BAR SYLLABUS-

BASED REVIEWER IN
LABOR LAW
&
SOCIAL LEGISLATION
BENEDICT GUI REY KATO
Labor Arbiter
NCR
Member
UP Law Center Panel of Experts in Labor Law

Law Professor
Currently: UST, UE, TSU & PUP
Formerly: UM, SLU, UC & UB
'
Bar Reviewer & Pre-Week Lecturer
(in the order invited)
ABRC, ChanRobles Online Bar Review
Magnificus Juris
Villasis Law Center, Great Minds Review Center
UST Bar Review, New Era Bar Review, SBU Bar Review
PUP Bar Review, TSU Bar Review,
Legal Edge Bar Review Center, UA&P Bar Review

Author
Survival Notes in Labor Law, Bar Questions and Answers in
Labor Law, Bar Syllabus-Based Reviewer in Labor Law,
Labor Standards Law, A Remunerative and Protective Law &
Labor Relations Law: An Organizational and Tenurial Law

2021 EDITION
 F.

Philippines Copyright 2021

By DEDICATION

BENEDICT GUIREY KATO

Nothing in life is to be feared.
ALL RIGHTS RESERVED It is only to be understood.
Now is the time to understand more,
No portion of this handbook may be copied or repro~uced so that we may fear less.
in book, pamphlets, outlines or notes, whether printed, Marie Curie
typewritten, mimeographed, machine copied, or in .any
other form, for sale or distribution, without the written
permission/consent of the Author. This work, done amidst the uncertainties of the times I

is dedicated to Bar candidates. May its pages, written

Any copy of this book without bearing the correspondin_g
Serial Number and original signature of the Author on this
page, either proceeds from an illegitimate source or is in
possession of one who has no authority to dispose thereof.
No. _ _ _ _ _4_6_5_____
ISBN: 978-621-02-1348-5
Published and Printed by
usheredly but freely, give them some sense of security.
Some of the covered laws, being new, have yet to
become part of controlling case authority. Others, although
old, have yet to figure in a Bar examination. For these
reasons, they are treated here thru hypothetical problems.
As the author of the "Bar Q & A in Labor Law", published
also by the centralbooks and in which I have updated the
answers to previous Bar questions in Labor Law and
Social Legislation given from 2008 to 2019, I have brought
into this reviewer the "minds" of Bar examiners. Hence,
said illustrative problems may not be far from the reach of
the present examiners' own minds.
To understand more in order to fear less - this, in
brief, is the humble purpose of this reviewer.

CENTRAL BOOK SUPPLY, INC. Looking forward to everyone's oathtaking, not virtually
927 Quezon Avenue, Quezon City, Philippines thru app but physically at the Philippine International
E-mail: info@central.com.ph Convention Center (PICC).
 * Republic of the Philippines
SUPREME COURT
, f0
Philippine Judicial Academy
DEPARTMENT OF JURISPRUDENCE AND LEGAL
PHILOSOPHY
Office of the Chairman
FOREWORD
I have, in the past, written and commented quite
harshly on the proliferation of Bar Review pamphlets and
manuals - especially if I found them in the hands of first
year students of law. For me, this indicated the decadent
obsession with the examinations and a really demeaning
concept of legal education as nothing more than a
preparation for an unscientifically prepared examination.
Many bar review materials are, sadly, nothing more than
collections of mnemonics all targeting the rather lowly
thinking skill of recall.
Prof. Kato entitles his latest book "Bar Syllabus-Based
Reviewer in Labor and Social Legislation". I have been
privileged to read advanced sections of it and I am not only
t ease but eager about recommending this book not only
those preparing for the Bar but to lawyers in practice,
scholars of the law, employers and managers alike.
It does not commend itself to memory. It calls on
thoughtfulness and careful reflection. ~ince it is syllabus-
based it follows what should be a logical and systematic
exposition of labo'. law. He calls it a review~~· but it is a
veritable introduction to, summary and expos1t1on of labor
law in the context of social legislation. That is the singular
merit of this book.
Refusing to take the student and the reader into the
often times meandering ways of disputed questions, what
the book leaves us with is a clear explanation and
summary of the law. The intelligibility of the law depends
on its craftsmanship - and unfortunately, not all of our
legislators are experts at draftsmanship.
Benny has re-written the law to make it more readable
- and, more importantly, he has put together what one
ought to know from various regulations and sources of
subordinate legislation.
Once more, Benny has done us all a tremendous
.favor but presenting us with a volume that should be taken
seriously not only as a preparation for an examination but
as a necessary guide . towards felicitously navigating
through the often treacherous waters of labor law and
more importantly, situating all this in the context of sociai
legislation - that p~rt of the law that sees to the flourishing
of all groups of society, and should be the antidote to the
so-desp_ised system of oligarchy that has rightly gained the
opprobrium of the nation.
 E -··
We can only look forward to more of Benny's •.
J,
Republic of the Philippines
,),

academic work. I can honestly say that reading what I TARLAC STATE UNIVERSITY
--1 ®
have been privileged to read has educated me. SCHOOL OF LAW
~,_,_ i 2/F Dean's Office, Tarlac State University Gym
G. Romulo Boulevard, Tarlac City 2300
Tel +63 45 606-8176 .
FR. RANHILIO CALLANGAN AQUINO tsuschooloflaw@gmail.com

Vice President
Administration and Finance
Cagayan State University
FOREWORD
Dean
Graduate School of Law
San Seda University

The world was caught by surprise when the Novel

Coronavirus hit late last year; in the days since, it has
practically devastated the economies of multiple nations.
However, no pandemic can conquer the indomitable spirit
of our law students as they seek to achieve their dreams of
becoming members of the Philippine Bar. In the new
normal, we have learned to value the essentials in life. The
book Bar Syllabus-Based Reviewer in Labor Law & Social
Legislation, a book painstakingly researched and compiled
by its esteemed author, ranks among those essentials. It is
a useful tool that every law student must have in their
arsenal.
 7
/--o·--~
The author is a proud member of the prestigious
faculty roster of the School of Law of Tarlac State UNIVERSITY OF THE EAST I
University. He is also a seasoned Bar Reviewer, Faculty COLLEGE OF LAW
Member of various law schools, and a distinguished
Member of the National Labor Relations Commission. His
knowledge of the principles and intricacies of labor issues ----"-------
is vast and comprehensive, and he is a living testament of
the tradition of excellence and dedication we in the
academe strive to maintain. It is his unwavering FOREWORD
commitment to the practice of law that has moved him to
produce a book containing quick, accurate, and important
legal principles. May this book produce lawyers who
uphold the same standards of excellence and moral
integrity in their fight to uphold the rights of the oppressed,
especially those in the labor sector.

Tarlac City, Province of Tarlac, Philippines.

Law is complex in itself and jurisprudence is mutable.

The Bar Examinations has become particularly challenging
DR. JOSEi 1. DELA RAMA, JR. with the various changes in the law and the speed at which
Dean cases are added to the list of must-read materials of every
bar-examinee. The field of Labor Law is not exempt from
the perceived vagaries of the bar examinations.
Luckily for the bar examinees, the author has found a
unique presentation of this reviewer in Labor Law by
including the right blend of statutory provisions, principles
and doctrines enunciated by the Supreme Court in cases it
has decided, hypothetical problems with proposed
answers, and actual bar examination questions with the
author's suggested answers. This book is undoubtedly, a
"one-stop shop" in Labor Law.
It pleases me that the author, a dear friend, and now
a member of our College of Law Faculty at the University

of the East, has taken time to write this book to share his
knowledge and expertise to our young bar hopefuls.
Undoubtedly, both students and practitioner~ can richly
benefit from this work which is a product of the author's
years of experience as a Labor Arbiter and a distinguished
member of the faculty in various law schools and bar
review centers. I commend the author for coming up with
this reviewer that will certainly make the bar examinations
in Labor Law a lot easier to answer and put the examinees
a little closer to their dreams of becoming full-fledged
members of the bar.
~
Viviana M. Paguirigan
Dean, UE College of Law
ACKNOWLEDGMENT
I owe my passion for Labor Law to my students and
reviewees. Without them - better yet, without their
expressions of confidence in me - I would have died a
thousand deaths before coming to this point at which I can
already deliver my lessons thru books. I have written five
books, in addition to my 2018 edition of Survival Notes in
Labor Law, during these difficult times. My success can be
explained by my many years of teaching them. In fact, the
updated handouts that I have given them over the years
since 2005 have found their final places in this work.
In a very special way, I want to thank Fr. Ranhilio
Cal/angan Aquino - the country's top legal scholar - for
teaching me the taxonomy of measurable thinking skills. In
this reviewer, one can see his footprints on the illustrative
problems that I have crafted which are means of measuring
one's higher order thinking skills or HOTS. , On a personal
note, Fr. Rannie has been my virtual reader and audience
all these years to the point that when I lecture, I imagine he
is in the room; and when I write, I imagine he will read my
work and count its defects in law, language and logic. In
both instances, the thought of earning his disapproval has
been my injunction.
On behalf of my siblings, I want to thank my brother
Aloy for taking good care of our 93-year old mother in our
absence. It would not have been possible for me to be away
a_nd have. the time to write this book if I had to be by her
side. He 1s a great son who, without complaint, selflessly
performs the duties of ten siblings most of the time.
Finally, I thank my daily dimpled inspiration who has
given me both happiness and honor. Stefi Kristin, my 2018
Bar passer, is the reason I want to wake up each day. My
daughter is the reason I defy age and must stay healthy.
I thank my God each time I think of them.
8 August 2021, Quezon City.
 7

BAR BULLETIN NO. 4, S. 2020

SYLLABUS
LABOR LAW AND SOCIAL LEGISLATION

INTRODUCTION

This is a syllabus-guided reviewer in Labor Law.

Every item listed under the Bar Syllabus is annotated
with statutory law, case law, decisions penned by the Bar
Chairman, previous Bar questions, analytical tools,
mnemonics, predictions, and/or applicable Bar techniques.
For the first time in so many Bar years, agrarian law is
made part of the "examinable" laws. Hence, the salient
features of the law are given sufficient space here. Like-
wise, both humanizing and equalizing functions of social
justice are treated here thru landmark pieces of social
legislation. Relative to the 2019 Safe Spaces Act (R.A.
11313), it will be explained how the Anti-Sexual Harass-
ment Act (R.A. 7877) has created or allowed unsafe
spaces in certain situations for persons; thus, the necessity
to address such situations thru corrective legislation. The
gravamen of the offense of sexual harassment as defined
and punished by R.A. 7877 is abuse of authority
(Philippine Aeolus Automotive United Corp. v, NLRC,
G.R. No. 124617, 28 April 2000); hence, a student cannot
possibly sexually harass his/her teacher. However, that
unsafe space for the teacher is now made safe by R.A.
11313; hence, said student can now be liable for sexual
harassment as separately defined by the new law. These
laws, which seek to discharge the humanizing function of
social justice, will be compared. As to the other function,
anti-discrimination laws form part of this reviewer.
New compensation rules, per various board resolu-
tions of the Employees Compensation Commission (ECC),

form part of this reviewer too. This is to update, among
others, the Personal Comfort Doctrine. This doctrine is
no longer to be mechanically applied. It is now required
that the contingency resulting in either disc!bility or death
take place within both time limit and space limit of the
member's employment. This reviewer will also show how
to apply the Continuing Act Rule, the Reasonable Nexus
Rule, the Proximate Cause Theory and the Increased
Risk Theory, among others. Given parallel points of
inquiry, crew claims rules governing the money claims of
seafarers are also treated here thru cross-referencing.
As to Labor Standards Law, Book Ill - which is the
heart of the law - is presented via a twin-diagram with
explanatory notes. The diagram is appended at the back. It
must be photographed and viewed while the explanatory
notes are being read for purposes of mastery. Previous
Bar questions and the answers I have proposed and which
the Central Books has published along with the answers
proposed by other Bar reviewers in the other Bar subjects,
are incorporated to invite attention to areas of engagement
in the Bar. And, as to Labor Relations Law, mastery is
envisioned thru simplifications and analysis of previous Bar
questions.
Certainly, the foregoing is not all there is to this review
material. It is copious; hence, it must be read patiently and
leisurely. If one wakes up at 3:00 a.m. and read it for an
hour only, i.e., daily until the appointed time, he/she would
be ready for the Bar examination.
7I
CONTENTS
Page
PARTI
FUNDAMENTAL PRINCIPLES
A. Legal Basis .......................................................................... 1
1987 Constitution ...................................................................... 1
Art. XIII .................................................................................. 1
The Full Protection Clause ................................................ 4
Full Protection Outside the Labor Code .................... 4
Full Protection Outside Employment
Contracts ............................................................... 6
Full Protection Outside Art. 291 (Now Art.
306), Labor Code ................................................... 7
Full Protection Outside Annex "A",
Employees Compensation Act (ECA) .................... 8
Full Protection Outside the Substantial
Evidence Rule ........................................................ 9
Full Protection Outside the PO EA-SEC .................... 9
Principle of Shared Responsibility ................................... 13
Collective Bargaining and Negotiations ........................... 13
Preferential Use of Voluntary Modes ............................... 16
Just Share in the Fruits of Production ............................. 17
Art. 111 ................................................................................... 17
The Due Process Clause ................................................. 17
Contractual Due Process ......................................... 18
Backwages and Nominal Damages ..................... 18
The Abbott Ruling ................................................ 19
Review of Ruben Serrano ....................................... 22
Curative Jurisprudence ............................................ 23
The Equal Protection Clause ........................................... 25
The Lesser Amount Rule ......................................... 25
The Sameer Doctrine .............................................. 26
 CONTENTS
Art. 11 .................................................................................... 31
Fundamental Equality Guarantee (Sec. 14,) .................... 31
Art. II & XIII ......................................................................... 32
The Social Justice Clause ............................................... 32
The Twin Functions of Social Justice ...................... 32
Social Utility Theory ......................................................... 33
Reinstatement Pending Appeal ............................... 34
New Civil Code ......................................................................... 34
Art. 13 ................................................................................. 34
1 Month is 30 days .......................................................... 34
Art. 19 .................................................................................. 35
Principle of Abuse of Rights ........................................... 35
Art. 22 .................................................................................. 36
Principle of Unjust Enrichment ........................................ 36
Payroll Reinstatement ..................................................... 37
Art. 1306 .............................................................................. 37
Principle of Freedom of Contracts ................................... 37
Art. 1311 .............................................................................. 39
Principle of Relativity of Contracts ................................... 39
Art. 1378 .............................................................................. 39
Principle of Least Transmission of Rights ....................... 39
Labor Code ............................................................................... 41
Art. 3.................................................................................... 41
The Protection to Labor Policy ....... :................................ 41
Art. 4 .................................................................................... 41
Liberal Interpretation Rule ............................................... 41
When not applicable ....................................................... .43
Articulation of the Principle ............................................. 46
Art. 5.................................................................................... 49
Operative Fact Doctrine ................................................... 49
Art. 6 .................................................................................... 51
Equal Protection to Agricultural Employees .................... 51
Art. 12 ................................................................................. 54
Pre-Employment Policies ................................................ 54
CONTENTS
Art. 100 ................................................................................ 56
Principle of Non-Diminution of Benefits ........................... 56
Art. 110 ................................................................................ 57
Workers' Preference ........................................................ 57
Art. 111 ................................................................................ 59
Right to Litigate ................................................................ 59
Arts 101-105; Arts. 112-116 ................................................ 62
Prescriptive and Proscriptive Wage Rules ...................... 62
Art. 124 ................................................................................ 62
Primacy of Negotiation .................................................... 62
Art. 218 . ............................................................................... 62
Labor Relations Principles ............................................... 62
Art. 266 ................................................................................ 66
No injunction Policy ......................................................... 66
Art. 292 ................................................................................ 67
Miscellaneous: Four Principles ........................................ 67
B. State Policy Towards Labor .............................................. 69
Security of Tenure ............................................................... 69
Social Justice ....................................................................... 70
Equal Work Opportunities .................................................... 73
Right to Self-Organization and Collective Bargaining ......... 73
Construction in Favor of Labor ............................................ 74
Burden of Proof and Quantum of Proof.. ............................. 74
Part II
RECRUITMENT AND PLACEMENT
Definition .................................................................................. 81
Art. 13 .................................................................................. 81
Regulation of Recruitment and Placement Activities .......... 82
Regulatory Authorities ......................................................... 82
Ban on Direct Hiring ............................................................ 83
Entities Prohibited from Recruiting ...................................... 86
Participation ......................................................................... 86
Documentary Suspension ................................................... 86
Characteristics of a Recruitment License ............................ 91
Order of Execution ............................................................... 92

f
CONTENTS
Suspension and Cancellation of License or Authority ......... 94
Illegal Recruitment ............................................ ,..................... 97
Elements .............................................................................. 97
Types ................................................................................... 97
Illegal Recruitment as Distinguished from Estafa ................ 97
Liability of Local Recruitment Agency and Foreign
Employer .................................................................................. 99
Solidary Liability ................................................................... 99
Theory of Imputed Knowledge ............................................ 99
Termination of Contract of Migrant Worker ....................... 103
Sec. 7, R.A. 10022: Money Claims ................................... 103
No Reinstatement and Backwages ................................... 104
Employment of Non-Resident Aliens .................................. 105
Employment Policy ............................................................ 106
Alien Employment Permit .................................................. 107
Exempt Aliens .................................................................... 107
Duty to Apply for an AEP ................................................... 109
Summary ............................................................................... 110
Acts of Recruitment & Placement (Art. 13-b) ................ 110
Illegal Recruitment.. ....................................................... 111
Feasible Defenses ......................................................... 111
Non-Feasible Defenses ................................................. 112
License v. Authority ........................................................ 113
Art. 14. Employment Promotion ............................................. 113
Art. 15. Bureau of Employment Services ............................... 114
Advisory 1, s. 2015 .................................................... 116
Art. 17. Overseas Employment Development Board ............. 117
Art. 18. Ban on Direct-Hiring .................................................. 117
Art. 21. Foreign. Service Role and Participation ..................... 120
Art. 22. Mandatory Remittance of Foreign Exchange
Earnings ..................................................................... 121
Amount of Remittance (Rule VIII, Book Ill,
POEA Rules) ............................................................. 121
Art. 34. Prohibited Practices ................................................ 122
Lack of License or Authority ...................................... 129
-----,
CONTENTS
Art. 35. Suspension and/or cancellation of license or
Authority ..................................................................... 130
Art. 36. Regulatory Power ...................................................... 130
Regulation of Overseas Employment.. ...................... 131
Art. 37. Visitorial Power .......................................................... 131
Art. 38. Illegal Recruitment .................................................. 132
Types of Illegal Recruitment.. .................................... 133
Modes of Committing Illegal Recruitment. ................. 134
R.A.10022 v. D.O.114-14 ...................................................... 136
PO EA-SEC of Seafarers ........................................................ 139
Crew Claims ...................................................................... 143
Theory of Aggravation ................................................... 143
The Clear Nexus Rule ................................................... 144
Medical Repatriation: Legal Effect... .............................. 145
The 3-day Reporting Requirement ................................ 145
Abandonment of Medical Examination and
Treatment ...................................................................... 146
Sickness Allowance ....................................................... 146
Disability Compensation ................................................ 148
Compensation Rules ......................................................... 149
Disease as Cause of Disability ...................................... 149
Injury/Accident as the Cause of Disability ..................... 154
Concept of Disability ............................................................. 155
Total Disability ............................................................... 155
Permanent Disability ...................................................... 155
Jurisprudence on Total Permanent Disability .................... 1.55
The 120-240 Day Rule ...................................................... 155
The Doble Doctrine ............................................................ 156
The Jebsens Instruction .................................................... 157
The Taok List ..................................................................... 157
Third Physician Rule ............................................................. 158
Non-Applicability of the Third Physician Rule .................... 160
Grounds for Contesting Third Medical Opinion ................. 161
Death Compensation: Rules ................................................ 161
Death Outside Period of Contract: When
Compensable .................................................................... 162

