2021 QuAMTO in LABOR LAW

University
of Santo Tomas
Faculty of Civil Law

LABOR LAW AND
SOCIAL LEGISLATION

Questions Asked More Than Once
QuAMTO 2021

QuAMTO is a compilation of past bar questions with answers as suggested by the UPLC and other
distinct luminaries in the academe, and updated by the UST Academics Committee to fit for the
2021 Bar Exams.

Bar questions are arranged per topic in accordance with the bar syllabus released by the
Supreme Court and were selected based on their occurrence on past bar examinations from 1987
to 2019.

ACADEMICS COMMITTEE

MARIA FRANCES FAYE R. GUTIERREZ SECRETARY GENERAL

JOHN EDWARD F. FRONDA
ANGEL ISAH M. ROMERO
KIRBY ANNE C. RENIA EXECUTIVE COMMITTEE
KAREN ABBIE C. ASPIRAS
JOSE CHRISTIAN ANTHONY I. PINZON
NATHAN RAPHAEL D.L. AGUSTIN

MARIA FRANCES FAYE R. GUTIERREZ LAYOUT AND DESIGN

QuAMTO COMMITTEE MEMBERS

KIARA LOUISE T. BALIWAG
NICOLO B. BONGOLAN
PATRICIA MAE H. CABAÑA
BEATRICE ROSE V. FANGON
DANICE GO GAN

ATTY. TEODORO LORENZO A. FERNANDEZ
ATTY. AL CONRAD ESPALDON
ADVISERS
OUR DEEPEST APPRECIATION TO OUR

MENTORS AND INSPIRATION

ATTY. ARNOLD E. CACHO

ATTY. BENEDICT G. KATO

ATTY. ROLAND L. MARQUEZ

DEAN SALVADOR A. POQUIZ

ATTY. CESAR E. SANTAMARIA, JR.

COMM. LEONARDO VINZ OCHOA IGNACIO

ATTY. JACQUELINE O. LOPEZ-KAW

ATTY. IRVIN JOSEPH FABELLA

ATTY. JERNY DE LEON

For being our guideposts in understanding
the intricate sphere of Labor Law and Social Legislation.
-Academics Committee 2021

QuAMTO (1987-2019)
LABOR LAW QUAMTO a valuable consideration in the form of wages,

salaries, benefits, etc. Art. XIII, Sec. 3 of the
____________________________________________________________ Constitution similarly provides and similarly
guarantees them the following rights:
FUNDAMENTAL PRINCIPLES AND CONCEPTS
____________________________________________________________ 1. Security of tenure
2. Receive a living wage
3. Humane conditions of work
LEGAL BASIS 4. Just share in the fruits of production
5. Right to self-organization
1987 Constitution (State Policies, Bill of Rights 6. Conduct collective bargaining or negotiation
& Social Justice) (1996, 1998, 2009 BAR) with management
7. Engage in peaceful concerted activities
Q: What are the salient features of the protection including strike
to labor provision of the Constitution? (1998 8. Participate in policy and decision-making
BAR) process

A: The salient features of the Protection to Labor Q: In her State of the Nation Address, the
provision of the Constitution (Sec. 3, Art. XIII, 1987 President stressed the need to provide an
Constitution) are as follows: investor-friendly business environment so that
the country can compete in the global economy
• Extent of Protection – Full protection to labor; that now suffers from a crisis bordering on

recession. Responding to the call, Congress
• Coverage of Protection – Local and overseas, passed two innovative legislative measures,
organized and unorganized; namely: (1) a law abolishing the security of
tenure clause in the Labor Code; and (2) a law
• Employment Policy – Full employment and allowing contractualization in all areas needed in
equality of employment opportunities for all; the employer’s business operations. However,
to soften the impact of these new measures, the
• Guarantees: law requires that all employers shall obtain
mandatory unemployment insurance coverage
Unionism and Method of Determination for all their employees.
Conditions of Employment – Right of all workers
to self-organization, collective bargaining and The constitutionality of the two (2) laws is
negotiations. challenged in court. As judge, how will you rule?
(2009 BAR)
Concerted Activities – Right to engage in
peaceful concerted activities, including the A: The first innovative measure, on abolition of the
right to strike in accordance with law. security of tenure clause in the Labor Code, is
unconstitutional as it goes against the entitlement
Working Conditions – Right to security of of workers to security of tenure under Sec. 3, Art.
tenure, humane conditions of work and a living XIII of the 1987 Constitution.
wage.

The second innovative measure, on a law allowing
Decision Making Processes – Right to contractualization in all areas needed in the
participate in policy and decision, making employer’s business operations, is legal. Art. 106 of
processes affecting their rights and benefits as the Labor Code already allows the Secretary of
way to provide by law. Labor and Employment not to make appropriate

distinction between labor-only and job contracting.
• Share in Fruits of Production – Recognition of This means that the Secretary may decide, through
right of labor to its just share in fruits of implementing regulation, not to prohibit labor-only
production. contacting, which is an arrangement where the
person supplying workers to an employer does not
Q: What are the rights of an employer and an have substantial capital or investment in the form
employee? (1996 BAR) of tools, equipment, machineries, work premises,
among others, and the workers recruited and place
A: An employer is a person who employs the by such person are performing activities which are
services of another and pays for their wages and directly related to the principal business of the
salaries. As such, Art. XIII, Sec. 3 of the Constitution employer.
provides and guarantees them with the following
rights: Hence, it would be legal for Congress to do away
with the prohibition on labor-only contracting and
1. Reasonable return of investment allow contractualization in all areas needed in the
2. Expansion employer’s business operations. Assuming, of
3. Growth course, that contractual workers are guaranteed
their security of tenure.
On the other hand, an employee is a person who
works under the employ of another in exchange of
1 U S T
U N I V E R S I T Y O F S A N T O T O M A S
2 0 2 1 A C A D E M I C S C O M M I T T E E B A R O P E R A T I O N S

Labor Law and Social Legislation
CONSTRUCTION IN FAVOR OF LABOR wrongdoing. (Corazon Jamer v. NLRC, 278 SCRA
(2017, 2010, 2009, 1993 BAR) 632 [1997])

Q: Clarito, an employee of Juan, was
dismissed for allegedly stealing Juan’s
wristwatch. In the illegal dismissal case RECRUITMENT AND PLACEMENT
instituted by Clarito, the Labor Arbiter, citing
Article 4 of the Labor Code, ruled in favor of
Clarito upon finding Juan’s testimony ILLEGAL RECRUITMENT (2010 BAR)
doubtful.
Q: A was approached for possible overseas
On appeal, the NLRC reversed the Labor deployment to Dubai by X, an interviewer of
Arbiter holding that Article 4 applies only job applicants for Alpha Personnel Services,
when the doubt involves “implementation Inc., an overseas recruitment agency. X
and interpretation” of the Labor Code required A to submit certain documents
provisions. The NLRC explained that the (passport, NBI clearance, medical
doubt may not necessarily be resolved in certificate) and to pay P25,000 as
favor of labor since this case involves the processing fee. Upon payment of the said
application of the Rules on Evidence, not the amount to the agency cashier, A was
Labor Code. Is the NLRC correct? Reasons. advised to wait for his visa. After five
(2017, 2009 BAR) months, A visited the office of Alpha
Personnel Services, Inc. during which X told
A: The NLRC is not correct. It is a well settled him that he could no longer be employed for
doctrine that if doubts exist between the employment abroad.
evidence presented by the employer and the
employee, the scale of justice must be tilted in A was informed by the Philippine Overseas
favor of the latter. It is a time-honored rule that Employment Administration (POEA) that
in controversies between laborer and master, while Alpha Personnel Services, Inc. was a
doubts necessarily arising from the evidence, or licensed agency, X was not registered as its
in the implementation of the agreement and employee, contrary to POEA Rules and
writing should be resolved in favor of the Regulations. Under POEA Rules and
laborer. Regulations, the obligation to register
personnel with the POEA belongs to the
ALTERNATIVE ANSWER: officers of a recruitment agency. (2010
BAR)
NO. Art. 227 [formerly 221] of the Labor Code

clearly provides that “the rules of evidence a. May X be held criminally liable for illegal
prevailing in courts of law shall not be
recruitment? Explain.
controlling” in any proceeding before the NLRC
or the Labor Arbiters. Moreover, the A: NO. X performed his work with the
NLRC/Labor Arbiters are mandated to use every knowledge that he works for a licensed
and all reasonable means to ascertain the facts recruitment agency. The obligation to register
speedily and objectively and without regard to its personnel with the POEA belongs to the
technicalities of law or procedure, all in the officers of the agency. He is in no position to
interest of due process. know that the officers of said recruitment
agency failed to register him as its personnel
SOCIAL JUSTICE (People v. Chowdury, G.R. No. 129577-80, Feb. 15,
(2003, 1994 BAR) 2000).

Q: May social justice as a guiding principle in b. May the officers having control,
labor law be so used by the courts in sympathy management or direction of Alpha
with the working man if it collides with the Personnel Services, Inc. be held
equal protection clause of the Constitution? criminally liable for illegal recruitment?
Explain. (2003 BAR) Explain.

A: YES. The State is bound under the A: YES. Alpha, being a licensed recruitment
Constitution to afford full protection to Labor; agency, still has obligations to A for processing
and when conflicting interests collide and they his papers for overseas employment. Under
are to be weighed on the scales of social justice, Sec. 6(m) of R.A. 8042, failure to reimburse
the law should accord more sympathy and expenses incurred by the worker in connection
compassion to the less privileged workingman. with his documentation and processing for
(Fuentes v. NLRC, 266 SCRA 24 [1997]) purposes of deployment, in cases where the
deployment does not actually take place
However, it should be borne in mind that social without the worker’s fault, amounts to illegal
justice ceases to be an effective instrument for recruitment.
the “equalization of the social and economic
forces” by the State when it is used to shield Prohibited Activities (2015, 2006, 2005, 1991

2
QuAMTO (1987-2019)
BAR) Q: Wonder Travel and Tours Agency (WTTA)
is a well-known travel agency and an
Q: Rocket Corporation is a domestic authorized sales agent of the Philippine Air
corporation registered with the SEC, with Lines. Since majority of its passengers are
30% of its authorized capital stock owned by overseas workers, WTTA applied for a license
foreigners and 70% of its authorized capital for recruitment and placement activities. It
stock owned by Filipinos. Is Rocket stated in its application that its purpose is not
Corporation allowed to engage in the for profit but to help Filipinos find
recruitment and placement of workers, employment abroad. Should the application
locally and overseas? Briefly state the basis be approved? (2006 BAR)
for your answer. (2015 BAR)
A: NO. The application should be disapproved.
A: NO. Art. 21 of the Labor Code mandates that, The law clearly states that travel agencies and
for a Corporation to validly engage in sales agencies of airline companies are
recruitment, and local and overseas placement of prohibited from engaging in the business of
workers, at least seventy-five percent (75%) of recruitment and placement of workers for
its authorized and voting capital stock must be overseas employment whether for profit or not
owned and controlled by Filipino citizens. Since (Art. 26, Labor Code).
only 70% of its authorized capital stock is owned
by Filipinos, it cannot, as a result, validly engage In the present case, it is clear WTTA is PAL’s
in recruitment, and local and overseas placement authorized sales agency. Thus, it falls within the
of workers. prohibition of Art. 26. Furthermore, its intention
of providing Filipinos with employment abroad
Q: Marino Palpak, Eddie Angeles, and Jose will not save its application, even with a noble
Berdugo advertised in the Manila Bulletin the purpose, because Art. 26 provides for an absolute
following information: “20 Teachers wanted prohibition and does not place any merit on the
for Egypt. Apply at No. 123 Langit, Manila." applicant’s intention.
Salvacion Inocente applied and was made to
pay minimal fees to cover administrative Q: Maryrose Ganda's application for the
expenses and the cost of her passport and renewal of her license to recruit workers for
visa. For one reason or another, Salvacion did overseas employment was still pending with
not get the job and filed a complaint with the the Philippine Overseas Employment
POEA. Marino, Eddie, and Jose admitted Administration (POEA). Nevertheless, she
having no license or authority but claimed recruited Alma and her three sisters, Ana, Joan
that they are not covered by the Labor Code and Mavic, for employment as housemaids in
since they are not engaged in the recruitment Saudi Arabia. Maryrose represented to the
and placement for profit and, at any rate, only sisters that she had a license to recruit
one prospective worker was involved. May workers for overseas employment. Maryrose
Marino, Eddie, and Jose be prosecuted? If so, also demanded and received P30,000.00 from
for what specific offense/s? (1991 BAR) each of them for her services. However,
Maryrose's application for the renewal of her
A: Marino, Eddie, and Jose can be prosecuted. license was denied, and consequently failed to
Recruitment and placement by persons without a employ the four sisters in Saudi Arabia.
license or authority constitute illegal activities.
Marino, Eddie, and Jose were engaged in The sisters charged Maryrose with large
recruitment and placement when they advertised scale illegal recruitment. Testifying in her
that 20 teachers were wanted to Egypt. defense, Maryrose declared that she acted in
Advertising for employment is one of the acts good faith because she believed that her
considered as recruitment and placement in the application for the renewal of her license
Labor Code. That they were not engaged in would be approved. Maryrose adduced in
recruitment and placement for profit does not evidence the Affidavits of Desistance which
mean that the conditions for a person to engage the four private complainants had executed
in recruitment and placement found in the Labor after the prosecution rested its case. In the
Code are not applicable to them. The Code said affidavits, they acknowledged receipt of
applies to any recruitment or placement, whether the refund by Maryrose of the total amount
for profit or not. The fact that only one of P120,000,00 and indicated that they were
prospective worker was involved does not mean no longer interested to pursue the case
that they were not engaged in recruitment or against Maryrose. Resolve the case with
placement. The reference in the Code that any reasons. (2005 BAR)
person who offers employment to “two or more
persons” as being engaged in recruitment and A: Maryrose is still criminally liable for large
placement does not mean that there must be at scale illegal recruitment. Good faith is not a
least two persons involved. This reference is defense in illegal recruitment as defined in Sec. 6
merely evidentiary. They may be prosecuted for of R.A. 8042. Illegal recruitment is malum
those specific offenses. They already charged fees prohibitum.
even if they have not yet obtained employment
for the applicant. Refund of the P120,000.00 she received does not
3 U S T

likewise extinguish her criminal liability. If at all, by a syndicate, that is when it is
it satisfies only her civil liability. The affidavit of carried out by a group of three (3) or
desistance, moreover, does not bar Maryrose's more persons conspiring and/or
prosecution. The criminal offense confederating with one another; or
is not extinguished by such desistance. Besides,
an affidavit of desistance, as a rule, is frowned b. When illegal recruitment is committed
upon. in large scale, that is when it is
committed against three (3) or more
Types of Illegal Recruitment (2015, 2007, persons whether individually or as a
2002 BAR) group.

Q: When is illegal recruitment considered a REGULATION OF RECRUITMENT AND
crime of economic sabotage? Explain briefly. PLACEMENT ACTIVITIES
(2015, 2007, 2002 BAR) (2017, 2002, 1998 BAR)

A: According to Art. 28 of the Labor Code, illegal Q: Is a corporation, seventy percent (70%) of
recruitment is considered a crime of economic the authorized and voting capital of which is
sabotage when committed by a syndicate or in owned and controlled by Filipino citizens,
large scale. allowed to engage in the recruitment and
placement of workers, locally or overseas?
Illegal recruitment is deemed committed by a Explain briefly. (2002 BAR)
syndicate if carried out by a group of three (3) or
more persons conspiring and/or confederating A: NO. A corporation, seventy percent (70%) of the
with one another in carrying out any unlawful or authorized and voting capital stock of which is
illegal transaction, enterprise or scheme which owned and controlled by Filipino citizens cannot
is an act of illegal recruitment. be permitted to participate in the recruitment
and placement of workers, locally or overseas,
Illegal recruitment is deemed committed in large because Art. 27 of the Labor Code requires at
scale if committed against three (3) or more least seventy-five percent (75%).
persons individually or as a group.
Q: A Recruitment and Placement Agency
Q: When does the recruitment of workers declared voluntary bankruptcy. Among its
become an act of economic sabotage? (2015 assets is its license to engage in business. Is
BAR) the license of the bankrupt agency an asset
which can be sold in public auction by the
A: Under Sec. 6(m) of R.A. 8042, illegal liquidator? (1998 BAR)
recruitment is considered economic sabotage if
it is committed by a syndicate or is large scale in A: NO, because of the non-transferability of the
scope. It is syndicated illegal recruitment if the license to engage in recruitment and placement.
illegal recruitment is carried out by three (3) or The Labor Code (in Art. 29) provides that no
more conspirators; and it is large scale in scope license to engage in recruitment and placement
when it is committed against three (3) more shall be used directly or indirectly by any person
persons, individually or as a group. other than the one in whose favor it was issued
nor may such license be transferred, conveyed or
Q: Discuss the types of illegal recruitment assigned to any other person or entity.
under the Labor Code. (2007 BAR)
It may be noted that the grant of a license is a
A: Under the Labor Code, as amended by governmental act by the Department of Labor
Republic Act No. 8042 otherwise known as the and Employment based on personal
“Overseas Filipinos and Migrant workers Act of qualifications, and citizenship and capitalization
1995”, there are two types of illegal recruitment, requirements. (Arts. 27-28, Labor Code)
particularly simple illegal recruitment and
illegal recruitment which is considered as an Q: W Ship Management, Inc. hired Seafarer G
offense involving economic sabotage. as bosun in its vessel under the terms of the
2010 Philippine Overseas Employment
Simple illegal recruitment is committed when a Administration - Standard Employment
licensee/non-licensee or holder/non-holder of Contract (POEA-SEC). On his sixth (6th) month
authority undertakes either any recruitment on board, Seafarer G fell ill while working. In
activities defined under Art. 13(b) of the Labor particular, he complained of stomach pain,
Code, or any prohibited practices enumerated general weakness, and fresh blood in his
under Sec. 6 of R.A. 8042, as amended. stool.

Illegal recruitment as an offense involving When his illness persisted, he was medically
economic sabotage is committed under the repatriated on January 15, 2018. On the same
following qualifying circumstances, to wit: day, Seafarer G submitted himself to a post-
employment medical examination, wherein
a. When illegal recruitment is committed he was referred for further treatment. As of

4
QuAMTO (1987-2019)
September 30, 2018, Seafarer G has yet to be Employment (DOLE). What permit, if any, can
issued any fit-to-work certification by the the DOLE issue so that AB can assume as
company- designated physician, much less a Vice-President in the telecommunications
final and definitive assessment of his actual company? Discuss fully. (2007 BAR)
condition.
A: The Labor Code provides that “any alien
Since Seafarer G still felt unwell, he sought an seeking admission to the Philippine for
opinion from a doctor of his choice who later employment purposes and any domestic or
issued an independent assessment stating foreign employer who desires to engage an alien
that he was totally and permanently disabled for employment in the Philippines shall obtain
due to his illness sustained during work. an employment permit from the Department of
Seafarer G then proceeded to file a claim for Labor.”
total and permanent disability compensation.
The company asserts that the claim should be The employment permit may be issued to a
dismissed due to prematurity since Seafarer G nonresident alien or to the applicant employer
failed to first settle the matter through the after a determination of the non-availability of a
third-doctor conflict resolution procedure as person in the Philippines who is competent,
provided under the 2010 POEA-SEC. able, and willing at the time of application to
perform the services for which the alien is
a. What is the third-doctor conflict desired. Thus, AB (or telecommunication
resolution procedure under the 2010 company) should be issued the above-
POEA-SEC? Explain. mentioned alien employment permit so that AB
can assume as Vice President of the
A: In the event of conflicting medical Telecommunication Company.
assessments, the parties are required to select a
third physician whose finding shall be final and Q: Phil-Norksgard Company. Inc., a domestic
binding on them. Under Sec. 20(B) of the 2010 corporation engaged in the optics business,
POEA-SEC, the selection is consensual; however, imported from Sweden highly sophisticated
jurisprudence has made it mandatory. and sensitive instruments for its laboratory.
(Philippine Hammonia Ship Agency, Inc. v. To install the instruments and operate them,
Eulogia Dumadag, G.R. No. 194362, Jun. 26, 2013) the company intends to employ Boija Anders,
a Swedish technician sojourning as a tourist in
b. Will Seafarer G's claim for total and the Philippines.

permanent disability benefits prosper
As lawyer of the company, what measures
despite his failure to first settle the
will you take to ensure the legitimate
matter through the third-doctor
employment of Boija Anders and at the same
conflict resolution procedure? Explain.
time protect Philippine labor? Discuss fully.

(1995 BAR)
A: YES, it will prosper. The Third Physician Rule

has no application when the company-
A: To ensure the legitimate employment of Boija
designated physician exceeds the 120-day
Anders, a non-resident alien, I will apply at the
treatment period without making a final,
Department of Labor and Employment for the
categorical, and definitive assessment. Here, he
issuance of an employment permit, claiming that
allowed 209 days to elapse without issuing a fit-
there is no one in the Philippines who can
to-work assessment or a disability grade. perform the work that Anders is being tasked to
(Alpines v. Elburg Shipmanagement Phil., Inc., do.
G.R. No. 202114, Nov. 9, 2016)
At the same time, to protect Philippine labor, I
c. Assuming that Seafarer G failed to will see to it that Anders will have an understudy
submit himself to a post- employment who will learn by working with Anders involving
medical examination within three (3) the installation and operation of the highly
working days from his return, what is
sophisticated and sensitive instruments from
the consequence thereof to his Sweden.
disability claim? Explain. (2019 BAR)
To protect Philippine Labor, the Labor Code
A: Non-compliance with the 3-day reporting provides that the alien employee shall not
requirement results in the forfeiture of G’s
transfer to another job or change his employer
entitlement to disability compensation. (Sec. without prior approval of the Secretary of Labor.
20[B], POEA-SEC) Q: Phil, a resident alien, sought employment
in the Philippines. The employer, noticing
EMPLOYMENT OF NON-RESIDENT ALIENS that Phil was a foreigner, demanded that he
(2017, 2007, 1995 BAR) first secure an employment permit from the
DOLE. Is the employer correct? Explain your
Q: AB, a non-resident American, seeks entry answer. (2017 BAR)
to the country to work as Vice- President of a
local telecommunications company. You are A: NO, the employer is not correct. Only non-
with the Department of Labor and resident aliens who are seeking employment in
5 U S T

the Philippines are required to secure first an Q: Ana Cruz has a low IQ. She has to be told at
Alien Employment Permit. Here, Phil is a least three times before she understands her
resident alien, who is exempted from Alien daily work assignment. However, her work
Employment Permit requirement. Hence, the output is at least equal to the output of the
employer is not correct in demanding that Phil least efficient worker in her work section. Is
first secure an employment permit from the Ms. Cruz a handicapped worker? Explain.
DOLE. (2000 BAR)

Liability of Local Recruitment Agency and A: NO, low IQ or low efficiency does not make the
Foreign Employer (2019, 2017, 2012, 2010 worker “handicapped” in the contemplation of
BAR) law. Handicap means such physical or mental
infirmity that impairs capacity to work. The
Q: Andrew Manning Agency (AMA) recruited deficiency may also be due to age or injury. (Art.
Feliciano for employment by Invictus 78, Labor Code)
Shipping, its foreign principal. Meantime,
AMA and Invictus Shipping terminated their Equal Opportunity (2012, 2006, 1998 BAR)
agency agreement. Upon his repatriation
following his premature termination, Q: A lady worker was born with a physical
Feliciano claimed from AMA and Invictus deformity, specifically, hard of hearing,
Shipping the payment of his salaries and speech impaired and color blind. However,
benefits for the unserved portion of the these deficiencies do not impair her working
contract. AMA denied liability on the ground ability. Can the employer classify the lady
that it no longer had an agency agreement worker as a handicapped worker so that her
with Invictus Shipping. Is AMA correct? daily wage will only be seventy-five percent
Explain your answer. (2017 BAR) (75%) of the applicable daily minimum wage?

A: AMA is not correct. Under Sec. 10 of R.A. 8042, (1998 BAR)

the solidary liability of the principal and the
recruitment agency exists for the whole duration A: NO, the employer cannot classify the lady
of the employment contract and shall not be worker as a handicapped worker because
affected by any substitution, amendment or according to the facts in the question, her
modification made locally or in a foreign country. deficiencies do not impair her working ability. If
Here, AMA recruited Feliciano for employment her earning capacity is therefore not also
by Invictus Shipping. impaired, then she cannot be considered a
handicapped worker.
Hence, AMA remains solidary liable with Invictus
for any breach of the Feliciano’s employment Because of the above fact, the employer shall not
contract, even if AMA and Invictus had already pay her less than the applicable daily minimum
terminated their agency contract. wage. (Art. 78, Labor Code)

TRAINING AND EMPLOYMENT Q: For humanitarian reasons, a bank hired
OF SPECIAL WORKERS several handicapped workers to count and
sort out currencies. Their employment
Disabled Workers (2006, 2000 BAR) contract was for six (6) months. The bank
terminated their employment on the ground
Q: For humanitarian reasons, a bank hired that their contract has expired prompting
several handicapped workers to count and them to file with the Labor Arbiter a
sort out currencies. Their employment complaint for illegal dismissal. Will their
contract was for six (6) months. The bank action prosper? (2012 BAR)
terminated their employment on the ground
that their contract has expired prompting A: NO. Art. 80 provides that in cases of employing
them to file with the Labor Arbiter a complaint handicapped workers, an employment
for illegal dismissal. Will their action prosper? agreement must be contracted. Art. 80 further
(2006 BAR) provides that such employment agreement shall
contain the duration of the employment period.
A: YES, their action will prosper. They are doing In the case at bar, the action will not prosper for
necessary or desirable jobs and are qualified for the bank cannot be held liable for illegal
the job, and therefore they should be treated like dismissal for the handicapped employees
other qualified able-bodied employees (Bernardo themselves have agreed that their term of
v. NLRC and Far East Bank, 310 SCRA 186 [1999]). employment will only be limited to 6 months.
They cannot be terminated simply because of the
expiration of the contract. The nature of their NOTE: The contract signed by the workers is akin
work gives them the status of regular employees. to a probationary employment, during which the
What determines regularity is not the bank determined the employees’ fitness for the
employment contract but the nature of the job. job. If the bank renewed the contract after the
(A.M. Oreta and Co. Inc. v. NLRC, 176 SCRA 218 lapse of the six-month probationary period, the
[1989]) employees will then become regular employees
since the task of counting and sorting bills is

6
QuAMTO (1987-2019)
necessary and desirable to the business of the The conditions for an allowable "compressed
bank. (Bernardo et. al. v. NLRC and Far East Bank work week" are the following: the workers agree
and Trust Co. G.R. No. 122917, July 12, 1999) to the temporary change of work schedule and
they do not suffer any loss of overtime pay,
fringe benefits or their weekly or monthly take-
home pay. (DOLE Explanatory Bulletin on the
LABOR STANDARDS Reduction of Workdays on Wages issued on July
23, 1985)

CONDITIONS OF EMPLOYMENT Overtime (2015, 2010, 1997, 2003, 2002,
1991, 1987 BAR)
Hours of Work (2004, 1997 BAR)
Q: Socorro is a clerk-typist in the Hospicio de
Q: Gil Bates, a computer analyst and San Jose, a charitable institution dependent
programmer of Hard Drive Company, works for its existence on contributions and
eight hours a day for five days a week at the donations from well-wishers. She renders
main office providing customers information work eleven (11) hours a day but has not
technology assistance. On Saturdays, been given overtime pay since her place of
however, the company requires him to keep work is a charitable institution. Is Socorro
his cellular phone open from 8:00 A.M. to 5:00 entitled to overtime pay? Explain briefly.
P.M. so that the Management could contact him (2002 BAR)
in case of heavy workload or emergency
problems needing his expertise. A: YES. Socorro is entitled to overtime
compensation. She does not fall under any of the
May said hours on Saturdays be considered exceptions to the coverage of Art. 82 (Hours of
compensable working hours “while on call”? If Work). The Labor Code is equally applicable to
so, should said compensation be reported to non-profit institutions. A covered employee who
the Social Security System? (2004 BAR) works beyond eight (8) hours is entitled to
overtime compensation.
A: Said hours on Saturdays should be considered
as compensable working hours "while on call". In Q: A case against an employer company was
accordance with the Rules and Regulations filed charging it with having violated the
Implementing the Labor Code, an employee who prohibition against offsetting undertime for
is not required to leave word at his home or with overtime work on another day. The
company officials as to where he may be reached complainants were able to show that,
is not working while on call. But in the question, pursuant to the Collective Bargaining
Gil Bates was required to keep his cell phone Agreement (CBA), employees of the union
open from 8:00 A.M. to 5:00 P.M. Therefore, Bates had been required to work "overtime" on
should be considered as working while on call if Saturday but were paid only at regular rates
he cannot use effectively and gainfully for his of pay on the thesis that they were not
own purpose the time from 8:00 A.M. to 5:00 P.M. required to complete, and they did not in fact
on Saturdays when he is required to keep his complete, the eight-hour work period daily
cellphone open. from Monday through Friday.

The compensation actually received by Bates for Given the circumstances, the employer
working while on call on Saturdays should be contended that the employees were not
reported to the Social Security System because entitled to overtime compensation, i.e., with
under the Social Security Law, compensation premium rates of pay. Decide the
means "all actual remuneration for employment." controversy. (2003 BAR)

NORMAL HOURS OF WORK A: Art. 88 of the Labor Code provides that
undertime work on any particular day shall not
Compressed Work week (2005 BAR)
be offset by overtime work on any other day.
Q: Under what conditions may a "compressed The CBA, the law between the parties and the
work week" schedule be legally authorized as Union has shown that the employees are
an exception to the "eight-hour a day" required to render overtime work on Saturdays,
thus the contention of the employer is not
requirement under the Labor Code? (2005
BAR) tenable. The employer cannot use the undertime
incurred from Monday through Friday to offset
A: "Compressed work week" is resorted to by the overtime on Saturday. Hence, the employees
the employer to prevent serious losses due to are entitled to overtime compensation, i.e.,
causes beyond his control, such as when there is premium rates of pay on Saturday.
a substantial slump in the demand for his goods
or services or when there is lack of raw Q: After working from 10 a.m. to 5 p.m. on a
materials. (Explanatory Bulletin on the Reduction Thursday as one of 5,000 employees in a
of Workdays on Wages Issued by DOLE, July 23, beer factory, A hurried home to catch the
1985) early evening news and have dinner with his
7 U S T

family. At around 10 p.m. of the same day, the differential. Is he correct? Explain briefly.
plant manager called and ordered A to fill in (2002 BAR)
for C who missed the second shift.
A: YES. Under Art. 86 of the Labor Code, night
a. May A validly refuse the plant manager’s shift differential shall be paid to every employee
directive? Explain. for work performed between 10:00 o’clock in
the evening to six o’clock in the morning.
A: YES. A may validly refuse to fill in for C. A may Therefore, Goma is entitled to night shift
not be compelled to perform overtime work differential for work performed from 10:00 pm
considering that the plant manager’s directive is until 6:00 am of the day following, but not from
not for an emergency overtime work, as 6:00 am to 7:00 am of the same day.
contemplated under Art. 89 of the Labor Code.
ALTERNATIVE ANSWER:
b. Assuming that A was made to work from
11 p.m. on Thursday until 2 a.m. on NO. The Omnibus Rules Implementing the Labor
Friday, may the company argue that, since Code (in Book III, Rule II dealing with night shift
he was two hours late in coming to work differential) provides that its provisions on night
on Thursday morning, he should only be shift differential shall NOT apply to employees of
paid for work rendered from 1 a.m. to 2 “retail and service establishments regularly
a.m.? Explain? (2010 BAR) employing not more than five (5) workers”.
Because of this provision, Goma is not entitled to
A: NO. Undertime is not offset by overtime. (Art. night shift differential because the gasoline
88, Labor Code) station where he works has only five employees.

Q: LKG Garments Inc. makes baby clothes for Rest Periods (1998, 1987 BAR)
export. As part of its measures to meet its
orders, LKG requires its employees to work Q: A Ladies Dormitory run or managed by a
beyond eight (8) hours everyday, from charitable non-profit organization claims that
Monday to Saturday. It pays its employees an it is exempt from the coverage of the Weekly
additional 35% of their regular hourly wage Rest Period provision of the Labor Code. Is the
for work rendered in excess of eight (8) claim valid? (1998 BAR)
hours per day. Because of additional orders,
LKG now requires two (2) shifts of workers A: NO. The claim is not valid. The provisions on
with both shifts working beyond eight (8) weekly rest periods in the Labor Code cover
hours but only up to a maximum of four (4) every employer, whether operating for profit or
hours. not. (Art. 91, Labor Code)

Carding is an employee who used to render up Q: Lawyer Antonio Martin recently formed a
to six (6) hours of overtime work before the law partnership with five other lawyer-
change in schedule. He complains that the friends of his. They hired two office
change adversely affected him because now he secretaries, an accounting clerk-cashier, one
can only earn up to a maximum of four (4) bookkeeper, and two messengers. You are
hours' worth of overtime pay. Does Carding among three associate attorneys. The
have a cause of action against the company? workweek is Monday to Friday. There is no
(2015 BAR) vacation leave but sick leave is 15 days for
every year of continuous and satisfactory
A: NO. A change in work schedule is a service.
management prerogative of LKG. Thus, Carding
has no cause of action against LKG if, as a result Managing partner Martin is preparing a set of
of its change to two (2) shifts, he now can only personnel policies in terms and conditions of
expect a maximum of four (4) hours overtime employment for the staff and has asked you to
work. Besides, Art. 87 of the Labor Code does give him a brief memo on the questions listed
not guarantee Carding a certain number of hours below. Should the law firm schedule a rest
of overtime work. In Manila Jockey Employees’ day for the employees, including you? (1987
Union v. Manila Jockey Club (G.R. No. 167760, BAR)
March 7, 2007), the Supreme Court held that the
basis of overtime claim is an employee’s having A: There is no need under the Labor Code to
been “permitted to work.” Otherwise, as in this schedule a rest day. The Code (in Art. 91) requires
case, such is not demandable. an employer to provide each of his employees a
weekly rest day after every six consecutive
Night Shift Differential (2002 BAR) normal work days. Here, the work week is such
that it is for five (5) days. The Saturdays and
Q: As a tireman in a gasoline station open Sundays when the employees are not required to
twenty-four (24) hours a day with only five work more than satisfy the required weekly rest
(5) employees, Goma worked from 10:00 day.
P.M. until 7:00 A.M. of the following day. He
claims he is entitled to night-shift Holiday Pay, 13th Month Pay (2018, 2012,

8
QuAMTO (1987-2019)
2005, 2004, 2002, 1998, 1994, 1987 BAR) v. Court of Appeals, 425 SCRA 478 [2004])

Q: Dennis was a taxi driver who was being paid Q: TRX, a local shipping firm, maintains a
on the "boundary" system basis. He worked fleet of motorized boats plying the island
tirelessly for Cabrera Transport Inc. for barangays of AP, a coastal town. At day's end
fourteen (14) years until he was eligible for the boat operators/crew members turn over
retirement. He was entitled to retirement to the boat owner their cash collections from
benefits. During the entire duration of his cargo fees and passenger fares, less the
service, Dennis was not given his 13th month expenses for diesel fuel, food, landing fees
pay or his service incentive leave pay. and spare parts.

a. Is Dennis entitled to 13th month pay and Fifty percent (50%) of the monthly income or
service leave incentive pay? Explain. earnings derived from the operations of the
boats are given to the boatmen by way of
A: NO. A taxi driver paid under the “boundary compensation. Deducted from the individual
system” is not entitled to a 13th month pay and a shares of the boatmen are their cash advance
SIL pay. Hence, his retirement pay should be and peso value of their absences, if any. Are
computed solely on the basis of his salary. these boatmen entitled to overtime pay,
Specifically, Sec. 3 (e) of the Rules and holiday pay, and 13th month pay? (2004
Regulations Implementing P.D. 851 excludes BAR)
from the obligation of 13th Month Pay “Employers
of those who are paid on x x x boundary” basis. A: If the boatmen are considered employees, like
On the other hand, Sec. 1(d), Rule V, Book III of jeepney drivers paid on a boundary system, the
the Omnibus Rules provides that those boatmen are not entitled to overtime and
“employees whose performance is unsupervised holiday pay because they are workers who are
by the employer” are not entitled to Service paid by results. Said workers, under the Labor
Incentive Leave. A taxi driver paid under the Code are not entitled to, among others, overtime
Boundary System is an “unsupervised” employee. pay and holiday pay.

b. Since he was not given his 13th month pay In accordance with the Rules and Regulations
and service incentive leave pay, should implementing the 13th month pay law, however,
Dennis be paid upon retirement, in the boatmen are entitled to the 13th month pay.
addition to the salary equivalent to fifteen Workers who are paid by results are to be paid
(15) days for every year of service, the their 13th month pay.
additional 2.5 days representing one-
twelfth (1/12) of the 13th month pay as Q: Nico is a medical representative engaged
well as the five (5) days representing the in the promotion of pharmaceutical products
service incentive leave for a total of 22.5 and medical devices for Northern
days? Explain. (2012 BAR) Pharmaceuticals, Inc. He regularly visits
physicians' clinics to inform them of the
A: NO. Since he is not entitled to 13th month pay chemical composition and benefits of his
and Service Incentive Leave, his retirement pay employer's products. At the end of every day,
should be computed solely on the basis of his he receives a basic wage of PhP700.00 plus a
salary. (R&E Transport v. Latag, G.R. No. 155214, PhP150.00 "productivity allowance." For
Feb. 13, 2004) purposes of computing Nico's 13th month
pay, should the daily "productivity
Q: During the open forum following your allowance" be included? (2018 BAR)
lecture before members of various unions
affiliated with a labor federation, you were A: NO. The second paragraph of Sec. 5(a) of the
asked the following question: Revised Guidelines Implementing the 13th Month
Pay Law states that “employees who are paid a
Araw ng Kagitingan and Good Friday are fixed or guaranteed wage plus commission are also
among the 10 paid regular holidays under entitled to the mandated 13th month pay, based on
Article 94 of the Labor Code. How much will an their total earnings during the calendar year, i.e., on
employee receive when both holidays fall on both their fixed or guaranteed wage and
the same day? (2005 BAR) commission.”

