond.
(Manila Mining vs. Lowito Amor, G.R. No. 182800, April 15, 2015, Perez, J.)
(Bar Reviewer Labor and Social Legislation, Caingat Jr., 2020, pp 950-951)

SSS Membership and Liability of the Employer

Question XVII
Baldo, a farm worker on pakyaw basis, had been working on Dencio's land by
harvesting abaca and coconut, processing copra, and clearing weeds from year to year
starting January 1993 up to his death in 2007. He worked continuously in the sense that
it was done for more than one harvesting season.
[a] Was Dencio required to report Baldo for compulsory social security coverage
under the SSS law? Explain. (2.5%)
[b] What are the liabilities of the employer who fails to report his employee for
social security coverage? Explain. (2.5%)
Answer :
a. Dencio is required to report Baldo for compulsory social security  
coverage under the SSS Law. From the facts mentioned, Baldo is clearly
an employee of Dencio. Considering the length of time that Baldo has
worked with Dencio, it may be justifiably concluded that he is engaged to
perform activities necessary or desirable in the usual trade or business of
Dencio and is therefore a regular employee. Length of service was used by
the Supreme Court in the case to pronounce that the individual involved
is a regular employee. Baldo, is thus, not a casual or  temporary
employee, exempted from the coverage of the SSS Law.
(Brotherhood Labor Unity Movement of the Philippines vs. Zamora,
147 SCRA 49, No. L-48645 January 7, 1987)

b. The employer is subject to the following liabilities: It shall pay to the

SSS damages equivalent to the benefit which the employee would have
been entitled had his name been reported on time to the SSS, except that in
case of pension benefits, the employer shall be liable to pay the SSS
damages equivalent to five years monthly pension; however, if the
contingency occurs within thirty (30) days from date of employment, the
 employer shall be relieved of his liability for damages and shall pay the
corresponding unremitted contributions and penalties thereon.
Strike

Question V
Asia Union (Union) is the certified bargaining agent of the rank-and-file
employees of Asia Pacific Hotel (Hotel).
The Union submitted its Collective Bargaining Agreement (CBA) negotiation
proposals to the Hotel. Due to the bargaining deadlock, the Union, on December 20,
2014, filed a Notice of Strike with the National Conciliation and Mediation Board
(NCMB). Consequently, the Union conducted a Strike Vote on January 14, 2015, when
it was approved.
The next day, waiters who are members of the Union came out of the Union
office sporting closely cropped hair or cleanly shaven heads. The next day, all the male
Union members came to work sporting the same hair style. The Hotel . prevented these
workers from entering the premises, claiming that they violated the company rule on
Grooming Standards.
On January 16, 2015, the Union subsequently staged a picket outside the Hotel
premises and prevented other workers from entering the Hotel. . The Union members
blocked the ingress and egress of customers and employees to the Hotel premises,
which caused the Hotel severe lack of manpower and forced the Hotel to temporarily
cease operations resulting to substantial losses.
On January 20, 2015, the Hotel issued notices to Union members, preventively
suspending them and charging them with the following offenses: (1) illegal picket; (2)
violation of the company rule on Grooming Standards; (3) illegal strike; and (4)
commission of illegal acts during the illegal strike. The Hotel later terminated the Union
officials and members who participated in the strike. The Union denied it engaged in an
illegal strike and countered that the Hotel committed an unfair labor practice (ULP) and
a breach of the freedom of speech.
a. Was the picketing legal? Was the mass action of the Union officials and
members an illegal strike? Explain. (2.5%)
 b. Rule on the allegations of ULP and violation of freedom of speech. Explain.
(2.5%)

Answer :
a. Yes, the employee’s concerted action is considered action is considered as an
economic strike and violates the no-strike policy in the CBA.
The union officers and members concerted action to shave their heads and
cropped their hair not only violated the Hotels Grooming Standards but also
violated the union’s duty and responsibility to bargain in good faith. Since the
bargaining deadlock. Is being conciliated by the NCMB, the union’s action to
have their officers and members heads shaved was manifestly calculated to
antagonize and embarrass the Hotel management and in doing so effectively
disrupted the corporations of the Hotel and violated their duty to bargain
collectively in good faith.
The union’s violation of the Hotels Grooming Standards was clearly a deliberate
and concerted action to undermine the authority of and to embarrass the Hotel
and was, therefore, not a protected action. The appearances of the Hotel
employees directly reflect the character and well-being of the Hotel, being a five-
star hotel that provides service to top-notch clients. Obviously, the Hotel does not
need to advertise its labor problems with its clients.
(National Union of Workers in the Hotel and Restaurant vs. Court of Appeals,
G.R. No. 163942, November 11, 2008, 570 SCRA 598, Velasco, Jr.)
(Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, 2020, pp 597-
598)