CONTENTS
PART Ill
LABOR STANDARDS
Coverage ............................................................................... 173
Labor Standards or Extra-Wage Benefits ................................ 176
Overtime pay and Service Charges .................................. 176
Built-in Overtime ................................................................ 177
Usual Claims of Workers Paid By Result .......................... 179
The Disqualification Rules .................................................... 181
Pieceraters: Sec. 8(b), Rule IV, Bk. Ill, ORILC .................. 182
R.A.10361: SIL & WRP .......................................................... 183
The 1ih Month Pay Law (P.D. 851) ...................................... 185
Part 2
Special Leaves ....................................................................... 192
Parental Leave for Solo Parents ....................................... 192
Expanded maternity Leave ................................................ 193
Paternity Leave .................................................................. 195
Gynecological Leave ......................................................... 196
Battered Woman Leave ..................................................... 199
Sexual Harassment in a Work Environment (R.A.7877) .... 203
Totality of Circumstances Rule .......................................... 209
Burden of Proof ................................................................. 209
Unsafe Spaces under RA. 7877 ....................................... 210
The Safe Spaces Act of 2019 (R.A. 11313) .... ...................... 210
The Law on Special Workers ................................................ 216
Apprentice ............................................ , ............................. 217
TESDA Approval ........................................................... 217
Employable Age ............................................................ 218
Regu Jar Employee ......................................................... 219
Apprentice v. Probationary Employee ........................... 219
Jurisdiction; Exhaustion of Administrative Remedies .... 221
Appeal ............................................................................ 222
Certiorari ........................................................................ 222
Learner .............................................................................. 224
Right to Hire ................................................................... 225
Handicapped Workers ....................................................... 229
Valid Employment Contract ........................................... 229
7
CONTENTS
Brent Ruling ................................................................... 230
Bernardo Ruling ............................................................. 230
Magna Carta of Persons with Disability ......................... 230
The Law on Special Groups of Workers ............................. 232
Women Workers ................................................................ 232
The Control Test.. .......................................................... 239
Minor Workers ................................................................... 241
House helpers .................................................................... 245
Industrial Homeworkers ..................................................... 245
Househelper v. Homeworker ......................................... 246
Types of Industrial Homeworker (Art. 153) .................... 247
Rights of a Homeworker ................................................ 24 7
Night Worker (R.A. 10151) ................................................ 248
Definition ........................................................................ 248
Night Worker v. Night Shifter ......................................... 252
Security Guards (D.O. 150-16) .......................................... 254
Probationary Employment ................................................. 254
Security of Tenure ................................................................. 254
Regular Employment (Hire-Fire-Rehire) ............................ 254
Off-Detail or Floating Status .............................................. 254
Separation Pay .................................................................. 256
Head Office Rule ............................................................... 257
SEnA Proceedings ............................................................ 257
PART IV
POST-EMPLOYMENT
Employer-Employee Relationship ....................................... 260
Test to Determine Existence ............................................. 260
The Fourfold Test .......................................................... 260
Two Tier Test ........................................................................ 263
Independent Contractor ................................................. 268
Employee of an Independent Contractor ....................... 269
Theory of Secondment .................................................. 270
Quasi-Contract Doctrine ................................................ 272
Characteristics of Employer-Employee Relationship ........ 273
Job Contracting v. Labor Contracting ................................ 274
Trilateral Relationship .................................................... 276
 f
CONTENTS
Solidary Liability ............................................................. 277
Legal Significance of a Certificate of Registration ......... 286
Service Agreement v. Distributorship Agree~ent ............. 287
Independent Contractor ..................................................... 302
Kinds of Employment. .............................................................. 318
Regular Employees ........................................................... 320
Project Employees ............................................................. 322
Seasonal Employees ......................................................... 323
Casual Employees ............................................................. 327
Fixed-Term Employees ..................................................... 329
Contractual Employees ..................................................... 333
Probationary Employees ................................................... 334
Corporate Employee .......................................................... 337
Post-Employment .................................................................. 341
Termination by Employer: Grounds & Requisites ....... 342
Breach of Trust .............................................................. 343
Willful Disobedience ...................................................... 346
Serious Misconduct ....................................................... 348
Union Expulsion ............................................................. 351
Gross and Habitual Neglect of Duty .............................. 352
Crime ............................................................................. 353
Inefficiency ..................................................................... 355
Special Rules ................................................................. 357
Medical Termination ...................................................... 365
Business-Related Authorized Causes ........................... 366
Health-Related Authorized Cause ................................. 368
Procedural Due Process ................................................. 370
Pre-Termination Procedure under Art. 297 ................... 370
Waiver ........................................................................ 372
Sec. 17, POEA-SEC: Clear and Existing Danger .......... 374
Under Art. 298: Authorized Cause ................................ 376
Defective Notice ........................................................ 378
Under Art. 299: Medical Termination ............................. 379
Illegal Dismissal ............................................................... 385
Right to Quit.. ................................................................. 385
CD thru Quitting ......................................................... 385
CD without Quitting .................................................... 386
Others CDs ................................................................ 387
CD thru Floating Status ............................................. 388
CONTENTS
General Return to Work Order ...................................... 389
Separation Pay .............................................................. 400
Damages ....................................................................... 403
Moral Damages ......................................................... 404
Attorney's Fees .......................................................... 404
Legal lnterest ................................................................. 404
Financial Assistance ...................................................... 405
Termination by Employee ............................................... 407
With Notice to the Employer (Resignation) .................. .407
Without Notice to the Employer (Constructive
Dismissal) .............................................................................. 407
Voluntary Resignation v. Constructive Dismissal .......... 412
Retirement ........................................................................ 417
Computation Under Art. 302 .......................................... 418
Prerequisites .................................................................. 419
Involuntary Retirement Plan .......................................... 421
The Retirement Plan ...................................................... 422
Bilateral Act. ................................................................... 424
Illegal Dismissal ............................................................. 424
Principle of Least Transmission of Rights ..................... 424
Types of Retirement Schemes ...................................... 428
Notional Rate ................................................................. 429
Compulsory Retirement v. Voluntary Retirement.. ........ 429
Principle of Compassionate Justice .............................. 432
PARTV
LABOR RELATIONS
Right to Self-Organization .................................................... 436
Coverage ........................................................................... 436
Exclusions .......................................................................... 437
Confidential Employees ..................................................... 437
Mixed-Membership ............................................................ 440
Rights and Conditions of Membership .............................. 440
Collective Bargaining Unit ................................................. 446
Exclusive Bargaining Representative ................................ 450
Check-off, Assessment, Agency Fees .............................. 460
Collective Bargaining ......................................................... 461
Collective Bargaining Agreement ...................................... 461
Unfair Labor Practices .......................................................... 466
 f
CONTENTS
The Non-Prejudicial Rule ................................................... 475
Peaceful Concerted Activities ......................... ~ ................... 4 77
Doctrine of Preferred Freedoms ........................................ 479
Lockout .............................................................................. 484
PART VI
MANAGEMENT PREROGATIVE
Management Prerogative ...................................................... 486
Discipline ........................................................................... 488
Transfer of Employees ...................................................... 490
Productivity Standards ....................................................... 491
Bonus ............................................................................... 494
Change of Working Hours ................................................ .496
Bona Fide Occupational Qualification ................................ 501
Post-Employment Restrictions .......................................... 504
Marriage Between Employees of Competitor
Employers .......................................................................... 513
PART VII
SOCIAL LEGISLATION
The Social Security Act of 1997 (R.A. 8282) ....................... 522
Policy ............................................................................... 522
Characteristics of the Social Security Law ........................ 523
Coverage ........................................................................... 525
Compulsory Coverage v. Voluntary Coverage .............. 526
Disqualification .................................................................. 526
Benefits ............................................................................... 529
Beneficiaries ...................................................................... 532
Sickness Benefits .............................................................. 533
Maternity Benefits v. Sickness Benefits ........................ 534
Other Benefits .................................................................... 534
The Government Service Insurance System Act of
1997 (R.A. 8291) ..................................................................... 547
Coverage ........................................................................... 547
Exclusions .......................................................................... 547
Benefits .............................................................................. 547
Proximate Cause Theory ................................................... 547
· 1ncreased Risk Theory ....................................................... 548
CONTENTS
Employees Compensation Rules: ECC Board
Resolutions .............................................................................. 548
The Limited Portability Law (R.A. 7699) .............................. 555
Disability and Benefits .......................................................... 558
Employees Compensation and State Insurance Fund ...... 558
PO EA-Standard Employment Contract.. ........................... 558
PO EA-SEC of Seafarers ............................................... 558
Contractual Employee ................................................... 558
Money Claims .................................................................... 561
Crew Claims .................................................................. 562
Theory of Aggravation ............................................... 562
The Clear Nexus Rule ............................................... 563
Medical Repatriation: Legal Effect.. ........................... 564
The 3-day Reporting Requirement.. .......................... 564
Abandonment of Medical Examination and
Treatment .................................................................. 565
Sickness Allowance ................................................... 565
Disability Compensation ............................................ 567
Compensation Rules ..................................................... 567
Burden of Evidence: Overlapping of Factors ............. 571
Effectivity of Contract Rule ........................................ 572
Usual Employer Defense ........................................... 572
Concept of Disability ....................................................... 57 4
Total Disability ............................................................... 574
Permanent Disability ...................................................... 57 4
Jurisprudence on Total Permanent Disability .............. 57 4
The Doble Doctrine ........................................................ 575
The Jebsen Instruction .................................................. 576
The Taok List ................................................................. 576
Third Physician Rule ...................................................... 577
Non-Applicability of the Third Physician Rule
Three Situations .................................. ,................... 579
Grounds for Contesting Third Medical Opinion ......... 580
Death Compensation ....................................................... 580
Death Outside ·Period of Contract: When Not
Compensable ................................................................. 581
Death Outside Period of Contract: When
Compensable ........................................................................ 581
The Solo Parents Welfare Act (R.A. 8972) ........................... 591
Policy ................................................................................. 591
 r
CONTENTS
Coverage ........................................................................... 591
Qualifications of Dependent .............................................. 593
Parental Responsibility ..................................'.................... 593
Benefits .............................................................................. 593
Batas Kasambahay (R.A. 10361) .......................................... 596
Coverage ........................................................................... 596
Rights and Benefits ........................................................... 596
Jurisdiction ......................................................................... 600
The Comprehensive Agrarian Reform Law (R.A. 6657) ..... 606
Constitutional Mandate (Art. XI II) ...................................... 606
Social Function of Land ..................................................... 607
Concept of Land Reform ................................................... 607
Stock Distribution Option ................................................... 607
Coverage ........................................................................... 608
Mechanism ........................................................................ 609
Livestock, Poultry and Swine ............................................. 610
Commercial Farming ......................................................... 611
Aquaculture Land; Aquaculture Employees ...................... 611
Right to Choose ................................................................. 614
Due Process ...................................................................... 617
Payment of Compensation by Beneficiaries under
Voluntary Land Transfer .................................................... 618
Distribution Limit ................................................................ 620
Collective Ownership ......................................................... 620
Transferability of Awarded Lands ...................................... 620
Administrative Adjudication ............................................... 621
Agrarian Dispute .............................................................. 621
Finality of Determination .................................................... 622
Frivolous Appeals .............................................................. 622
Certification of BARC .......................... :.............................. 622
Judicial Review ................................................................ 622
Special Agrarian Court ...................................................... 623
Special Jurisdiction ........................................................ 624
Appointment of Commissioners ..................................... 624
Orders of Special Agrarian Courts ................................. 624
Appeals .......................................................................... 624
Agricultural Tenancy Relationship v. Employer-
Employee Relationship ................................................... 629
Personal Cultivation ........................................................... 629
.Consent ............................................................................. 630
Agricultural Land ................................................................ 632
CONTENTS
Agricultural Production ........................................................ 632
Compensation in Money and/or Produce ............................ 633
Money is not necessarily Wage ...................................... 634
Termination of Tenancy Relation ........................................ 635
Disturbance Compensation ................................................. 635
Abandonment ...................................................................... 635
Voluntary Surrender of Property .......................................... 636
Universal Healthcare Act ...................................................... 644
The National Health Insurance Act of 1995 (R.A. 7875,
as amended by R.A. 10606) ................................................ 644
The Concept of Philhealth ............................................... 644
Policy ............................................................................... 644
Guiding Principles ............................................................ 645
Coverage (Art. Ill) ............................................................ 647
Dependents ..................................................................... 647
Benefits ............................................................................ 648
Entitlement to Benefits ..................................................... 648
Excluded Personal Health Services ................................ 649
PART VIII
JURISDICTION AND REMEDIES
Labor Procedure .................................................................... 651
Twin-Jurisdictional Rules ..................................................... 651
Habeas Data .................................................................... 653
Related Matters ............................................................... 656
Aspects of Labor Procedure ................................................ 661
How Immunity is Proven ...................................................... 6_84
Processual Presumption Theory/Presumed lndentity
Approach ............................................................................. 684
Foreign Element .................................................................. 691
Interplay of Jurisdictions ...................................................... 693
Judgment. ............................................................................... 700
Appeal ..................................................................................... 703
Matters Not Raised on Appeal ............................................ 713
Post-Judgment Remedies .................................................... 714
Execution of Judgment.. ....................................................... 717
Restitution (Rule XI, 2011 NLRC Rules of Procedure,
as amended) ........................................................................ 719
Revival of Judgment.. .......................................................... 720
 r 7

CONTENTS

Piercing the Veil of Corporate Fiction .................................. 722 PARTI

Appendix A ............................................................................. 727 FUNDAMENTAL PRINCIPLES

Appendix B ............................................................................. 728
Appendix C .... ......................................................................... 729 A. Legal Basis
Appendix D ............................................................................. 730
1. 1987 Constitution

Art. XIII

Section 3. The State shall afford full protection to

labor, local. and overseas, organized and unorganized, and
promote full employment and equality of employment
opportunities for all.

It shall guarantee the rights of all workers to self-

organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be
provided by law.

The State shall promote the principle of shared res-

ponsibility between workers and employers and the prefe-
rential use of voluntary modes in settling disputes, inclu-
ding conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.

The State shall regulate the relations between wor-

kers and employers, recognizing the right of labor to its just
share in the fruits of production and the right of enterprises
to reasonable returns to investments, and to expansion
and growth. (Underscoring supplied for emphasis.)
1
 7

2 FUNDAMENTAL PRINCIPLES BAR SYLLABUS-BASED REVIEWER IN 3

LABOR LAW & SOCIAL LEGISLATION

Labor Code Guarantee UP Law Center Answer (Reformatted)

Article 3.
.
Declaration of Basic Policy.-The State
shall afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or
creed and regulate the relations between workers and
employers. The State shall assure the rights of workers to
self-organization, collective bargaining, security of tenure,
and just and humane conditions of work. (Underscoring
supplied for emphasis.)
2009 Bar, Question No. II (a)
Enumerate at least four (4) policies enshrined in
Section 3, Article XIII of the Constitution that are not
covered by Article 3 of the Labor Code on declaration of
basic policy. (2%)
Answer
The following are the policies enshrined in Sec. 3, Art.
XIII of the Constitution but not covered by Art. 3 of the
Labor Code:
(1) Principle of Participation;
(2) Principle of Shared-responsibility;
(3) Preferential use of volunta.ry modes of settling
disputes; and
(4) Just share in the fruits of production.
1998 Bar, Question No. 1
What are the salient features of the protection to labor
provision of the Constitution?
The salient features of the protection to labor
provision of the Constitution ( Sec. 3, Article XIII) are as
follows:
1. Extent of Protection - Full protection to labor;
2. Coverage of Protection- Local and overseas
workers;organized and unorganized labor;
3. Employment Policy - Full employment and
equality of employment opportunities for all; and
4. Guarantees
4.1. Unionism and Method of Determining
Conditions of Employment - Right of all workers to
self-organization, collective bargaining and
negotiations.
4.2. Concerted Activities - Right to engage in
peaceful concerted activities, including the right to
strike in accordance with law.
4.3. Working Conditions - Right to security of
tenure, humane conditions of work, and a living wage.
4.4. Decision-Making Processes - Right to
participate in policy and decision-making processes
affecting their rights and benefits as may be provided
bylaw.
4.5. Share in Fruits of Production - Recognition
of right of labor to its just share in the fruits of
production.
Another Answer
First Salient Feature: The guarantee of full
protection to labor.

4 FUNDAMENTAL PRINCIPLES
Second Salient Feature: The guarantee of full
protection to local and overseas workers~ as well as to
organized and unorganized labor.
Third Salient Feature: The constitutionalization of old
labor principles and setting forth of new ones.
Fourth Salient Feature: The recital of specific
individual and collective guarantees and of employers'
rights.
The New Labor Principles
The Full Protection Clause
In Art. 3 of the Labor Code, the guarantee is
"protection to labor''. In contrast, it is now "full protection to
labor" in Sec. 3, Art. XIII of the Constitution. As to how full
"full protection to labor" is, the answer is better illustrated
than explained. Thus:
1. Full Protection Outside the Labor Code
In Star Paper Corp., et al. v. Simbol, et al., G.R. No.
164774, 12 April 2006, Art. 136 (now Art. 134) of the Labor
Code was not a source of protection for the female
employees who lost their jobs under the company's "no
couples policy". The policy reads:
"In case of two of our employees (both
singles [sic], one male and another female) de-
veloped a friendly relationship during the course
of their employment and then decided to get
married, one of them should resign to preserve
the policy stated above."
7
BAR SYLLABUS-BASED REVIEWER IN 5
LABOR LAW & SOCIAL LEGISLATION
Relevantly, the Labor Code provides:
Art. 136. (now Art. 134) Stipulation
Against Marriage. - It shall be unlawful for an
employer to require as a condition of employ-
ment or continuation of employment that a
woman employee shall not get married, or to
stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed
resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a
woman employee merely by reason of her
marriage.
The reason Art. 136 would not make the policy void
was there was no singling out of women. It was facially
neutral; hence, it was valid because it was not a source of
disparate treatment - absent such singling out - as couples
determined who should give up his/her work. However, it
was still discriminatory against women, although indirectly.
Since the Full Protection Clause makes no distinction
between direct-intentional discrimination ( disparate treat-
ment) and indirect-unintentional discrimination (disparate
impact), the policy was still declared void.
Disparate Treatment v. Disparate Impact
Disparate Treatment is direct and intentional discri-
mination, as illustrated by an employment policy that
reads: "Employees of this company shall not inter-marry. If
they do, the wife shall resign or be deemed resigned." Its
character is that it singles out women. In contrast,
Disparate Impact is indirect and unintentional discrimi-
ation as illustrated by this employment policy: "Employees
of this company shall not inter-marry. If they do, one of
them shall resign or be deemed resigned." Its character is
6 FUNDAMENTAL PRINCIPLES
that it produces accidental discrimination only, i.e., the
discrimination kicks in only when the couple decides that it
should be the wife who must give up her work.
Adverse Impact Rule
Adverse impact refers to employment practices that
appear neutral but have a discriminatory effect on a
protected group. Adverse impact may occur in hiring,
promotion, training and development, transfer, layoff, and
even performance appraisals. (Report of Human Resource
Management (RHRM), 9 Nov. 2018, https:/ blog. Areer-
inds.com).
In the Star Paper Case, women were not singled out.
Instead, couples were given the opportunity to choose who
between husband and wife should resign. If it was the wife,
when it could have been the husband, the discrimination
was incidental, i.e., it resulted from the couples having to
choose one or the other to give up work to comply with the
policy. If they decided that it would/should be the wife then
the discrimination was incidental to their mutual decision.
2. Full Protection Outside Employment Contracts
In Santosa Datuman v. First. Cosmopolitan Man-
power, et al., G.R. No. 156029, 14 November 2008, the
contract sued upon was executed overseas; hence, it could
not have been approved by the POEA. Under POEA rules,
the solidary liability of a recruiter arises from any violation of
the POEA-approved contract (Sec. 1, Rule II, POEA Rules
and Regulations). On this basis, the recruiter sought
exoneration. However, the contract was a second contract
which the OFW was forced to enter into because her first
employer violated the terms of the POEA-approved contract
under which she was deployed. In effect, the second
BAR SYLLABUS-BASED REVIEWER IN 7
LABOR LAW & SOCIAL LEGISLATION
contract constituted "continuing breaches" of the terms
and conditions of the POEA-approved contract; hence, the
recruiter was still solidarily liable with the foreign employer.
3. Full Protection Outside Art. 291 (now Art. 306),
Labor Code
In Accessories Specialist, Inc. v. Alabanza, G.R.
No. 168985, 23 July 2008, the employer made a string of
promises to pay the employee's withheld salaries and com-
missions. The latter believed in those promises; hence, he
did not file a money complaint within three years pursuant
to Art. 291 (now Art. 306) of the Labor Code. Unfortu-
nately, on the fifth year, he died on his claims. Sued by the
widow, the company interposed prescription. However, the
defense was rejected by the Supreme Court which applied
the Principle of Promissory Estoppel (PPE).
Elements of PPE: (1) the employer
promised payment - not once but as many times
as the employee returned to demand for pay-
ment; (2) the promises reasonably induced belief
on the part of the latter; in fact, it induced in-
action on his part as not to timely file a complaint
for payment; and (3) if said inaction was taken
against him, it would have prejudiced him.
Under the Principle of Promissory Estoppel, "... an
estoppel may arise from the making of a promise, even
though without consideration, if it was intended that the
promise should be relied upon and in fact it was relied
upon, and if a refusal to enforce it would be virtually to
sanction the perpetration of fraud or would result in other
injustice. In this respect, the reliance by the promisee is
generally evidenced by action or forbearance on his part,
and the idea has been expressed that such action or
8 FUNDAMENTAL PRINCIPLES
forbearance would reasonably have been expected by the
promiser. Mere omission by the promisee. to do whatever
the promiser promised to do has been held insufficient
'forbearance' to give rise to a promissory estoppel." ( 19
Am. Jur., loc. cit.). (Emerito Ramos v. Central Bank of
the Philippines, G.R. No. L-29352, October 4, 1971; 41
SCRA 565 at p. 588, also Go Ong v. Court of Appeals,
G.R. No. 75884, September 24, 1987; 154 SCRA 270).
4. Full Protection Outside Annex "A", Employees
Compensation Act (ECA)
Death or disability of a GSIS member arising from
disease is compensable if the disease is an occupational
disease. Put simply, it is occupational if it is listed in Annex
"1" of the EGA. In Rhoda Castor Garupa (rep. by Imelda
C. Electona) v. ECC & GSIS, G.R. No. 158268, 12 April
2006, Dr. Garupa died of Glomerulonephritis, an unlisted
disease. For that reason, the consequent death claim was
denied. However, the Supreme Court allowed compensa-
tion outside the list.
The rule is, work-connection may still be established
outside Annex "1" with substantial evidence, i.e., thru the
instrumentality of the Proximate Cause Theory or
Increased Risk Theory. The Supreme Court applied the
second. It noted that, for 20 long years, Dr. Garupa
performed her work as a government physician - exposing
herself in the process to all kinds of bacteria, including
streptococcus bacterium. This type of bacterium caused
streptococcal infection. In turn, said infection caused
Glomerulonephritis which caused her death. In other
words, her performance of her work increased her risk of
contracting the unlisted disease.
Question to Ask: "Has performance by the
BAR SYLLABUS-BASED REVIEWER IN 9
LABOR LAW & SOCIAL LEGISLATION
member of his work increased his risk of
contracting the unlisted disease?"
Answer: If "yes" then the death or disability is
compensable because the unlisted disease from
which it arose is occupational.
5. Full Protection Outside the Substantial
Evidence Rule
A GSIS member suffering from a disability caused by
an unlisted disease, e.g., osteoblastic sarcoma, must
prove work-connection with substantial evidence. Unfortu-
nately, in GSIS v. CA, G.R. No. 124208, 1 January 2008, a
soldier could not. The reason was simple: even medical
science could not explain the origin of his disease then. In
view of the impossibility of evidence, the Supreme Court
allowed his disability claim. It held that since even medical
science could not explain the origin of his disease, the
condition that he proved work-connection with substantial
evidence was deemed not imposed. In fact, it became a
void condition under the circumstances.
6. Full Protection Outside the POEA-SEC
Under the POEA-SEC, the death of a seafarer by
reason of disease is compensable if (a) his disease is
work-connected or listed under Sec. 32-A of the POEA-
SEC; and (b) his death occurred during the term of his
contract. In Anita Canuel v. Magsaysay Maritime Corp.,
G.R. No. 190161 , 13 October 2014, medical repatriation
was by reason of an onboard injury. Although the seafarer
died after the termination of his employment contact as to
negate the second requisite, the Supreme Court allowed
death compensation for the reason that he died of a work-
connected disease, viz., lung cancer, among others, of
 F
1
10 FUNDAMENTAL PRINCIPLES
which his injury was a factor in its development. Moreover,
his medical repatriation was deemed an ~xception to the
second requisite, viz., effectivity of contract.
Race/is died of brainstem cavernous malformation, an
unlisted disease, months after the termination of his
employment contract. Hence, his death was not supposed
to be compensable because of the absence of both
requisites. However, the Supreme Court allowed the death
claim. In holding that the seaman's death was
compensable, it reasoned that an unlisted disease was
disputably presumed by the POEA-SEC to be work-
connected; however, the employer failed to dispute the
presumption. Moreover, he was medically repatriated due
to extreme pain on his ear and high blood pressure. His
repatriation was deemed an exception to the second
requisite (Race/is vs. United Philippine Lines, Inc., G.R.
No. 198408, 12 November 2014).
The Asked Questions:
2007 Bar, Question No. I
(a) What is the principle of codetermination?
(b) What, if any, is the basis under the Constitution
for adopting it?
Answer
(a) Codetermination is the principle observed in
advanced economies of permitting workers to co-manage
their employers' businesses.
(b) Its adoption in the Philippines has no constitu-
tional basis because the guarantee of participation in Sec.
3, Art. XIII is limited to workers' involvement in the adoption
of policies affecting their rights, welfare and benefits only.
BAR SYLLABUS-BASED REVIEWER IN 11
LABOR LAW & SOCIAL LEGISLATION
The guarantee does not cover workers' right to co-manage
1
their employer's business.
2008 Bar, Question No. I (b): Extent of Participation
Explain the extent of the workers' right to participate
in policy and decision-making processes as provided under
Article 111, Section 3 of the Philippine Constitution. Does it
include membership in the Board of Directors of a corpo-
ration?
Answer
(b) The right to participate, as enshrined in Sec. 3,
Art. XIII of the Constitution, is the right to be part of the
deliberative and adoptive phases of policy and decision-
making on matters affecting workers' rights, benefits and
welfare. This right does not cover purely business
decisions (PAL v. NLRC, et al., G.R. No. 85985, 13
August 1993) and the determination of retention criteria in
retrenchment (FASAP v. PAL, G.R. No. 178083, 13 March
2018).
Board membership is not included in the right to
participate. The participation provision does not provide a
shortcut to board membership which is by election only.
However, by concession, the employer may permit wor-
kers' representation in its seat of governance, e.g., by way
of trade-off to get the union to agree to a bargaining
moratorium arrangement (Rivera, et al. v. Espiritu, et al.,
G.R. No. 135547, 23 January 2002).
The Un-asked Questions:
1. Co-management
1
See Art. 218, p.63.
 r 7
12 FUNDAMENTAL PRINCIPLES
Reformulation of the Bar 2007 Question
(a) What is co-management? •
(b) Does its observance in the Philippines have
any legal basis? Explain.
Answer
(a) Co-management is the same as codeter-
mination. It is the practice in advanced economies of
permitting workers to co-run businesses. (TSN,
ConCom Proceedings, 6 August 1986).
(b) Since the participation guarantee in both
Sec. 3, Art. XIII of the Constitution and Art. 218 of the
Labor Code does not take after such practice then the
adoption of co-management in the country has no
legal basis.
2. Levels of Participation
Workers do not just co-adopt policies affect-
ting their rights, benefits and welfare. They have
to participate also in the deliberations leading to
their adoption. In other words, the levels of the
participation guaranteed them are the delibe-
rative phase and the adoptive phase.
3. D.O. 174-15 (Analogous Causes)
A valid dismissal based on employee fault
or culpability is one that is grounded on a listed
cause (Art. 297, Labor Code). But even one that
is grounded on an unlisted cause is valid if that
cause is an analogous cause, or one
substantially similar to any of the listed causes.
Examples: abandonment (similar to gross
and habitual neglect of duty); quarrelsome
BAR SYLLABUS-BASED REVIEWER IN 13
LABOR LAW & SOCIAL LEGISLATION
attitude (sufficient basis for loss of trust); gross
inefficiency (akin to gross and habitual neglect of
duty); and use of shabu (not a crime under Art.
297 which requires that the victim be the em-
ployer, immediate member of his family or autho-
rized representative; it is analogous to serious
misconduct only). These are sourced from de-
cided cases. Now, under D.O. 174-15, there can
be more; provided, the employer sets them forth
in its rules and regulations. However, because
the list of additional analogous causes is discipli-
nary in nature, it affects the workers' tenurial
right. Consequently, they must be allowed parti-
cipation because the company rules are much
like a code of discipline.
Principle of Shared-Responsibility
One of the characteristics of employer-employee
affair is it is a shared-responsibility. This is the
constitutional description of employer-employee
relationship in Sec. 3, Art. XIII. To illustrate, the duty of the
employer to pay his employee a living wage implies the
correlative obligation of the latter to render efficient,
adequate and loyal service. This is a significant converging
point between Labor Standards Law and Labor Relations
Law. The first requires the employer to pay. If he does but
his employee's work performance is wanting in efficiency
and adequacy, a dismissal based on gross and habitual
neglect of duty can be effected (Art. 297, Labor Code); or,
if found wanting in loyalty, the employee can be dismissed
on the ground of loss of trust and confidence (id.).
Collective Bargaining and Negotiations
The guarantee of Art. 3 of the Labor Code is collective
bargaining only. Sec. 3, Art. XIII of the Constitution has
14 FUNDAMENTAL PRINCIPLES
expanded it to collective bargaining and negotiations. It
can be safely assumed that the two terms.have different
meanings; otherwise, the framers of the Constitution would
just have used one to the exclusion of the other to avoid
unwanted use of synonyms. Collective bargaining is a right
under the Constitution. In the Labor Code, however, it is an
obligation. It reads:
Art. 263 (formerly Art. 252). Meaning of
Duty to Bargain Collectively. - The duty to bar-
gain collectively means the performance of the
mutual obligation to meet and convene promptly
and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages,
hours of work and other terms and conditions of
employment including proposals for adjusting
any grievances or questions arising under such
agreement and executing a contract incorpo-
rating such agreements if requested by either
party but such duty does not compel any party to
agree to a proposal or to make any concession.
As a right, it is a penumbra or shadow right of the
right to self-organization which is the right to join, assist or
form labor organizations for collective bargaining, dealing
with the employer, or mutual aid and protection. As a duty,
it is the obligation to meet promptly, .expeditiously and in
good faith to negotiate a contract embodying improved
terms and conditions of employment. More or less, this is
how collective bargaining is understood in the private sec-
tor. Notably, even employees in the public sector can
organize as guaranteed by Sec. 8, Art. Ill of the Cons-
titution. The equivalent of the penumbra/ right of collective
bargaining in the public sector is collective negotiations
over negotiable employment terms since State workers
cannot contract over non-negotiable aspects of their
employment, e.g., salary, which are for the State to fix. To
BAR SYLLABUS-BASED REVIEWER IN 15
LABOR LAW & SOCIAL LEGISLATION
this extent, therefore, collective bargaining pertains to the
private sector; whereas, collective negotiations pertain to
the public sector.
Other Distinctions
The Labor Code reads:
Art. 255 (now Art. 267). Exclusive Bargai-
ning Representative and Worker's Participa-
tion in Policyand Decision-Making. - The labor
organization designated or selected by the majo-
rity of the employees in an appropriate collective
bargaining unit shall be the exclusive bargaining
representative of the employees in such unit for
the purpose of collective bargaining. However, an
individual employee or group of employees shall
have the right at any time to present grievances to
their employer.
XXX
(Underscoring supplied.)
There are two processes contemplated by the present
Art. 267, viz.: (a) collective bargaining, which is the function
of the exclusive or sole bargaining representative; and (b)
dealing with the employer, which is the function of any
group of workers.
Since the Constitution does not make a distinction, or
does not make specific references, it can be ventured that
the two processes in Art. 267 are the very same processes
contained in the constitutional twin "collective bargaining
and negotiations". Therefore, a necessary outcome is this:
collective bargaining requires prior compliance by the
exclusive bargaining representative with the jurisdictional
preconditions of collective bargaining; whereas, collective
16 FUNDAMENTAL PRINCIPLES
r BAR SYLLABUS-BASED REVIEWER IN 17
LABOR LAW & SOCIAL LEGISLATION

negotiation does not. Furthermore, there is unfair labor {b) XX X

practice (ULP) based on violation of the dut~ to collectively
bargain; whereas, there can be no ULP based on violation
of the right/duty to collectively negotiate. The reason for
this is that only the first is listed as ULP under both Arts
259 and 260 of the Labor Code.
Preferential Use of Voluntary Modes
Another characteristic of employer-employee relation-
ship, according to Prof Azucena, is that it is inter-party.
As such, employer-employee affairs are to be strictly deci-
ded upon by the parties in the concept of party autonomy.
They are to determine the course of their affair. Disputes
arising from their affair must be let to them that they may
employ their own means of resolving them with minimum
State interference because industrial peace cannot be
achieved thru State compulsion. For this reason, the
Constitution requires the preferential use of conciliation,
mediation and voluntary arbitration. These are the so-
called voluntary modes of labor dispute resolution.
Answer
(a) Since the establishment is organized, the mode
of settlement most procedurally peaceful is recourse to the
grievance machinery. If the dispute be not resolved within
seven (7) calendar days, the same shall be elevated to
voluntary arbitration.
{b) XX X
Just Share in the Fruits of Production
The Productivity Incentives Act of 2000 is the im-
plementing law for this principle. Understandably, as
pronounced in Serrano v. Gallant Maritime Services,
lnc.,G.R. No. 167614, 24 March 2009, the principles in
Sec. 3, Art. XIII are not self-executing. They require imple-
mentation by statute. Regardless, the Full Protection
Clause can always be applied even without an implemen-
ting law.

