2020-2021 Pre-Week Labor Notes

#BESTBAREVER2020-2021
LABOR LAW BAR PRE-WEEK HAND-OUTS

THE ABAD NOTES (COMPLETED 01 FEB 2022)
HAND-OUTS FOR
PRE-WEEK LABOR NOTES
DEAN ADA D. ABAD
Adamson University College of Law
Based on reduced coverage of the 2020-2021 Bar Examinations

per Supreme Court Bar Bulletin No. 31 s. 2022 (04 Jan 2022, as amended 06 Jan)
For 04 February 2022 Morning
A. PRELIMINARY ITEMS
1. The Bar Examination is the qualifying level, where the examinee is tested on
basic competence and knowledge of key legal texts and canonical doctrines.
2. QUESTIONS WILL BE “TEXTUAL AND CANONICAL”

● Only text of the law, plus basic principles and canons which are
consistently upheld by the Court
● Interpretation of the law
● Areas of strong dissent will not be preferred
3. The 2021 Bar will NOT focus on RATIO DECIDENDI of a particular case, e.g,
the rule of law on which a judicial decision is based, BUT ON CANONICAL
DOCTRINES.
● Doctrine: a well-settled principle of law, interpretation of the law, definition
or procedure
● Canonical: when the principle of law/definition/procedure is often
repeated unanimously over time e.g., several generations of Courts.
4. CUT-OFF PERIODS FOR THE 2021 BAR EXAMS:

• Supreme Court decisions until 30 September 2020
• Laws, rules and issuances until 30 June 2019
5. UNLIKE PREVIOUS BAR EXAMINATIONS WHERE THE AVERAGE NUMBER

OF QUESTIONS PER SUBJECT IS 40 (OR ROUGHLY A TOTAL OF 320
QUESTIONS IN FOUR DAYS), YOU HAVE TO ANSWER ONLY
69 QUESTIONS FOR THE ENTIRE BAR EXAMINATIONS
FIRST MORNING, 04 FEB

POLITICAL, LABOR AND TAX
18 questions over four (4) hours 13.3 minutes/question
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FIRST AFTERNOON, 04 FEB

CRIMINAL LAW
15 questions over four (4) hours 16 minutes/question
SECOND MORNING, 06 FEB

CIVIL AND COMMERCIAL
SECOND AFTERNOON, 06 FEB

REMEDIAL AND ETHICS
5.1 You have more time to answer questions this year, as compared to the
usual bar examinations (pre-pandemic) where you are given only 6-7
minutes to answer each question (at average 40 questions per subject).
5.2 WHEN YOU ANSWER, REMEMBER TO “KISSS IT” – KEEP IT SHORT,

SIMPLE AND STRAIGHT TO THE POINT.
● No need to impress the bar examiners with highfalutin words -- and

much less, latin terms.
● Just use key words and key phrases of the legal text and the canonical
doctrines.
● Earn higher points with good grammar and logic.
● Do NOT leave any question blank. In doing so, you leave the examiner
no choice but to give you a “zero” for that question. Remember, one
point can spell the difference between you passing the bar or failing it.
6. LABOR BAR EXAM FOR 04 FEB 2022 MORNING

6.1 LABOR LAW WILL ONLY HAVE THREE (3) QUESTIONS, TO BE
TAKEN FROM THE FOLLOWING TOPICS UNDER SC BAR BULLETIN
NO. 31, S. 2022 (04 Jan 2022 as amended on 06 Jan 2022):
“c. Labor Law - 3 questions

i. Basic principles
ii. Existence of employer-employee relationship; tests
iii. Termination of employment
iv. Requirements for labor-only contracting
v. Rights of employees and of labor organizations; membership in unions
vi. Management prerogative
vii. Illegal recruitment of overseas Filipino workers
viii. Remedies (for labor standards violations)”
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6.2. WHEN FACED WITH A PROBLEM SOLVING ESSAY-TYPE

QUESTION IN THE BAR EXAMINATIONS, REMEMBER:
• ALL relevant facts already given, but some facts may be immaterial. The
intention of the examiner here is to see if you can determine which facts
are relevant or not, in answering the question.
• Do NOT add to the facts at hand, except if it is an open-ended question.
• Most questions require you to decide on the issue as follows –

Comment on the action of one party
Decide if you were the Labor Arbiter
Comment on the decision of the Labor Arbiter (or Court)
6.3 How to answer the bar question: “IF YOU WERE THE LABOR
ARBITER, HOW WOULD YOU DECIDE?”
Check existence of Employer-employee relationship
MEMORIZE ARTICLE 3, LABOR CODE: DECLARATION OF

POLICY
(Mnemonic: PFEW-SC-SSJ), and use it as your framework
ART. 3. Declaration of basic policy. - The State shall afford Protection to

labor, promote full Employment, ensure Equal work opportunities
regardless of sex, race or creed and regulate the relations between workers
and employers. The State shall assure the rights of workers to Self-
organization, Collective bargaining, right to Strike, Security of tenure,
and Just and humane conditions of work.
In balancing the interests of management vs. labor, apply the

general principles, text and/or canonical doctrines to the case
at bar.
In balancing the interest between labor and capital, the prudent recourse
in termination cases is to safeguard the prized employees and to require
employers to present the best evidence obtainable, especially so because
in most cases, the documents or proof needed to resolve the validity of the
termination, are in the possession of employers. (American Power
Conversion Corp et. al. vs. Jason Yu Lim, G.R. No. 214291. 11 January
2018.)
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7. HOW TO BALANCE CONFLICTING INTERESTS IN PROBLEM SOLVING:

REMEMBER THE BASIC PRINCIPLES OF LABOR LAW
B. BASIC PRINCIPLES AND CONCEPTS
1. CONSTITUTIONAL AND STATUTORY BASIS OF LABOR LAW AND

SOCIAL LEGISLATION
2. SIX (6) BASIC PRINCIPLES TO REMEMBER

FOR THE BALANCING OF INTEREST IN
ANSWERING PROBLEM SOLVING QUESTIONS
2.1. BASIC PRINCIPLE #1: The existence of Employer-Employee relationship

is a condition sine qua non for the application of labor laws, and for labor
courts to have jurisdiction.
2.1.1 Four tests to determine the existence of an employer-employee relationship
(MEMORY AID: SOUTH WEST DISASTER CONTROL)

a. Selection and hiring;
b. payment of Wages;
c. power of Dismissal;
d. Control test.
a) Of these four tests however, the most important test is the element of
control, which has been defined as [MEMORIZE THIS] “one where the
employer has reserved the right to control not only the work to be
achieved, but the manner and method by which such work is to be
achieved.”. (LVN Pictures vs. LVN Musician’s Guild, 1 SCRA 132).
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(b) DISTINGUISH BETWEEN “RULES THAT FIX METHODOLOGY” VS.

“RULES THAT ARE MERE GUIDELINES.”
EXAMPLE: INSURANCE AGENTS; TWO CASES:
Insurance agents are not employees of the insurance companies, in the

absence of evidence that rules or regulations were promulgated or issued
which effectively controlled or restricted the agent’s choice of methods — or
the methods themselves — of selling insurance. (Insular Life Assurance Co.,
Ltd., vs. NLRC and Melecio Basiao, G.R. 84484, 15 November 1989, 179 SCRA 459).
But this is not to say that ALL insurance agents are NOT employees of
the insurance company.
As the Supreme Court clarified in the case of Tongko vs. Manufacturers'

Life Insurance Company (Phils.) Inc. (G.R. No. 167622, 29 June 2010,),
the Insular Life ruling above was tempered with the qualification that had there
been evidence that the company promulgated rules or regulations that
effectively controlled or restricted an insurance agent's choice of methods or
the methods themselves in selling insurance, an employer-employee
relationship would have existed. In other words, the Court in Insular in no way
definitively held that insurance agents are not employees of insurance
companies, but rather made the same on a case-to-case basis.
2.2 BASIC PRINCIPLE #2: PRINCIPLE OF INCORPORATION
The minimum labor standards and benefits in Labor Code are considered
inherent in every employer-employee relationship even absent a written
employment contract
2.3 BASIC PRINCIPLE #3: BURDEN OF PROOF IS ALWAYS UPON

EMPLOYER to show validity of its exercise of management prerogatives,
especially as regards termination of employment.
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TWO EXCEPTIONS when burden of proof is initially placed upon

EMPLOYEE:
a) Fact of hiring.
In sum, the rule of thumb remains: the onus probandi falls on petitioner
(EMPLOYEE) to establish or substantiate such claim by the requisite
quantum of evidence. “Whoever claims entitlement to the benefits provided
by law should establish his or her right thereto x x x.” Sadly, Javier failed to
adduce substantial evidence as basis for the grant of relief. In this case, the
LA and the CA both concluded that Javier failed to establish his employment
with Fly Ace. By way of evidence on this point, all that Javier presented were
his self-serving statements purportedly showing his activities as an employee
of Fly Ace. Clearly, Javier failed to pass the substantiality requirement to
support his claim. Hence, the Court sees no reason to depart from the
findings of the CA. (Danilo “Bitoy” Javier vs. CA, G.R. No. 192558, 15
February 2012)
b) Fact of firing/dismissal.
J. LEONEN: Remoticado v. Typical Construction Trading Corp.,
G.R. No. 206529, [April 23, 2018]: There can be no case for illegal
termination of employment when there was no termination by the employer.
While, in illegal termination cases, the burden is upon the employer to show
just cause for termination of employment, such a burden arises only if the
complaining employee has shown, by substantial evidence, the fact of
termination by the employer.|||
2.4. BASIC PRINCIPLE #4: There must exist SUBSTANTIAL EVIDENCE to

prove valid exercise of management prerogatives, viz., just or authorized cause
of termination.
a) Proof beyond reasonable doubt is not required in administrative cases.
b) Substantial evidence defined:
It is an oft-repeated rule that in labor cases, as in other administrative and

quasi-judicial proceedings, “the quantum of proof necessary is substantial
evidence, or such amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion.” Valencia
v. Classique Vinyl Products Corp., G.R. No. 206390, 30 January 2017
c) Case on substantial evidence: Alilem Credit Coop vs. Bandiola
QUESTION: Are sworn statements of relatives and friends of respondent

attesting to the existence of an extra-marital affair considered sufficient
evidence to prove immorality, as a just cause for termination?
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ANSWER: YES. The employer’s evidence consists of sworn statements of

either relatives or friends of Thelma and respondent. They either had direct
personal knowledge of the illicit relationship or revealed circumstances
indicating the existence of such relationship. (Alilem Credit Cooperative vs.
Bandiola, G.R. No. 173489, 25 February 2013)
Note: Failure of employer to submit documents which are presumed to be

in its possession, in spite of an Order to do so, implies that the presentation
of said documents is prejudicial to its case. (De Guzman vs. NLRC, 540 SCRA
210 [Dec. 2007]).
2.5 BASIC PRINCIPLE #5: No retroactive effect of labor laws.