A: The employee will receive 200% of his However, the SC in Philippine Duplicators, Inc. v.
regular daily wage when both regular holidays NLRC (G.R. No. 110068, Feb. 15, 1995), declared the
fall on the same day and he does not work. The aforesaid provision as null and void with respect to
law provides that he shall receive his regular those medical representatives who do not obtain
daily wage for each regular holiday. The productivity allowances by virtue of generated
employee will receive 100% for Araw ng sales. Such allowances are in the nature of profit-
Kagitingan and 100% for Good Friday, If he sharing bonuses or commissions that should be
works on that day, he is entitled to 400% of his properly excluded from the ambit of the term
regular daily wage; otherwise, there will be “basic salary” for purposes of computing 13th
diminution of benefits. (Asian Transmission Corp. month pay due to employees.
9 U S T

ALTERNATIVE ANSWER: company be held liable for the salaries of the
supervisor? Decide (2008 BAR)
YES, the productivity allowance should be included
in the computation of the 13th month pay. The said A: NO, I will apply the “No work, No pay”
allowance is a fixed amount and made part of principle. The supervisors are not entitled to
Nico’s daily compensation, and as such this is their money claim for unpaid salaries, as they
demandable and enforceable as a matter of right. should not be compensated for services skipped
The “basic salary” of an employee for purposes of during the strike of the rank-and-file union. The
computing the 13th month pay include all age-old rule governing the relation between
remuneration or earnings paid by his employer for labor and capital, or management and employee
services rendered but does not include allowances of a “fair day’s wage for a fair day’s labor”
and monetary benefits which are not considered or remains as the basic factor in determining
integrated as part of the regular or basic salary. employees’ wages. (Aklan Electric Cooperative,
(Protacio Laya Mananghaya & Co., G.R. No. 168654, Inc. v. NLRC, G.R. No. 121439, Jan. 25, 2000)
March 25, 2009)
Q: Benito is the owner of an eponymous
WAGES (2019, 2018, 2017, 2015, 2010, 2008, clothing brand that is a top seller. He employs
1998, 1997, 1992 BAR) a number of male and female models who
wear Benito's clothes in promotional shoots
Q: A worked as a roomboy in La Mallorca Hotel. and videos. His deal with the models is that
He sued for underpayment of wages before the Benito will pay them with 3 sets of free
NLRC, alleging that he was paid below the clothes per week. Is this arrangement
minimum wage. The employer denied any allowed? (2015 BAR)
underpayment, arguing that based on long
standing, unwritten policy, the Hotel provided A: NO. The arrangement is not allowed. The
food and lodging to its housekeeping employees, models are Benito’s employees. As such, their
the costs of which were partly shouldered by it services are required to be paid only in legal
and the balance was charged to the employees. tender, even when expressly requested by the
The employees’ corresponding share in the employee (Art. 102, Labor Code). Hence, no lawful
costs was thus deducted from their wages. The deal in this regard can be entered into by and
employer concluded that such valid deduction between Benito and his models. The three (3)
naturally resulted in the payment of wages sets of clothes, regardless of value, are in kind;
below the prescribed minimum. If you were the hence, the former’s compensation is not in the
Labor Arbiter, how would you rule? Explain. form prescribed by law.
(2010 BAR)
Wage versus Salary
A: I will rule in favor of A. Even if food and lodging
were provided and considered as facilities by the Q: Distinguish "salary" from "wages." (1994
employer, the employer could not deduct such BAR)
facilities from its workers’ wages without
compliance with law. (Mayon Hotel & Restaurant v. A: In the case of Gaa v. Court of Appeals (G.R. No.
Adana, 458 SCRA 609 [2005]) L-44169, Dec. 3, 1985), the Supreme Court had the
opportunity to distinguish salary and wages.
In Mabeza v. NLRC (271 SCRA 670 [1997]), the According to the Supreme Court, the term wages
Supreme Court held that the employer simply refer to the compensation given in consideration
cannot deduct the value from the employee’s of manual labor, skilled or unskilled. On the other
wages without satisfying the following: hand, salary denotes a compensation for a higher
degree of employment.
a. Proof that such facilities are customarily
furnished by the trade; Q: Tarcisio was employed as operations
b. The provision of deductible facilities is manager and received a monthly salary of
voluntarily accepted in writing by the P25,000.00 through his payroll account with
employee; and DB Bank. He obtained a loan from Roberto to
c. The facilities are charged at fair and purchase a car. Tarcisio failed to pay Roberto
reasonable value. when the loan fell due. Roberto sued to collect
and moved to garnish Tarcisio’s payroll
Q: The rank-and-file union staged a strike in account. The latter vigorously objected and
the company premises which caused the argued that salaries were exempt from
disruption of business operations. The garnishment. Is Tarcisio correct? Explain your
supervisors union of the same company filed answer. (2017 BAR)
a money claim for unpaid salaries for the
duration of the strike, arguing that the A: NO, Tarcisio is not correct. Under Art. 1708 of
supervisors' failure to report for work was the Civil Code, only wages, which are the
not attributable to them. The company compensation paid for manual skilled or
contended that it was equally faultless, for the unskilled labor, are exempt from garnishment.
strike was not the direct consequence of any Here, the subject of garnishment is Tarcisio’s
lockout or unfair labor practice. May the salary as a managerial employee, which is not

10
QuAMTO (1987-2019)
considered as wages. Hence, Tarcisio’s salary A: NO, if the agreement is with regards to
may be garnished. reduction, Art. 100 provides for the prohibition
against elimination or diminution of benefits.
ALTERNATIVE ANSWER: However, if the agreement seeks to increase the
minimum percentage, it is allowed because
YES, Tarcisio is correct. Under Art. 1708 of the there is nothing in the law which prohibits the
Civil Code, “(t)he laborer’s wages shall not be same. What is expressly prohibited under the
subject to execution or attachment, for debts law is only reduction.
incurred for food, shelter, clothing and medical
attendance.” The indebtedness of Tarcisio was Q: D, one of the sales representatives of OP,
due to a purchase of a car which is one of the Inc., was receiving a basic pay of P50,000.00
exceptions under the said law. a month, plus a 1 % overriding commission
on his actual sales transactions. In addition,
Payment of Wages (2004, 1998 BAR) beginning three (3) months ago, or in August
2019, D was able to receive a monthly gas
Q: TRX, a local shipping firm, maintains a fleet and transportation allowance of P5,000.00
of motorized boats plying the island despite the lack of any company policy
barangays of AP, a coastal town. At day’s end therefor.
the boat operators/crew members turn over
to the boat owner their cash collections from In November 2019, D approached his
cargo fees and passenger fares, less the manager and asked for his gas and
expenses for diesel fuel, food, landing fees transportation allowance for the month. The
and spare parts. Fifty percent (50%) of the manager declined his request, saying that the
monthly income or earnings derived from the company had decided to discontinue the
operations of the boats are given to the aforementioned allowance considering the
boatmen by way of compensation. Deducted increased costs of its overhead expenses. In
from the individual shares of the boatmen are response, D argued that OP, Inc.' s removal of
their cash advance and peso value of their the gas and transportation allowance
absences, if any. Are these boatmen entitled amounted to a violation of the rule on non-
to overtime pay, holiday pay, and 13th month diminution of benefits. Is the argument of D
pay? (2004 BAR) tenable? Explain. (2019 BAR)

A: NO. The boatmen are considered as workers A: NO, the argument of D is not tenable. The
who are paid by results. More specifically, they principle of non-diminution of benefits, which
are task workers who are paid not based on the has been incorporated in Art. 100 of the Labor
number of units produced, but based on the Code, forbids an employer from unilaterally
completion of their task, with appropriate reducing, diminishing, discontinuing or
deductions based on circumstances such as road eliminating compensation or privilege which are
and traffic conditions (Adriano Quintos, et al. v. given as a company practice. In Netlink v. Delmo
D.D. Transportation Co., NLRC Case No. RB-IV- (G.R. No. 160827, Jun. 18, 2014), the Supreme
20941, May 31, 1979). In the case at bar, the Court said that the length of time has not been
boatmen’s pay differs depending on conditions laid out on what constitutes a company practice.
such as the increase or decrease of the price of However, there are Supreme Court decisions
diesel, food expenses, landing fees and spare that say a period of two years, more or less, is
parts. deemed a company practice (Sevilla Trading
Company v. Semana, G.R. No. 152456, Apr. 28,
In connection thereto, their payment although 2004). In the question, the monthly gas and
being direct remunerations or compensation for transportation allowance was given to D for
their service cannot be considered as wages three months only. Such a short period appears
because they do not partake the nature of wages not to fall under the category of company
as defined by the laws on labor. Instead, their pay practice using the above decisions as a basis.
is considered as commissions; and as held by the
Supreme Court in the case of King of Kings Q: Far East Bank (FEB) is one of the leading
Transport, Inc. et al. v. Mamac, (GR No. 166208, banks in the country. Its compensation and
June 29, 2007), workers who are paid by bonus packages are top of the industry. For
commission are not entitled to the 13th month the last 6 years, FEB had been providing the
pay. following bonuses across-the-board to all its
employees:
Non-Diminution of Benefits (2019, 2015,
2006, 2005, 2003, 2002, 1995 BAR) a. 13th month pay;
b. 14th to 18th month pay;
Q: Can an employer and an employee enter c. Christmas basket worth P6,000;
into an agreement reducing or increasing the d. Gift check worth P4,000; and
minimum percentage provided for night e. Productivity-based incentive ranging
differential pay, overtime pay, and premium from a 20%-40% increase in gross
pay? (2006 BAR) monthly salary for all employees who
would receive an evaluation of
11 U S T

"Excellent" for 3 straight quarters in the a. An existing hierarchy of positions with
same year. corresponding salary rates;

Because of its poor performance over-all, FEB b. A significant change or increase in salary rate
decided to cut back on the bonuses this year of a lower pay class without a corresponding
and limited itself to the following: increase in the salary of a higher one;

a. 13th month pay; c. The elimination of the distinction between
b. 14th month pay; two groups or classes; and
c. Christmas basket worth P4,000; and
d. Gift check worth P2,000. d. The distortion exists in the same region of
the country. (Prubankers Association v.
Katrina, an employee of FEB, who had gotten Prudential Bank and Trust Co., 302 SCRA 74
a rating of "Excellent" for the last 3 quarters, [1999])
was looking forward to the bonuses plus the
productivity incentive bonus. After learning Q: How should a wage distortion be settled?
that FEB had modified the bonus scheme, she (2006, 1997, 2009 BAR)
objected. Is Katrina's objection justified?
Explain. (2015 BAR) A: Any dispute arising from wage distortion shall
be resolved through the grievance procedure as
A: Katrina’s objection is justified. Having provided in the applicable collective bargaining
enjoyed the across-the-board bonuses, Katrina agreement and, if the dispute remains
has earned a vested right. Hence, none of them unresolved, then through voluntary arbitration.
can be withheld or reduced. In the problem, the
company has not proven its alleged losses to be In cases where there are no collective bargaining
substantial. Permitting reduction of pay at the agreements or recognized labor unions, the
slightest indication of losses is contrary to the employers and workers shall endeavor to correct
policy of the State to afford full protection to such wage distortions. Any dispute arising
labor and promote full employment. (Linton therefrom shall be settled through the National
Commercial Co. v. Hellera, G.R. No. 163147, Oct. Conciliation and Mediation Board and, if it
10, 2007) remains unresolved after ten (10) calendar days
of conciliation, the issue of wage distortion shall
As to the withheld productivity-based bonuses, be referred to the appropriate branch of the
Katrina is deemed to have earned them because National Labor Relations Commission (NLRC).
of her excellent performance ratings for three
quarters. On this basis, they cannot be withheld Q: Can the issue of wage distortion be raised in a
without violating the Principle of Non- notice of strike? Explain. (2006, 1997, 2009
Diminution of Benefits. BAR)

Moreover, it is evident from the facts of the case A: In Ilaw ng Manggagawa v. NLRC, 198 SCRA 586
that what was withdrawn by FEB was a (1991), the Supreme Court held that any issue
productivity bonus. Protected by R.A. 6791 involving wage distortion shall not be a ground
which mandates that the monetary value of the for a strike or lockout. The legislative intent is to
productivity improvement be shared with the solve wage distortion problems through
employees, the “productivity-based incentive” voluntary negotiation or arbitration.
scheme of FEB cannot just be withdrawn
without the consent of its affected employees. Q: How should a wage distortion be resolved
(1) In case there is a collective bargaining
Wage Order, Wage Distortion (2019, 2017, agreement and (2) in case there is none?
2009, 2008, 2006, 2002, 1997 BAR) Explain briefly. (2002 BAR)

Q: When is there a wage distortion? (2019, A: According to Art. 124 of the Labor Code, in
2009, 2006, 1997 BAR) case there is a collective bargaining agreement, a
dispute arising from wage distortions shall be
A: There is wage distortion where an increase in resolved through the grievance machinery
prescribed wage rates results in the elimination provided in the CBA, and if remains unresolved,
or severe contraction of intentional quantitative through voluntary arbitration. In case there is no
differences in wage or salary rates between and collective bargaining agreement the employers
among employee groups in an establishment as and workers shall endeavor to correct such
to effectively obliterate the distinctions distortions. Any dispute arising therefrom shall
embodied in such wage structure based on be settled through the National Conciliation and
skills, length of service, or other logical bases of Mediation Board and if it remains unresolved
differentiation. after ten (10) calendar days of conciliations, then
the dispute is referred to the appropriate branch
Wage distortion arises when (4) essential of the National Labor Relations Commission.
elements are present:
Q: The Regional Tripartite Wages and

12
QuAMTO (1987-2019)
Productivity Board (RTWPB) for Region 3 Q: Dennis was a taxi driver who was being
issued a wage order on November 2, 2017 paid on the “boundary” system basis. He
fixing the minimum wages for all industries worked tirelessly for Cabrera Transport Inc.
throughout Region 3. for fourteen (14) years until he was eligible for
retirement. He was entitled to retirement
a. Is the wage order subject to the approval benefits. During the entire duration of his
of the National Wages and Productivity service, Dennis was not given his 13th month
Commission before it takes effect? pay or his service incentive leave pay.

A: NO, the wage order is not subject to the a. Is Dennis entitled to 13th month pay and
approval of the National Wages and Productivity service leave incentive pay?
Commission (NWPC) before it takes effect. Under Explain.
the Labor Code, the NWPC only exercises
technical and administrative supervision over the A: NO. A taxi driver paid under the “boundary
RTWPB. system” is not entitled to a 13th month pay and a
SIL pay. Hence, his retirement pay should be
ALTERNATIVE ANSWER: computed solely on the basis of his salary.

NO, the Wage Order becomes effective fifteen Specifically, Sec. 3(e) of the Rules and
(15) days after its publication in at least one (1) Regulations Implementing P.D. 851 excludes
newspaper of general circulation in the region from the obligation of 13th Month Pay
pursuant to the Rules of Procedure in Minimum “Employers of those who are paid on x x x
Wage Fixing. boundary” basis. On the other hand, Sec. 1 (d),
Rule V, Book III of the Omnibus Rules provides
ANOTHER ALTERNATIVE ANSWER: that those “employees whose performance is
unsupervised by the employer” are not entitled
YES. In NWPC v. Alliance of Progressive Labor to Service Incentive Leave. A taxi driver paid
(G.R. No. 150326, March 12, 2014), it was ruled under the Boundary System is an
that “(t)he very fact that the validity of the “unsupervised” employee.
assailed sections of Wage Order No. NCR-07 had
been already passed upon and upheld by the b. Since he was not given his 13th month pay
NWPC meant that the NWPC had already given and service incentive leave pay, should
the wage order its necessary legal imprimatur. Dennis be paid upon retirement, in
Accordingly, the requisite approval or review addition to the salary equivalent to fifteen
was complied with. (15) days for every year of service, the
additional 2.5 days representing one-
b. The law mandates that no petition for twelfth (1/12) of the 13th month pay as
wage increase shall be entertained within well as the five (5) days representing the
a period of 12 months from the effectivity service incentive leave for a total of 22.5
of the wage order. Under what days? Explain. (2012 BAR )
circumstances may the Kilusang Walang
Takot, a federation of labor organizations A: NO. Since he is not entitled to 13th month pay
that publicly and openly assails the wage and Service Incentive Leave, his retirement pay
order as blatantly unjust, initiate the should be computed solely on the basis of his
review of the wage increases under the salary. (R&E Transport v. Latag, G.R. No. 155214,
wage order without waiting for the end of Feb. 13, 2004)
the 12-month period? Explain your
answer. (2017 BAR) Q: A driver for a bus company, sued his
employer for non-payment of commutable
A: Kilusang Walang Takot may initiate the review service incentive leave credits upon his
of wage order without waiting for the end of the resignation after five years of employment.
12-month period when there are supervening The bus company argued that A was not
conditions that demand a review of the minimum entitled to service incentive leave since he
wage rates. was considered a field personnel and was
paid on commission basis and that, in any
These supervening conditions include: event, his claim had prescribed. If you were
the Labor Arbiter, how would you rule?
1. Extraordinary increase in prices of Explain. (2010 BAR)
petroleum products; and
2. Extraordinary increase in the cost of basic A: I will grant the prayer of A. Payment on
goods and services. commission basis alone does not prove that A is
a field personnel. There must be proof that A is
LEAVES left to perform his work unsupervised by his
employer. Otherwise, he is not a field personnel,
Service Incentive Law (2012, 2010, 1987 thus entitled to commutable service incentive
BAR) leave (SIL) credits. (Auto Bus v. Bautista, 458
SCRA 578 [2005])
13 U S T

His action has not yet prescribed. In Auto Bus v. termination of pregnancy.
Bautista (supra.), the Supreme Court recognized
that SIL is such a unique labor standard benefit, Such maternity leave benefits may be availed of
because it is commutable. An employee may by qualified female workers regardless of the
claim his accrued SIL throughout the years of his civil status, employment status, legitimacy of the
service with the company upon his resignation, child, and frequency of the pregnancy.
retirement, or termination. Therefore, when A Furthermore, such qualified female workers shall
resigned after five years, his right of action to be entitled to full pay during the maternity leave
claim ALL of his SIL benefits accrued at the time which consists of their basic salary and
when the employer refused to pay him his allowances as may be provided under existing
rightful SIL benefits. (Art. 291 [now 306], Labor guidelines. (Sec. 3, R.A. 11210)
Code)
Q: A, single, has been an active member of the
Q: Mrs. B, the personal cook in the household Social Security System for the past 20 months.
of X, filed a monetary claim against her She became pregnant out of wedlock and on
employer, X, for denying her service her 7th month of pregnancy, she was
incentive leave pay. X argued that Mrs. B did informed that she would have to deliver the
not avail of any service incentive leave at the baby through caesarean section because of
end of her one (1) year of service and hence, some complications. Can A claim maternity
not entitled to the said monetary claim. benefits? If yes, how many days can she go on
maternity leave? If not, why is she not
a. Is the contention of X tenable? Explain. entitled? (2010 BAR)

A: No, the contention of X is not tenable. Mrs. B A: YES. The SSS Law does not discriminate based
being a kasambahay is entitled to service on the civil status of a female member- employee.
incentive leave under R.A. 10361 as clarified by As long as said female employee has paid at least
Labor Advisory No. 010-18. As such, she has the three (3) monthly contributions in the twelve-
prerogative to use it, monetize it after 12 month period immediately preceding the
months of service, or commute it until semester of her childbirth, she can avail of the
separation from service. If she elects the second, maternity benefits under the law.
she has three (3) years to demand for payment
to avail of the benefit. Hence, not being a Since A gave birth through C-section, she is
prescribed claim, it’s withholding is unlawful. entitled to one hundred percent (100%) of her
(Lourdes Rodriguez v. Park N Ride, G.R. No. average salary credit for seventy-eight (78) days,
222980, March 20, 2017, as penned by J. Leonen) provided she notifies her employer of her
pregnancy and the probable date of her
b. Assuming that Mrs. B is instead a clerk in childbirth, among others. (Sec. 14-A, R.A. 8282, as
X's company with at least 30 regular amended)
employees, will her monetary claim
prosper? Explain. (2019 BAR) The same maternity benefits are ensured by Sec.
22 (b) (2) of the Magna Carta of Women. (R.A.
A: Yes, the money claim will prosper. A clerk is 9710)
not one of those exempt employees in Art. 82 of
the Labor Code which refers to government NOTE: Under the Expanded Maternity Leave
employees, managerial employees, field Law, A shall be entitled to a minimum of 105 days
personnel members of the family who are maternity leave with full pay. As long as a female
dependent on him for support, domestic helpers, SSS member has paid at least three (3) monthly
persons in the personal service of another and contributions in the twelve-month period
persons who are paid by results. immediately preceding the semester of her
Maternity Leave (2010, 2007, 2005 BAR) childbirth, miscarriage, or emergency
termination of pregnancy, she can avail of the
NOTE: Under R.A. 11210, otherwise known as maternity benefits under the law, regardless of
the “Expanded Maternity Leave Law” which took whether she gave birth via caesarian section or
effect on March 11, 2019, qualified female natural delivery, subject to the conditions set
workers in the public sector, private sector, and forth under Sec. 5 of R.A. 11210.
informal economy shall be entitled to maternity
leave with full pay for: Further, A may also avail of an additional
maternity leave of thirty (30) days without pay,
a. 105 days for live childbirth, regardless of the provided that she gives due notice to her
mode of delivery, with an option to extend employer in writing at least forty-five (45) days
for an additional 30 days without pay; and before the end of her maternity leave. However,
an additional 15 days paid leave if the no prior notice shall be necessary in the event of
female worker qualifies as a solo parent a medical emergency but subsequent notice shall
under R.A. 8972, otherwise known as the be given to her employer (Sec. 3, IRR of R.A.
“Solo Parents’ Welfare Act of 2000”; OR 11210). Lastly, if A qualifies as a solo parent
under R.A. 8972, she shall also be granted an
b. 60 days for miscarriage and emergency additional fifteen (15) days maternity leave with

14
QuAMTO (1987-2019)
full pay. (Sec. 3, R.A. 11210) A: The contention of Weto is correct. The law
provides that every married male is entitled to a
Q: AB, single and living-in with CD (a married paternity leave of seven (7) days for the first
man), is pregnant with her fifth child. She four (4) deliveries of the legitimate spouse with
applied for maternity leave but her employer whom he is cohabiting. (Sec. 2, R.A. 8187)
refused the application because she is not
married. Who is right? Decide (2007 BAR) Jovy is Weto's legitimate spouse with whom he
is cohabiting. The fact that Jovy is his second
A: AB is right. The Social Security Law, which wife and that Weto had 4 children with his first
administers the Maternity Benefit Program does wife is beside the point. The important fact is
not require that the relationship between the that this is the first child of Jovy with Weto. The
father and the mother of the child be legitimate. law did not distinguish and we should therefore
The law is compensating the female worker not distinguish.
because of her maternal function and resultant
loss of compensation. The law is morality free. The paternity leave was intended to enable the
husband to effectively lend support to his wife in
NOTE: AB is right. Under the Expanded Maternity her period of recovery and/or in the nursing of
Leave Law, all female members of the Social the newly born child (Sec. 3, R.A. 8187). To deny
Security System, regardless of their civil status, Weto this benefit would be to defeat the
shall be granted maternity leave. (R.A. 11210, Sec. rationale for the law.
7)
Q: How many times may a male employee go
In older laws, maternity leave may be availed for on Paternity Leave? Can he avail of this
up to four (4) pregnancies only. Now, being benefit, for example, 50 days after the first
pregnant for a fifth child should not affect AB’s delivery by his wife? (2002 BAR)
application because the Expanded Maternity
Leave Act allows maternity leave to female A: A male employee may go on Paternity Leave
workers in every instance of pregnancy. (R.A. for the first four deliveries of the legitimate
11210, Sec. 3) spouse (Sec. 2, R.A. 8187). The male employee
can avail this benefit 50 days after the delivery
Q: Mans Weto had been an employee of Nopolt of his wife because the Rules Implementing the
Assurance Company for the last ten (10) years. Paternity Leave Act says that the availment
His wife of six (6) years died last year. They had should not be later than 60 days after the date of
four (4) children. He then fell in love with Jovy, delivery.
his co-employee, and they got married.
Special Leaves for Women Workers (Magna
In October this year, Weto's new wife is Carta for Women) (2013 BAR)
expected to give birth to her first child. He has
accordingly filed his application for paternity Q: Because of the stress in caring for her four
leave, conformably with the provisions of the (4) growing children, Tammy suffered
Paternity Leave Law which took effect in miscarriage late in her pregnancy and had to
1996. The HRD manager of the assurance firm undergo an operation. In the course of the
denied his application, on the ground that operation, her obstetrician further
Weto had already used up his entitlement discovered a suspicious-looking mass that
under that law. Weto argued that he has a required the subsequent removal of her
new wife who will be giving birth for the first uterus (hysterectomy).
time, therefore, his entitlement to paternity
leave benefits would begin to run anew. After surgery, her physician advised Tammy
to be on full bed rest for six (6) weeks.
a. Is Jovy entitled to maternity leave benefits? Meanwhile, the biopsy of the sample tissue
(2005 BAR) taken from the mass in Tammy's uterus
showed a beginning malignancy that
A: YES, if Jovy, as a female employee, has paid at required an immediate series of
least three (3) monthly contributions in the chemotherapy once a week for four (4) weeks.
twelve-month period immediately preceding the What benefits can Tammy claim under
semester of her childbirth (Sec. 14-A, R.A. 8282, as existing social legislation? (2013 BAR)
amended); otherwise, she is not entitled to the
benefit. A: Assuming she is employed, Tammy is entitled
to a special leave benefit of two months with full
NOTE: Under the Expanded Maternity Leave Law pay (Gynecological Leave) pursuant to R.A. 9710
(R.A. 11210), the relevant provision is Sec. 5 or the Magna Carta of Women. She can also
thereof. claim Sickness Leave Benefit in accordance with
the SSS Law.
Paternity Leave (2005, 2002 BAR)
SPECIAL GROUPS OF EMPLOYEES
b. Whose contention is correct, Weto or the
HRD manager? (2005 BAR) APPRENTICES AND LEARNERS
15 U S T

(2017, 2016, 2012, 2011 BAR) Code provides that the Secretary of Labor and
Employment shall establish standards that will
Q: Distinguish a learner from an apprentice. ensure the safety and health of women
(2017 BAR) employees, including the authority to determine
appropriate minimum age and other standards
A: The distinctions between a learner and an for retirement or termination in special
apprentice are as follows: occupations such as those of flight attendants
and the like.
a. As to nature: a learner trains in a semi-
skilled job; whereas an apprentice trains in CAVEAT:
a highly technical job.
It could be argued that Art. 132 (d) [now
b. As to period: a learner works for 3 months; 130(d)] may be unconstitutional because this
whereas an apprentice works for not less may constitute discrimination in violation of the
than three (3) months but not more than six spirit of Sec. 14 of Art. XIV of the Constitution
(6) months, as a rule. which provides that the State shall protect
working women by providing safe and healthful
c. As to commitment to employ: for a learner, working conditions, taking into account their
there is a commitment to employ the maternal functions, and such facilities and
learner as a regular employee if he so opportunities that will enhance their welfare
desires, upon the completion of the and enable them to realize their full potential in
learnership; whereas, for an apprentice, the service of the nation.
there is no such commitment.
Q: An exclusive school for girls, run by a
d. As to necessity of TESDA approval: for a religious order, has a policy of not employing
learner, TESDA approval is not necessary, unwed mothers, women with live-in
only TESDA inspection is required; whereas, partners, and lesbians.
for an apprentice, prior approval by TESDA
is required. a. Is the policy violative of any provision of
the Labor Code on employment of
e. As to deductibility of expenses: for a learner, women?
there is no provision for deductibility of
expenses; whereas, for an apprentice, A: NO, the policy does not violate the Labor Code.
expenses of training are deductible from The practice is a valid exercise of management
income tax. function. Considering the nature and reason for
existence of the school, it may adopt such policy
f. As to compensation: a learner has as will advance its laudable objectives. In fact, the
compensation; whereas, an apprentice may policy accords with the constitutional precept of
be uncompensated, if DOLE authorizes such inculcating ethical and moral values in schools.
as when apprenticeship is part of OJT The school policy does not discriminate against
required by schools. women solely on account of sex (Art. 135 [now
133], Labor Code) nor are the acts prohibited
WOMEN under Art. 137 [now 135] of the Labor Code.

Discrimination (2000, 1998 BAR) b. The same school dismissed two female
faculty members on account of pregnancy
Q: An airline which flies both the out of wedlock. Did the school violate any
international and domestic routes requested provision of the Labor Code on
the Secretary of Labor and Employment to employment of women? (2000 BAR)
approve the policy that all female flight
attendants upon reaching age forty (40) with A: NO, because to tolerate pregnancy out of
at least fifteen (15) years of service shall be wedlock will be a blatant contradiction of the
compulsorily retired; however, flight school’s laudable mission which, as already
attendants who have reached age forty (40) stated, accords with high constitutional precepts.
but have not worked for fifteen (15) years This answer does not contradict the ruling in
will be allowed to continue working in order Chua-Qua where the teacher merely fell in love
to qualify for retirement benefits, but in no with a bachelor student and the teacher, also
case will the extension exceed four (4) years. single, did not get pregnant out of wedlock.

Does the Secretary of Labor and Employment Stipulation against Marriage (2017, 2012,
have the authority to approve the policy? 1998, 1995, 1991 BAR)
(1998 BAR)
Q: Fil-Aire Aviation Company (FIL-AIRE) is a new
A: YES, the Secretary of Labor and Employment airline company recruiting flight attendants
has the authority to approve a policy dealing for its domestic flights. It requires that the
with the retirement of flight attendants of applicant be single, not more than 24 years old
airlines. Art. 132 (d) [now 130(d)] of the Labor attractive, and familiar with three (3) major

16
QuAMTO (1987-2019)
Visayan dialects, viz: Ilongo, Cebuano and A: As counsel for Josephine, I will file a
Waray. Lourdes, 23 years old, was accepted as complaint for work-related sexual harassment
she possessed all the qualifications. which, as in the case at bar, occurs when a
person who has authority, influence or moral
After passing the probationary period. ascendancy over another demands, requests or
Lourdes disclosed that she got married when otherwise requires any sexual favor from the
she was 18 years old but the marriage was latter as a condition for, inter alia, the continued
already in the process of being annulled on employment of said individual. (Sec. 3, R.A.
the ground that her husband was afflicted 7877)
with a sexually transmissible disease at the
time of the celebration of their marriage. As a I will likewise file a complaint for illegal
result of this revelation, Lourdes was not dismissal citing Art. 136 [now 134] of the Labor
hired as a regular flight attendant. Code which provides that it is unlawful for an
Consequently, she filed a complaint against employer to require as a condition of continued
FIL-AIRE alleging that the pre-employment employment or continuation of employment
qualifications violate relevant provisions of that a woman employee shall not get married, or
the Labor Code and are against public policy. to stipulate expressly or tacitly that upon getting
Is the contention of Lourdes tenable? Discuss married a woman employee shall be deemed
fully. (2012, 1995 BAR) resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a
A: The contention of Lourdes is tenable. When woman employee merely by reason of her
she was not hired as a regular flight attendant by marriage.
FIL-AIRE because she disclosed that she got
married when she was 18 years old, the airline Q: Pedrito Masculado, a college graduate
company violated the provision of the Labor from the province, tried his luck in the city
Code which states: and landed a job as a utility/maintenance
man at the warehouse of a big shopping mall.
“It shall be unlawful for an employer to require as After working as a casual employee for six
a condition of employment or continuation of months, he signed a contract for
employment that a woman employee shall not probationary employment for six months.
get married, or to stipulate expressly or tacitly
that upon getting married a woman employee Because Pedrito was well-built and
shall be deemed resigned or separated, or to physically attractive, Pedrito’s supervisor,
actually dismiss, discharge, discriminate or Mr. Hercules Barak, took special interest to
otherwise prejudice a woman employee merely befriend him. When his probationary period
by reason of her marriage." was about to expire, he was surprised when
one afternoon after working hours, Mr.
ALTERNATIVE ANSWER: Barak followed him to the men's comfort
room. After seeing that no one else was
A: YES. [FIL-AIRE]’s pre-employment around, Mr. Barak placed his arm over
requirement cannot be justified as a “bona fide Pedrito's shoulder' and softly said: "You have
occupational qualification,” where the great potential to become regular employee
particular requirements of the job would justify and I think I can give you a favorable
it. The said requirement is not valid because it recommendation. Can you come over to my
does not reflect an inherent quality that is condo unit on Saturday evening so we can
reasonably necessary for a satisfactory job have a little drink? I'm alone, and I'm sure
performance. (PT&T v. NLRC, G.R. No. 118978, you want to stay longer with the company."
May 23, 1997, citing 45A Am. Jur. 2d, Job
Discrimination, Sec. 506, p. 486) Is Mr. Barak liable for sexual harassment
committed in a work-related or employment
Sexual Harassment (2018, 2009, 2006, 2005, environment? (2004 BAR)
2004, 2003, 2000 BAR)
A: YES, the elements of sexual harassment are
Q: As a condition for her employment, all present:
Josephine signed an agreement with her
employer that she will not get married, a. The act of Mr. Barak was committed in a
otherwise, she will be considered resigned or workplace.
separated from the service.
b. Mr. Barak, as supervisor of Pedrito
Josephine got married. She asked Owen, the Masculado, has authority, influence and
personnel manager, if the company can moral ascendancy over Masculado.
reconsider the agreement. He told Josephine
he can do something about it, insinuating c. Given the specific circumstances mentioned
some sexual favors. She complained to in the question like Mr. Barak following
higher authorities but to no avail. She hires Masculado to the comfort room, etc. Mr.
you as her counsel. What action or actions Barak was requesting a sexual favor from
will you take? Explain. (2006 BAR) Masculado for a favorable recommendation
17 U S T

regarding the latter's employment. Maganda. After the seminar, Renan requested
Maganda to stay, purportedly to discuss some
d. It is not impossible for a male, who is a work assignment. Left alone in the training
homosexual, to ask for a sexual favor from room, Renan asked Maganda to go out with
another male. him for dinner and ballroom dancing.
Thereafter, he persuaded her to accompany
Q: Can an individual, the sole proprietor of a him to the mountain highway in Antipolo for
business enterprise, be said to have violated sight-seeing.
the Anti-Sexual Harassment Act of 1995 if he
clearly discriminates against women in the During all these, Renan told Maganda that
adoption of policy standards for employment most, if not all, of the lady supervisors in the
and promotions in the enterprise? Explain. firm are where they are now, in very
(2003 BAR) productive and lucrative posts, because of his
favorable endorsement. Did Renan commit
A: When an employer discriminates against acts of sexual harassment in a work-related or
women in the adoption of policy standards for employment environment? Reasons. (2009
employment and promotion in his enterprise, he BAR)
is not guilty of sexual harassment. Instead, the
employer is guilty of discrimination against A: YES. Atty. Renan is guilty of sexual
women employees which is declared to be harassment. This conclusion is predicated upon
unlawful by the Labor Code. the following consideration:

For an employer to commit sexual harassment, a. Atty. Renan has authority, influence or moral
he - as a person of authority, influence or moral ascendancy over Miss Maganda;
ascendancy - should have demanded, requested
or otherwise required a sexual favor from his b. While the law calls for a demand, request or
employee whether the demand, request or requirement of a sexual favor, it is not
requirement for submission is accepted by the necessary that the demand, request or
object of said act. In the question, no such act was requirement of a sexual favor be articulated
committed by the sole proprietor. in a categorical oral or written statement. It
may be discerned, with equal certitude from
Q: Nena worked as an Executive Assistant for the acts of the offender; (Domingo v. Rayala,
Nesting, CEO of Nordic Corporation. One day, 546 SCRA 90 [2008]);
Nesting called Nena into his office and showed
her lewd pictures of women in seductive c. The acts of Atty. Renan towards Miss
poses which Nena found offensive. Nena Maganda resound with deafening clarity the
complained before the General Manager who, unspoken request for a sexual favor,
in turn, investigated the matter and regardless of whether it is accepted or not by
recommended the dismissal of Nesting to the Miss Maganda;
Board of Directors. Before the Board of
Directors, Nesting argued, that since the Anti- d. In sexual harassment, it is not essential that
Sexual Harassment Law requires the the demand, request or requirement be made
existence of "sexual favors," he should not be as a condition for continued employment or
dismissed from the service since he did not promotion to a higher position. It is enough
ask for any sexual favor from Nena. Is Nesting that Atty. Renan’s act result in creating an
correct? (2018 BAR) intimidating, hostile or offensive
environment for Miss Maganda.
A: No, Nesting’s argument on lack of sexual favor
is incorrect. While his actions require further MINORS
proof of being a “sexual favor” in terms of (2007, 2006, 2004, 2002 BAR)
criminal liability under R.A. 7877, he may still be
held liable under the just causes of termination in Q: Determine whether the following minors
Art. 297 of the Labor Code. should be prohibited from being hired and
from performing their respective duties
In Villarama v. NLRC and Golden Donuts (G.R. No. indicated hereunder: (2006 BAR)
106341, Sept. 2, 1994), the Supreme Court held
that a managerial employee is bound by more a. A 17-year-old boy working as a miner at
exacting work ethics, with a high standard of the Walwaldi Mining Corporation.
responsibility. Sexual harassment of a
subordinate amounts to “moral perversity” which A: YES, he should be prohibited from being hired
provides a justifiable ground for dismissal due to and from performing the duties of a miner
lack of trust and confidence. because such constitutes hazardous work under
D.O. No. 04 Series of 1999. Art. 139 (c) [now
Q: Atty. Renan, a CPA-lawyer and Managing 137(c)] of the Labor Code expressly prohibits the
Partner of an accounting firm, conducted the employment of persons below 18 years of age in
orientation seminar for newly hired an undertaking which is hazardous or deleterious
employees of the firm, among them, Miss in nature as determined by the Secretary of

18
QuAMTO (1987-2019)
Labor. undertaking which is hazardous or deleterious in
nature as identified in the guidelines issued by
b. An 11-year-old boy who is an the DOLE Secretary. Working as a dealer in a
accomplished singer and performer in casino is classified as hazardous under D.O. No.
different parts of the country. 04 Series of 1999 as it exposes children to
physical, psychological, or sexual abuses.
A: NO, he should not be prohibited from being
hired and from performing as a singer. Under Art. Q: You were asked by 3 paint manufacturing
VIII, Sec. 12, par. 2 of R.A. 7610 as amended by company regarding the possible employment
R.A. 7658, this constitutes an exception to the as a mixer of a person, aged seventeen (17),
general prohibition against the employment of who shall be directly under the care of the
children below 15 years of age, provided that the section supervisor. What advice would you
following requirements are strictly complied give? Explain briefly. (2002 BAR)
with:
A: I will advise the paint manufacturing company
(a) The employer shall ensure the protection, that it cannot hire a person who is aged
health, safety and morals of the child; seventeen (17). Art. 139 (c) [now Art. 137(c)] of
the Labor Code provides that a person below
(b) The employer shall institute measures to eighteen (18) years of age shall not be allowed to
prevent the child’s exploitation or work in an undertaking which is hazardous or
discrimination taking into account the deleterious in nature as determined by the
system and level of remuneration, and the Secretary of Labor. Paint
duration and arrangement of working time; manufacturing has been classified by the
and Secretary of Labor as a hazardous work.

(c) The employer shall formulate and KASAMBAHAY
implement, subject to the approval and (2018, 2015, 2014, 2012, 2009,
supervision of competent authorities, a 2007, 2000, 1998 BAR)
continuing program for training and skill
acquisition of the child. Q: Soledad, a widowed school teacher, takes
under her wing one of her students, Kiko, 13
Moreover, the child must be directly under the years old, who was abandoned by his parents
sole responsibility of his parents or guardian and and has to do odd jobs in order to study. She
his employment should not in any way interfere allows Kiko to live in her house, provides
with his schooling. him with clean clothes, food, and a daily
allowance of 200 pesos. In exchange, Kiko
c. A 15-year-old girl working as a library does routine housework, consisting of
assistant in a girls’ high school. cleaning the house and doing errands for
Soledad.
A: NO, she should not be prohibited from
working as a library assistant because the One day, a representative of the DOLE and
prohibition in the Labor Code against the DSWD came to Soledad's house and
employment of persons below 18 years of age charged her with violating the law that
merely pertains to employment in an prohibits work by minors. Soledad objects
undertaking which is hazardous or deleterious in and offers as a defense that she was not
nature as identified in the guidelines issued by requiring Kiko to work as the chores were
the DOLE Secretary. Working as a library not hazardous. Further, she did not give him
assistant is not one of undertakings identified to chores regularly but only intermittently as
be hazardous under D.O. No. 04 Series of 1999. the need may arise. Is Soledad's defense
meritorious? (2015 BAR)
d. A 16-year-old girl working as model
promoting alcoholic beverages. A: Soledad’s defense is meritorious. Sec. 4(d) of
the Kasambahay Law (R.A. 10361) provides that
A: YES, she should be prohibited from working as the term “Domestic Worker” shall not include
a model promoting alcoholic beverages. R.A. children who are under foster family
7610 categorically prohibits the employment of arrangement, and are provided access to
child models in all commercials or education and given an allowance incidental to
advertisements promoting alcoholic beverages education, i.e., “baon”, transportation, school
and intoxicating drinks, among other things. projects and school activities.

e. A 17-year-old boy working as dealer in a Q: Linda was employed by Sectarian
casino. University (SU) to cook for the members of a
religious order who teach and live inside the
A: YES, he should be prohibited from working as campus. While performing her assigned task,
a dealer in a casino, because Art. 139 [now Art. Linda accidentally burned herself. Because of
137] of the Labor Code prohibits the employment the extent of her injuries, she went on medical
of persons below 18 years of age in an leave. Meanwhile, SU engaged a replacement
19 U S T

cook. Linda filed a complaint for illegal Q. Distinguish briefly, but clearly, a
dismissal, but her employer SU contended “househelper” from a “homeworker.” (2017,
that Linda was not a regular employee but a 2009 BAR)
domestic househelp. Decide. (2014 BAR)
A: As to persons included, househelpers include
A: The employer's argument that Linda was not those who minister exclusively to the personal
a regular employee has no merit. The definition comfort and enjoyment of the employer’s family;
of domestic servant or househelper whereas homeworkers include those who work
contemplates one who is employed in the in a system of production under an employer or
employer’s home to minister exclusively to the contractor whose job is carried out at his or her
personal comfort and enjoyment of the home.
employer’s family. The Supreme Court already
held that the mere fact that the househelper is As to applicable law, househelpers are covered
working in relation to or in connection with its by the Kasambahay Law; whereas homeworkers
business warrants the conclusion that such are covered by Book III of the Labor Code.
househelper or domestic servant is and should
be considered as a regular employee (Apex As to place of work, househelpers work in their
Mining Co., Inc. v. NLRC, G.R. No. 94951, April 22, employers’ homes; whereas homeworkers work
1991). in their own homes.

Here, Linda was hired not to minister to the As to existence of definite employers,
personal comfort and enjoyment of her househelpers work for a definite employer;
employer's family but to attend to other whereas homeworkers have none.
employees who teach and live inside the
campus. As to security of tenure, househelpers have
security of tenure; whereas homeworkers have
Q: The weekly work schedule of a driver is as none.
follows:
Q: Nova Banking Corporation has a resthouse
Monday, Wednesday, Friday – Drive the and recreational facility in the highlands of
family car to bring and fetch the children to and Tagaytay City for the use of its top executives
from school. and corporate clients. The resthouse staff
includes a caretaker, two cooks and
Tuesday, Thursday, Saturday – Drive the laundrywoman. All of them are reported to
family van to fetch merchandise from the Social Security System as domestic or
suppliers and deliver the same to a boutique household employees of the resthouse and
in a mall owned by the family. recreational facility and not of the bank.