Grievance Machinery
Art. Ill
2018 Bar, Question No. IV (a) The Due Process Clause

Natasha Shoe Company adopted an organizational Types of Due Process

streamlining program that resulted in the retrenchment of 1. Constitutional Due Process (Sec. 1,
550 employees in its main plant. After having been paid Art. Ill, Constitution)
their separation benefits, the retrenched workers
demanded payment of retirement benefits under a CBA 2. Statutory Due Process (Art. 292, Labor
between their union and management. Natasha Shoe Code)
Company denied the workers'demand. 3. Contractual Due Process (Code of
(a) What is the most procedurally peaceful means to Discipline, etc.)
resolve this dispute? (2.5%) Constitutional Due Process (CDP) v. Statutory
Due Process (SDP)
18 FUNDAMENTAL PRINCIPLES
As to Nature. CDP limits State action;
whereas, SOP limits private action. ,
As to Extent. CDP protects right to life,
liberty and property; whereas, SOP protects right
to property only.
As to Violation. Violation of CDP renders
State action void; whereas, violation of SOP
justifies assessment of nominal damages.
Contractual Due Process
Abbott Laboratories Phil., et al. v. Pearlie Ann Alcaraz
(en bane)
G.R. No. 192571, 22 April 2014
A pre-termination or disciplinary procedure adopted
by a company must be observed by it. The duty to observe
rules is not imposed solely on employees. Rules are
equally binding on employers. Breach of CDP justifies
assessment of nominal damages, i.e., even if SOP may
have been observed.
Backwages and Nominal Damages
Armando Aliling v. Jose Feliciano, et al.
G.R. No. 185829, 25 April 2012
Even in a case where a dismissal is found to be
illegal, nominal damages shall be assessed as long as due
process has been violated. Hence, full backwages and
nominal damages should be awarded at the same time.
The Abbott Case v. The Aliling Case
In Abbott, the dismissal is valid; in Aliling, it is illegal.
In Abbott, the employee is duly informed of the
BAR SYLLABUS-BASED REVIEWER IN 19
LABOR LAW & SOCIAL LEGISLATION
regularization standards; in Aliling, he is not. In Abbott,
SOP is observed but not CDP; in Aliling, SOP is breached.
Note:
Alcaraz was given a pre-employment orientation and
training; she was given a copy of the Rules of Conduct and
Perfo~m_ance of Abbott; she was notified of her job
description; etc ... Moreover, adequate performance of work
is itself an implied regularization standard. In contrast
Aliling was informed that he would be evaluated on the 5th
month; however, no standards were made known to him
upon his engagement. In fact, he was informed that those
standards would still be agreed upon subsequently. Yet,
there was no proof that an agreement ever ensued.
Hence, unlike Alcaraz, Aliling was a regular employee from
Day 1.
The Abbott Ruling
"Records show that Abbott's PPSE proce-
dure mandates, inter a/ia, that the job perfor-
mance of a probationary employee should be for-
mally reviewed and discussed with the emplo-
yee at least twice: first on the third month and
second on the fifth month from the date of em-
pl_oyment. Abbott is also required to come up
with a Performance Improvement Plan during the
third month review to bridge the gap between the
employee's performance and the standards set
if any. In addition, a signed copy of the PPSE
form should be submitted to Abbott's HRD as the
same would serve as basis for recommending
the confirmation or termination of the probatio-
nary employment.
In this case, it is apparent that Abbott failed
to follow the above-stated procedure in evalua-
ting Alcaraz. For one, there lies a hiatus of
20 FUNDAMENTAL PRINCIPLES
r BAR SYLLABUS-BASED REVIEWER IN
evidence that a signed copy of Alcaraz's PPSE
form was submitted to the HRD. It Wi:IS not even
shown that a PPSE form was completed to for-
mally assess her performance. Neither was the
performance evaluation discussed with her
during the third and fifth months of her employ-
ment. Nor did Abbott come up with the necessa-
ry Performance Improvement Plan to properly
gauge Alcaraz's performance with the set com-
pany standards.
While it is Abbott's management prerogative
to promulgate its own company rules and even
subsequently amend them, this right equally
demands that when it does create its own
policies and thereafter notify its employees of the
same, it accords upon itself the obligation to
faithfully implement them. Indeed, a contrary
interpretation would entail a disharmonious
relationship in the work place for the laborer
should never be mired by the uncertainty of
flimsy rules in which the latter's labor rights and
duties would, to some extent, depend."
The traditional formula for nominal damages ( Serra-
no, Agabon, Jaka Foods, etc .. ) is that the dismissal is
valid but due process is violated. Thus, the formula does
not include a situation in which the finding is that the
dismissal is not for a just or authorized cause (illegal
dismissal) and due process is also violated.
In Tongko v. Manulife (2008), the Supreme Court
awarded nominal damages based on its finding of illegal
dismissal and violation of due process. In other words,
as long as due process was violated then nominal da-
mages must be awarded. Unfortunately, this ruling lost its
mooring when - on reconsideration - the Supreme Court
in Tongko v. The Manufacturers Life, G.R. No. 167622,
21
LABOR LAW & SOCIAL LEGISLATION
25 January 2011, ruled that Tongko was not an employee
after all but an independent contractor.
Bar 2016, Question No. II
Gregorio was hired as an insurance underwriter by
the Guaranteed Insurance Corporation (Guaranteed). He
does not receive any salary but solely relies on
commissions earned for every insurance policy approved
by the company. He hires and pays his own secretary but
is provided free office space in the office of the company.
He is, however, required to meet a monthly quota of twenty
(20) insurance policies, otherwise, he may be terminated.
He was made to agree to a Code of Conduct for
underwriters and is supervised by a Unit Manager.
a. Is Gregorio an employee of Guaranteed? Explain.
(2.5%)
b. Suppose Gregorio is appointed as Unit Manager
and assigned to supervise several underwriters. He holds
office _in. the company premises, receives an overriding
comm1ss1on on the commissions of his underwriters, as
well as a monthly allowance from the company, and is
supervised by a branch manager. He is governed by the
Code of Conduct for Unit Managers. Is he an employee of
Guaranteed? Explain. (2.5%)
Answer
(a) No, Gregorio is not an employee. He is an
inde~endent contractor because the control exercised by
the insurance company over him is not the labor law
concept of control but a legally prescribed control device.
In other words, it is not pervasive control over means and
methods of performance. He sold insurance policies free
from any form of company prescriptions or proscriptions as
to how to sell. In fact, he employed his own manpower to
22 FUNDAMENTAL PRINCIPLES
r BAR SYLLABUS-BASED REVIEWER IN
be able to sell insurance policies anywhere. As to his
monthly quota and acquiescence to the code of conduct,
the same do not go into means and methods of perfor-
mance but into result of performance only ( See Gregorio
Tongko v. Manulife, G.R. No. 167 622, 25 January 2011).
(b) No. The supervisory functions of Gregorio did not
invest him with employee status. As leading agent, it was
his duty to oversee the agents under him to ensure their
compliance with legally imposed rules on selling insurance
policies. The attending system of control, including supervi-
sion over him by a branch manager, is inherent in insu-
rance agency. In fact, it is a legally prescribed control
device (See Gregorio Tongko v. Manulife, G.R. No.
167622, 25 January 2011).
Notably, the Supreme Court returned to its first
Tongko ruling on nominal damages when it resolved
Aliling v. Feliciano, supra. Hence, it should be clear now
that whenever due process or prescribed pretermination
procedure is violated then nominal damages must be
awarded regardless of the nature of the dismissal.
Review of Ruben Serrano
In the Ruben Serrano Case, the Supreme Court ruled
that the employer's act of dismissal was a private act;
hence, it was not covered by Sec. 1, Art. Ill of the Consti-
tution. In effect, the employer's violation of pre-termination
procedure did not have the same effect of rendering the
act in question void or illegal. That was only true to acts of
the State that violated the Due Process Clause (Sec. 1,
Art. Ill, Constitution).
It is true that pre-termination procedure does not
equate with procedural due process under the Due Pro-
cess Clause. However, Art. 292 of the Labor Code requires
it. So its violation is a violation of law (statutory due pro-
23
l
LABOR LAW & SOCIAL LEGISLATION
cess). Significantly, Art. 5 of the New Civil Code provides
that acts executed against the provisions of mandatory
laws shall be void, except if the law itself authorizes its vali-
dity. Therefore, is it not time to go back to the old rule that
a dismissal must be both substantially and procedurally
valid in order to be valid? Do not bother. Just stick to Jaka
Food Processing Corp. v. Pacot, et al., G.R. No.
151378, 28 March 2005, i.e., award P30K nominal
damages if the ground is a just cause and P50K if it is an
authorized cause.
Curative Jurisprudence
Ma. Lourdes de Jesus v. Hon. Raul T. Aquino, et al.
G.R. No. 164662, 18 February 2013
"Although Agabon, being promulgated only
on November 17, 2004, ought to be prospective,
not retroactive, in its operation because its
language did not expresslt state that it would
also operate retroactively,_§ the Court has al-
ready deemed it to be the wise judicial course to
let its abandonment of Serrano be retroactive as
its means of giving effect to its recognition of the
unfairness of declaring illegal or ineffectual dis-
missals for valid or authorized causes but not
complying with statutory due process. 21 Under
Agabon, the new doctrine is that the failure of the
employer to observe the requirements of due
process in favor of the dismissed employee (that
is, the two-written notices rule) should not invali-
date or render ineffectual the dismissal for just or
authorized cause. The Agabon Court plainly saw
the likelihood of Serrano producing unfair but far-
reaching consequences, such as, but not limited
to, encouraging frivolous suits where even the
most notorious violators of company policies
would be rewarded by invoking due process; to
24 FUNDAMENTAL PRINCIPLES
r
having the constitutional policy of providing pro-
tection to labor be used as a sword, to oppress
the employers; and to compelling the employers
to continue employing persons who were admit-
tedly guilty of misfeasance or malfeasance and
whose continued employment would be patently
inimical to the interest of employers. 28
Even so, the Agabon Court still deplored the
employer's violation of the employee's right to
statutory due process by directing the payment
of indemnity in the form of nominal damages, the
amount of which would be addressed to the
sound discretion of the labor tribunal upon taking
into account the relevant circumstances. Thus,
the Agabon Court designed such form of da-
mages as a deterrent to employers from commit-
ting in the future violations of the statutory due
process rights of employees, and, at the same
time, as at the very least a vindication or recog-
nition of the fundamental right granted to the
employees under the Labor Code and its imple-
menting rules. 29 Accordingly, consistent with pre-
cedent30 the amount of PS0,000.00 as nominal
damages is hereby fixed for the purpose of in-
demnifying De Jesus for the violation of her right
to due process." (Citations omitted.)
Note:
The dismissal was for a just cause; however, it was
effected without due process. This happened under the
Serrano Doctrine. When the CA decided the case, Agabon
was the applicable doctrine yet it awarded De Jesus
backwages. The SC reversed the CA for the reason that
Agabon was a curative jurisprudence; hence, it could be
retroacted to the date of the dismissal.
The amount of nominal damages is adjustable.
BAR SYLLABUS-BASED REVIEWER IN 25
LABOR LAW & SOCIAL LEGISLATION
The Equal Protection Clause
The Lesser Amount Rule
Serrano v. Gallant Maritime Services, Inc.
G.R. No. 167614, 24 March 2009
The Lesser Amount Rule in Sec. 10, R.A. 8042 was
declared void for being violative of the Due Process Clause
and Equal Protection Clause.
Where lie the violations?
Th_e Due Process Clause proscribes taking of pro-
perty without due process of law. If an OFW was given a 2-
year (24 months) employment contract that paid him
P20,000.00 a month and the same was unlawfully pre-
terminated after two (2) paid months (P40,000.00 paid
salaries), he would only be awarded P120,000.00 (P60,
000.00 representing 3 monthly salaries x 2 representing 1
year from the first 12 months of the unexpired portion of
the 24-month contract - which was 22 months - and 1
more year from the remaining fraction of 10 months).
Under the Lesser Amount Rule, he would get com-
pensation for his supposed 24-month contract to the extent
of P160,000.00 only (P120,000.00 + P40,000.00); where-
as, if not illegally dismissed, he would have continued
working until its expiration and paid P480,000.00. In effect,
out of 24 months, he would be paid 8 months only (2 paid
months + 6 months under the formula). This meant that he
was deprived of 16 monthly salaries which were property
to him.
If Congress was asked why it took away the OFW's
16 monthly salaries, its answer was "Basta" and nothing
else more.
26 FUNDAMENTAL PRINCIPLES
The Equal Protection Clause was also violated by
Congress. While it limited the salaries for the unexpired
portion of an OFW's contract (if it was at least 1 year) to 3
monthly salaries multiplied by the number of 12 months
there were in the remaining portion, it allowed payment
based on straight computation (monthly salary multiplied
by the number of months in the unexpired portion) to an
OFW with less than 1 year of contract. Hence, an OFW
with a 10-month contract - if dismissed after 1 month -
would get 9 monthly salaries.
Why the classification?
The SolGen told the Supreme Court that the classifi-
cation of OFWs into those with at least 1 year of contract
and those with less than 1 year was needed to minimize
the legal injury suffered by recruiters who were made to
answer for their foreign principals' abuses. Definitely,
based on that argument, the interest sought to be protect-
ted by Congress was not a compelling State interest but a
private one. Thus, applying the Strict Judicial Scrutiny
Test, the classification was struck down.
The Sameer Doctrine
Sameer Overseas Placement Agency v. Joy Cabiles
G.R. No. 170139, 5 August 2014
Leonen,J
'We reiterate our finding in Serrano v. Gallant Maritime
that limiting wages that should be recovered by an illegally
dismissed overseas worker to three months is both a violation
of due process and the equal protection clauses of the
Constitution.
Equal protection of the law is a guarantee that per-
sons under like circumstances and falling within the same
BAR SYLLABUS-BASED REVIEWER IN 27
LABOR LAW & SOCIAL LEGISLATION
class are treated alike, in terms of "privileges conferred
and liabilities enforced." It is a guarantee against "undue
favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality."
XXX
A reasonable classification "(1) must rest on substan-
tial distinctions; (2) must be germane to the purposes of
the law; (3) must not be limited to existing conditions only;
and (4) must apply equally to all members of the same
class."
The reinstated clause does not satisfy the require-
ment of reasonable classification.
XXX
Observing the terminologies used in the clause, we
also found that "the subject clause creates a sub-layer of
discrimination among OFWs whose contract periods are
for more than one year: those who are illegally dismissed
with less than one year left in their contracts shall be en-
titled to their salaries for the entire unexpired portion
thereof, while those who are illegally dismissed with one
year or more remaining in their contracts shall be covered
by the reinstated clause, and their monetary benefits
limited to their salaries for three months only."
XXX
Putting a cap on the money claims of certain over-
seas workers does not increase the standard of protection
afforded to them. On the other hand, foreign employers are
more incentivized by the reinstated clause to enter into
contracts of at least a year because it gives them more
flexibility to violate our overseas workers' rights. Their
liability for arbitrarily terminating overseas workers is de-
creased at the expense of the workers whose rights they
violated. Meanwhile, these overseas workers who are
impressed with an expectation of a stable job overseas for
 r
28 FUNDAMENTAL PRINCIPLES
the longer contract period disregard other opportunities
only to be terminated earlier. They are left with claims that
are less than what others in the same situation would
receive. The reinstated clause, therefore, creates a
situation where the law meant to protect them makes
violation of rights easier and simply benign to the violator.
XXX
Along the same line, we held that the reinstated
clause violates due process rights. It is arbitrary as it
deprives overseas workers of their monetary claims with-
128
out any discernable valid purpose.
Respondent Joy Cabiles is entitled to her salary for
the unexpired portion of her contract, in accordance with
Section 1O of Republic Act No. 8042. The award of the
three-month equivalence of respondent's salary must be
modified accordingly. Since she started working on June
26, 1997 and was terminated on July 14, 1997, respondent
is entitled to her salary from July 15, 1997 to June 25,
1998. "To rule otherwise would be iniquitous to petitioner
and other OFWs, and would, in effect, send a wrong signal
that principals/employers and recruitment/manning agen-
cies may violate an OFW's security of tenure which an
employment contract embodies and actually profit from
such violation based on an unconstitutional provision of
law." (Citations omitted.)
Note:
The Gallant Case was decided in 2009. In 2010,
Congress resurrected the nullified formula when it passed
R.A. 10022, the new Migrants' Act. Sec. 10 of R.A. 8042,
which was nullified the year before, became Sec. 7 of the
new law. In 2011 , the Supreme Court still applied the
Serrano Doctrine in Claudio Yap v. Thenamaris Ships
Management, G.R. No. 179532, 30 May 2011. However, it
appears that it was not aware of Sec. 7, R.A. 10022. In
2014, in the Sameer Case, the Court re-nullified the reborn
BAR SYLLABUS-BASED REVIEWER IN 29
LABOR LAW & SOCIAL LEGISLATION
formula. It held that Sec. 7, R.A. 10022 conferred no rights;
it imposed no duties; it afforded no protection; it created no
office; and it was inoperative as if it had not been enacted
at all.
Hypothetical Problem
After qualifying and undergoing PDOS, Geraldine was
deployed to the KSA under a 2-year POEA-approved con-
tract that stipulated a monthly salary of USD400.00. After
two (2) unpaid months of hard work, physical abuse and
hunger, she decided to quit as she could no longer stand
her foreign employer's abuses. On her return, she filed a
complaint for breach of contract with the Labor Arbiter and
prayed that she be awarded all salaries she would have
earned had she not been constructively dismissed. After
notice and hearing, the Labor Arbiter rendered a decision
finding that she was constructively dismissed. Accordingly,
he ordered her foreign employer, her recruiter and its cor-
porate officers to pay USD9,600.00 consisting of her un-
paid salaries during her 2-month work amounting to USO
800.00 and salaries for the unexpired portion of her em-
ployment contract amounting to USDB,800.00. For want of
basis, he dismissed the damage claims but awarded 10%
attorney's fees for the reason that Geraldine was com-
pelled to litigate to protect her rights and was forced to
seek legal representation and incur expenses.
A. You are a member of Congress and your son is
lawyering for the respondents. Regardless of the outcome
of his appeal, you want to reinstate the Lesser Amount
Rule. Which of the following arguments would you employ
to gain support from your colleagues:
1. Statutory law is the business of men and women
directly elected by the people whereas case law is just the
invention of a handful of men and women appointed by just