b. The allegations of ULP and violation of freedom of speech is untenable. In

National Union of Workers in the Hotel Restaurant and Allied Industries
(NUWHRAIN-APL-IUF) Dusit Hotel Nikko Chapter vs. Court of Appeals The court
is of the opinion that the act of the union was not merely an expression of their
grievance or displeasure but indeed a calibrated and calculated act designed to
inflict serious damage to the Hotels finances or its reputation.
 (Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, 2020, pp 598)

Successor Employer

Question IX
Zienna Corporation (Zienna) informed the Department of Labor and Employment
Regional Director of the end of its operations. To carry out the cessation, Zienna sent a
Letter Request for Intervention to the NLRC for permission and guidance in effecting
payment of separation benefits for its fifty (50) terminated employees.
Each of the terminated employees executed a Quitclaim and Release before
Labor Arbiter Nocomora, to whom the case was assigned. After the erstwhile
employees received their separation pay, the Labor Arbiter declared the labor dispute
dismissed with prejudice on the ground of settlement. Thereafter, Zienna sold all of its
assets to Zandra Company (Zandra), which in tum hired its own employees.
Nelle, one of the fifty (50) terminated employees, filed a case for illegal dismissal
against Zienna. She argued that Zienna did not cease from operating since the
corporation subsists as Zandra. Nelle pointed out that aside from the two companies
having essentially the same equipment, the managers and owners of Zandra and
Zienna are likewise one and the same.
For its part, Zienna countered that Nelle is barred from filing a complaint for
illegal dismissal against the corporation in view of her prior acceptance of separation
pay.
Is Nelle correct in claiming that she was illegally dismissed? (5%)

Answer :
No. The successor-employer doctrine involves a transfer of ownership of the
business to a new employer. Where the change of ownership is in bad faith or is used to
defeat the rights of labor, the successor-employer is deemed to have absorbed the
employees and is held liable for the transgressions of his/her predecessor. (Philippine
Air Lines vs. Catindoy, G.R. No. 125792, November 9, 1998. Panganiban, J.)
 In this case, the Nelle was not able to prove that the acquisition of Zienna was in
bad faith thus making Zandra a successor-employer of Zienna.

Termination : Due Process

Question VI
Pedro, a bus driver of Biyahe sa Langit Transport, was involved in a collision with
a car, damaging the bus. The manager accused him of being responsible for the
damage and was told to submit his written explanation within 48 hours. Pedro submitted
his explanation within the period. The day after, Pedro received a notice of termination
stating that he is dismissed for reckless driving resulting to damage to company
property, effective immediately. Pedro asks you, as his counsel, if the company
complied with the procedural due process with respect to dismissal of employees.
a. Explain the twin notice and hearing rule. (2.5%)
b. Did the Biyahe sa Langit Transport comply with the prior procedural
requirements for dismissal? (2.5%)

Answer :
a. For termination of employment based on just causes as defined in Article 282 of
the Code:
1. A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to
explain his side;
2. A hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given opportunity to respond
to the charge, present his evidence or rebut the evidence presented against him;
and
3. A written notice of termination served on the employee indicating that upon
due consideration of all the circumstances, grounds have been established to
justify his termination.
 In case of termination, the foregoing notices shall be served on the employee’s
last known address.
(Salazar vs. Philippine Duplicators, Inc., 510 SCRA 288, G.R. No. 154628
December 6, 2006)
(Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, pp 778)

b. No. Biyahe sa Langit failed to comply with the procedural requirement because
Pedro was only given 48 hours within which to submit his written explanation.
The law requires a reasonable period of five days from receipt of the notice in
order to give Pedro an opportunity to study the accusation against him, consult or
be represented by a lawyer or union officer, gather data and evidence, and
decide on the defenses against the complaint.
(Sec. 5 and 5.1, Department Order NO. 147-15, series of 2015)
(Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, pp 778)