Is the driver a househelper? (2012, 1998 a. Can the bank legally consider the
BAR) caretaker, cooks and laundrywoman as
domestic employees of the rest house
A: The driver is a househelper. A person is a and not of the bank?
househelper or is engaged in domestic or
household service if he/she renders services in A: NO, they are not domestic employees. They are
the employer's home which are usually bank employees because the rest house and
necessary or desirable for the maintenance and recreational facility are business facilities as they
enjoyment thereof and includes ministering to are for use of the top executives and clients of the
the personal comfort and convenience of the bank. (Art. 141 [now 139], Labor Code; Apex
members of the employer's household including Mining Co., Inc. v. NLRC, 196 SCRA 251
the services of family drivers. [1991];Traders Royal Bank v. NLRC, G.R. No.
127864, Dec. 22, 1991)
A family driver who drives the family van to
fetch merchandise from suppliers and delivers b. Mrs. Josie Juan is the confidential
the same to a boutique in a mall owned by the secretary of the Chairman of the Board of
family for whom he works should be paid the the bank. She is presently on maternity
minimum daily wage of a driver in a commercial leave. In an arrangement where the
establishment. Chairman of the Board can still have
access to her services, the bank allows her
The Labor Code (in Art. 143) provides that no to work in her residence during her leave.
househelper shall be assigned to work in a For this purpose, the bank installed a fax
commercial, industrial or agricultural enterprise machine in her residence, and gave her a
at a wage or salary rate lower than that provided cellphone and a beeper. Is Mrs. Juan a
by law for agricultural or non-agricultural homeworker under the law? Explain.
workers. (2000 BAR)

HOMEWORKERS A: NO, she is actually an office worker. She is not
(2017, 2009, 2000, 1998 BAR) an industrial homeworker who accepts work to

20
QuAMTO (1987-2019)
be fabricated or processed at home for a driving the jeepney operator’s vehicle. The
contractor, which work, when finished, will be jeepney driver operating under the boundary
returned to or repurchased by said contractor. system is an employee of the jeepney operator.
(Art. 155 [now 153], Labor Code)
Q: Don Luis, a widower, lived alone in a house
with a large garden. One day, he noticed that
the plants in his garden needed trimming. He
POST-EMPLOYMENT remembered that Lando, a 17-year-old out-of-
school youth, had contacted him in church the
other day looking for work. He contacted
EMPLOYER-EMPLOYEE RELATIONSHIP Lando who immediately attended to Don
Luis’s garden and finished the job in three
Tests to Determine Employer-Employee days. Is there an employer-employee
Relationship (2019, 2018, 2017, 2016, 2014, relationship between Don Luis and Lando?
2006, 2005, 2002, 2001, 1997, 1996, 1993, (2014 BAR)
1988, 1987 BAR)
A: YES. All the elements of employer-employee
Q: What are the accepted tests to determine relationship are present, viz:
the existence of an employer-employee
relationship? (2017 BAR) 1. The selection and engagement of the
employee;
A: The accepted tests to determine the existence 2. The power of dismissal;
of an employer-employee relationship are the 3. The payment of wages; and
four-fold test and the economic reality test. 4. The power to control the employee's
conduct.
The four-fold test requires the following
requisites: (a) the power to hire employees; (b) There was also no showing that Lando has his
the power of dismissal; (c) payment of wages; (d) own tools, or equipment so as to qualify him as
power to control employee’s conduct, which is an independent contractor.
the most important requisite.
ALTERNATIVE ANSWER:
The economic reality test examines the
economic realities prevailing within the activity None. Lando is an independent contractor for
or between the parties, taking into consideration Don Luis does not exercise control over Lando’s
the totality of circumstances surrounding the means and method in tending to the former’s
true nature of the relationship between the garden.
parties. (Orozco v. CA, G.R. No. 155207, Aug. 13,
2008) Q: Pandoy, an electronics technician, worked
Q: Applying the tests to determine the within the premises of Perfect Triangle, an
existence of an employer-employee auto accessory shop. He filed a complaint for
relationship, is a jeepney driver operating illegal dismissal, overtime pay and other
under the boundary system an employee of benefits against Perfect Triangle, which
his jeepney operator or a mere lessee of the refused to pay his claims on the ground that
jeepney? Explain your answer. (2017 BAR) Pandoy was not its employee but was an
independent contractor. It was common
A: The jeepney driver operating under the practice for shops like Perfect Triangle to
boundary system is an employee of the jeepney collect the service fees from customers and
operator. pay the same to the independent contractors
at the end of each week. The auto shop
Applying the four-fold test: explained that Pandoy was like a partner who
worked within its premises, using parts
a. The jeepney operator has the power to provided by the shop, but otherwise Pandoy
choose the jeepney drivers who can drive his was free to render service in the other auto
vehicles; shops.
b. The jeep operator has the power to dismiss
the jeepney driver by refusing to let the On the other hand, Pandoy insisted that he
latter drive; still was entitled to the benefits because he
c. The jeepney driver’s wage is the excess of the was loyal to Perfect Triangle, it being a fact
boundary; and that he did not perform work for anyone else.
d. Most importantly, the jeepney operator Is Pandoy correct? Explain briefly. (2002
exercises control over the jeepney driver, BAR)
since the owner must see to it that the driver
follows the route prescribed under the A: Pandoy is not correct. He is not an employee
certificate of public convenience. because he does not meet the fourfold test for
him to be an employee of Perfect Triangle. Ail
Applying the economic reality test, the jeepney that he could claim is he worked within the
driver is dependent solely on his income from premises of Perfect Triangle. Pandoy was NOT
21 U S T

engaged as an employee by Perfect Triangle. He dismiss; and (4) power of control.
was NOT paid wages by Perfect Triangle. Perfect
Triangle does NOT have the power to dismiss Q: Gregorio was hired as an insurance
him although Perfect Triangle may not continue underwriter by the Guaranteed Insurance
to allow him to work within its premises. And Corporation (Guaranteed). He does not
most important of all, Pandoy was NOT under receive any salary but solely relies on
the control of Perfect Triangle as regards the commissions earned for every insurance
work he performs for customers. policy approved by the company. He hires
and pays his own secretary but is provided
Q: Malyn Vartan is a well-known radio-N talk free office space in the office of the company.
show host. She signed a contract with XYZ He is, however, required to meet a monthly
Entertainment Network to host a one-hour quota of twenty (20) insurance policies,
daily talk show where she interviews various otherwise, he may be terminated. He was
celebrities on topical subjects that she herself made to agree to a Code of Conduct for
selects. She was paid a monthly remuneration underwriters and is supervised by a Unit
of P300.000.00. Manager.

The program had been airing for almost two a. Is Gregorio an employee of Guaranteed?
years when sponsors' advertising revenues
dwindled, constraining the network to cancel A: NO, Gregorio is not an employee of
the show upon the expiration of its latest Guaranteed. Control is the most important
contract with Ms. Vartan. The talk-show host element of employer-employee relationship,
protested the discontinuance of her monthly which refers to the means and methods by
talent fee, claiming that it was tantamount to which the result is to be accomplished (Avelino
her illegal dismissal from the network since Lambo and Vicente Belocura v. NLRC and J.C.
she has already attained the status of a regular Tailor Shop and/or Johnny Co., 375 Phil. 855
employee. [1999] citing Makati Haberdashery, Inc. v. NLRC,
259 Phil. 52 [1989]). The requirement of
a. As the network’s legal counsel, how complying with quota, company code of conduct
would you justify its decision to cancel and supervision by unit managers do not go into
Ms. Vartan’s program which in effect means and methods by which Gregorio must
terminated her services in the process? achieve his work. He has full discretion on how
to meet his quota requirement, hence, there is
A: If I were the network's legal counsel, I would no employer-employee relationship between
argue that no employer-employee relationship Gregorio and Guaranteed.
exists between the network and Ms. Vartan.
Reference must be made to the terms and ALTERNATIVE ANSWER:
conditions in the contract and the parties shall
be governed by the provisions of the New Civil YES, Gregorio is Guaranteed’s employee. The
Code. fact that Gregorio was made to agree to a Code
of Conduct and was supervised by a Unit
In the case of Jay Sonza v. ABS-CBN (431 SCRA manager are indicators that he is an employee of
583 [2004]) it was held that a TV and radio talent Guaranteed by using the control test mentioned
is not an employee of the network company. in the Makati Haberdashery case. Furthermore,
Similarly in this case, Ms. Vartan cannot be the fact that he was given a quota and can be
considered an employee of the network. Under terminated if he does not meet it all the more
the control test, the network had no control on indicated that he is indeed an employee of
the manner and means through which Ms. Guaranteed.
Vartan will perform her work. She herself selects
the topical subjects in her interviews. She is also In Francisco v. NLRC, Kasei Corporation, (G.R.
paid an extraordinary huge amount of P300,000 No. 170087, Aug. 31, 2006), the court added
for her to be considered a mere employee. another element to ascertain employer-
employee relationship. This is whether or not
b. As counsel for the talk show host, how the worker is dependent on the alleged
would you argue your case? (2005 BAR) employer for his continued employment. This
was dubbed as the economic dependence test.
A: As counsel for Ms. Vartan, I will argue that an The fact that Guaranteed can terminate Gregorio
employer-employee relationship exists, and that if he does not meet the quota of 20 insurance
she is a regular employee of the Network policies a month, mean that the latter is
because of the nature of her work in relation to economically dependent on the former which
the nature of the business of the Network. Her negates his status as an independent contractor
work is usually necessary or desirable in the and proves that he is an employee.
usual, trade or business of the employer (Art.
280 [now 295], Labor Code). I will invoke the b. Suppose Gregorio is appointed as Unit
four-fold test of employer-employee Manager and assigned to supervise
relationship, i.e. (1) selection and engagement of several underwriters. He holds office in
employee: (2) payment of wages; (3) power to the company premises, receives an

22
QuAMTO (1987-2019)
overriding commission on the the payment of wages; (c) the employer’s power
commissions of his underwriters, as well to control the employee’s conduct; and (d) the
as a monthly allowance from the power of dismissal.
company, and is supervised by a branch
manager. He is governed by the Code of The first element is present, as Matibay Shoe
Conduct for Unit Managers. Is he an allowed shoe shine boys in its shoe shine stand to
employee of Guaranteed? Explain. (2016 render services that are desirable in the line of
BAR) business of Matibay Shoe. In issuing ID’s to the
shoe shine boys, the same signifies that they can
A: YES, Gregorio is an employee. In fact, he is represent themselves as part of the work force of
deemed as a regular employee. As a unit manager Matibay Shoe.
who was tasked to supervise underwriters, he
can be said to be doing a task which is necessary The second element is also present. Requiring the
and desirable to the usual business of customers to pay through the Matibay Shoe’s
Guaranteed. Art. 295 of the Labor Code provides cashier signifies that their services were not
that “The provisions of written agreement to the engaged by the customers. Equally important, it
contrary notwithstanding and regardless of the was Matibay Shoe which gave the shoe shine
oral agreement of the parties, an employment boys their daily wage.
shall be deemed to be regular where the
employee has been engaged to perform activities The third element is satisfied. Requiring the shoe
which are usually necessary or desirable in the shine boys to be present from store opening until
usual business or trade of the employer, x x x.” store closing and to follow company rules on
cleanliness and decorum shows that they cannot
ALTERNATIVE ANSWER: conduct their activity anywhere else but inside
the store of Matibay Shoe, hence, their means and
YES. Art. 219(m) of the Labor Code defines a methods of accomplishing the desired services
Managerial employee as one who is vested with for the customers of Matibay Shoe was controlled
the powers or prerogatives to lay down and by it.
execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign Lastly, the fourth element is made apparent when
or discipline employees. As Gregorio was Matibay Shoe barred the shoe shine boys from
appointed Unit Manager, the means and methods continuing with their work-related activity inside
of accomplishing his goal come under the its establishment.
guideline laid down by Guaranteed.
ALTERNATIVE ANSWER:
ANOTHER ALTERNATIVE ANSWER:
NO. The elements to determine the existence of
NO. Guaranteed did not define the duties and an employment relationship are: (a) the selection
responsibilities of Gregorio; Guaranteed left it to and engagement of the employee; (b) the
Gregorio’s discretion as to how he will achieve payment of wages; (c) the employer’s power to
his goal. Therefore, the only interest Guaranteed control the employee’s conduct; and (d) the
has is in the result of Gregorio’s work. power of dismissal.

Q: Matibay Shoe and Repair Store, as added The first element is absent. The mere issuance of
service to its customers, devoted a portion of an ID to the boys is not conclusive of the power of
its store to a shoe shine stand. The shoe shine selection of Matibay Shoe. They may be given IDs
boys were tested for their skill before being merely as a security measure for the
allowed to work and given ID cards. They establishment
were told to be present from the opening of
the store up to closing time and were Furthermore, using the control test, the boys
required to follow the company rules on have exclusive power over the means and
cleanliness and decorum. They bought their method by which the shoe shining activity is to
own shoe shine boxes, polish and rags. The be conducted.
boys were paid by their customers for their
services but the payment is coursed through Q: Section 255 [245] of the Labor Code
the store’s cashier, who pays them before recognizes three categories of employees,
closing time. They were not supervised in namely: managerial, supervisory, and rank-
their work by any managerial employee of the and-file. Give the characteristics of each
store but for a valid complaint by a customer category of employees, and state whether the
or for violation of any company rule, they can employees in each category may organize and
be refused admission to the store. Were the form unions. Explain your answer. (2017,
boys employees of the store? Explain. (2016 2003 BAR)
BAR)
A: Managerial employees are those who are
A: YES. The elements to determine the existence vested with the powers or prerogatives to lay
of an employment relationship are: (a) the down and execute management policies and/or
selection and engagement of the employee; (b) to hire, transfer, lay-off, recall, discharge, assign
23 U S T

or discipline employees. Managerial employees the hospital because the hospital controlled the
cannot organize and form labor unions since means and the details of the process by which
their managerial duties present a conflict of the resident doctors accomplished their task. In
interest with that of a union member or officer. this case, the hospital maintained the specific
work schedules of A,B, & C. Moreover, the
Supervisory employees are those who, in the hospital monitored their specific instructions on
interest of the employer, effectively recommend how they should perform their respective tasks,
such managerial actions if the exercise of such including diagnosis, treatment and management
functions is not merely routinary or clerical in of their patients. The element of control having
nature but requires the use of independent been established, A, B, & C are employees of MM
judgment. Supervisory are allowed to organize Medical Center, Inc. (Calamba Medical Center,
and form unions. Inc. v. NLRC, et al., G.R. No. 176484, Nov. 25, 2008)

Rank-and-file employees include those which do KINDS OF EMPLOYMENT
not fall under the classification of managerial or
supervisory employees. Rank-and-file Probationary (2016, 2006, 2001, 1998, 1995,
employees are allowed to organize and form 1993, 1992, 1988, 1987 BAR)
unions.
Q: What limitations, if any, do the law and
Q: A, B, and C were hired as resident-doctors jurisprudence impose on an employer's right
by MM Medical Center, Inc. In the course of to terminate the services of a probationary
their engagement, A, B, and C maintained employee? (2001 BAR)
specific work schedules as determined by the
Medical Director. The hospital also A: The Labor Code (in Art. 281 [now 296])
monitored their work through supervisors provides that the services of an employee who
who gave them specific instructions on how has been engaged on a probationary basis may
they should perform their respective tasks, be terminated for a just cause or when he fails to
including diagnosis, treatment, and qualify as a regular employee in accordance with
management of their patients. reasonable standards made known by the
employer to the employee at the time of his
One day, A, B, and C approached the engagement. If the probationary employee is
Medical Director and inquired about the being terminated for just cause, he must, of
non-payment of their employment benefits. course, be given due process before his
In response, the Medical Director told them termination.
that they are not entitled to any because
they are mere "independent contractors" as Q: During their probationary employment,
expressly stipulated in the contracts which eight (8) employees were berated and
they admittedly signed. As such, no insulted by their supervisor. In protest, they
employer-employee relationship exists walked out. The supervisor shouted at them
between them and the hospital. to go home and never to report back to work.
Later, the personnel manager required them
a. What is the control test in determining to explain why they should not be dismissed
the existence of an employer-employee from employment for abandonment and
relationship? failure to qualify for the positions applied
for. They filed a complaint for illegal
A: This test is premised on the exercise or the dismissal against their employer. As a Labor
reservation of the right to control the manner Arbiter, how will you resolve the case? (2006
and method to do a job. The important factor BAR)
to consider is how the work itself is done, not
just the end result thereof. (Reyes v. Glaucoma, A: If I were the Labor Arbiter, I would rule
June 17, 2015, G.R. No. 189255) against management. There was no
abandonment because there was no intention
b. Is the Medical Director's reliance on the not to return to work. It was just that the 8
contracts signed by A, B, and C to refute employees were berated and insulted and even
the existence of an employer-employee told never to report back to work. It was but
relationship correct? If not, are A, B, natural for them to feel demoralized, but there
and C employees of MM Medical Center, was never an indication to abandon their
Inc.? Explain. (2019 BAR) employment.

A: NO, the Medical Director’s reliance on the The probationary workers could, however, be
contracts signed by A,B & C to refute the terminated for failing to meet probationary
existence of an employer-employee standards. If the reasons for the supervisor’s
relationship is not correct. A, B & C are berating and insulting behavior were poor or
employees of MM Medical Center, Inc. substandard performance on the part of the
workers, their probationary employment could
Under the “control test” the employment be legally terminated.
relationship existed between the physicians and

24
QuAMTO (1987-2019)
Q: Mr. X was hired by Y Company on na yun x x x Alam mo ba, kahit wala naming
probation for six months as general utility diperensya yung baby, ipinapa-isolate niya?”
worker. On the expiration of the
probationary period, Mr. X was informed by The SFH President asks you, being the
Y Co. that his work was unsatisfactory and hospital’s counsel, which of these two (2)
failed to meet the required standard. To give options is the legal and proper way of
him a chance to improve his performance, Y terminating Amaya: (a) terminate her for a
Co. instead of terminating Mr. X’s services, just cause under Art. 228 of the Labor Code
extended, with X’s written consent, the (termination by Employer); or (b) terminate
probation period for another three months. her for violating her probationary contract.
This extension notwithstanding, his Explain. (2016 BAR)
performance did not improve, on account of
which, Y Co. terminated Mr. X's services at A: I will advise the President of SFH to terminate
the end of the extended period. Amaya for violating her probationary contract.
Part and parcel of the standards of her
Mr. X filed a case for illegal dismissal employment is to strictly follow the Code of
contending that he was already regular at the Conduct of SFH. The act of defaming Dr. Ligaya is
time of his dismissal pursuant to Art. 281 certainly a misdemeanor that is usually not
[now 296] of the Labor Code, the particular acceptable in any work environment. With such
portion of which provides: attitude Amaya displayed, she cannot pass the
company standard of SFH.
“x x x An employee who is allowed to work
after a probationary period shall be I will not suggest the dismissal of Amaya under
considered a regular employee." Art. 297. Though she displayed misconduct, the
same is not work-related, as spreading a rumor
Therefore, he could not have been lawfully against a Doctor does not go into the duties and
dismissed for failure to meet company responsibilities of a staff nurse.
standards as a probationary worker. Decide
with reason. (1993 BAR) ALTERNATIVE ANSWER:

A: Mr. X could not argue that because his I will advise the President of SFH to terminate
probationary period was extended beyond six Amaya for a just cause under Art. 297 of the
months he was now a regular employee and thus Labor Code in relation Art. 296. The Labor Code
could no longer be terminated except for Just assigns a separate provision, Art. 296, and
cause or when authorized by law. The fact is that provides a different set of grounds for the
the probationary period of Mr. X was extended dismissal of probationary employees.
beyond six months with his consent. It was to
give him an opportunity to improve his The law does not preclude the employer from
performance. terminating the probationary employment, if the
employer finds that the probationary employee is
Thus, it was legal for Y Company to terminate Mr. not qualified for regular employment. As long as
X for his failure to meet company standard as a the termination was made for reasons provided
probationary worker. The Labor Code provides under Art. 296 of the Labor code before the
that probationary employment shall not exceed expiration of the six-month probationary period,
six (6) months. But the Supreme Court has ruled the employer is well within its rights to sever the
that said probationary period could be extended employer-employee relationship. (Pasamba v.
with the consent of the probationary employee to NLRC, G.R. No. 168421, June 8, 2007)
give him an opportunity to improve his
performance. (Art. 281 [now 296], Labor Code) Regular (2019, 2008, 2007, 2005 BAR)

Q: Amaya was employed as a staff nurse by St. Q: Super Comfort Hotel employed a regular
Francis Hospital (SFH) on July 08, 2014 on a pool of “extra waiters” who are called or
probationary status for six months. Her asked to report for duty when the Hotel’s
probationary contract required, among volume of business is beyond the capacity of
others, strict compliance with SFH’s Code of the regularly employed waiters to undertake.
Discipline. Pedro has been an “extra waiter” for more
than 10 years. He is also called upon to work
On October 16, 2014, Dr. Ligaya, filed a on weekends, on holidays and when there are
complaint with the SFH Board of Trustees big affairs at the hotel. What is Pedro’s status
against Amaya for uttering slanderous as an employee under the Labor Code? Why?
remarks against the former. Attached to the Explain your answer fully. (2008 BAR)
complaint was a letter of Minda, mother of a
patient, who confirmed the following remarks A: Pedro has acquired the status of a regular
against Dr. Ligaya: employee. Pedro was engaged to perform
activities which are necessary or desirable in the
“Bakit si Dr. Ligaya pa ang napili mong ‘pedia’ usual business or trade of the employer.
eh ang tanda tanda na n’un? E makakalimutin Moreover, Pedro has been “extra waiter” for
25 U S T

more than 10 years. Under the law, any employee President for Sports expressed to Ms. A the
who has rendered service at least one year of University's expectation that she would bring
service, whether such service is continuous or the University a championship at the end of
broken, shall be considered a regular employee the year.
with respect to the activity in
which he is employed and his employment shall In her first volleyball season, the University
continue while such activity exists. (Art. 280 [now placed ninth (9th) out of 10 participating
295], Labor Code) teams. Soon after the end of the season, the
Vice-President for Sports informed Ms. A that
Q: Kitchie Tempo was one of approximately she was a mere probationary employee and
500 production operators at HITEC hence, she need not come back for the next
Semiconductors, Inc., an export-oriented season because of the poor performance of
enterprise whose business depended on the team. In any case, the Vice-President for
orders for computer chips from overseas. Sports claimed that Ms. A was a fixed-term
She was hired as a contractual employee four employee whose contract had ended at the
years ago. Her contracts would be for a close of the year.
duration of five (5) months at a time usually
after a one-month interval. Her re- hiring a. Is Ms. A a probationary, fixed-term, or
was contingent on her performance for the regular employee? Explain your reasons
immediately preceding contract. as to why she is or she is not such kind of
an employee for each of the types of
Six months after the expiration of her last employment given.
contract, Kitchie went to HITEC's personnel
department to inquire why she was not yet A: There being no specific indication as to the
being recalled for another temporary nature of the engagement or that her
contract. She was told that her performance performance was to be evaluated in accordance
during her last stint was "below average." with standards for regularization made known
Since there was no union to represent her, at the time of engagement, it is thus presumed
Kitchie seeks your advice as labor lawyer that Ms. A was hired as a regular employee. She
about her chances of getting her job back. cannot also be categorized as a term employee
What will your advice be? (2005 BAR) since it was not agreed upon by her and the
University that her employment would only be
A: Kitchie’s "below average" rating will not for a definite period of time. As a matter of fact,
matter. She was a regular employee from day 1 there being no mention of a contract in the facts,
of her service as her work was evidently usually Ms. A can only be considered as a regular
necessary or desirable to HITEC's usual employee.
business. Under par. 1 of Art. 280 [now 295],
Kitchie is a regular (not casual) employee. Also, b. Assuming that Ms. A was dismissed by
Kitchie obtained permanent regular the University for serious misconduct but
employment when she was repeatedly re-hired was never given a notice to explain, what
by HITEC. is the consequence of a procedurally
infirm dismissal from service under our
As a permanent regular employee, working for Labor law and jurisprudence? Explain.
an indefinite period, Kitchie is, entitled to the (2019 BAR)
reliefs of reinstatement and full backwages as
mandated in Art. 279 [now 294] of the Labor A: The University should pay nominal damages
Code. to Ms. A in the amount of P30,000.00. Applying
the Agabon Doctrine, if the dismissal of the
A “below average” rating would matter if Kitchie employee was for just cause but procedural due
was made to undergo probationary process was not observed, the lack of statutory
employment, or was a probationary employee due process should not nullify the dismissal or
under Art. 281 [now 296] of the Code. She was render it illegal or ineffectual (Agabon v. NLRC,
not obviously, she was a qualified and G.R. No. 158693, Nov. 17, 2004). However, the
competent production operator; She would not employer should indemnify the employee for the
have been repeatedly re-hired if she were not violation of his right to procedural due process.
that qualified and competent. I will thus, advise
her to sue for illegal dismissal, with prayer for Casual (2007, 2005 BAR)
regularization in addition to the reliefs of
reinstatement and full backwages provided for Q: A Carpenter is employed by a private
in Art. 279 [now 294] of the Labor Code. university in Manila. Is the carpenter a
regular or a casual employee? Discuss fully.
Q: Ms. A is a volleyball coach with five (5) (2007 BAR)
years of experience in her field. Before the
start of the volleyball season of2015, she was A: If the employment of the carpenter is sporadic
hired for the sole purpose of overseeing the and brief in nature or occasional, his
training and coaching of the University's employment is casual especially because the
volleyball team. During her hiring, the Vice- work he is performing is not in the usual course

26
QuAMTO (1987-2019)
of the school’s trade or business. However, if the working? (2013 BAR)
carpenter has rendered services for at least one
year, whether continuous or broken, he becomes A: He would be considered a contractual
a regular employee by operation by law, with employee, not a regular employee. His salaries
respect to the activity in which he is employed and benefits will be in accordance with the
and his employment shall continue while such stipulations of the contract he signed with the
activity exists. (Art. 280 [now 295], Labor Code; company.
See also Philippine Geothermal, Inc. v. NLRC, 189
SCRA 211 [1990]; Kimberly Independent Labor The present case is similar to a case decided by
Union, etc. v. Drilon, 185 SCRA 190 [1990]) the Supreme Court (Januaria Rivera v. United
Laboratories, G.R. No. 155639 [2009]) where the
Contractual (2017, 2014, 2013, 2002 BAR) Court held that the company, in employing a
retired employee whose knowledge, experience
Q: Lina has been working as a steward with a and expertise the company recognized, as an
Miami, U.S.A.-based Loyal Cruise Lines for the employee or as a consultant, is not an illegality;
past 15 years. She was recruited by a local on the contrary, it is a recognized practice in this
manning agency, Macapagal Shipping, and country.
was made to sign a 10-month employment
contract every time she left for Miami. Q: Marciano was hired as Chief Engineer on
Macapagal Shipping paid for Lina’s round-trip board the vessel MN Australia. His contract of
travel expenses from Manila to Miami. employment was for nine months. After nine
Because of a food poisoning incident which months, he was re-hired. He was hired a third
happened during her last cruise assignment, time after another nine months. He now
Lina was not re-hired. Lina claims she has claims entitlement to the benefits of a regular
been illegally terminated and seeks employee based on his having performed
separation pay. If you were the Labor Arbiter tasks usually necessary and desirable to the
handling the case, how would you decide? employer’s business for a continuous period
(2014 BAR) of more than one year. Is Marciano’s claim
tenable? Explain your answer. (2017 BAR)
A: I will dismiss Lina's complaint. Lina is a A: No, Marciano’s claim is not tenable. Seafarers
contractual employee and the length of her are contractual employees for a fixed term and
employment is determined by the contracts she cannot attain regular status. Here, Marciano is a
entered into. Here, her employment was considered a seafarer since he is hired as Chief
terminated at the expiration of the contract. Engineer on board a vessel. Hence, Marciano’s
(Millares, et al. v. NLRC, 385 SCRA 306, 318 claim that he is a regular employee is not tenable.
[2002])
Project (2019, 2009, 2005, 2002, 1998, 1994
Q: After thirty (30) years of service, Beta BAR)
Company compulsorily retired Albert at age 65
pursuant to the company's Retirement Plan. Q: How is a project worker different from a
Albert was duly paid his full retirement casual or contractual worker? (2005 BAR)
benefits of one (1) month pay for every year of
service under the Plan. Thereafter, out of A: A project worker is employed for a specific
compassion, the company allowed Albert to project or undertaking the completion or
continue working and paid him his old termination of which is determined at the time of
monthly salary rate, but without the his engagement. His work need not be incidental
allowances that he used to enjoy. to the business of the employer. His employment
may exceed 1 year without necessarily making
After five (5) years under this arrangement, him a regular employee.
the company finally severed all employment
relations with Albert; he was declared fully A casual employee is engaged to perform a job,
retired in a fitting ceremony but the company work, or service which is incidental to the
did not give him any further retirement business of the employer; moreover, the definite
benefits. Albert thought this treatment unfair period of his employment is made known to him
as he had rendered full service at his usual at the time of his engagement. His continued
hours in the past five (5) years. Thus, he filed employment after the lapse of one year makes
a complaint for the allowances that were not him a regular employee. Under the Social
paid to him, and for retirement benefits for Security Law, employment that is purely casual
his additional five (5) working years, based and not for the purpose of occupation or business
either on the company's Retirement Plan or of the employer is not under the coverage of the
the Retirement Pay Law, whichever is aforesaid law.
applicable.
A "project worker", on the other hand, is a specific
After Albert's retirement at age 65, should he term used to designate workers in the
be considered a regular employee entitled to construction industry hired to perform a specific
all his previous salaries and benefits when undertaking for a fixed period which is co-
the company allowed him to continue terminus with a project or phase thereof
27 U S T

determined at the time of the engagement of the South Expressway Extension. Design
employee (Policy Instruction No, 19. DOLE), and it Consultants, Inc. hired Omar as a driver for
is mandatorily required that a termination report two (2) years. After his two-year contract
be submitted to the nearest public employment expired, he was extended another contract
office upon the completion of the construction for nine (9) months. These contracts were
project (Aurora Land Projects Corp. v. NLRC. 266 entered into during the various stages and
SCRA 48 [1997]). There is no such requirement before the completion of the extension
for an ordinary contractual worker. project. Omar claims that because of these
repeated contracts, he is now a regular
Q: Diosdado, a carpenter, was hired by employee of Design Consultants, Inc. Is he
Building Industries Corporation (BIC), and correct? Explain briefly. (2002 BAR)
assigned to build a small house in Alabang.
His contract of employment specifically A: YES. The principal test for determining
referred to him as a “project employee,” whether a particular employee is a “project
although it did not provide any particular employee” as distinguished from a “regular
date of completion of the project. Is the employee” is whether or not the “project
completion of the house a valid cause for the employee” was assigned to carry out a “specific
termination of Diosdado’s employment? If so, project or undertaking,” the duration and scope
what are the due process requirements that of which were specified at the time the
the BIC must satisfy? If not, why not? (2009 employee was engaged for the projects.
BAR)
In the problem given, there is no showing that
A: The completion of the house should be valid Omar was informed that he was to be assigned
cause for termination of Diosdado’s to a “specific project or undertaking.” Neither
employment. Although the employment contract has it been established that he was informed of
may not state a particular date, but if it did the duration and scope of such project or
specify that the termination of the parties undertaking at the time of his engagement.
employment relationship was to be on a “day (Philex Mining Corp. v. NLRC, 312 SCRA 119
certain” – the day when the phase of work would [1999])
be completed – the employee cannot be Moreover, the re-hiring of Omar is sufficient
considered to have been a regular employee. evidence of the necessity or the indispensability of
(Filipinos Pre-Fabricated Building Systems v. his services to the company’s business (Aurora
Puente, 453 SCRA 820 [2005]) Land Projects Corp v. NLRC, 266 SCRA 48 [1997]).
Hence, Omar is correct in claiming that he is a
To satisfy due process requirement, under DOLE regular employee of Design Consultants, Inc.
Department Order No. 19, series of 1993, the
employer is required to report to the relevant Seasonal (2019 BAR)
DOLE Regional Office the fact of termination of
project employees as a result of the completion Q: Define, explain or distinguish the following
of the project or any phase thereof in which one terms: x x x (b) Seasonal and project employees
is employed. (2019 BAR)

Q: Martillo and other similarly-situated A: Seasonal employees are those who are called to
project workers demanded that the work from time to time according to the
increases be extended to them, inasmuch as occurrence of varying need during a season, and
they should now be considered regular the employment is only for the duration of said
employees and members of the bargaining season. They are laid off after completion of the
unit. If you were ABC's legal counsel, how required phase of work for the season.
would you respond to this demand? (2005
BAR) Project employees are those who are assigned to
carry out a specific project or undertaking, the
A: As legal counsel for ABC, I would argue that duration and scope of which were specified at the
the employment of Martillo was fixed for a time the employees were engaged for the project,
specific project or undertaking, the completion hence, the services of the project employees are
or termination of which has been determined at coterminous with the project for which they were
the time of his engagement. Rendering 14 hired. (Art. 295, Labor Code)
months of work does not make him a regular
employee, when to begin with, he was employed Fixed-term (2014 BAR)
for a specific project, i.e., which is the
construction of a particular 40-storey building. Q: Lucy was one of approximately 500 call center
The rule on more than 1 year of service making agents at Hambergis, Inc. She was hired as a
the employment regular applies only to casual contractual employee four years ago. Her
employees, hence, Mariano does not belong to contracts would be for a duration of five (5)
the bargaining unit of regular employees. months at a time, usually after a one-month
interval. Her re-hiring was contingent on her
Q: Design Consultants, Inc. was engaged by performance for the immediately preceding
the PNCC to supervise the construction of the contract.

28
QuAMTO (1987-2019)
Six (6) months after the expiration of her last been hired by the independent contractor to
contract, Lucy went to Hambergis personnel perform said work, task, job or project.
department to inquire why she was not yet being
recalled to work. She was told that her In the event that the independent contractor fails
performance during her last contract was to pay the wages of his employees, an indirect
“below average.” Lucy seeks your legal advice employer, in the same manner and extent that he
about her chances of getting her job back. What is liable to employees directly employed by him,
will your advice be? (2014 BAR) is jointly and severally liable with the
independent contractor to the employees of the
A: Lucy cannot get her job back. She is a fixed- term latter to the extent of the work performed under
employee and as such, her employment terminates the contract.
upon the expiration of her contract. (Rowell
Industrial Corporation v. Court of Appeals, 517 SCRA As for the person who engages the services of a
691 [2007]) "labor only" contractor, the latter is considered
merely as an agent of the former who shall be
Subcontracting vs. Labor-Only Contracting responsible to the workers hired by the “labor
(2019, 2017, 2016, 2015, 2012, 2005, 2004, only" contractor in the same manner and extent
2003, 2002, 2000, 1994 BAR) as if he directly employed such workers.

Q: What is a “labor-only" contract? (1994 BAR) Q: Dr. Crisostomo entered into a retainer
agreement with AB Hotel and Resort whereby
A: “Labor-only" contract is a contract between an he would provide medical services to the
employer and a person who supplies workers to guests and employees of AB Hoteland Resort,
such employer where the person supplying which, in turn, would provide the clinic
workers does not have substantial capital or premises and medical supplies. He received a
investment in the form of tools, equipment, monthly retainer fee of P60,000.00, plus a
machineries, work premises, among others, and the 70% share in the service charges from AB
workers recruited and placed by such person are Hotel and Resort’s guests availing themselves
performing activities which are directly related to of the clinic’s services.
the principal business of such employer. (Art. 106,
Labor Code) The clinic employed nurses and allied staff,
whose salaries, SSS contributions and other
Q: The labor sector has been loudly agitating benefits he undertook to pay. AB Hotel and
for the end of labor-only contracting, as Resort issued directives giving instructions to
distinguished from job contracting. Explain him on the replenishment of emergency kits
these two kinds of labor contracting, and give and forbidding the clinic staff from receiving
the effect of a finding that one is a labor-only cash payments from the guests.
contractor. Explain your answers. (2017 BAR)
In time, the nurses and the clinic staff claimed
A: There is job contracting if a contractor carries entitlement to rights as regular employees of
on a distinct and independent business free from AB Hoteland Resort, but the latter refused on
the control of the principal in all matters except the ground that Dr. Crisostomo, who was their
as to the results thereof; and has substantial employer, was an independent contractor.
capital or investment. Rule, with reasons. (2017 BAR)

There is labor-only contracting when the A: I will rule in favor of AB Hoteland Resort.
principal retains the power to control the Applying the Four-Fold Test will readily show
contracted employees; or when the contractor that the real employer of the nurses and the clinic
has insufficient capital and performs activities staff is Dr. Crisostomo and not AB Hoteland
directly related to the business of the principal. Resort, viz:

A finding that there is labor-only contracting 1. The selection and engagement of the nurses
makes the principal the direct employer of the and clinic staff were made by Dr. Crisostomo;
contracted employees and is solidarily liable with 2. Their wages were paid by Dr. Crisostomo.
the contractor for the wages and other benefits of
the contracted employees. As a matter of fact, SSS contributions were paid
by him which, by itself, is already an indication
Q: Distinguish the liabilities of an employer that he is the employer. Although he did not
who engages the services of a bona fide exercise the power of dismissal, it can be said
“independent contractor” from one who that as the doctor, he has the control of his
engages a “labor-only" contractor? (2012, employee’s conduct in the dispensing of medical
1994 BAR) services to the guests and personnel of the resort.
The fact that AB Hoteland Resort gave
A: A person who engages the services of a bona instructions to him regarding replenishment of
fide “Independent contractor" for the emergency kits and forbidding his staff from
performance of any work, task, job or project is receiving cash payments from guests is of no
the indirect employer of the employees who have consequence. They are nothing more but
29 U S T

guidelines which will not create an employer- Pablo's death, his widow filed a claim for
employee relationship. (Insular Life Co., Ltd. v. burial grant and pension benefits with the
NLRC, G.R. No. 84484, Nov. 15, 1989) Social Security System (SSS) The claim was
denied on the ground that Pablo had not
ALTERNATIVE ANSWER: been a registered member-employee. Pablo’s
widow filed a petition before the SSS asking
I will rule in favor of the employees. In labor that ABC & Co. be directed to pay the
contracting, the party with the power to control premium contributions of Pablo and that his
is considered the employer of the contracted name be reported for SSS coverage.
employees. Here, AB Hoteland Resort exercises
the power to control by requiring replenishment ABC & Co. countered that Pablo was hired to
of emergency kits and forbidding the clinic staff plow, harrow and burrow, using his own
from receiving cash payments from the guests. carabao and other implements and following
Hence, the employees are correct in arguing that his own schedule of work hours, without any
they are regular employees of AB Hoteland supervision from the company. If proven,
Resort. would this factual setting advanced by ABC &
Co. be a valid defense against the petition?
Q: Star Crafts is a lantern maker based in (2003 BAR)
Pampanga. It supplies Christmas lanterns to
stores in Luzon, Metro Manila, and parts of A: ABC & Co. has a valid defense. Pablo should be
Visayas, with the months of August to an employee of ABC & Co. to be under the
November being the busiest months. Its compulsory coverage of the SSS. To be an
factory employs a workforce of 2,000 workers employee, Pablo should be under the control of
who make different lanterns daily for the ABC & Co. as regards his employment. But the
whole year. Because of increased demand, facts show that he was not under the control of
Star Crafts entered into a contractual ABC & Co. as regards his employment. Among
arrangement with People Plus, a service others, he had his own schedule of work hours,
contractor, to supply the former with without any supervision from the company.
100 workers for only 4 months, August to Thus, he is an independent contractor and not
November, at a rate different from what they an employee.
pay their regular employees.
An independent contractor is not under the
The contract with People Plus stipulates that compulsory coverage of the SSS. He may be
all equipment and raw materials will be covered as a self-employed person. But then as
supplied by Star Crafts with the express such, ABC & Co. has no legal obligation to report
condition that the workers cannot take any Pablo for coverage under the SSS because ABC &
of the designs home and must complete their Co. is not Pablo’s employer.
tasks within the premises of Star Crafts. Is
there an employer-employee relationship Q: Sta. Monica Plywood Corporation entered
between Star Crafts and the 100 workers into a contract with Arnold for the milling of
from People Plus? Explain. (2015 BAR) lumber as well as the hauling of waste wood
products. The company provided the
A: YES. People Plus is a labor-only-contractor equipment and tools because Arnold had
because it is not substantially capitalized. neither tools and equipment nor capital for
Neither does it carry on an independent the job. Arnold, on the other hand, hired his
business in which it uses its own investment in friends, relatives and neighbors for the job.
the form of tools, equipment, machineries or Their wages were paid by Sta. Monica
work premises. Hence, it is just an agent or Plywood Corp. to Arnold, based on their
recruiter of workers who perform work directly production or the number of workers and
related to the trade of Star Crafts. Since both the the time used in certain areas of work. All
essential element and the conforming element of work activities and schedules were fixed by
labor-only contracting are present, Star Crafts the company. Is Arnold a job contractor?
becomes the employer of the supplied worker. Explain briefly. (2002 BAR)

As principal, Star Crafts will always be an A: NO. In two cases decided by the Supreme
employer in relation to the workers supplied by Court, it was held that there is “job contracting”
its contractor. Its status as employer is either where:
direct or indirect depending on whether the
contractor is legitimate or not. Thus even if 1. The contractor carries on an independent
People Plus were a legitimate job contractor, business and undertakes the contract work
still Star Crafts will be treated as a statutory in his own account, under his own
employer for purposes of paying the workers’ responsibility according to his own manner
unpaid wages and benefits. and method, free from the control and
direction of his employer or principal in all
Q: Pablo was a farm-hand, in a plantation matters connected with the performance of
owned by ABC & Co., working approximately the work except as to the results thereof;
6 days a week for a good 15 years. Upon and

30
QuAMTO (1987-2019)
2. The contractor has substantial capital or elements is present, there is labor-only
investment in the form of tools, equipment, contracting:
machineries, work premises and other
materials which are necessary in the a. The contractor or subcontractor does not
conduct of his business. (Lim v. NLRC, 303 have substantial capital or investment which
SCRA 432 [1999]; Baguio v. NLRC, 202 SCRA relates to the job, work or service to be
465 [1991]) performed and the employees recruited,
supplied or placed by such contractor or
In the problem given, Arnold did not have subcontractor are performing activities
sufficient capital or investment for one. For which are directly related to the main
another Arnold was not free from the control business of the principal; or
and direction of Sta. Monica Plywood Corp.
because all work activities and schedules were b. The contractor does not exercise the right to
fixed by the company. Therefore, Arnold is not a control over the performance of the work of
job contractor. He is engaged in labor-only the contractual employee.
contracting.
The first element is present herein, as Style has
Q: Empire Brands (Empire) contracted the no substantial capital or investment in engaging
services of Style Corporation (Style) for the in the supply of services contracted out by
marketing and promotion of its clothing line. Empire which is directly related to the marketing
Under the contract, Style provided Empire and promotion of its clothing line. The second
with Trade Merchandising Representatives element is present as it is inevitable for Empire to
(TMRs) whose services began on September direct the activities of the TMRs to properly
15, 2004 and ended on June 6, 2007, when market and promote its product line.
Empire terminated the promotions contract The subsequent contract of Empire with Wave
with Style. did not affect the regular employment of the
TMRs with Empire as, through the Marketing
Empire then entered into an agreement for Director of Empire, the TMRs were under the
manpower supply with Wave Human control of Empire. Thus, the five-month
Resources (Wave). Wave owns its condo employment contract entered into by the TMRs
office, owns equipment for the use by the with Wave did not divest them of their regular
TMRs, and has assets amounting to employment status with Empire. In addition,
P1,000,000.00. Wave provided the such scheme undermined the security of tenure
supervisors who supervised the TMRs, who, of the TMRs which is constitutionally guaranteed,
in turn, received orders from the Marketing hence, the contract of the TMRs with Wave is
Director of Empire. In their agreement, the void ab initio.
parties stipulated that Wave shall be liable
for the wages and salaries of its employees or Q: W Gas Corp. is engaged in the manufacture
workers, including benefits and protection and distribution to the general public of
due them, as well as remittance to the proper various petroleum products. On January 1,
government entities of all withholding taxes, 2010, W Gas Corp. entered into a Service
Social Security Service, and PhilHealth Agreement with Q Manpower Co., whereby
premiums, in accordance with relevant laws. the latter undertook to provide utility
workers for the maintenance of the former's
As the TMRs wanted to continue working at manufacturing plant. Although the workers
Empire, they submitted job applications as were hired by Q Manpower Co., they used the
TMRs with Wave. Consequently, Wave hired equipment owned by W Gas Corp. in
them for a term of five (5) months, or from performing their tasks, and were likewise
June 7, 2007 to November 6, 2007, specifically subject to constant checking based on W Gas
to promote Empire’s products. Corp.' s procedures.