30 FUNDAMENTAL PRINCIPLES
one man, viz., the President; hence, the nullified provision
can be resurrected a second time;
2. Overseas workers are contractual employees
who can never acquire regular employment status, unlike
local workers; hence, they can be accorded differentiated
treatment in terms of the computation of money claims; or
3. The jurisdictional and enforcement issues on
overseas workers' money claims justify a differentiated
treatment in the computation of their money claims.
B. In the meantime:
1. Would you advise your son, owing to the non-
participation of the respondent corporate officers in the
events leading to Geraldine's forced repatriation, to invoke
Sec. 30 of the Revised Corporation Code as basis for their
exoneration ?
2. Would you advise your son to file a motion to re-
duce the appeal bond from USD9,600.00 to USO 8, 800.00
on the ground that the Labor Arbiter has misapplied the
Sameer Doctrine?
Proposed Answer
A. I will not employ any of the three arguments for the
following reasons:
1. Legislation is subject to judicial review;
2. This argument was rejected by the Supreme Court
in the Sameer Case; and
3. This argument was also rejected by the Supreme
Court in the same case.
B.
1. No. The solidary liability of corporate officers is sta-
tutory i.e., one imposed without qualification by Sec. 7,
R.A. 10022; hence, it is not covered by Sec. 30 of the Re-
7
BAR SYLLABUS-BASED REVIEWER IN 31
LABOR LAW & SOCIAL LEGISLATION
vised Corporation Code. For this reason, it does not matter if
they have not parti~ipated in the illegality, ratified it, or acted
in a grossly negligent manner as to cause legal injury.
2. No. The Labor Arbiter correctly computed Geraldine's
salaries for the 22 remaining months of her pre-terminated
contract which is USD8,800.00. As to the additional award of
USD800.00, it is her compensation for the two months that
she worked without pay.
Art II
Fundamental Equality Guarantee
{Sec. 14)
Halaguena, et al. vs. PAL
G.R. No. 172013, 2 October 2009
Sec. 144 of the CBA between PAL and PAL-FASAP
provided that female flight attendants would retire at 55, or
5 years earlier than their male counterparts. Feeling disad-
vantaged, Patricia Halaguena and her female co-flight
attendants sought nullification of the provision for being
discriminatory against women in violation of Arts 3 and 135
of the Labor Code, Sec. 14, Art. II of the Constitution,
provisions of the New Civil Code on contracts, and the
Convention on the Elimination of all Forms of Discrimina-
tion Against Women (CEDAW). To this end, they filed a
petition for declaratory relief with the RTC. PAL moved to
dismiss on the ground of lack of jurisdiction, alleging that
the matter was a labor dispute; hence, it was for the
voluntary arbitrator to hear and resolve.
The RTC upheld its jurisdiction. However, the CA
reversed it. Consequently, Halaguena, et al. sought review
by the Supreme Court.
The Supreme Court held:
32 FUNDAMENTAL PRINCIPLES
RTC, a court of general jurisdiction, has the compe-
tence to hear and resolve a petition for ,declaratory relief
since the subject of litigation is incapable of pecuniary esti-
mation. The material allegations of the complaint and relief
prayed for, regardless of whether the plaintiff is entitled
thereto or not, determine jurisdiction over the subject mat-
ter of a case.
The issue did not involve CBA interpretation or imple-
mentation. There was nothing to interpret or implement -
only a provision to nullify if it was found to be unconstitu-
tional.
The issue (validity of Sec. 144) could not be resolved
solely by applying the Labor Code, other labor statutes or
CBA. Rather, it required the application also of the Consti-
tution, the New Civil Code on contracts, and the CEDAW.
Art II & XIII
The Social Justice Clause
(Sec. 2, Art. XIII; Sec. 9, Art. II)
Calalang v. Williams
G.R. No. 47800, 2 December 1940
Social justice is the humanization of laws, and the
equalization of social and economic forces, so that justice
in its rational and objectively secular conception may at
least be approximated.
The Twin-Functions of Social Justice
1. Equalizing Function. It is discharged by protec-
tive laws and principles, such as: the Liberal Interpre-
tation Rule, which is applied to labor claims; and Utmost
Liberality Rule which is applied to employees compensa-
tion claims; and Anti-discrimination laws, e.g., the Anti-Age
BAR SYLLABUS-BASED REVIEWER IN 33
LABOR LAW & SOCIAL LEGISLATION
Discrimination in Employment Act, Solo Parents Welfare
Act, and Magna Carta for Women.
2. Humanizing Function. It is discharged by,
among others, gender-sensitive laws, e.g., the Anti-Sexual
Harassment Act of 1995 and the Safe Spaces Act of 2019.
Social Utility Theory
(2015 Milan Case, infra)
Employees and employers are socio-economic part-
ners. In their conflicts, it is State policy to look for a middle
ground so that each party's interest would be accorded the
protection it deserves.
Bar 2003 Question
May social justice as a guiding principle in labor law
be so used if it collides with the Equal Protection Clause?
Proposed Answer
No. Humanization of laws and equalization of socio-
economic opportunities go hand in hand. Social justice, the
purpose of which is to approximate justice in its rational
and objectively secular sense and which actualizes itself
thru ~hese twin-principles, is not a selective clause blindly
favoring workers only. Hence, labor law must be applied as
not to result in either oppression or self-destruction of
employers.
Note:
~ur answe_r i~ ta~en from the second part of the long
definition of social Justice in Calalang v. Williams. The last
sentence is from the opening quote "social justice autho-
rizes neither oppression nor self-destruction of the employer''
in PLDT v. Honrado. The rest of the answer, e.g., "twin-prin-
ciples", "actualizes itself thru", is personal articulation which
34 FUNDAMENTAL PRINCIPLES
can be developed when one ceases to behave like a parrot,
i.e., repeating memorized rules - and nothing else more.
Reinstatement Pending Appeal {Art. 229, Labor Code)
Aris (Phil), Inc. v. NLRC
G.R. No. 905501, 5 August 1991
Reinstatement pending appeal is a social justice
measure. Sec. 17 of the old NLRC Interim Rules (on rein-
statement pending appeal) is not unconstitutional.
Visayan Electric Company Employees
Union-ALU-TUCP v. Visayan Electric Company
G.R. No. 205575, 22 July 2015
In resolving disputes between labor and capital, fair-
ness and justice should always prevail. Social justice does
not mandate that every dispute should be automatically
decided in favor of labor. Justice is to be granted to the
deserving and dispensed in light of the established facts
and the applicable law and doctrine.
2. Civil Code
New Civil Code Principles
(Read-to-Recall Principles)
Art. 13
1 Month is 30 Days
Mitsubishi Motors v. Chrysler Philippine Labor Union
· G.R. No. 148738, 29 June 2004
(In the Book of Prof. C. Azucena)
Art. 13 applies if the probationary employment con-
tract says 6 months and it bears the date of commence-
ment only. In such case, one should count 180 days (6 x
30) from said date. If the employee is dismissed for poor
BAR SYLLABUS-BASED REVIEWER IN 35
LABOR LAW & SOCIAL LEGISLATION
performance after 180 days, he is deemed illegally
dismissed because he becomes a regular employee after
180 days. As such, he can only be dismissed for a just or
authorized cause. Notably, poor performance is neither a
just nor an authorized cause.
Radin Alcira v. NLRC, et al.
G. R. No. 149859, 9 June 2004
(in the Book of Prof. C. Azucena)
Art. 13 does not apply if the probationary employment
contract bears the date of commencement and the date of
expiry. If the employee is dismissed for poor performance
on or before the stipulated date of expiry, he is not deemed
illegally dismissed even if 180 days may have lapsed
already.
Art. 19
Principle of Abuse of Rights
It is one thing to have a right, recognized either by law
or contract, and quite another to exercise it. One exercising
it shall do so in a manner not productive of legal injury to
another. The Principle of Abuse of Rights, intoned by
Art. 19, requires that a person, in the exercise of his rights,
must act with justice, give everyone his due, and observe
honesty and good faith.
The following rights are prone to abuse:
1. Right to dismiss is abused when it is based on
suspicions only;
2. Right to resign is abused when the employee
does not serve the required 30-day notice;
3. Right to suspend is abused when the 30-day
period is exceeded;
36 FUNDAMENTAL PRINCIPLES
4. Prerogative to transfer is abused when its
exercise serves no legitimate bJJsiness purpose,
or it is exercised in bad faith;
5. Right to dismiss for an authorized cause is
abused if exercised in bad faith; and
6. Right to strike is abused if exercised with the use
of illegal means.
The same standards are required of one who
performs a duty. The following duties may be performed
with abuse:
1. Duty to pay wages is discharged by making
unconsented deductions;
2. Duty to reinstate is complied with by assigning
difficult work to the dismissed employee; or
3. Duty to bargain is discharged thru surface
bargaining or blue sky bargaining.
Art. 22
Principle of Unjust Enrichment
Garcia, et al. v. PAL
G.R. No. 164856, 20 January 2009
(en bane) ·
Justice Velasco applied the Principle of Unjust
Enrichment in Citibank v. Genuino/Genuino v. NLRC,
G.R. No. 142732-33, 4 December 2007. Owing to the re-
versal of the Labor Arbiter's decision on appeal, he or-
dered reimbursement of the salaries paid under a payroll
reinstatement. That ruling did not sit well with the en bane
in this case (Garcia). The Supreme Court, in sparing two
employees of PAL from reimbursing payroll reinstatement
salaries, reasoned that the choice to restore their jobs via
payroll reinstatement was entirely the option of PAL. Had
BAR SYLLABUS-BASED REVIEWER IN 37
LABOR LAW & SOCIAL LEGISLATION
they known that they would be required to reimburse, they
would never have agreed to the payroll reinstatement.
Payroll Reinstatement
A payroll reinstatement occurs when neither actual
reinstatement nor reinstatement to a substantially equiva-
lent position can be effected. It is an option entirely given
to management.
In payroll reinstatement, the preferences of the em-
ployee are not sought as a matter of right. There is no
known remedy made available to him to get the kind of
reinstatement he desires. It is really the exclusive preroga-
tive of the employer. The employer, therefore, should not
be given the convenience of a reimbursement considering
that payroll reinstatement is his sole choice. Imposing the
burden on the employee requires that he be given the op-
tion to refuse payroll reinstatement. But no such option is
given him; hence, he would be driven to penury if required
to reimburse.
Art. 1306
Principle of Freedom of Contracts
General Rule
Brent School, Inc. v. Zamora
G.R. No. L-48494, 5 February 1990
The expiration of a fixed-term employment contract
and non-renewal thereof resulting in dissociation is not a
dismissal but a simple expiration of contract only.
Justice Narvasa applied Art. 1306 of the New Civil
Code over Art. 280 (now Art. 295) of the Labor Code. He
may have disregarded the rule in statutory construction,
viz., in the event of a conflict between a general law and a
 FUNDAMENTAL PRINCIPLES
38
special law, the latter shall enjoy preferential use or appli-
cation. However, he reasoned that Art. 2&0 did not prohibit
employment contracts with periods, unless their periods
were resorted to for the purpose of circumventing tenurial
law; or, unless the parties did not deal with each other on
equal footing which could be ascertained from the use of
means to vitiate the employee's consent.
Exception
Thelma Dumpit-Murillo v. CA, et al.
G.R. No. 164652, 8 June 2007
Thelma was deemed illegally dismissed. Her last of
several contracts, which expired on her, did not result in a
finding similar to that in Brent.
Questions to Ask
1. How many employment contracts are involved?
1.1. If only one, Brent is more likely the ruling to
apply. The period is binding, except when the
employee's consent was vitiated or there is evidence
of circumvention of the law on tenure.
1.2. If several, Dumpit-Murillo, Phi/ex Mining,
etc. may be the rulings to apply.
2. Questions to ask if there are several contracts:
2.1. Is the interval between contracts brief?
2.2. Is the work performed the same each time?
2.3. Is the work usually necessary or desirable in
the usual trade of the employer?
2.4. Were the contracts exclusively prepared by
the employer?
If the answer to 2.1 to 2.4 is Yes, the employee is a
regular employee. The contracts shall be regarded as
BAR SYLLABUS-BASED REVIEWER IN 39
LABOR LAW & SOCIAL LEGISLATION
contracts of adhesion. Hence, the expiration of the last
contract will not justify permanent dissociation.
Art. 1311
Principle of Relativity of Contracts
General Rule: No Successor Employer Rule
(EER is in personam)
Exceptions:
1. Express agreement to succeed as employer;
2. Piercing the Veil of Corporate Fiction;
3. Instrumentality Rule or Alter Ego Theory;
4. Principle of Limited Liability;
5. Principle of Unaltered Responsibility; and
6. Automatic Absorption Rule (in merger of compa-
nies).
Art. 1378
Principle of the Least Transmission of Rights
Marilyn Gerlach v. Reuters Ltd Phil.
G. R. No. 148542, 17 January 2005
Gerlach signed a non-contributory retirement plan
which provided that retirement pay be computed based on
notional (local) rate. At the time she retired, she was re-
ceiving foreign currency in higher amount due to her relo-
cation abroad by Reuters. When her retirement pay was
computed based on her local rate, she demanded for a
recomputation based on her foreign rate.
Per Art. 1378, NCC, the lesser amount based on her
local rate must be awarded. The retirement plan was
exclusively paid from the company's monthly contributions
in amounts equivalent to 10% of Gerlach's notional rate;
40 FUNDAMENTAL PRINCIPLES
hence, it was a gratuitous contract. As such, an interpre-
tation that would transmit the least rights.or benefits must
be adopted. Since none of the NCC provisions on contract
interpretation was of any use, the Supreme Court had to
apply Art. 1378.
Questions to Ask
1. Is the source of the dispute a contract?
2. Is the contract gratuitous?
3. Is there a need to interpret the contract?
4. Are the provisions of the New Civil Code on the
interpretation of gratuitous contracts (Arts 1377
down) applicable?
If none of the aforementioned articles can be used to
resolve the issue, Art. 1378 shall be applied. Accordingly,
the interpretation that will transmit the least rights or
benefits shall be adopted.
Note:
Principle of the Necessitous Person
Orchard Golf & Country Club v. Francisco
G.R. No. 178125, 18 March 2013
A Necessitous Person is Not a Free Person
Francisco did not quit her work. In fact, although de-
moted in rank, she continued to receive the same amount
of salary. Regardless, it was held that she was construc-
tively dismissed.
Questions to Ask
1. Was the employee subjected to disciplinary
action?
BAR SYLLABUS-BASED REVIEWER IN 41
LABOR LAW & SOCIAL LEGISLATION
2. Did he fully serve his penalty?
3. Was he imposed further penalty/ies for the same
infraction without due process?
4. Was he subjected to abuse as to leave him no op-
tion except to continue discharging the functions of
the lower position to which he had been demoted?
5. Can he be considered as a necessitous person?
If found to be a necessitous person then he is not a
free man. Therefore, his involuntary occupation of the lo-
wer position - coupled with his timely filing of a complaint
for illegal dismissal - amounts to constructive dismissal.
3. Labor Code
Art. 3
The Protection to Labor Policy (supra)
A practical approach to Art. 3 is thru Bar 2009 which
asked for four (4) new constitutional principles not found
therein. One possible question is: Which labor principles
are both constitutional and statutory in origin? But this
would be a test of lower order thinking skills (LOTS), i.e., of
ability to recall only. In the contemplated online Bar exami-
nation, LOTS questions will be avoided in favor of higher
order thinking skills (HOTS) questions so that examinees
will not be tempted to cut and paste.
At any rate, protection to labor means the protection
of workers from their employers, the State, their labor
organizations, and their own ignorance (Prof. Azucena).
Art. 4
Liberal Interpretation Rule
The term Liberal Interpretation Rule (LIR) is used
under the Labor Code; whereas, the term Utmost Libera-
42 FUNDAMENTAL PRINCIPLES
Jity Rule is used under the Employees Compensation Act
(now Amended Rules on Employee Compensation): T~ey
mean the same thing. However, Art. 4 has no application
to GSIS claims. Likewise, penal labor laws should not be
construed using Art. 4.
The Full Extent of the LIR. Pro-labor interpretation of
doubts and ambiguities arising from:
1. PD 442 provisions (Art. 4, LC);
2. ORILC provisions (Art. 4, LC);
3. Labor contracts (Art. 1702, NCC); and
4. Evidence in labor proceedings (Hocheng, infra)
Hocheng Philippines Corporation v. Farra/es
G.R. No. 211497, 18 March 2015
Doubts arising from evidence in labor proceedings
shall be resolved in favor of labor.
Bar 2009, Question No. II (b)
XXX
b. Clarita, an employee of Juan, was dismissed for
allegedly stealing Juan's wristwatch. In the illegal dismissal
case instituted by Clarito, the Labor Arbiter, citing Article 4 of
the Labor Code, ruled in favor of Clarita upon finding Juan's
testimony doubtful. On appeal, the NLRC reversed the Labor
Arbiter holding that Article 4 applies only when the doubt
involves "implementation and interpretation" of the Labor
Code provisions. The NLRC explained that the doubt may
not necessarily be resolved in favor of labor since this case
involves the application of the Rules on Evidence, not the
Labor Code. Is the NLRC correct? Reasons. (3%)
Answer
XXX
(b) The NLRC is not correct.
BAR SYLLABUS-BASED REVIEWER IN 43
LABOR LAW & SOCIAL LEGISLATION
The Liberal Interpretation Rule under Art. 4 of the
Labor Code has an expanded coverage. Not only does it
require pro-labor resolution of doubts and ambiguities ari-
sing from provisions of the Labor Code and its ORILC but
also from labor contracts (Art. 1702, New Civil Code) and
evidence in labor proceedings (Hocheng Philippines Corp.
v. Antonio M. Farra/es, G.R. No. 211497, 18 March 2018).
PEME is Non-Exploratory
The Heirs of the late Delfin de la Cruz v. Philippine
Transmarine Carriers, Inc.
G. R. No. 196357, 20 April 2015
"While PEME may reveal enough for the petitioner
(vessel) to decide whether a seafarer is fit for overseas
employment, it may not be relied upon to inform petitioners
of a seafarer's true state of health. The PEME could not
have divulged respondent's illness considering that the
examinations were not exploratory."
Note:
A seafarer cannot argue that, having been medically
cleared during PEME, he could have only contracted his
disease by reason of his employment; hence, it is work-
connected.
When not applicable.
1. No law to interpret or the law is not a labor law.
Bar 1993, Question No. 10
If the law is a mere reorganization law, and nothing
else more as it does not contain a salary structure, a
person who is promoted without a salary raise cannot seek
favorable interpretation of that law under Art. 4 in order to
be awarded salary differentials. The reason is that there is
no wage law to interpret.
44 FUNDAMENTAL PRINCIPLES
2. The law is clear.
Marcopper Mining Corp. v. NLRC
G.R. No. 103525, 29 March 1996
Art. 128 of the Labor Code bears a wage replacement
provision. Workers who lose their wages by reason of
either suspension or closure of business operations shall
be entitled to wage replacement if the employer is found
liable. But for this provision to apply, the order of sus-
pension or closure must be issued by the DOLE Regional
Director or DOLE Secretary. If issued by the DENR, it does
not apply; hence, the employer shall be freed from liability.
3. The contract is clear.
Ace Navigation Co., Inc. v. CA
G.R. No. 140364, 138 SCRA 70
The employment contract of a seafarer had these
stipulations: Basic Salary = USD300 plus overtime; Over-
time= TIP of USD2 per customer; etc ... After completion of
his contract, the seafarer (bartender) started claiming leave
credits and TIP from his manning agent which denied
them. The LA awarded the leave benefits but denied the
claim for TIP. The NLRC, on appeal, awarded both. The
Supreme Court ruled that the TIP award was erroneous.
TIP meant "to insure promptness" and it was given by cus-
tomers, not the employer. Besides,· the provision on basic
salary included overtime already. Hence, the separate pro-
vision on overtime was superfluous.
Note:
If the seafarer had no issue with his basic salary
which included overtime (OT) pay, the logical conclusion is
that whatever OT work he might have rendered must have
been paid. TIP was entirely different from OT pay.
BAR SYLLABUS-BASED REVIEWER IN 45
LABOR LAW & SOCIAL LEGISLATION
Lepanto Consolidated Mining Co. v. Lepanto
Local Staff Union
G.R. No. 161713, 20 August 2008
CBA Provision: "However, for overtime work, which
extends beyond the regular day shift (7:00 a.m to 3:00
p.m.), there (will) be no night differential pay added before
the overtime pay is calculated."
Employer's Interpretation: The employees were not
entitled to NSD.
VA's interpretation: They were entitled, except that
NSD should not be included in the basic pay when
computing OT.
Ruling: Based on CSA history (past 3 CBAs), the
concerned employees had always been receiving NSD.
Hence, the VA's interpretation was correct.
Hypothetical Question
Textually, Art. 4 does not cover doubts arising from
labor contracts and evidence in labor proceedings. Should
this provision be so construed so as to cover said doubts in
favor of labor?
Proposed Answer
As to doubts arising from labor contracts, Art. 1702. of
the New Civil Code requires favorable interpretation for
labor. And as to doubts arising from evidence in labor pro-
ceedings, Hocheng Philippines Corporation v. Farra/es,
G.R. No. 211497, 18 March 2015, requires no less. In
effect, the full extent of the Liberal Interpretation Rule is
that it requires a pro-labor approach to doubts arising from
PD 442 provisions, ORILC provisions, labor contracts, and
evidence in labor proceedings.
46 FUNDAMENTAL PRINCIPLES
Articulation of the Principle when:
1. Interpreting Law
"... in carrying out and interpreting the Labor Code's
provisions and its implementing regulations, the working-
man's welfare should be the primordial and paramount
consideration. This kind of interpretation gives meaning
and substance to the liberal and compassionate spirit of
the law as provided for in Article 4 of the New Labor Code
which states that "all doubts in the implementation and
interprettation of the provisions of the Labor Code
including its implementing rules and regulations shall be
resolved in favor of labor." (Abella v. NLRC, G.R. No.
71812, 30 July 1987)
2. Interpreting Contract
Art. 1700. The relations between capital and labor
are not merely contractual. They are so impressed with
public interest that labor contracts must yield to the com-
mon good. Therefore, such contracts are subject to the
special laws on labor unions, collective bargaining, strikes
and lockouts, closed shop, wages, working conditions,
hours of labor and similar subjects. (New Civil Code).
"Indeed, a contract of employment is impressed with
public interest. For this reason, provisions of applicable
statutes are deemed written into the contract. Hence, the
parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations
by simply contracting with each other. Moreover, in case of
doubt, the terms of a contract should be construed in favor
of labor." (Philippine Federation of Credit Cooperatives,
Inc. v. NLRC, 360 Phil. 254, 261, December 11, 1998,
cited in lnnodata Phil., Inc. v. Jocelyn L. Quejada-Lopez
and Estella G. Natividad-Pascual, G.R. No. 162839, 12
October 2006).
BAR SYLLABUS-BASED REVIEWER IN 47
LABOR LAW & SOCIAL LEGISLATION
"It is relevant to state that the POEA standard em-
ployment contract is designed primarily for the protection
and benefit of Filipino seafarers in the pursuit of their
employment on board ocean-going vessels. Its provisions
must, therefore, be construed and applied fairly, reason-
nably and liberally in favor or for the benefit of the sea-
farers and their dependents. Only then can its beneficent
provisions be fully carried into effect." (Wal/em Maritime
Services, Inc. vs. NLRC, 318 SCRA 623).
3. Interpreting Evidence
"But where there is no showing of a clear, valid and
legal cause for termination of employment, the law consi-
ders the case a matter of illegal dismissal. If doubts exist
between the evidence presented by the employer and that
of the employee, the scales of justice must be tilted in favor
of the latter. The employer must affirmatively show ratio-
nally adequate evidence that the dismissal was for a justi-
fiable cause." (Asuncion v. NLRC, 414 Phil. 329, 341-342
(2001); Nicario v. NLRC, 356 Phil. 936, 943 (1998), cited
in Hocheng Phil. Corp. v. Antonio M. Farra/es, G. R. No.
211497, March 18, 2015).
2017 Bar, Question No. II (Same as Bar 2009, Question
No. 11(b))
Procopio was dismissed from employment for stealing
his co-employee Raul's watch. Procopio filed a complaint for
illegal dismissal. The Labor Arbiter ruled in Procopio's favor
on the ground that Raul's testimony was doubtful, and,
therefore, the doubt should be resolved in favor of Procopio.
On appeal, the NLRC reversed the ruling because Art. 4 of
the Labor Code - which states that all doubts in the inter-
pretation and implementation of the provisions of the Labor
Code, including the implementing rules and regulations,
shall be resolved in favor of labor - applied only when the
doubt involved the "implementation and interpretation" of the
48 FUNDAMENTAL PRINCIPLES
Labor Code; hence, the doubt, which involved the applica-
tion of the rules on evidence, not the Labqr Code, could not
necessarily be resolved in favor of Procopio. Was the rever-
sal correct? Explain your answer. (3%)
Answer
No.
The reversal is not correct. The Liberal Interpretation
Rule is not confined to the four (4) corners of Art. 4 of the
Labor Code. Its full extent covers doubts and ambiguities
arising from labor contracts (Art. 1702. New Civil Code) and
evidence in labor proceedings (Hocheng Philippines Corp.
v. Antonio Farra/es, G.R. No. 211497, 18 March 2015).
Hence, the Labor Arbiter's application thereof is correct.
Hypothetical Problem
The Labor Arbiter found that the employer's six pay-
rolls, attached as Annexes "1" to "6" to its position paper,
were all signed above the complainant's printed name.
However, the signatures did not match his signature on his
complaint and the verification of his position paper. On that
basis, he allowed the latter's money claims reasoning that
a doubt presented itself for resolution under Art. 4 of the
Labor Code. On appeal, the employer argued that the
complainant suffered a stroke a couple of weeks before
the filing of his complaint as shown by medical records it
attached to its appeal memorandum; that his medical
condition explained the discrepancy; and, therefore, the
Labor Arbiter should have conducted a clarificatory hearing
on the matter instead of lightly applying the Liberal
Interpretation Rule in favor of the appellee.
(a) Should the NLRC admit the evidence on appeal?
(1%)
(b) Should the NLRC reverse the monetary award
based on the Labor Arbiter's alleged misapplication of the
principle? (1 %)
BAR SYLLABUS-BASED REVIEWER IN 49
LABOR LAW & SOCIAL LEGISLATION
Proposed Answer
(a) Yes. The employer would have had no need to
present the medical evidence at the level of the Labor
Arbiter. However, the moment it received the decision,
there arose the need to explain the discrepancy; hence,
the clarificatory evidence could be submitted for the first
time on appeal.
(b) Yes. The Labor Arbiter should have conducted a
clarificatory hearing on what he already perceived as a
discrepancy. That he kept it to himself, only to surprise the
employer with his pro-labor interpretation after the case
was deemed submitted for decision, is not in keeping with
the tenets of fair play. At no instance did the complainant
disown his signature on the payrolls; hence, the Labor
Arbiter should not have used the principle to help him
discharge the shifted burden of proving non-payment.
Art. 5
Operative Fact Doctrine
1. Rule-Making Power
1.1. It is the power to implement provisions of PD
442; hence, the DOLE could validly issue the OR/LC. But
as implementing arm, it could also implement other labor
laws, like the Law on Night Work (R.A. 10151); hence, it
validly issued D.O. 119-12.
1.2. Rule-making power is not MAR (making, amen-
ding, repealing) power. Hence, the DOLE could not validly
exclude monthly-paid employees from the coverage of
holiday pay because Art. 82 did not distinguish between
daily-paid and monthly-paid employees. For this reason,
the Supreme Court nullified:
1.2.1. Sec. 2, Rule IV, Book Ill of the OR/LC;
and
50 FUNDAMENTAL PRINCIPLES
1.2.2. Policy Instructions No. 9 in the 1984
/BAA Case.
2. Conflicting Rulings. There are amendatory OR/LC
provisions and 0. 0. 's which have not been similarly
nullified, e.g. Sec. 8 (b), Rule IV, Bk Ill of the Labor Code
which entitles pieceraters to holiday pay even if they are
workers paid by result and, as such, are excluded by Art.
82. In this regard, however, the Supreme Court could not
bring itself to nullify the provision just yet. Meantime, it has
at least four conflicting decisions rendered by its divisions
on the matter, viz.:
2.1. 1993 Vil/uga Case which excluded pieceraters;
2.2. 1998 Labor Congress of the Philippines
Case which included pieceraters based on Sec.
8(b), Rule IV, Bk Ill, OR/LC;
2.3. August 1999 Mark Roche International Case
which returned to the Villuga ruling; and
2.4. October 1999 Lambo Case which returned to
the Labor Congress ruling.
3. CE Appeal. Whereas Art. 272 (formerly Art. 259) of
the Labor Code allows both union and company to appeal
a CE order, D.O. 40-03 makes a distinction, viz.: in orga-
nized establishments, both parties ca_n appeal; but in unor-
ganized establishments, only the union can appeal.
Whereas Art. 219, same Code, considers a terminated
employee possessed with employee status for purposes of
joining a union, voting in a CE, and participating in a strike,
i.e., even being dismissed, provided:
3.1. his dismissal is the result of or in connection
with any current labor dispute or because of
any ULP; and
3.2. he has not yet obtained a substantially equi-
valent and regular employment.
BAR SYLLABUS-BASED REVIEWER IN 51
LABOR LAW & SOCIAL LEGISLATION
Note:
D.O. 40-03 has added a third requisite, viz., he
has to contest his dismissal before a forum of appro-
priate jurisdiction.
4. Operative Fact Doctrine. Until nullified, above amen-
datory implementing rules shall be valid and will be allowed
to produce legal effects.
5. Definition of Nightworker. R.A. 10151, the Night
Work Law, defines a night worker (in substance) as one
required to work for not less than seven (7) consecutive
hours between midnight and 5:00 a.m. the following day.
This is an impossible definition because there are five (5)
hours between midnight and 5:00 a.m. only; hence, work
will be less than seven (7). In D.O. 119-12, the DOLE rede-
fined a night worker as one who is required to work for not
less than seven (7) consecutive hours between 10:00 p.m.
and 6:00 a.m. the following day. This is an amendment to
the R.A. However, since it is the better or correct definition
then one should no longer quarrel with the D.O.
Equal Protection to Agricultural Employees
1. Agricultural employees. They get protection from
Labor Law too. Suppose the examiner will give a
farmworker with a money claim to assert against the owner
of the land he tills. When should one apply Labor Law and
when should he apply Agrarian Law?
Sample Claims: Overtime pay, 13th month pay and
holiday pay. '
 -,.---
52 FUNDAMENTAL PRINCIPLES
,
1
2. Labor law applies when there is employer-employee
relationship (EER); whereas, agrarian law applies when
there is agricultural tenancy relationship (ATR).
2.1. EER is tested with the Two-tier Test (Control
Test + Economic Dependence Test); whereas, ATR is
tested with the LACAPH Test (this is not a legal term but a
memory tool only).
The LACAPH Test
L - the relationship is between a Lessor and a
Lessee ( land owner and tenant);
A - the subject of the relationship is an Agricultural
Land;
C - the relationship is established by Consent;
A - its purpose if Agricultural Production;
P - the service rendered is Personal Cultivation; and
H - the compensation is a share in the Harvest.
2.2. Watch out for AHA (agricultural land, share in
harvest, and agricultural production).
Agricultural Land (AL). AL is a non-MinFoReColnAn
land · (non-Mineral, Forest, Residential, Commercial,
Industrial, Ancestral) which is devoted to agricultural
activity;
Harvest (H). An employee is paid a wage; whereas, a
tenant gets a share in the harvest;
Agricultural Activity (AA). The following are Ms:
production of rice, production of corn, and the like, which
involve plowing, planting and harvesting. The following are
commercial activities: prawn farming, fishpond, piggery
and poultry.
2.3. Background: Wage is remuneration however
designated capable of being expressed in terms of
money, whether on a fixed basis or ascertained on some
BAR SYLLABUS-BASED REVIEWER IN 53
LABOR LAW & SOCIAL LEGISLATION
other basis, payable under a contract of employment for
work done or to be done or services rendered or to be
rendered, including the reasonable value of facilities
customarily provided by the employer (Art. 97, Labor
Code).
Memory Tool: ReMon How Des FixAs PayCon Worser
Fae
Hypothetical Question
lslaw wakes up at 4:00 a. m. daily. After breakfast, he
gathers his farm implements and proceeds to plow Ago's
3-hectare land. Sometimes, he gets an overseas call from
Ago who usually asks him about Noah, the white carabao
he has entrusted to him. When the soil is ready for
planting, Ago's brother-in-law tells him what variety of rice
to plant. At harvest time, he instructs him on how to use
the thresher, how to dry the palay on the highway, and
where to bring it for milling. For his services, lslaw is given
the cash equivalent of 25% of the gross harvest which is
his pre-arranged compensation. On a yearly basis, his
compensation is roughly P36, 000.00. Since he works from
Monday to Saturday, his yearly compensation translates to
a daily pay of P115.38 only. Can Ago be criminally prose-
cuted under the Double Indemnity Law (OIL) based on
wage underpayment? ·
Proposed Answer
No. Ago cannot be criminally prosecuted under the
OIL because there is no underpayment of wages to speak
of. While lslaw is paid in cash, same is just the money
conversion of his 25% share in the harvest generated by
his agricultural activity on the agricultural land of Ago. In
other words, he is not an employee being paid a wage but
a tenant being compensated with a share in the harvest.
Therefore, subject wage law does not apply to him.
54 FUNDAMENTAL PRINCIPLES
2.4. The OIL is not only a labor law, but a penal law
as well. Subsequent payment by the employer of unpaid
wages does not bar criminal prosecution ( Sapia Ruling). It
only applies to wages; hence, criminal actions cannot be
instituted based on non-payment of mandatory benefits,
like overtime pay (/RR of R.A. 8188). It would be shocking
to tell the examiner that Ago cannot be criminally
prosecuted because he is abroad. What fits a hole need
not be placed inside that hole.
Art. 12
Pre-Employment Policies
1. Free Choice of Employment
1.1. Acceptance of an offer of promotion cannot be
compelled because an employee has free choice in regard
employment. In view of this policy, he can refuse ascalar
transfer because it is in the nature of a promotion.
However, he cannot refuse a lateral transfer as long as
the prerogative to transfer is exercised in good faith, it
serves a legitimate business objective, and it will not make
continued employment impossible, unlikely or
unreasonable - not to mention that the position to which
he is being transferred must actually exist.
1.2. Illustration
Bar 2015, Question No. IX (rephrased)
Din Din is a single mom with one child. She lives
in Quezon City just 15 minutes away from the com-
pany where she works as a sales executive. She is
being offered a managerial position in the Visayas
but, being inconvenient, she has to refuse it. She is
humiliated by her employer for refusing her promo-
tion. She is also given a failed performance evaluation
BAR SYLLABUS-BASED REVIEWER IN 55
LABOR LAW & SOCIAL LEGISLATION
rating and, on that basis, she is dismissed. What will
your legal advice be?
Answer
I will advise Din Din to seek SEnA assistance. If not
restored to her job as sales executive, I will see to the filing
of a complaint for illegal dismissal against the company.
Her refusal of the promotion, being a scalar promotion
which can be refused, is not an act of insubordination but a
fair exercise of her right to free choice of employment.
2. Regulation of Recruitment
2.1. Recruitment is primarily a State function (Art.