Question VII
Forbes Country Club (Club) owns a golf course and has 250 rank-and-file
employees who are members of the Forbes Country Club Union (Union). The Club has
a CBA with the Union and one of the stipulations is a Union Security Clause, which
reads: "All regular rank-and-file employees who are members of the union shall keep
their membership in good standing as a condition for their continued employment during
the lifetime of this agreement."
Peter, Paul and Mary were the Treasurer, Assistant Treasurer, and Budget Officer of
the Union, respectively. They were expelled by the Board of Directors of the Union for
malversation. The Union then demanded that the Club dismiss said officials pursuant to
the Union Security Clause that required maintenance of union membership. The Club
required the three officials to show cause in writing why they should not be dismissed.
Later, the Club called the three Union officials for a conference regarding the charges
against them. After considering the evidence submitted by the parties and their written
explanations, the Club dismissed the erring officials. The dismissed officials sued the
Club and the Union for illegal dismissal because there was really no malversation based
on the documents presented and their dismissal from the Union was due to the fact that
they were organizing another union.
a. Is the dismissal of Peter, Paul and Mary by the Club valid? (2.5%)
b. If the expulsion by the Union was found by the Labor Arbiter to be baseless,
is the Club liable to Peter, Paul and Mary? Explain. (2.5%)

Answer :
a. The dismissal of Peter, Paul and Mary is valid as it was made pursuant to union
security clause contained in the Collective Bargaining Agreement between the
management and the union. A union security clause is intended to strengthen, a
contracting union and protect it from the fickleness or perfidy of its own members
(Caltex Refinery Employees Association vs. Brillarts). In terminating employees
by reason of union security clause, what the employer needs to determine and
prove are: a) that the union security clause is applicable, c) that there are
sufficient evidence to support the decision of the union to expel the employee
from the union (Picop. Resources vs. Tantla). In the case at bar, the union
demanded – the dismissal of Peter, Paul and Mary after they were expelled from
the union. The club then afforded them due process by ordering them to show
cause in writing why they should not be dismissed. Thereafter, a conference was
held in their behalf. Having complied with all the requirements mentioned, it can
be said that the dismissal of Peter, Paul and Mary was made validly.

b. Yes. The club can be held liable to Peter, Paul and Mary. Even if the elements
under a and b as mentioned above are present, it behooves upon the club to
ascertain in good faith the sufficiency of evidence that supports the decision of
expelling them from the union. The club should have been circumspect in the
sense that it should have determined the veracity of the union’s claims that Peter,
Paul and Mary were indeed guilty of malversation. Should it have been guilty of
making a mistake then it should accountable for it. Just as the Court has stricken
down unjust exploitation of laborers by oppressive employers, so will it strike
down the unfair treatment by their own unworthy leaders. The constitution enjoins
 the state to afford protection to labor. Fair dealing is equally demanded of unions
as well as of employers, in their dealing with employees. (Heirs of Cruz vs. CIR) 

Retrenchment

Question IV
Hagibis Motors Corporation (Hagibis) has 500 regular employees in its car
assembly plant. Due to the Asian financial crisis, Hagibis experienced very low car sales
resulting to huge financial losses. It implemented several cost-cutting measures such as
cost reduction on use of office supplies, employment hiring freeze, prohibition on
representation and travel expenses, separation of casuals and reduced work week. As
counsel of Hagibis, what are the measures the company should undertake to implement
a valid retrenchment? Explain. (5%)
Answer :
The following requisites must be complied with before implementing the
retrenchment program such as:
a. the retrenchment are reasonably necessary and likely to prevent business
losses;
b. the losses are not merely “de minimis”, but substantial, serious, and actual
and real, or if only expected, are reasonably imminent;
c. the expected or actual losses is proven by sufficient and convincing
evidence;
d. the retrenchment is in good faith; and
e. there is fair and reasonable criteria in ascertaining who would be dismissed
and who would be retained among the employees, such as status, efficiency,
seniority, physical fitness, age, and financial hardship for certain workers.
(Sec. 5.4, [c], Department Order No. 147-15, series of 2015)
(Caingat Jr., 2020, Bar Reviewer Labor and Social Legislation, pp 736)