PART I

Note: As stated in the Insjtructions, Part I covers problem sets labelled A.1. to A.10. All answers to
these questions should be written in Booklet I.

A.1.

Define, explain or distinguish the following terms:

(a) Just and authorized causes (2%)

A just cause is a fault-based ground for dismissal under Art. 297 , Labor Code; whereas
an authorized cause is a non-fault ground for dismissal under Articles 298 and 299 of the
Labor Code.
(b) Seasonal and project employees (2%)
A seasonal employee is one engaged for the duration of the season for which he has
been engaged; whereas a project employee is one whose employment is co-terminus
with the specific project or undertaking for which he has been engaged; provided , its
scope and duration was made known to him upon engagement
(c) Strikes and lockouts (2%)
Strikes are carried out thru temporary stoppage of work; whereas lockouts are carried
out thru temporary withholding of work
(d) Bona fide occupational qualifications (2%)
A bona fide occupational qualification is an occupational requirement is based on quality
or attribute. It is a valid if it serves a legitimate business purpose, it is a work-related, and
its possession enhances an employee’s productivity at work
(e) Grievance machinery (2%)
A grievance machinery is a contractual dispute resolution mechanism for all grievable
disputes. It is mandatory provision of a collective bargaining agreement , without which it
cannot be registered.

A.2.

X is a member of the Social Security System (SSS). In 2015, he died without any spouse or children.
Prior to the semester of his death, X had paid 36 monthly contributions. His mother, M, who had
previously been receiving regular support from X, filed a claim for the latter’s death benefits.

(a) Is M entitled to claim death benefits from the SSS? Explain. (2.5%)
M is entitled to the death benefits. Being the mother of X, who was single and without
issue, she is elevated to the status of sole beneficiary
(b) Assuming that X got married to his girlfriend a few days before his death, is M
entitled to claim death benefits from the SSS? Explain. (2.5%)
In view of the marriage of X to his girlfriend is deem restored to her secondary
beneficiary status. Hence, X’s wife will be his primary beneficiary until she remarries;
provide she was iving with him at the time of his death.

A.3.

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?

(2%)
Under the control test, the person which exercises labor law concept of control, actual or
reserved, is the employer of the person over whom he exercises it. Labor law concept of
control is control over means and methods of performance.
(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. (3%)
No, the Medical Director is not correct. Employer-Employee relationship is a question of
both law and fact. Law provides its cognitive significance, whereas evidence gives its
out-there representation. Being a matter of law and evidence, it cannot be subject of
stipulation. A, B, C, who are not medical specialists, are the employees of MM Medical
Center, Inc. owning to the “means-methods control” exercised by the latter over them

A.4.

Mrs. B, the personal cook in the household of X, filed a monetary claim against her employer, X, for
denying her service incentive leave pay. X argued that Mrs. B 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 X tenable? Explain. (2.5%)

No, X’s contention is not tenable. As a kasambahay Mrs. B is entitled to service incentive
leave. As such, she has the prerogative to use it, monetize it after 12 months of service,
or commute it until separation from service. IF she elects the second, she has 3 years
from demand for payment to avail of the benefit.
(b) Assuming that Mrs. B is instead a clerk in X’s company with at least 30 regular
employees, will her monetary claim prosper? Explain (2.5%)
Being a corporate employee, Mrs. B is a covered employee. And not being one of the
less than 10 regular employees, as he employer has atleast 30 regular employee, she is
qualified. Hence, prescription being a non-issue, she is entitled to service incentive
leave.

A.5.

Ms. F, a sales assistant, is one of the eight (8) workers regularly employed by ABC Convenience
Store. She was required to report on December 25 and 30.

Should ABC Convenience Store pay her holiday pay? Explain. (2.5%)

No. ABC convenience store, being a retail establishment, does not have the duty to pay
holiday pay to Ms. F because she is one of its less than 10 regular employees. As such she
is disqualified by Art. 94 (a) of the Labor Code.
 A.6.

D, one of the sales representatives of OP, 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, D was able to receive a monthly gas and transportation allowance of
₱5,000.00 despite the lack of any company therefor.

In November 2019, D 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, D argued that OP, 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. (2.5%)

NO, D’s argument is not tenable.

The principle of Non-Diminution of Benefits strictly pertains to pre-promulgation benefits and

not to post-promulgation benefits such as a subject allowance. If what is diminished is a
post-promulgation benefit, the rule violated is the Principle Grants. At any rate, the subject
allowance has not yet ripened to a demandable right since its enjoyment was for a few
months only and the company did not intend to gran it permanently

A.7.