16, Labor Code). But it can be delegated to the private
sector (Art. 25, Labor Code), subject to strict regulation. It
is a policy to allow the deployment of able, competent, and
fit OFWs only by recruiters who are able to discharge the
duty of protecting them overseas.
2.2. To protect OFWs, R.A 10022 and the POEA
rules (Sec. 1, Rule //)impose on recruiters and manning
agents solidary liability. Thus, they can be made fully
answerable under final judgments against their principals.
2.3. Philippine courts can acquire jurisdiction over
the persons of foreign employers thru proper service of
summonses on their local agents. The POEA will not
accredit job orders procured by local recruiters from foreign
employers unless their SPAs are submitted.
2.4. How to memorize Art. 12 in a prayerful fashion:
Key Terms Mnemonics
Full employment (FE) Father Eternal,
Protec;tion to labor (P) Priests
Free choice of employment (FC) Find Chicks!
Movement of workers (MW) Mary Weeps ...
56 FUNDAMENTAL PRINCIPLES
Alien employment regulation (A) Abstain!!
Public employment offices (PEO)•Popes
Endlessly Order.
Overseas employment (OE) Ordination bars
Evil!!!
Art. 100
Principle of Non-Diminution of Benefits
1. The two non-diminution provisions of the Labor
Code:
1.1. Art. 100; and
1.2. Art. 127.
2. Art. 100 pertains to benefits enjoyed at the time
(read as on or before) of the promulgation of P.O. 442.
Those benefits could not be withdrawn or diminished ~
P.O. 442. In other words, the prohibition is directed by PD
442 to itself.
3. Art. 127 pertains to benefits enjoyed prior to the
issuance of a new wage order. Those benefits cannot be
withdrawn or diminished by the new wage order.
4. Where a benefit is withdrawn or diminished by an
employer, which provision is violated? It cannot be Art.
100 because this provision contemplates taking by P.O.
442, nor can it be Art.127 because it contemplates taking
by a wage order. Truth to tell, however, the Supreme Court
always applies Art. 100.
4.1. Not only is there a loose judicial reading of
Art. 100 which contemplates taking by P.O. 442 only.
Even benefits granted after the promulgation of the
Code (post PD 442 benefits) are lightly included al-
though it is rather clear that only benefits enjoyed
before promulgation are contemplated.
BAR SYLLABUS-BASED REVIEWER IN 57
LABOR LAW & SOCIAL LEGISLATION
4.2. All these observations are not fanfare or
sophistry. Truth is, J (now CJ) Peralta saw the matter
in Insular Hotel Employees Union-NFL v. Water-
front Insular Hotel Davao, G. R. No. 174040-41, 22
September 2010. In said case, he remarked that Art.
100 pertains to pre-promulgation benefits citing Apex
Mining Co., Inc. v. NLRC, G.R. No. 86200, 25
February 1992.
5. Although one cannot apply Art. 100 to post-
promulgation benefits, however, it does not follow that their
unilateral withdrawal or diminution is proper. Neither is. But
to explain why the taking is unlawful, one should use the
Principle of Grants and not the Principle of Non-Dimi-
nution of Benefits under Art. 100 (Prof. Samson
Alcantara).
Note:
Thru the crafting of the problem, one should be able
to see the direction of the examiner's mind: towards the J
Peralta ruling or not. If the question reads "Does the taking
(by the employer and/or of a post-promulgation benefit)
constitute a violation of Art. 100 of the Labor Code?" then it
signals that the examiner wants Waterfront Insular. Re-
gardless, it would not be mental dishonesty to write: "The
unilateral withdrawal is a violation of the Principle of Non-
Diminution of Benefits and/or Principle of Grants." After all;
many do not distinguish between the two. If the examiner
does distinguish, he would understand the "and/or".
Art. 110
Workers' Preference
1. Under the Labor Code, an unpaid worker is No. 1
(Art. 110). Under the New Civil Code, however, he is No. 6
(Art. 2241); No. 3 (Art. 2242); and No. 2 (Art. 2244). By
58 FUNDAMENTAL PRINCIPLES
applying Art. 110, does No. 6 become No. 1?; does No. 3
become No. 1?; and does No. 2 become Np. 1?
2. Based on the DBP cases wherein the mortgagee
bank is always ahead of the unpaid worker, the answer is
obviously No. Hence, it should be obvious that Art. 11 O
does not mean what it says.
2.1. In Republic v. Peralta, G.R. No. L-56568,
20 May 1987, J Cruz quarrelled with the majority. He
invited attention to the rule in statutory construction
that in the event of a conflict between a general law
(NCC) and a special law (LC), the latter should
prevail. However, the majority also pointed to the
equally known rule that, in the event of such conflict,
the first thing to do is to harmonize them.
2.2. The simplified reconciliation in Peralta is
as follows:
2.2.1. The credits listed under Arts 2241
and 2242 are special preferred credits
(SPCs).They are liens or encumbrances. As
such, they attach to specific properties, e.g., a
mortgagee possesses a mortgage lien. Hence,
his lien attaches to the very property subject of
the real estate mortgage (REM). Since the mort-
gaged property is encumbered, it cannot be
taken away from the mortgagee for delivery to an
unpaid worker because the right given to the
latter by Art. 110 is just a mere preference (not a
right secured by a lien or an encumbrance).
Hence, No. 6 and No. 3 cannot become No. 1
because the creditors sitting above an unpaid
worker under Arts 2241 and 2242 enjoy a right
superior to a mere preference, viz., a lien.
2.2.2. Only the credits listed in Art. 2244
can be affected by Art. 110 because they are or-
I
dinary preferred credits (OPCs). As such, they
are not liens and so they do not attach to spe-
BAR SYLLABUS-BASED REVIEWER IN 59
LABOR LAW & SOCIAL LEGISLATION
cific properties. Hence, No. 1 (funeral expen-
ses) can be overtaken by No. 2 (unpaid worker);
provided, the unpaid claim is first brought in an
appropriate proceeding before the court (bank-
ruptcy, insolvency, or judicial settlement of estate
proceedings - but not judicial foreclosure
proceedings because they are not proceedings
of similar import).
Art. 111
Right to Litigate
1. There are two types of attorney's fees: ordinary
attorney's fees (OAF) and extraordinary attorney's fees
(EAF). Art. 111 contemplates EAF only.
Distinctions
As to who is entitled. OAF belongs to the
lawyer for his legal services, whereas EAF belongs to
the employee as a species of civil damages for being
unlawfully deprived of his wages and benefits, or for
being compelled to litigate to protect his rights.
As to limit. The amount of OAF is determined by
agreement. In the absence of an agreement, it shall
be determined by quantum meruit. In contrast, EAF is
limited to 10% only.
2. In Masmud v. NLRC, G.R. No. 183385, 13 Feb-
ruary 2009, wherein a lawyer and his client quarrelled over
the amount of attorney's fees, the Supreme Court awarded
more than 10% because the subject of the dispute was
OAF - hence, it was not covered by Art. 111.
3. It might be asked if the 10% can be reduced. In a
case, it was reduced to 5% and the reason offered was the
poor financial condition of the employee. One need not
read the case because it is useless. The error is obvious:
60 FUNDAMENTAL PRINCIPLES
the financial condition of an employee has certainly
nothing to do with the amount of the fee. If for this, the fee
should even be increased. Suffice to state that the
reduction was a non sequitur.
4. R.A. 10706 (Seafarers Protection Act), as imple-
mented by D.O. 153, limits ordinary attorney's fees to 10%.
Hence, a contract for legal services between a lawyer and
a seafarer stipulating 30% attorney's fees over a case for
payment of disability benefits is void as to the 20% excess.
Hypothetical Problem
Riki, an Able Seaman, paid ambulance-chasing Atty.
Rigo Santos USD18,000.00 representing 30% of his
USD60,000.00 disability award. Told by Cong. Jonathan
Dela Cruz about R.A. 10706 which he authored, he
engaged Atty. Farina Salvador to recover the 20% excess.
The two agreed that should there be successful recovery
of the excess of USD12,000.00 then Atty. Salvador would
get 30% thereof as her professional fee. (a) Is the
agreement valid?; and (b) Can Atty. Santos be criminally
prosecuted under R.A. 10706? If so, on what basis?
(2.5%)
Suggested Answer
(a) The agreement is valid.
The subject matter of R.A. 10706 is ambulance-
chasing on seafarers. It criminalizes it. As an additional
protection, the law limits lawyer's fees in compensation
cases to 10% only. Hence, it applies to the agreement
between Atty. Santos and Riki. Therefore, Riki can recover
the 20% excess he has paid. As to the agreement between
him and Atty. Salvador, the subject of the recovery suit is
not disability compensation anymore but excessive
attorney's fees. In fact, the money claim should be filed
with the regular courts for lack of EER between Riki and
Atty. Santos. Besides, no lawyer will initiate a case against
BAR SYLLABUS-BASED REVIEWER IN 61
LABOR LAW & SOCIAL LEGISLATION
a fellow lawyer for 10% only - unless they are mortal ene-
mies. Hence, to encourage legal representation for
disadvantaged seafarers, the 10% rule should not be
applied. At the end of the day, Riki will recover USD8,
400.00 from Atty. Santos in exchange for paying USD3,
600. 00 attorney's fees only to Atty. Salvador.
Being outside the contemplation of R.A. 10706,
therefore, subject agreement is valid.
Note:
This is just an experimental answer. It is relatively
talkative. It rests on common sense; it has a practical tone;
and it shows that a computation was done as to show that
effort was exerted. At least it talks. The examiner might just
score the length and not the contents. Who knows?
(b) Yes.
As stated in the problem, Atty. Santos engaged himself
in ambulance-chasing in regard the disability claim of Riki. On
this basis, but not on his excessive professional fee, he can
be criminally prosecuted. What R.A. 10706 criminalizes is
ambulance-chasing only.
5. Related Matters
5.1. Quantum meruit applies also to the fees
of contractors (F.F. Manacop Construction Co., Inc:
v. CA, G.R. No. 122196, 15 January 1997).
5.2. Quantum Meruit {QM) v. Quantum Vale-
bant {QV). In QM, compensation is based on "as
much as he deserves"; whereas, in QV, it is based on
"as much as what is reasonably worth." This will not
be asked in Labor Law. It is added in order to have a
5.2 after 5.1. so that there will be visual balance.
62 FUNDAMENTAL PRINCIPLES
Arts 101-105: Arts 112-116
,
Prescriptive and Proscriptive Wage Rules
1. If the employer's violation of the prescriptive rules
(e.g., wage shall be settled with legal tender) and pros-
criptive rules (e.g., employers shall not interfere with wage
disposition) is such that it leaves the employee no option
except to forego with his employment then a case of
constructive dismissal may likely result.
2. An OFW forced to self-repatriate due to his em-
ployer's continuing act of withholding his salaries is
deemed constructively dismissed since the violation places
him a situation that leaves him no option except to quit.
Art. 124
Primacy of Negotiation
In the event of a wage distortion dispute, the parties
shall negotiate to resolve it.
Art. 218
Labor Relations Principles
1. Participation
1.1. Previous Bar Questions on the Principle
of Participation
Bar 2007: (a) What is the principle of codetermi-
nation?; (b) What, if any, is the basis under the
Constitution for adopting it?
Bar 2008: Does the right to participate include
the workers' right to be represented in the Board of
Directors of the company?
BAR SYLLABUS-BASED REVIEWER IN 63
LABOR LAW & SOCIAL LEGISLATION
1.2. Comments
1.2.1. Anent Bar 2007, the TSN of the
Concom proceedings on 6 August 1986 shows
that the framers of the Constitution did not intend
to equate participation with codetermination.
Based thereon, they were aware that codetermi-
nation was co-management of businesses which
was not the right about to be guaranteed by them
to Filipino workers (Read: Prof. Azucena's anno-
tations under Art. 255, old). Therefore, Sec. 3,
Art. XIII of the Constitution could not have been
the provision to invoke. Unfortunately, the ex-
perts who suggested an answer to the question
could not tell the examiner that his question
(letter "b") was misplaced. And so, they gave a
diplomatic answer.
1.2.2. The lesson is clear: one should ne-
ver quarrel with the examiner over a defective
question. In one Bar year, the examiner took a
case from the Labor Arbiter up to the National
Labor Relations Commission thru a petition for
review._ Of. course, there was no such remedy.
!here Is still none. The remedy is appeal which
Is perfected thru the simple filing of an appeal
memorandum, payment of docket fee, and (on
the employer's part) posting of appeal bond - afl
within the appeal period of 1O days, of course.
1.3. The Un-asked Questions on Participation
1.3.1. As to levels of participation. The
right pertains to both deliberative and adoptive
phases of policy or decision-making processes.
. 1_.3.2. As to availability of right. The right
Is available when employees' rights, benefits and
welfare are at stake. Thus, purely business
decisions can be made without observing the
64 FUNDAMENTAL PRINCIPLES
principle (PAL v. NLRC, G.R. No. 85985, 13
August 1993).
1.3.3. A re-write of Bar 2007.
(a) What is the principle of co-
management?
(b) Would its observance in the
Philippines have any legal justification? Explain.
Proposed Answer
(a) Co-management is the same as
codetermination. Both principles require
employers to allow their employees to co-
adopt business policies and co-run their
businesses.
(b) The observance of the principle
of co-management in the Philippines would
have no legal basis at all. Neither Sec. 3,
Art. XIII of the Constitution nor Art. 218 of
the Labor Code, as renumbered, offers
justification therefor because the principle of
participation whereof both provisions speak
is the exact opposite of co-management.
1.4. FASAP v. PAL, G.R. No. 178083, 13 March
2018
Employees do not have the right to co-determine
the selection criteria for retrenchment, unless agreed
upon in the CBA.
Free Trade Unionism & Movement of Workers
Levels. This principle guarantees right to self-
organization on two levels: (a) craft level; and (b)
industry level. In other words, craft workers and
industry workers have the right to join, assist or form
unions. By comparison, craft is smaller than industry.
Workers belonging to a craft are carpenters, painters,
BAR SYLLABUS-BASED REVIEWER IN 65
LABOR LAW & SOCIAL LEGISLATION
and mechanics. On the other hand, miners and steel
workers are industrial workers.
The One Industry One Union Principle
This principle was repealed by E.O. 111 as it cur-
tailed movement of workers or free trade unionism.
Member unions may disaffiliate from their mother
organizations.
Equity of the Incumbent Principle
Art. 249 of the Labor Code provides that all existing
federations and national unions which meet the qualifica-
tions of an LLO and none of the grounds for cancellation
shall continue to maintain their existing affiliates regardless
of the nature of the industry and the location of the affi-
liates.
Free Collective Bargaining
1. Collective bargaining is free if: (a) the bargaining
agent (SEBA or EBR) is freely selected by the workers;
and (b) the non-compulsion rule is observed during collec-
tive bargaining.
2. To ensure freedom, the following rules have been
set up. Compliance therewith limits employer manipulation.
2.1. Standby Rule. The selection of the wor'-
kers' bargaining representative cannot be interfered
with by the employer. To this end, it cannot file a CE
petition - unless required to collectively bargain and
its establishment is unorganized, i.e., there is no EBR
to bargain with. Neither can it file a motion to dismiss
a CE petition.
2.2. Criminalization of the employer's unjusti-
fiable refusal to bargain, or unjustifiable evasion of its
duty to bargain. An unfair labor practice - which both
refusal and evasion are - is a crime.
66 FUNDAMENTAL PRINCIPLES
Art. 266
No Injunction Policy
1. Un-asked Topics
1.1. Principle of the Strong Arm of Equity
(a) What is the Principle of the Strong Arm of
Equity?
(b) How does the Labor Code, if at all, serve its
ends?
1.2. Restitution
Would the fact that the NLRC's decision is attended
with the gravest degree of abuse of discretion justify the
issuance by the certiorari court of a TRO to stop enforce-
ment of judgment; otherwise, the employer would suffer
serious and irreparable damage or injury?
Proposed Answers
1.1.
(a) The Principle of the Strong Arm of Equity re-
gards injunction as a destructive exercise of power be-
cause, instead of preserving the status quo, it creates a
new one. Thus, it must be issued only under stringent con-
ditions, viz: upon a clear invasion of a right in esse; for
compelling reasons; and when the courts have no means
of protecting the right asserted except to enjoin its in-
vasion.
(b) To serve its ends, the Labor Code has anti-in-
junction provisions. It prohibits injunctions in labor disputes
(Art. 266); and it prohibits injunctions in wage fixing (Art. 126).
1.2.
No. Even in light of such abuse of appellate power,
the expected injury from the enforcement of the judgment
BAR SYLLABUS-BASED REVIEWER IN 67
LABOR LAW & SOCIAL LEGISLATION
will not be irreparable. The reason is Sec. 18, Rule XI of
the 2011 NLRC Rules of Procedure, as amended, allows
restitution of the judgment award in the event of a reversal
judgment. With this remedy, the status quo ante should be
preserved.
2. The NLRC's Injunctive Power (See Labor Procedure)
2.1. Ordinary Cases
2.2. Ancillary Remedy
2.3. Extraordinary Remedy
Art. 292
Miscellaneous: Four Principles
1. Important provisions: (1) self-organization; (2)
statutory due process; (3) appeal fee (in labor standards
disputes, workers shall not be assessed appeal fees); and
(4) suspension power of SOLE (SOLE may suspend the
effects of a dismissal).
2. The NLRC cannot enjoin an intended dismissal
for a just cause. In the PAL Case, supra, it was held that its
injunctive power was ancillary to its review power; hence, a
case for illegal dismissal should have been commenced
before the Labor Arbiter first.
3. Neither can the DOLE-Regional Director enjoin
an intended dismissal for an authorized cause even if
convinced that it lacks basis, or that it is in bad faith. There
is simply no such remedy.
3.1. If neither remedy is available, why would a
Bar examiner ask this question as it was asked
before: What remedy should be availed of to protect
the several workers dismissed en masse?
68 FUNDAMENTAL PRINCIPLES
3.2. The Bar examiner must have wanted to
surface the suspension power of the SOLE hidden in
Art. 292 (formerly Art. 277) of the Labor Code. Under
this provision, the remedy is to convince the DOLE
Regional Director/Labor Arbiter to submit to the SOLE
a report based on prima facie finding that the assailed
dismissal is in implementation of a mass lay-off or is
likely to result in a serious labor dispute. Based there-
on, the SOLE may suspend the effects of the dismis-
sal. This is a probable area of questioning owing to
the pandemic.
Hypothetical Problem
Due to serious losses it has suffered in a 5-month
period owing to Covid19, the Pacman Transport Corp.
serves retrenchment notices to half of its 300 drivers and
conductors with a separation pay offer based on ½ month
salary. The workers, led by 3 dismissed union officers,
reject the offer and seek SEnA assistance instead. They
claim that losses incurred in just 5 months are not reflec-
tive of the financial status of the company which has been
gainfully operating the past 35 years. Although confident of
winning their case, since jurisprudence is in their favor,
they worry that victory is not something that comes ins-
tantly. In the meantime, the unaffected workers warn ma-
nagement of dire consequences, including a congressional
investigation, if it does not reconsider. As union counsel,
what remedy would you utilize to restore these workers to
their jobs while assailing the validity of their retrenchment?
Proposed Answer
I will see to the immediate pretermination the SEnA
proceedings so that the corresponding complaint for illegal
dismissal can be filed and raffled to a Labor Arbiter for the
purpose of having a predicate case. In said case, I will
manifest that the retrenchment has resulted in a mass lay-
off and is likely to result in a serious labor dispute between
BAR SYLLABUS-BASED REVIEWER IN 69
LABOR LAW & SOCIAL LEGISLATION
the company and the workers. On that basis, I will move
that the Labor Arbiter submit the corresponding report to
the SOLE. Thereafter, I will move that the SOLE suspend •
the effects of the retrenchment pursuant to Art. 292(b)of
the Labor Code and order the admission of the retrenched
workers, albeit on "no work no pay status only" during the
quarantine but without prejudice to actual work status
when feasible.
Note: This is a remedy that is not being availed of. In
a "new normal" situation, it is the remedy to use since
injunctive relief from either the RTC or the NLRC is not
available.
B. State Policy Towards Labor
1. Security of Tenure
1.1. The constitutional guarantee is found in
Sec. 3, Art. Ill; whereas, the statutory guarantee is
found in Art. 3 and Art. 294 of the Labor Code. Security
of tenure is the right to remain employed until
dismissed for a valid cause with due process.
1.2. Extent of Right
1.2.1. Right against illegal dismissal;
1.2.2. Right against illegal demotion; and
1.2.3. Right against illegal transfer.
Labor Dispute: Labor Jurisdiction
Mera/co v. Lim
G.R. No. 184769, 6 February 2012
An allegation of punitive transfer not preceded by
notice is an allegation of violation of right to security of
tenure. Therefore, the dispute brought on its basis is a
labor dispute. As such, it cannot be brought to the RTC
70 FUNDAMENTAL PRINCIPLES
via a petition for habeas data on the pretext of compel-
ling the production of the report on th~ basis of which
the petitioner's transfer has been ordered. For lack of
jurisdiction, therefore, the RTC cannot enjoin the as-
sailed transfer.
2. Social Justice
2.1. Sec.10, Art. II &Sec. 2, Art Ill, Constitution
2.2. Meaning
Maximo Calalang v. A.O. Williams, et al.
G.R. No. 47800, 2 December 1940
"Social justice is "neither communism, nor des-
potism, nor atomism, nor anarchy," but the humani-
zation of laws and the equalization of social and eco-
nomic forces by the State so that justice in its rational
and objectively secular conception may at least be
approximated. Social justice means the promotion of
the welfare of all the people, the adoption by the Go-
vernment of measures calculated to insure economic
stability of all the competent elements of society,
through the maintenance of a proper economic and
social equilibrium in the interrelations of the members
of the community, constitutionally, through the adop-
tion of measures legally justifiable, or extra-constitu-
tionally, through the exercise of powers underlying the
existence of all governments on the time-honored
principle of salus populi est suprema lex. Social
justice, therefore, must be founded on the recognition
of the necessity of interdependence among divers
and diverse units of a society and of the protection
that should be equally and evenly extended to all
groups as a combined force in our social and econo-
mic life, consistent with the fundamental and para-
mount objective of the state of promoting the health,
BAR SYLLABUS-BASED REVIEWER IN 71
LABOR LAW & SOCIAL LEGISLATION
comfort, and quiet of all persons, and of bringing
about "the greatest good to the greatest number."
2.3. Principles of Fair Play
Justice for the Deserving Rule
Dionisio Auza, et al. v. MOL Philippines, Inc., et al.
G.R. No. 175481, 21 November 2012
"Justice is in every case for the deserving, to be
dispensed in the light of the established facts and the
applicable law and doctrine. "Although we are com-
mitted to protect the working class, it behooves us to
uphold the rights of management too if only to serve
the interest of fair play. As applied in this case, the
employees who voluntarily resigned and executed
quitclaims are barred from instituting an action or
claim against their employer." (Citation omitted)
The Anti-Rascal Rule
Philippine Airlines, Inc. v. NLRC, et al.
G.R. No. 124456, 5 December 1997
"The policy of social justice is not intended to
countenance wrongdoing, and it matters not the
wrongdoing is committed by the underprivileged for
which, at best, the policy may mitigate the penalty but
certainly will not condone the offense. Compassion for
the poor is an imperative of every humane society,
that should be so only when the recipient is not a
rascal claiming an underserved privilege. Social
justice cannot be permitted to be the refuge of
scoundrels any more than can equity be an
impediment to the punishment of the guilty. Those
who invoke social justice may do so only if their hands
72 FUNDAMENTAL PRINCIPLES
are clean and their motives blameless, and not simply
because they happen to be poor. Thi~ great policy of
the Constitution was never meant to protect those
who have proved themselves unworthy, like the
workers who have tainted the cause of labor with the
blemishes of their own character." (Citing PLOT v.
NLRC)
2.4. The Social Utility Theory
Erner Milan, et al. v. NLRC, et al.
G.R. No. 202961, 4 February 2015
Leonen,J
"Our laws provide for a clear preference for
labor. This is in recognition of the asymmetrical power
of those with capital when they are left to negotiate
with their workers without the standards and protect-
tion of law. In cases such as these, the collective bar-
gaining unit of workers are able to get more benefits
and in exchange, the owners are able to continue with
the program of cutting their losses or wind down their
operations due to serious business losses. The
company in this case did all that was required by law.
The preferential treatment given by our law to
labor, however, is not a license for abuse. 84 It is not a
signal to commit acts of unfairness that will unreaso-
nably infringe on the property rights of the company.
Both labor and employer have social utility, and the
law is not so biased that it does not find a middle
ground to give each their due.
Clearly, in this case, it is for the workers to return
their housing in exchange for the release of their be-
nefits. This is what they agreed upon. It is what is fair
in the premises." (Citations omitted)
BAR SYLLABUS-BASED REVIEWER IN 73
LABOR LAW & SOCIAL LEGISLATION
3. Equal Work Opportunities
3.1 . Sec. 3, Art. XIII, Constitution
Implementing Laws
Anti-Age Discrimination in Employment Act
Solo Parents Welfare Act
Anti-Sexual Harassment Act
3.2. Art. 3, Labor Code
"The State shall afford protection to labor, pro-
mote full employment, ensure equal work opportuni-
ties regardless of sex, race or creed and regulate the
relations between workers and employers. The State
shall assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just and
humane conditions of work."
4. Right to Self-Organization and Collective
Bargaining
4.1. Self-Organization (Ryt 2 JAF LOs 4 CB-
D-MAP)
The right to join, assist or form labor organi-
zations for purposes of collective bargaining, dealing
with the employer, or for mutual aid protection. ·
4.2. Collective Bargaining
4.2.1. A right under Sec. 3, Art. XIII, Cons-
titution.
4.2.2. An obligation under Art. 263 , Labor
Code.
"The duty to bargain collectively means the per-
formance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the pur-
pose of negotiating an agreement with respect to
74 FUNDAMENTAL PRINCIPLES
wages, hours of work and all other terms and con-
ditions of employment including prol'.}osals for adjust-
ting any grievances or questions arising under such
agreement and executing a contract incorporating
such agreements if requested by either party but such
duty does not compel any party to agree to a proposal
or to make any concession."
5. Construction in Favor of Labor
5.1. Art. 4, Labor Code
"All doubts in the implementation and inter-
pretation of the provisions of this Code, including
its implementing rules and regulations, shall be
resolved in favor of labor."
5.2. Art. 1702, New Civil Code
"In case of doubt, all labor legislation and
all labor contracts shall be construed in favor of
the safety and decent living for the laborer."
5.3. Evidence
Hocheng Philppines Corp. v. Antonio Farra/es
G.R. No. 211497, March 18, 2015
"But where there is no showing of a clear, valid and
legal cause for termination of employment, the law
considers the case a matter of illegal dismissal. If doubts
exist between the evidence presented by the employer
and that of the employee, the scales of justice must be
tilted in favor of the latter. The employer must affirma-
tively show rationally adequate evidence that the dis-
missal was for a justifiable cause." (Citations omitted)
6. Burden of Proof and Quantum of Proof
6.1. Money Claims
BAR SYLLABUS-BASED REVIEWER IN 75
LABOR LAW & SOCIAL LEGISLATION
Reyman Minso/a v. New City Builders, Inc,. et al
G.R. No. 207613, 31 January 2018
In claims for payment of salary differential, ser-
vice incentive leave, holiday pay and 13th month pay,
the burden rests on the employer to prove payment.
This standard follows the basic rule that in all illegal
dismissal cases the burden rests on the defendant to
prove payment rather than on the plaintiff to prove
non-:payment. This likewise stems from the fact that
all pertinent personnel files, payrolls, records, remit-
tances and other similar documents - which will show
that the differentials, service incentive leave and other
claims of workers have been paid - are not in the
possession of the worker but are in the custody and
control of the employer.
On the other hand, for overtime pay, premium
pays for holidays and rest days, the burden is shifted
on the employee, as these monetary claims are not
incurred in the normal course of business. It is thus
incumbent upon the employee to first prove that he
actually rendered service in excess of the regular
eight working hours a day, and that he in fact worked
on holidays and rest days. (Citations omitted)
6.2. Illegal Dismissal
Renante Remoticado v. Typical Construction
Trading Corp., et al.
G.R. No. 206529, 23 April 2018
Leonen,J
"It is true that in illegal termination cases, the
burden is upon the employer to prove that termination
of employment was for a just cause. Logic dictates,
however, that the complaining employee must first
establish by substantial evidence the fact of termina-
tion by the employer. If there is no proof of termination
76 FUNDAMENTAL PRINCIPLES
by the employer, there is no point in even considering
the cause for it. There can be no ill~gal termination
when there was no termination. Before the employer
must bear the burden of proving that the dismissal
was legal, the employee must first establish by
substantial evidence the fact of his dismissal from
service. If there is no dismissal, then there can be no
question as to the legality or illegality thereof.
Petitioner here insists on his version of events,
that is, that on December 23, 2010, he was told to
stop reporting for work on account of his supposed in-
debtedness at the canteen. This bare insistence,
however, is all that petitioner has. He failed to present
convincing evidence. Even his basic narrative is be-
reft of supporting details that could be taken as bad-
ges of veracity. As the Court of Appeals underscored,
"[p]etitioner only made a general statement that he
was illegally dismissed ... He did not state how he
was terminated [or] mentioned who prevented him
from reporting for work." (Citations omitted)
Clear and Convincing Evidence
Duty Free Philippines Services, Inc. v. Manolito
Tria
G.R. No. 174809, 27 June 2012
"Petitioner dismissed respondent from employ-
ment based on the recommendation of the DFPDC
holding respondent guilty of dishonesty for his direct
participation in the "fake condemnation" and "pilfe-
rage" of the missing 1,020 Marlboro Pack of 5 ciga-
rettes. Respondent was implicated in the anomalous
transaction by his co-employees who pointed to the
former as the one who ordered the other suspects to
look for a vehicle that would be used to transport the
subject cigarettes. This, according to the DFPDC, was
BAR SYLLABUS-BASED REVIEWER IN 77
LABOR LAW & SOCIAL LEGISLATION
odd and strange. With this act alone and by reason of
his position, the DFPDC concluded, and affirmed by
petitioner, that respondent definitely had knowledge of
the "fake condemnation." From these circumstances,
petitioner sustained the findings of dishonesty and
dismissed respondent from employment.
Again, we agree with the appellate court that
DFPDC's conclusions are not supported by clear and
convincing evidence to warrant the dismissal of res-
pondent. In illegal dismissal cases, the employer is
burdened to prove just cause for terminating the em-
ployment of its employee with clear and convincing
evidence. This principle is designed to give flesh and
blood to the guaranty of security of tenure granted by
the Constitution to employees under the Labor Code.
In this case, petitioner failed to submit clear and con-
vincing evidence of respondent's direct participation in
the alleged fake condemnation proceedings. To be
sure, unsubstantiated suspicions, accusations, and
conclusions of employers do not provide for legal jus-
tification for dismissing employees. In case of doubt,
such cases should be resolved in favor of labor, pur-
suant to the social justice policy of labor laws and the
Constitution." (Footnotes and citations omitted).
Substantial Evidence
Ariel Ebuenga v. Southfield Agencies, Inc., et al.
G.R. No. 208396, 14 March 2018
Leonen,J
"It is petitioner's claim that respondents failed to
deliver their part of the reciprocal obligation by
refusing to entertain him when he asked to have
himself examined. He insists that their refusal is
allegedly an offshoot of his acrimony with them, which
began after his report of a colleague's death to the
International Transport Workers' Federation.
78 FUNDAMENTAL PRINCIPLES
Petitioner weaves a curious narrative of indiffe-
rence and oppression but, just as, curiously, has
nothing more than bare allegations to back him up.
He falls far too short of the requisite quantum of proof
in labor cases. He failed to discharge his burden to
prove his allegations by substantial evidence."
Footnote 36 reads:
"In Tenazas v. R. Villegas Taxi Transport, 731
Phil. 217, 229 (2014) [Per J. Reyes, First Division]: "It
is an oft-repeated rule that in labor cases, as in other
administrative and quasi-judicial proceedings, 'the
quantum of proof necessary is substantial evidence,
or such amount of relevant evidence which a
reasonable mind might accept as adequate to justify a
conclusion.' '[T]he burden of proof rests upon the
party who asserts the affirmative of an issue."
6.3. Types of Substantial Evidence
6.3.1. Quantitative Substantial Evidence
6.3.2. Qualitative Substantial Evidence
Masing & Sons Dev't Corp. v. Gregorio Rogelio
G.R. No. 161787, 27 July 2011
"We agree with the CA's factual findings, be-
cause they were based on the evidence and records
of the case submitted before the LA. The CA essen-
tially complied with the guidepost that the substan-
tiality of evidence depends on both its quantitative
and its qualitative aspects. Indeed, the records sub-
stantially established that Chan and MSDC had
employed Rogelio until 1997. In contrast, Chan and
MSDC failed to adduce credible substantiation of their
averment that Rogelio had been Lim's employee from
July 1989 until 1997. Credible proof that could out-
weigh the showing by Rogelio to the contrary was de-
BAR SYLLABUS-BASED REVIEWER IN 79
LABOR LAW & SOCIAL LEGISLATION
manded of Chan and MSDC to establish the veracity
of their allegation, for their mere allegation of
Rogelio's employment under Lim did not constitute
evidence.but they did not submit such proof, sadly
failing to discharge their burden of proving their own
affirmative allegation. In this regard, as we pointed out
at the start, the doubts reasonably arising from the
evidence are resolved in favor of the laborer in any
controversy between a laborer and his master." (Cita-
tions omitted)
6.4. Burden of Evidence
Gregorio Saberola v. Ronald Suarez, et al.
G.R. No. 151227, 14 July 2008
"As to respondents' monetary claims, we uphold
the findings of the NLRC. As employer, the petitioner
has the burden of proving that the rate of pay given to
the respondents is in accordance with the minimum
fixed by the law and that he paid thirteenth month
pay, service incentive leave pay and other monetary
claims.
We have consistently held that as a rule, one
who pleads payment has the burden of proving it.
Even when the plaintiff alleges non-payment, still the
general rule is that the burden rests on the defendant
to prove payment, rather than on the plaintiff to prove
non-payment. The debtor has the burden of showing
with legal certainty that the obligation has been
discharged by payment. When the existence of a debt
is fully established by the evidence contained in the
record, the burden of proving that it has been
extinguished by payment devolves upon the debtor
who invokes such a defense against the claim of the
creditor. When the debtor introduces some evidence
of payment, the burden of going forward with the
80 FUNDAMENTAL PRINCIPLES