When the TMRs’ 5 month contracts with Wave On February 1, 2010, Mr. R, one of the utility
were about to expire, they sought renewal workers, was dismissed from employment in
thereof, but were refused. Their contracts line with the termination of the Service
with Wave were no longer renewed as empire Agreement between W Gas Corp. and Q
hired another agency. This prompted them to Manpower Co. Thus, Mr. R filed a complaint
file complaints for illegal dismissal, for illegal dismissal against W Gas Corp.,
regularization, non-payment of service claiming that Q Manpower Co. is only a labor-
incentive leave and 13th month pay against only contractor. In the course of the
Empire and Wave. Are the TMRs employees of proceedings, W Gas Corp. presented no
Empire? (2016 BAR) evidence to prove Q Manpower CO.'s
capitalization.
A: YES. From the time Empire contracted the
services of Style, both engaged in labor-only a. Is Q Manpower Co. a labor-only
contracting. In BPI Employees Union-Davao City contractor? Explain.
FUBU v. BPI (G.R. No. 174912, July 24, 2013), it
was ruled that where any of the following A: YES, Q Manpower Co. is a labor-only
31 U S T

contractor. Art. 106 of the Labor Code provides janitorial services to the National Economic
that there is “labor-only” contracting where the Development Authority (NEDA) since April
person supplying workers to an employer does 1988. Its service contract was renewed every
not have substantial capital or investment in the three months. However, in the bidding held
form of tools, equipment, machineries, work on July 1992, CMI was disqualified and
premises, among others and the workers excluded. In 1993, six janitors of CMI
recruited and placed by such contractor are formerly assigned at NEDA filed a complaint
performing activities which are directly related for underpayment, of wages. Both CMI and
to the business. NEDA were impleaded as respondents for
failure to comply with NCR Wage Orders Nos.
In the question posed, the equipment belonged to 01 and 02, which took effect on November 1,
W Gas Corp. In the course of the proceedings, no 1990 and January 2, 1992, respectively.
evidence was presented to prove Q Manpower
Co’s substantial capitalization. Should NEDA, a government agency subject
to budgetary constraints, be held liable
b. Will Mr. R's complaint for illegal dismissal solidarity with CMI for the payment of salary
against W Gas Corp. prosper? Explain. differentials due the complainants? Cite the
(2019 BAR) legal basis of your answer. (2004 BAR)

A: YES, Mr. R's complaint for illegal dismissal A: NEDA shall be held solidarity liable with CMI
against W Gas Corp will prosper as it is solidarily for the payment of salary differentials due to the
liable with Q Manpower Corp. under Art. 106 of complainants, because NEDA is the indirect
the Labor Code. Having proved that Q Manpower employer of said complainants. The Labor Code
is only a labor-only contractor, it is considered provides that x x x (A) person, partnership,
merely as an agent of W Gas Corp. Consequently, association or corporation which, not being an
there exists an employer-employee relationship employer, contracts with an independent
between Mr. R and W Gas Corp. It cannot contractor for the performance of any work, task,
terminate Mr. R on the pretext that the service job or project" x x x “shall be jointly and severally
contract it had entered with Q Manpower Co. has liable with his contractor or subcontractor to
already lapsed, but must prove just or authorized such employees (of the contractor or
cause after due process. subcontractor) to the extent of work performed
under the contract x x x." (Arts. 106 and 107,
Solidary Liability (2009, 2005, 2004 BAR) Labor Code)

Q: Antonio Antuquin, a security guard, was TERMINATION OF EMPLOYMENT
caught sleeping on the job while on duty at the (2019, 2015, 2014 BAR)
Yosi Cigarette Factory, As a result, he was
dismissed from employment by the Wagan Q: Gabriela Liwanag has been working as a
Security Agency, an independent contractor. bookkeeper at Great Foods, Inc. which
operates a chain of high-end restaurants
At the time of his dismissal, Antonio had been throughout the country, since 1970 when it
serving as a watchman in the factory for many was still a small eatery at Binondo.
years, often at stretches of up to 12 hours,
even on Sundays and holidays, without In the early part of the year 2003, Gabriela,
overtime, nighttime and rest day benefits. He who was already 50 years old, reported for
thereafter filed a complaint for illegal work after a week-long vacation in her
dismissal and non-payment of benefits province. It was the height of the SARS (Severe
against Yosi Cigarette Factory, which he Acute Respiratory Syndrome) scare, and
claimed was his actual and direct employer. As management learned that the first confirmed
the Labor Arbiter assigned to hear the case, SARS death case in the Philippines, a
how would you correctly resolve Antonio's “balikbayan” nurse from Canada, is a
claim for overtime and other benefits? (2005 townmate of Gabriela. Immediately, a
BAR) memorandum was issued by management
terminating the services of Gabriela on the
A: Antonio's claim for overtime and other ground that she is a probable carrier of SARS
benefits should be paid by Yosi Cigarette virus and that her continued employment is
Factory. The Labor Code provides that in the prejudicial to the health of her co-employees.
event that the contractor or subcontractor fails Is the action taken by the employer justified?
to pay the wages of his employees, the employer (2004 BAR)
shall be jointly and severally liable to the extent
of the work performed under the contract in the A: The employer’s act of terminating the
same manner and extent that he is liable to employment of Gabriela is not justified. There is
employees directly employed by his contractor no showing that said employee is sick with SARS,
or subcontractor for any violation of any or that she associated or had contact with the
provision of the Labor Code. deceased nurse. They are merely townmates.
Furthermore, there is no certification by a
Q: Manpower Inc. (CMI) had provided competent authority that the disease is of such a

32
QuAMTO (1987-2019)
nature or such a stage that it cannot be cured Resignation is voluntary, whereas in constructive
within a period of six months even with proper dismissal there is vitiated consent.
medical treatment. (Implementing Rules, Book VI,
Rule 1, Sec. 8, Labor Code) Resignation means no separation pay, whereas
constructive dismissal means payment of
Q: Rico has a temper and, in his work as separation pay and damages.
Division Manager of Matatag Insurance,
frequently loses his temper with his staff. One Resignation must be at least with 30 days’ notice
day, he physically assaults his staff member on the part of the employee, whereas in
by slapping him. The staff member sues him constructive dismissal the employee can leave
for physical injuries. Matatag insurance anytime.
decides to terminate Rico, after notice and
hearing, on the ground of loss of trust and b. Will Ms. T's claim for constructive
confidence. Rico claims that he is entitled to dismissal prosper? Explain. (2019 BAR)
the presumption of innocence because he has
not yet been convicted. Comment on Matatag’s A: NO. The Supreme Court ruled that “...the
action in relation to Rico’s argument. (2015 employer did not violate any law when it gave
BAR) the employee the option to resign because there
is nothing illegal with the practice of allowing an
A: Matatag Insurance does not have to await the employee to resign instead of being separated for
result of the criminal case before exercising its cause, so as not to smear her employment…” This
prerogative to dismiss. Dismissal is not affected case applies to Ms. T as she was caught stealing
by a criminal case. Under the Three-fold Liability and her resignation gives her a chance not to
Rule, a single act may result in three liabilities, smear her records. (Sicangco v. NLRC, G.R. No.
two of which are criminal and administrative. To 110261, Aug. 4, 1994)
establish them, the evidence of the crime must
amount to proof beyond reasonable doubt; Q: An accidental fire gutted the JKL factory in
whereas, the evidence of the ground for dismissal Caloocan. JKL decided to suspend operations
is substantial evidence only. In this regard, the and requested its employees to stop reporting
company has some basis already for withholding for work. After six (6) months, JKL resumed
the trust it has reposed on its manager. Hence, operations but hired a new set of employees.
Rico’s conviction need not precede the The old set of employees filed a case for
employee’s dismissal. illegal dismissal. If you were the Labor
Arbiter, how would you decide the case?
TERMINATION BY EMPLOYEE (2014 BAR)

Resignation versus Constructive dismissal A: I will rule in favor of the employees. JKL
(2019, 2014, 2004, 1996 BAR) factory merely suspended its operations as a
result of the fire that gutted its factory. Art. 286
Q: Ms. T was caught in the act of stealing the [now Art. 301] of the Labor Code states that an
company property of her employer. When employer may bona fide suspend the operation of
Ms. T admitted to the commission of the said its business for a period not exceeding six (6)
act to her manager, the latter advised her to months. In such a case, there would be no
just tender her resignation; otherwise, she termination of the employment of the employees,
would face an investigation which would but only a temporary displacement. Since, the
likely lead to the termination of her suspension of work lasted more than six months,
employment and the filing of criminal there is now constructive dismissal. (Sebuguero v.
charges in court. NLRC, 245 SCRA 532 [1995])

Acting on her manager's advice, Ms. T Q: RS, a security guard, filed a complaint for
submitted a letter of resignation. Later on, Ms. illegal dismissal against Star Security Agency.
T filed a case for constructive dismissal He alleged he was constructively dismissed
against her employer. While Ms. T conceded after ten years of service to the Agency. Having
that her manager spoke to her in a calm and 'been placed on "off detail" and "floating
unforceful manner, she claimed that her status" for 6 months already, he claimed the
resignation was not completely voluntary Agency just really wanted to get rid of him
because she was told that should she not because it required him to take a
resign, she could be terminated from work for neuropsychiatric evaluation test by Mahusay
just cause, and worse, criminal charges could Medical Center. RS said he already submitted
be filed against her. the result of his evaluation test by Brent
Medical Clinica – precondition to a new
a. What is the difference between assignment, but the report was rejected by
resignation and constructive dismissal? the Agency. RS added that Mahusay Medical
Center had close ties with Star's president. It
A: Resignation is at the instance of the employee, could manipulate tests to favor only those
whereas constructive dismissal is at the instance guards whom the Agency wanted to retain.
of the employer.
33 U S T

Star defended its policy of reliance on treasurer. Lincoln is not one of them. There is
Mahusay Medical Center because it has been likewise no showing that his position as
duly accredited by the Philippine National Assistant Vice-President is a corporate officer in
Police. It is not one of those dubious testing the company's by-laws. The Labor Arbiter
centers issuing readymade reports. Star cited therefore, has jurisdiction over the case. (Art.
its sad experience last year when a guard ran 217 [a] [2] [now Art. 224(a)(2)], Labor Code)
amuck and shot an employee of a client bank.
Star claimed management prerogative in Q: Due to his employer's dire financial
assigning its guards, and prayed that RS' situation, Nicanor was prevailed upon by his
complaint be dismissed. What are the issues? employer to voluntarily resign. In exchange,
Identify and resolve them. (2004 BAR) he demanded payment of salary differentials,
13th month pay, and financial assistance, as
A: On the first issue, there is constructive promised by his employer. Management
dismissal. RS cannot be placed on "off - detail" promised to pay him as soon as it is able to
and "floating status" indefinitely. If it lasts for pay off all retrenched rank-and-file
more than six (6) months, RS shall be, deemed to employees.
have been constructively dismissed thus entitling
him to separation benefits. (Superstar Security Five years later, and before management was
Agency v. NLRC, 1114 SCRA 74 [1990]) able to pay Nicanor the amount promised to
him, Nicanor died of a heart attack. His
On the second issue, there is no valid exercise of widow, Norie, filed a money claim against the
management prerogative. Star's claim of company before the National Labor Relations
management prerogative in assigning its guards Commission (NLRC), including interest on
cannot be exercised to defeat or circumvent RS' the amount of the unpaid claim. She also
right to security of tenure. claimed additional damages arguing that the
supposed resignation letter was obtained
Q: Lincoln was in the business of trading from her spouse through undue pressure and
broadcast equipment used by television and influence.
radio networks. He employed Lionel as his
agent. Subsequently, Lincoln set up Liberty The employer filed a motion to dismiss on
Communications to formally engage in the the ground that (a) the NLRC did not have
same business. He requested Lionel to be one jurisdiction over money claims, and (b) the
of the incorporators and assigned to him 100 action has prescribed.
Liberty shares. Lionel was also given the title
Assistant Vice-President for Sales and Head of a. May Nicanor's spouse successfully claim
Technical Coordination. additional damages as a result of the
alleged undue pressure and influence?
After several months, there were allegations
that Lionel was engaged in “under the table A: Norrie failed to establish that Nicanor’s
dealings” and received “confidential consent was vitiated when he filed his
commissions” from Liberty’s clients and resignation letter. In BMG Record v. Aparecio,
suppliers. He was, therefore, charged with (G.R. No. 153290, Sept. 5, 2007), the SC ruled that
serious misconduct and willful breach of the matter of “financial assistance” was an act of
trust, and was given 48 hours to present his generosity on the part of management. Under
explanation on the charges. the circumstances, Nicanor had the intention to
resign. Once management had accepted the
Lionel was unable to comply with the 48-hour resignation, Nicanor could not unilaterally
deadline and was subsequently barred from withdraw this voluntary act of termination of
entering company premises. Lionel then filed a employment.
complaint with the Labor Arbiter claiming
constructive dismissal. Among others, the b. Does the NLRC have jurisdiction to award
company sought the dismissal of the complaint money claims including interest on the
alleging that the case involved an intra- amount unpaid? (2018 BAR)
corporate controversy which was within the
jurisdiction of the Regional Trial Court (RTC). A: The NLRC has jurisdiction over money claims
If you were the Labor Arbiter assigned to the arising from an employer-employee relationship
case, how would you rule on the company’s where the amount claimed is in excess of P5,000,
motion to dismiss? (2014 BAR) including interest, regardless of whether or not
there is a claim for reinstatement. (Sec. 10, R.A.
A: I will deny the motion to dismiss. "Corporate 8042, as amended by R.A. 10022)
officers" in the context of Presidential Decree
No. 902-A are those officers of the corporation TERMINATION BY EMPLOYER
who are given that character by the Corporation
Code or by the corporation's by-laws. Sec. 25 of a. Just Causes (2019, 2017, 2016, 2014, 2013,
the Corporation Code enumerates three specific 2009, 2008, 2004, 2003, 2000, 1996, 1995,
officers that in law are considered as corporate 1993, 1989 BAR)
officers – the president, secretary and the

34
QuAMTO (1987-2019)
Q: Distinguish between dismissal of an Q: Arnaldo, President of “Bisig” Union in
employee for just cause and termination of Femwear Company, readied himself to leave
employment for authorized cause. exactly at 5:00 p.m. which was the end of his
Enumerate examples of just cause and normal shift to be able to send off his wife
authorized cause. (2019, 2000 BAR) who was scheduled to leave for overseas.
However, the General Manager required him
A: A termination based on just cause under Art. to render overtime work to meet the
282 [now Art. 297] of the Labor Code means that company's export quota. Arnaldo begged off,
the employee has committed a wrongful act or explaining to the General Manager that he
omission inimical to the interests of the had to see off his wife who was leaving to
employer, which justifies the severance of the work abroad. The company dismissed
employer-employee relationship, e.g., the Arnaldo for insubordination. He filed a case
employee has committed some serious for illegal dismissal. Decide. (2008 BAR)
misconduct; gross insubordination; fraud or loss
of trust and confidence; gross and habitual A: Arnaldo cannot be dismissed for
neglect of duty; crime committed against the insubordination. This is so because one of the
employer and his family; other analogous cases. requisites for insubordination is absent. It cannot
Payment of separation pay is not mandated by be said that Arnaldo’s conduct was characterized
law. by a “wrongful and perverse attitude.” Arnaldo
can be said to have been motivated by his honest
On the other hand, termination based on belief that the order was unreasonable because
authorized cause under Art. 283 and Art. 284 he had to send off his wife who was scheduled to
[now 298 and 299] of the Labor Code means leave for overseas.
that there exists a ground which the law itself
authorizes to be invoked to justify the Q: Sergio, an employee of Encantado
termination of an employee even if he has not Philippines, Inc. (EPI), was at the company
committed any wrongful act or omission. Under canteen when Corazon, a canteen helper,
the same provisions, authorized causes are questioned him for his use of somebody else’s
classified into two (2) classes, namely, business- identification card (ID). Sergio flared up and
related causes such as installation of labor- shouted at Corazon “Wala kang pakialam!
saving devices; retrenchment; redundancy; or Kung gusto mo, itapon ko itong mga pagkain
closure not due to serious losses; and health- ninyo!”
related causes, such as disease.
When Sergio noticed that some people where
ALTERNATIVE ANSWER: staring at him rather menacingly, he left the
canteen but returned a few minutes later to
A: Dismissal for a just cause is founded on faults remark challengingly “Sino ba ang nagagalit"
or misdeeds of the employee. Separation pay, as Sergio then began smashing some food items
a rule, will not be paid. Examples: Serious that were on display for sale in the canteen,
misconduct, willful disobedience, commission of after which he slapped Corazon which caused
crime, gross and habitual neglect, fraud and her to fall and suffer contusions. The incident
other causes analogous to the foregoing. (Art. prompted Corazon to file a written complaint
282 [now 297], Labor Code) with Gustavo, the personnel manager of EPI
against Sergio.
Termination for authorized causes are based on
business exigencies or measures adopted by the Gustavo required Sergio to explain in writing
employer, not constituting faults of the why no disciplinary action should be taken
employee. Payment of separation pay at varying against him. In his written explanation, Sergio
amounts is required. Examples: Redundancy, admitted his misconduct but tried to explain
closure, retrenchment, installation of labor- it away by saying that he was under the
saving device and authorized cause. (Art. 283- influence of liquor at the time of the incident.
284 [now 298-299], Labor Code) Gustavo thereafter issued a letter of
termination from the employment of Sergio
Q: Give the procedure to be observed for for serious misconduct. Sergio now files a
validly terminating the services of an complaint for illegal dismissal, arguing that
employee based on a just cause? (2017 BAR) his acts did not constitute serious misconduct
that would justify his dismissal. Decide. (1996
A: Termination of an employee based on just BAR)
causes requires compliance with the twin-notice
requirement. First, a notice should be served on A: The acts of Sergio constituted serious
the employee specifying the grounds for misconduct. Thus, there was just cause for his
termination. The employee should be given termination. The fact that he was under the
reasonable opportunity to explain his side influence of liquor at the time that he did what he
Second, a notice should be served on the did does not mitigate instead it aggravates, his
employee indicating the termination of his misconduct. Being under the influence of liquor
services. while at work is by itself serious misconduct.

35 U S T

Q: Roman had been a driver of Double-Ten ardent suitor; the two were on their way back to
Corporation for ten (10) years. As early as his the office from a sales call on Silver Drug, a
fifth year in the service he was a ready major drug retailer. In a fit of extreme jealousy,
commended as a Model Employee and given a Jose rammed Paolo's car, causing severe
salary increase. On his seventh year, he injuries to Paolo and Erica. Jose's flare up also
became a steward of his labor union. Since caused heavy damage to the two company-
then he became disputatious and obstinate owned cars they were driving.
and his performance fell below par.
a. As lawyer for Magna, advise the company
One day his manager told him to pick up some on whether just and valid grounds exist to
documents from a certain bank which were dismiss Jose.
needed to close a business transaction.
Roman did not obey. He said he had an A: Jose can be dismissed for serious misconduct,
important personal engagement. Moreover, violation of company rules and regulations, and
he did not want to drive a vehicle that was not commission of a crime against the employer’s
airconditioned. When his immediate representatives. Art. 282 [now 297] of the Labor
supervisor asked him in the afternoon to Code provides that an employer may terminate
drive an airconditioned car, Roman again an employment for any serious misconduct or
refused. He said he did not want to drive as he willful disobedience by the employee of the
wanted to leave the office early. lawful orders of his employer or his
representatives in connection with his work.
Roman was asked to explain. After hearing his
explanation, Roman was dismissed for willful Misconduct involves “the transgression of some
disobedience. Roman filed a case for illegal established and definite rule of action, forbidden
dismissal against the Double-Ten Corporation act, a dereliction of duty, willful in character, and
with prayer for reinstatement and full back implies wrongful intent and not mere error in
wages without loss of seniority rights, plus judgment.” For misconduct to be serious and
moral and exemplary damages and attorney's therefore a valid ground for dismissal, it must
fees. be:

Roman contended that since there was no 1. Of grave and aggravated character and not
emergency situation and there were other merely trivial or unimportant and;
drivers available, his refusal to drive for the 2. Connected with the work of the employee.
manager, and later for his supervisor, was not
serious enough to warrant his dismissal. On b. Assuming this time that Magna dismissed
the other hand, he claimed that he was being Jose from employment for cause and you
punished because of his activities as a are the lawyer of Jose, how would you
steward of his union. If you were the Labor argue the position that Jose's dismissal
Arbiter, would you sustain Roman? Discuss was illegal? (2013 BAR)
fully. (1995 BAR)
A: The offense committed by Jose did not relate
A: If I were the Labor Arbiter. I would not sustain to the performance of his duties. For misconduct
Roman. It is true that it would be an unfair labor or improper behavior to be a just cause for
practice for an employer to discriminate against dismissal, it (a) must be serious; (b) must
his employee for the latter’s union activities. relate to the performance of the employee’s
duties; and (c) must show that the employee has
But in the case, the Corporation is not become unfit to continue working for the
discriminating against Roman because he is a employer.
union official. When Roman’s manager told him
to pick up some documents from a certain bank, On the basis of the foregoing guidelines, it can be
this was a lawful order and when Roman did not concluded that Jose was not guilty of serious
obey the order, he was disobedient; and when he misconduct; Jose was not performing official
disobeyed a similar request made later in the work at the time of the incident (Lagrosas v.
afternoon of same day, he was guilty of willful Bristol Myers Squibb, G.R. No. 168637 and 170684
disobedience to do what management asked him [2008]). Additionally, there was no compliance
to do. This is just cause for his termination. with the rudimentary requirements of due
process.
Q: Jose and Erica, former sweethearts, both
worked as sales representatives for Magna, a Q: Oscar Pimentel was an agent supervisor,
multinational firm engaged in the rising from the ranks, in a corporation
manufacture and sale of pharmaceutical engaged in real estate. In order to promote
products. Although the couple had already the business, the company issued a
broken off their relationship, Jose continued memorandum to all agent supervisors
to have special feelings for Erica. requiring them to submit a feasibility study
within their respective areas of operation. All
One afternoon, Jose chanced upon Erica riding agent supervisors complied except Oscar.
in the car of Paolo, a co-employee and Erica's

36
QuAMTO (1987-2019)
Reminded by the company to comply with among others, a “brown monkey.” Hurt, Lee
the memorandum, Oscar explained that decided to file a criminal complaint for grave
being a drop-out in school and uneducated, defamation against Lanz. The prosecutor
he would be unable to submit the required found probable cause and filed an
study. The company found the explanation information in court. Lobinsons decided to
unacceptable and terminated his terminate Lanz for committing a potential
employment. Aggrieved, Oscar filed a crime and other illegal acts prejudicial to
complaint for illegal dismissal against the business.
company. Decide the case. (2003 BAR)
Can Lanz be legally terminated by the
A: For failure to comply with the memorandum company on these grounds? (2014 BAR)
to submit a feasibility study on his area of
operation, Oscar cannot be terminated A: NO. The grounds relied upon by Lobinsons are
(presumably for insubordination or willful not just causes for dismissal under the Labor
disobedience) because the same envisages the Code. Defamation is not a crime against person
concurrence of at least two requisites: which is a ground to dismiss under Art. 282 [now
Art. 297 (d)] of the Labor Code.
1. The employee’s assailed conduct must have
been willful or intentional, the willfulness Q: Nicodemus was employed as a computer
being characterized by a wrongful and programmer by Network Corporation, a
perverse attitude; and telecommunications firm. He has been coming
to work in shorts and sneakers, in violation of
2. The order violated must have been the "prescribed uniform policy" based on
reasonable, or lawful, made known to the company rules and regulations. The company
employee and must pertain to the duties human resources manager wrote him a letter,
which he had been engaged to discharge. giving him 10 days to comply with the
company uniform policy.
In the case at bar, at least two requisites are
absent, namely: (1) Oscar did not willfully Nicodemus asserted that wearing shorts and
disobey the memorandum with a perverse sneakers made him more productive, and
attitude; and (2) the directive to make a cited his above-average output. When he
feasibility study did not pertain to his duties. came to work still in violation of the uniform
Hence, the termination from employment of policy, the company sent him a letter of
Oscar Pimentel is not lawful. termination of employment. Nicodemus filed
an illegal dismissal case. The Labor Arbiter
Q: Domingo, a bus conductor of San Juan ruled in favor of Nicodemus and ordered his
Transportation Company, intentionally did reinstatement with backwages. Network
not issue a ticket to a female passenger, Kim, Corporation, however, refused to reinstate
his long-time crush. As a result, Domingo was him.
dismissed from employment for fraud or
willful breach of trust. Domingo contests his The NLRC 1st Division sustained the Labor
dismissal, claiming that he is not a Arbiter's judgment. Network Corporation still
confidential employee and, therefore, cannot refused to reinstate Nicodemus. Eventually,
be dismissed from the service for breach of the Court of Appeals reversed the decision of
trust. Is Domingo correct? Reasons. (2009 the NLRC and ruled that the dismissal was
BAR) valid. Despite the reversal, Nicodemus still
filed a motion for execution with respect to
A: Domingo as bus conductor holds a position his accrued backwages.
wherein he was reposed with the employer’s
trust and confidence. a. Were there valid legal grounds to dismiss
Nicodemus from his employment?
In Bristol Myers Squibb (Phils.) v. Baban (574
SCRA 198 [2008]), the Court established a second A: YES. Nicodemus clearly committed willful
class of positions of trust that involve rank-and- disobedience of lawful orders issued by the
file employees who, in the normal and routine Network Corporation, with respect to the
exercise of their functions, regularly handle uniform policy. This is a ground for termination
significant amounts of money. A bus conductor under Art. 297(a) of the Labor Code.
falls under such second class of persons. This
does not mean, however, that Domingo should b. Should Nicodemus' motion for execution
be dismissed. In Etcuban v. Sulpicio Lines (448 be granted? (2018 BAR)
SCRA 516 [2005]), the Court held that where the
amount involved is miniscule, an employee may A: YES In Garcia v. Philippine Airlines, Inc. (G.R.
not be dismissed for loss of trust and confidence. No. 164856, Jan. 20, 2009) the employer who did
Q: Lanz was a strict and unpopular Vice- not reinstate an employee pending appeal may
President for Sales of Lobinsons Land. One be held liable for wages of the dismissed
day, Lanz shouted invectives against Lee, a employee covering the period from the time he
poor performing sales associate, calling him, was ordered reinstated by the Labor Arbiter to
37 U S T

the reversal of the NLRC’s decision by the Court month pay or at least one month pay for
of Appeals. every year of service, whichever is higher;

b. Authorized Causes (2018, 2017, 2016, 4. That the employer exercises its prerogative
2006, 2004, 2003, 2002, 2001, 2000, 1999, to retrench employees in good faith for the
1998, 1994, 1990 BAR) advancement of its interest and not to defeat
or circumvent the employees' right to
Q: What are the authorized causes for a valid security of tenure; and
dismissal by the employer of an employee?
Why are they distinct from the just causes? 5. That the employer used fair and reasonable
(2004, 2002 BAR) criteria in ascertaining who would be
dismissed and who would be retained among
The authorized causes for a valid dismissal are the employees, such as status (i.e., whether
the following: they are temporary, casual, regular or
managerial employees), efficiency, seniority,
a. Installation of labor-saving devices physical fitness, age, and financial hardship
b. Redundancy for certain workers.
c. Retrenchment to prevent losses
d. The closing or cessation of operation of the Q: Hagibis Motors Corporation (Hagibis) has
establishment or undertaking 500 regular employees in its car assembly
plant. Due to the Asian financial crisis,
The authorized causes for a valid dismissal are Hagibis experienced very low car sales
distinct from just causes because where the resulting to huge financial losses. It
dismissal of an employee is based on just causes, implemented several cost-cutting measures
these just causes are acts committed by the such as cost reduction on use of office
employee which provide the basis for his supplies, employment hiring freeze,
dismissal. On the other hand, where the dismissal prohibition on representation and travel
is based on authorized causes, these authorized expenses, separation of casuals and reduced
causes are the results of the proper exercise by work week. As counsel of Hagibis, what are
the employer of his management prerogatives. the measures the company should undertake
to implement a valid retrenchment? Explain.
If a valid dismissal is based on just causes, there (2016 BAR)
is no liability on the part of the employer,
although sometimes, financial assistance to be A: For a valid retrenchment, the following
given to the dismissed employee is asked of the requisites must be complied with:
employer. If a valid dismissal is based on
authorized causes, the employer has to pay a. The retrenchment is necessary to prevent
separation pay except In case of closure or losses and such losses are proven;
cessation of operation due to serious business b. Written notice to the employees and to the
losses or financial reverses. DOLE at least one month prior to the
intended date of retrenchment; and
Q: What conditions must prevail and what c. Payment of separation pay equivalent to
requirements, if any, must an employer one-month pay or at least one-half month
comply with to justify/effect a valid pay for every year of service, whichever is
retrenchment program? (2001 BAR) higher.

A: In the case of Asian Alcohol Corp. v. NLRC (G.R. Jurisprudential standards for the losses
No. 131108, March 25, 1999), the Supreme Court which may justify retrenchment are: firstly,
stated that the requirements for a valid the losses expected should be substantial
retrenchment must be proved by clear and and not merely de minimis in extent. If the
convincing evidence: loss purportedly sought to be forestalled by
retrenchment is clearly shown to be
1. That the retrenchment is reasonably insubstantial and inconsequential in
necessary and likely to prevent business character, the bona fide nature of the
losses which, if already incurred, are merely retrenchment would appear to be seriously
de minimis, but substantial, serious, actual in question; secondly, the substantial loss
and real or if only expected, are reasonably must be reasonably imminent, as such
imminent as perceived objectively and in imminence can be perceived objectively and
good faith by the employer; in good faith by the employer; x x x thirdly,
because of the consequential nature of
2. That the employer served written notice retrenchment, it must be reasonably
both to the employees and to the Department necessary and is likely to be effective in
of Labor and Employment at least one month preventing the expected losses; x x x lastly,
prior to the intended date of retrenchment; alleged losses if already realized, and the
expected imminent losses sought to be
3. That the employer pays the retrenched forestalled, must be proved by sufficient and
employees separation pay equivalent to one convincing evidence. (Manatad v. Philippine

38
QuAMTO (1987-2019)
Telegraph and Telephone Corporation, G.R. Q: ABC Tomato Corporation, owned and
No. 12363, March 7, 2008) managed by three (3) elderly brothers and
two (2) sisters, has been in business for 40
Hagibis should exercise its prerogative to years. Due to serious business losses and
retrench employees in good faith. It must be financial reverses during the last five (5)
for the advancement of its interest and not years, they decided to close the business.
to defeat or circumvent the employees’ right (2006 BAR)
to security of tenure. Hagibis should use fair
and reasonable criteria such as status, a. As counsel for the corporation, what
efficiency, seniority, physical fitness, age and steps will you take prior to its closure?
financial hardship for certain workers in
ascertaining who would be dismissed and A: As counsel for the corporation, I will see to it
who would be retained among the that the corporation shall serve a written notice
employees. on its intended date of closing or cessation of
operation on the workers of the corporation and
Q: Daisy’s Department Store hired Leo as a the Department of Labor and Employment at
checker to apprehend shoplifters. Leo later least one month before the intended date of the
became Chief of the Checkers Section and closure or cessation of operation.
acquired the status of a regular employee. By
way of a cost-cutting measure, Daisy's decided b. Are the employees entitled to separation
to abolish the entire Checkers Section. The pay?
services of Leo, along with those of his co-
employees working in the same section, were A: The employees of the corporation are not
terminated on the same day. entitled to separation pay because Art. 283 [now
298] of the Labor Code expressly provides that if
A month after the dismissal of Leo, Daisy’s the closure or cessation of operation of an
engaged the services of another person as an establishment is due to serious business losses
ordinary checker and with a salary much or financial reverses, the
lower than that which Leo used to receive. employees are not entitled to separation pay.
Given the above factual settings (nothing
more having been established), could the c. If the reason for the closure is due to old
dismissal of Leo be successfully assailed by age of the brothers and sisters: Is the
him? (2003 BAR) closure allowed by law?

A: YES. Given the factual setting in the problem, A: YES, the closure is allowed by law. For a bona
and since ‘‘nothing more (have) been fide reason, an employer can lawfully close shop
established”, the dismissal of Leo can be at any time. Just as no law forces anyone to go
successfully assailed by him. This is so because into business, no law can compel anybody to
the burden of proof is upon the employer to continue the same. It would be stretching the
show compliance with the following requisites intent and spirit of the law if the Court interferes
for reduction of personnel: with management’s prerogative to close or cease
its business operations just because the business
1. Losses or expected losses should be is not suffering from any loss or because of the
substantial and not merely de minimis; desire to provide workers continued
employment. (Alabang Country Club, Inc. v. NLRC,
2. The expected losses must be reasonably 466 SCRA 329 [2005])
imminent, and such imminence can be
perceived objectively and in good faith by Q: Zienna Corporation (Zienna) informed the
the employer. Department of Labor and Employment
Regional Director of the end of its operations.
3. It must be necessary and likely to prevent To carry out the cessation, Zienna sent a
the expected losses. The employer must Letter Request for Intervention to the NLRC
have taken other measures to cut costs for permission and guidance in effecting
other than labor costs; and payment of separation benefits for its fifty
(50) terminated employees.
4. Losses if already realized, or the expected
losses must be proved by sufficient and Each of the terminated employees executed a
convincing evidence. (Lopez Sugar Corp. v. Quitclaim and Release before Labor Arbiter
Federation of Sugar Workers, 189 SCRA 179 Nocomora, to whom the case was assigned.
[1990]) After the erstwhile employees received their
separation pay, the Labor Arbiter declared
Moreover, the notice requirements to be given the labor dispute dismissed with prejudice on
by Daisy’s Department Store to DOLE and the the ground of settlement. Thereafter, Zienna
employees concerned 30 days prior to the sold all of its assets to Zandra Company
intended date of termination, as well as the (Zandra), which in turn hired its own
requisite separation pay, were not complied employees.
with.
39 U S T

Each of the terminated employees executed a (Arts. 279 [now 294] and 277 [b] [now 292(b)],
Quitclaim and Release before Labor Arbiter Labor Code)
Nocomora, to whom the case was assigned.
After the erstwhile employees received their Twin-notice Requirement (2017, 2009, 2006,
separation pay, the Labor Arbiter declared 1998 BAR)
the labor dispute dismissed with prejudice on
the ground of settlement. Thereafter, Zienna Q: Assuming the existence of valid grounds for
sold all of its assets to Zandra Company dismissal, what are the requirements before
(Zandra), which in turn hired its own an employer can terminate the services of an
employees. employee? (1998 BAR)

Nelle, one of the fifty (50) terminated A: Assuming that there is a valid ground to
employees, filed a case for illegal dismissal terminate employment, the employer must
against Zienna. She argued that Zienna did comply with the requirement of procedural due
not cease from operating since the process – written notice of intent to terminate
corporation subsists as Zandra. Nelle pointed stating the cause for termination; Hearing and
out that aside from the two companies having Notice of Termination. The Labor Code reads:
essentially the same equipment, the
managers and owners of Zandra and Zienna A. Notice and Hearing
are likewise one and the same.
Art. 277 [now 292]. Miscellaneous provisions. –
For its part, Zienna countered that Nelle is x x x
barred from filing a complaint for illegal
dismissal against the corporation in view of (b) x x x The employer shall furnish the worker
her prior acceptance of separation pay. Is whose employment is sought to be
Nelle correct in claiming that she was illegally terminated a written notice containing a
dismissed? (2016 BAR) statement of the causes for termination
and shall afford the latter ample
A: NO. In SME Bank v. De Guzman (G.R. No. opportunity to be heard and to defend
184517 and 186641, Oct. 8, 2013), there are two himself with the assistance of his
(2) types of corporate acquisitions: asset sales representative if he so desires x x x
and stock sales. In asset sales, the corporate
entity sells all or substantially all its assets to The Supreme Court ruled in Salaw v. NLRC (202
another entity. In stock sales, the individual or SCRA 7 [1991]):
corporate shareholders sell a controlling block of
stock to new or existing shareholders. x x x Not only must the dismissal be for a valid
or unauthorized cause as provided by law x x x
Asset sales happened in this case; hence, Zienna but the rudimentary requirements of due
is authorized to dismiss its employees, but must
pay separation pay. The buyer, Zandra, is not process - notice and hearing - must
obliged to absorb the employees affected by the also be observed before an employee
sale, nor is it liable for the payment of their must be dismissed.
claims. The most that Zandra may do, for reasons
of public policy and social justice, is to give B. Two (2) Notice Requirements
preference in hiring qualified separated
personnel of Zienna. The Supreme Court in Tanala v. NLRC (252 SCRA
314 [1996]), and in a long line of earlier cases,
c. Due Process (2016, 2006, 1999, 1998, 1997, ruled:
1995, 1994, 1990 BAR)
x x x This Court has repeatedly held that to
Q: Distinguish between the substantive and the meet the requirements of due process, the
procedural requirements for the dismissal of law requires that an employer must furnish
an employee (1994 BAR) the workers sought to be dismissed with
two written notices before termination of
A: This is the substantive requirement for the employment can be legally effected, that is,
valid dismissal of an employee: There should be a (1) a notice which apprises the employee of
just cause for the termination of an employee or the particular acts or omissions for which
that the termination is authorized by law. his dismissal is sought; and (2) subsequent
notice, after due hearing, which informs the
This is the procedural requirement: The employee of the employers decision to
employer should furnish the employee whose dismiss him.
employment is sought to be terminated a written
notice containing a statement of the causes for Q: Alfredo was dismissed by management for
termination and the employer should afford the serious misconduct. He filed suit for illegal
employee to be terminated ample opportunity to dismissal, alleging that although there may
be heard and to defend himself with the be just cause, he was not afforded due
assistance of his representative if he so desires. process by management prior to his

40
QuAMTO (1987-2019)
termination. He demands reinstatement with circumstances, grounds have been
full backwages. established to justify his termination.

What are the twin requirements of due Hearing; Ample Opportunity to be Heard
process which the employer must observe in (1994, 1999)
terminating or dismissing an employee?
Explain. (2009 BAR) Q: Atty. Oliza heads the legal department of
Company X with the rank and title of Vice-
A: The twin requirements of due process are President. During his leave of absence, his
notice and hearing to be given to the worker. assistant took over as acting head of the legal
There is likewise a two-notice requirement rule, department. Upon his return, Atty. Oliza was
with the first notice pertaining to specific causes informed in writing that his services were no
or grounds for termination and a directive to longer needed, it appearing that the
submit a written explanation within a Company had lost so many cases by default
reasonable period. “The second notice pertains due to his incompetence. Atty. Oliza filed a
to notice of termination. Pursuant to Perez v. case for illegal dismissal. Will his case
PT&T Company (G.R. No. 152048, April 7, 2009), prosper?
the Court held that a hearing or conference is
not mandatory, as long as the employee is given A: His case will prosper. He was not given
“ample opportunity to be heard”, i.e., any procedural due process. He was not given the
meaningful opportunity (verbal or written) to required notice, namely, a written notice
answer the charges against him or her and containing a statement of the causes for
submit evidence in support of the defense, termination, and he was not afforded ample
whether in a hearing, conference, or some other opportunity to be heard and to defend himself.
fair, just and equitable way. But if, before the Labor Arbiter, in a hearing of
the case of illegal dismissal that Atty. Oliza may
Q: Inday was employed by Herrera Home have filed, he is found to be grossly incompetent,
Improvements, Inc. (Herrera Home) as this is just cause for his dismissal. (Art. 277[b]
interior decorator. During the first year of [now 292(b)], Labor Code)
her employment, she did not report for work
for one month. Hence, her employer Q: Joseph Vilriolo (JV), a cashier of Seaside
dismissed her from the service. She filed with Sunshine Supermart (SSS), was found after
the Labor Arbiter a complaint for illegal an audit, to have cash shortages on his
dismissal alleging she did not abandon her monetary accountability covering a period of
work and that in terminating her about five months in the total amount of
employment, Herrera Home deprived her of P48,000.00. SSS served upon JV the written
her right to due process. She thus prayed that charge against him via a memorandum order
she be reinstated to her position. of preventive suspension, giving JV 24 hours
to submit his explanation. As soon as JV
Inday hired you as counsel. In preparing the submitted his written explanation within the
position paper to be submitted to the Labor given period, the same was deemed
Arbiter, explain the standards of due process unsatisfactory by the company and JV was
which should have been observed by Herrera peremptorily dismissed without any hearing.
Home in terminating your client's
employment. (2006 BAR) The day following his termination from
employment. JV filed a case of illegal
A: The Labor Code provides the following dismissal against SSS. During the hearing
procedure to be observed in terminating the before the Labor Arbiter, SSS proved by
services of an employee based on just causes as substantial evidence JVs misappropriation of
defined in Art. 282 [now 297] of the Code: company funds and various infractions
detrimental to the business of the company.
a. A written notice must be served on the JV, however, contended that his dismissal
employee specifying the ground or grounds was illegal because the company did not
for termination and giving him reasonable comply with the requirements of due
opportunity within which to explain his process. Did SSS comply with the
side; requirements of procedural due process in
the dismissal from employment of JV?
b. A hearing or conference shall be conducted Explain briefly. (1999 BAR)
during which the employee concerned,
with the assistance of counsel if he so A: In connection with the right to due process in
desires, is given an opportunity to respond the termination of an employee, the Labor Code
to the charge, present his evidence or rebut (in Art. 277[b] [now 292(b)]) requires that the
the evidence presented against him; and employer furnish the worker whose employment
is sought to be terminated a written notice
c. A written notice of termination must be containing a statement of the causes for
served on the employee indicating that termination and shall afford ample opportunity
upon due consideration of all the to be heard and to defend himself with the
41 U S T

assistance of his representative if he so desires. from his family and his usual work
assignments in Metro Manila.
SSS did not comply with the above-described
requirements for due process. The memorandum The Labor Arbiter found that there was no
order was for the preventive suspension of JV, constructive dismissal but ordered the
not a notice for his termination and the causes of payment of separation pay due to strained
his termination. relations between Santiago and Bagsak
Builders plus attorney's fees equivalent to ten
Reliefs for Illegal Dismissal (2019, 2009, percent (10%) of the value of Santiago's
2007, 2002, 2001, 1997, 1995, 1994 BAR) separation pay.