EXCEPTION: when the law itself provides for retroactivity
2.6 BASIC PRINCIPLE #6: IN CASES OF DOUBT OR AMBIGUITY, INTERPRET

OR RULE IN FAVOR OF LABOR. -- “Where the contract of employment, being
a contract of adhesion, is ambiguous, any ambiguity therein should be construed
strictly against the party who prepared it.” (Price vs. Innodata Phils., 567 SCRA
122 [2008])
CASES ON INTERPRETATION OF LABOR CONTRACTS:
A. CASE ON FUNERAL AND BEREAVEMENT AID FOR DEATH OF LEGAL

DEPENDENTS: (Philippine Journalist Inc. vs. Journal Employees
Union, G.R. No. 192601, 26 June 2013)
ISSUE: In the availment of funeral and bereavement aid under the CBA, may
the Company interpret “legal dependent” in accordance with the SSS
definition of “beneficiary” and hence, refuse payment of the benefit?
Married employee sought payment of funeral/bereavement aid under CBA

when one of his parents died. Company denied the claim, based on its
interpretation that a married employee’s “legal dependent” is limited only to
“legitimate spouse and minor children”; while the legal dependents of a single
employee are the parents and siblings 18 yrs old and below, in accordance
with SSS definitions. CBA provision states:
SECTION 4. Funeral/ Bereavement Aid. The COMPANY agrees to grant a

funeral/bereavement aid in the following instances:
a. Death of a regular employee in line of duty – P50,000
b. Death of a regular employee not in line of duty – P40,000
c. Death of legal dependent of a regular employee – P15,000.
SUPREME COURT DECISION:
NO, the Company is incorrect and cannot limit the definition to the SSS
definition of “legal dependents” to “beneficiaries”, when said SSS
provision was itself NOT referred to in the CBA. It will thus be
interpreted in its most contemporaneous sense to allow the employee
to avail of said benefit.
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Citing statutory definitions, the Supreme Court concluded that the civil status
of the employee as either married or single is not the controlling consideration
in order that a person may qualify as the employee’s legal dependent. What
is rather decidedly controlling is the fact that the spouse, child, or
parent is actually dependent for support upon the employee.
The Court defined a dependent as "one who derives his or her main
support from another. Meaning, relying on, or subject to, someone else
for support; not able to exist or sustain oneself, or to perform anything
without the will, power, or aid of someone else."
Considering that existing laws always form part of any contract, and are
deemed incorporated in each and every contract, the definition of legal
dependents under the aforecited social legislations applies herein in the
absence of a contrary or different definition mutually intended and adopted
by the parties in the CBA. Accordingly, the concurrence of a legitimate
spouse does not disqualify a child or a parent of the employee from being a
legal dependent provided substantial evidence is adduced to prove the actual
dependency of the child or parent on the support of the employee.
Since Section 4, Article XIII of the (company’s) CBA has not included
any differentiation, petitioner had no basis to deny the claim for funeral and
bereavement aid of Alfante for the death of his parent whose death and fact
of legal dependency on him could be substantially proved.
Pursuant to Article 100 of the Labor Code, petitioner as the employer could
not reduce, diminish, discontinue or eliminate any benefit and supplement
being enjoyed by or granted to its employees. This prohibition against the
diminution of benefits is founded on the constitutional mandate to protect the
rights of workers and to promote their welfare and to afford labor full
protection. ||| (Philippine Journalists, Inc. v. Journal Employees Union, G.R.
No. 192601, [June 3, 2013], 710 PHIL 94-109)
B. CONTRA CASE: Where the law is clear and unambiguous, simply apply
the law.
National Union Of Workers In Hotel Restaurant And Allied Industries

(NUWHRAIN) - Philippine Plaza Chapter Vs. Philippines Plaza Inc., G.R.
No. 177524, 23 July 2014. – The Union anchors its claim for unpaid services
charges on Sections 68 and 69 of the CBA, in relation with Article 96 of the
Labor Code. Section 68 states that the sale of food, beverage,
transportation, laundry and rooms are subject to service charge at the rate of
ten percent (10%). Excepted from the coverage of the 10% service charge
are the so-called “negotiated contracts” and “special rates.”
Issue: Can the Union validly claim proportionate share of service

charges from “non-sales” (example: free benefits from hotel and credit
cards; and similar arrangements)?
Answer: NO. Hotel does not have any obligation to the Union, inasmuch as
their claims arises from “non-sale” transactions like “Westin Gold Cards
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Revenue” and “Maxi Media Barter” to be negotiated contracts or contracts

under special rates, and the entries “Business Promotions” and “Gift
Certificates” as contracts that did not involve a sale of food, beverage, etc.
Jurisprudence settles that a CBA is the law between the contracting parties
who are obliged under the law to comply with its provisions. Thus, if the
terms of the CBA are plain, clear and leave no doubt on the
intention of the contracting parties, the literal meaning of its
stipulations, as they appear on the face of the contract, shall
prevail. Only when the words used are ambiguous and doubtful or leading
to several interpretations of the parties’ agreement that a resort to
interpretation and construction is called for.
C. CASE EXAMPLE OF A TEXTUAL INTERPRETATION

OF LABOR CODE PROVISIONS
J. LEONEN: Cuadra v. San Miguel Corp., G.R. No. 194467, [July 13,
2020]):
QUESTION: In cases of rehiring of an employee, when do you start the

counting of the period of employment?
SUPREME COURT: Distinguish between re-hiring by reason of valid

termination/ resignation -- versus – continuation (not REHIRING) OF
EMPLOYMENT DUE TO ILLEGAL TERMINATION CASE
TEXTUAL PROVISION:
EMPLOYEE DEFINED - includes any person in the employ of an

employer. The term shall not be limited to the employees of a
particular employer, unless the Code explicitly states. (Art. 219 [f])
DOLE Dept. Order 40 [2003], R1 S1 (r): “Employee” refers to any

person working for an employer. It includes one whose work has
ceased in connection with any current labor dispute or because
of any unfair labor practice and one who has been dismissed from
work but the legality of the dismissal is being contested in a
forum of appropriate jurisdiction
J. LEONEN: Cuadra v. San Miguel Corp., G.R. No. 194467, [July 13,
2020]):
Melchor, Melencio, and Serafin were among the 60 complainants who filed an
illegal dismissal case before the National Labor Relations Commission against
Lippercon Services, Inc. and San Miguel on January 4, 1991. During the
pendency of the proceedings before the Labor Arbiter, 51 out of the 60
complainants amicably settled with San Miguel.
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Due to the length of time of the proceedings, with backwages increasing, the
parties decided to come up with a Compromise Agreement.
San Miguel paid the remaining nine (9) complainants, who executed a
quitclaim, acknowledging receipt of sum of money, and reinstated them.
However, as reflected in their newly issued identification cards, San Miguel

reckoned the date of their employment from July 1, 2003 — not from the time
they were first hired to work in San Miguel, which was 1985 for Melchor,
and 1988 for Melencio and Serafin. Reinstated employees questioned
this.
ISSUE: What is the reckoning date of their service's length in San Miguel?
COMPLAINANT’S POSITION: It should be from the time they began their

employment in those years.
SAN MIGUEL POSITION: Start from day 1 of reinstatement, because lump

sum paid under the quitclaim already included Melchor, Melencio, and
Serafin's separation pay. Because of this, they are already effectively new
hires upon reinstatement, considering that their new positions were
substantially different from their previous positions.
SUPREME COURT: When there is no evidence to the contrary, an employee's

period of service is presumed continuous and its reckoning point shall be the
day the employee first came under the employ of the employer. However, if in
the interim, the employer-employee relationship was validly severed, returning
to the same employer for work shall be considered a rehiring, and the length
of service shall be reckoned from the day the employee was rehired.
If an employee who returns to work for the same employer AFTER valid just
or authorized cause for termination or voluntary resignation, then the
reckoning point of the length of service, for purposes of security of tenure,
begins on the date the employee was rehired.
BUT, if an employee returns to work upon an order of reinstatement, he

or she is not considered a new hire. Because reinstatement presupposes
the illegality of the dismissal, the employee is deemed to have remained under
the employ of the employer from the date of illegal dismissal to actual
reinstatement. There is NO PRIOR EMPLOYMENT: it is the SAME
employment.
C. EMPLOYER-EMPLOYEE RELATIONSHIP
Vis-à-vis Issues of Jurisdiction (as part of Remedies)
1. TWO ELEMENTS TO DETERMINE JURISDICTION OF LABOR COURTS:
(a) There exists an EMPLOYER-EMPLOYEE RELATIONSHIP
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(b) There must be a REASONABLE CAUSAL CONNECTION between the

parties’ employer-employee relations, as well as the claim asserted, in order
for labor courts to have jurisdiction.
1.1 In the absence of such nexus, it is the regular courts that have jurisdiction.
ADA’S NOTES: In short, aside from ER-EE relationship, the claim or relief
prayed for, can be answered by referring to the Labor Code or other labor laws.
In determining the nature of the case, check the principal relief sought by the
complainant. That is the main factor that determines jurisdiction.
1.2 GOOD EXAMPLE OF A CASE WHERE THERE IS AN EMPLOYER-

EMPLOYEE RELATIONSHIP BUT THERE IS NO REASONABLE CAUSAL
CONNECTION BETWEEN THE CLAIM AND THE ER-EE RELATIONSHIP:
Indophil Textile Mills Vs. Adviento, G.R. No. 171212, 04 August 2014
Facts: Adviento was hired as Civil Engineer (for maintenance of facilities) of

Indophil, whose primary business is the manufacture of textiles. Adviento
developed a chronic allergy on account of the textile dust. He was eventually
dismissed from employment, for which reason he filed two cases against the
company, viz: (a) NLRC for illegal termination; and (b) Regional Trial Court for
damages arising from gross negligence and failure of company to provide a
safe, workable and healthy environment. Company sought to dismiss the RTC
case on account of litis pendencia and lack of jurisdiction, considering that the
claim arises from an employer-employee relationship.
Question: Whether or not RTC has jurisdiction?
Answer: YES, RTC has jurisdiction. This is a tort case under Civil Code and not
answerable by referring to the Labor Code. There is no reasonable causal
connection between claim and employer-employee relationship.
Although Adviento contracted the occupational disease during his employment

with the company, there is no reasonable causal connection between the claim
asserted and the employer-employee relations. As such, the case does not fall
within the jurisdiction of the labor courts; but rather with the regular courts that
have jurisdiction. While the maintenance of a safe and healthy workplace may
be a subject of a labor case, note that the cause of action is one for torts/quasi-
delict and that relief prayed for is the payment for damages arising from alleged
gross negligence on the part of the company to provide a safe, healthy and
workable environment for its employees.
2. RECAPITULATION ON CASES REGARDING JURISDICTION:
In determining the nature of the case, check the principal relief sought by
the complainant. That is the main factor that determines jurisdiction.
In the Smart case, the case filed was one of replevin, and hence, jurisdiction lies with
the regular courts. In the Margallo case, the principal case was one of illegal
termination with claim for reimbursement as well as damages, and hence, properly
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falls within the jurisdiction of the Labor Arbiter. Same also with the Indophil case,
which was a case for damages arising from alleged negligence on the part of the
company to provide a safe, healthy and workable environment for its employees. As
such, jurisdiction properly lies with the regular courts.
As regards termination of an employee who is a corporate officer, or vice-versa: It is

only when the dismissed employee is actually classified as a corporate officer, that the
issue may be considered an intra-corporate dispute and hence, cognizable by the
regular courts and NOT the labor courts.
D. MANAGEMENT PREROGATIVES:
1. GENERAL PRINCIPLE: Management is free to regulate, according to its discretion
and judgment, all aspects of employment, including hiring, work assignments,
working methods, time, place and manner of work, processes to be followed,
supervision of workers, working regulations, transfer of employees, work supervision,
lay-off of workers, and discipline, dismissal and recall of workers. (Malcaba v.
|||
ProHealth Pharma Philippines, Inc., G.R. No. 209085 , [June 6, 2018]) citing San MIguel
Brewery Sales Force Union vs. Ople.
2. MEMORIZE ELEMENTS: Valid exercise of management prerogatives
The free will of the management to conduct its own affairs to achieve its purpose
cannot be denied, PROVIDED THAT THE SAME IS EXERCISED:
• IN GOOD FAITH (BONA-FIDE IN CHARACTER),

• FOR THE ADVANCEMENT OF THE EMPLOYER’S
INTEREST; AND
• NOT TO CIRCUMVENT THE RIGHTS OF THE EMPLOYEES.
(Capitol Medical Center vs. Meriz; San Miguel Brewery and Union
Carbide cases)
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3. TRANSFER OF EMPLOYEES
3.1 RULES ON TRANSFER: It is the prerogative of management to transfer an
employee where he can be most useful to the company; Insubordination if
not followed.
3.2 Jurisprudential guidelines in the transfer of employees: ICT Marketing