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. (2.5%)

Q Manpower Co., not being substantially capitalized and possessed with investment in
the form of tools, equipment, machineries or work premises, is labor-only contractor.
Relevantly it apparent labor-only contractor status is confirmed by the fact that it does not
control the means and methods of performance of the manpower it supplied. Since both
essential element and confirming element are present, it Is a labor-only contractor

(b)Will Mr. R’s complaint for illegal dismissal against W Gas Corp. prosper? Explain.
(2.5%)

Yes, it will prosper. In labor-only contracting, the legal personality of the principal merges
with that of its labor-only contractor who is just its agents. Hence, pursuant to the Principle
 of Merge of Legal Personalities m the former as the real employer can be proceeded against
for the illegal dismissal despite the termination of subject contracting agreement

A.8.

Ms. T was caught in the act of stealing the company property of her employer. When Ms. T admitted
to the commission of the said act to her manager, the latter advised her to just tender her
resignation; otherwise, she would face an investigation which would likely lead to the termination of
her employment and the filing of criminal charges in court.

Acting on her manager’s advice, Ms. T submitted a letter of resignation. Later on, Ms. T filed a case
for constructive dismissal against her employer. While Ms. T conceded that her manager spoke to
her in a calm and unforceful manner, she claimed that her resignation was not completely voluntary
because she was told that should she not resign, she could be terminated from work for just cause
and worse criminal charges could be file against her.

(a) What is the difference between resignation and constructive dismissal? (2%)
A resignation is a voluntary self –termination when the personal reasons cannot be
sacrificed in favour of exigency of the employer’s business. IN contrast, a constructive
dismissal is a quitting because the employer makes continued employment impossible ,
unreasonable or unlikely.
(b) Will Ms. T’s claim for constructive dismissal prosper? Explain. (3%)
No, Ms. T’s claim will not prosper. She was not placed in a situation that left her no
option except to self-terminate. Instead , she was just given a graceful exit. A graceful
exit is within the prerogative of an employer to give instead of binding an employee to his
fault, or filing an action for redress.

A.9.

After due proceedings, the Labor Arbiter (LA) declared Mr. K to have been illegally dismissed by his
former employer, AB, Inc. As a consequence, the LA directed ABC, Inc. to pay Mr. K separation pay
in lieu of reinstatement as well as his full backwages.

While ABC, Inc. accepted the finding of illegal dismissal, it nevertheless filed a motion for
reconsideration, claiming that the LA erred in awarding both separation pay and full backwages, and
instead, should have ordered Mr. K’s reinstatement to his former position without loss of seniority
rights and other privileges, but without payment of backwages. In this regard, ABC, Inc. pointed out
that the LA’s ruling did not contain any finding of strained relations or that reinstatement was no
longer feasible. In any case, it appears that no evidence was presented on this score.

(a) Is ABC, Inc.’s contention to delete the separation pay, and instead, order
reinstatement without backwages correct? Explain. (3%)
Asto separation pay, the LA’s decision fails to state that there is a bar to reinstatement;
hence, he should have ordered reinstatement pursuant to the general rule prescribed by
Art. 294 of the Labor Code. Since the alternative relief of separation pay is an exception,
it must be justified with a reinstatement bar. As to backwage, however, it cannot be
deleted because it is a logical consequence of finding of illegal dismissal.
(b) Assuming than on appeal, the National Labor Relations Commission (NLRC)
upholds the decision of the LA, where, how, and within what timeframe should
ABC, Inc. assail the NLRC ruling? (2%)
After the denial of the appellant’s motion for reconsideration, the MLRC’s decision and
order of denial can be assailed under Rule 65 of the Rules of Court thru the filing of
 petition for certiorari within 60 days from receipt of said denial order. Correction of error
of jurisdiction, resulting, resulting in the nullification of the assailed dispositions, should
be sought based on the MLRC’s grave abuse of its appellate power amounting to lack of,
or excess of jurisdiction.

A.10.