Q: Discuss briefly the instances when a. Is the award of attorney's fees valid? State
noncompliance by the employer with a the reasons for your answer.

reinstatement order of an illegally dismissed
employee is allowed. (2007 BAR) A: YES. What Art. 111 (b) prohibits is the demand
or acceptance by any person in a judicial or

A: Despite a reinstatement order, an employer administrative proceedings for the recovery of
may not reinstate an employee in the following wages, attorney’s fees which exceed 10% of the
instances: amount of wages recovered. Since in this case,
the amount of attorney’s fees is exactly
a. When the position or any substantial equivalent to the 10% of the separation fee
equivalent thereof no longer exists; recovered, the award is valid.

b. When reinstatement has been rendered b. Could the labor arbiter have validly
moot and academic by supervening events, awarded moral and exemplary damages
such as insolvency of the employer as to Santiago instead of attorney’s fees?
declared by the court or closure of the Why? (2001 BAR)
business;
A: NO. In the case of Lirag Textile Mills, Inc. et al.
c. The existence of strained relations between v. Court of Appeals, et al., (GR No. L-30786, April
the employer and the illegally dismissed 14, 1975), the Supreme Court held that when the
employee, provided the matter is raised termination of the services of an employee is
before the Labor Arbiter. attended by fraud or bad faith on the part of the
employer as when the latter knowingly made
In the event that reinstatement is no longer false allegations of a supposed valid cause when
feasible, or if the employee chooses not to be none existed, moral and exemplary damages may
reinstated, the employer shall pay him separation be awarded in favour of the former.
pay in lieu of reinstatement pending appeal. (Art.
223 [now 229], Labor Code) In this case, there was no showing that there was
a bad faith on the part of the employer. In fact,
Q: A strike was staged in Mella Corporation the bad faith and false allegations were on the
because of a deadlock in CBA negotiations part of the employee when he refused to obey the
over certain economic provisions. During the transfer mandated by his employer solely on the
strike, Mella Corporation hired replacements shallow basis that he will be away from his
for the workers who went on strike. family.
Thereafter, the strikers decided to resume
their employment. Can Mella Corporation be Q: What damages can an illegally dismissed
obliged to reinstate the returning workers to employee collect from his employer? (2001
their previous positions? (1997 BAR) BAR)

A: YES. Mella Corporation can be obligated to A: An illegally dismissed employee may collect
reinstate the returning workers to their previous from his employer ACTUAL and COMPENSATORY
positions. Workers who go on strike do not lose damages, MORAL damages and EXEMPLARY
their employment status except when, while on damages, as well as attorney’s fees as damages.
strike, they knowingly participated in the
commission of illegal acts. The Labor Code Q: Lyric Theater Corp. issued a memorandum
expressly provides: Mere participation of a prohibiting all ticket sellers from encashing
worker in a lawful strike should not constitute any check from their cash collections and
sufficient ground for termination of his requiring them instead to turn over all cash
employment, even if a replacement had been collections to the management at the end of
hired by the employer during such lawful strike. the day. In violation of this memorandum,
Melody, a ticket seller, encashed five (5)
Q: Eduardo Santiago, a project worker, was checks from her cash collection.
being assigned by his employer, Bagsak Subsequently the checks were dishonored
Builders, to Laoag, Ilocos Norte. Santiago when deposited in the account of Lyric
refused to comply with the transfer claiming Theater.
that it, in effect, constituted a constructive
dismissal because it would take him away

42
QuAMTO (1987-2019)
For this action, Melody was placed under a process of winding up. Nonetheless, B paid A
20-day suspension and directed to explain his backwages and separation pay.
why she should not be dismissed for
violation of the company's memorandum. In A complained that B’s computation was
her explanation, she admitted having erroneous in that A’s allowances was not
encashed the checks without the company's included. Is A correct in his claim? For what
permission. reasons? (2001 BAR)

While the investigation was pending, Melody A: A is correct. Art. 279 [now 294] provides that
filed a complaint against Lyric Theater for an employee who is unjustly dismissed from
backwages and separation pay. The Labor work shall be entitled to reinstatement without
Arbiter ordered Lyric Theater to pay Melody loss of seniority rights and other privileges and
P115, 420.79 representing separation pay to his full backwages, inclusive of allowances,
and backwages. The NLRC affirmed the ruling and to his other benefits or their monetary
of the Labor Arbiter. Is the ruling of the NLRC equivalent computed from the time his
correct? Explain briefly. (2002 BAR) compensation was withheld from him up to the
time of his actual reinstatement. Clearly, based
A: The ruling of the NLRC affirming the Labor from the foregoing provision, A is entitled to his
Arbiter's decision ordering Lyric Theater to pay allowances.
P115,420.79 representing separation pay and
backwages is wrong. The Labor Arbiter's RETIREMENT
decision is wrong because: (2018, 2013, 2007, 2005, 2001, 1994 BAR)

a. It is premature. There was still no Q: As a rule, when is retirement due? (2007
termination. All that was done by the BAR)
employer (Lyric Theater) was to place the
employee (Melody) under a 20-day A: Art. 287 [now 302] provides for two types of
suspension, meanwhile directing her to retirement:
explain why she should not be dismissed for
violation of company's memoranda. a. Optional retirement – which may be
availed of by an employee reaching the
b. The order for Lyric Theater to pay age of 60 years;
separation pay has no factual basis.
Separation pay is to be paid to an employee b. Compulsory retirement – which may be
who is terminated due to the installation of availed of by an employee upon reaching
labor-saving devices, redundancy, the age of 65 years.
retrenchment to prevent losses or the
closing or cessation of operation of the In both instances, the law imposes the minimum
establishment undertaking. None of these service requirement of 5 years with the
events has taken place. Neither is separation establishment.
pay here in lieu of reinstatement applicable
because there is just cause if Melody is Q: Discuss the differences between
terminated under the circumstances. compulsory and voluntary/optional
retirement as well as the minimum benefits
c. The order for Lyric Theater to pay provided under the Labor Code for retiring
backwages has no factual basis either employees of private establishments. (2019
because there is just cause if she will be BAR)
terminated after investigation. In this case,
there is willful disobedience by the A: A voluntary/optional retirement is a
employee of the lawful orders of her termination of employment based on a bilateral
employer in connection with her work. She agreement to terminate employment at an
did not just violate the lawful order of the agreed age regardless of years in service, or
employer, she violated it five times. Melody after a certain number of years in service
did not give any justifiable reason for regardless of age. It is a matter of contract. In
violating the company's memorandum contrast, a compulsory retirement is a
prohibiting the encashment of checks. (Jo termination of employment by operation of law.
Cinema Corp. v. Avellana, G.R. No. 32837, June It is a matter of statute.
28, 2001)
Under Art. 302 of the Labor Code, retiring
Q: “A”, an employee of Company “B” was found employees shall be paid retirement benefits
computed as follows:
to have been illegally dismissed and was

ordered to be reinstated and paid backwages
(22.5 days x Daily Rate) x Length of Service
from the time of dismissal until actual

reinstatement. The case was elevated all the
The 22.5 days consist of 15 days representing
way to the Supreme Court. By the time the
half-month salary, 5 days as service incentive
Supreme Court’s decision became final and
leave, and 2.5 days representing 1/12 of 13th
executory, B had closed down and was in the
month pay. The full 22.5 days shall be used if the
43 U S T

retiree is entitled to both service incentive leave relations with Albert; he was declared fully
and 13th month pay. Meantime, the 15 days retired in a fitting ceremony but the company
must always be used. did not give him any further retirement
benefits. Albert thought this treatment unfair
Q: When is retirement due for underground as he had rendered full service at his usual
miners? (2007 BAR) hours in the past five (5) years. Thus, he filed
a complaint for the allowances that were not
A: Pursuant to R.A. 8558, in the absence of a paid to him, and for retirement benefits for
retirement plan or other applicable agreement his additional five (5) working years, based
providing for retirement benefits of underground either on the company's Retirement Plan or the
mine employees in the establishment, any such Retirement Pay Law, whichever is applicable.
employee may retire upon reaching the age of 50
years or more if he has served for at least 5 years Is he entitled to additional retirement benefits
as underground mine employee or in for the additional service he rendered after
underground mine of the establishment. age 65? (2013 BAR)

Q: Ricky Marvin had worked for more than A: NO. He cannot be compulsorily retired twice in
ten (10) years in 1GB Corporation. Under the the same company.
terms of the personnel policy on retirement,
any employee who had reached the age of 65 Q: A Collective Bargaining Agreement (CBA)
and completed at least ten (10) years of between Company A and its employees
service would be compulsorily retired and provides for optimal retirement benefits for
paid 30 days’ pay for every year of service. employees who have served the company for
over 25 years regardless of age, equivalent to
Ricky Marvin, whose immigrant visa to the one-and- one-half months pay per year of
USA had just been approved, celebrated his service based on the employee’s last pay. The
60th birthday recently. He decided to retire CBA further provides that “employees whose
and move to California where the son who services are terminated, except for cause,
petitioned him had settled. The company shall receive said retirement benefits
refused to grant him any retirement benefits regardless of age or service record with the
on the ground that he had not yet attained the company or to the applicable separation pay
compulsory retirement age of 65 years as provided by law, whichever is higher."
required by its personnel policy; moreover, it
did not have a policy on optional or early The Company, due to poor business conditions,
retirement. decided to cease operations and gave its
employees the required one month’s advance
Taking up the cudgels for Ricky Marvin, the notice as well as notice to DOLE, with the
union raised the issue in the grievance further advice that each employee may claim
machinery as stipulated in the CBA. No his corresponding separation or retirement
settlement was arrived at and the matter was benefits whichever is higher after executing
referred to voluntary arbitration. If you were the required waiver and quitclaim.
the Voluntary Arbitrator, how would you
decide? Briefly explain the reasons for your Dino Ramos and his co-employees who have
award. (2007 BAR) all rendered more than 25 years of service,
received their retirement benefits. Soon after,
A: I will grant Ricky Marvin the retirement Ramos and others similarly situated
benefits under Art. 287 [now 302] of the Labor demanded for their separation pay. The
Code. Art. 287 [now 302] of the Labor Code, as Company refused, claiming that under the CBA
the minimum standard in law, allows an they cannot receive both benefits. Who is
employee an optional retirement upon reaching correct, the employees or the Company? (1994
the age of 60 years provided he rendered at least BAR)
5 years of service – requirements that Ricky
Marvin met under the facts of the case. A: The employees are correct. In the absence of a
categorical provision in the Retirement Plan and
Q: After thirty (30) years of service, Beta the CBA that an employee who receives
Company compulsorily retired Albert at age 65 separation pay is no longer, entitled to
pursuant to the company's Retirement Plan. retirement benefits, the employee is entitled to
Albert was duly paid his full retirement the payment of both benefits pursuant to the
benefits of one (1) month pay for every year of social justice policy. (Conrado Aquino, et al. v.
service under the Plan. Thereafter, out of NLRC, et al., G.R. No. 87653, Feb. 11, 1992)
compassion, the company allowed Albert to
continue working and paid him his old Q: Narciso filed a complaint against Norte
monthly salary rate, but without the University for the payment of retirement
allowances that he used to enjoy. benefits after having been a part-time
professional lecturer in the same school since
After five (5) years under this arrangement, 1974.
the company finally severed all employment

44
QuAMTO (1987-2019)
Narciso taught for two semesters and a
summer term for the school year 1974-1975, MANAGEMENT PREROGATIVE
took a leave of absence from 1975 to 1977,
and resumed teaching until 2003. Since then,
his contract has been renewed at the start of Management Prerogative (2019, 2015, 2014,
every semester and summer, until November 2013, 2010, 2003, 2002, 1994, 1993, 1989
2005 when he was told that he could no BAR)
longer teach because he was already 75 years
old. Q: Which takes precedence in conflicts
arising between employer’s management
Norte University also denied Narciso's claim prerogative and the employee’s right to
for retirement benefits stating that only full- security of tenure? Why? (1993 BAR)
time permanent faculty, who have served for
at least five years immediately preceding the A: The employee's right to security of tenure
termination of their employment, can avail takes precedence over the employer's
themselves of post-employment benefits. As management prerogative. Thus, an employer's
part-time faculty member, Narciso did not management prerogative includes the right to
acquire permanent employment status terminate the services of an employee but this
under the Manual of Regulations for Private management prerogative is limited by the Labor
Schools, in relation to the Labor Code, Code which provides that the employer can
regardless of his length of service. terminate an employee only for a just cause or
when authorized by law. This limitation on
a. Is Narciso entitled to retirement benefits? management prerogative is because no less than
the Constitution recognizes and guarantees an
A: As a part-time employee with fixed-term employee’s right to security of tenure. (Art. 279
employment, Narciso is entitled to retirement [now 294], Labor Code; Sec. 3, Art. XIII, 1987
benefits. Book VI, Rule II of the Rules Constitution)
Implementing the Labor Code states that the
rule on retirement shall apply to all employees Q: Harbor View Hotel has an existing
in the private sector, regardless of their Collective Bargaining Agreement (CBA) with
position, designation or status and irrespective the union of rank-and-file employees
of the method by which their wages are paid, consisting, among others, of bartenders,
except to those specifically exempted. Part- waiters, roomboys, housemen and stewards.
time faculty members do not fall under the During the lifetime of the CBA, Harbor View
exemption. Based also on the Retirement Pay Hotel, for reasons of economy and efficiency,
Law, and its Implementing Rules, part-time decided to abolish the position of housemen
faculty members of private educational and stewards who do the cleaning of the
institutions are entitled to full retirement hotel’s public areas.
benefits even if the services are not
continuous, and even if their contracts have Over the protest of the Union, the Hotel
been renewed after their mandatory age of contracted out the aforementioned job to the
retirement. City Service Janitorial Company, a bona fide
independent contractor which has a
b. If he is entitled to retirement benefits, substantial capital in the form of janitorial
how should retirement pay be computed tools, equipment, machineries and
in the absence of any contract between competent manpower. Is the action of the
him and Norte University providing for Harbor View Hotel legal and valid? (1994
such benefits? (2018 BAR) BAR)

A: In the absence of any contract providing for A: The action of Harbor View Hotel is legal and
higher retirement benefits, private educational valid. The valid exercise of management
institutions, including Norte University, are prerogative, discretion and judgment
obligated to set aside funds for the retirement encompasses all aspects of employment,
pay of all its part-time faculty members. A including the hiring, work assignments, working
covered employee who retires pursuant to the methods, time, place and manner of work, tools
Retirement Pay Law shall be entitled to to be used, processes to be followed, supervision
retirement pay equivalent to at least one-half of workers, working regulations, transfer of
(1/2) month salary for every year of service, a employees, work supervision, lay-off of workers,
fraction of at least six (6) months being and the discipline, dismissal and recall of
considered as one whole year. One-half month workers, except as provided for, or limited by
salary shall mean fifteen (15) days plus one- special laws.
twelfth (1/12) of the 13th month pay and the
cash equivalent of not more than five (5) days Company policies and regulations, unless shown
service incentive leaves. In total, this should to be grossly oppressive or contrary to law, are
amount to 22.5 days for every year of service. generally binding and valid on the parties and
(De La Salle Araneta University v. Bernardo, G.R. must be complied with until finally revised or
No. 190809, Feb. 13, 2017) amended unilaterally or preferably through
45 U S T

negotiation or by competent authority (San citing, among others, the inconvenience of the
Miguel Corporation v. Reynaldo Ubaldo and 50 concerned employees and union
Emmanuel Noel Cruz, Chairman and Member discrimination, as 8 of the 50 concerned
respectively of the Voluntary Arbitration Panel, et ground crew personnel were union officers.
al., G.R. No. 92859, Feb. 1, 1993). Also, the Union argued that Northeast Airlines
could easily hire additional employees from
Q: Define, explain or distinguish the Mindanao to boost its ground operations in the
following terms: x x x (d) Bona fide Mindanao airports.
occupational qualifications (2019 BAR)
a. Will the transfer of the 50 ground crew
A: Employment in particular jobs may not be personnel amount to illegal dismissal?
limited to persons of a particular sex, religion,
or national origin unless the employer can A: YES. The transfer of an employee is an exercise
show that sex, religion, or national origin is an of a managerial prerogative, which must be
actual qualification for performing the job. The exercised without grave abuse of discretion,
qualification is called a bona fide occupational bearing in mind the basic elements of justice and
qualification (BFOQ). (Armando Yrasuegui v. fair play. Such transfer cannot be used as a
PAL, G.R. No. 168081, Oct. 17, 2008) subterfuge by the employer to rid itself of an
undesirable worker.
TRANSFER OF EMPLOYEES
(2018, 2015, 1999 BAR) In particular, the employer must be able to show
that the transfer is not undesirable, inconvenient
Q: Din Din is a single mother with one child. She or prejudicial to the employee; nor does it involve
is employed as a sales executive at a a demotion in rank or a diminution of his salaries,
prominent supermarket. She and her child privileges, and other benefits. Should the
live in Quezon City and her residence and employer fail to overcome this burden of proof,
workplace are a 15-minute drive apart. the employee’s transfer shall be tantamount to
constructive dismissal which exists when an act of
One day, Din Din is informed by her boss that clear discrimination, insensibility or disdain by an
she is being promoted to a managerial employer has become so unbearable to the
position but she is now being transferred to employee, leaving him with no option but to
the Visayas. Din Din does not want to uproot forego with his continued employment. (Best Wear
her family and refuses the offer. Her boss is so Garments v. De Lemos, G.R. No. 191281, Dec. 5,
humiliated by Din Din's refusal of the offer that 2012)
she gives Din Din successive unsatisfactory
evaluations that result in Din Din being In the present case, the impending transfer of 50
removed from the supermarket. Din Din employees based in Luzon to Mindanao, allegedly
approaches you, as counsel, for legal advice. borne out of business necessity, is unreasonable
What would you advise her? (2015 BAR) and inconvenient to the concerned employees and
their families. It was not shown also if Northeast
A: I will advise Din Din to sue her boss and the Airlines looked into the option of hiring workers
supermarket for illegal dismissal. Din Din cannot from Mindanao to run its counters in the
be compelled to accept the promotion. Her Mindanao airports.
unsatisfactory evaluations as well as her boss’
insistence that she should agree to the intended b. Will the unfair labor practice case
transfer to Visayas are badges of an abuse of prosper? (2018 BAR)
management prerogative. In Pfizer Inc. v. Velasco
(645 SCRA 135 [2011]), the Supreme Court held A: NO. In ascertaining whether Northeast Airlines’
that the managerial prerogative to transfer proposed transfer amounted to an unfair labor
personnel must be exercised without abuse of practice or interference with, restraint or coercion
discretion, bearing in mind the basic elements of of the employees’ exercise of their right to self-
justice and fair play. Hence, Din Din’s dismissal is organization, the “totality of conduct doctrine” test
illegal. should be applied (Insular Life Assurance Co., Ltd.
Employees Association-NATU v. Insular Life
Q: Northeast Airlines sent notices of transfer, Assurance Co., Ltd., G.R. No. L-25291, Jan. 30, 1971).
without diminution in salary or rank, to 50
ground crew personnel who were front- A finding of an unfair labor practice should not be
liners at Northeast Airlines counters at the based on a single act in isolation, but should be
Ninoy Aquino International Airport (NAIA). viewed on the basis of the employer’s acts outside
The 50 employees were informed that they of the bigger context of the accompanying labor
would be distributed to various airports in relation situation. In the case at hand, Northeast
Mindanao to anticipate robust passenger Airlines’ act of transferring the 50 employees,
volume growth in the area. while it may amount to constructive dismissals,
cannot translate into an unfair labor practice,
North Union, representing rank-and-file absent any other indicia of anti-union bias on the
employees, filed unfair labor practice and part of the Company.
illegal dismissal cases before the NLRC,

46
QuAMTO (1987-2019)
BONUS Because of its poor performance over-
(2015, 2003, 2002 BAR) all, FEB decided to cut back on the
bonuses this year and limited itself to
Q: The projected bonus for the employees of the following:
Suerte Co. was 50% of their monthly
compensation. Unfortunately, due to the slump a. 13th month pay;
in the business, the president reduced the b. 14th month pay;
bonus to 5% of their compensation. Can the c. Christmas basket worth P4,000; and
company unilaterally reduce the amount of d. Gift check worth P2,000.
bonus? Explain briefly. (2002 BAR)
Katrina, an employee of FEB, who had gotten
A: Yes. The granting of a bonus is a management a rating of "Excellent" for the last 3 quarters
prerogative, something given in addition to what was looking forward to the bonuses plus the
is ordinarily received by or strictly due the productivity incentive bonus. After learning
recipient. An employer, like Suerte Co., cannot be that FEB had modified the bonus scheme, she
forced to distribute bonuses when it can no longer objected. Is Katrina's objection justified?
afford to pay. To hold otherwise would Explain. (2015 BAR)
be to penalize the employer for his past
generosity. (Producers Bank of the Phil. v. NLRC, A: Katrina’s objection is justified. Having
355 SCRA 489 [2001]) enjoyed the across-the-board bonuses, Katrina
has earned a vested right. Hence, none of them
Q: Lito was anticipating the bonus he would can be withheld or reduced. In the problem, the
receive for 2013. Aside from the 13th month company has not proven its alleged losses to be
pay, the company has been awarding him and substantial. Permitting reduction of pay at the
his other co-employees a two to three months slightest indication of losses is contrary to the
bonus for the last 10 years. However, because policy of the State to afford full protection to
of poor over-all sales performance for the labor and promote full employment. (Linton
year, the company unilaterally decided to Commercial Co. v. Hellera, G.R. No. 163147, Oct.
pay only a one month bonus in 2013. Is Lito’s 10, 2007)
employer legally allowed to reduce the
bonus? (2014 BAR) As to the withheld productivity-based bonuses,
Katrina is deemed to have earned them because
A: Yes. A bonus is an act of generosity granted of her excellent performance ratings for three
by an enlightened employer to spur the quarters. On this basis, they cannot be withheld
employee to greater efforts for the success of the without violating the Principle of Non-
business and realization of bigger profits. The Diminution of Benefits.
granting of a bonus is a management
prerogative, something given in addition to what Moreover, it is evident from the facts of the case
is ordinarily received by or strictly due the that what was withdrawn by FEB was a
recipient. Thus, a bonus is not a demandable and productivity bonus. Protected by R.A. 6791
enforceable obligation, except when it is made which mandates that the monetary value of the
part of the wage, salary or compensation of the productivity improvement be shared with the
employee. It may, therefore, be withdrawn, employees, the “productivity-based incentive”
unless they have been made a part of the wage scheme of FEB cannot just be withdrawn
or salary or compensation of the employees, a without the consent of its affected employees.
matter which is not in the facts of the case.
(American Wire and Cable Daily Rated Employees CHANGE OF WORKING HOURS
Union v. American Wire and Cable Co., Inc. and the
Court of Appeals, G.R. No. 155059, April 29, 2005) Q: Inter-Garments Co. manufactures
garments for export and requires its
Q: Far East Bank (FEB) is one of the leading employees to render overtime work ranging
banks in the country. Its compensation and from two to three hours a day to meet its
bonus packages are top of the industry. For the clients' deadlines. Since 2009, it has been
last 6 years, FEB had been providing the paying its employees on overtime an
following bonuses across-the-board to all its additional 35% of their hourly rate for work
employees: rendered in excess of their regular eight
working hours.
a. 13th month pay;
b. 14th to 18th month pay; Due to the slowdown of its export business in
c. Christmas basket worth P6,000; 2012, Inter-Garments had to reduce its
d. Gift check worth P4,000; and overtime work; at the same time, it adjusted
e. Productivity-based incentive ranging the overtime rates so that those who worked
from a 20% to 40% increase in gross overtime were only paid an additional 25%
monthly salary for all employees who instead of the previous 35%. To replace the
would receive an evaluation of workers' overtime rate loss, the company
"Excellent" for 3 straight quarters in the granted a one-time 5% across-the-board
same year. wage increase.
47 U S T

Vigilant Union, the rank-and-file bargaining The GROs, however, are free to ply their
agent, charged the company with Unfair trade elsewhere at anytime but once they
Labor Practice on the ground that (1) no enter the premises of the night club, they are
consultations had been made on who would required to stay up to closing time. The GROs
render overtime work; and (2) the unilateral earned their keep exclusively from
overtime pay rate reduction is a violation of commissions for food and drinks, and tips
Article 100 (entitled Prohibition Against from generous customers.
Elimination or Diminution of Benefits) of the
Labor Code. Is the union position In time, the GROs formed the Solar Ugnayan ng
meritorious? (2013 BAR) mga Kababaihang Inaapi (SUKI), a labor union
duly registered with DOLE. Subsequently, SUKI
A: The allegation of ULP by the Union is not filed a petition for certification election in
meritorious. The selection as to who would order to be recognized as the exclusive
render overtime work is a management bargaining agent of its members. Solar Plexus
prerogative. opposed the petition for certification election
on the singular ground of absence of employer-
However, the charge of the Union on the employee relationship between the GROs on
diminution of benefits (violation of Art. 100 of one hand and the night club on the other hand.
the Labor Code) appears to be meritorious. Since
three (3) years have already lapsed, the May the GROs form SUKI as a labor
overtime rate of 35% has ripened into practice organization for purposes of collective
and policy, and cannot anymore be removed bargaining? Explain briefly. (2012, 1999 BAR)
(Sevilla Trading v. Semana, 428 SCRA 239 [2004]).
This is deliberate, consistent and practiced over A: The GROs may form SUKI as a labor
a long period of time. organization for purposes of collective bargaining.
There is an employer-employee relationship
MARRIAGE BETWEEN EMPLOYEES OF between the GROs and the night club.
COMPETITOR-EMPLOYERS
The Labor Code (in Art. 138 [now 136]) provides
Q: A was working as a medical representative that any woman who is permitted or suffered to
of RX pharmaceutical company when he met work, with or without compensation, in any night
and fell in love with B, a marketing strategist club, cocktail lounge, massage clinic, bar or similar
for Delta Drug Company, a competitor of RC. establishment, under the effective control or
On several occasions, the management of RX supervision of the employer for a substantial
called A’s attention to the stipulation in his period of time as determined by the Secretary of
employment contract that requires him to Labor, shall be considered as an employee of such
disclose any relationship by consanguinity or establishment for purposes of labor and social
affinity with co-employees or employees of legislation.
competing companies in light of a possible
conflict of interest. A seeks your advice on In the case at bar, it is clearly stated that the
the validity of the company policy. What women once they enter the premises of the night
would be your advice? (2010 BAR) club would be under the direct supervision of the
manager from 8:00 p.m. to 4:00 a.m. everyday
A: The company policy is valid. However, it does including Sundays and holidays. Such is indicative
not apply to A. As A and B are not yet married, of an employer-employee relationship since the
no relationship by consanguinity or affinity manager would be exercising the right of control.
exists between them. The case of Duncan v. Glaxo
Wellcome (438 SCRA 343 [2004]) does not apply Q: How does the government employees’ right
in the present case. to self-organization differ from that of the
employees in the private sector? (1996 BAR)

A: There is no substantial difference of the right of
LABOR RELATIONS self-organization between workers in the private
sector and those in the public sector. In the public
sector, Executive Order No. 180, the purpose of
RIGHT TO SELF-ORGANIZATION self-organization is stated as "for the furtherance
and protection of their interest." In the private
Who May/May Not Exercise the Right (2018, sector, Art. 243 [now 253] of the Labor Code
2014, 2012, 2010, 2009, 2004, 2003, 2002, states, "for the purpose of collective bargaining",
2000, 1999, 1996 BAR) and "for the purpose of enhancing and defending
their interests and for their mutual aid and
Q: Solar Plexus Bar and Night Club allowed by protection." Furthermore, no less than the
tolerance fifty (50) Guest Relations Officers Constitution itself guarantees that ALL workers
(GRO) to work without compensation in its have the right to self- organization. (Sec. 3, Art. 13,
establishment under the direct supervision 1987 Constitution)
of its Manager from 8:00 p.m. to 4:00 a.m.
every day, including Sundays and holidays. Q: Do workers have a right not to join a labor

48
QuAMTO (1987-2019)
organization? (2000 BAR) union as affiliates thereof.

A: YES. The constitutional right to self- Q: Mang Bally, owner of a shoe repair shop
organization has two aspects, the right to join or with only nine (9) workers in his
form labor organizations and the right not to join establishment, received proposals for
said organization (Victoriano v. Elizalde Rope collective bargaining from the Bally Shoe
Worker’s Union, G.R. No. L-25246, Sept. 12, 1974). Union. Mang Bally refused to bargain with the
Moreover, if they are members of a religious group workers for several reasons. First, his shoe
whose doctrine forbids union membership, their business is just a service establishment.
right not to be compelled to become union Second, his workers are paid on a piecework
members has been upheld. However, if the worker basis (i.e., per shoe repaired) and not on a time
is not a "religious objector" and there is a union basis. Third, he has less than ten (10)
security clause, he may be required to join the employees in the establishment. Which reason
union if he belongs to the bargaining unit. (Reyes v. or reasons is/are tenable? Explain briefly.
Trajano, G.R. No. 84433, June 2, 1992) (2002 BAR)

Q: Do the following workers have the right to A: NONE. First, Mang Bally's shoe business is a
self-organization? Reasons/basis: commercial enterprise, albeit a service
establishment.
a. Employees of non-stock, non-profit
organizations? Second, the mere fact that the workers are paid on
b. Alien employees? (2000) a piece-rate basis does not negate their status as
regular employees. Payment by piece is just a
A: method of compensation and does not define the
a. Even employees of non-stock non-profit essence of the relation. (Lambo v. NLRC, G.R. No.
organizations have the right to self- 111042, Oct. 26, 1999)
organization. This is explicitly provided for
in Art. 243 [now 253] of the Labor Code. A Third, the employees' right to self-organization is
possible exception, however, are employee not delimited by their number. The right to self-
members of non-stock, non-profit organization covers all persons employed in
cooperatives. commercial, industrial and agricultural
enterprises and in religious, charitable, medical, or
b. ALIEN EMPLOYEES with valid work permits educational institutions whether operating for
may exercise the right to self- organization on profit or not. (Art. 243 [now 253], Labor Code)
the basis of parity or reciprocity, that is, if
Filipino workers in the aliens' country are Q: PhilHealth is a government-owned and
given the same right. (Art. 269 [now 283], controlled corporation employing thousands
Labor Code) of Filipinos. Because of the desire of the
employees of PhilHealth to obtain better
Q: Nexturn Corporation employed Nini and terms and conditions of employment from
Nono, whose tasks involved directing and the government, they formed the PhilHealth
supervising rank-and-file employees engaged Employees Association (PEA) and demanded
in company operations. Nini and Nono are PhilHealth to enter into negotiations with
required to ensure that such employees obey PEA regarding terms and conditions of
company rules and regulations, and employment which are not fixed by law. Are
recommend to the company's Human the employees of PhilHealth allowed to self-
Resources Department any required organize and form PEA and thereafter
disciplinary action against erring employees. demand PhilHealth to enter into negotiations
In Nexturn Corporation, there are two with PEA for better terms and conditions of
independent unions, representing rank-and- employment? (2014 BAR)
file and supervisory employees, respectively.
(2018 BAR) A: YES. Employees of PhilHealth are allowed to
self-organize under Sec. 8, Art. III and Sec. 3, Art.
a. May Nini and Nono join a union? XIII of the Constitution which recognize the
rights of all workers to self-organization. They
A: YES. Nini and Nono, in effect, are supervisors cannot demand, however, for better terms and
as defined under Art. 219(m) who may join a conditions of employment for the same are fixed
supervisory union pursuant to Art. 255 of the by law (Art. 244 [now 254], Labor Code), besides,
Labor Code. their salaries are standardized by Congress. (Art.
276 [now 291], Labor Code)
b. May the two unions be affiliated with
the same Union Federation? Doctrine of Necessary Implication

A: YES. Art. 255, as amended by R.A. 9481, Q: Section 255 [245] of the Labor Code
allows a rank-and-file union and a supervisors’ recognizes three categories of employees,
union operating within the same establishment namely: managerial, supervisory, and rank-
to join one and the same federation or national and-file.
49 U S T


a.Give the characteristics of each category Determination of Representation Status (2018,
of employees, and state whether the 2017, 2016, 2014, 2009, 2007, 2006, 2005,
employees in each category may 2004, 1999, 1998, 1996, 1993, 1992, 1990
organize and form unions. Explain your BAR)
answer.
Q: The modes of determining the exclusive
A: Managerial employees are those vested with bargaining agent of the employees in a
the powers or prerogatives to lay down and business are: (a) Voluntary Recognition; (b)
execute management policies and/or to hire, Certification Election; and (c) Consent Election.
transfer, lay-off, recall, discharge, assign or Explain how they differ from one another.
discipline employees. Managerial employees (2017, 2006, 2005, 2000, 1989 BAR)
cannot organize and form labor unions since
their managerial duties present a conflict of A: NOTE: Voluntary recognition has been repealed
interest with that of a union member or officer. by DO 40-I-15, series of 2015, and replaced with
Request for SEBA recognition.
Supervisory employees are those who, in the
interest of the employer, effectively recommend a. Request for SEBA recognition is the process of
such managerial actions if the exercise of such certifying a labor union as the exclusive
functions is not merely routinary or clerical in bargaining agent when there is only one
nature but requires the use of independent legitimate labor union in an unorganized
judgment. Supervisory are allowed to organize establishment.
and form unions.
b. Certification election is the process by which
Rank-and-file employees include those which do an employer or the employees file a petition
not fall under the classification of managerial or with the med-arbiter to determine the
supervisory employees. Rank-and-file exclusive bargaining agent through secret
employees are allowed to organize and form ballot.
unions.
Alternative Answer:
b. May confidential employees who assist
managerial employees, and who act in Certification election refers to the process of
a confidential capacity or have access determining through secret ballot the sole and
to confidential matters being handled exclusive representative of the employees in an
by persons exercising appropriate bargaining unit for purposes of
managerial functions in the field of collective bargaining or negotiation. A
labor relations form, or assist, or join certification election is ordered by the
labor unions? Explain your answer. Department of Labor and Employment, while a
(2017 BAR) consent election is voluntarily agreed upon by
the parties, with or without the intervention by
A: NO, confidential employees to managerial the Department.
employees may not form, assist, or join labor
unions. c. Consent election is the process by which the
employees, voluntarily by agreement, with
Applying the doctrine of necessary implication, or without the DOLE’s intervention,
confidential employees are also covered by the determine the exclusive bargaining agent
prohibition on joining or forming unions imposed through secret ballot.
on managerial employees. The policy of the law is
not to place confidential employees in a position ALTERNATIVE ANSWER:
involving a conflict of interest because of their
access to matters handled by managerial When the process of determining through secret
employees whom they assist. ballot the sole and exclusive representative of
the employees in an appropriate bargaining unit
BARGAINING REPRESENTATIVE is not ordered by the Department of Labor and
Employment, but has been voluntarily agreed
Q: The Ang Sarap Kainan Workers Union upon by the parties with or without the
appointed Juan Javier, a law student, as intervention of the Department of Labor and
bargaining representative. Mr. Javier is neither Employment, then the process is a consent
an employee of Ang Sarap Kainan Company election.
nor a member of the union. Is the appointment
of Mr. Javier as a bargaining representative in Q: There are instances when a certification
accord with law? Explain. (2000 BAR) election is mandatory. What is the rationale
for such a legal mandate? (2005 BAR)
A: YES, the law does not require that the
bargaining representative be an employee of the A: According to the Labor Code, in any
company nor an officer or member of the union. establishment where there is no certified
(Art. 212[j] [now 219(j)], Labor Code) bargaining agent, a certification election shall

50
QuAMTO (1987-2019)
automatically be conducted by the Med-Arbiter A: None of them should represent the rank- and-
upon the filing of a petition by a legitimate labor file employees. (Art. 255 [now Art. 265], Labor
organization. In the above-described situation, a Code)
certification election is made mandatory because
if there is no certified bargaining agent as e. Suppose that in the election, the unions
determined by a certification election, there obtained the following votes: A-250; B-
could be no collective bargaining in the said 150; C-50; 40 voted “no union”; and 10
unorganized establishment. were segregated votes. Should Union A be
certified as the bargaining
Q: Liwayway Glass had 600 rank-and-file representative?
employees. Three rival unions A, B, and C –
participated in the certification elections A: YES. The Labor Code provides that the Labor
ordered by the Med-Arbiter. 500 employees Union receiving majority of the valid votes cast
voted. The unions obtained the following shall be certified as the exclusive bargaining agent
votes: A-200; B-150; C-50; 90 employees of all the workers in the unit (Art. 256 [now Art.
voted “no union”; and 10 were segregated 266], Labor Code). Here, the number of valid votes
votes. cast is 490. Thus, the winning union should
receive at least 246 votes; Union A received 250
Out of the segregated votes, four (4) were cast votes.
by probationary employees and six (6) were
cast by dismissed employees whose Q: Samahang East Gate Enterprises (SEGE) is a
respective cases are still on appeal. (2014 labor organization composed of the rank-and-
BAR) file employees of East Gate Enterprises (EGE),
the leading manufacturer of all types of gloves
a. Should the votes of the probationary and and aprons. EGE was later requested by SEGE
dismissed employees be counted in the to bargain collectively for better terms and
total votes cast for the purpose of conditions of employment of all the rank-and-
determining the winning labor union? file employees of EGE. Consequently, EGE filed
a petition for certification election before the
A: YES. Rule IX, Sec. 5 of DOLE Department Order Bureau of Labor Relations (BLR).
40-03 provides that “[a]ll employees who are
members of the appropriate bargaining unit During the proceedings, EGE insisted that it
sought to be represented by the petitioner at the should participate in the certification process.
EGE reasoned that since it was the one who
time of the issuance of the order granting the
filed the petition and considering that the
conduct of a certification election shall be
employees concerned were its own rank-and-
eligible to vote. An employee who has been
file employees, it should be allowed to take an
dismissed from work but has contested the
active part in the certification process. Is the
legality of the dismissal in a forum of
contention of EGE proper? Explain. (2014 BAR)
appropriate jurisdiction at the time of the

issuance of the order for the conduct of a
A: NO. Under Art. 258-A [now 271] of the Labor
certification election shall be considered a
Code, an employer is a mere bystander in
qualified voter, unless his/her dismissal was
certification elections, whether the petition for
declared valid in a final judgment at the time of
certification election is filed by said employer or a
the conduct of the certification election.” legitimate labor organization. The employer shall
not be considered a party thereto with a
b. Was there a valid election? concomitant right to oppose a petition for
certification election.
A: YES. To have a valid election, at least majority
of all eligible voters in the unit must have cast Q: Among the 400 regular rank-and-file
their votes (Art. 256 [now Art. 266], Labor Code). workers of MNO Company, a certification
In the instant case, 500 out of 600 rank-and-file election was ordered conducted by the Med-
employees voted. Arbiter of the Region. The contending parties
obtained the following votes:
c. Should Union A be declared the winner?
Union A – 70
A: NO. The Labor Code provides that the Labor Union B – 71
Union receiving the majority of the valid votes Union C – 42
cast shall be certified as the exclusive bargaining No union – 180
agent of all the workers in the unit (Art. 256 [now Spoiled votes - 4
Art. 266], Labor Code). Here, the number of valid
votes cast is 490; thus, the winning union should There were no objections or challenges
receive at least 246 votes. Union A only received raised by any party on the results of the
200 votes. election.

d. Suppose the election is declared invalid, a. Can Union B be certified as the sole and
which of the contending unions should exclusive collective bargaining agent
represent the rank-and-file employees? among the rank-and-file workers of MNO
51 U S T

Company considering that it garnered the The Labor Code provides (in Art. 256 [now 268])
highest number of votes among the that to have a valid certification election, at least
contending unions? Why or why not? a majority of all eligible voters in the bargaining
unit must have cast their votes in the election. In
A: NO. To be certified as bargaining agent, the the facts of the case in the question, 1,000
vote required is majority of the valid votes cast. employees are eligible voters and 900 voters,
There were 396 valid votes cast, the majority of which is very much more than the majority (501)
which is 199. Since Union B got only 71 votes, it of the eligible voters cast their votes.
cannot be certified as the sole and exclusive
bargaining agent of MNO’s rank-and-file Q: Nayon Federation issued a charter
workers. certificate creating a rank-and-file Neuman
Employees Union. On the same day, New
b. May the management or lawyer of MNO Neuman Employees Union filed a petition for
Company legally ask for the absolute certification election with the Department of
termination of the certification election Labor and Employment (DOLE) Regional
proceedings because 180 of the workers Office, attaching the appropriate charter
— a clear plurality of the voters — have certificate. The employer, Neuman
chosen not to be represented by any Corporation, filed a motion to dismiss the
union? Reasons. petition for lack of legal personality on the
part of the petitioner union.
A: NO, because 216 workers want to be
represented by a union as bargaining agent. a. Should the motion be granted?
Only 180 workers opted for No Union. Hence, a
clear majority is in favor of being represented by A: NO. The motion should be denied. Under Art.
a union. 241 of the Labor Code, a petition for certification
election may be filed on the basis of a valid
c. If you were the duly designated election charter certificate issued to a chartered local by a
officer in this case, what would you do to duly registered federation.
effectively achieve the purpose of
certification election proceedings? b. The employer likewise filed a petition for
Discuss. (2009 BAR) cancellation of union registration against
New Neuman Employees Union, alleging
A: I will conduct a run-off election between the that Nayon Federation already had a
labor unions receiving the two highest number chartered local rank-and-file union,
votes. To have a run-off election, all the Neuman Employees Union, pertaining to
contending unions (3 or more choices required) the same bargaining unit within the
must have garnered 50% of the number of votes establishment. Should the petition for
cast. In the present case, there are four (4) cancellation prosper? (2018 BAR)
contending unions and they garnered 216 votes.
There were 400 vote cast. The votes garnered by A: NO. The existence of another chartered local
the contending unions is even more than 50% of under the same federation within the same
the number of vote cast. Hence, a run-off bargaining unit is not among the grounds to
election is in order. cancel union registration under Art. 247 of the
Labor Code, as amended by R.A. 9481.
Q: The Construction and Development
Corporation has a total of one thousand and Q: A certification election was conducted in
one hundred (1,100) employees. In a Nation Manufacturing Corporation, whereby
certification election ordered by the Bureau 55% of eligible voters in the bargaining unit
of Labor Relations to elect the bargaining cast their votes. The results were as follows:
representative of the employees, it was
determined that only one thousand (1,000) Union Nana: 45 votes
employees are eligible voters. In the election Union Nada: 40 votes
a total of nine hundred (900) ballots was Union Nara: 30 votes
cast. There were fifteen (15) spoiled ballots No Union: 80 votes
and five (5) blank ballots.
Union Nana moved to be declared as the
A total of four hundred (400) votes was cast winner of the certification election.
for ABC Labor Union, a total of two hundred
forty (240) votes was cast in favor of JVP a. Can Union Nana be declared as the
Labor Union, and a total of two hundred and winner?
forty (240) votes was in favor of RLG Labor
Organization. Is there a valid certification A: Union Nana cannot be immediately declared as
election? Why? (1990 BAR) the winner. A run-off election pursuant to Art.
268 of the Labor Code must be first be conducted.
A: There is a valid certification election. In the A run-off election is required since the present
facts of the case in question, there is no bar to the case involves an election which provided for
holding of the certification election. three or more choices, with no choice receiving a
majority of the valid votes cast, and the total