Services, Inc., etc. vs. Mariphil L. Sales, G.R. No. 202090, 09 September
2015.
i. Transfer is a movement from one position to another of equivalent rank,

level or salary without break in the service or a lateral movement from one
position to another of equivalent rank or salary;
ii. The employer has the inherent right to transfer or reassign an employee for
legitimate business purposes;
iii. A transfer becomes unlawful where it is motivated by discrimination or bad
faith or is affected as a form of punishment or is a demotion without sufficient
cause;
iv. The employer must be able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee.
3.3 2020 CASE ON TRANSFER: Caniogan Credit and Dev't Cooperative, Inc. v.
Mendoza, G.R. No. 194353 (Notice), [March 4, 2020].
Facts: Respondents are employees of Caniogan Credit. They were closely

associated with Mr. Celso F. Pascual, Sr. and Mr. Serafin Terencio (petitioner's
former General Manager and Collection Manager, respectively).
They were transferred to petitioner's other branches where they reported for three
(3) months but were not given any tasks.
Respondents wrote a letter noting the perceived acts of discrimination. Without

addressing respondents' letter, petitioner issued notices requiring respondents to
explain why they did not report for work on July 18, 2006. This was followed by a
termination letter stating that respondents' services will be discontinued effective
August 3, 2006.
Issues: (1) Was the transfer of respondents tainted with bad faith?
(2) Was this abandonment or constructive dismissal?
Supreme Court:
(1) Transfer tainted with bad faith.
(2) This was constructive dismissal.
RESPONDENTS’ TRANSFER WAS MOTIVATED BY BAD FAITH
Here, Caniogan Cooperative failed to prove its burden that the employees'
transfer was for valid and legitimate grounds such as genuine business
necessity. From the effectivity of their transfer on May 2, 2006 up to July 17,
2006 or for two and a half (2 1/2) months, not a single task was assigned to
respondents at their new respective stations. This belied petitioner's claim
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that respondents' services were greatly needed and instead gave credence
to the idea that their transfer was only a ruse to cover up management's
mistrust and motive of retaliation.
Petitioner's acts clearly exhibited discrimination, insensibility, and disdain

towards undesirable employees with close association with the former
management. As respondents could no longer take what they felt was an act of
oppression, if not constructive dismissal, they were forced not to report for work
anymore.
RESPONDENTS DID NOT VOLUNTARILY ABANDON THEIR JOB
As they were forced to discontinue their employment, respondents could not be

deemed to have voluntarily abandoned their job. Rather respondents were
confronted with undeniable hostility from the management.
To constitute abandonment, there must be: (a) failure to report for work or
absence without valid or justifiable reason; and, (b) a clear intention, as
manifested by some overt act, to sever the employer-employee relationship,
requisites that are negated by the immediate filing of a complaint for
constructive dismissal.
A charge of abandonment is totally inconsistent with the immediate filing of a
complaint for illegal dismissal; more so, when it includes a prayer for
reinstatement. (Caniogan Credit and Dev't Cooperative, Inc. v. Mendoza, G.R.
No. 194353 (Notice), [March 4, 2020])
4. NOT ASKED IN THE PREVIOUS BAR EXAMS

MANAGEMENT PREROGATIVE TO IMPOSE PRODUCTIVITY
STANDARDS: Armando Puncia vs. Toyota Shaw, G.R. No. 214399, 28 June
2016. --.
Facts: Records reveal that as a Marketing Professional for Toyota, Puncia had a
monthly sales quota of seven (7) vehicles from March 2011 to June 2011. As he was
having trouble complying with said quota, Toyota even extended him a modicum of
leniency by lowering his monthly sales quota to just three (3) vehicles for the months
of July and August 2011; but even then, he still failed to comply.
Issue: Whether or not management may impose productivity standards to determine

efficiency of employees
Supreme Court: YES!!! Puncia’s repeated failure to perform his duties, i.e.,
reaching his monthly sales quota for such a period of time, falls under the
concept of gross inefficiency. In Aliling vs. Feliciano (686 Phil. 910 [2012], citing Lim
vs. NLRC, 328 Phil. 843 [1996]), the SC held that an employer is entitled to impose
productivity standards for its employees, and the latter’s non-compliance therewith
can lead to his termination from work. In this regard, case law instructs that “gross
inefficiency” is analogous to “gross neglect of duty”, a just cause of dismissal under
Article 297 of the Labor Code, for both involve specific acts of omission on the part of
the employee resulting in damage to the employer or to his business.
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5. POSSIBLE BAR QUESTION ON DRUG USE AND DRUG POLICY (ONLY

BECAUSE OF PRESIDENT DUTERTE’S DRUG WAR).
Mirant Philippines vs. Joselito A. Caro, G.R. No. 181490, 23 April 2014. – Mirant
Phils conducted a drug test where Caro was randomly chosen among its employees
who would be tested for illegal drug use. Caro and the selected employees duly
received an Intracompany Correspondence that the random drug testing was to be
conducted after lunch on the same day. However at 11:30 a.m. of the same day,
Caro received an emergency phone call from his wife’s colleague who informed him
that a bombing incident occurred near his wife’s work station in Tel Aviv, Israel where
his wife was then working as a caregiver. Caro thereafter informed the company that
he will go to the Israeli Embassy first to attend to his wife’s concerns, and that he will
submit to a drug test the following day at his own expense. On account of his alleged
refusal to submit to a random drug test, the company terminated his services. During
admin investigation however, the Company secured evidence that: (a) there was no
such bombing; and (b) Caro did not go to the Israeli Embassy on the day of the drug
test.
Issue: Whether or not the failure to subject himself to a drug test may be considered
as “willful refusal” to comply with the reasonable orders of the company?
Decision: NO. Caro was illegally dismissed.
While the adoption and enforcement by petitioner corporation of its Anti-Drugs Policy
is recognized as a valid exercise of its management prerogative as an employer, such
exercise is not absolute and unbridled. In the exercise of its management
prerogative, an employer must therefore ensure that the policies, rules
and regulations on work-related activities of the employees must always
be fair and reasonable and the corresponding penalties, when
prescribed, must commensurate to the offense involved and to the
degree of the infraction. The Anti-Drugs Policy of Mirant fell short of these
requirements.
E. KINDS OF EMPLOYMENT
FRAMEWORK:
General rule: Employment is deemed regular where job/task is necessary or
desirable in the usual trade or business of the employer.
Exception: Probationary Seasonal

Term Casual
Project
Exceptions to exception:
Probationary employees allowed to work after probn. period
Casual workers rendering service for at least one year
Term employee allowed to work after term has expired/ended
15
Project employee allowed to work after project without any contract; or

project employee allowed to work project after project but no termination
reports.
Regular seasonal workers
1. REGULAR EMPLOYEES – those who are hired for activities which are necessary
or desirable in the usual trade or business of the employer.
J. LEONEN: Paragele v. GMA Network, Inc., G.R. No. 235315, [July 13,
2020]: Complaint for regularization, which was subsequently converted into one for
"illegal dismissal, non-payment of salary/wages, and regularization” filed by 30
camera men, against respondent GMA Network, Inc., with work service ranging from
two (2) years to thirteen (13) years.
CASE FOR CAMERA MEN: As camera operators, petitioners performed functions

that were necessary and desirable to GMA's usual business as a television and
broadcasting company. They emphasize that their continuous employment with GMA,
despite the end of shooting and recording for each television program to which they
were assigned, further demonstrates the necessity and desirability of the functions
they were performing. Accordingly, they were regular employees.
CASE FOR GMA: No employer-employee relationship. Camera men were engaged

as mere "pinch-hitters or relievers" whose services were engaged only when there
was a need for a substitute or additional workforce.
LABOR ARBITER: No employer-employee relationship; dismissed complaint.
NLRC and CA: There is employer-employee relationship BUT it does not

automatically make the camera men regular employees.
ISSUES:
(1) Are the camera men employees of GMA-7?
(2) If yes, are they regular employees, or may they be classified as casual employees
from the beginning?
SUPREME COURT:
(1) Camera men are EMPLOYEES OF GMA-7 (Control Test used);
(2) Camera men are REGULAR EMPLOYEES OF GMA-7 from the very beginning.
They cannot even be considered as casual employees because their jobs are
necessary or desirable to the usual trade or business of the company. Neither are
they required to render 365 days of service to become regular.
THE CAMERA MEN ARE EMPLOYEES. The four-fold test has been applied in
determining the existence of an employer-employee relationship. In Begino v. ABS-
CBN:
To determine the existence of [an employer-employee relationship], case law

has consistently applied the four-fold test, to wit: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the employee on the means
and methods by which the work is accomplished. Of these criteria, the so-
called "control test" is generally regarded as the most crucial and determinative
16
indicator of the presence or absence of an employer-employee relationship.

Under this test, an employer-employee relationship is said to exist where
the person for whom the services are performed reserves the right
to control not only the end result but also the manner and means utilized
to achieve the same. (Citations omitted, emphasis supplied)
Petitioners were subject to GMA's control and supervision, as follows:.

• Their recordings and shoots were never left to their own discretion and
craft;
• They were required to follow the work schedules which GMA provided to
them;
• They were not allowed to leave the work site during tapings, which often
lasted for days;
• They were also required to follow company rules like any other employee.
GMA provided the equipment they used during tapings. GMA also assigned supervisors to
monitor their performance and guarantee their compliance with company protocols and
standards.
Petitioners were never casual employees precisely because they performed

functions that were necessary and desirable to the usual business of GMA. They did
not need to render a year's worth of service to be considered regular employees.
Classifying employment, that is, whether an employee is engaged as a regular,
project, seasonal, casual, or fixed-term employee, is "determined by law, regardless
of any contract expressing otherwise.
Here, GMA argues that petitioners should have rendered "at least one (1) year of
service equivalent to 313 working days (6-day work per week) or 261 days (5-day
work per week)" before they are deemed to have attained regular status. It harps
on the March 3, 2017 Decision of the Court of Appeals which noted that petitioners
cannot be deemed regular employees since they failed to comply with the one-year
period supposedly required by law. Quite notably, GMA does not refute the
finding that petitioners performed functions necessary and desirable to its
usual business, it merely insists on a supposedly requisite duration. (J.
LEONEN, Paragele v. GMA Network, Inc., G.R. No. 235315, [July 13, 2020])
2. PROBATIONARY EMPLOYEES – those who are hired generally for regular

positions but are placed on a probationary status for a period of 6 months (as a general
rule). May become regular once he has qualified as such in accordance with
reasonable standards made known to him at the time of hiring. They are considered
regular if they are allowed to work beyond the probationary period.
2.1 Burden of proof is upon the employer to show that: (a) employee was informed of
the reasonable standards made known to him at the time of engagement; and (b)
employee failed to qualify in accordance with said reasonable standards for
regularization.
While the probationary employee is required to be appraised of the standards

against which his performance shall be assessed, there is however no need to
inform the probationary employee that he has to follow company rules and
regulations – such requirement strains credulity. (Philippine Daily Inquirer vs.
Magtibay, 528 SCRA 355 [2007]).
17
2.2 HYBRID CONTRACTS; Probationary employment on fixed-term contract. --

Expiration of contract NO LONGER valid ground. (Colegio del Santissimo
Rosario vs. Rojo, G.R. No. 170388, 03 September 2013, reiterating Yolanda
Mercado vs. AMA Computer College-Paranaque 618 SCRA 218 [2010].)
Situation: High School teacher on probationary status with fixed term contracts
who was able to complete three consecutive years of service. Teacher no longer
rehired on the ground that with the expiration of the contract to teach, the
employment contract would no longer be renewed.
Issue: May the probationary teacher be validly dismissed for expiration of

the contract to teach?
Answer: NO! Termination of a probationary employee must be for his/her failure

to comply with the reasonable standards for regular employment made known at
the time of the engagement, and NOT simply because the probationary period has
expired.
Yolanda Mercado, et al. vs. AMA Computer College Parañaque City, Inc. 618
SCRA 218 [2010].- The Supreme Court stated that nothing is illegitimate in
defining the school-teacher on fixed term basis. HOWEVER, the school should
not forget that its system of fixed-term contract is a system that operates
during the probationary period and for this reason is subject to the terms of
Article 281 of the Labor Code. Unless this reconciliation is made, the
requirements of this Article on probationary status would be fully negated as the
school may freely choose not to renew contracts simply because their terms have
expired.
Given the clear constitutional and statutory intents, the Supreme Court concluded
that in a situation where the probationary status overlaps with a fixed-term contract
not specifically used for the fixed term it offers, Article 281 should assume
primacy and the fixed-period character of the contract must give way.
NOTE1: In this instance therefore, the School illegally dismissed the teachers
because it simply refused to renew the employment contract. Because the
teachers were under a probationary period, it was incumbent upon the School to
have evaluated said teachers, and to have informed them of their failure to qualify
as regular employees in accordance with standards made known to them at the
time of hiring.
NOTE2: To highlight what the Supreme Court meant by a fixed-term contract

specifically used for the fixed term it offers, a replacement teacher, for example,
may be contracted for a period of one year to temporarily take the place of a
permanent teacher on a one-year study leave. The expiration of the replacement
teacher’s contracted term, under the circumstances, leads to no probationary
status implications as she was never employed on probationary basis; her
employment is for a specific purpose with particular focus on the term and with
every intent to end her teaching relationship with the school upon expiration of this
term. (Mercado, et al. vs. AMA Computer College Parañaque City, Inc. 618 SCRA
218 [2010]. Emphasis supplied.)
18
3. TERM EMPLOYEES – those who are hired for a specific period, the arrival of the
date specified in the contract of which automatically terminates the employer-
employee relationship. (Brent School vs. NLRC, 181 SCRA 702 [1989], reiterated in
AMA Computer – Paranaque vs. Austria, 538 SCRA 438 [November 2007]).
3.1 A contract of employment for a definite period terminates by its own terms at the
end of such period
3.2 The decisive determinant in term employment should not be the activities that the
employee is called upon to perform, but the day certain agreed upon by the
parties for the commencement and the termination of their employment
relation.
3.3 Criteria for fixed term employment contracts so that the same will not
circumvent security of tenure:
A. The fixed period of employment was KNOWINGLY AND VOLUNTARILY