evidence - as distinct from the general burden of PART II

proof - shifts to the creditor, who js then under a
duty of producing some evidence to show non- RECRUITMENT AND PLACEMENT
payment.
In the instant case, the burden of proving pay-
ment of the monetary claims rests on petitioner, being
the employer of respondents. This is because the per- Definition
tinent personnel files, payrolls, records, remittances
and other similar documents that would show that the Recruitment and Placement
claims have been paid are not in the possession of
the worker but in the custody and absolute control of The Labor Code reads:
the employer. Sadly, the petitioner failed to do so." ART. 13. Definitions. -
(Citations omitted.)
a) XX X

b) "Recruitment and placement" refers to any act of

canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or
abroad, whether for profit or not: Provided, That any person
or entity which, in any manner, offers or promises for a fee,
employment to two or more persons shall be deemed
engaged in recruitment and placement.
C) XX X

d) "License" means a document issued by the

Department of Labor authorizing a person or entity to
operate a private employment agency.
e) "Private recruitment entity" means any person or
association engaged in the recruitment and placement of
workers, locally or overseas, without charging, directly or
indirectly, any fee from the workers or employers.
f) "Authority'' means a document issued by the Depart-
ment of Labor authorizing a person or association to
engage in recruitment and placement activities as a private
recruitment entity.
XXX
81
82 RECRUITMENT AND PLACEMENT
Regulation of Recruitment and Placement Activities
Regulatory Authorities
1. Philippine Overseas Employment Administration
Executive Order No. 797 reads:
Sec. 4. There is hereby created a Philippine Overseas
Employment Administration, hereinafter referred to as the
administration, which shall assume the functions of the
Overseas Employment Development Board, the National
Seamen Board, and the overseas employment functions of
the Bureau of Employment Services; which shall absorb
the applicable functions, appropriations, records, equip-
ment, property, and such personnel as may be necessary
of the abolished units; and which shall have the powers,
functions, and structure as provided for below.
(a) The Administration shall formulate and undertake
in coordination where necessary with the appropriate
entities concerned a systematic program for promoting and
monitoring the overseas employment of Filipino workers
taking into consideration domestic manpower require-
ments, and to protect their rights to fair and equitable em-
ployment practices. It shall have original and exclusive
jurisdiction over all cases, including money claims, invol-
ving employer-employee relations arising out of or by virtue
of any law or contract involving Filipino workers for
overseas employment, including seamen. This adjudica-
tory function shall be undertaken in appropriate circums-
tances in consultation with the Construction Industry
Authority of the Philippines. The governing Board of the
Administration, as hereinunder provided, shall promulgate
the necessary rules an regulations to govern the exercise
of the adjudicatory functions of the Administration.
BAR SYLLABUS-BASED REVIEWER IN 83
LABOR LAW & SOCIAL LEGISLATION
2. Regulatory and Visitorial Powers of the Department
of Labor and Employment Secretary
The Labor Code reads:
Article 36. Regulatory power. The Secretary of
Labor shall have the power to restrict and regulate the
recruitment and placement activities of all agencies within
the coverage of this Title and is hereby authorized to issue
orders and promulgate rules and regulations to carry out
the objectives and implement the provisions of this Title.
Article 37. Visitoria/ Power. The Secretary of Labor
or his duly authorized representatives may, at any time,
inspect the premises, books of accounts and records of
any person or entity covered by this Title, require it to
submit reports regularly on prescribed forms, and act on
violation of any provisions of this Title.
Ban on Direct Hiring
ART. 18. Ban on Direct-Hiring. - No employer may
hire a Filipino worker for overseas employment except
through the Boards and entities authorized by the Secretary
of Labor. Direct-hiring by members of the diplomatic corps,
international organizations and such other employers as may
be allowed by the Secretary of Labor is exempted from this
provision.
2010 Bar, Question No. I (3)
TRUE OR FALSE. Explain your answer briefly.
1. X X X
2. X X X
3. As a general rule, direct hiring of Overseas
Filipino Workers (OFWs) is not allowed. (2%)
84 RECRUITMENT AND PLACEMENT BAR SYLLABUS-BASED REVIEWER IN 85
LABOR LAW & SOCIAL LEGISLATION