52
QuAMTO (1987-2019)
number of votes for all contending unions being concerned. (ABS-CBN Supervisors
at least 50% of the number of votes cast. Employees Union Members v. ABS-CBN
Broadcasting Corp, and Union Officers, G.R.
b. Assume that the eligibility of 30 voters No. 106518, March 11, 1999; Art. 241[n]
was challenged during the pre-election and [o] [now 250], Labor Code)
conference. The ballots of the 30
challenged voters were placed inside an In the problem given, none of the above
envelope sealed by the DOLE Election requisites were complied with by the union.
Officer. Considering the said envelope Hence, Rogelio can object to the deduction made
remains sealed, what should be the next by the union for being invalid.
course of action with respect to the said
challenged votes? (2018 BAR) NOTE: Substantial compliance of the
requirements is not enough in view of the fact
A: Since the challenged votes may materially that the special assessment will diminish the
affect the results of the election, and may in fact compensation of union members. (Palacol v.
even give Union Nada or Union Nara an absolute Ferrer-Calleja, G.R. No. 85333, Feb. 26, 1990)
majority, then the said challenged votes should
be opened. Pursuant to Rule IX, Sec. 11 of the Q: Atty. Facundo Veloso was retained by
Rules Implementing Book V of the Labor Code, Welga Labor Union to represent it in the
the envelope with the challenged votes shall be collective bargaining negotiations. It was
opened and the question of eligibility shall be agreed that Atty. Veloso would be paid in the
passed upon by the DOLE med-arbiter. sum of P20,000.00 as attorney's fees for his
assistance in the CBA negotiations.
RIGHTS OF LABOR ORGANIZATIONS
After the conclusion of the negotiations
Check Off, Assessment, Agency Fees (2002, Welga Labor Union collected from its
2001, 1997 BAR) individual members the sum of P100.00 each
to pay for Atty. Veloso's fees and another sum
Q: What requisites must a Union comply with of P100.00 each for services rendered by the
before it can validly impose special union officers. Several members of the Welga
assessments against its members for Labor Union approached you to seek advice
incidental expenses, attorney's fees, on the following matters.
representation expenses and the like? (2001,
2002 BAR) a. Whether or not the collection of the
amount assessed on the individual
A: In order that the special assessment may be members to answer for the attorney's
upheld as valid, the following requisites must be fees was valid?
compiled with: (1) Authorization by a written
resolution of the majority of all the members at A: The assessment for attorney’s fees is not
the general membership meeting duly called for valid. The Labor Code prohibits the payment of
the purpose; (2) Secretary's record of the attorney’s fees when it is effected through forced
meeting; and (3) Individual written authorization contributions from the workers from their own
for the check-off duly signed by the employee funds as distinguished from the union funds
concerned. (ABS-CBN Supervisors Employees (Art. 222[b] [now 228], Labor Code). The
Union Members v. ABS-CBN Broadcasting Corp, obligation to pay the attorney’s fees belongs to
and Union Officers, G.R. No. 106518, March 11, the union and cannot be shunted to the workers
1999; Art. 241[n] and [o] [now 250], Labor Code) as their direct responsibility. (BPI Employees’
Union v. NLRC, G.R. Nos. 69746-47, March 31,
Q: The union deducted P20.00 from Rogelio’s 1989)
wages for January. Upon inquiry he learned
that it was for death aid benefits and that the b. Whether or not the assessment of
deduction was made pursuant to a board P100.00 from the individual members of
resolution of the directors of the union. Can the Welga Labor Union for services
Rogelio object to the deduction? Explain rendered by the union officers in the
CBA negotiations was valid? (1997 BAR)
briefly. (2002 BAR)
A: The assessment for negotiation fees is not
A: YES. In order that the special assessment valid. The Labor Code prohibits negotiation fees
(death aid benefit) may be upheld as valid, the and other similar charges of any kind arising
following requisites must be compiled with: from any collective bargaining negotiations to be
imposed on any individual member of the
1. Authorization by a written resolution of contracting union. (Art. 222[b] [now 228], Labor
the majority of all the members at the Code)
general membership meeting duly called
for the purpose; NOTE: Special assessments may be allowed like
2. Secretary's record of the meeting; and attorney’s fees and negotiation fees provided
3. Individual written authorization for the that there be strict compliance with the
check-off duly signed by the employee requisites of a valid special assessment. (Art. 241
53 U S T

[n] and [o] [now 250(n) and (o)], Labor Code) Q: What is an appropriate bargaining unit for
purposes of collective bargaining? (1999
COLLECTIVE BARGAINING BAR)

Duty to Bargain Collectively (2010, 2009, A: An APPROPRIATE BARGAINING UNIT is a
2008, 2001, 1999, 1996, 1992, 1991 BAR) group of employees of a given employer
comprised of all or less than all of the entire body
Q: ABC company and U labor union have been of employees, which the collective interest of all
negotiating for a new Collective Bargaining the employees, consistent with the interest of the
Agreement (CBA) but failed to agree on employer, indicated to be the best suited to serve
certain economic provisions of the existing reciprocal rights and duties of the parties under
agreement. In the meantime, the existing the collective bargaining provisions of the law.
CBA expired. The company thereafter (University of the Philippines v. Ferrer-Calleja, G.R.
refused to pay the employees their midyear No. 96189, July 14, 1992)
bonus, saying that the CBA which provided
for the grant of midyear bonus to all Q: On December 1, 2018, GHI Co., an
company employees had already expired. organized establishment, and Union J, the
Are the employees entitled to be paid their exclusive bargaining agent therein, executed
midyear bonus? Explain your answer. (2010 a five (5)-year collective bargaining
BAR) agreement (CBA) which, after ratification, was
registered with the Bureau of Labor Relations.
A: YES, under Art. 253 [now 264] of the Labor
Code, the parties are duty-bound to maintain the a. When can the union ask, at the earliest,
status quo and to continue in full force and effect for the renegotiation of all the terms of
the terms and conditions of the existing CBA the CBA, except its representation
until a new agreement is reached by the parties. aspect? Explain.
Likewise, Art. 253-A [now 265] provides for an
automatic renewal clause of a CBA. Although a A: It can ask for the renegotiation of the terms of
CBA has expired, it continues to have legal the CBA within sixty (60) days prior to the
effects as between the parties until a new CBA expiration of its economic period, viz., from
has been entered into. October 2, 2018 until November 30, 2021.

The same is also supported by the principle of According to Art. 253-A [now 265] of the Labor
holdover, which states that despite the lapse of Code, all other provisions of the [CBA] shall be
the formal effectivity of the CBA, the law stills renegotiated not later than three (3) years after
considers the same as continuing in force and its execution. Any agreement of such other
effect until a new CBA shall have been validly provisions of the [CBA] entered into within six
executed (MERALCO v. Hon. Sec. of Labor, 337 (6) months from the date of expiry of the term of
SCRA 90 [2000] citing National Congress of such other provisions as fixed in such [CBA], shall
Unions in the Sugar Industry of the Philippines v. retroact to the day immediately following such
Ferrer-Calleja, 205 SCRA 478 [1992]). The terms date. If any such agreement is entered into
and conditions of the existing CBA remain under beyond six months, the parties shall agree on the
the principle of CBA continuity. duration of retroactivity thereof. In case of a
deadlock in the renegotiation of the [CBA], the
Q: What jurisdictional pre-conditions must parties may exercise their rights under this Code.
be present to set in motion the mechanics of
a collective bargaining? (1996 BAR) Hence, they may submit the demand for
renegotiation at any time between October 2,
A: To set in motion the mechanics of collective 2021 to November 30, 2021. The earliest day
bargaining, these jurisdictional pre-conditions would be October 2, 2021.
must be present, namely:
b. When is the earliest time that another
1. The employees in a bargaining unit union can file for a petition for
should form a labor organization; certification election? Explain. (2019
BAR)
2. The labor organization should be a
legitimate labor organization; A: The sixty-day freedom period is from October
2, 2023 to November 30, 2023. Hence, they can
3. As such legitimate labor organization, it file a petition for CE on October 2, 2023 at the
should be recognized or certified as the earliest.
collective bargaining representative of
the employees of the bargaining unit; and According to Art. 253-A of the Labor Code, any
Collective Bargaining Agreement that the parties
4. The labor organization as the collective may enter into shall, insofar as the
bargaining representative should request representation aspect is concerned, be for a term
the employer to bargain collectively. (See of five (5) years. No petition questioning the
Arts. 243, 234, 255 and 250 [now 253, 240, majority status of the incumbent bargaining
267, and 261, respectively], Labor Code) agent shall be entertained and no certification

54
QuAMTO (1987-2019)
election shall be conducted by the Department of Supervising Union (FFW), G.R. No. L-35120, Jan. 30,
Labor and Employment outside of the sixty-day 1984)
period immediately before the date of expiry of
such five-year term of the [CBA]. b. Can the Secretary of Labor decide the
labor dispute by awarding the JEU CBA
COLLECTIVE BARGAINING AGREEMENT (CBA) Proposals as the Collective Bargaining
Agreement of the parties? Explain
Mandatory Provisions of CBA (2019, 2018, briefly. (1999 BAR)
2008, 1999 BAR)
A: YES, the Secretary of Labor can decide the
Q: Jenson & Jenson (J & J) is a domestic labor dispute by awarding the JEU CBA
corporation engaged in the manufacturing of proposals as the Collective Bargaining
consumer products. Its rank-and-file workers Agreement between the parties because when
organized the Jenson Employees Union (JEU), the Secretary of Labor (under Art. 263 [g] [now
a duly registered local union affiliated with 278(g)]) assumes jurisdiction over a labor
PAFLU, a national union. dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
After having been certified as the exclusive national interest, the Secretary of Labor
bargaining agent of the appropriate exercises the power of compulsory arbitration
bargaining unit, JEU-PAFLU submitted its over the labor dispute, meaning, that as an
proposals for a Collective Bargaining exception to the general rule, the Secretary of
Agreement with the company. In the Labor now has the power to set or fix wages,
meantime, a power struggle occurred within rates of pay, hours of work or terms and
the national union PAFLU between its conditions of employment by determining what
National President, Manny Pakyao, and its should be the CBA of the parties. (See Divine
National Secretary General, Gabriel Miro. The Word University v. Secretary of Labor, G.R. No.
representation issue within PAFLU is pending 91915, Sept. 11, 1992)
resolution before the Office of the Secretary of
Labor. Alternative Answer:

By reason of this intra-union dispute within What is involved in the case is a corporation
PAFLU, J & J obstinately and consistently engaged in the manufacturing of consumer
refused to offer any counterproposal and to products. If the consumer products that are
bargain collectively with JEUPAFLU until the being manufactured are not such that a strike
representation issue within PAFLU shall have against the company cannot be considered a
been resolved with finality. JEU-PAFLU filed a strike in an industry indispensable for the
Notice of Strike. The Secretary of Labor national interest, then the assumption of
subsequently assumed jurisdiction over the jurisdiction by the Secretary of Labor is not
labor dispute. proper. Therefore, he cannot legally exercise the
powers of compulsory arbitration in the labor
a. Will the representation issue that has dispute.
arisen involving the national union
PAFLU, to which the duly registered Q: Nagrab Union and Nagrab Corporation
local union JEU is affiliated, bar have an existing CBA which contains the
collective bargaining negotiation with J following provision: "New employees within
& J? Explain briefly. the coverage of the bargaining unit who may
be regularly employed shall become
A: The representation issue that has arisen members of Nagrab Union. Membership in
involving the national union PAFLU should not good standing with the Nagrab Union is a
bar collective bargaining negotiation with J and J. requirement for continued employment with
It is the local union JEU that has the right to Nagrab Corporation."
bargain with the employer J and J, and not the
national union PAFLU. Nagrab Corporation subsequently acquired
all the assets and rights of Nuber Corporation
It is immaterial whether the representation issue and absorbed all of the latter's employees.
within PAFLU has been resolved with finality or Nagrab Union immediately demanded
not. Said squabble could not possibly serve as a enforcement of the above-stated CBA
bar to any collective bargaining since PAFLU is provision with respect to the absorbed
not the real party-in interest to the talks; rather, employees. Nagrab Corporation refused on
the negotiations are confined to the corporation the ground that this should not apply to the
and the local union JEU. Only the collective absorbed employees who were former
bargaining agent, the local union JEU, possesses employees of another corporation whose
the legal standing to negotiate with the assets and rights it had acquired.
corporation. A duly registered local union
affiliated with a national union or federation does a. Was Nagrab Corporation correct in
not lose its legal personality or independence. refusing to enforce the CBA provision
(Adamson and Adamson, Inc. v. The Court of with respect to the absorbed
Industrial Relations and Adamson and Adamson employees? May a newly-regularized
55 U S T

employee of Nagrab Corporation (who is process of Collective Bargaining.
not part of the absorbed employees)
refuse to join Nagrab Union? Q: Natasha Shoe Company adopted an
organizational streamlining program that
A: Nagrab Corporation’s argument that the resulted in the retrenchment of 550
union security clause should not apply to employees in its main plant. After having been
absorbed employees resulting from the paid their separation benefits, the retrenched
acquisition is untenable. In BPI Employees Union- workers demanded payment of retirement
Davao City-FUBU (BPIEU-Davao City-FUBU) v. benefits under a CBA between their union and
BPI, (G.R. No. 174912, July 24, 2013), the Supreme management. Natasha Shoe Company denied
Court ruled that the subject union security the workers' demand.
clause does not make a distinction as to how a
regular employee should attain such status as a a. What is the most procedurally peaceful
“new employee” in order to be covered by the means to resolve this dispute?
clause. Absorbed employees as a result of
merger or acquisition of assets and rights A: The parties may resolve this through plant-
between two corporations, therefore, should be level mechanisms such as a labor-management
considered as “new employees” of the surviving committee or a grievance machinery under a
or acquiring corporation. collective bargaining agreement.

b. How would you advise the human b. Can the workers claim both separation
resources manager of Nagrab pay and retirement benefits? (2018 BAR)
Corporation to proceed? (2018 BAR)
A: In Santos v. Senior Philippines, (G.R. No. 166377,
A: The HR Manager should heed the Supreme Nov. 28, 2008), the Supreme Court held that
Court’s proscription in Alabang Country Club, retirement benefits and separation pay are not
Inc. v. NLRC (G.R. No. 170287, Feb. 14, 2008), in mutually exclusive, and both benefits may be paid
cases involving termination of employment due in the absence of a contrary stipulation in the
to enforcement of a union security clause. The retirement plan and/or in the CBA.
following requirements must be observed:
ALTERNATIVE ANSWER:
1. The union security clause is applicable;
2. The certified bargaining agent is YES. In the absence of any express or implied
requesting for enforcement of such prohibition against it, collection of both
clause; and retirement benefits and separation pay upon
3. There is sufficient evidence to support the severance from employment is allowed. This is
sole and exclusive bargaining agent’s
grounded on the social justice policy that doubts
decision to expel the employee from
should always be resolved in favor of labor.
membership.
(Goodyear Philippines, Inc. v. Angus, G.R. No.

185449, Nov. 12, 2014)
Q: Explain the automatic renewal clause of

collective bargaining agreements. (2008
UNFAIR LABOR PRACTICE
BAR)

Nature, Aspects (2019, 2010, 2009, 2007,
A: The automatic renewal clause of Collective
2005 BAR)
Bargaining Agreements means that although a

CBA has expired, it continues to have legal
Q: When resolving a case of unfair labor
effects as between the parties until a new CBA
practice (ULP) filed by a union, what should
has been entered into (Pier 8 Arrastre &
be the critical point of analysis to determine if
Stevedoring Services, Inc. v. Roldan-Confessor, 241
an act constitutes ULP? (2019 BAR)
SCRA 294 [1995]). This is so because the law

makes it a duty of the parties to keep the status
A: The critical point of analysis is the violation of
quo and to continue in full effect the terms and
the rights of workers to self-organization,
conditions of the existing agreement until a new
characterized by interference, coercion, restraint
agreement is reached by the parties. (Art. 253
by the employer to discourage unionism and
[now 264], Labor Code)
refusal to bargain a collective bargaining

agreement.
Q: Define, explain or distinguish the

following terms: x x x (e) Grievance
Q: Is the commission of an unfair labor
machinery (2019 BAR)
practice by an employer subject to criminal

prosecution? (2005 BAR)
A: Under the Labor Code, grievance machinery

refers to the mechanism for the adjustment and
A: Yes. The second paragraph of Art. 247 [now
resolution of grievances arising from the
258] of the Labor Code expressly so provides.
interpretation or implementation of a Collective
The last paragraph of Art. 247 [now 258]
Bargaining Agreement and those arising from the
provides that no criminal prosecution for unfair
interpretation or enforcement of company
labor practice may be made without a prior final
personnel policies. It is part of the continuing

56
QuAMTO (1987-2019)
judgment in an unfair labor practice 2001, 1999, 1996, 1992, 1991, 1990 BAR)
administrative case (filed before the Labor
Arbiter of the NLRC pursuant to Art. 217(a)(1) Q: Article 248(d) of the Labor Code states
[now 224(a)(1)] of the Labor Code). And even that it shall be unlawful for an employer to
with such final judgment in an administrative initiate, dominate, assist in or otherwise
case, still, the final judgment would not be interfere with the formation or
binding in the criminal case. Neither would such administration of any labor organization.
final judgment be considered as evidence in the Including the giving of financial or other
criminal case. At best, it would only serve as support to it or to its organizers or officers.
proof of compliance of the required prior
exhaustion of administrative complaint. X Company, Inc. has been regularly
contributing money to the recreation fund of
Q: Discuss in full the jurisdiction over the civil the labor union representing its employees.
and criminal aspects of a case involving an This fund, including the financial assistance
unfair labor practice for which a charge is given by the employer, is used for
pending with the Department of Labor and refreshment and other expenses of the labor
Employment. (2007 BAR) union whenever the employees go on a
picnic, on an excursion, or hold a Christmas
A: Unfair labor practices are not only violations of party. Is the employer liable for unfair labor
the civil rights of both labor and management but practice under Article 248(d) of the Labor
are also criminal offenses against the State. Code? Explain your answer. (1990 BAR)

The civil aspect of all cases involving unfair labor A: NO. If the contributions of the employer
practices, which may include claims for actual, benefit all the employees and there is no
moral, exemplary, and other forms of damages, employee discriminated against, there is no
attorney’s fees and other affirmative relief, shall unfair labor practice. The contributions may be
be under the jurisdiction of the Labor Arbiters. considered a fringe benefit given by the
employer.
However, no criminal prosecution shall be
instituted without a final judgment, finding that Q: Company "A" contracts out its clerical and
an unfair labor practice was committed, having janitorial services. In the negotiations of its
been first obtained in the administrative CBA, the union insisted that, henceforth, the
proceeding. During the pendency of such company may no longer engage in
administrative proceeding, the running of the contracting out these types of services, which
period for prescription of the criminal offense services the union claims to be necessary in
herein penalized shall be interrupted. The final the company's business, without prior
judgment in the administrative proceeding shall consultation. Is the union’s stand valid or
not be binding in the criminal case nor be not? For what reason(s)? (2001 BAR)
considered as evidence of guilt but merely as
proof of compliance of the requirements set forth A: The union's stand is not valid. It is part of
by law. (Art. 247 [now 258], Labor Code) management prerogative, to contract out any
work, task, job or project except that it is an
Q: Differentiate “surface bargaining” from unfair labor practice to contract out services or
“blue-sky bargaining”. (2010 BAR) functions performed by union members when,
such will interfere with, restrain or coerce
A: Surface Bargaining is defined as “going employees in the exercise of their rights to self-
through the motions of negotiating” without any organization. (Art. 248[c], [now 259] Labor Code)
legal intent to reach an agreement. The
determination of whether a party has engaged in Q: Give three (3) examples of unfair labor
unlawful surface bargaining is a question of the practices on the part of the employer and
intent of the party in question, which can only be three (3) examples of unfair labor practices
inferred from the totality of the challenged on the part of the labor union. (1996 BAR)
party’s conduct both at and away from the
bargaining table. It involves the question of A: Any three (3) from the following enumeration
whether an employer’s conduct demonstrates an in the Labor Code:
unwillingness to bargain in good faith or is
merely hard bargaining. (Standard Chartered ART. 248 [now 259]. Unfair labor practices of
Bank Employees Union (NUBE) v. Confesor, 432 employers. – It shall be unlawful for an employer
SCRA 308 [2004]) to commit any of the following unfair labor
practice:
Blue-Sky Bargaining is defined as “unrealistic
and unreasonable demands in negotiations by a. To interfere with, restrain or coerce
either or both labor and management, where employees in the exercise of their right to
neither concedes anything and demands the self-organization;
impossible.” (Standard Chartered Bank Employees
Union (NUBE) v. Confesor, supra.) b. To require as a condition of employment
that a person or an employee shall not join
By Employers (2018, 2010, 2009, 2004, a labor organization or shall withdraw from
57 U S T

one to which he belongs; denied or to terminate an employee on any
ground other than the usual terms and
c. To contract out services or functions being conditions under which membership or
performed by union members when such continuation of membership is made
will interfere with, restrain or coerce available to other members;
employees in the exercise of their rights to
self-organization; c. To violate the duty, or refuse to bargain
collectively with the employer, provided it
d. To initiate, dominate, assist or otherwise is the representative of the employees;
interfere with the formation or
administration of any labor organization, d. To cause or attempt to cause an employer
including, the giving of financial or other to pay or deliver or agree to pay or deliver
support to it, or its organizations, or any money or other things of value, in the
supporters; nature of an exaction, for services which
are not performed or not to be performed,
e. To discriminate in regard to wages, hours including the demand for fee for union
of work, and other terms and conditions of negotiations;
employment in order to encourage or
discourage membership in any labor e. To ask for or accept negotiations of
organization. Nothing in this Code or in any attorney's fees from employers as part of
other law shall stop the parties from the settlement of any issue in collective
requiring membership in a recognized bargaining or any other dispute; or
collective bargaining agent as a condition
for employment, except those employees f. To violate a collective bargaining
who are already members of another union agreement.
at the time of the signing of the collective
bargaining agreement. Provided, that the Q: Around 100 workers of a mill in a coconut
individual authorization required under plantation organized themselves for the
Art. 241 [now 250], paragraph (o) of this
purpose of promoting their common interest
Code shall not apply to the non-members of
and welfare. The workers’ association
the recognized collective bargaining agent;
prepared a petition for increasing the daily

pay of its members in compliance with
f. To dismiss, discharge, or otherwise
minimum wage rates for their sector in the
prejudice or discriminate against an
employee for having given or being about region and for granting benefits to which they
to give testimony under this Code; are entitled under the law.

g. To violate the duty to bargain collectively However, the workers became restless and
as prescribed by this Code; anxious after the owner-manager threatened
them with mass lay-off if the association
h. To pay negotiation or attorney's fees to the would press for their demands. Most of its
union or its officers or agents as part of the members have worked in the mill for 10 to 15
settlement of any issue in collective years with no improvement in working
bargaining or any other dispute; or conditions and monetary benefits.

i. To violate a collective bargaining The leaders of the workers' association
agreement. approached you and asked: What legal steps
could they take to protect their security of
Any three (3) from the following provisions tenure? What advice could you give them?
of the Labor Code: (2004 BAR)

ART. 249 [now 260]. Unfair labor practices A: I would advise them to register the workers’
of labor organizations. – It shall be unfair association with the Department of Labor and
labor practice for a labor organization, its Employment. Then, have the workers' association
officers, agents, or representatives: file a ULP case against the employer.

a. To restrain or coerce employees in the Q: A is employed by XYZ Company where XYZ
exercise of their rights to self- organization. Employees Union (XYZ-EU) is the recognized
However, a labor organization shall have exclusive bargaining agent. Although A is a
the right to prescribe its own rules with member of rival union XYR-MU, he receives
respect to the acquisition or retention of the benefits under the CBA that XYZ-EU had
membership; negotiated with the company.

b. To cause or attempt to cause an employer XYZ-EU assessed A a fee equivalent to the
to discriminate against an employee, dues and other fees paid by its members, but
including discrimination against an A insists that he has no obligation to pay said
employee with respect to whom dues and fees because he is not a member of
membership in such organization has been XYZ-EU and he has not issued an

58
QuAMTO (1987-2019)
authorization to allow the collection. Explain A: NO. In Digitel Telecommunications Philippines,
whether his claim is meritorious. (2010 BAR) Inc. v. Digitel Employees Union (DEU) (G.R. No.
184903-04, Oct. 10, 2012), the Supreme Court
A: NO. The fee exacted from A takes the form of ruled that the award of moral and exemplary
an AGENCY FEE. This is sanctioned by Art. 248 damages in illegal dismissal cases (applicable to
(e) [now 259(e)] of the Labor Code. suspension) resulting from unfair labor practices
may be made in individual or aggregate amounts.
The collection of agency fees in an amount If the offended parties can be identified, then
equivalent to union dues and fees from damages may be awarded individually, such as in
employees who are not union members is the case at hand.
recognized under Art. 248(e) [now 259(e)] of the
Labor Code. The union may collect such fees even Q: Pablo works as a driver at the National Tire
without any written authorization from the non- Company (NTC). He is a member of the
union member employees, if said employees Malayang Samahan ng Manggagawa sa NTC,
accept the benefits resulting from the CBA. The the exclusive rank-and-file collective
legal basis of agency fees is quasi-contractual. bargaining representative in the company.
(Del Pilar Academy v. Del Pilar Academy
Employees Union, 553 SCRA 590 [2008]) The union has a CBA with NTC which contains
a union security and a check-off clause. The
Q: In Northern Lights Corporation, union union security clause contains a maintenance
members Nad, Ned, and Nod sought of membership provision that requires all
permission from the company to distribute members of the bargaining unit to maintain
flyers with respect to a weekend union their membership in good standing with the
activity. The company HR manager granted union during the term of the CBA under pain
the request through a text message sent to of dismissal. The check- off clause on the
another union member, Norlyn. other hand authorizes the company to deduct
from union members' salaries defined
While Nad, Ned, and Nod were distributing the amounts of union dues and other fees.
flyers at the company assembly plant, a
company supervisor barged in and demanded Pablo refused to issue an authorization to the
that they cease from distributing the flyers, company for the check- off of his dues,
stating that the assembly line employees were maintaining that he will personally remit his
trying to beat a production deadline and were dues to the union.
thoroughly distracted. Norlyn tried to show
the HR manager's text message authorizing a. Would the NTC management commit
flyer distribution during work hours, but the unfair labor practice if it desists from
supervisor brushed it aside. checking off Pablo's union dues for lack
of individual authorization from Pablo?
As a result, Nad, Ned, and Nod were
suspended for violating company rules on A: NO. Under R.A. 9481, violation of the Collective
trespass and highly-limited union activities Bargaining Agreement, to be an unfair labor
during work hours. The Union filed an unfair practice, must be gross in character. It must be a
labor practice (ULP) case before the NLRC for flagrant and malicious refusal to comply with the
union discrimination. economic provisions of the CBA.

a. Will the ULP case filed by the Union ALTERNATIVE ANSWER:
prosper?
NO. Check-offs in truth impose an extra burden
A: YES. The supervisor of Nad, Ned and Nod on the employer in the form of additional
directly interfered with union activities and administrative and bookkeeping costs. It is a
ultimately with the right to self-organization. burden assumed by management at the instance
Good faith can be ascribed to Nad, Ned and Nod’s of the union and for its benefit, to facilitate the
actions, as prior permission was obtained thru collection of dues necessary for the latter’s life
the HR Manager who apparently failed to and sustenance. But the obligation to pay union
communicate such permission to the plant dues and agency fees obviously devolves not
supervisor. upon the employer, but the individual employee.
It is a personal obligation not demandable from
b. Assume the NLRC ruled in favor of the the employer upon default or refusal of the
Union. The Labor Arbiter's judgment employee to consent to a check-off. The only
included, among others, an award for obligation of the employer under a check-off is to
moral and exemplary damages at effect the deductions and remit the collections to
P50,000.00 each for Nad, Ned, and Nod. the union. (Holy Cross of Davao College v. Joaquin,
Northern Lights Corporation argued that G.R. No. 110007 [1996])
any award of damages should be given to
the Union, and not individually to its b. Can the union charge Pablo with
members. Is Northern Lights Corporation disloyalty for refusing to allow the check
correct? off of his union dues and, on this basis,
59 U S T

ask the company to dismiss him from A: NO, the opinion of counsel is not in accord
employment? (2013 BAR) with law. The Labor Code (in Art. 249 [now 260
(a) and (b)]) provides that a labor organization
A: NO. The “check-off clause” in the CBA will not has the light to prescribe its own rules for the
suffice. The law prohibits interference with the acquisition or retention of membership, but it is
disposition of one’s salary. The law requires an unfair labor practice act for a labor
“individual written authorization” to deduct organization to restrain or coerce employees in
union dues from Pablo’s salaries. For as long as the exercise of their right to self-organization.
he pays union dues, Pablo cannot be terminated Thus, a labor organization cannot discriminate
from employment under the union security against any employee by denying such employee
clause. As a matter of fact, filing a complaint membership in the labor organization on any
against the union before the Department of ground other than the usual terms and
Labor for forcible deduction from salaries does conditions under which membership or
not constitute acts of disloyalty against the continuation of union membership is made
union. (Tolentino v. Angeles, 52 O.G. 4262) available to other members.

Q: The Collective Bargaining Agreement PEACEFUL CONCERTED ACTIVITIES
(CBA) between Libra Films and its union,
Libra Films Employees' Union (LFEU), BY LABOR ORGANIZATIONS
contains the following standard clauses:
Strike (2019, 2018, 2017, 2010, 2008, 2002,
1. Maintenance of membership; 2000, 1998 BAR)
2. Check off for union dues and
agency fees; and Q: Define, explain or distinguish the
3. No strike, no lock-out. following terms: x x x (c) Strikes and lockouts
(2019 BAR)
While Libra Films and LFEU are in re-
negotiations for an extension of the CBA, A: Strikes are any temporary stoppage of work
LFEU discovers that some of its members by the concerted action of employees as a result
have resigned from the union, citing their of an industrial labor dispute; whereas, lockouts
constitutional right to organize (which are the temporary refusal of an employer to
includes the right NOT to organize). LFEU furnish work as a result of an industrial or labor
demands that Libra Films institute dispute. (Art. 219 [formerly 212], par. o and p,
administrative proceedings to terminate Labor Code)
those union members who resigned in
violation of the CBA's maintenance of Q: The day following the workers' voluntary
membership clause. Libra Films refuses, return to work, the Company Production
citing its obligation to remain a neutral
party. Manager discovered an unusual and sharp
drop in workers' output. It was evidently
As a result, LFEU declares a strike and after clear that the workers are engaged in a work
filing a notice of strike and taking a strike slowdown activity. Is the work slowdown a
vote, goes on strike. The union claims that valid form of strike activity? (1998 BAR)
Libra Films grossly violated the terms of the
CBA and engaged in unfair labor practice. Are A: A work slowdown is not a valid form of strike
LFEU's claims correct? Explain. (2015 BAR) activity. If workers are to strike, there should be
temporary stoppage of work by the concerted
A: LFEU’s claim that Libra Films committed ULP action of employees as a result of an industrial
based on its violation of the CBA is not correct. or labor dispute. (See Art. 212[o] [now 219(o)],
For violation of a CBA to constitute ULP, the Labor Code)
violation must be violation of its economic
provisions. Moreover, said violation must be Q: Due to business recession, Ballistic
gross and flagrant. Based on the allegation of the Company retrenched a part of its workforce.
union, what was violated was the maintenance Opposing the retrenchment, some of the
of membership clause which was a political or affected employees staged a strike.
representational provision; hence, no ULP was Eventually, the retrenchment was found to
committed. (BPI Employees Union-Davao City v. be justified, and the strike was declared
BPI, 702 SCRA 42 [2013]) illegal; hence, the leaders of the strike,
including the retrenched employees, were
By Labor Organizations declared to have lost their employment
status.
Q: A labor union lawyer opined that a labor
organization is a private and voluntary Are the striking retrenched employees still
organization; hence, a union can deny entitled to separation pay under Sec. 298
membership to any and all applicants. Is the [283] of the Labor Code despite the illegality
opinion of counsel in accord with law? (1998 of their strike? Explain your answer. (2017
BAR) BAR)

60
QuAMTO (1987-2019)
A: NO. The Supreme Court has ruled if the agreement contrary to morals, good customs,
strike staged by the union is declared illegal, the public order or public policy.
union officers and members are considered
validly dismissed from employment for Thus, when the workers did not report for work
committing illegal acts during the illegal strike. when by agreement they were supposed to be on
The striking retrenched union officials and duty, there was a temporary stoppage of work by
members who were found guilty of having the concerted action of the employees as a result
staged an illegal strike, which constituted of an industrial or labor dispute because they
serious misconduct, will not be entitled to were on strike. (See Interphil Laboratories
separation pay. (C. Alcantara & Sons, Inc. v. Employees Union-FFW v. Interphil Laboratories
Court of Appeals, G.R. No. 155109, March 14, Inc., CR No. 142924, Dec. 19, 2001)
2012; citing Toyota Motors Phils. Corp. Workers
Association v. NLRC, G.R. No. 158786 & 158789, Q: On the day that the Union could validly
Oct. 19, 2007) declare a strike, the Secretary of Labor issued
an order assuming jurisdiction over the
ALTERNATIVE ANSWER: dispute and enjoining the strike, or if one has
commenced, ordering the striking workers to
YES, the striking retrenched employees are still immediately return to work. The return-to-
entitled to separation pay despite the illegality of work order required the employees to return
their strike. Union members who participate in to work within twenty-four hours and was
an illegal strike do not lose their employment if served at 8 a.m. of the day the strike was to
they did not commit illegal acts during the strike. start. The order at the same time directed the
Here, there is no evidence that the retrenched Company to accept all employees under the
employees committed illegal acts during the same terms and conditions of employment
strike. Hence, they are entitled to separation pay prior to the work stoppage.
as retrenched employees.
The Union members did not return to work on
Q: Eaglestar Company required a 24-hour the day the Secretary’s assumption order was
operation and embodied this requirement in served, nor on the next day; instead, they held
the employment contracts of its employees. a continuing protest rally against the
The employees agreed to work on Sundays company’s alleged unfair labor practices.
and Holidays if their work schedule required Because of the accompanying picket, some of
them, to do so for which they would be paid the employees who wanted to return to work
additional compensation as provided by law. failed to do so. On the 3rd day, the workers
reported for work, claiming that they do so in
Last March 2000, the union filed a notice of compliance with the Secretary’s return-to-
strike. Upon Eaglestar’s petition, the work order that binds them as well as the
Secretary of Labor certified the labor dispute Company. The Company, however, refused to
to the NLRC for compulsory arbitration. On admit them back since they had violated the
April 20, 2000 (Maundy Thursday), while Secretary’s return-to-work order and are now
conciliation meetings were pending, the considered to have lost their employment
union officers and members who were status.
supposed to be on duty did not report for
work. Neither did they report for work on The Union officers and members filed a
April 21 (Good Friday) and on April 22 (Black complaint for illegal dismissal arguing that
Saturday), disrupting the factory’s operations there was no strike but a protest rally which
and causing it huge losses. is a valid exercise of the workers’
constitutional right to peaceable assembly
The union denied it had gone on a strike and freedom of expression. Hence, there was
because the days when its officers and no basis for the termination of their
members were absent from work were legal employment.
holidays. Is the contention of the union
correct? Explain briefly. (2002 BAR) You are the Labor Arbiter to whom the case
was raffled. Decide, ruling on the following
A: The contention of the union is NOT correct. In issues: Was there a strike? (2008 BAR)
the case, it is clear that the employees agreed to
work on Sundays and Holidays if their work A: YES, there was a strike. No matter how they
schedule required them to do so for which they call it, the “continuing protest rally against the
would be paid additional compensation as company’s alleged unfair labor practices”
provided by law. constitutes a “temporary stoppage of work by the
concerted action of employees as a result of an
The above-mentioned agreement that the industrial or labor dispute” - a case of strike as
employees voluntarily entered into is valid. It is defined in Art. 212(o) [now 219(o)] of the Labor
not contrary to law. It is provided in the Code.
agreement that if they will work Sundays or
Holidays that they will be paid additional Recently, in Santa Rosa Coca-Cola Plant
compensation as provided by law. Neither is the Employees Union, et al. v. Coca-Cola Bottlers
61 U S T

Phils., Inc. (512 SCRA 437 [2007]), the Supreme off period” mandated by the Labor Code;
Court clarified that a strike comes in varied and
forms, from “slowdowns, mass leaves, sit b. The union went on strike without
downs” to other “similar activities.” A protest complying with the strike-vote
rally which results in temporary stoppage of requirement under the Labor Code.
work by the concerted action of employees, as a (2009 BAR)
result of a labor or industrial dispute, is clearly a
case of strike. Rule on the foregoing contentions with
reasons.
Q: What is the rationale for the State
regulation of strike activity and what are the A:
interests involved that the State must a. YES. The conduct of a strike action without
balance and reconcile? (2000 BAR) observing the cooling-off period is a
violation of one of the requirements of law
A: The first rationale is the constitutional which must be observed. The cooling-off
provision that the right to strike is to be periods required by Arts. 263 (c) [now
exercised “in accordance with law”. Another 278(c)] and 263 (f) [now 278(f)] of the
rationale is the Civil Code provision that the Labor Code are to enable the DOLE to exert
relations between employer and employee are efforts to amicably settle the controversy,
imbued with public interest and are subject to and for the parties to review and
the provisions of special law. A third rationale is reconsider their respective positions
the police power of the state. during the cooling-off periods. But the
Labor Code also provides that if the
The interests to be balanced are the rights of the dismissal constitutes union busting, the
workers, as primary socio-economic force, to union may strike immediately.
protection of the law, to security of tenure, to
concerted activities, etc. These should be b. YES. The conduct of the strike action
balanced with the right of the employer to without a strike vote violates Art. 263 (f)
reasonable return on investment and to [now 278(f)] – In every case, the union or
expansion and growth. General welfare or the the employer shall furnish the [DOLE] the
general peace and progress of society should results of the voting at least seven days
also be considered. This is why assumption of before the intended strike...” to enable the
jurisdiction and certification to NLRC are DOLE and the parties to exert the last effort
allowed in “national interest" cases. (Art. 263 to settle the dispute without strike action.
[now 278], Labor Code: Ilaw at Buklod ng
Manggagawa v. NLRC, 198 SCRA 586 [1991]; Q: Upon compliance with the legal
Lapanday Workers Union v. NLRC, 248 SCRA 96 requirements on the conduct of a strike,
[1995]) Navarra Union staged a strike against
Newfound Corporation on account of a
Q: Cite two (2) examples on how the law collective bargaining deadlock. During the
regulates the use of tire strike as a form of strike, some members of Navarra Union
concerted activity. (2000 BAR) broke the windows and punctured the tires
of the company-owned buses. The Secretary
A: Examples: of Labor and Employment assumed
jurisdiction over the dispute.
1. Procedural requirements should be
observed, namely, filing of notice of strike, a. Should all striking employees be
observance of cooling-off period, taking of strike admitted back to work upon the
note, and report of the strike vote; assumption of jurisdiction by the
Secretary of Labor and Employment?
2. Use of violence, intimidation or coercion Will these include striking employees
and blockade of ingress-egress are not allowed. who damaged company properties?
(Art. 263 [now 278] [b] [c] [f] [g], Labor Code)
A: YES. Under Art. 278(g) of the Labor Code, all
Q: Johnny is the duly elected President and striking employees shall immediately return to
principal union organizer of the work and the employer shall immediately resume
Nagkakaisang Manggagawa ng Manila operations and re-admit all workers under the
Restaurant (NMMR), a legitimate labor same terms and conditions prevailing before the
organization. He was unceremoniously strike or lockout.
dismissed by management for spending
virtually 95% of his working hours in union Regarding the striking union members who
activities. On the same day Johnny received damaged company property, the employer
the notice of termination, the labor union should still reinstate them, but after their
went on strike. Management filed an action reinstatement, the employer may institute the
to declare the strike illegal, contending that: appropriate disciplinary proceedings, or raise the
matter on the illegality of the strike on the
a. The union did not observe the “cooling- ground of violence and illegal acts committed

62
QuAMTO (1987-2019)
during the strike before the Secretary of Labor Secretary of Labor and Employment. The
and Employment assumed jurisdiction. Union opposed the petition, arguing that it
did not intend to stage a strike. Should the
b. May the company readmit strikers only petition be granted? Explain.
by restoring them to the payroll? (2018
BAR) A: YES. There was a strike. What the union engaged
in was actually a “work stoppage” in the guise of a
A: As a general rule, the answer is no, as actual protest rally.
reinstatement is envisioned by Art. 278(g) of
the Labor Code. The purpose of the law is to Art. 212(o) [now 219(o)] of the Labor Code defines
bring back the workers to their original work strike as a temporary stoppage of work by the
under the same terms and conditions prevailing concerted action of employees as a result of an
before the strike. industrial or labor dispute. The fact that the
conventional term "strike” was not used by the
Q: A is a member of the labor union duly striking employees to describe their common
recognized as the sole bargaining course of action is inconsequential. What is
representative of his company. Due to a controlling is the substance of the situation, and
bargaining deadlock, 245 members of the not its appearance. The term "strike” encompasses
500-strong union voted on March 13, 2010 not only concerted work stoppages, but also
to stage a strike. A notice of strike was slowdowns, mass leaves, sit-downs, attempts to
submitted to the National Conciliation and damage, destroy or sabotage plant equipment and
Mediation Board on March 16, 2010. Seven facilities, and similar activities. (Santa Rosa Coca-
days later or on March 23, 2010, the Cola Plant Employees Union, Donrico v. Sebastian, et
workers staged a strike in the course of al. v. Coca-Cola Bottlers Phils., Inc., 512 SCRA 437
which A had to leave and go to the hospital [2007])
where his wife had just delivered a baby.
The union members later intimidated and b. The Union contended that assuming
barred other employees from entering the that the mass leave will be considered
work premises, thus paralyzing the business as a strike, the same was valid because
operations of the company. of the refusal of the company to discuss
the economic provisions of the CBA.
A was dismissed from employment as a Rule on the contention.
consequence of the strike. Was the strike
legal? Explain (2010 BAR) A: The Union’s contention is wrong. A strike may
be declared only in cases of deadlock in collective
A: NO. The strike was not legal due to the bargaining negotiations and unfair labor practice.
union’s failure to satisfy the required majority (Art. 263[c] [now 278(c)], Labor Code; Sec. 1, Rule V,
vote of union membership (251 votes), NCMB Manual of Procedures)
approving the conduct of a strike (See Art.
263[f] [now 278(f)], Labor Code; Sec. 11, Rule The proposal of the company to discuss political
XXII, Dept. Order No. 40-03). Also, the strike was provisions pursuant to the ground rules agreed
illegal due to the non-observance of the 30-day upon does not automatically mean that the
cooling off period by the union. (Art. 263[c] company refuses to discuss the economic
[now 278(c)], Labor Code; Club Filipino, Inc. v. provisions of the CBA, or that the company was
Bautista, 592 SCRA 471 [2009]) engaged in “surface bargaining” in violation of its
duty to bargain, absent any showing that such tend
Q: On the first day of collective bargaining to show that the company did not want to reach an
negotiations between rank-and-file Union A agreement with the Union. In fact, there is no
and B Bus Company, the former proposed a deadlock to speak of in this case.
P45/day increase. The company insisted
that ground rules for negotiations should The duty to bargain does not compel either party
first be established, to which the union to agree to a proposal or require the making of a
agreed. After agreeing on ground rules on concession. The parties’ failure to agree which to
the second day, the union representatives discuss first on the bargaining table did not amount
reiterated their proposal for a wage to ULP for violation of the duty to bargain.
increase.
Besides, the mass leave conducted by the union
When company representatives suggested a members failed to comply with the procedural
discussion of political provisions in the requirements for a valid strike under the Rules,
Collective Bargaining Agreement as without which, the strike conducted taints of
stipulated in the ground rules, union illegality.
members went on mass leave the next day to
participate in a whole-day prayer rally in c. Union member AA, a pastor who headed
front of the company building. the prayer rally, was served a notice of
termination by management after it filed
a. The company filed a petition for the petition for assumption of
assumption of jurisdiction with the jurisdiction. May the company validly
63 U S T

terminate AA? Explain. (2010 BAR) 3. A decision to declare a strike must be
approved by majority of the total union
A: NO. The company cannot terminate AA membership in the bargaining unit
because the Labor Code provides mere concerned, obtained by secret ballot in
participation of a worker in a strike shall meetings or referenda called for that
not constitute sufficient ground for purpose.
termination of his employment.
4. In every case, the union shall furnish the
Q: Given that the liability for an illegal strike Department of Labor and Employment the
is individual, not collective, state when the voting at least seven (7) days before the
participating union officers and members intended strike subject to the cooling-off
may be terminated from employment period herein provided.
because of the illegal strike. Explain your
answer. (2017 BAR) 5. No labor organization shall declare a strike
without first having bargained collectively;
A: When a strike is declared illegal because of without first having filed the notice
non-compliance with statutory or contractual required or without the necessary strike
requirements or because of the use of unlawful vote first having been obtained and
means, the consequence is loss of employment reported to the Department of Labor and
status of the officers of the union who knowingly Employment.
participated in the illegal strike.
6. No strike shall be declared after
Ordinary union members will lose their assumption of jurisdiction by the President
employment status only if they participated in or the Secretary or after certification or
the commission of illegal acts during the strike, submission of the dispute to compulsory
thus, mere union membership does not result in or voluntary arbitration or during the
automatic loss of employment as a result of an pendency of cases involving the same
illegal strike. (Arts. 263-264 [now Arts. 278-279], grounds for the strike.
Labor Code; Pepsi-Cola Labor Union v. NLRC, G.R.
No. L-58341, June 29, 1982; Solidbank Corp. v. 7. In a strike, no person engaged in picketing
Solidbank Union, G.R. No. 159461, Nov. 15, 2010) should commit any act of violence,
coercion or intimidation or obstruct the
Valid versus Illegal strikes (2017, 2010, free ingress to or egress from the
2007, 2004, 2003, 2000, 1994 BAR) employer’s premises for lawful purposes,
or obstruct public thoroughfares.