AGREED UPON by the parties, without any force, duress or improper pressure
being brought to bear upon the employee and absent any other circumstances
vitiating his consent; AND
B. It satisfactorily appears that the employer and employee DEALT WITH EACH
OTHER ON MORE OR LESS EQUAL TERMS with no moral dominance
whatever being exercised by the former on the latter.(PNOC vs. NLRC [G.R.
No. 97747, 31 March 1993] and Brent School vs. NRLC, 181 SCRA 702]
4. PROJECT EMPLOYEES – The principal test for determining whether particular

employees are properly characterized as "project employees" as distinguished from
"regular employees" is whether or not the project employees were assigned to carry
out a "specific project or undertaking," the duration and scope of which were specified
at the time the employees were engaged for that project.
4.1 Indicators of Project Employment is found in Section 2.2(e) and (f) of DOLE
Department Order No. 19, Series of 1993, entitled Guidelines Governing the
Employment of Workers in the Construction Industry, to wit:
“2.2 Indicators of project employment. - Either one or more of the following
circumstances, among others, may be considered as indicators that an employee is a
project employee.
(a) The duration of the specific/identified undertaking for which the worker
is engaged is reasonably determinable.
(b) Such duration, as well as the specific work/service to be performed, is
defined in an employment agreement and is made clear to the
employee at the time of hiring.
(c) The work/service performed by the employee is in connection with the
particular project/undertaking for which he is engaged.
(d) The employee, while not employed and awaiting engagement, is free
to offer his services to any other employer.
(e) The termination of his employment in the particular project/undertaking
is reported to the Department of Labor and Employment (DOLE)
Regional Office having jurisdiction over the workplace within 30 days
following the date of his separation from work, using the prescribed
form on employees' terminations/dismissals/suspensions.
19
(f) An undertaking in the employment contract by the employer to pay

completion bonus to the project employee as practiced by most
construction companies.
4.2 Purely Project employees – are those employed in connection with a

particular construction project. Must comply with the indicators above.
Effect:
(a) not entitled to separation pay if terminated as a result of the completion of
the project or any phase thereof in which they are hired;
(b) no prior clearance for termination is necessary, but termination must be
reported to DOLE;
(c) however, if the project or phase lasts for more than one (1) year, he may
not be terminated prior to completion of project or phase without previous
written clearance from DOLE.
4.4 Employees from Labor Pool -- those employed by a construction company

without reference to any particular project. May be further classified into
probationary and regular.
Effect:
(a) organize and to collectively bargain, or join rank-and-file union of the
construction company may not be curtailed;
(b) completion of project or phase will not sever employer-employee
relationship, as they are to be considered employees for an indefinite term.
4.5 Report of termination of project employers compulsory. – Failure to file

termination reports, particularly on the cessation of petitioner’s employment,
was an indication that the petitioner was not a project employee but a regular
employee. Goma vs. Pamplona Plantation, Inc., 557 SCRA 124 (2007)
5. SEASONAL EMPLOYEES -- those hired for work or services which is seasonal in

nature, and the employment is for the duration of the season.
IMPORTANT NOTE ON EMERGING TREND OF SUPREME COURT CASES:

REGULAR SEASONAL WORKERS. -- Where the seasonal employees had
been hired repeatedly and continuously to perform the same tasks or activities for
several seasons or even after the cessation of the season, this length of time may
likewise serve as badge of regular employment. In fact, even though denominated as
“seasonal workers,” if these workers are called to work from time to time and are only
temporarily laid off during the offseason, the law does not consider them separated
from the service during the off-season period. The law simply considers these
seasonal workers on leave until re-employed. [Hacienda San Isidro v. Villaruel,
G.R. No. 220087 (Notice), November 9, 2015; See also: Gapayao vs. Fulo and SSS, G.R.
No. 193493, 13 June 2013 (Sereno, C.J.)]
Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439.
15 January 2014. J Brion.
Issue: Whether or not complainants are regular workers or seasonal workers? Are
they entitled to CBA benefits accorded the regular employees?
20
Answer: Complainants are REGULAR SEASONAL WORKERS. Complainants are

NOT entitled to CBA benefits which are for regular workers only.
Be this as it may, REGULAR SEASONAL EMPLOYEES, LIKE THE

RESPONDENTS IN THIS CASE, SHOULD NOT BE CONFUSED WITH THE
REGULAR EMPLOYEES OF THE SUGAR MILL such as the administrative or office
personnel who perform their tasks for the entire year regardless of the season. The
NLRC, therefore, gravely erred when it declared the respondents regular employees
of URSUMCO without qualification and that they were entitled to the benefits granted,
under the CBA, to URSUMCO’S regular employees.
6. CASUAL EMPLOYEES – those who are hired to perform work or service which is
merely incidental to the business of the employer. Any casual employee who has
rendered at least one (1) year of service, whether it be continuous or broken, shall be
considered a regular employee with respect to the activity for which he is employed,
and his employment shall continue while such activity exists.
EMPLOYEE CLASSIFICATION AS TO RANK

7. MANAGERIAL EMPLOYEES – those vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall employees. (Art. 212, par. m, Labor Code)
7.1 CONFIDENTIAL EMPLOYEES: Doctrine of necessary implication and/or

confidential employee rule reiterated.
Confidential employees are those who: (1) assist or act in a confidential

capacity, (2) to persons who formulate, determine, and effectuate management
policies in the field of labor relations. The two criteria are cumulative, and both
must be met if an employee is to be considered a confidential employee —
e.g., the confidential relationship must exist between the employee and his
supervisor, and the supervisor must handle the prescribed responsibilities
relating to labor relations. The exclusion from bargaining units of the
employees who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective sought
to be accomplished by the “confidential employee rule”. Tunay na Pagkakaisa
ng Manggagawa sa Asia Brewery vs. Asia Brewery, G.R. No. 162025, 03
August 2010.; See also: San Miguel Corporation Supervisors and Exempt
Employees Union vs. Laguesma, 277 SCRA 370 [1997].
8. SUPERVISORY EMPLOYEES – those who, in the interest of management,

effectively recommend such managerial actions if the exercise of such authority is not
merely routinary or clerical in nature, but requires use of independent judgment. (Art.
212, par. N, Labor Code). Note: Supervisory employees form part of the managerial
staff, which are not covered by the rules on hours of work, viz., night shift differentials,
overtime pay, etc. (See Art. 82, Labor Code cf. Art. 212 [m]).
9. RANK-AND-FILE EMPLOYEES - All other employees not falling within the

definition of “managerial” or “supervisory” employees, are considered rank-and-file
employees for purposes of Book V of the Labor Code.
21
F. INDEPENDENT CONTRACTING ARRANGEMENTS

VS. LABOR ONLY CONTRACTING
Employees of an independent contractor are not your employees
Fuji Television Network, Inc. vs. Arlene S. Espiritu G.R. No. 204944-45, 03
December 2014 citing DOLE D.O. 18-A [2011], sec. 5 (b); Sonza vs. ABS-CBN,
supra, see page __ hereof. -- There are different kinds of independent contractors:
those engaged in legitimate job contracting, and those who have unique skills and
talents that set them apart from ordinary employees. Since no employer-employee
exist between independent contractors and their principals, their contracts are
governed by the Civil Code provisions on contracts and other applicable laws.
ADA’S NOTE: In the above 2014 case of Fuji Television Network vs. Arlene Espiritu,
the Supreme Court made an exhaustive distinction between Independent Contractor
vs. Fixed-term employment and/or regular employment.
● The main factor that distinguishes independent contracting from fixed-term or

regular employment is that of CONTROL.
● Where the alleged “employer” has no actual control over the conduct of the
work of the complainant, then there is no employer-employee relationship.
● However, if control over the conduct of work can be established, then

this is one of fixed-term or regular employment depending on the
circumstances of the case.
F.1 VALID INDEPENDENT CONTRACTING

OR SUB-CONTRACTING ARRANGEMENTS
Article 106, LB; IRR S8R8B3;
ELEMENTS: (MEMORY AID: I ARM FREE CAPITAL TEMWORK

R&B)
● There is a job-contracting permissible by law where the

contractor/agency carries on an INDEPENDENT business and
undertakes the contract work on his ACCOUNT, under his own
22
RESPONSIBILITY, using his own MANNER AND METHODS,

FREE from the control of the principal in all matters connected with
the performance of work excepting the results thereof.
● He has his own CAPITAL in the form of TOOLS, EQUIPMENT,

MACHINERY, WORK PREMISES, and that the agreement between
the contractor and principal assures the former’s employees of ALL
RIGHTS AND BENEFITS under the law.
F.2 ELEMENTS OF LABOR-ONLY CONTRACTING

PROHIBITED UNDER THE LAW -- Philippine Airlines vs. Ligan,
548 SCRA 181 (2008).
There is labor-only contracting where the contractor or sub-contractor merely

recruits, supplies or places workers to perform a job, work or service for a
principal.
TWO WAYS OF PROVING LABOR-ONLY CONTRACTING:

(Memory Aid: No Cap Direct OR No Control)
For labor-only to exist, Sec. 5 of Department Order No. 18-02 requires any
two of the elements to be present, viz.:
● The contractor or sub-contractor DOES NOT HAVE

SUBSTANTIAL CAPITAL or investment to actually perform
the job, work or service under its own account and responsibility;
and the employees recruited, supplied or placed by such
contractors are performing activities which are DIRECTLY
RELATED to the main business of the principal;
OR
● The CONTRACTOR has NO CONTROL over the conduct of the work
to be done by his employees.
23
F.3 EFFECT OF LABOR-ONLY CONTRACTING AND VALID

JOB CONTRACTING AGREEMENTS -- San Miguel Corp. vs.
MAERC Integrated Systems, 405 SCRA 579 [10 July 2003]
● If labor only contracting: ILLEGAL. The employer is deemed the

DIRECT employer and is made liable to the employees of the contractor
for a more comprehensive purpose (wages, monetary claims, and all
other benefits in the Labor Code such as SSS/Medicare/Pag-Ibig). The
labor-only contractor is deemed merely an agent. .(Industrial Timer Corp.,
vs. NLRC, 169 SCRA 341; See also: Alviado et. al. vs. Procter & Gamble,
and Promm Gemm, G.R. No. 160506, 09 March 2010).
● If independent job-contracting: LEGAL. The employer is

considered an INDIRECT EMPLOYER, and is made solidarily liable with
the contractor to the employees of the latter for a more limited purpose,
viz.: payment of unpaid wages and other monetary claims, including 13th
month pay, service incentive leave pay. (New Golden Builders case)
2015 BAR EXAMINATION QUESTION: (VIII)
Star Crafts is a lantern maker based in Pampanga. It supplies Christmas

lanterns to stores in Luzon, Metro Manila, and parts of Visayas, with the
months of August to November being the busiest months. Its factory
employs a workforce of 2,000 workers who make different lanterns daily for
the whole year. Because of increased demand, Star Crafts entered into a
contractual arrangement with People Plus, a service contractor, to supply
the former with I 00 workers for only 4 months, August to November, at a
rate different from what they pay their regular employees. The contract with
People Plus stipulates that all equipment and raw materials will be supplied
by Star Crafts with the express condition that the workers cannot take any
of the designs home and must complete their tasks within the premises of
Star Crafts.
Question: Is there an employer-employee relationship between Star Crafts

and the 100 workers from People Plus? Explain. (4%)
Answer: YES, there is an employer-employee relationship between Star

Crafts and the 100 workers from People Plus.
This is so because People Plus is engaged in labor-only contracting

inasmuch as it appears NOT to have any capital in the form of tools,
equipment machineries and work premises. Moreover, it does NOT have
any control over its own employees, the control being exercised by Star
Crafts. Labor-only contracting is illegal and, in this case, the principal Star
Craft is deemed the direct employer of the 100 workers, while People Plus
is deemed merely an agent. (Ada’s note: Memo aid – No CAP + DIRECT
or No CONTROL. In both tests, Star Crafts fall within the elements of labor-
only contracting under Dept Order No 18 and 18-A).
24
F.4 IMPORTANT DIFFERENCE IN DOLE DEPT. ORDER NO.