For purposes of prescription, within what periods from the time the cause of action accrued
should the following cases be filed:

(a) Money claims arising from employer-employee relations (1%)

Money claims arising from employer-employee relationship shall be prosecuted within 3
years from the date they become a legal possibility, or can be judicially brought
(b) Illegal dismissal (1%)
Illegal dismissal shall be assailed within 4 years from complete severance of employer-
employee relationship, or date of salary/ positional downgrade
(c) Unfair Labor Practice
Unfair Labor practice shall be brought by complaint under the Labor Code not later than
1 year from the date of commission. As to its criminal aspect, it shall be prosecuted
within 3 years from date of finality of the ULP judgment
(d) Offenses under the Labor Code
Offenses under the Labor Code shall be prosecuted within 3 years from the date of
commission.
(e) Illegal recruitment (1%)
Illegal recruitment shall be prosecuted within 5 yeas if simple illegal recruitment, and
within 20 years if economic sabotage

- END OF PART I -

Note: This marks the end of Part I. The forthcoming problem sets will fall under Part II and the
answers therefor should be written in Booklet II.

PART II

Note: As stated in the Instructions, Part II covers problem sets labelled B.11. to B.20. All answers to
these questions should be written in Booklet II.

B.11.

Briefly discuss the powers and responsibilities of the following in the scheme of the Labor
Code:

(a) Secretary of Labor (2%)

 (i) Ordinary Powers. Visitorial and enforcement; appellate ) review of compliance
orders issued under Art. 28, Labor Code; and review and CE orders per Art. 272.
Labor Code; rule-making; and control; and supervision
(ii) Extraordinary Powers. Assumption power under Art. 278 (g); and suspension
power under Art 292 (b), both of the Labor Code.

(b) Bureau of Labor Relations (2%)

(i) Original Jurisdiction.Jurisdiction over intra-union and inter-union disutes involving national
unions, and like labor organizations

(ii) Appellate Jurisdiction. Jurisdiction over appealed decisions of the DOLE Regional
Director n intra-union and inter-union cases.

(b) Voluntary Arbitrators (2%)

(i) Traditional Jurisdiction. Jurisdiction over unresolved disputes arising from CBA
interpretation or implementation; and unresolved disputes arising from the
enforcement or implementation company personnel policies
(ii) Jurisdiction by Stipulation. Jurisdiction over such other disputes as may be
expressly conferred by a CBA or similar agreement.

B.12.

Due to serious business reverses, ABC Co. decided to terminate the services of several officers
receiving "fat" compensation packages. One of these officers was Mr. X, its Vice-President for
External Affairs and a member of the Board of Directors. Aggrieved, Mr. X filed a complaint for illegal
dismissal before the National labor Relations Commission (NLRC) – Regional Arbitration Branch.

ABC Co. moved for the dismissal of the case on the ground of lack of jurisdiction, asserting that
since Mr. X occupied the position of Vice-President for External Affairs which is listed in the by-laws
of the corporation, the case should have been tiled before the Regional Trial Court.

The Labor Arbiter (LA) denied ABC Co.’s motion and proceeded to rule that Mr. X was illegally
dismissed. Hence, he was reinstated in ABC Co.’s payroll pending its appeal to the NLRC.

(a) Did the LA err in denying ABC Co.’s motion to dismiss on the ground of lack of
jurisdiction? Explain. (2.5%)

The LA did not err. Even if the office occupied by Mr. X may have been listed n the corporate
by-laws as a corporate office, it should have been shown that he was appointed to it by the
Board of Directors. Absent evidence . Mr.X was a corporate employee; hence, the tenurial
issue he brought to the LA was not an intra-corporate issue.

(b) Assuming the LA’s ruling of illegal dismissal with finality, may ABC Co. claim
reimbursement for the amounts it paid to Mr. X during the time that he was on
payroll reinstatement pending appeal? Explain. (2.5%)

ABC Co. cannot claim reimbursement because MR. X had nothing to do with the
reinstatement given him. On the contrary, the company exercised its exclusive right to
determine which type of reinstatement to give him. Had it informed his of the possibility of a
reimbursement, he would not have chosen to be driven to penury at the end of the day thru a
 reimbursement by compulsion. In this case, the Principle of Unjust Enrichment has no
application ; hence he can keep the salaries he received.

B.13.

Mr. A signed a one (1)-year contract with XYZ Recruitment Co. for deployment as welding
supervisor for DEF, Inc. located in Dubai. The employment contract, which the Philippine Overseas
Employment Administration (POEA) approved, stipulated a salary of US$600.00 a month.

Mr. A had only been in his job in Dubai for six (6) months when DEF, Inc. announced that it was
suffering from severe financial losses and thus intended to retrench some of its workers, among
them Mr. A. DEF, Inc. hinted, however, that employees who would accept a lower salary could be
retained.