Q: Discuss the legal requirements of a valid Q: A division manager of a company taunted a
strike. (2007 BAR) union officer two days after the union
submitted to the Department of Labor and
A: The legal requirements of a valid strike are as Employment (DOLE) the result of the strike
follows: vote. The division manager said: “Your union
threat of an unfair labor practice strike is
1. No labor union may strike on grounds phony or a bluff. Not even ten percent (10%)
involving inter-union and intra-union of your members will join the strike.’' To
disputes. prove union member support for the strike,
the union officer immediately instructed its
2. In cases of bargaining deadlocks, the duly members to cease working and walk out. Two
certified or recognized bargaining agent may hours after the walkout, the workers
file a notice of strike with the Department of voluntarily returned to work.
Labor and Employment at least 30 days
before the intended date thereof. In cases of a. Was the walkout a strike? And if so, was it
unfair labor practice, the period of notice a valid activity?
shall be 15 days and in the absence of a duly
certified or recognized bargaining agent, the A: YES it was a strike because there was a work
notice of strike may be filed by any stoppage by concerted action and there is an
legitimate labor organization in behalf of its existing labor dispute. It was not a valid activity
members. because the requisites for a valid strike were
not observed. (Art. 212 [now 219] [o], [i], Labor
However, in case of dismissal from Code)
employment of union officers duly elected in
accordance with the union constitution and b. Can the union officer who led the short
by-laws, which may constitute union busting walk-out, but who likewise voluntarily
where the existence of the union is led the workers back to work, be
threatened, the 15-day cooling-off period disciplined by the employer? (2000
shall not apply and the union may take BAR)
action immediately.
A: YES, the employer may discipline the union

64
QuAMTO (1987-2019)
officer. An Illegal strike is a cause for the union cellular phone equipment, with a nationwide
officer to be declared to have lost his network of facilities.
employment status. (Art. 263 [now 278] [c], [d],
[e], [f]; Art. 264 [a] [now 279(a)], Labor Code) In a petition with the DOLE, the company
questioned the legality of the strike and asked
Q: What are the statutory requisites for a for compulsory arbitration. The Secretary of
valid strike by the workers? Should these the DOLE certified the dispute to the NLRC for
requisites be complied with substantially or compulsory arbitration and ordered the
strictly? (2004 BAR) company to readmit the workers pending the
arbitration. The workers returned and were
A: Statutory Requirements for a Valid Strike: readmitted by the company but five (5)
technicians were temporarily reassigned to the
a. Status of Striking Union – For a ULP strike or warehouse while five (5) others were
bargaining deadlock strike, only a duly reinstated on payroll only. The company
certified or recognized bargaining justified its acts as an exercise of management
representative may declare such strike. prerogative.

b. Procedural Requirements: During the strike, may the striking union picket
the company's outside outlets although they
i. Notice of Intent. Filing of Notice of Intent are not company-owned but independent
to Strike with NCMB. dealers? (1991 BAR)
ii. Cooling off Period – Observance of
Cooling-off Period. A: Peaceful picketing conducted by employees in a
strike area during any labor controversy is given
(a) ULP – 15 days before intended date protection by the Labor Code.
of strike
(b) Bargaining Deadlock – 30 days Thus, if the place being picketed is a strike area
before intended date of strike. which is defined by the Labor Code as “the
establishment, warehouses, depots, plants or
iii. Strike Vote and Filing of the same with offices, including the sites or premises used as
the NCMB and the observance of the runaway shops, of the employer struck against, as
seven (7) days strike ban. (Art. 263[c-f] well as the immediate vicinity actually used by
[now 278(c-f)], Labor Code) picketing strikers in moving to and fro before all
points of entrance to and exit from said
c. Cause – The cause of the strike must be a labor establishment,” then the picketing is protected, if it
or industrial dispute. (Art. 212[o] [now is peaceful.
219(o)], Labor Code)
In the question given, however, since the striking
Compliance with all legal requirements is meant union is picketing the company's outside outlets
to be and should be mandatory. (National who are not company owned but independent
Federation of Sugar Workers v. Ovajera, 114 SCRA dealers, the picketing is not in a strike area, thus
354 [1982]) the picketing is not protected by the Code.

Q: A sympathetic strike is stoppage of work to Q: President FX, head of a newly formed labor
make common cause with other strikers in union composed of 1/3 of the total number of
another establishment or business. Is the rank-and-file employees in Super Stores, Inc.,
sympathetic strike valid? Explain your agitated his fellow employees to demand from
answer. (2017 BAR) management pay increases and overtime pay.
His supervisor summoned him to explain his
A: NO, a sympathetic strike is not valid. A strike is tardiness and refusal to obey regulations.
not valid if there is no labor dispute between the
employer and the employees. In a sympathetic Feeling threatened, he gathered 20 of his
strike, there is no labor dispute in the employees’ members and staged a 2-day picket in front of
work since they are merely making common the shopping mall. Security staff arrived and
cause with strikers in another establishment. dismantled the placards and barricades
Hence, a sympathetic strike is not valid. blocking the employees' entry to the mall. In
retaliation, FX threw stones at the guards, but
Picket (2016, 2004, 2000, 1992, 1991 BAR) the other striking workers just stood by
watching him. Seven days after the picket, FX
Q: Following a deadlock in collective who had gone absent without leave returned to
bargaining, the AC-AC Labor Union filed a the mall and announced that he had filed a
notice of strike with the Department of Labor complaint for illegal dismissal and unfair labor
and Employment and, thirty (30) days later, practice against SSI.
went on strike and picketed the gates of the
UP-UP Company, paralyzing its operations. SSI learned that FX's group was not
The company is engaged in registered. No strike vote and strike notice
telecommunications, including the supply of were filed prior to the picket. The guards
65 U S T

were told not to allow FX entry in the Q: Fifty percent (50%) of the employees of
company premises as management Grandeur Company went on strike after
considered him effectively terminated. Other negotiations for a collective bargaining
union members were accepted back to work agreement ended in a deadlock. Grandeur
by SSI. Was the dismissal of FX for a valid Company, being a public utility, immediately
cause? Was due process observed? (2004 petitioned the Secretary of Labor and
BAR) Employment to assume Jurisdiction and
certify the case to the NLRC. On the fourth day
A: There is a valid cause for the dismissal of FX, of the strike and before the DOLE Secretary
but due process was not observed. could assume jurisdiction or certify the case
to the NLRC, the strikers communicated in
Peaceful picketing is part of the constitutional writing their offer to return to work.
freedom of speech. The right to free speech, Grandeur Company refused to accept the offer
however, has its limits, and picketing as a of the strikers because it realized that they
concerted activity is subject to the same were not at all capable of paralyzing the
limitations as a strike, particularly as to lawful operations of the company. The strikers
purpose and lawful means. But it does not have accused Grandeur Company of illegal lockout.
to comply with the procedural requirements for Has Grandeur Company committed the act
a lawful strike, like the notice of strike or the charged by refusing to accept the offer of the
strike vote. strikers to return to work? Discuss fully.
(1995 BAR)
However, in the problem given, picketing
became illegal because of unlawful means, as A: There is no law that prohibits strikers to
barricades blocked the employees' entry to the decide not to continue with a strike that they
mill, and violence, ensued when FX threw stones have started. Thus, the company committed an
at the guards. There was thus, valid cause for the illegal lockout in refusing to accept the offer of
dismissal of FX, however, due process was not the strikers to return to work. Under the set of
observed because SSI did not comply with the facts in the question, the Company did not give
twin requirements of notice and hearing. the required notice to lockout, much less did it
observe the necessary waiting period, nor did it
Q: The workers engaged in picketing activity take a needed vote on the lockout. Thus, the
in the course of a strike. lockout is illegal.

a. Will picketing be legal if non- ASSUMPTION OF JURISDICTION
employees of the strike-bound
employer participate in the activity? Nature (2017, 2004, 1998, 1997, 1996, 1994,
1992, 1991 BAR)
A: YES, the picketing is legal even though non- Q: Calabarzon Transportation Company (CTC)
employees join it. Picketing is a form of the and the Calabarzon Workers Union (CWU) are
exercise of freedom of speech. Picketing, parties to a collective bargaining agreement
provided it is held peacefully, is a constitutional (CBA), which is effective until December 31,
right. The disputants in a legal dispute need not 1992. The CBA provides for among others, a
be employer-employee of each other. (De Leon v. bipartite committee composed of CTC and
National Labor Union, 100 Phil. 789 [1957]; Cruz CWU representatives to evaluate all positions
v. Cinema Stage, etc., 101 Phil. 1259 [1957]) in the CTC and determine adjustment of
wages and allowances. The Committee
b. Can picketing activity be curtailed members having failed to agree on the
when illegal acts are committed by the adjustments, the CWU filed a notice of strike.
picketing workers in the course of the Conciliation efforts by the National
activity? (2000 BAR) Conciliation and Mediation Board failed. The
CWU then declared a strike.
A: NO, the picketing activity itself cannot be
curtailed. What can be curtailed are the illegal The Secretary of Labor and Employment
acts being done in the course of the picket. assumed jurisdiction over the dispute and
However, if this is a “national interest" case under after proceedings issued an order (a)
Art. 263(g) [now 278(g)], the strike or work awarding certain monetary benefits to the
stoppage may be stopped by the power of strikers, (b) declaring the strike legal on the
assumption of jurisdiction or certification of the ground that CWU complied with all the
case to the National Labor Relations Commission requirements for a valid strike, and (c)
(Nagkakaisang Mangagawa sa Cuison Hotel v. restraining CTC from taking retaliatory
Libron, 124 SCRA 448 [1983]; Free Telephone actions against the officers and members of
Workers Union v. PLDT, 113 SCRA 662 [1982]) CWU who were responsible for the strike.

BY EMPLOYERS a. As lawyer for CTC what action
should you take?
Lockout
A: As lawyer of CTC, I will first file with the

66
QuAMTO (1987-2019)
Secretary of Labor and Employment a Motion down by the strikers.
for Reconsideration. If this Motion is denied,
then I will file with the Supreme Court a Could the DOLE Secretary intervene, assume
petition for certiorari under Rule 65 of the jurisdiction and issue a TRO (Temporary
Rules of Court. I will assail the issuance by the Restraining Order)? Briefly justify your
Secretary of Labor of his Order, and his refusal answer. (2004 BAR)
to reconsider said Order as a grave abuse of
discretion amounting to lack or excess of A: YES, the Secretary of Labor and Employment
jurisdiction. can assume jurisdiction over the dispute because
ABC could be considered as an industry
b. Was the assumption of the labor dispute indispensable to the national interest since it
by the Secretary of Labor and produces the country’s supply of chlorine for
Employment valid? water treatment.

A: It is valid. Under the Labor Code, (in Art. 263 The assumption of jurisdiction by the Secretary of
[g] [now 278(g)]) the Secretary of Labor has the Labor and Employment has the effect of ending
power to assume jurisdiction over a labor the strike. The strikers will be subject to a return-
dispute causing or likely to cause a strike or to-work order by the Secretary of Labor and
lockout in an industry indispensable to the Employment upon her assumption of jurisdiction
national interest. CTC, as a transportation
Company, is in an industry indispensable to the Effects of Assumption of Jurisdiction (2017,
national interest. 2010, 2008, 2003, 1998, 1997, 1991 BAR)

c. Was the Secretary’s order granting Q: Following a deadlock in collective
monetary benefits, declaring the strike of bargaining, the AC-AC Labor Union filed a
CWU legal and restraining the CTC from notice of strike with the Department of Labor
penalizing CWU members valid? Reasons. and Employment and, thirty (30) days later,
(1992 BAR) went on strike and picketed the gates of the
UP-UP Company, paralyzing its operations.
A: The Secretary's order declaring the strike of The company is engaged in
CWU legal and restraining the CTC from telecommunications, including the supply of
penalizing CWU members on the basis of the cellular phone equipment, with a nationwide
finding of the Secretary that the strike is legal, is network of facilities.
illegal. He is acting in excess of his jurisdiction. It
is a Labor Arbiter, not the Secretary of Labor that In a petition with the DOLE, the company
has the jurisdiction to determine the legality of a questioned the legality of the strike and asked
strike (Art. 217 [now 224], Labor Code; Philippine for compulsory arbitration. The Secretary of
Airlines, Inc. v. Secretary of Labor and the DOLE certified the dispute to the NLRC for
Employment et al., G.R. No. 88210, Jan. 23, 1991) compulsory arbitration and ordered the
but in International Pharmaceuticals v. Secretary company to readmit the workers pending the
of Labor (G.R. No. 92981-83, Jan. 9, 1992), the arbitration. The workers returned and were
Supreme Court held that the Secretary of Labor, readmitted by the company, but five (5)
when he assumes jurisdiction under Art. 263(g) technicians were temporarily reassigned to
[now 278(g)] of the Labor Code, could deal with the warehouse while five (5) others were
all the incidents of the labor dispute including the reinstated on payroll only. The company
issue as to whether or not a strike is legal. justified its acts as an exercise of management
prerogative.
Q: Employees of ABC declared a strike after
filing a Notice of Strike with the DOLE. They a. Was the certification of the dispute for
barricaded company gates and damaged compulsory arbitration proper?
vehicles entering company premises. On the
second day of the strike, ABC filed a petition A: The certification of the dispute for
with the DOLE Secretary to intervene through compulsory arbitration was proper. The dispute
the issuance of an assumption of jurisdiction was causing a strike in an industry
order that the Secretary may issue when a indispensable to the national interest. The
strike or lock-out will adversely affect company was engaged in telecommunication
national interest. including the supply of cellular equipment, with
a nationwide network of facilities. All these
ABC furnished the Secretary with evidence to activities are at present indispensable to the
show that company vehicles had been national interest.
damaged; that electric power had been cut off;
and equipment and materials were damaged b. Were the temporary reassignment and
because electric power was not immediately payroll reinstatement valid? (1991 BAR)
restored. ABC forecast that the country’s
supply of chlorine for water treatment (which A: NO. The temporary re-assignment and payroll
die company produces) would be affected reinstatement are not valid. According to the
adversely if ABC’s operations were closed Labor Code, when the Secretary of Labor assumes
67 U S T

Jurisdiction, such assumption has the effect of enjoin the hunger “strike”. What answer will
automatically enjoining the strike that is taking you give if you were the Secretary of Labor?
place and all striking employees shall (2008 BAR)
immediately return to work as the employer shall
immediately resume operations and readmit all A: I will deny the letter-request of SDS because
workers under the same terms and conditions its business is not indispensable to the national
prevailing before the strikes. interest. Although the Secretary of Labor has a
wide latitude of discretion in deciding whether
Q: In a labor dispute, the Secretary of Labor or not to assume jurisdiction over a labor
issued an "Assumption Order" Give the legal dispute or certify the same to the NLRC for
implications of such an order. (2017, 2003 compulsory arbitration, SDS’s business is clearly
BAR) not one which is indispensable to the national
interest. Moreover, the grounds relied upon by
A: Under Art. 263(g) [now 278(g)] of the Labor SDS, to wit: “eyesore and disruptive of its
Code, such assumption shall have the effect of business”, betrays the weakness of its case.
automatically enjoining the intended or
impending strike or lockout as specified in the Q: Several employees and members of Union
assumption order. If one had already taken A were terminated by Western Phone Co. on
place at the time of assumption, all striking or the ground of redundancy. After complying
lockout employees shall immediately return to with the necessary requirements, the Union
work and the employer shall immediately resume staged a strike and picketed the premises of
operations and re-admit all workers under the the company. The management then filed a
same terms and conditions prevailing before the petition for the Secretary of Labor and
strike or lockout. Employment to assume jurisdiction over the
dispute. Without the benefit of a hearing, the
The Secretary of Labor and Employment may Secretary issued an Order to assume
seek the assistance of law enforcement agencies jurisdiction and for the parties to revert to
to ensure compliance with this provision as well the status quo ante litem.
as with such orders as he may issue to enforce
the same. The mere issuance of an assumption a. Was the order to assume jurisdiction
order by the Secretary of Labor automatically legal? Explain.
carries with it a return-to-work order, even if the
directive to return to work is not expressly stated A: YES. The Secretary of Labor and Employment
in the assumption order. has plenary power to assume jurisdiction under
Art. 263(g) [now 278(g)] of the Labor Code.
Those who violate the foregoing shall be subject When in his opinion, there exists a labor dispute
to disciplinary action or even criminal causing or likely to cause a strike or lockout in
prosecution. Under Art. 264 [now 279] of the an industry indispensable to the national
Labor Code, no strike or lockout shall be declared interest, the Secretary of Labor may assume
after the assumption of jurisdiction by the jurisdiction over the dispute and decide it or
Secretary. certify it to the NLRC for compulsory arbitration.
(Art. 263[g] [now 278(g)], Labor Code)
Q: Savoy Department Store (SDS) adopted a
policy of hiring salesladies on five-month This extraordinary authority given to the
cycles. At the end of a saleslady’s five-month Secretary of Labor is aimed at arriving at a
term, another person is hired as replacement. peaceful and speedy solution to labor disputes,
Salesladies attend to store customers, wear without jeopardizing national interests. (Steel
SDS uniforms, report at specified hours, and Corporation v. SCP Employees Union, 551 SCRA
are subject to SDS workplace rules and 594 [2008])
regulations. Those who refuse the 5-month
employment contract are not hired. Such assumption shall have the effect of
automatically enjoining an impending strike or
The day after the expiration of her 5-month lockout, or an order directing immediate return
engagement, Lina wore her SDS white and to work and resume operations, if a strike
blue uniform and reported for work but was already took place, and for the employer to re-
denied entry into the store premises. admit all employees under the same terms and
Agitated, she went on a hunger strike and conditions prevailing before the strike or
stationed herself in front of one of the gates lockout. (Art. 263[g] [now 278(g)], Labor Code;
of SDS. Soon thereafter, other employees Sec. 15, Rule XXII, D.O. No. 40-G-03)
whose 5-month term had also elapsed joined
Lina’s hunger strike. b. Under the same set of facts, the
Secretary issued an Order directing all
The owner of SDS considered the hunger striking workers to return to work
strike staged by Lina, et al., an eyesore and within 24 hours, except those who
disruptive of SDS’ business. He wrote the were terminated due to redundancy.
Secretary of Labor a letter asking him to Was the Order legal? Explain. (2010
assume jurisdiction over the dispute and BAR)

68
QuAMTO (1987-2019)

A: NO. The Secretary of Labor’s order will be Under the Social Security Act of 2018, the
inconsistent with the established policy of the coverage of SSS is:
State of enjoining the parties from performing
acts that undermine the underlying principles 1. Compulsory Coverage
embodied in Art. 263(g) [now 278(g)] of the
Labor Code. a. All Ees not over sixty (60) years of age
and their Ers;
In this case, excepting the employees terminated b. Domestic helpers whose income is not
due to redundancy from those who are required less than P1,000/month and not over
to return-to-work, which was the very labor sixty (60) years of age and their Ers;
dispute that sparked the union to strike, the c. All self-employed professionals;
Secretary of Labor comes short of his duty under d. Partners and single proprietors of
Art. 263(g) [now 278(g)] to maintain status quo business;
or the terms and conditions prevailing before e. Actors and actresses, directors,
the strike. In fact, the Secretary could be accused scriptwriters and news correspondents
of disposing of the parties’ labor dispute without who do not fall within the definition of
the benefit of a hearing, in clear derogation of the term “employee” in Sec. 8(d) of this
due process of law. Act;
f. Professional athletes, coaches, trainers,
and jockeys;
SOCIAL WELFARE LEGISLATION g. Individual farmers and fishermen;
h. All sea-based and land-based OFWs, as
defined under R.A. 8042, as amended,
Q: State the respective coverage of: provided they are not over sixty (60)
years of age.
a. Social Security Law
b. Revised Government Service Insurance 2. Voluntary Coverage
Act
c. Employees Compensation Act. (1997 a. Spouses who devote full time to
BAR) managing the household and family
affairs;
A:
a. Social Security Law: XPN: If they are also engaged in other
vocation or employment which is subject
Coverage of SSS includes (Sec. 9 and 9-A, Social to mandatory coverage
Security Act of 1997):
b. An OFW upon the termination of his/her
a. Employees not over sixty years of age and employment overseas;
their employers; c. A covered employee who was separated
b. Domestic helpers, provided their monthly from employment who continues to pay
income shall not be less than P1,000; his/her contributions;
c. Self-employed persons as provided by law d. Self-employed who realizes no income
and as determined by the Commission; for a certain month; and
d. Spouse that is fully devoted to management e. Filipino permanent migrants, including
of household and family affairs, on Filipino immigrants, permanent
voluntary basis; and residents, and naturalized citizens of
e. Filipinos recruited by foreign-based their host countries.
employers abroad, on voluntary basis.
3. By agreement
NOTE: Under R.A. 10361 (Kasambahay Law),
domestic helpers who have rendered at least 1 a. Any foreign government, international
month of service regardless of the amount of organization or their wholly owned
their salary shall be covered by the SSS. instrumentality employing workers in
Premium payments or contributions shall be the Philippines or employing Filipinos
shouldered by the employer. However, if the outside of the Philippines.
domestic worker is receiving a wage of Five
thousand pesos (P5,000.00) and above per XPN: Those already covered by
month, the domestic worker shall pay the their respective civil service
proportionate share in the premium payments retirement systems.
or contributions, as provided by law. (Sec. 30,
R.A. 10361) b. Revised GSIS Act:

NOTE: R.A. 11199, otherwise known as the Membership in the Government Service
“Social Security Act of 2018” which took effect on Insurance System (Art. 3, R.A. 8291) shall be
March 5, 2019, repealed R.A. 1161, as amended compulsory for all employees receiving
by R.A. 8282 (Social Security Act of 1997). compensation who have not reached the
69 U S T

compulsory retirement age, irrespective of benefits under the SSS Act. Is she entitled to
employment status, except members of the AFP, claim? (2015, 2010, 2007, 2000 BAR)
PNP, and contractuals that have no employer-
employee relationship with the agencies that they A: YES. Provided, Luisa has reported to her
serve. Employees included are any person employer her pregnancy and date of expected
receiving compensation while in the service of delivery and paid at least three-monthly
employers, which includes the national contributions during the 12-month period
government, its political subdivisions, branches, immediately preceding her miscarriage then she
agencies, or instrumentalities including GOCCs is entitled to maternity benefits up to four
and financial institutions with original charters, deliveries. As to the fact that she got pregnant
constitutional commissions, and judiciary, outside wedlock, as in her past three
whether by election or appointment irrespective pregnancies, this will not bar her claim because
of status of appointment, including barangay and the SSS is non-discriminatory.
sanggunian officials. (Sec. 2 [c] and [d]; Sec. 3, GSIS
Act of 1997) NOTE: The law merely says, “a female
employee”. It does not qualify the term to mean
c. Employees Compensation Act: legally married woman. (Sec. 14-A, Social
Security Act of 1997 [now Sec. 14-A, R.A. 11199])
Coverage in the State Insurance Fund (Art. 168
[now 174], Labor Code) shall be compulsory upon NOTE: Under the Expanded Maternity Leave
all employers and their employees not over sixty Law, which took effect on March 11, 2019, all
(60) years of age; Provided, that an employee who covered female workers in government and the
is over (60) years of age and paying contributions private sector, including those in the informal
to qualify for the retirement or life insurance economy, regardless of civil status or legitimacy
benefit administered by the System shall be of the child, shall be granted maternity leave
subject to compulsory coverage. The employer or with full pay in every instance of pregnancy,
employee may either belong to the public or miscarriage, or emergency termination of
private sector as covered by their own respective pregnancy, regardless of frequency. (Sec. 3, R.A.
systems. (Art. 168 [now 174], Labor Code) 11210)

Q: The owners of FALCON Factory, a company
SSS LAW engaged in the assembling of automotive
components, decided to have their building
NOTE: R.A. 11199, otherwise known as the renovated. Fifty (50) persons, composed of
“Social Security Act of 2018” which took effect engineers, architects and other construction
on March 5, 2019, repealed R.A. 1161, as workers, were hired by the company for this
amended by R.A. 8282 (Social Security Act of purpose. The work was estimated to be
1997). Thus, the given suggested answers to the completed in three (3) years. The employees
succeeding questions may no longer be correct contended that since the work would be
and/or applicable under the new law. completed after more than one (1) year, they
should be subject to compulsory coverage
Coverage and Exclusions (2015, 2010, 2009, under the Social Security Law. Do you agree
2007, 2004, 2000, 1997, 1995, 1993, 1989 with their contention? Explain your answer
BAR) fully. (2002 BAR)

Q: State the respective coverage of (a) the A: NO. Under Sec. 8 (j) of R.A. 1161, as amended,
Social Security Law; x x x (1997 BAR) employment of purely casual and not for the
purpose of the occupation or business of the
A: Coverage of SSS (Sec. 9, R.A. 8282) shall be employer are excepted from compulsory
compulsory upon all employees not over sixty coverage. An employment is purely casual if it is
years of age and their employers. Filipinos not for the purpose of occupation or business of
recruited in the Philippines by foreign-based the employer.
employers for employment abroad may be
covered by the SSS on a voluntary basis. In the problem given, Falcon Factory is a
Coverage in the SSS shall also be compulsory company engaged in the assembling of
upon all self-employed persons earning P1,800 automotive components.
or more per annum.
The fifty (50) persons (engineers, architects and
NOTE: Refer to the coverage of the Social construction workers) were hired by Falcon
Security Act of 2018 in the preceding question. Factory to renovate its building. The work to be
performed by these fifty (50) people is not in
Q: Luisa is an unwed mother with 3 children connection with the purpose of the business of
from different fathers. In 2004, she became a the factory. Hence, the employ of these fifty (50)
member of the Social Security System (SSS). persons is purely casual. They are, therefore,
That same year, she suffered a miscarriage of exempted from the compulsory coverage of the
a baby out of wedlock from the father of her SSS law.
third child. She wants to claim maternity

70
QuAMTO (1987-2019)
I agree with the contention that the employees employer in which either or both mental and
hired by the owners of FALCON factory as physical efforts are used and who receives
construction workers in the renovation of its compensation for such service, where there is an
building should be under the compulsory employer-employee relationship.” (now Sec. 8[d],
coverage of the Social Security Law. It is true that R.A. 11199)
in connection with FALCON Factory, which is
engaged in the assembling of automotive Dependents, Beneficiaries (2019, 2017, 2008,
components, the construction workers may be 1992, 1990, 1987 BAR)
considered casual employees because their
employment is not for the purpose of occupation Q: A is an employee of B who in turn
of business of FALCON Factory. As such, In registered A with the Social Security System
accordance with Sec. 8 (j) of the Social Security as required by law. Unfortunately, B did not
Law, they are excepted form the compulsory remit A’s contributions to the System. In the
coverage of the Social Security System. course of his employment, A met a serious
accident requiring his hospitalization.
But they could also be considered project
employees of FALCON Factory and as such could a. Suppose he decides to retire from the firm
be under the compulsory coverage of the SSS, because of the accident, is he entitled to
applying Art. 4 of the Labor Code that provides recover retirement benefits under the
that all doubts in the implementation and System? Explain your answer.
interpretation of the provisions of Labor Law
shall be resolved in favor of labor. The employees A: A is entitled to receive benefits from the Social
here therefore, should be considered as under the Security System even if his employer did not
compulsory coverage of the SSS. remit A’s contribution to the System because the
Social Security Law provides in Sec. 22(b) that
NOTE: Under the Social Security Act of 2018 (R.A. the failure or refusal of the employer to pay or
11199), the relevant provision is likewise Sec. 8(j) remit contributions shall not prejudice the right
thereof. of the covered employee to the benefits of the
coverage.
Q: Tito Paciencioso is an employee of a
foundry shop in Malabon, Metro Manila. He is But A is not entitled to retirement benefits in the
barely able to make ends meet with his salary form of a monthly pension unless at the time of
of P4,000.00 a month. One day, he asked his the accident, he has reached the age of sixty years
employer to stop deducting from his salary and has paid at least 120 monthly contributions
his SSS monthly contribution, reasoning out prior to the semester of the accident. (Sec. 12-B,
that he is waiving his social security coverage. Social Security Law [now Sec. 12-B, R.A. 11199])
If you were Tito’s employer, would you grant
his request? Why? (2008 BAR) b. Suppose that he died because of the
accident, are his heirs entitled to death
A: NO. As Tito’s employer, I am bound by law to benefits under the System? Explain your
remit to SSS Tito’s monthly contribution. The SSS answer. (1990 BAR)
law covers any person natural, juridical, domestic
or foreign, carrying in the Philippines trade, A: The heirs are not entitled, but his primary
business industry, undertaking or activity and beneficiaries or in the absence of primary
uses the services of another under his order as beneficiaries, his secondary beneficiaries are
regards employment. entitled.

The compulsory coverage of employers and Q: X is a member of the Social Security System
employees under the SSS law is actually a legal (SSS). In 2015, he died without any spouse or
imposition on the employers and employees, children. Prior to the semester of his death, X
designed to provide social security to had paid 36 monthly contributions. His
workingmen. Membership in SSS is in compliance mother, M, who had previously been receiving
with a lawful exercise of the police power of the regular support from X, filed a claim for the
State, and may not be Waived by agreement of latter's death benefits.
any party. (Phil. Blooming Mills, Co., Inc. v. SSS, 17
SCRA 1077 [1966]) a. Is M entitled to claim death benefits from
the SSS? Explain.
Q: Can a member of a cooperative be deemed
an employee for purposes of compulsory A: YES. R.A. 8282, otherwise known as the SSS
coverage under the Social Security Act? Law, states that if a member has no primary
Explain. (2009 BAR) beneficiaries, his secondary beneficiaries shall be
entitled to a lump sum benefit equivalent to
A: YES, an employee of a cooperative, not over thirty-six (36) times the monthly pension. Thus,
sixty (60) years of age is, under the SSS Law, the mother of X, as a secondary beneficiary, is
subject to compulsory coverage. The Sec. 8 (d) entitled to a lump sum death benefits for X, who
SSS Law defines an employee as - “Sec. 8 (d) — has made at least 36 monthly contributions. (Sec.
any person who performs services for an 13 in relation to Sec. 8[k], R.A. 8282)
71 U S T

b. Is Gene entitled to the funeral aid for the
NOTE: Under the Social Security Act of 2018 (R.A. death of his widowed mother? Explain
11199), the relevant provision is likewise Sec. 13 your answer. (2017 BAR)
in relation to Sec. 8(k) thereof.
A: YES, Gene is entitled to the funeral aid for the
b. Assuming that X got married to his death of his widowed mother.
girlfriend a few days before his death, is M
entitled to claim death benefits from the In Philippine Journalists, Inc. v. Journal Employees
SSS? Explain. (2019 BAR) Union (G.R. No. 192601, June 3, 2013), the
Supreme Court held that term “legal dependent”
A: YES. The presumption that the surviving as used CBA should be construed as similar to the
spouse whose marriage to SSS members were meaning that contemporaneous social
contracted after the latter’s retirement entered legislations have set if the CBA is silent about it.
into the marriage for the purpose of securing
survivor’s benefits is not necessarily or Here, the CBA is silent about the coverage of the
universally true. (Dycaico v. Social Security term “legal dependent.” Hence, the definition of
System, G.R. No. 161357, Nov. 30, 2005) legal dependent in the Social Security Law, which
includes a legitimate parent dependent on the
Benefits (2010, 2007, 2005, 200 BAR) employee for support, should be used.

Q: Ms. Sara Mira is an unwed mother with GSIS LAW
three children from three different fathers. In
1999, she became a member of the Social Coverage and Exclusions (2015, 2009, 2005,
Security System. In August 2000, she suffered 2004, 1999 BAR)
a miscarriage, also out of wedlock, and again
by a different father. Can Ms. Mira claim Q: Odeck, a policeman, was on leave for a
maternity benefits under the Social Security month. While resting in their house, he heard
Act of 1997? Reason. (2000 BAR) two of his neighbors fighting with each other.
Odeck rushed to the scene intending to pacify
A: YES, she can claim maternity benefits. the protagonists. However, he was shot to
Entitlement thereto is not dependent on the death by one of the protagonists.
claimant’s being legally married. (Sec. 14-A, Social
Security Act of 1997) Zhop, a housemaid, was Odeck's surviving
spouse whom he had abandoned for another
Q: Gene is a married regular employee of woman years back. When she learned of
Matibay Corporation. The employees and Odeck's death, Zhop filed a claim with the
Matibay Corporation had an existing CBA that GSIS for death benefits. However, her claim
provided for funeral or bereavement aid of was denied because: (a) when Odeck was
P15,000.00 in case of the death of a legal killed, he was on leave; and (b) she was not
dependent of a regular employee. His the dependent spouse of Odeck when he
widowed mother, who had been living with died. Resolve with reasons whether GSIS is
him and his family for many years, died; correct in denying the claim. (2005 BAR)
hence, he claimed the funeral aid. Matibay
Corporation denied the claim on the basis that A: YES, because under the law, a dependent is
she had not been his legal dependent as the one who is a legitimate spouse living with the
term legal dependent was defined by the employee (Art. 167 [i] [now 173(i)], Labor Code).
Social Security Law. In the problem given, Zhop had been abandoned
by Odeck who was then living already with
a. Who may be the legal dependents of Gene another woman at the time of his death.
under the Social Security Law? Moreover, Odeck was on leave when he was
killed. The 24-hour duty rule does not apply
A: The legal dependents of Gene under the Social when the policeman is on vacation leave
Security Law are as follows: (Employees’ Compensation Commission v. CA, G.R.
No. 121545, Nov. 14, 1996). Taking together
1. Legitimate, legitimated or legally adopted jurisprudence and the pertinent guidelines of the
child, who is unmarried, not gainfully ECC with respect to claim for death benefits,
employed, and not over 21 years or age, or namely:
over 21 years of age but congenitally
incapacitated and incapable of self- a. That the employee must be at the place
support; where his work requires him to be;
b. That the employee must have been
2. The legitimate spouse dependent for performing his official functions; and
support from the employee; and c. That the injury is sustained elsewhere,
the employee must have been
3. The legitimate parents wholly dependent executing an order for the employer.
on the employee for support.
It is not difficult to understand then why Zhop’s

72
QuAMTO (1987-2019)
claim was denied by the GSIS (Tancinco v. GSIS, Pepay Palaypay (Pitoy Mondero's common-
G.R. No. 132916, Nov. 16, 2001). In the present law wife for more than twenty years) and a
case, Odeck was resting at his house when the Pitoy Mordero Jr. (his only son) filed a claim
incident happened; thus, he was not at a place for death benefits with the Government
where his work requires him to be. Although at Service Insurance System (GSIS), which was
the time of his death Odeck was performing a denied on the ground that Pitoy Mordero's
police function, it cannot be said that his death death did not arise out of and in the course of
occurred elsewhere other than the place where employment and therefore not compensable
he was supposed to be because he was executing because the accident occurred in his house
an order for his employer. and not in the school premises.

Q: Luis, a PNP officer, was off duty and resting a. Is Pepay Palaypay entitled to file a claim for
at home when he heard a scuffle outside his death benefits with the GSIS? Why?
house. He saw two of his neighbors fighting
and he rushed out to pacify them. One of the A: The beneficiaries of a member of the GSIS are
neighbors shot Luis by mistake, which entitled to the benefits arising from the death of
resulted in Luis's death. Marian, Luis's widow, said member. Death benefits are called
filed a claim with the GSIS seeking death survivorship benefits under the GSIS Law. Pepay
benefits. The GSIS denied the claim on the Palaypay is not entitled to receive survivorship
ground that the death of Luis was not service- benefits since she is not a beneficiary being a
related as he was off duty when the incident common-law wife and not a legal dependent
happened. Is the GSIS correct? (2015 BAR) spouse. (Sec. 2[g], GSIS Act of 1997)

A: No. The GSIS is not correct. Luis, a policeman, b. Is the cause of death of Pitoy Mordero
just like a soldier, is covered by the 24-Hour Duty (cardiac arrest due to accidental
Rule. He is deemed on round-the clock-duty electrocution in his house) compensable?
unless on official leave, in which case his death Why? (1999 BAR)
outside performance of official peace-keeping
mission will bar death claim. In this case, Luis A: YES. To be compensable under the GSIS Law, the
was not on official leave and he died in the death need not be work connected.
performance of a peace-keeping mission.
Therefore, his death is compensable. NOTE: As long as the decedent-member was (a) in
service; (b) rendered 3 years of service and at
Dependents, Beneficiaries (2018, 1999, 1997, least paid 36 monthly contributions within the
1991 BAR) five-year period immediately preceding his
death; or (c) paid a total of at least 180 monthly
Q: Pitoy Mondero was employed as a public contributions prior to his death.
school teacher at the Marinduque High
School from July 1, 1983 until his untimely Q: Sgt. Nemesis was a detachment non-
demise on May 27, 1997. commissioned officer of the Armed Forces of
the Philippines in Nueva Ecija. He and some
On April 27, 1997, a memorandum was other members of his detachment sought
issued by the school principal, which reads: permission from their Company Commander
"You are hereby designated to prepare the for an overnight pass to Nueva Vizcaya to
MODEL DAM project, which will be the settle some important matters. The
official entry of our school in the forthcoming Company Commander orally approved their
Division Search for Outstanding Improvised request and allowed them to carry their
Secondary Science Equipment for Teachers firearms as the place they were going to was
to be held in classified as a "critical place."