174 S. 2017 ON EXPIRATION OF CONTRACT BETWEEN
THE PRINCIPAL AND CONTRACTOR; EFFECT ON THE
CONTRACTOR’S REGULAR EMPLOYEES
QUESTION: What will happen to the workers employed by the contractor
after the expiration of the Service Agreement?
ANSWER:
The mere expiration of the Service agreement shall not be deemed

as a termination of employment of the contractor’s/subcontractor’s
employees who are regular employees of the latter. (SECTION 13, D.O.
174, SERIES OF 2017).
● The employee may opt to wait for re-employment (redeployment) within
three (3) months. (This was previously six months floating status.)
● If contractor FAILS to redeploy its employee, then SEPARATION PAY
should be paid to its employee.
● There is also a provision on development of Financial Relief Program and
Tripartite Engagement on Co-regulation for workers in transition from one
Service to the next. (SECTION 31, D. O. 174, SERIES OF 2017)
F.5 VERY IMPORTANT CASE: (NOT ASKED IN 2019 BAR)
NESTLE PHILS VS. PUEDAN et. al., G.R. NO. 220617, 30 January 2017,
J. PERLAS-BERNABE – Where the agreement is one of distributorship, where
ODSI purchases the goods from Nestle, then this is a SALE OF GOODS, and NOT
a trilateral working arrangement contemplated under Articles 106-109 of the Labor
Code. Nestle cannot be held solidarily liable for the monetary obligations of ODSI
to its employees.
SUPREME COURT:
A closer examination of the Distributorship Agreement reveals that the relationship

of NPI and ODSI is not that of a principal and a contractor (regardless of whether
labor-only or independent), BUT THAT OF A SELLER AND A BUYER/RE-
SELLER.
25
As stipulated in the Distributorship Agreement, NPI agreed to sell its products

to ODSI at discounted prices, which in turn will be re-sold to identified
customers, ensuring in the process the integrity and quality of the said products
based on the standards agreed upon by the parties.
As aptly explained by NESTLE, the goods it manufactures are distributed to the

market through various distributors, e.g., ODSI, that in turn, re-sell the same to
designated outlets through its own employees such as the respondents.
Therefore, the reselling activities allegedly performed by the respondents
properly pertain to ODSI, whose principal business consists of the "buying,
selling, distributing, and marketing goods and commodities of every kind" and
"[entering] into all kinds of contracts for the acquisition of such goods [and
commodities]."
The stipulations in the Distributorship Agreement do not operate to control

or fix the methodology on how ODSI should do its business as a distributor
of NPI products, but merely provide rules of conduct or guidelines towards
the achievement of a mutually desired result — which in this case is the sale
of NPI products to the end consumer.
Thus, the foregoing circumstances show that ODSI was not a labor-only
contractor of NESTLE; hence, the latter cannot be deemed the true employer of
respondents. As a consequence, NESTLE cannot be held jointly and severally
liable to ODSI's monetary obligations towards respondents.
F.6 2020 CASE: MONSANTO PHILIPPINES, INC. V. NLRC, G.R.

Nos. 230609-10, 27 August 2020. J. C. Reyes, Jr.
FACTS: Monsanto is engaged in agricultural business, including manufacturing xxx

and marketing of agricultural products, chemicals and related products with Filipino
farmers are main clients. To promote its products, it entered into a service agreement
with East Star on April 25, 2005. East Star is an accredited job contractor with the
Department of Labor and Employment (DOLE). Private respondents Martin B.
Generoso Jr., et al. were agricultural crop technicians of East Star and were tasked
to promote Monsanto's products.
Sometime in April 2007, complainants were told that their position and function were
redundant. On May 16, 2007, East Star formally terminated their employment,
26
prompting private respondents to file a complaint against Monsanto, East Star, and
its corporate officers, for illegal dismissal with claim for back wages, separation pay,
incentives/commission, and tax refund.
QUESTION: WHO IS THE EMPLOYER -- MONSANTO OR EAST STAR?
SUPREME COURT: EAST STAR IS A LABOR-ONLY CONTRACTOR; CONTROL

IS WITH MONSANTO. THEREFORE, COMPLAINANTS ARE REGULAR
EMPLOYEES OF MONSANTO
CONTROL was established by the following:

• Monsanto hired the private respondents on different dates between
1996 to 2001.
• Monsanto has direct control and supervision over their activities
through its Marketing Executives and Territory Leads.
• In promoting and selling Monsanto's agricultural products and services,
they were engaged in activities such as: conducting farmers' meeting,
harvest festivals, big landowners/financiers' meeting, and product
inventories.
• Monsanto provided them with vehicles, gasoline supply, and
promotional materials necessary for their work. Monsanto also
conducted a defensive driving seminar and actual test driving, which
included private respondents.
The power of the employer to control the work of the employee is considered the most
significant determinant of the existence of an employer-employee relationship. This
test is premised on whether the person for whom the services are performed reserves
the right to control both the end achieved and the manner and means used to achieve
that end.
If indeed East Star is the real employer of private respondents, it should be exercising
the power of control over them and not Monsanto. The evidence points to the
conclusion that East Star is not a legitimate job contractor, but a labor-only
contractor. East Star is not the employer of private respondents. (Monsanto
Philippines, Inc. v. National Labor Relations Commission, G.R. Nos. 230609-10,
[August 27, 2020])
ADA’S NOTES: USING MONSANTO CASE AS FRAMEWORK --
When faced with a trilateral work (or services) arrangement falling under
Articles 106-109 Labor Code vis-à-vis Dept Order No. 174 s 2017, check first
if the contractor is an Independent Contractor (I ARM FREE CAPITAL
TEMWORK R&B) or a Labor-only Contractor (NO CAP + DIRECT OR NO
CONTROL)
❖ IF East Star is an Independent Contractor, then complainants are

employees of East Star and NOT Monsanto. There is no illegal termination
by Monsanto.
❖ IF East Star is a Labor-only Contractor, then complainants are

employees of Monsanto. There is illegal termination because they cannot
27
be terminated by virtue of the expiration of contract with East Star. As

employees, they are entitled to security of tenure and as such, can only be
terminated for just or authorized cause, and after due process compliance.
G. RIGHTS OF EMPLOYEES AND OF LABOR

ORGANIZATIONS; MEMBERSHIP IN UNIONS
G.1. RIGHT TO SELF-ORGANIZATION
1.1 WHO MAY UNIONIZE FOR PURPOSES OF BARGAINING?
General Rule: Any employee may be eligible to join and be a member of a

labor union, beginning on his first day of service, whether employed for a
definite period or not. (Article 292 [c], Labor Code; See also: UST Faculty
Union vs. Bitonio)
1.2 WHO CANNOT UNIONIZE FOR PURPOSES OF COLL BARGAINING?
• Govt employees (see below; J Leonen case on GSIS Family Bank)

• Managerial employees (distinguish with supervisory employees, who can
form unions of their own but cannot join with the Rank-and-File)
• Confidential employees, by the doctrine of necessary implication
• Members of a cooperative (considered co-owners)
• Members of the diplomatic corps and international organizations
• Aliens
1.3 GOVERNMENT EMPLOYEES; EXPLAINED
• employed by the National Government or any of its political subdivisions,

including those employed in GOCCs with original charters
• The civil service embraces ALL (Mnemonic: BRASIA) Branches,

Subdivisions, Instrumentalities and Agencies of the Government, including
government-owned and controlled corporations with original charters.
• Employees of GOCC without original charter (incorporated under the

Corporation Code) are considered as employees of the private sector BUT
their right to bargain for better terms and conditions are limited to
those items which are NOT fixed by law.
J. LEONEN: GSIS FAMILY BANK EMPLOYEES UNION,v s. SEC.

CESAR L. VILLANUEVA ET.AL., G.R. NO. 210332, 23 JANUARY
2019:
Officers and employees of government-owned or controlled corporations

without original charters are covered by the Labor Code, not the Civil
Service Law. HOWEVER, non-chartered government-owned or controlled
corporations are limited by law in negotiating economic terms with
28
their employees. This is because the law has provided the Compensation
and Position Classification System, which applies to all government-owned
or controlled corporations, chartered or non-chartered.
ELEMENTS OF GOVERNMENT-OWNED OR CONTROLLED

CORPORATION: (1) established by original charter or through the general
corporation law; (2) vested with functions relating to public need whether
governmental or proprietary in nature; and (3) directly owned by the
government or by its instrumentality, or where the government owns a
majority of the outstanding capital stock. Possessing all three (3) attributes
is necessary to be classified as a government-owned or controlled
corporation.
Republic Act No. 10149 (GOCC Governance Act of 2011) established a

Governance Commission to develop a Compensation and Position
Classification System, to be submitted for the President's approval, which
shall apply to all officers and employees of government owned or
controlled corporations, whether chartered or non-chartered. THUS:
Section 9 of Republic Act No. 10149: "Any law to the

contrary notwithstanding, no government-owned or
controlled corporation shall be exempt from the coverage
of the Compensation and Position Classification System
developed by the [Governance Commission] under this
Act."
Republic Act No. 10149 defined a non-chartered government-owned or

controlled corporation as a government-owned or controlled corporation
that was organized and is operating under the Corporation Code. It did not
differentiate between chartered and non-chartered government-owned or
controlled corporations; hence, its provisions apply equally to both.
On March 22, 2016, President Aquino issued Executive Order No. 203,
which approved the compensation and classification standards and the
Index of Occupational Services Framework developed and submitted by
the Governance Commission. When it comes to collective bargaining
agreements and collective negotiation agreements in government-owned
or controlled corporations, Executive Order No. 203 unequivocally stated
that while it recognized the right of workers to organize, bargain, and
negotiate with their employers, "the Governing Boards of all covered
[government owned or controlled corporations], whether Chartered
or Non-chartered, may not negotiate with their officers and employees
the economic terms of their [collective bargaining agreements]."
Thus, considering the existing law at the time, GSIS Family Bank could
not be faulted for refusing to enter into a new collective bargaining
agreement with the petitioner as it lacked the authority to negotiate
economic terms with its employees. Unless directly challenged in the
appropriate case and with a proper actual controversy, the constitutionality
and validity of Republic Act No. 10149, as it applies to fully government-
owned and controlled non-chartered corporations, prevail.
29
1.4 MANAGERIAL EMPLOYEES, EXPLAINED:
• By explicit provision of law, managerial employees are prohibited from

unionizing. Otherwise, the union may not be assured of their loyalty, in
view of the evident conflict of interest, or the possibility that it may become
a company union. BUT Supervisory employees may unionize and form
labor organizations of their own, but may not join rank-and-file unions.
• Sec. 8. Article 245 of the Labor Code is hereby amended to read as

follows:
ART. 245. Ineligibility of Managerial Employees to Join any

Labor Organization; Right of Supervisory Employees. -
Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be
eligible for membership in the collective bargaining unit of the
rank-and-file employees but may join, assist or form separate
collective bargaining units and/or legitimate labor
organizations of their own. The rank and file union and the
supervisors’ union operating within the same establishment
may join the same federation or national union.”
• Question: Can a supervisory union affiliate with a Federation with where

Its own rank-and-file union is also affiliated with?
Answer: Yes. Article 255 had been amended by Congress under Rep.
Act No. 9481 to read as follows:
“ART. 255. Ineligibility of Managerial Employees to Join any Labor

Organization; Right of Supervisory Employees. - Managerial employees
are not eligible to join, assist or form any labor organization. Supervisory
employees shall not be eligible for membership in the collective bargaining
unit of the rank-and-file employees but may join, assist or form separate
collective bargaining units and/or legitimate labor organizations of their
own. The rank and file union and the supervisors’ union operating
within the same establishment may join the same federation or
national union.”
1.5 CONFIDENTIAL EMPLOYEES, EXPLAINED:
Confidential employees are those who: (1) assist or act in a confidential

capacity, (2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations. *Access to confidential
information relating to labor matters.
Where an employee's access to confidential labor relations information is

merely incidental, but not central, to the discharge of his duties and
responsibilities, then the employee is NOT a confidential employee and
cannot be excluded from the bargaining unit. Reason: Interpretation of the
constitutional guarantee to the right to self-organization must be made
LIBERALLY in favor of unionization and STRICTLY against exclusion from
30
union membership. (San Miguel Corp. Supervisors and Exempt Employees