Together with some other Filipino workers, Mr. A agreed to a reduced salary of US$400.00 a month
and thus, continued with his employment.

(a) Was the reduction of Mr. A’s salary valid? Explain. (2.5%)
No, the reduction is not valid. There is a contractual breach, Applying lex ex contractu or
lex loci celebrationis, Philippine law controls; hence, the substantial character of the
alleged financial losses must have been proven with financial statements duly certified by
an independent external auditor. Mere announcement of losses would not suffice. The
threat of retrenchment was just a scheme to conveniently effect the illegal substitution of
the POEA-approved employment contracts.
(b) Assuming that the reduction was invalid, may Mr. A hold XYZ recruitment Co.
liable for underpayment of wages? Explain. (2.5%)
Yes, Mr. A may hold XYZ Recruitment Co. liable for the payment of his wages under the
rule that a recruiter is solidarily liable for breaches of the terms and conditions of the
POEA-approved employment contract

B.14.

Upon a review of the wage rate and structure pertaining to its regular rank and file employees, K
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? (2%)

A wage distortion is the elimination of serious contraction of the wage gap advantage
enjoyed by one wage group over another of same wage region; provided, such
elimination or compression is caused by a wage law, or wage order or merger but not a
promotion
(b) Did a wage distortion arise under the circumstances which legally obligated K
Corporation to rectify the wages of its old employees? Explain. (3%)
No. Since the cause of the alleged elimination is not one of the recognized causes, as it
was an adjustment of the hiring rate of new hires joining other wage groups, the
elimination of the wage gap is not a wage distortion. It is rather clear that the increased
 rate would only be given to new hires and not to all the members of the wage groups
they would be joining. Hence, the company has nothing to adjust or rectify.

B.15.

On December 1, 2018, GHI Co., an organized establishment, and Union J, the exclusive bargaining
agent therein executed a five (5)-year collective bargaining agreement (CBA) which, after ratification,
was registered with the Bureau of Labor Relations.

(a) When can the union ask, at the earliest, for the renegotiation of all terms of the
CBA, except its representation aspect? Explain. (2.5%)
Except for the representation aspect of the CBA, the other provision can be renegotiated
not later than 3 years from date of the CBA’s effectivity
(b) When is the earliest time that another union can file for a petition for certification
election? Explain. (2.5%)
Another union can file a petition for certification election during the freedom period of the
CBA which is its last 60 days.

B.16.

W Ship Management, Inc. hired Seafarer G as bosun in its vessel under the terms of the 2010
Philippine Overseas Employment Administration – Standard Employment Contract (POEA-SEC).

On his sixth (6th) month on board, Seafarer G fell ill while working. In particular, he complained of
stomach pain, general weakness, and fresh blood in his stool. When his illness persisted, he was
medically repatriated on January 15, 2018. On the same day, Seafarer G submitted himself to a
post-employment medical examination, wherein he was referred for further treatment. As of
September 30, 2018, Seafarer G has yet to be issued any fit-to-work certification by the company-
designated physician, much less a final and definite assessment of his actual condition. Since
Seafarer G still felt unwell, he sought an opinion from a doctor of his choice who later issued an
independent assessment stating that he was totally and permanently disabled due to his illness
sustained during work.

Seafarer G then proceeded to file a claim for total and permanent disability compensation. The
company asserts that the claim should be dismissed due to prematurity since Seafarer g failed to
first settle the matter through the third-doctor conflict resolution procedure as provided under the
2010 POEA-SEC.

(a) What is the third-doctor conflict resolution procedure under the 2010 POEA-SEC?
Explain. (2%)
In the event of conflicting medical assessments, the parties are required to select a third
physician whose finding shall be final and binding on them. Under Sec. 20(B) of the 2010
POEA-SEC, the selection is consensual; however, jurisprudence has made it mandatory
(b) Will Seafarer G’s claim for total and permanent disability benefits prosper despite
his failure to first settle the matter through the third-doctor conflict resolution
procedure? Explain. (3%)
Yes, it will prosper. The Third Physician Rule has no application when the company-
designated physician exceeds the 120-day treatment period without making a final,
categorical and definitive assessment. Here, he allowed 2019 days to elapse without
issuing a fit-to-work assessment or a disability grade
 (c) Assuming that Seafarer G failed to submit himself to a post-employment medical
examination within three (3) working days from his return, what is the
consequence thereof to his claim? Explain. (2%)
Non-compliance with the 3-day reporting requirement results in the forfeiture of the G’s
entitlement to disability compensation

B.17.