Answer (3) direct hiring as may be allowed by the Secretary

1. X X X
2. X X X C.
3. TRUE
Art. 18 of the Labor Code bans direct hiring. Art. 16,
on the other hand, limits hiring of OFWs thru State agen-
cies but subject to Art. 25 under which the private sector
may be allowed participation under very stringent condi-
tions for the full protection of recruits.
2017 Bar, Question No. Ill
X X X Office of the Labor Arbiter. Due to the fact that he was a
B. As a rule, direct hiring of migrant workers is not
allowed. What are the exceptions? Explain your answer.
(2.5%)
C. Phil, a resident alien, sought employment in the
Philippines. The employer, noticing that Phil was a
foreigner, demanded that he first secure an employment
permit from the DOLE. Is the employer correct? Explain
your answer. (2.5%)
Answer
X X X
B. The following are the exceptions to the ban on
direct hiring:
(1) direct hiring of Filipinos by the diplomatic corps;
(2) direct hiring of Filipinos by foreign governments
or international organization; and
of Labor and Employment (Art. 18, Labor Code)
No, the employer is not correct.
Under 0.0. 75-06, certain aliens are not required to
procure alien employment permits. Among those listed as
exempt are resident aliens, like Phil. This is still the case
under the present D. 0. 186-17.
In Manila Hotel Corp. v. NLRC, G.R. No. 120077, 13
October 2000, a Filipino national directly applied for work with
Manila Hotel International Corp. in China while working in the
Sultanate of Oman. When retrenched as a consequence of
economic difficulties caused by the Tiannamen Massacre, he
came home to file a complaint for illegal dismissal with the
direct hire and that all the elements of the case he filed were
foreign, except that he was a Filipino, it was held that the
Office of the Labor Arbiter was a forum non conveniens.
Therefore, whatever decision it might render would not be
effective as it could not be enforced in China.
Even if a local tribunal may have been conferred
jurisdiction, and even if it may have acquired it, it should not
exercise it if it is a forum non conveniens. One reason for this
is that it cannot enforce its judgment outside Philippine
territory anyway (Principle of Effectivity of Judgments). If
hiring is done thru authorized boards and entities, OFWs can
enjoy protection. For one thing, the Office of the Labor Arbiter
can acquire jurisdiction over foreign employers thru service of
summonses on their local agents. This provision should be
connected to Art. 22 on mandatory remittance of foreign
exchange earnings. The ban ensures that the employment of
OFWs undergo State supervision and documentation for the
effective enforcement of Art. 22.
86 RECRUITMENT AND PLACEMENT
Entities Prohibited from Recruiting
, gives them a documentary suspension.
ART. 25. Private Sector Participation in the
Recruitment and Placement of Workers. - Pursuant to
national development objectives and in order to harness
and maximize the use of private sector resources and
initiative in the development and implementation of a com-
prehensive employment program, the private employment
sector shall participate in the recruitment and placement of
workers, locally and overseas, under such guidelines, rules
and regulations as may be issued by the Secretary of
Labor.
Participation
Only licensed persons and entities can participate in
recruitment activity. They are required to submit for accre-
ditation by the POEA the job orders they procure overseas.
As a condition for accreditation, among other conditions,
they must submit their Special Powers of Attorney (SPA)
whereby their foreign principals authorize them to recruit
OFWs. On the basis thereof, the Office of the Labor Abriter
can acquire jurisdiction over foreign employers thru the
service of summonses on recruiters.
Thus, the participation of the private sector provides
procedural convenience. It would be different if the State
recruited exclusively. In the event _of suits, it cannot be
proceeded against because it has immunity.
Documentary Suspension
Money judgments won by OFWs can be conveniently
enforced against the performance bonds posted by
recruiters with the POEA. If garnished and released to the
sheriff, said bonds must be replenished; otherwise,
recruiters cannot pursue their trade while their bonds are in
a .state of partial depletion or full depletion. They cannot
BAR SYLLABUS-BASED REVIEWER IN 87
LABOR LAW & SOCIAL LEGISLATION
continue operating if, by reason of depletion, the POEA
ART. 26. Travel Agencies Prohibited to Recruit. -
Travel agencies and sales agencies of airline companies are
prohibited from engaging in the business of recruitment and
placement of workers for overseas employment whether for
profit or not.
ART. 27. Citizenship Requirement. - Only Filipino
citizens or corporations, partnerships or entities at least
seventy-five percent (75%) of the authorized and voting
capital stock of which is owned and controlled by Filipino
citizens shall be permitted to participate in the recruitment
and placement of workers, locally or overseas.
ART. 28. Capitalization. - All applicants for autho-
rity to hire or renewal of license to recruit are required to
have such substantial capitalization as determined by the
Secretary of Labor.
Sec. 2, Rule I, POEA Rules and Regulations
Who may participate; Required Capitalization. -
Any Filipino citizen acting as a sole proprietor or a part-
nership, or a corporation at least seventy-five percent
(75%) of the authorized and voting capital stock of which is
owned and controlled by Filipino citizens, may engage in
the business of recruitment and placement of Filipino wor-
kers. The sole proprietor and partnership shall have a mini-
mum capitalization of Five Million Pesos (PhP 5,000,
000.00) and a minimum paid up capital of Five Million
Pesos (PhP5,000,000.00) in case of a corporation. Those
with existing licenses shall, within four (4) years from effec-
tivity hereof, increase their capitalization or paid up capital,
as the case may be, to Five Million Pesos (PhP 5,000,
000.00) at the rate of Seven Hundred Fifty Thousand
88 RECRUITMENT AND PLACEMENT
Pesos (PhP750,000.00) every year. b. Direct Hiring Art 18
(See above) Exceptions: Art 18 (See 9bove) Omnibus
Rules Implementing RA 8042 as amended, Rule II. Sec 1
(i). Direct Hires - refer to workers directly hired by emplo-
yers for overseas employment as authorized by the Secre-
tary of Labor and Employment and processed by the
POEA, including: 1. Those hired by international organiza-
tions; 2. Those hired by members of the diplomatic corps;
and 3. Name hires or workers who are able to secure
overseas employment opportunities with employers without
the assistance or participation of any agency.
2015 Bar, Question No. I
A. Rocket Corporation is a domestic corporation re-
gistered with the SEC, with 30% of its authorized capital
stock owned by foreigners and 70% of its authorized capi-
tal stock owned by Filipinos. Is Rocket Corporation allowed
to engage in the recruitment and placement of workers,
locally and overseas? Briefly state the basis for your
answer. (2%)
B. When does the recruitment of workers become an
act of economic sabotage? (2%)
Answer
A. No. Foreign ownership of a corporation engaged in
recruitment, whether local or overseas, is limited to 25%
(Art. 27, Labor Code).
B. The recruitment of workers becomes economic
sabotage when:
(1) committed by a syndicate, i.e., by three or more
persons acting in conspiracy with one another; and
BAR SYLLABUS-BASED REVIEWER IN 89
LABOR LAW & SOCIAL LEGISLATION
(2) committed in large scale or qualified, i.e., against
three or more persons, whether dealt with individually or as
a group (Art. 38, Labor Code).
Mario Hornales v. NLRC, et al.
G.R. No. 118943, 10 Sept. 2001
"Mario Hornales et. al. were sent by JEAC Interna-
tional Management and Contractor Services as fishermen
for Min Fee Fishery while the owner of Step-Up Employ-
ment Agency supervised them. Due to inhumane condi-
tions (inadequate food and water, maltreatment by captain,
lack of medical assistance, 22-hour work shifts without
pay), M et al escaped from the vessel. M filed a complaint
for non-payment of wages against JEAC. JEAC contended
that they were a mere travel agency and Step-Up was a
complete stranger to them. M presented evidences such
as the photocopies of the bank checks issued in favor of
his relatives and the agreement that their existing loans are
deducted from their salaries: M's evidences are strong and
proves there is a relationship between JEAC and Step-Up.
JEAC is still liable to M even if there is no employment
contract between him and Step-Up Agency that had been
approved by the POEA. Non-compliance with the POEA
Rules and Regulations cannot be a basis in escaping from
liability_ ari~ing from an employer-employee relationship.
There Is still a relationship that exists, in fact, this makes
JEAC open to sanctions (cancellation or suspension of
license) for the violation."
2009 Bar, Question No. Ill
~ichie, a driver-mechanic, was recruited by Supreme
Recruiters (SR) and its principal, Mideast Recruitment
Agency (MRA), to work in Qatar for a period of two (2)
years. However, soon after the contract was approved by
POEA, M~A advised SR to forego Richie's deployment
because It had already hired another Filipino driver-
90 RECRUITMENT AND PLACEMENT
mechanic, who had just completed his contract in Qatar.
Aggrieved, Richie filed with the NLRC a cpmplaint against
SR and MRA for damages corresponding to his two years'
salary under the POEA-approved contract.
SR and MRA traversed Richie's complaint, raising the
following arguments:
a. The Labor Arbiter has no jurisdiction over the
case; (2%)
b. Because Richie was not able to leave for Qatar,
no employer-employee relationship was established
between them; (2%) and
c. Even assuming that they are liable, their liability
would, at most, be equivalent to Richie's salary for only six
(6) months, not two years. (3%).
Rule on the validity of the foregoing arguments with
reasons.
Answer
a. The Labor Arbiter has jurisdiction.
Sec. 7, R.A. 10022 confers jurisdiction on the Labor
Arbiter over the money claims, including damages, of
OFWs arising from employer-employee relationship, con-
tract, or law.
b. Actual deployment of an OFW signals the birth of
employer-employee relationship between him and his
foreign employer (Paul v. Santiago v. CF Sharp Crew Ma-
nagement, Inc., G.R. No. 162419, 10 July 2007). Neverthe-
less, an undeployed OFW can litigate before the Labor
Arbiter over money claims arising from his perfected em-
ployment contract.
BAR SYLLABUS-BASED REVIEWER IN 91
LABOR LAW & SOCIAL LEGISLATION
c. The lesser amount rule in Sec. 7, R.A. 10022 has
been declared as unconstitutional for violating the Due
Process Clause and the Equal Protection Clause (Sameer
overseas Placement Agency v. Joy Cabiles, G.R. No.
170139, 5 August 2014). Hence, MRA and SR are liable
for the payment of 2 years of salaries.
ART. 29. Non-transferability of License or Autho-
rity. - No license or authority shall be used directly or
indirectly by any person other than the one in whose favor it
was issued or at any place other than that stated in the
license or authority be transferred, conveyed or assigned to
any other person or entity. Any transfer of business address,
appointment or designation of any agent or representative
including the establishment of additional offices anywhere
shall be subject to the prior approval of the Department of
Labor.
Characteristics of a Recruitment License
1. It is place-specific;
2. It is person-specific; and
3. It is prospective.
Per Art. 29, the authorized place of operation shall not
be expanded. Hence, if the authorized place is Baguio
City, the licensee or holder of authority cannot do his trade
in Metro Manila; otherwise, he will be liable. Per Art. 29
also, the licensee or holder of authority cannot multiply
himself to expand his trade. Prior POEA approval is
required in the event of transfer, conveyance or assign-
ment of license or authority. A recruitment license cannot
be retroacted to legitimize an act of recruitment committed
without State authorization (People v. Chua, supra).
92 RECRUITMENT AND PLACEMENT
ART. 30. Registration Fees. - The Secretary of
Labor shall promulgate a schedule of fee,s for the Regis-
tration of all applicants for license or authority.
ART. 31. Bonds. - All applicants for license or au-
thority shall post such cash and surety bonds as determined
by the Secretary of Labor to guarantee compliance with
prescribed recruitment procedures, rules and regulations,
and terms and conditions of employment as may be ap-
propriate.
Order of Execution
In the event of a monetary judgment against a recruit-
ment agency, its bond can be attached. In general, the
order of execution which the Labor Arbiter's sheriff must
observe is as follows: cash bond, bank deposits, surety
bond, personal property and real property (Sec. 9, Rule XI,
2011 NLRC Rules of Procedure, as amended). However,
for monetary judgments involving OFWs, the order of exe-
cution shall be in accordance with R.A. 10022. (Sec. 9(d),
Rule XI, 2011 NLRC Rules of Procedure, as amended).
Hence:
XXX
(1) After a decision has become final and executory
or a settlement/compromise agreem~nt has been reached
between the parties at the NLRC, an order shall be
released mandating the respondent recruitment/manning
agency to pay the amount adjudged or agreed upon within
thirty (30) days;
(2) The recruitment/manning agency shall then im-
mediately file a notice of claim with its insurance provider
for the amount of liability insured, attaching therewith a
copy of the decision or compromise agreement;
(3) Within ten (10) days from the filing of notice of
claim, the insurance company shall make payment to the
BAR SYLLABUS-BASED REVIEWER IN 93
LABOR LAW & SOCIAL LEGISLATION
recruitment/manning agency the amount adjudged or
agreed upon, or the amount of liability insured, whichever
is lower. After receiving the insurance payment, the
recruitment/manning agency shall immediately pay the
migrant worker's claim in full, taking into account that in
case the amount of insurance coverage is insufficient to
satisfy the amount adjudged or agreed upon, it is liable to
pay the balance thereof;
(4) In case the insurance company fails to make
payment within ten (10) days from the filing of the claim,
the recruitment/ manning agency shall pay the amount
adjudged or agreed upon within the remaining days of the
thirty (30)-day period, as provided in the first subparagraph
hereof;
(5) If the worker's claim was not settled within the
aforesaid thirty (30)-day period, the recruitment/manning
agency's performance bond or escrow deposit shall be
forthwith garnished to satisfy the migrant worker's claim;
(6) The provision of compulsory worker's insurance
under this section shall not affect the joint and solidary
liability of the foreign employer and the recruitment/ man-
ning agency under Section 1O;
(7) Lawyers for the insurance companies, unless the
latter is impleaded, shall be prohibited to appear before the
NLRC in money claims cases under this section. ( Sec. 23) ·
ART. 32. Fees to be Paid by Workers. - Any per-
son applying with a private fee-charging employment
agency for employment assistance shall not be charged any
fee until he has obtained employment through its efforts or
has actually commenced employment. Such fee shall be
always covered with the appropriate receipt clearly showing
the amount paid. The Secretary of Labor shall promulgate a
schedule of allowable fees.
94 RECRUITMENT AND PLACEMENT
This provision must be read with Art. 34, Labor Code
and Sec. 5, R.A. 10022 under which it is prohibited practice
to:
1. To charge or accept, directly or indirectly, any
amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor, or to
make a worker pay any amount greater than that actually
received by him as a loan or advance (Art. 34 ); and
2. Fail to reimburse placement and other fees in the
event of non-deployment (Sec. 5,m).
ART. 33. Reports on Employment Status. - When-
ever the public interest requires, the Secretary of Labor may
direct all persons or entities within the coverage of this Title
to submit a report on the status of employment, including job
vacancies, details of job requisitions, separation from jobs,
wages, other terms and conditions and other employment
data.
Suspension or Cancellation of License or Authority
Republic v. Principalia Management and Personnel
Consultants, Inc.
G.R. No. 198426, 2 September 2015
It should be recalled that what impelled Principalia to
file the main action for injunction was the June 8, 2009
POEA Order directing the immediate cancellation of its
license. Since Principalia could not then engage in recruit-
ment activities because of the said Order, it resorted to the
RTC to question and seek to enjoin such immediate can-
cellation for the obvious reason that it wanted to continue
the operation of its business. Significantly, however, Princi-
palia, to date, is a POEA-accredited recruitment agency
BAR SYLLABUS-BASED REVIEWER IN 95
LABOR LAW & SOCIAL LEGISLATION
licensed to do business until April 1, 2016. As things stand,
therefore, Principalia has no more claim for relief against
POEA since this has been mooted by the latter's renewal
of its license to do business. In fact and as mentioned,
Principalia already moved for the dismissal of the
injunction case before the RTC which the said court
correctly granted.
X X X
In stressing that the RTC is bereft of jurisdiction to
entertain the injunction case, the Republic avers that it is
the POEA which has original and exclusive jurisdiction to
hear and decide all pre-employment cases which are admi-
nistrative in character involving or arising out of violations
of recruitment regulations, or violations of conditions for the
issuance of license to recruit workers, under Section 3(d)
of Executive Order No. 247 (EO 247) and as reiterated in
Section 1, Rule I, Part VI of the 2002 POEA Rules. On the
other hand, the remedy of an appeal/petition for review of
an Order issued by the POEA in the exercise of such
exclusive jurisdiction is lodged exclusively with the DOLE
Secretary as provided under Section 1, Rule V, Part VI of
the 2002 POEA Rules. Notably, however, nothing in EO
247 and the 2002 POEA Rules relied upon by the Republic
provides for the grant to a recruitment agency of an
injunctive relief from the immediate execution of penalties
for serious offenses (e.g., cancellation to operate, suspen~
sion of license for a maximum period of 12 months). Con-
versely, they do not deprive the courts of the power to
entertain injunction petitions to stay the execution of a
POEA order imposing such penalties.
The Court thus agrees with the CA in holding that the
RTC can take cognizance of the injunction complaint,
which "is a suit which has for its purpose the enjoinment of
the defendant, perpetually or for a particular time, from the
commission or continuance of a specific act, or his compul-
sion to continue performance of a particular act." Actions
96 RECRUITMENT AND PLACEMENT BAR SYLLABUS-BASED REVIEWER IN 97
LABOR LAW & SOCIAL LEGISLATION

for injunction and damages lie within the exclu_sive and C

original jurisdiction of the RTC pursuant.to Section 19 ~f Illegal Recruitment
Batas Pambansa Big. 129, otherwise known as the Judi-
ciary Reorganization Act of 1980, as amended by RA Elements
7691. (Footnotes omitted.)
1. First Mode of Commission
1.1. Act of recruitment or placement is commit-
ted;
1.2. It is committed by a non-licensee or non-
holder of authority.
2. Second Mode of Commission
2.1. A prohibited practice is committed;
2.2. It is committed by any person.

Types
1. Simple
It is committed by less than 3 perpetrators against
less than 3 victims.
2. Economic Sabotage
2.1. By a Syndicate. It is committed by 3 or more
conspirators.
2.2. In Large Scale. It is committed against 3 or
more victims, whether dealt with individually
or as a group.

Illegal Recruitment as Distinguished from Estafa

People v. Yabut
(374 Phil. 575, 586)
"In this jurisdiction, it is settled that a person who
commits illegal recruitment may be charged and convicted
separately of illegal recruitment under the Labor Code and
estafa under par. 2(a) of Article 315 of the Revised Penal
Code. The offense of illegal recruitment is ma/um prohibi-
98 RECRUITMENT AND PLACEMENT
tum where the criminal intent of the accused is not ne-
cessary for conviction, while estafa is mq/um in se where
the criminal intent of the accused is crucial for conviction.
Conviction for offenses under the Labor Code does not bar
conviction for offenses punishable by other laws. Con-
versely, conviction for estafa under par. 2(a) of Article 315
of the Revised Penal Code does not bar a conviction for
illegal recruitment under the Labor Code. It follows that
ones acquittal of the crime of estafa will not necessarily
result in his acquittal of the crime of illegal recruitment in
large scale, and vice versa.
The prosecution must prove beyond reasonable doubt
that an accused is similarly guilty of estafa under Art. 315
(2)(a) of the Revised Penal Code committed -
By means of any of the following false pretenses or
fraudulent acts executed prior to or simultaneously with the
commission of the fraud:
(a) By using a fictitious name, or falsely pretending to
possess power, influence, qualifications, property, credit,
agency, business or imaginary transactions, or by means
of other similar deceits.
Both elements of the crime must be established in a
case, namely, (a) accused defrauded complainant by
abuse of confidence or by means of deceit; and (b) com-
plainant suffered damage or prejudice capable of
pecuniary estimation as a result. In most instances, the
victim parted with his money upon the prodding and
enticement of the accused on the false pretense that latter
had the capacity to deploy him for employment abroad. In
the end, victims usually are not able to leave for work
overseas nor do they get their money back, thus causing
them damage and prejudice. Hence, the filing of crime of
estafa is proper."
BAR SYLLABUS-BASED REVIEWER IN 99
LABOR LAW & SOCIAL LEGISLATION
D
Liability of Local Recruitment Agency and Foreign
Employer
Solidary Liability
The LA's decision shall direct the principal and
recruiter to solidarily pay the OFW. If the recruiter is a juri-
dical being, its corporate officers shall be held solidarily
liable with it. This liability shall attach during the effectivity
of the contract and it shall not be affected by any substi-
tution, amendment, or modification made locally or over-
seas (Sec. 7, R.A. 10022).
In Elizabeth Gagui vs. Simeon Dejero, G.R. No.
196036, 23 October 2013, the Supreme Court said: "The
liability of corporate directors and officers is not automatic.
To make them jointly and solidarily liable with their com-
pany, there must be a finding that they were remiss in
directing the affairs of that company, such as sponsoring or
tolerating the conduct of illegal activities." This is a 2013
decision, whereas R.A. 10022 is a 2010 law. Does it mean
that Sec. 7, R.A. 10022 has been overshadowed by juris-
prudence? No. Solidary liability is of at least two (2) types:
(a) statutory, or one imposed by law (Sec. 7, R.A. 10022);
and (b) Sec. 31 solidary liability (Oejero, supra). Sec.31 i$
now Sec.30 of the Revised Corporation Code.
1. Theory of Imputed Knowledge
Sunace lnt'I Management Services, Inc. v. NLRC, et al.
G.R. No. 161757, 25 January 2006
Sunace deployed Divina A. Montehermozo (Divina) to
M. Xiong in Taiwan as a domestic helper under a 1-year
contract with the assistance of a Taiwanese broker, Wang.
After her contract expired, she entered into a 2-year
100 RECRUITMENT AND PLACEMENT
extension contract with Mr. Xiong. Thereafter, she returned
to the Philippines.
Shortly after her return, Divina filed a complaint before
the NLRC against Sunace, alleging that she was jailed for
three months and that she was underpaid. In her position
paper, she claimed that the 2-year extended contract was
with the knowledge and consent of Sunace and that
amounts representing income tax and savings were deduc-
ted from her salary. Allegedly, those deducted in 1998 and
1999 were not returned. To prove otherwise, Sunace
presented a telefax message from Mr. Wang which read:
"Regarding to Divina, she did not say
anything about her saving in police station. As
we contact with her employer, she took back her
saving already last years. And they did not
deduct any money from her salary. Or she will
call back her employer to check it again. If her
employer said yes! we will get it back for her."
Moreover, Sunace alleged that Divina's 2-year exten-
sion contract was without its knowledge and consent;
hence, it had no liability for any claim arising therefrom.
The Labor Arbiter rejected its argument because the tele-
fax message showed that Sunace and Wang did not stop
communicating with each other. The NLRC also found that
Sunace knew of and impliedly consented to the extension.
It said "It is undisputed that [Sunace] was continually com-
municating with [Divina's] foreign employer." It thus con-
cluded that "[a]s agent of the foreign principal, 'petitioner
cannot profess ignorance of such extension as obviously,
the act of the principal extending complainant (sic) employ-
ment contract necessarily bound it."' The CA affirmed.
The SC held that the CA misapplied the Theory of
Imputed Knowledge. The theory of ascribes the know-
ledge of the agent, Sunace, to the principal, employer
Xiong, not the other way around. The knowledge of the
BAR SYLLABUS-BASED REVIEWER IN 101
LABOR LAW & SOCIAL LEGISLATION
principal-foreign employer cannot, therefore, be imputed to
its agent Sunace.
It noted that the alleged continuous communication
was with the Taiwanese broker Wang, not with the foreign
employer Xiong. The message did not provide evidence
that Sunace was privy to the new contract executed after
the expiration of the original contract. That Sunace and the
Taiwanese broker communicated regarding Divina's alle-
gedly withheld savings did not necessarily mean that
Sunace ratified the extension of the contract. The New
Civil Code provides: "Contracts take effect only between
the parties, their assigns, and heirs, except in case where
the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by
provision of law." Furthermore, there was an implied revo-
cation of the agency relationship when, after the termina-
tion of the original employment contract, the foreign princi-
pal directly negotiated with Divina and entered into a new
and separate employment contract in Taiwan. Article 1924
of the New Civil Code provides: "The agency is revoked if
the principal directly manages the business entrusted to
the agent, dealing directly with third persons."
Santosa Datuman v. First Cosmopolitan Manpower
and Promotion Services, Inc.
G.R. No. 156029, 14 November 2008
First Cosmopolitan Manpower & Promotion Services,
Inc. deployed Santosa B. Datuman to Bahrain as a sales-
lady. However, her employer Mohammed Hussain took her
passport when she arrived there; and instead of working as
a saleslady, she was forced to work as a domestic helper
with a salary of USO 100.00 instead of USO 370.00 per her
POEA-approved contract.
Later, Hussain compelled her to sign another 2-year
contract, transferring her to another employer as house-
maid with a salary of 8D40.00. She pleaded with him to
 102 RECRUITMENT AND PLACEMENT
give her a release paper and to return her passport but her
pleas were unheeded. Left with no choice, she continued
working against her will. Worse, she even worked without
compensation from September 1991 to April 1993. In May
1993, she was able to finally return to the Philippines
through the help of the Bahrain Passport and Immigration
Department.
Upon returning, Datuman sued on her second con-
tract before the NLRC for underpayment of salary, non-
payment of vacation pay and reimbursement of return
airfare. After hearing, the LA found that respondent viola-
ted the terms of said contract. The NLRC affirmed with mo-
dification. However, the CA reversed both LA and NLRC
as follows: "In Catan v. National Labor Relations Commis-
sion, 160 SCRA 691 (1988), it was held that the responsi-
bilities of the local agent and the foreign principal towards
the contracted employees under the recruitment agree-
ment extends up to and until the expiration of the employ-
ment contracts of the employees recruited and employed
pursuant to the said recruitment agreement." "It is only as
regards the principal contract to which it is privy shall its
liability extend."
The SC reversed the CA for the following reasons:
(1) Section 1 of Rule II of the POEA Rules and Regulations
requires an applicant for a recruitment license to execute a
verified undertaking that it "(s)hall assume joint and soli-
dary liability with the employer for all claims and liabi-
lities which may arise in connection with the imple-
mentation of the contract; including but not limited to
payment of wages, death and disability compensation and
repatriation"; and (2) the signing of the "substitute" contract
with the foreign employer/principal before the expiration of
the POEA-approved contract and any continuation of
petitioner's employment beyond the original one-year term,
. against the will of petitioner, are continuing breaches of
the original POEA-approved contract." (Emphasis copied.)
BAR SYLLABUS-BASED REVIEWER IN 103
LABOR LAW & SOCIAL LEGISLATION
Note:
In Sunace, there was no privity of contract because
the recruiter was not a party to the second contract; hence,
Sec. 1, Rule I of the POEA Rules and Regulations (which
makes a recruiter solidarily liable for violations of the terms
of the POEA-approved contract) could not be applied. In
contrast, the recruiter in Datuman may not have been privy
to the second contract; however, the second contract was
the direct result of breaches of the POEA-approved
contract. On that basis, it was held liable because it was
really the first contract which was violated.
D. Termination of Contract of Migrant Worker
Sec. 7, R.A. 10022: Money Claims
What usually initiates a money claim under Sec. 7
R_.A. 10~22_, is an illegal repatriation occasioned by eithe~
d1r~ct d1sm1ssal. or constructive dismissal. An OFW may
claim the following: (a) his placement fee which will earn
for him legal interest; (b) the salaries he would have
earned had he not been illegally dismissed; (c) moral and
exemplary damages; and (d) attorney's fees.
At the end of the day, the task of the Labor Arbiter
who is conferred the jurisdiction to hear and resolve th~
money claims of OFWs, is to compute salaries. J Leanen,
~ho penned the Sameer Decision, has made that task very
simple now. In other words, the LA will now do a straight
computation free from the Lesser Amount Rule.
Computations
1. Period of contract 24 months
Date of dismissal after 4 months
Monthly salary SR3,000
Unexpired portion 20 months
Salary Award = 20 months x SR3,000
104 RECRUITMENT AND PLACEMENT BAR SYLLABUS-BASED REVIEWER IN 105
LABOR LAW & SOCIAL LEGISLATION