Union vs. Laguesma, 277 SCRA 370 [1997]).
The two criteria are cumulative, and both must be met if an employee
is to be considered a confidential employee — e.g., the confidential
relationship must exist between the employee and his supervisor, and
the supervisor must handle the prescribed responsibilities relating to
labor relations. The exclusion from bargaining units of the employees who,
in the normal course of their duties, become aware of management policies
relating to labor relations is a principal objective sought to be accomplished
by the “confidential employee rule.” (Tunay na Pagkakaisa ng Manggagawa
sa Asia Brewery vs. Asia Brewery, G.R. No. 162025, 03 August 2010)
1.6 MEMBERS OF A COOPERATIVE, EXPLAINED:
• Rationale: A cooperative is different from an ordinary business concern,

inasmuch as its owners are likewise the ones who run and operate the
business themselves. Hence, an incongruous situation where the owners
will just bargain with themselves or their co-workers (who are also co-
owners). However, this will not apply insofar as it involves employees of
the cooperative who are not owners or members thereof.
• Note however SSS VS. ASIAPRO COOPERATIVE: While members of a

cooperative cannot form unions and bargain with themselves, they are to
be considered as employees with respect to SSS coverage because the
Cooperative acts as an independent contractor vis-à-vis principal clients
they secure, and an employer-employee relationship actually exists
between respondent cooperative and its owners-members.
1.7 EMPLOYEES OF INTL ORGANIZATIONS OR WITH DIPLOMATIC

IMMUNITY; EXPLAINED
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly
necessitated by their international character and respective purposes. The
objective is to avoid the danger of partiality and interference by the host
country in their internal workings. (International Catholic Migration
Commission vs. Calleja, G.R. No., 89331, 28 September 1990; and
Kapisanan ng Manggagawa at TAC sa IRRI, etc. vs. Secretary of Labor, G.R.
No. 85750, 28 September 1990)
1.8 ALIENS WITHOUT VALID WORK PERMITS AND NO RECIPROCITY

(DEPARTMENT ORDER NO. 9 [1997], RULE II, SEC. 2)
Generally, aliens are prohibited from joining unions. EXCEPTION is only when
the alien has a valid work permit, and his home country allows Filipinos to join
unions there.
31
1.9 WHAT ABOUT SECURITY GUARDS -- ARE THEY ALLOWED TO FORM

AND JOIN UNIONS?
Answer: YES. There is NO MORE PROHIBITION against security guards

joining the unions as of 1989, when Pres. Corazon C. Aquino issued E.O No.
111 which eliminated the above-cited provision on the disqualification of
security guards.
G.2. RIGHTS APPURTENANT TO UNIONIZATION
● The creation of a Union is NOT an act of disloyalty to the employer
● Right to use all LAWFUL means of communicating with employees, and to

persuade them to join
● Union may impose obligations upon its members, viz., payment of union dues
● Right to expel members who commit acts inimical to the interests of the union
● Right to be certified as exclusive bargaining agent
● Right to make union security arrangements
G.3 UNION DUES VS. AGENCY FEES VS. ATTORNEY’S OR

NEGOTIATION FEES
UNION DUES CHECK-OFF REQUISITES:
a) an authorization by a written resolution of the MAJORITY OF ALL THE

MEMBERS at the general membership meeting duly called for the purpose;
b) the secretary's record of the minutes of the meeting, which shall include
the list of all members present, the votes cast, the purpose of the special
assessment or fees and the recipient of such assessment or fees; and
c) NEEDS INDIVIDUAL WRITTEN AUTHORIZATIONS for check-off duly
signed by the employees concerned. (Article 250 (n) and (o) (formerly
Article 241) of the Labor Code, ABS-CBN Union Members vs. ABS-CBN
Corp., 364 Phil.133, 144 [1999]. See also San Miguel Corp. Employees
Union vs. Noriel, G.R. L-53918, February 24, 1991, 103 SCRA 185,195.)
AGENCY FEES CHECK-OFF REQUISITES:
a) Employee is NOT a member of the exclusive bargaining agent (Majority

Union). HENCE, may be a non-union member or a minority union member.
b) Members of the majority union are paying union dues
c) Non-union member or minority union member will be charged by the
exclusive bargaining agent (Majority Union) an equivalent amount when
the non-union member ACCEPTS the benefits of CBA
d) NO NEED FOR WRITTEN AUTHORIZATIONS. (Basis: Art 259 (e) in
relation to Art. 250 (o) cf. Article 228 (b)
32
ATTORNEY’S FEES CANNOT BE CHARGED INDIVIDUALLY BUT ONLY

AGAINST UNION FUNDS:
Article 228 (b), LC. Appearances and fees. -- NO ATTORNEY’S FEES,

NEGOTIATION FEES OR SIMILAR CHARGES of any kind arising from any Collective
Bargaining Agreement shall be imposed on any individual member of the contracting
union; PROVIDED HOWEVER, That Attorney’s fees may be charged AGAINST
UNION FUNDS in an amount to be agreed upon by the parties. Any contract,
agreement or arrangement of any sort to the contrary shall be null and void.
H. TERMINATION OF EMPLOYEES
1. BASIC PRINCIPLES IN TERMINATION:
1.1 Burden of proof is UPON THE EMPLOYER to show just cause for the termination
of the employee. Hence, there must exist substantial evidence to prove just
or authorized cause of termination.
• SUBSTANTIAL EVIDENCE: That amount of relevant evidence which

a reasonable mind might accept as adequate to justify a conclusion.
(Eagle Clarc Shipping Philippines, Inc. v. National Labor Relations
Commission (Fourth Division), G.R. No. 245370, [July 13, 2020])
1.2. The penalty imposed must be COMMENSURATE to the offense committed. A

grave injustice is committed in the name of justice when the penalty imposed is
grossly disproportionate to the wrong committed. (Bookmedia Press, Inc. v.
Sinajon, G.R. No. 213009, [July 17, 2019])
1.3. Thus: for valid termination, there must both be JUST OR AUTHORIZED CAUSE
AND DUE PROCESS.
2. GROUNDS FOR TERMINATION
33
3. AUTHORIZED CAUSES FOR TERMINATION
J. LEONEN: FOR AUTHORIZED CAUSES OF RETRENCHMENT AND

REDUNDANCY, THERE MUST BE FAIR AND REASONABLE CRITERIA
OF SELECTION AS TO WHO WILL BE RETRENCHED OR DECLARED
REDUNDANT.
3.1. RETRENCHMENT
• REQUISITES OF A VALID RETRENCHMENT: (CANONICAL

DOCTRINE)
a) The losses expected should be substantial and not merely de minimis in
extent.
b) The substantial losses apprehended must be reasonably imminent;
c) The retrenchment must be reasonably necessary and likely to effectively
prevent the expected losses; and
d) The alleged losses, if already incurred and the expected imminent losses
sought to be forestalled, must be proved by sufficient and convincing
evidence.
• J. LEONEN: TEAM PACIFIC CORP. V. PARENTE, G.R. No.

206789, [July 15, 2020]: All the requisites for a valid retrenchment must
be present in order for a dismissal to be lawful. The employer must not only
show that it incurred substantial and serious business losses, but must also
prove that the retrenchment was done in good faith and the retrenched
employees were selected through fair and reasonable criteria.
3.2. REDUNDANCY
§ Redundancy exists where the services of an employee are in excess of

what is reasonably demanded by the actual requirements of the
enterprise. (Mejila v. Wrigley Philippines, Inc., G.R. Nos. 199469 & 199505,
[September 11, 2019] citing Wiltshire File case)
34
§ J. LEONEN: ACOSTA V. MATIERE SAS, G.R. NO. 232870, [JUNE

3, 2019]: In redundancy, an employer must show that it applied fair and
reasonable criteria in determining what positions have to be declared
redundant. Otherwise, it will be held liable for illegally dismissing the
employee affected by the redundancy.
The requirements for a valid redundancy program were laid down in Asian
Alcohol Corporation v. National Labor Relations Commission:
(1) written notice served on both the employees and the Department
of Labor and Employment at least one month prior to the
intended date of retrenchment;
(2) payment of separation pay equivalent to at least one month pay
or at least one month pay for every year of service, whichever is
higher;
(3) good faith in abolishing the redundant positions; and
(4) fair and reasonable criteria in ascertaining what positions are to
be declared redundant and accordingly abolished.
Assuming that respondents can declare some positions redundant due to

the alleged decrease in volume of their business, they still had to comply
with the above-cited requisites. This, they failed to do.
As to the third and fourth requisites, this Court held that "[t]o establish
good faith, the company must provide substantial proof that the
services of the employees are in excess of what is required of the
company, and that fair and reasonable criteria were used to determine
the redundant positions." Here, respondents' only basis for declaring
petitioner's position redundant was that his function, which was to monitor
the delivery of supplies, became unnecessary upon completion of the
shipments.
3. JUST CAUSES FOR TERMINATION
35
3.1 SERIOUS MISCONDUCT
• defined as IMPROPER OR WRONG CONDUCT, a transgression of a definite

rule of action, a forbidden act or dereliction of duty which is willful in character
and implies wrongful intent, and not mere error in judgment. For misconduct
or improper behavior to be a just cause for dismissal, the same must be
related to the performance of the employee’s duties and must show that
he has become unfit to continue working for the employer. (Molato vs. NLRC)
• Elements of serious misconduct:

a. Must be serious, of grave and aggravated character, and not merely trivial
or unimportant
b. Must be related to the performance of the employee’s duties; and
c. must show that he has become unfit to continue working for the
employer.
• J. LEONEN: Adamson University Faculty and Employees Union v.

Adamson University, (G.R. No. 227070, [March 9, 2020]):
Misconduct is not considered serious or grave when it is not performed with

wrongful intent. If the misconduct is only simple, not grave, the employee
cannot be validly dismissed. A teacher exclaiming "anak ng puta" after
having encountered a student is an unquestionable act of misconduct.
However, whether it is serious misconduct that warrants the teacher's

dismissal will depend on the context of the phrase's use. "Anak ng puta" is
similar to "putang ina" in that it is an expletive sometimes used as a casual
expression of displeasure, rather than a personal attack or insult. A review of
the records reveals that the utterance in question, "anak ng puta," was an
expression of annoyance or exasperation. Both petitioner and Paula Mae
were pulling from each side of the door, prompting the professor to exclaim
frustration without any clear intent to maliciously damage or cause emotional
harm upon the student. That they had not personally known each other before
the incident, and that petitioner had no personal vendetta against Paula Mae
as to mean those words to insult her, confirm this conclusion.
However, it is the petitioner's succeeding acts that aggravated the

misconduct he committed. He not only denied committing the act, but
he also refused to apologize for it and even filed a counter-complaint
against Paula Mae for supposedly tarnishing his reputation. He even
refused to sign the receiving copy of the notices that sought to hold him
accountable for his act.
The refusal to acknowledge this mistake and the attempt to cause further
damage and distress to a minor student cannot be mere errors of judgment.
Petitioner's subsequent acts are willful, which negate professionalism
in his behavior. They contradict a professor's responsibility of giving primacy
to the students' interests and respecting the institution in which he teaches.
In the interest of self-preservation, the petitioner refused to answer for his own
mistake; instead, he played the victim and sought to find fault in a student who
had no ill motive against him. Indeed, had he been modest enough to own
36
up to his first blunder, petitioner's case would have gone an entirely

different way.
• NOT YET ASKED IN THE BAR: VERBAL FIGHTING WITHIN COMPANY

PREMISES. (Northwest Airlines vs. Concepcion Del Rosario, GR.
157633, 10 September 2014.)
Question: Whether or not a verbal altercation between two employees falls

within the purview of the infraction “fighting” as to merit termination?
Supreme Court: NO. Fighting to be interpreted strictly, and must be more

than more than just an exchange of words that usually succeeded the
provocation by either party, to merit termination.
• PHYSICAL VIOLENCE AS SERIOUS MISCONDUCT; BURDEN OF PROOF