Ms. A is a volleyball coach with five (5) years of experience in her field. Before the start of the
volleyball season of 2015, she was hired for the sole purpose of overseeing the training and
coaching of the University’s volleyball team. During her hiring, the Vice-President for Sports
expressed to Ms. A the University’s expectation that she would bring the University a championship
at the end of the year.

In her first volleyball season, the University placed ninth (9th) out of 10 participating teams. Soon
after the end of the season, the Vice-president for Sports informed Ms. A that she was a mere
probationary employee and hence, she need not come back for the next season because of the poor
performance of the team.

In any case, the Vice-President for Sports claimed that Ms. A was a fixed-term employee whose
contract had ended at the close of the year.

(a) Is Ms. A a probationary, fixed-term, or regular employee? Explain your reasons as

to why she is or she is not such kind of an employee for each of the types of
employment given, (5%)
Ms. A is a regular employee. She cannot be considered a fixed-term employee in the
absence of a fixed-term employment contract, nor a probationary employee because it
was not expressly communicated to her upon her engagement that the tenure was for six
(6) months unless she survived pre-disclosed standards for regularization. When an
employee is hired without being appraised of such standards, he is deemed a regular
employee regardless of the employer’s intent to hire him as a probationary employee.
(b) Assuming that Ms. A was dismissed by the University for serious misconduct but
was never given a notice to explain, what is the consequence of a procedurally
infirm dismissal from service under our labor law and jurisprudence? Explain.
(2%)
The violation of Mr. A’s right to statutory due process requires the assessment of the
University with the nominal damages. The amount is P30,000.00 because a dismissal for
failure to qualify is akin to a dismissl for a just cause

B.18.

When resolving a case of unfair labor practice (ULP) filed by a union, what should be
the critical point of analysis to determine if an act constitutes ULP? (2.5%)

The nature of an unfair labor practice is that it is a violation of worker’s right to self-
organization. An act, however unfair it may be , is not a ULP unless listed as such under
Articles 259 and 260 of the Labor Code. Therefore, the critical point of analysis is a UKP
case filed by a union is whether the act complained of is expressly listed as ULP under Art.
259 of the Labor Code.

B.19.
Because of dwindling sales and the consequent limitation of productions, rumors were rife that XYZ,
Inc. would reduce its employee force. The next day, the employees of XYZ, Inc. received a notice
that the company will have a winding down period of 10 days, after which there will be a six (6)-
month suspension of operations to allow the company to address its precarious financial position.

On the fourth (4th) month of suspension of its operations XYZ, Inc. posted announcement that it will
resume its operations in 60 days but at the same time announced that instead of closing down due
to financial losses, it will retrench 50% of the work force.

(a) Is the announcement that there would be retrenchment affecting 50% of the work
force sufficient compliance with the legal requirements for retrenchment? Explain.
(2.5%)
No. The 30-day notice requirement is a written notice that must be served on both the
Department of Labor and Employment and the affected employees. Hence, the posted
announcement is a violation of the prescribed pre-termination procedure.
(b) Assuming that XYZ, Inc., instead of retrenchment, extended the suspension of its
operations from six (6) months to eight (8) months, would the same be legally
permissible? If not, what are the consequences? (2.5%)
Temporary suspension of business operations under Art. 301 of the Labor Code should
not exceed 6 months; otherwise the suspension would ripen to constructive dismissal
after the period expires. In such cases, the company would be ordered to reinstate and
pay backwages.

B.20.

Discuss the differences between compulsory and voluntary/optional retirement as

well as the minimum benefits provided under the Labor Code for retiring employees of
private establishments. (2.5%)

A voluntary/optional retirement is a termination of employment based on a bilateral

agreement to terminate employment at an agreed age regardless of years in service, or after
a certain number of years in service regardless of age. It is a matter of contract. In contrast,
a compulsory retirement is a termination of employment by operation of law. It is a matter of
statute.

Under Art. 302 of the Labor Code, retiring employees shall be paid retirement benefits
computed as follows: (22.5 days x Daily rate) x Length of service/ The 22.5 days consist of
15 days representing half-month salary, 5 days as service incentive leave, and 2.5 day
representing 1/12 of 13th month pay. The full 22.5 days shall be used if the retiree is entitled
to both service incentive leave and 13th month pay. Meantime the 15 days must always be
used.