Manila on June 4, 1997. You are hereby They arrived at the place past midnight; and
instructed to complete this MODEL DAM on or as they were alighting from a tricycle, one of
before the scheduled date of the contest." his companions accidentally dropped his
Mondero complied with his superior's rifle, which fired a single shot, and in the
instruction and constructed an improvised process hit Sgt. Nemesis fatally. The shooting
electric microdam, which he took home to was purely accidental.
enable him to finish it before the deadline.
At the time of his death, he was still legally
On May 27, 1997, while working on the married to Nelda, but had been separated de
MODEL DAM Project in his house, he came to facto from her for 17 years. For the last 15
contact with a live wire and was electrocuted. years of his life, he was living in with Narda,
He was immediately brought to a clinic for with whom he has two minor children. Since
emergency treatment but was pronounced Narda works as a kasambahay, the two
dead on arrival. The death certificate showed children lived with their grandparents, who
that he died of cardiac arrest due to provided their daily support. Sgt. Nemesis
accidental electrocution. and Narda only sent money to them every
year to pay for their school tuition.
73 U S T

Nelda and Narda, both for themselves and means of living as determined by his position in
the latter, also on behalf of her minor life. One need not be in the deceased’s household
children, separately filed claims for in order to be a dependent. (Malate Taxicab v.
compensation as a result of the death of Sgt. Del Villar G.R. No. L-7489, Feb. 29, 1956)
Nemesis. The line of Duty Board of the AFP
declared Sgt. Nemesis' death to have been Benefits
"in line of duty", and recommended that all
benefits due to Sgt. Nemesis be given to his Q: Atty. CLM, a dedicated and efficient public
dependents. However, the claims were official, was the top executive of a
denied by GSIS because Sgt. Nemesis was not government owned and controlled
in his workplace nor performing his duty as corporation (GOCC). While inspecting an
a soldier of the Philippine Army when he ongoing project in a remote village in
died. Mindanao, she suffered a stroke and since
then had been confined to a wheelchair. At
a. Are the dependents of Sgt. Nemesis the time she stopped working because of her
entitled to compensation as a result of illness in line of duty, Atty. CLM was only
his death? sixty years old but she had been an active
member of the GSIS for thirty years without
A: The death of Sgt. Nemesis arose out of and in any break in her service record. What
the course of his employment as a soldier on benefits could she claim from the GSIS? Cite
active duty in the AFP and hence, compensable. at least five benefits. (2004 BAR)
The concept of a “workplace” cannot always be
literally applied to a soldier on active duty. Sgt. A:
Nemesis had permission to go to Nueva Vizcaya 1. Separation Benefit (Secs. 11-12, GSIS Act
and he and his companions had permit to carry of 1997)
their firearms which they could use to defend 2. Retirement Benefits (Secs. 13-14, GSIS
themselves when attacked. A soldier on active Act of 1997)
duty is really on duty 24 hours a day since he 3. Permanent Disability Benefits (Secs. 15-
can be called upon anytime by his superiors, 17, GSIS Act of 1997)
except when he is on vacation leave status, 4. Temporary Disability Benefits (Secs. 18-
which Sgt. Nemesis was not, at the time of his 19, GSIS Act of 1997)
death. (Hinoguin v. ECC, G.R. No. 8430, April 17, 5. Survivorship Benefits (Secs. 20-22, GSIS
1989). Act of 1997)
6. Funeral Benefits (Sec. 23, GSIS Act of
b. As between Nelda and Narda, who 1997)
should be entitled to the benefits? (2018 7. Life Insurance Benefits (Secs. 24-27, GSIS
BAR) Act of 1997)

A: To be considered as a beneficiary, the spouse PORTABILITY LAW
must be the legal spouse and living with the (2014, 2005 BAR)
employee at the time of his death.
Q: How are the "portability" provisions of
Nelda, as the surviving spouse who has been Republic Act No. 7699 beneficial or
separated de facto from the deceased employee, advantageous to SSS and GSIS members in
may still however be entitled if the separation terms of their creditable employment
was due to the covered employee’s abandonment services in the private sector or the
of the spouse without valid reason, or for other government, as the case may be, for purposes
justifiable reasons. of death, disability or retirement? Please
explain your answer briefly. (2005 BAR)
Narda, not being a legitimate spouse, is not
entitled to the benefits; however, the ECC may act A: Portability provisions of R.A. 7699 shall
as referee and arbitrator between two (2) benefit a covered worker who transfers
claimants to help each other reach a mutually employment from one sector to another or is
acceptable compromise settlement of allocating employed in both sectors, whose creditable
the compensation among themselves and their services or contributions in both systems
dependent children. (Samar Mining Co. Inc. v. credited to his service or contribution record in
WCC, G.R. No. L-29938-39, March 31, 1971) each of the system and shall be totalized for
purposes of old age, disability, survivorship and
c. Are the minor children entitled to the other benefits (Sec. 3, R.A. 7699).
benefits considering that they were
not fully dependent on Sgt. Nemesis for In the event the employees transfer from the
support? private sector to the public sector, or vice versa,
their creditable employment services and
A: Being a dependent does not mean absolute contributions are carried over and transferred
dependency for the necessities of life, but rather, as well.
that the claimant looked up to and relied on the
contribution of the covered employee for his Q: Luisito has been working with Lima Land

74
QuAMTO (1987-2019)
for 20 years. Wanting to work in the public twin requisites of compensability. However,
sector, Luisito applied with and was offered a despite his knowledge of his medical condition,
job at Livecor. Before accepting the offer, he he failed to report to his manning agent within
wanted to consult you whether the payments three (3) days from his arrival as required by
that he and Lima Land had made to the Social Sec. 20-B(3) of the POEA-SEC. Since he already
Security System (SSS) can be transferred or felt the manifestations of TB before his sign-off,
credited to the Government Service Insurance he should have submitted to post-employment
System (GSIS). What would you advice? (2014 medical examination (Jebsens Maritime Inc. v.
BAR) Enrique Undag, G.R. No. 191491, Dec. 14, 2011).
The effect of his omission is forfeiture by him of
A: YES. Under R.A. 7699, otherwise known as the disability benefits (Coastal Safeway Marine
Portability Law, one may combine his years of Services, Inc. v. Elmer Esguerra, G.R. No. 185352,
service in the private sector represented by his Aug. 10, 2011). In effect, the 120-day rule has no
contributions to the Social Security System (SSS) application at all.
with his government service and contributions to
the GSIS. The contributions shall be totalized for Q: Rosa was granted vacation leave by her
purposes of old-age, disability, survivorship and employer to spend three weeks in Africa with
other benefits in case the covered member does her family. Prior to her departure, the General
not qualify for such benefits in either or both Manager of the company requested her to
Systems without totalization. visit the plant of a client of the company in
Zimbabwe in order to derive best
EMPLOYEE’S COMPENSATION – manufacturing practices useful to the
COVERAGE AND WHEN COMPENSABLE company. She accepted the request because
(2018, 2017, 2015 BAR) the errand would be important to the
company and Zimbabwe was anyway in her
Q: Victor was hired by a local manning agency itinerary.
as a seafarer cook on board a luxury vessel for
an eight-month cruise. While on board, It appears that she contracted a serious
Victor complained of chronic coughing, disease during the trip. Upon her return, she
intermittent fever, and joint pains. He was filed a claim for compensation, insisting that
advised by the ship's doctor to take complete she had contracted the disease while serving
bed rest but was not given any other the interest of her employer.
medication. His condition persisted but the
degree varied from day to day. At the end of Under the Labor Code, the sickness or death of
the cruise, Victor went home to Iloilo and an employee, to be compensable, must have
there had himself examined. The resulted from an illness either definitely
examination revealed that he had accepted as an occupational disease by the
tuberculosis. Employees’ Compensation Commission, or
caused by employment subject to proof that
a. Victor sued for medical the risk of contracting the same is increased
reimbursement, damages and by working conditions.
attorney's fees, claiming that
tuberculosis was a compensable Is the serious disease Rosa contracted
illness. Do you agree with Victor? during her trip to Africa compensable?
Why or why not? Explain your answer. (2017 BAR)

A: TB is listed under Sec. 32-A of the POEA-SEC A: NO, the serious disease Rosa contracted
as a work-related disease. It was also either during her trip to Africa is not compensable. For
contracted or aggravated during the effectivity an occupational disease to be compensable, it
of Victor’s contract. Having shown its must be an illness accepted as occupational
manifestations on board, Victor should have disease by the Employees’ Compensation
been medically repatriated for further Commission or otherwise shown that the risk of
examination and treatment in the Philippines. contracting the disease is increased by the
This obligation was entirely omitted in bad working condition. Here, Rosa failed to present
faith by the company when it waited for his proof that there is increased risk of contracting
contract to expire on him before signing him the disease because of the General Manager’s
off. On this basis, Victor is entitled to medical request for her to visit a client’s plant. Hence,
reimbursement, damages and attorney’s fees. Rosa’s serious disease is not compensable.

b. Due to his prolonged illness, Victor ALTERNATIVE ANSWER:
was unable to work for more than 120
days. Will this entitle him to claim YES, although Rosa’s leave of absence was
total permanent disability approved, she was merely on a partial vacation
benefits? (2015 BAR) due to the business assignment that her
employer gave her to visit the plant of a client in
A: NO. Victor’s TB is work-related and it Zimbabwe to derive best manufacturing
developed on board, thereby satisfying the practices useful to the company; thus, she had
75 U S T

to go and observe said activity beneficial to her proved futile so the unresolved issues were
employer in the performance of her assigned referred to an Arbiter who rendered a
task. As she contracted the disease during her decision on March 15, 1992 retroactive to
trip, the same must be construed as work- December 14, 1990. Is the Arbiter's decision
related. providing for retroactivity tenable or not?
Why? (2001 BAR)

A: The referral of the unresolved issues of the
JURISDICTION AND REMEDIES collective bargaining negotiations to an Arbiter is
not within the jurisdiction of the Arbiter. But
assuming that the unresolved issues in the
LABOR ARBITER collective bargaining negotiations were properly
referred to the Arbiter pursuant to the provision
Jurisdiction (2017, 2015, 2014, 2008, 2001, of the Labor Code (Art. 262 [now 275]) that states
1995, 1991, 1990 BAR) that a Voluntary Arbitrator may hear and decide
any labor dispute, including bargaining
Q: Lincoln was in the business of trading deadlocks, the Arbiter's decision providing for
broadcast equipment used by television and retroactivity is tenable. Exercising his
radio networks. He employed Lionel as his compulsory arbitration power, the Arbiter could
agent. Subsequently, Lincoln set up Liberty decide the issue of retroactivity in any way which
Communications to formally engage in the is not contrary to law, morals, good customs,
same business. He requested Lionel to be public order or public policy.
one of the incorporators and assigned to
him 100 Liberty shares. Lionel was also But in the case Manila Electric Co v. Secretary of
given the title Assistant Vice-President for Labor Leonardo Quisumbing (G.R. No. 127598,
Sales and Head of Technical Coordination. Feb. 22, 2000), the Supreme Court said that an
arbitral award shall retroact to the first day after
After several months, there were allegations the six-month period following the expiration of
that Lionel was engaged in “under the table the last day of the CBA that was being re-
dealings” and received “confidential negotiated.
commissions” from Liberty’s clients and
suppliers. He was, therefore, charged with Q: Mario comes from a family of coffee bean
serious misconduct and willful breach of growers. Deciding to incorporate his
trust, and was given 48 hours to present his fledgling coffee venture, he invites his best
explanation on the charges. friend, Carlo, to join him. Carlo is hesitant
because he does not have money to invest
Lionel was unable to comply with the 48- but Mario suggests a scheme where Carlo can
hour deadline and was subsequently barred be the Chief Marketing Agent of the company,
from entering company premises. Lionel earning a salary and commissions. Carlo
then filed a complaint with the Labor Arbiter agrees and the venture is formed. After one
claiming constructive dismissal. Among year, the business is so successful that they
others, the company sought the dismissal of were able to declare dividends. Mario is so
the complaint alleging that the case involved happy with Carlo's work that he assigns 100
an intra-corporate controversy which was shares of stock to Carlo as part of the latter's
within the jurisdiction of the Regional Trial bonus.
Court (RTC). If you were the Labor Arbiter
assigned to the case, how would you rule on Much later on, it is discovered that Carlo had
the company’s motion to dismiss? (2014 engaged in unethical conduct which caused
BAR) embarrassment to the company. Mario is
forced to terminate Carlo but he does so
A: I will deny the motion to dismiss. "Corporate without giving Carlo the opportunity to
officers" in the context of Presidential Decree No. explain.
902-A are those officers of the corporation who
are given that character by the Corporation Code Carlo filed a case against Mario and the
or by the corporation's by-laws. Sec. 25 of the company for illegal dismissal. Mario objected
Corporation Code enumerates three specific on the ground that the Labor Arbiter had no
officers that in law are considered as corporate jurisdiction over the case as it would
officers – the president, secretary and the properly be considered as an intracorporate
treasurer. Lincoln is not one of them. There is controversy cognizable by the RTC. Further,
likewise no showing that his position as Assistant Mario claimed that because Carlo's dismissal
Vice-President is a corporate officer in the was a corporate act, he cannot be held
company's by-laws. The Labor Arbiter therefore, personally liable.
has jurisdiction over the case. (Art. 217 [now 224]
[a] [2], Labor Code) a. As the Labor Arbiter assigned to this
case, how would you resolve the
Q: Company A and Union B had a 3-year CBA jurisdiction question.
that expired on June 12, 1990. Negotiations

76
QuAMTO (1987-2019)
A: The Labor Arbiter has jurisdiction over Marcel countered that he had only been
Carlo’s illegal dismissal complaint as he was removed as Vice President for Finance and
hired by Mario on a “salary and commission” Administration, not as a member of the Board
basis. In Grepalife v. Judico (G.R. No. 73887, Dec. of Directors. He also argued that his position
21, 1989) it was held that a worker who is paid was not listed as among the corporate offices
on a salary plus commission basis is an in Mercedes Corporation's by-laws. Is the
employee. While regular courts have jurisdiction argument of Marcel correct? Explain your
over Mario’s corporate act of severing ties with answer. (2017 BAR)
Carlo, the Labor Arbiter, pursuant to Art. 217
(a)(2) [now 224(a)(2)] of the Labor Code, has A: YES, the argument of Marcel is correct. The
jurisdiction over Carlo’s illegal dismissal term “Corporate officers” in the context of P.D.
complaint. No. 902-A are these officers of the corporation
who are given that character by the Corporation
ALTERNATIVE ANSWER: Code or by the corporation’s by-laws. Sec. 25 of
the Corporation Code
Carlo is party to a joint venture. Hence, he is not
related to Mario as an employee. As a business enumerates three specific officers that in law are
organization, the affairs of that joint- venture are considered as corporate officers – the president,
not governed by Labor Law, except in relation to secretary and the treasurer. Marcel is not one of
its employees. Any issue arising from that affair, them. More, his position was not listed as among
therefore, must be brought to the RTC. Thus, the the corporate offices in Mercedes Corporation’s
NLRC has no jurisdiction because the matter did by-laws.
not arise from employer-employee relationship
and the issue between the disputants is not Q: Due to serious business reverses, ABC Co.
resolvable solely through the application of decided to terminate the services of several
Labor Law. officers receiving "fat" compensation
packages. One of these officers was Mr. X, its
b. What is the rule on personal liability of Vice-President for External Affairs and a
corporate officers for a corporate act member of the Board of Directors. Aggrieved,
declared to be unlawful? (2015 BAR) Mr. X filed a complaint for illegal dismissal
before the National Labor Relations
A: Corporate officers are not, as a general rule, Commission (NLRC) - Regional Arbitration
personally liable for the corporate acts they Branch.
performed in behalf of the corporation they
represent. They are, however, personally liable ABC Co. moved for the dismissal of the case on
for their corporate acts if they acted with malice the ground of lack of jurisdiction, asserting
or bad faith. (Girly Ico v. Systems Technology that since Mr. X occupied the position of Vice-
Institute, Inc., G.R. No. 185100, July 9, 2014) President for External Affairs which is listed
in the by-laws of the corporation, the case
Q: State the cases when a labor dispute would should have been filed before the Regional
fall under the jurisdiction of voluntary Trial Court.
arbitrators or panel of voluntary arbitrators.
(2017, 1997 BAR) The Labor Arbiter (LA) denied ABC Co.'s
motion and proceeded to rule that Mr. X was
A: A labor dispute falls under the jurisdiction of a illegally dismissed. Hence, he was reinstated
voluntary arbitrator or a panel of voluntary in ABC Co.'s payroll pending its appeal to the
arbitrator if a labor dispute arises from an NLRC.
unresolved grievance which in turn arises from
the interpretation of implementation of a a. Did the LA err in denying ABC Co.'s motion
Collective Bargaining Agreement or of company to dismiss on the ground of lack of
personnel policies. jurisdiction? Explain.

Upon agreement of parties, a voluntary arbitrator A: NO, the LA did not err. There is a two-tiered
or panel of voluntary arbitrators may also hear test to determine whether a dispute is with the
and decide all other labor disputes including LA or the RTC, to wit:
unfair labor practices and bargaining deadlock.
1. The status or the relationship of the parties,
Q: Marcel was the Vice President for Finance and
and Administration and a member of the 2. The nature of the question that is the subject
Board of Directors of Mercedes Corporation. of the controversy. (Viray v. CA, G.R. No.
He brought a complaint for illegal suspension 92481, Nov. 9, 1990)
and illegal dismissal against Mercedes
Corporation, which moved to dismiss the Distinction should be made between a labor
complaint on the ground that the complaint controversy and an intra-corporate dispute. Not
pertained to the jurisdiction of the RTC due to all conflicts between a corporation and a
the controversy being intracorporate based stockholder involve corporate matters (Cosare v.
on his positions in the corporation. Broadcom, G.R. No. 201298, Feb. 5, 2014). In the
77 U S T

case at bar, since Mr. X seeks to recover his anchor from a rival station, National News
position as a Vice-President of External Affairs Network (NNN). NNN objects to the transfer of
and not as a member of the board of ABC Co., Anya claiming that she is barred from
then the LA has jurisdiction to try his case and working in a competing company for a period
therefore the motion to dismiss was correctly of three years from the expiration of her
denied by the LA. contract. Anya proceeds to sign with PNN
which then asks her to anchor their nightly
b. Assuming that jurisdiction is not at issue newscast.
and that the NLRC reverses the LA's ruling
of illegal dismissal with finality, may ABC NNN sues Anya and PNN before the National
Co. claim reimbursement for the amounts Labor Relations Commission (NLRC), asking
it paid to Mr. X during the time that he for a labor injunction. Anya and PNN object
was on payroll reinstatement pending claiming that it is a matter cognizable by a
appeal? Explain. (2019 BAR) regular court and not the NLRC.

A: NO, it may not. A reinstatement order by the
LA is immediately executory and no a. Is NNN's remedy correct? Why or why
reimbursement is due even if it is reversed on not?
appeal. (Garcia v. PAL, G.R. No. 164856, Jan. 20,
2009) A: The NLRC has no jurisdiction. As to PNN, there
is no employer-employee relationship between
Q: Juanito initiated a case for illegal dismissal itself and NNN; hence, the NLRC cannot hear and
against Mandarin Company. The Labor resolve their dispute (Reasonable Causal
Arbiter decided in his favor and ordered his Connection Rule). As to Anya, the injunctive
immediate reinstatement with full backwages power of the NLRC is ancillary in nature; hence,
and without loss of seniority and other it requires a principal case, which is absent.
benefits. Mandarin Company did not like to Besides, the dispute between her and PNN is not
allow him back in its premises to prevent him resolvable solely through the application of Labor
from influencing his co-workers to move Code, other labor statutes, CBA or employment
against the interest of the company; hence, it contract (Reference to Labor Law Rule).
directed his payroll reinstatement and paid
his full backwages and other benefits even as b. What are the grounds for a labor
it appealed to the NLRC. A few months later, injunction to issue?
the NLRC reversed the ruling of the Labor
Arbiter and declared that Juanito’s dismissal A: The NLRC may issue an injunctive writ to
was valid. The reversal ultimately became enjoin an illegal activity under Art. 264 [now 279]
final. of the Labor Code; as an ancillary remedy to
avoid irreparable injury to the rights of a party in
May Mandarin Company recover the an ordinary labor dispute pursuant to Rule X,
backwages and other benefits paid to Juanito 2011 NLRC Rules of Procedure, as amended; and
pursuant to the decision of the Labor Arbiter to correct the Labor Arbiter’s grave abuse of
in view of the reversal by the NLRC? Rule, with discretion pursuant to Rule XII of the 2011 NLRC
reasons. (2017 BAR) Rules of Procedure, as amended. Moreover, for
labor injunction to issue, it must be proven under
A: NO, Mandarin Company may not recover the Art. 218(e) [now 225(e)] Labor Code:
backwages and other benefits paid to Juanito.
a. That the prohibited or unlawful acts have
In Garcia v. Philippine Airlines, Inc. (G.R. No. been threatened and will be committed and
164856, Jan. 20, 2009), the Supreme Court held will be continued unless restrained;
that a reinstated employee need not refund the
backwages and other benefits paid pursuant to an b. That substantial and irreparable injury to
order of reinstatement by the Labor Arbiter. The the complainant’s property will follow;
rationale is to help the employee make both ends
meet during the pendency of the appeal and to c. That greater injury will be inflicted upon
prevent a situation where the dismissed complainant by the denial of relief than will
employee will not spend the reinstatement wages be inflicted upon defendants by the granting
for fear of refunding the same if the decision of of relief;
Labor Arbiter is subsequently reversed.
d. That complainant has no adequate remedy
NATIONAL LABOR RELATIONS COMMISSION at law; and
(NLRC)
e. That public officers charged with the duty to
Jurisdiction (2015, 2001, 1997, 1996, 1995 protect complainant’s property are unable
BAR) or unwilling to furnish adequate protection.

Q: Philippine News Network (PNN) engages c. Distinguish the jurisdiction of a
the services of Anya, a prominent news Labor Arbiter from that of the NLRC.

78
QuAMTO (1987-2019)
(2015 BAR) of the Labor Code: x x x (b) Bureau of Labor
Relations (2019 BAR)
A: As to jurisdiction, the Labor Arbiter can hear
and resolve cases under Art. 217 [now 224] of the A: The BLR has the following administrative
Labor Code, money claims under Sec. 7 of R.A. functions:
10022; and referred wage distortion disputes in
unorganized establishments, as well as the a. Registration of labor unions;
enforcement of compromise agreements b. Keeping of registry of labor unions; and
pursuant to the 2011 NLRC Rules of Procedure, c. Maintenance and custody of CBAs.
as amended. On the other hand, the NLRC
reviews decisions rendered by the LA; decisions Jurisdiction (2019, 2001, 1998, 1996 BAR)
or orders rendered by the RD under Art. 129 of
the Labor Code; and conducts compulsory Q: Can the Bureau of Labor Relations certify a
arbitration in certified cases. union as the exclusive bargaining
representative after showing proof of
As to the power to issue a labor injunction, the majority representation thru union
NLRC can issue an injunctive writ. On the other membership cards without conducting an
hand, the Labor Arbiter cannot issue an election? (1998 BAR)
injunctive writ.
A: The Bureau of Labor Relations cannot certify a
Q: What is the jurisdiction of the National union as the exclusive collective bargaining
Labor Relations Commission? (1995 BAR) representative after showing of proof of majority
representation thru union membership cards
A: without conducting a certification election. The
1. Exclusive Original Jurisdiction: Labor Code (in Arts. 256, 257 and 258 [now Arts.
268, 269, and 270]) provides only for a
a. Certified labor disputes causing or certification election as the mode for determining
likely to cause a strike or lockout in the exclusive collective bargaining representative
an industry indispensable to national if there is a question of representation in an
interest, certified to it by the appropriate bargaining unit.
Secretary of Labor or the President
for compulsory arbitration; Q: Some disgruntled members of Bantay
b. Injunction in ordinary labor disputes Labor Union filed with the Regional Office of
to enjoin or restrain any actual or the DOLE a written complaint against their
threatened commission of any or all union officers for mismanagement of union
prohibited or unlawful acts or to funds. The Regional Director did not rule in
require the performance of a the complainants' favor. Not satisfied, the
particular act in any labor dispute complainants elevated the Regional Director's
which, if not restrained or performed decision to the NLRC. The union officers
forthwith may cause grave or moved to dismiss on the ground of lack of
irreparable damage to any party; Jurisdiction. Are the union officers correct?
c. Injunction in strikes or lockouts Why? (2001 BAR)
under Art. 264 [now 279] of the Labor
Code; A: YES. NLRC has no jurisdiction over the
d. Contempt cases; appealed ruling since the appellate authority over
e. Claims arising out of an employer decisions of the Regional director involving
employee relationship or by virtue of examination of union accounts is expressly
any law or contract involving Filipino conferred upon the Bureau of Labor Relations of
workers for overseas deployment DOLE by the Rule of Procedure on Mediation
including claims for actual, moral, Arbitration. (Barles v. Bitonio, G.R. No. 120270,
exemplary and other forms of June 16, 1999)
damage.
DOLE REGIONAL DIRECTORS
2. Exclusive Appellate Jurisdiction (2009, 2008, 1996 BAR)

a. All cases decided by the Labor Recovery/Adjudicatory power
Arbiters (Art. 217[b] [now 224(b)],
Labor Code); Q: Savoy Department Store (SDS) adopted a
b. Cases decided by the Regional Offices policy of hiring salesladies on five-month
of DOLE in the exercise of its cycles. At the end of a saleslady’s five- month
adjudicatory function. (Art. 129, Labor term, another person is hired as replacement.
Code) Salesladies attend to store customers, wear
SDS uniforms, report at specified hours, and
BUREAU OF LABOR RELATIONS (BLR) are subject to SDS workplace rules and
regulations. Those who refuse the 5-month
Q: Briefly discuss the powers and employment contract are not hired.
responsibilities of the following in the scheme
79 U S T

The day after the expiration of her 5-month a. Power to inspect employer’s records and
engagement, Lina wore her SDS white and premises at any time of the day or night
blue uniform and reported for work but was whenever work is being undertaken therein,
denied entry into the store premises. and the right to copy therefrom, to question
Agitated, she went on a hunger strike and any employee and investigate any fact,
stationed herself in front of one of the gates of condition or matter which may be necessary
SDS. Soon thereafter, other employees whose to determine violations or which may aid in
5-month term had also elapsed joined Lina’s the enforcement of the Labor Code and of any
hunger strike. labor law, wage order or rules and
regulations issued pursuant thereto. (Art.
Assume that no fixed-term worker 128[a], Labor Code)
complained, yet in a routine inspection a
labor inspector of the Regional Office of the b. Power to issue compliance orders to give
DOLE found the 5-month term policy of SDS effect to the labor standards provisions of
violative of the Labor Code’s security of this Code and other labor legislation based
tenure provisions and recommended to the on the findings of labor employment and
Regional Director the issuance of a enforcement officers or industrial safety
compliance order. The Regional Director engineers made in the course of inspection.
adopted the recommendation and issued a (Art. 128[b], Labor Code)
compliance order. Is the compliance order
valid? Explain your answer. (2008 BAR) c. Power to issue writs of execution to the
appropriate authority for the enforcement of
A: No, the Compliance Order is not valid. The their orders, except in cases where the
Regional Director only exercises both visitorial employer contests the findings of the labor
and enforcement powers over labor standard employment and enforcement officer and
cases and empowered to adjudicate uncontested raises issues supported by documentary
money claims of persons still employed. The proofs which were not considered in the
Regional Director has no jurisdiction to rule on course of inspection. (Art. 128[b], Labor Code)
SDS’ 5-month term policy.
d. Power to order stoppage of work or
Q: AB, a non-resident American, seeks entry to suspension of operations of any unit or
the country to work as Vice-President of a department of an establishment when non-
local telecommunications company. You are compliance with the law or implementing
with the Department of Labor and rules and regulations poses grave and
Employment (DOLE). What permit, if any, can imminent danger to the health and safety of
the DOLE issue so that AB can assume as Vice- workers in the workplace. (Art. 128[c], Labor
President in the telecommunications Code)
company? Discuss fully. (1995, 2007 BAR)
e. Assumption of Jurisdiction and/or
A: Art. 40 of the Labor Code states that “Any alien Certification to the NLRC for Compulsory
seeking admission to the Philippines for Arbitration in labor disputes causing or likely
employment purposes and any domestic or to cause a strike or lockout in an industry
foreign employer who desires to engage an alien indispensable to the national interest. (Art.
for employment in the Philippines shall obtain an 278[g], Labor Code; Art. 128[a], Labor Code)
employment permit from the Department of
Labor. The employment permit may be issued to Visitorial and Enforcement Powers (2016,
a nonresident alien or to the applicant employer 2008, 2001, 1999 BAR)
after a determination of the non-availability of a
person in the Philippines who is competent, able Q: Under what conditions may the Secretary
and willing at the time of application to perform of Labor or his duly authorized representative
the services for which the alien is desired.” inquire into the financial activities or
legitimate labor organizations? (2001 BAR)
Thus, AB should be issued the abovementioned
employment permit so that AB can assume as A: The Labor Code authorizes the Secretary of
Vice President of the Telecommunication Labor and Employment or his duly authorized
Company. representative to inquire into the financial
activities of any labor organization on the basis of
DOLE SECRETARY a complaint under oath, supported by 20% of the
membership in order to determine compliance or
Powers and Responsibilities (2019 BAR) noncompliance with the law and to aid in the
prosecution of any violation thereof. (Art. 274
Q: Briefly discuss the powers and [now 289], Labor Code)
responsibilities of the following in the scheme
of the Labor Code: (a) Secretary of Labor x x x Q: Inggo is a dram talent hired on a per drama
(2019 BAR) “participation basis” by DJN Radio Company.
He worked from 8:00 am until 5:00 pm, six
A: days a week, on a gross rate of P80.00 per

80
QuAMTO (1987-2019)
script, earning an average of P20,000.00 per 1995 BAR)
month. Inggo filed a complaint before the
Department of Labor and Employment (DOLE) Q: State the jurisdiction of the Voluntary
against DJN Radio for illegal deduction, non- Arbitrator or Panel of Voluntary Arbitrators in
payment of service incentive leave, and 13th labor disputes. (2019, 2017, 1997 BAR)
month pay, among others. On the basis of the
complaint, the DOLE conducted a plant level A: Under the Labor Code, the jurisdiction of the
inspection. Voluntary Arbitrator or Panel of Voluntary
Arbitrators include disputes involving:
The DOLE Regional Director issued an order
ruling that Inggo is an employee of DJN Radio, a. Unresolved grievances arising from the
and that Inggo is entitled to his monetary interpretation or implementation of a
claims in the total amount of P30,000.00. DJN collective bargaining agreement;
Radio elevated the case to the Secretary of b. The interpretation or enforcement of
Labor who affirmed the order. company personnel policies;
The case was brought to the Court of Appeals. c. All labor disputes, upon agreement of
The radio station contended that there is no the parties, including unfair labor
employer-employee relationship because it was practices and bargaining deadlock;
the drama directors and producers who paid,
supervised, and disciplined him. Moreover, it Q: Company C, a toy manufacturer, decided to
argued that the case falls under the jurisdiction ban the use of cell phones in the factory
of the NLRC and not the DOLE because Inggo’s premises. In the pertinent Memorandum,
claim exceeded P5, 000.00 management explained that too much texting
and phone-calling by employees disrupted
a. May the DOLE make a prima facie company operations. Two employees-
determination of the existence of an members of Union X were terminated from
employer-employee relationship in the employment due to violation of the
exercise of its visitorial and enforcement memorandum-policy. The union countered
powers? with a prohibitory injunction case (with
prayer for the issuance of a temporary
A: YES. Pursuant to Art. 128(b) of the Labor Code, restraining order) filed with the Regional
the DOLE may do so where the prima facie Trial Court, challenging the validity and
determination of employer-employee relationship constitutionality of the cell phone ban.
is for the exclusive purpose of securing compliance
with labor standards provisions of said Code and The company filed a motion to dismiss,
other labor legislation. arguing that the case should be referred to the
grievance machinery pursuant to an existing
The DOLE, in the exercise of its visitorial and Collective Bargaining Agreement
enforcement powers, somehow has to make a with Union X, and eventually to Voluntary
determination of the existence of an employer- Arbitration. Is the company correct? Explain.
employee relationship. Such determination, (2010 BAR)
however, cannot be co-extensive with the visitorial
and enforcement power itself. Indeed, such A: YES. Termination cases arising in or resulting
determination is merely preliminary, incidental from the interpretation and implementation of
and collateral to the DOLE’s primary function of collective bargaining agreements, and
enforcing labor standards provisions. (People’s interpretation and enforcement of company
Broadcasting Bombo Radyo Phils., Inc. v. Secretary personnel policies which were initially processed
of Labor, G.R. No. 179652, May 8, 2009) at the various steps of the plant-level Grievance
Procedures under the parties collective
b. If the DOLE finds that there is an employee- bargaining agreements, fall within the original
employer relationship, does the case fall and exclusive jurisdiction of the voluntary
under the jurisdiction of the Labor Arbiter arbitrator pursuant to Art. 217(c) [now 224(c)]
considering that the claim of Inggo is more and Art. 261 [now 274] of the Labor Code.
than P5, 000.00. Explain. (2016 BAR)
PRESCRIPTION OF ACTIONS
A: NO. As held in the case of Meteoro v. Creative
Creatures, Inc. (G.R. No. 171275, July 13, 2009), the Q: For purposes of prescription, within what
visitorial and enforcement powers of the Secretary, periods from the time the cause of action
exercised through his representatives, encompass accrued should the following cases be filed:
compliance with all labor standards laws and other (2019 BAR)
labor legislation, regardless of the amount of the
claims filed by workers; thus, even claims a. Money claims arising from employer-
exceeding P5,000.00. employee relations

VOLUNTARY ARBITRATOR A: All money claims arising from employer-
employee relations accruing during the effectivity
Jurisdiction (2019, 2017, 2010, 2005, 1997, of this Code shall be filed within three (3) years
81 U S T

from the time the cause of action accrued; Q: Due to his employer's dire financial
otherwise they shall be forever barred. (Art. 306 situation, Nicanor was prevailed upon by his
[formerly 291], Labor Code) employer to voluntarily resign. In exchange,
he demanded payment of salary differentials,
b. Illegal dismissal 13th month pay, and financial assistance, as
promised by his employer. Management
A: The prescriptive period for filing an illegal promised to pay him as soon as it is able to
dismissal complaint is four years from the time pay off all retrenched rank-and-file
the cause of action accrued. (Teekay Shipping employees.
Philippines, Inc., v. Ramier Concha, G.R. No.
185463, Feb. 22, 2012; Art. 1146, Civil Code) Five years later, and before management was
able to pay Nicanor the amount promised to
c. Unfair labor practice him, Nicanor died of a heart attack. His
widow, Norie. filed a money claim against the
A: All unfair labor practices arising from Book V company before the National Labor Relations
shall be filed with the appropriate agency within Commission (NLRC), including interest on the
one (1) year from accrual of such unfair labor amount of the unpaid claim. She also claimed
practice; otherwise, they shall be forever barred. additional damages arguing that the supposed
(Art. 305 [formerly 290], Labor Code) resignation letter was obtained from her
spouse through undue pressure and
d. Offenses under the Labor Code influence.

A: Offenses penalized under this Code and the The employer filed a motion to dismiss on the
rules and regulations issued pursuant thereto ground that (a) the NLRC did not have
shall prescribe in three (3) years. (Art. 305 jurisdiction over money claims; and (b) the
[formerly 290], Labor Code) action has prescribed. Assuming that the
NLRC has jurisdiction, has the action
e. Illegal recruitment prescribed? (2018 BAR)

A: Illegal recruitment cases under this Act shall A: In Accessories Specialists, Inc. v. Alabama, (G.R.
prescribe in five (5) years: Provided, however, No. 168985, July 23, 2008), the Supreme Court
that illegal recruitment cases involving economic held that the principle of promissory estoppel can
sabotage as defined herein shall prescribe in apply as a recognized exception to the three-year
twenty (20) years. (Migrant Workers and prescriptive period under Art. 291 [now 306] of
Overseas Filipinos Act of 1995, Sec. 12, R.A. 8042, the Labor Code. Nicanor relied on the promise of
Jun. 7, 1995) the employer that he would be paid as soon as
the claims of retrenched employees were paid. If
Note that R.A. 8042 only applies to Migrant not for this promise, there would have been no
Workers. Illegal recruitment for local reason why Nicanor would delay the filing of the
employment is subject to the provisions of the complaint. Great injustice would be committed if
Labor Code, in particular, Art. 305, first the employee’s claim were brushed aside on
paragraph, to wit: offenses penalized under this mere technicality, especially when it was the
Code x x x shall prescribe in three (3) years. employer’s action that prevented Nicanor from
filing the claims within the required period.
Money Claims (2018, 2013, 2010 BAR)
Q: Chito was illegally dismissed by DEF Corp.
Q: A driver for a bus company, sued his effective at the close of business hours of
employer for non-payment of commutable December 29, 2009. If he has money claims
service incentive leave credits upon his against DEF Corp., he can make the claim
resignation after five years of employment. without any legal bar within _______. (2013
The bus company argued that A was not BAR)
entitled to service incentive leave since he
was considered a field personnel and was A: Three (3) years. (Basis: Art. 297 [formerly
paid on commission basis and that, in any 291] of the Labor Code)
event, his claim had prescribed. If you were
the Labor Arbiter, how would you rule? Illegal Dismissal (2002, 1997, 1994, 1991
Explain. (2010 BAR) BAR)

A: The money claim as cause of action has Q: On October 30, 1980, A, an employee, was
prescribed because the claim was filed after five served notice of dismissal allegedly for gross
(5) years from date of negotiation. Art. 291 [now dishonesty. Forthwith, the Union to which A
306] of the Labor Code provides that all money was a member raised A’s dismissal with the
claims arising from employer-employee relations grievance machinery as provided for in its
occurring during the effectivity of the Code shall Collective Bargaining Agreement (CBA).
be filed within three (3) years from that time the
cause of action has accrued, otherwise, they shall At that point, negotiations for a new CBA was
be forever barred. in progress. Hence, both the Union and the

82
QuAMTO (1987-2019)
Company had very little time to address A’s by his employer. Illegal dismissal, as a cause of
grievance. In fact, said grievance, as it were, action, prescribes after four (4) years from the
slept the sleep of the dead, being resolved time the cause of action, namely, illegal dismissal
only with finality on November 23, 1983 took place. This is pursuant to the Civil Code
when the General Manager of the Company which provides that actions upon an injury to the
affirmed A’s dismissal on the fifth and the last rights of a person should be initiated within four
step of the grievance machinery. years from the time the right of the action
accrues. (Art. 1146 of the Civil Code)
A filed an action for illegal dismissal with the
Arbitration Branch of the NLRC on November Q: State your agreement or disagreement with
25, 1983. The Company immediately filed a the following statement and explain your
Motion to Dismiss on the ground of answer briefly: A criminal case filed against
prescription, invoking Article 290 of the an employee does not have the effect of
Labor Code. If you were the Labor Arbiter, suspending or interrupting the running of the
how would you resolve the Company’s Motion prescriptive period for the filing of an action
to Dismiss? (1994 BAR) for illegal dismissal. (2002 BAR)

A: As the Labor Arbiter. I will deny the Motion to A: I agree. The two (2) cases, namely: the criminal
Dismiss. Where an employee was dismissed and case where the employee is the accused; and the
the matter of his dismissal was then referred to case for illegal dismissal, where the employee
the grievance machinery pursuant to the would be the complainant, are two (2) separate
provision in the existing collective bargaining and independent actions governed by different
agreement, and the grievance machinery had a rules, venues, and procedures. The criminal case
final meeting after quite a long while thereafter, is within the jurisdiction of the regular courts of
the complaint for illegal dismissal was then filed, law and governed by the rules of procedure in
the action was not barred by laches, as the criminal cases. The action for the administrative
pendency of the matter before the grievance aspect of illegal dismissal would be filed with the
machinery affected the ripeness of the cause of NLRC and governed by the procedural rules of
action for illegal dismissal. (Radio the Labor Code.
Communications of the Philippines, Inc. [RCPI], v.
NLRC, et al., G.R No. 102958, June 25, 1993)

ALTERNATIVE ANSWER:

If I were the Labor Arbiter, I will deny the motion
to dismiss because the action for illegal dismissal
has not yet prescribed. The prescriptive period
for an action for illegal dismissal is four (4) years.
(Callanta v. Carnation, G.R. No. 70615, Oct. 28,
1986)

Q: The general manager of Junk Food
Manufacturing Corporation dismissed
Andrew Tan, a rank-and-file employee on the
ground of insubordination. The general
manager served on Andrew Tan the letter of
termination effective upon receipt which was
on March 8, 1992. Shocked by his unexpected
dismissal. Andrew Tan confronted the
general manager and hit the latter on the
head with a leap pipe.

Junk Food Manufacturing filed a complaint in
court against Andrew Tan for less serious
physical injuries. Somehow, Andrew Tan was
acquitted by the court assigned to hear the
criminal case. A few days following his
acquittal, or on 01 March 1996, Andrew Tan
filed complaint against the company for
illegal dismissal, reinstatement and the
payment of backwages and damages. Was the
complaint filed by Andrew Tan for illegal
dismissal within the reglementary period
granted by law? (1997 BAR)

A: YES. The complaint was filed within four (4)
years from the date Andrew Tan was dismissed
83 U S T

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OUR DEEPEST APPRECIATION TO OUR

LABOR LAW QUAMTO a valuable consideration in the form of wages,

A: AMA is not correct. Under Sec. 10 of R.A. 8042, (1998 BAR)

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