UPON EMPLOYER THAT IT IS WORK-RELATED.
Stanfilco vs. Tequillo, G.R. No. 209735, [July 17, 2019] J. Reyes, Jr.:
Physical violence inflicted by one employee on another constitutes serious
misconduct, which justifies the former's dismissal. Nevertheless, the employer
bears the onus of proving that the attack was work-related and has rendered
the erring employee unfit to continue working. This burden is not overcome by
the mere fact that the act occurred within company premises and during work
hours. Verily, the employer must establish a reasonable connection
between the purported offense and the employee's duties.
3.2 GROSS INSUBORDINATION
• Elements of gross insubordination:

a. employee’s assailed conduct must be willful or intentional;
b. willfulness characterized by wrongful or perverse attitude;
c. the order violated must be reasonable, lawful and made known to the
employee; and
d. the order must pertain to the duties which the employee has been engaged
to discharge. (The Coffee Bean and Tea Leaf Philippines, Inc. vs. Rolly P.
Arenas G.R. No. 208908, 11 March 2015)
• An employee is not guilty of insubordination if his disobedience does not

pertain to his duties as indicated in his position description. In sum, the Court
agrees that the complainants were indeed bound to obey the lawful orders
of CCBPI, but only as long as these pertain to the duties as indicated in their
position description. The order to perform the additional task of dumping
caps/crowns, however, while being lawful, is not part of their duties. Coca-
Cola Bottlers Phils., Inc., et al. vs. Regner A. Sangalang, et al., G.R. Nos.
169967 and 176205, 23 November 2016.
• J. LEONEN:. Stanley Fine Furniture v. Gallano, G.R. No. 190486,

[November 26, 2014], 748 PHIL 624-649: To terminate the
employment of workers simply because they asserted their legal rights by
filing a complaint is illegal. It violates their right to security of tenure and
should not be tolerated. ||
37
3.3 FRAUD
Elements of fraud as just cause for termination:

a. There must be an act, omission or concealment
b. The act, omission or concealment involves a breach of legal duty, trust or
confidence justly reposed
c. It must be committed against the employer or his/her representative; and
d. It must be in connection with the employee’s work
LOSS OF TRUST AND CONFIDENCE

a. There must be an act, omission or concealment
b. The act, omission or concealment justifies the loss of trust and confidence
of the employer to the employee;
c. The employee concerned must be holding a position of trust and
confidence;
d. The loss of trust and confidence should not be simulated
e. It should not be used as a subterfuge for causes which are improper, illegal
or unjustified; and
f. It must be genuine and not a mere afterthought to justify an earlier action
taken in bad faith.
• J. LEONEN. Bravo v. Urios College (now Father Saturnino Urios

University), G.R. No. 198066, June 7, 2017, citing Lima Land, Inc. v.
Cuevas, G.R. 169523, 16 June 2010, 621 SCRA 37. --. The employer must
adduce proof of actual involvement in the alleged misconduct for loss of trust
and confidence to warrant the dismissal of fiduciary rank-and-file employees.
However, "mere existence of a basis for believing that [the] employee has
breached the trust [and confidence] of [the] employer" is sufficient for
managerial employees.
• SM Development Corp. v. Ang, G.R. No. 220434, 22 July 2019. J.

Carandang. --Respondent was not an ordinary company employee. His
position as one of SMDC's Project Director is clearly a
position of responsibility demanding an extensive amount of trust from
petitioners. The entire project account depended on the accuracy of the
classifications made by him. It was reasonable for the petitioners to trust that
respondent had basis for his calculations and specifications. Not only does
these projects involve the company's finances, it also affects the welfare of all
the other employees and clients as well.| Respondent manager's failure to
properly manage these projects clearly is an act inimical to the
company's interests sufficient to erode
petitioners' trust and confidence in him. He ought to know that his job
requires that he keep the trust and confidence bestowed on him by his
employer untarnished. He failed to perform what he had represented or what
was expected of him, thus, petitioners had a valid reason in
losing confidence in him which justified his termination. Respondent's
lack of previous record of inefficiency, infractions or violations of company
rules for almost six years of service cannot serve as justification to reduce the
severity of the penalty. There is really no premium for a clean record of almost
six years to speak of, for a belated discovery of the misdeed does not serve
to sanitize the intervening period from its commission up to its eventual
discovery.
38
3.4 GROSS AND HABITUAL NEGLECT OF DUTIES
• gross negligence: connotes want of care in the performance of one’s duties,

or absence of even slight care or diligence as to amount to a reckless
disregards of the safety of the person or property
• habitual neglect: implies repeated failure to perform one’s duties over a

period of time
• willful neglect of duties: imply bad faith on the part of the employee in failing
to perform his job, to the detriment of the employer and the latter’s business
• Totality of infractions ruling: where the employee has been found to have
repeatedly incurred several suspensions or warnings on account of violations
of company rules and regulations, the law warrants their dismissal as it is akin
to “habitual delinquency”. It is the totality, not the compartmentalization of
company infractions that the employee had consistently committed, which
justified the penalty of dismissal. (Meralco vs. NLRC, 263 SCRA 531, [24 Oct
1996]).
3.5 TERMINATION DUE TO UNION SECURITY CLAUSE:
Elements:
a) the union security clause is applicable;
b) the union is requesting for the enforcement of the union security
provision in the CBA; and
c) there is sufficient evidence to support the Union’s decision to expel
the employee from the union or company. (Inguillo vs. First
Philippines Scales, Inc., 588 SCRA 471 [2009]; See also: PICOP
Resources, Inc. (PRI) vs. Anacleto Taneca et. al, G.R. No. 160828,
09 August 2010).
H. ILLEGAL RECRUITMENT
1. RECRUITMENT OF LOCAL AND MIGRANT WORKERS
1.1 ”RECRUITMENT AND PLACEMENT” (Art. 13 (b), LC: [CETCHUP-CRAP] –

Any act of Canvassing; Enlisting; Transporting; Contracting; Hiring; Utilizing or;
Procuring workers; and includes Contract services, Referrals, Advertising, or
Promising for employment, locally or abroad, whether for profit or not.
1.2 Recruitment includes the act of referral. (People vs. Saley, 291 SCRA 715
[1998]; See also People vs. Goce, 247 SCRA 780 [1995], at 789).
What is REFERRAL? “The act of passing along or forwarding of an applicant

for employment after an initial interview of a selected applicant for employment
to a selected employer, placement officer or bureau.”
39
2. RECRUITMENT AND PLACEMENT, PER SE, IS NOT ILLEGAL. However, the

activity is restricted in the exercise of the State’s police power, in order to prevent
commission of abuse and malpractices by fly-by-night or private recruiters against
unsuspecting workers.
● GENERAL RULE: ONLY POEA AND PUBLIC EMPLOYMENT OFFICES MAY

ENGAGE IN RECRUITMENT AND PLACEMENT
EXCEPTION: LICENSED OR AUTHORIZED PRIVATE RECRUITMENT

AGENCIES
3. WHAT ARE THE THREE MODES OF COMMITTING ILLEGAL RECRUITMENT?
a) illegal recruitment per se, when recruitment is done by a non-licensee or non-

holder of authority;
b) illegal recruitment practices, as listed [(a) to (m)] in the same provision; and
c) prohibited practices amounting to illegal recruitment as numerically listed, still in
Section 6 of R.A. No. 8042.
4. Illegal recruitment per se can only be committed by non-licensees or non-holders

of authority; while illegal recruitment practices and prohibited practices
amounting to illegal recruitment may be committed by any person or entity,
regardless of recruitment licensing status. (Toston y Hular v. People, G.R. No.
232049, [March 3, 2021])
5. ILLEGAL RECRUITMENT [according to Sec. 6, Migrant Workers Act of 1995

(R.A. 8042)] - shall mean CETCHUP-CRAP, whether for profit or not, when
undertaken by a non-license or non-holder of authority contemplated under Article
13(f) of the Labor Code of the Philippines. Provided, that such non-license or non-
holder, who, in any manner, offers or promises for a fee employment abroad to two
or more persons shall be deemed so engaged.
It shall likewise include the following (PROHIBITED) acts, whether committed by any
persons, whether a non-licensee, non-holder, licensee or holder of authority:
(a) To charge or accept directly or indirectly any amount greater than

the specified in the schedule of allowable fees prescribed by the
Secretary of Labor and Employment, or to make a worker pay any
amount greater than that actually received by him as a loan or
advance;
(b) To furnish or publish any false notice or information or document in

relation to recruitment or employment;
(c) To give any false notice, testimony, information or document or

commit any act of misrepresentation for the purpose of securing a
license or authority under the Labor Code;
(d) To induce or attempt to induce a worker already employed to quit

his employment in order to offer him another unless the transfer is
designed to liberate a worker from oppressive terms and
conditions of employment;
40
(e) To influence or attempt to influence any persons or entity not to

employ any worker who has not applied for employment through
his agency;
(f) To engage in the recruitment of placement of workers in jobs harmful

to public health or morality or to dignity of the Republic of the
Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of

Labor and Employment or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement

vacancies, remittances of foreign exchange earnings, separations
from jobs, departures and such other matters or information as
may be required by the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment

contracts approved and verified by the Department of Labor and
Employment from the time of actual signing thereof by the parties
up to and including the period of the expiration of the same without
the approval of the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement agency to

become an officer or member of the Board of any corporation
engaged in travel agency or to be engaged directly on indirectly in
the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers before

departure for monetary or financial considerations other than those
authorized under the Labor Code and its implementing rules and
regulations;
(l) Failure to actually deploy without valid reasons as determined by the

Department of Labor and Employment; and
(m) Failure to reimburse expenses incurred by the workers in

connection with his documentation and processing for purposes of
deployment, in cases where the deployment does not actually take
place without the worker's fault. Illegal recruitment when
committed by a syndicate or in large scale shall be considered
as offense involving economic sabotage.
6. FOUR TYPES OF ILLEGAL RECRUITMENT
a. SIMPLE or licensed: illegal recruitment committed by a licensee or holder of

authority against one or two persons only if they commit any of the acts
enumerated under Section 6 of Republic Act No. 8042.
b. NON-LICENSED: committed by a person who has neither a license nor authority.
c. SYNDICATED: that carried out by a group of three (3) or more persons in
conspiracy or confederation with one another.
41
d. LARGE SCALE or qualified: that committed against 3 or more persons,

individually or as a group.
7. NATURE OF THE LIABILITY OF LOCAL RECRUITMENT AGENCY AND

FOREIGN PRINCIPAL: Local Agency is solidarily liable with foreign principal.
Severance of relations between local agent and foreign principal does not affect
liability of local recruiter.
• A recruitment agency is solidarily liable for the unpaid salaries of a worker it

recruited for employment overseas.
• Even if the recruiter and the principal had already severed their agency
agreement at the time employee was injured, the recruiter may still be sued for
a violation of the employment contract because no notice of the agency
agreement's termination was given to the employee
8. COMPENSABILITY OF DISEASE OR INJURY.
J. LEONEN: TOLIONGCO V. COURT OF APPEALS, G.R. NO. 231748,

[JULY 8, 2020]: --.. MAY POST-TRAUMATIC STRESS DISORDER ARISING
FROM SEXUAL HARASSMENT BE USED AS GROUND TO CLAIM DISABILITY
BENEFITS?
Toliongco argues that he suffers from Post-Traumatic Stress Disorder or PTSD as a

consequence of the incident that happened onboard the M/V Mineral Water. He
claims that this condition made it physically impossible for him to comply with the 3-
day reportorial requirement.
Toliongco also insists that the PTSD was work related as it resulted from the sexual
harassment he experienced while working as a Messman. He claims "the sexual
42
harassments that occurred that night of 27 June 2014, not once, but twice, and the
threats to his life took a severe toll on [his] mental health and sanity." Hence, it cannot
be denied that "he was disabled in the course of employment."
ISSUES:
(1) Whether or not the 3-day rule on post-employment medical examination is

mandatory;
(2) Whether or not Toliongco's post-traumatic stress disorder is work-related or
work-aggravated; and
(3) Whether or not Toliongco is entitled to salary covering the unexpired period of
his contract, and to damages.
SUPREME COURT:
(1) Generally must be done within 3-days but with exceptions depending on
the type of illness (esp. mental)
General rule is that the OFW must have himself examined by the company
physician within three (3) days upon arrival. However, some illnesses may take
more than three (3) days before its symptoms manifest. There are also illnesses
that are asymptomatic. Thus, the application of the 3-day reportorial
requirement must also be viewed on a case-to-case basis, depending on
the type of illness or disease.
For instance, petitioner's alleged illness involves mental health. Mental health
disorders are not normally detected in laboratory tests that we are accustomed
to such as blood extraction. The diagnosis of mental health disorders usually
involve an interview with a psychiatrist and the conduct of tests xxx.
(2) There is no doubt that sexual harassment occurred on board the M/V Mineral
Water, and that petitioner was a victim of it. The question now is whether
petitioner was able to prove that his PTSD, as diagnosed by his physicians of
choice, is work-related or work-aggravated.
To support his claim for disability benefits, petitioner presented a psychiatric

report and a medical certificate by his personal physicians. These documents
only prove that he was diagnosed with PTSD, prescribed to take medication,
and recommended for psychotherapy sessions. However, there was no
disability grading.
Lest this Court be misunderstood, We recognize that it takes time for victims of
sexual harassment to come forward. Perhaps more so if the victim is a male,
due to factors such as "fear that he will be considered to have provoked the
assault in some way, stigma, a sense of loss of masculinity, either through being
penetrated or not having fought hard enough to prevent the attack (or both), . .
. and fear of being perceived as homosexual."
It is established that petitioner suffered some form of injury, but the pieces of
evidence he submitted are not sufficient to convince this Court that he
has been rendered permanently and totally disabled. Thus, this Court is
precluded from awarding disability benefits, not because of his non-
43
compliance with the 3-day reportorial requirement, but because there is

barely any evidence to support the claim for disability benefits.
(3) Toliongco is entitled to his salary for the unexpired portion of his contract..
A unique circumstance in this case is that the alleged illness is not caused by the
duties and responsibilities of a Messman, but is due to the seafarer's work
environment. Petitioner was harassed twice in one night. Though he managed to
escape in both instances, there was no way for him to avoid CO Oleksiy. The only
way he could protect himself from further sexual advances or unwanted sexual
contact was to request for repatriation.
The unique condition of working on board a ship empowers the harassment.
The unique condition of working on board a ship empowers the sexual predator
and leaves the victim feeling helpless because they are in the same enclosed
space.. By no means can petitioner's repatriation be considered as
voluntary, for he had been pushed against the wall with no other
recourse. Hence, he is entitled to his salary for the unexpired
portion of his contract.
|||
(4) Petitioner is entitled to damages. This Court reinstates the Labor Arbiter's
award of moral damages but increases the amount to P100,000.00. The award of
moral damages is based not on the grounds stated by petitioner but because this
court cannot turn a blind eye to the sexual harassment that he had to endure while
onboard the M/V Mineral Water. Certainly, a wrongful act was committed against
him.
We also reinstate and increase the award of exemplary damages to P50,000.00

in view of the award of moral damages. In addition, the award of exemplary
damages should serve as a warning to shipping companies and manning
agencies that it is their obligation to ensure safe working conditions for our
seafarers.
As petitioner was forced to litigate in order to receive compensation for the

unexpired portion of his contract and compensation for what he suffered at the
hands of CO Oleksiy, attorney's fees are also awarded.
I. JURISDICTION, ACTION, AND REMEDIES
1. TWO ELEMENTS FOR LABOR COURTS TO ACQUIRE JURISDICTION
a. EMPLOYER-EMPLOYEE RELATIONSHIP
b. REASONABLE CAUSAL CONNECTION –
Under this rule, if there is a reasonable causal connection between the claim
asserted and the employer-employee relations, then the case is within the
jurisdiction of our labor courts. In the absence of such nexus, it is the regular
courts that have jurisdiction.
44
2. ADA’S TIP ON HOW TO DECIDE ON JURISDICTION
• In determining the nature of the case, check the principal relief/ prayer sought
by the complainant. That is the main factor that determines jurisdiction.
• If the character of the principal relief sought is to be resolved by reference to Labor

Code or social legislation AND NOT by civil or criminal law, then LABOR courts
will have jurisdiction.
• If the character of the principal relief sought is to be resolved by reference by civil

or criminal law, then LABOR courts will NOT have jurisdiction. This may happen
despite the existence of an employer-employee relationship.
3. REMEDIES ON LABOR STANDARDS VIOLATION; WHO HAS

JURISDICTION?
IMPORTANT DOCTRINAL CASE: Jurisdiction of DOLE on its visitorial

power vis-à-vis Labor Arbiter for claims beyond P5,000.00.
PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.), vs.

THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT
(G.R. No. 179652, March 6, 2012)
Question: In the exercise of its visitorial and inspection powers, the Secretary
of Labor discovered the underpayment of minimum wages of Pedro. May the
Secretary of Labor still have jurisdiction if the aggregate total of the
employee’s monetary claims is above P5,000.00?
ANSWER: YES! The Secretary of Labor still has jurisdiction, provided that
there still exists an employer-employee relationship. The P5,000.00
limitation has been deleted by Republic Act No. 7730.
45
Under Art. 129 of the Labor Code,the power of the DOLE and its duly authorized
hearing officers to hear and decide any matter involving the recovery of wages and
other monetary claims and benefits was qualified by the proviso that the complaint
not include a claim for reinstatement, or that the aggregate money claims not exceed
PhP5,000.
RA 7730, or an Act Further Strengthening the Visitorial and Enforcement Powers of

the Secretary of Labor, did away with the PhP5,000 limitation, allowing the DOLE
Secretary to exercise its visitorial and enforcement power for claims beyond
PhP5,000. The only qualification to this expanded power of the DOLE was only that
there still be an existing employer-employee relationship.
FOLLOW-UP QUESTION:
But what if the company raises the issue of non-existence of er-

employee relationship during the exercise of visitorial power? Example:
company alleges indep contracting arrangement. Is the Secretary of
Labor under obligation to refer the issue of the existence of an ER-EE
relationship to the Labor Arbiter?
ANSWER:
NO. The Secretary of Labor is NOT obliged to refer the case to the Labor
Arbiter, even if the company alleges that there is NO employer-
employee relationship because of an independent contracting
arrangement. The Secretary still has concurrent jurisdiction to
determine the existence of the ER-EE relationship. If it finds none, then
it refers the complaint to the Labor Arbiter.
The determination of the existence of an employer-employee

relationship by the DOLE must be respected. The expanded visitorial and
enforcement power of the DOLE granted by RA 7730 would be rendered
nugatory if the alleged employer could, by the simple expedient of disputing
the employer-employee relationship, force the referral of the matter to the
NLRC
The law did not say that the DOLE should first seek the NLRC's determination of the
existence of an employer-employee relationship, or that should the existence of the
employer-employee relationship be disputed, the DOLE would refer the matter to the
NLRC. The DOLE must have the power to determine whether or not an employer-
employee relationship exists, and from there to decide whether or not to issue
compliance orders in accordance with Art. 128 (b) of the Labor Code, as amended
by RA 7730.
At least a prima facie showing of the absence of an employer-employee relationship

(must) be made to oust the DOLE of jurisdiction. But it is precisely the DOLE that
will be faced with that evidence, and it is the DOLE that will weigh it, to see if the
same does successfully refute the existence of an employer-employee
relationship. (People's Broadcasting Service v. Secretary of the Department of Labor
and Employment, G.R. No. 179652 (Resolution), [March 6, 2012], 683 PHIL 509-
526)
46
2016 BAR QUESTION:
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 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 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, in the exercise of the DOLE’s visitorial and enforcement power, the Labor
Secretary or the latter’s authorized representative shall have the power to
determine the existence of an employer-employee relationship to the exclusion
of the NLRC. The determination of the existence of an employer-employee
relationship by the DOLE must be respected. The expanded visitorial and
enforcement power of the DOLE granted by RA 7730 would be rendered
nugatory if the alleged employer could, by the simple expedient of disputing the
employer-employee relationship, force the referral of the matter to the NLRC.
(People’s Broadcasting Service [Bombo Radio Phils. Inc.] vs. The Secretary of
Labor, etc., G.R. No. 179652, 06 March 2012, J. Velasco En Banc.)
(b) NO. DOLE’s jurisdiction may be exercised even if the claim of Inggo is beyond
P5,000.00, inasmuch as this was made in the exercise of its expanded visitorial
and enforcement power of the DOLE. (Guico vs. Quisumbing, 298 SCRA 666
[1998]).
- END OF ABAD LABOR PRE-WEEK NOTES –

#BestBarEver2020-2021
Good luck and may our good Lord be with you!
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#BESTBAREVER2020-2021

LABOR LAW BAR PRE-WEEK HAND-OUTS

Based on reduced coverage of the 2020-2021 Bar Examinations

For 04 February 2022 Morning

2. QUESTIONS WILL BE “TEXTUAL AND CANONICAL”

4. CUT-OFF PERIODS FOR THE 2021 BAR EXAMS:

5. UNLIKE PREVIOUS BAR EXAMINATIONS WHERE THE AVERAGE NUMBER

FIRST MORNING, 04 FEB

FIRST AFTERNOON, 04 FEB

SECOND MORNING, 06 FEB

SECOND AFTERNOON, 06 FEB

5.2 WHEN YOU ANSWER, REMEMBER TO “KISSS IT” – KEEP IT SHORT,

● No need to impress the bar examiners with highfalutin words -- and

6. LABOR BAR EXAM FOR 04 FEB 2022 MORNING

“c. Labor Law - 3 questions

6.2. WHEN FACED WITH A PROBLEM SOLVING ESSAY-TYPE

• Do NOT add to the facts at hand, except if it is an open-ended question.

• Most questions require you to decide on the issue as follows –

Check existence of Employer-employee relationship

MEMORIZE ARTICLE 3, LABOR CODE: DECLARATION OF

ART. 3. Declaration of basic policy. - The State shall afford Protection to

In balancing the interests of management vs. labor, apply the

7. HOW TO BALANCE CONFLICTING INTERESTS IN PROBLEM SOLVING:

B. BASIC PRINCIPLES AND CONCEPTS

1. CONSTITUTIONAL AND STATUTORY BASIS OF LABOR LAW AND

2. SIX (6) BASIC PRINCIPLES TO REMEMBER

2.1. BASIC PRINCIPLE #1: The existence of Employer-Employee relationship

2.1.1 Four tests to determine the existence of an employer-employee relationship

(MEMORY AID: SOUTH WEST DISASTER CONTROL)

(b) DISTINGUISH BETWEEN “RULES THAT FIX METHODOLOGY” VS.

EXAMPLE: INSURANCE AGENTS; TWO CASES:

Insurance agents are not employees of the insurance companies, in the

As the Supreme Court clarified in the case of Tongko vs. Manufacturers'

2.2 BASIC PRINCIPLE #2: PRINCIPLE OF INCORPORATION

2.3 BASIC PRINCIPLE #3: BURDEN OF PROOF IS ALWAYS UPON

TWO EXCEPTIONS when burden of proof is initially placed upon

2.4. BASIC PRINCIPLE #4: There must exist SUBSTANTIAL EVIDENCE to

a) Proof beyond reasonable doubt is not required in administrative cases.

b) Substantial evidence defined:

It is an oft-repeated rule that in labor cases, as in other administrative and

c) Case on substantial evidence: Alilem Credit Coop vs. Bandiola

QUESTION: Are sworn statements of relatives and friends of respondent

ANSWER: YES. The employer’s evidence consists of sworn statements of

Note: Failure of employer to submit documents which are presumed to be

2.5 BASIC PRINCIPLE #5: No retroactive effect of labor laws.

2.6 BASIC PRINCIPLE #6: IN CASES OF DOUBT OR AMBIGUITY, INTERPRET

CASES ON INTERPRETATION OF LABOR CONTRACTS:

A. CASE ON FUNERAL AND BEREAVEMENT AID FOR DEATH OF LEGAL

Married employee sought payment of funeral/bereavement aid under CBA

SECTION 4. Funeral/ Bereavement Aid. The COMPANY agrees to grant a

SUPREME COURT DECISION:

National Union Of Workers In Hotel Restaurant And Allied Industries

Issue: Can the Union validly claim proportionate share of service

Revenue” and “Maxi Media Barter” to be negotiated contracts or contracts

C. CASE EXAMPLE OF A TEXTUAL INTERPRETATION

QUESTION: In cases of rehiring of an employee, when do you start the

SUPREME COURT: Distinguish between re-hiring by reason of valid

EMPLOYEE DEFINED - includes any person in the employ of an

DOLE Dept. Order 40 [2003], R1 S1 (r): “Employee” refers to any

However, as reflected in their newly issued identification cards, San Miguel

COMPLAINANT’S POSITION: It should be from the time they began their

SAN MIGUEL POSITION: Start from day 1 of reinstatement, because lump

SUPREME COURT: When there is no evidence to the contrary, an employee's