= SR60,000 or its Php Philippine law applies because the employment con-
equivalent at the time tract is executed in the Philippines (/ex ex contractu, Jex
of payment. foci celebrationis). Invocation of a foreign law is subject to
proof. If not proven, it shall be presumed to be the same as
In the event of underpayment of salary, the Philippine law (Processua/ Presumption Theory).
contractual salary rate shall be used. Thus:
E. Employment of Non-Resident Aliens
2. Period of contract 24 months
Date of dismissal after 4 months TITLE II
Contractual salary SR3,000 EMPLOYMENT OF NON-RESIDENT ALIENS
Actual salary SR1 ,500
Unexpired portion 20 months ART. 40. Employment Permit of Non-Resident
Salary Award = SR3,000 x 20 months Aliens. 1-Any alien seeking admission to the Philippines for
= SR60,000 employment purposes and any domestic or foreign
Plus Salary Deficiency employer who desires to engage an alien for employment
(based on underpay- in the Philippines shall obtain an employment permit from
ment of SR1 ,500) the Department of Labor.
= SR1 ,500 x 4 months
The employment permit may be issued to a non-
= SR6,000
Total Award = SR66,000, or its Php resident alien or to the applicant employer after a determi-
equivalent at the time nation of the non-availability of a person in the Philippines
of payment. who is competent, able and willing at the time of applica-
tion to perform the services for which the alien is desired.
Subject to jurisprudence, infra, on when to validly For an enterprise registered in preferred areas of
award damages and attorney's fees, the LA may also investments, said employment permit may be issued upon
award these additional relief. recommendation of the government agency charged with
the supervision of said registered enterprise. ·
No Reinstatement and Backwages
ART. 41. Prohibition Against Transfer of
For an OFW domestic helper, Sec. 7, R.A. 10022 is the
Employment.-
law to apply and not Art. 149 (now Art. 147) of the Labor
Code or the ·Kasambahay Act. But in Philippine Integrated a) After the issuance of an employment permit, the
Labor Assistance Corp. (PH/LAC) v. NLRC, et al., G.R. No. alien shall not transfer to another job or change his emplo-
123353, 19 November 1996, aside from salaries for the unex- yer without prior approval of the Secretary of Labor.
pired portion of contract, the Supreme Court awarded indem-
nity (15 days salary) as required by Art. 149 of the Labor
Code to an OFW domestic helper. Just take note of this.
1
See Department Order No.75 dated May31, 2006 (Revised Rules for the
Issuance of Employment Permits to Foreign Nationals).
106 RECRUITMENT AND PLACEMENT
b) Any non-resident alien who shall take up employ-
ment in violation of the provision of this Tjtle and its imple-
menting rules and regulations shall be punished in ac-
cordance with the provisions of Articles 289 and 290 of the
Labor Code.
In addition, the alien worker shall be subject to
deportation after service of his sentence.
ART. 42. Submission of List.-Any employer em-
ploying non-resident foreign nationals on the effective date
of this Code shall submit a list of such nationals to the
Secretary of Labor within thirty (30) days after such date
indicating their names, citizenship, foreign and local ad-
dresses, nature of employment and status of stay in the
country. The Secretary of Labor shall then determine if
they are entitled to an employment permit.
Employment Policy
Sec. 12, Art. XII of the 1987 Constitution lays down
the Filipino Work for Filipino Workers policy. Foreign natio-
nals who intend to be gainfully employed cannot work on
Philippine soil. Gainful employment implies employer-em-
ployee relationship between a Philippine-based employer
and a foreign national (0.0. 186-17).
Exception. Arts 40-42 of the Labor Code, as imple-
mented by 0.0. 186-17, permit the employment of non-
resident aliens under these conditions:
1. There are no Filipino CAWs (capable, able and
willing) workers to perform the work in question as certified
by the DOLE;
2. Procurement of Alien Employment Permits (AEPs);
and
3. Aliens must have working visas.
BAR SYLLABUS-BASED REVIEWER IN 107
LABOR LAW & SOCIAL LEGISLATION
Certificates of Exclusion (COE) may be applied for by
those who do not have employer-employee relationship
with a Philippine company, or whose employers are based
abroad. Without COEs, foreigners will have a difficult time
securing their visas.
Alien Employment Permit
1. Exempt Aliens (D.O. 186-17)
1.1 . Section 2
(i) All members of the diplomatic service
and foreign government officials accredited by
and with reciprocity arrangement with the Ph go-
vernment;
(ii) Officers and staff of international orga-
nizations of which the Ph is a member, and their
legitimate spouses desiring to work in the Ph;
(iii) Owners and representatives of foreign
principals whose companies are accredited by
the POEA who come to the Ph for a limited period
and solely for the purpose of interviewing Filipino
applicants for overseas employment;
(iv) Foreign nationals who come to the Ph
to teach, present and/or conduct research studies
in universities and colleges as visiting, exchange
or adjunct professors under formal agreements
between the universities or colleges in the Ph and
foreign universities or colleges; or between the
Ph government and foreign governments; provi-
ded that the exemption is on reciprocal basis;
(v) Permanent resident foreign nationals
and probationary or temporary resident visa hol-
ders under Sec. 13 (a-f) of the Ph Immigration Act
of 1940 and Sec. 3 of the Alien Social Integration
Act of 1995 (R.A. 79170);
108 RECRUITMENT AND PLACEMENT
(vi) Refugees and stateless persons re-
cognized by the DOJ pursuant.to Art. 17 of the
UN convention and Protocol Relating to the Sta-
tus of Refugees and Stateless Persons; and
1.2. Section 3
(i) Members of the governing board with
voting rights only and who do not intervene in the
management of the corporation or in the day-to-
day operation of the enterprise;
(ii) President and Treasurer who are part-
owners of the company;
(iii) Those providing consultancy services
who do not have employers in the Ph;
(iv) Intra-corporate transferee who is a
manager, executive or specialist as defined below
in accordance with trade agreements and who is
an employee of the foreign service supplier for at
least 1 continuous year employment prior to dep-
loyment to a branch, subsidiary, affiliate or repre-
sentative office in the Ph;
(iv.i) Executive. A natural person
within the organization who primarily directs
the management of the organization and
exercises wide latitude in decision-making
and receives only general supervision or
direction from higher level executives, the
board of directors, or stockholders of the
business; and he does not directly perform
tasks related to the actual provision of the
service/s of the organization;
(iv.ii) Manager. A natural person
within the organization who primarily directs
the organization/department/subdivision and
exercises supervisory and control functions
BAR SYLLABUS-BASED REVIEWER IN 109
LABOR LAW & SOCIAL LEGISLATION
over other supervisory, managerial or
professional staff. It does not include first
line supervisors unless the employees
supervised are professionals. It does not
include employees who primarily perform
tasks necessary for the provision of the
service;
(iv.iii) Specialist. A natural person
within the organization who possesses
knowledge on an advanced level of exper-
tise essential to the establishment/provision
of the service and/or possesses proprietary
knowledge of the organization's service,
research equipment, technique or manage-
ment. It may include, but is not limited to,
members of the licensed profession.
Duty to Apply for an AEP
Armando De Rossi v. NLRC, et al., G.R. No. 108710,
14 September 1999, instructs that if an alien is applying for
work, he must procure his AEP as follows: If still abroad,
from the Philippine Embassy in his country; and if on
Philippine soil, from the nearest DOLE-RD office.
If a local employer is offering work to an alien, it must
procure the required AEP from the nearest DOLE-RD
office.
2015 Bar, Question No. XVIII
George is an American who is working as a consul-
tant for a local IT company. The company has a union and
George wants to support the union. How far can George
go in terms of his support for the union?(3%)
110 RECRUITMENT AND PLACEMENT
Answer
.
George is not an alien employee but an independent
contractor. The term "working" per se cannot be used as
an indicium of employer-employee relationship because a
worker is any member of the labor force, whether em-
ployed or not (Art. 13, Labor Code). As a consultant, he is
logically the master of his time, means and methods. What
he advises the company and how he does it are entirely
left to his discretion. Not being an employee, he cannot
assist the union by joining it.
Moreover, foreigners are prohibited from engaging in
trade union activities except when employed - subject,
however, to possession of alien employment permits and
proof of reciprocity (Arts. 284 & 285, Labor Code).
Summary
Acts of Recruitment & Placement (Art. 13-b)
CUTE CPAs Have Cute Red Pens
C - Canvassing
U - Utilizing
T - Transporting
E - Enlisting
C - Contracts, entering into
P - Procuring
A - Advertising
H - Hiring
C - Contracts, entering into
R - Referring
P - Promising
BAR SYLLABUS-BASED REVIEWER IN 111
LABOR LAW & SOCIAL LEGISLATION
1. Illegal Recruitment
1.1. Types
1.1.1. Simple
It is simple if committed by less than 3
perpetrators against less than 3 victims.
1.1.2. Economic Sabotage
(a) Illegal recruitment in large scale. It is
committed against 3 or more victims, whether
dealt with individually or as a group.
(b) Illegal recruitment by a syndicate. It
is committed by 3 or more conspirators.
1.2. Modes of Commission
1.2.1. An act of recruitment or placement as
listed under Art. 13(b) is committed by a non-
licensee or non-holder of authority.
1.2.2. A prohibited act as listed under Art. 34 of
the Labor Code or Sec. 5 of R.A. 10022 is
committed by any person.
2. Feasible Defenses
2.1. Distinct Impression Rule. The accused must
have made a distinct impression that he could procure em-
ployment, reason the complainant parted with his money·;
otherwise, he is not criminally liable. Payment of P150,
000.00 for a promise of a passport, visa and plane ticket is
an act of visa assistance which is unlisted under Art. 13(b);
hence, it does not require a recruitment license. (Imelda
Darvin v. CA, G.R. No. 125044, 13 July 1998).
2.2. Pp v. Goce, G.R. No.113161, 29 August 1995
(cited in Darvin v. CA, same rule).
2.3. If prosecution is under RA 10022, the promise is
for local and not overseas employment.
112 RECRUITMENT AND PLACEMENT
2.4. Non-deployment is by reason of the recruit's fault
(R.A. 10022).
3. Non-Feasible Defenses
3.1. Pp v. Panis, G.R. Nos. L-58674-77, 11 July 1990.
Recruitment of just one (1) is not a ground for acquittal
because the term "promise of employment for a fee to two
or more" in Art. 13(b), Labor Code, is not an element of
illegal recruitment. "Two or more" is just a rule of evidence.
Hypothetical Question (Rule of Evidence)
After the prosecutor has proven promise of employ-
ment for a fee to 2 or more persons, should he proceed to
present a certification from the POEA that the accused is
not licensed to recruit?
Suggested Answer
No. Hypothetically, the burden of evidence shifts to
the accused; hence, he must prove that he is licensed.
3.2. Pp v. Camila, G.R. No. 171448, 28 February
2007. Lack of knowledge amounts to good faith which is
not an available defense in prosecutions for acts ma/a pro-
hibita. Hence, a husband's alleged lack of knowledge that
his passengers were his wife's recruits must fail.
3.3. Pp v. Jamilosa, G.R. No. 169076, 23 January
2007. Non-presentation during trial of the receipts covering
the placement fees paid is not a defense because the law
says "whether for profit or not."
3.4. Rodolfo v. Pp, G.R. No. 146964, 10 August
2006. Referral is an act of recruitment; hence, a recruit-
ment license is required. Remittance to a licensed recruiter
of amounts collected is not a defense under the "whether
for profit or not" clause.
BAR SYLLABUS-BASED REVIEWER IN 113
LABOR LAW & SOCIAL LEGISLATION
3.5. Pp v. Chua, G.R. No. 128280, 4 April 2001. A
recruitment license is prospective; hence, a belatedly
issued license cannot be used to legitimize an act of
recruitment committed before its issuance.
3.6. Pp v. Rodolfo Navarra and Job Navarra, G.R.
No. 119361, 19 February 2001. If the evidence does not
support one type of economic sabotage but supports the
other then the imposition of the penalty of life imprisonment
is proper because the crime is still economic sabotage.
License v. Authority
Performance of an act of recruitment requires prior
State authorization; otherwise, the actor becomes liable for
illegal recruitment. Said authorization may be given thru a
licence or authority.
1. "License" means a document issued by the Depart-
ment of Labor authorizing a person or entity to operate a
private employment agency.
2. "Authority" means a document issued by the De-
partment of Labor authorizing a person or association to
engage in recruitment and placement activities as a private
recruitment entity.
Although the Bar Syllabus includes the distinction
between license and authority, no Bar question has ever
been asked on the matter.
ART. 14. Employment Promotion.- The Secretary
of Labor shall have the power and authority:
a) To organize and establish new employment offi-
ces in addition to the existing employment offices under
the Department of Labor as the need arises;
b) To organize and establish a nationwide job clea-
rance and information system to inform applicants regis-
tering with particular employment office of job opportunities
114 RECRUITMENT AND PLACEMENT
in other parts of the country as well as job opportunities
abroad;
c) To develop and organize a program that will facili-
tate occupational, industrial and geographical mobility of
labor and provide assistance in the relocation of workers
from one area to another; and
d) To require any person, establishment, organization
or institution to submit such employment information as may
be prescribed by the Secretary of Labor.
Read-to-Know
Sec. 14 is a read-to-know. It is a provision that grants
power and authority when it should rather impose the duty
to promote a state of employment for the people.
Paragraphs "a" to "d" are ends that are better achieved thru
the performance of duty instead of exercise of right or
authority. Sec. 3, Par. 1, Art. XIII of the Constitution imposes
on the State duties, e.g., to promote full employment.
Hence, Sec. 14 should emphasize duty instead of right.
ART. 15. Bureau of Employment Services. 2 -
a) The Bureau of Employment Services shall be pri-
marily responsible for developing and monitoring a compre-
hensive employment program. It shall have the power and
duty:
1) To formulate and develop plans and prog-
rams to implement the employment promotion object-
tives of this Title;
2) To establish and maintain a registration
and/or licensing system to regulate private sector par-
ticipation in the recruitment and placement of workers,
2
Abolished by Executive OrderNo. 797 (May1, 1982) creating the Bureau of
Local Employment.
BAR SYLLABUS-BASED REVIEWER IN 115
LABOR LAW & SOCIAL LEGISLATION
locally and overseas, and to secure the best possible
terms and conditions of employment for Filipino con-
tract workers and compliance therewith under such
rules and regulations as may be issued by the
Minister of Labor;
3) To formulate and develop employment prog-
rams designed to benefit disadvantaged groups and co-
mmunities;
4) To establish and maintain a registration and/
or work permit system to regulate the employment of
aliens;
5) To develop a labor market information
system in aid or proper manpower and development
planning;
6) To develop a responsive vocational gui-
dance and testing system in aid or proper human
resources allocation; and
7) To maintain a central registry of skills,
except seamen.
b) The regional offices of the Ministry of Labor shall
have the original and exclusive jurisdiction over all matters
involving employer-employee relations including money
claims, arising out of or by virtue of any law or contracts
involving Filipino workers for overseas employment except
seamen: Provided, That the Bureau of Employment Ser-
vices may, in the case of the National Capital Region,
exercise such power, whenever the Minister of Labor
deems it appropriate. The decisions of the regional offices
of the Bureau of Employment Services, if so authorized by
the Minister of Labor as provided in this Article, shall be
appealable to the National Labor Relations Commission
upon the same grounds provided in Article 223 hereof. The
decisions of the National Labor Relations Commission
shall be final and inappealable. (Superseded by the Execu-
tive Order 797, May 1, 1982).
116 RECRUITMENT AND PLACEMENT
c) The Minister of Labor shall have the power to im-
pose and collect fees based on rates recommended by the
Bureau of Employment Services. Such fees shall be depo-
sited in the National Treasury as a special account to the
General Fund, for the promotion of the objectives of the
Bureau of Employment Services, subject to the provisions
of Section 40 of Presidential Decree No. 1177.
Advisory 1, s. 2015
Advisory 1, s. 2015 should not have only renumbered
P.O. 442 but changed (a) Ministry of Labor to Department of
Labor and Employment; and (b) Minister of Labor to
Secretary of Labor and Employment as well. In addition, it
was not enough to renumber the Labor Code. Some articles
make references to other articles. But in the renumbered
articles, the articles referred to were not correspondingly
renumbered.
Exempli Gratia:
Art. 266 is the new number for Art. 254. It still pro-
vides: "No temporary or permanent injunction or restraining
order in any case involving or growing out of labor disputes
shall be issued by any court or entity, except as otherwise
provided in Articles 218 and 264 of this Code." The articles
adverted to have also been renumbered as follows: Art.
218 is now Art. 225 and Art. 264 is now Art. 279. However,
the necessary changes were not made.
ART. 16. Private Recruitment.-Except as provided
in Chapter II of this Title, no person or entity other than the
public employment offices, shall engage in the recruitment
and placement of workers.
Distinction
The local agent who engages and deploys an OFW to
his foreign employer is called a "recruiter." If the worker is
BAR SYLLABUS-BASED REVIEWER IN 117
LABOR LAW & SOCIAL LEGISLATION
a seaman, the agent is called a "manning agent'' or
"manning agency''.
ART. 17. Ove,seas Employment Development
Boarcf .-An Overseas Employment Development Board is
hereby created to undertake, in cooperation with relevant
entities and agencies, a systematic program for overseas
employment of Filipino workers in excess of domestic
needs and to protect their rights to fair and equitable
employment practices. It shall have the power and duty:
1) To promote the overseas employment of Filipino
workers through a comprehensive market promotion and
development program;
2) To secure the best possible terms and conditions
of employment of Filipino contract workers on a govern-
ment-to-government basis and to ensure compliance there-
with;
3) To recruit and place workers for overseas
employment on a government-to-government arrangement
and in such other sectors as policy may dictate; and
4) To act as secretariat for the Board of Trustees of
the Welfare and Training Fund for Overseas Workers.
ART. 18. Ban on Direct-Hiring.-No employer may
hire a Filipino worker for overseas employment except
through the Boards and entities authorized by the Secre-
tary of Labor. Direct-hiring by members of the diplomatic
corps, international organizations and such other emplo-
yers as rnay be allowed by the Secretary of Labor is
exempted from this provision.
3
Functions of the OEDB are now being undertaken by the POEA per Executive
Order No.797.
118 RECRUITMENT AND PLACEMENT
BAR SYLLABUS-BASED REVIEWER IN 119
LABOR LAW & SOCIAL LEGISLATION

2010 Bar, Question No. I (3)

TRUE OR FALSE.
.
Explain your answer briefly.
Answer
X X X

4. X X X B. The following are the exceptions to the ban on

direct hiring:
5. X X X

6. As a general rule, direct hiring of Overseas (1) direct hiring of Filipinos by the diplomatic corps;
Filipino Workers (OFWs) is not allowed. (2%)
(2) direct hiring of Filipinos by foreign governments
Answer or international organization; and
(3) direct hiring as may be allowed by the Secretary
1. X X X of Labor and Employment (Art. 18, Labor Code)
2. X X X
C. No, the employer is not correct.
3. TRUE
Under O. 0. 75-06, certain aliens are not required to
Art. 18 of the Labor Code bans direct hiring. Art. 16,
procure alien employment permits. Among those listed as
on the other hand, limits hiring of OFWs thru State agen-
exempt are resident aliens, like Phil. This is still the case
cies but subject to Art. 25 under which the private sector
under the present 0.0. 186-17.
may be allowed participation under very stringent condi-
tions for the full protection of recruits. In Manila Hotel Corp. v. NLRC, G.R. No. 120077, 13
October 2000, a Filipino national directly applied for work with
2017 Bar, Question No. Ill Manila Hotel International Corp. in China while working in the
Sultanate of Oman. When retrenched as a consequence of
X X X
economic difficulties caused by the Tiannamen Massacre, he
came home to file a complaint for illegal dismissal with th~
B. As a rule, direct hiring of migrant workers is not
LA. Due to the fact that he was a direct hire and that all the
allowed. What are the exceptions?· Explain your answer.
elements of the case he filed were foreign, except that he
(2.5%)
was a Filipino, it was held that the Office of the LA was a
forum non conveniens. Therefore, whatever decision it might
C. Phil, a resident alien, sought employment in the
render would not be effective as it could not be enforced in
Philippines. The employer, noticing that Phil was a fo-
China.
reigner, demanded that he first secure an employment per-
mit from the DOLE. Is the employer correct? Explain your Even if a local tribunal may have been conferred juris-
answer. (2.5%) diction, and even if it may have acquired it, it should not exer-
cise it if it is a forum non conveniens. One reason for this is
that it cannot enforce its judgment outside Philippine territory
anyway (Principle of Effectivity of Judgments). If hiring is
120 RECRUITMENT AND PLACEMENT
done thru authorized boards and entities, OFWs can enjoy
protection. For one thing, the LA can acquire jurisdiction over
foreign employers thru service of summonses on their local
agents. This provision should be connected to Art. 22 on
mandatory remittance of foreign exchange earnings. The ban
ensures that the employment of OFWs undergo State
supervision and documentation for the effective enforcement
of Art. 22.
ART. 19. (Superseded by B. P. Big. 79-An Act
Creating the Commission on Filipinos Overseas and for
Other Purposes)
ART. 20. Superseded by Exec. Order 79-Reorga-
nizing the Ministry of Labor and Employment, Creating the
Philippine Overseas Employment Administration, and for
other purposes).
ART. 21. Foreign Service Role and Participation.
-To provide ample protection to Filipino workers abroad,
the labor attaches, the labor reporting officers duly design-
nated by the Secretary of Labor and the Philippine diplo-
matic or consular officials concerned shall, even without
prior instruction or advice from the home office, exercise
the power and duty:
a) To provide all Filipino workers within their juris-
diction assistance on all matters arising out of employment;
b) To insure that Filipino workers are not exploited
or discriminated against;
c) To verify and certify as requisite to authentication
that the terms and conditions of employment in contracts
involving Filipino workers are in accordance with the Labor
Code and rules and regulations of the Overseas Employ-
ment and National Seamen Board;
BAR SYLLABUS-BASED REVIEWER IN 121
LABOR LAW & SOCIAL LEGISLATION
d) To make continuing studies or researches and
recommendations on the various aspects of the employ-
ment market within their jurisdiction;
e) To gather and analyze information on the em-
ployment situation and its probable trends, and to make
such information available; and
f) To perform such other duties as may be required
of them from time to time.
Note:
Under then DFA Secretary Allan Peter Cayetano,
abused OFWs in Kuwait were rescued "tokhang" style.
That angered Kuwait which deported Ambassador Renato
Villa who led the rescue. Asking for diplomatic space from
angered Filipinos, Cayetano, after apologizing to Kuwait
for violating the latter's sovereignty, worked out a peaceful
solution to the dispute.
ART. 22. Mandatory Remittance of Foreign
Exchange Earnings.-lt shall be mandatory for all Filipino
workers abroad to remit a portion of their foreign exchange
earnings to their families, dependents, and/or beneficiaries
in the country in accordance with rules and regulations
prescribed by the Secretary of Labor.
Amount of Remittance (Rule VIII, Book Ill, POEA Rules)
All overseas Filipino workers are required to remit a
portion of their foreign exchange earnings ranging from
50% to 80%, depending on the worker's kind of job, to their
families, dependents and/or beneficiaries as follows:
Seamen or Merchants 80%
Workers for Filipino Contractors
and Construction companies 70%
Professionals whose Employment
122 RECRUITMENT AND PLACEMENT
Contract provided for Lodging Facilities 70%
Professional without Board and Lodging 50%
Domestic and other Service Workers 50%
All other workers 50%
Cross Topics
1. Bangko Sentral Ng Pilipinas (Money Laundering)
2. Bureau of Internal Revenue (TRAIN)
ART. 23. (Repealed)
ART. 24. (Repealed)
ART. 34. Prohibited Practices. - It shall be unlaw-
ful for any individual, entity, licensee, or holder of authority:
a) To charge or accept, directly or indirectly, any
amount greater than that specified in the schedule of allo-
wable fees prescribed by the Secretary of Labor, or to
make a worker pay any amount greater than that actually
received by him as a loan or advance;
b) To furnish or publish any false notice or infor-
mation or document in relation to recruitment or employ-
ment;
c) To give any false notice, testimony, informa-
tion or document or commit any act of misrepresentation
for the purpose of securing a license or authority under this
Code;
d) To induce or attempt to induce a worker already
employed to quit his employment in order to offer him to
another unless the transfer is designed to liberate the worker
from oppressive terms and conditions of employment;
e) To influence or to attempt to influence any
person or entity not to employ any worker who has not
applied for employment through his agency;
BAR SYLLABUS-BASED REVIEWER IN 123
LABOR LAW & SOCIAL LEGISLATION
f) To engage in the recruitment or placement of
workers in jobs harmful to public health or morality or to
the dignity of the Republic of the Philippines;
g) To obstruct or attempt to obstruct inspection by
the Secretary of Labor or by his duly authorized represen-
tatives;
h) To fail to file reports on the status of employ-
ment, placement vacancies, remittance of foreign exchange
earnings, separation from jobs, departures and such other
matters or information as may be required by the Secretary
of Labor;
i) To substitute or alter employment contracts ap-
proved and verified by the Department of Labor from the
time of actual signing thereof by the parties up to and
including the periods of expiration of the same without the
approval of the Secretary of Labor;
j) To become an officer or member of the Board of
any corporation engaged in travel agency or to be en-
gaged directly or indirectly in the management of a travel
agency; and
k) To withhold or deny travel documents from ap-
plicant workers before departure for monetary or financial
considerations other than those authorized under this
Code and its implementing rules and regulations. (Empha~
sis supplied.)
Prohibited Practices
1. Art. 34 lists down A THIFF Reports OCIO as
prohibited practices.
A - Amount (Par a)
T - Travel documents (Par. k)
H - Harmful (Par. f)
I - Influence (Par. e)
F - False NTID in recruiting (Par. b)
124 RECRUITMENT AND PLACEMENT
F - False NTID in procuring license or authority
(Par. c)
Reports(Par. h)
0 - Officer (Par j)
C - Contract substitution (Par. i)
I - Induce (Par. d)
0 - Obstruct (Par. g)
A person who engages in a prohibited practice shall
be liable for illegal recruitment, whether licensed or not;
holder of authority or not.
2. In addition to A THIFF Reports OCIO, R.A. 10022
lists several other prohibited practices. It provides:
Sec. 5. Definition. - For purposes of this Act, illegal
recruitment shall mean any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring wor-
kers and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or
not, when undertaken by non-licensee or non-holder of
authority contemplated under Article 13(f) of Presidential
Decree No. 442, as amended, otherwise known as the La-
bor Code of the Philippines: Provided, That any such non-
licensee or non-holder who, in any manner, offers or
promises for a fee employment abroad to two or more per-
sons shall be deemed so engaged. It shall likewise include
the following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of
authority:
(a) To charge or accept directly or indirectly any
amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor and
Employment, or to make a worker pay or acknowledge any
BAR SYLLABUS-BASED REVIEWER IN 125
LABOR LAW & SOCIAL LEGISLATION
amount greater than that actually received by him as a
loan or advance;
(b) To furnish or publish any false notice or informa-
tion or document in relation to recruitment or employment;
(c) To give any false notice, testimony, informa-
tion or document or commit any act of misrepresentation
for the purpose of securing a license or authority under the
Labor Code, or for the purpose of documenting hired wor-
kers with the POEA, which include the act of reprocessing
workers through a job order that pertains to nonexistent
work, work different from the actual overseas work, or work
with a different employer whether registered or not with the
POEA;
(d) To induce or attempt to induce a worker al-
ready employed to quit his employment in order to offer
him another unless the transfer is designed to liberate a
worker from oppressive terms and conditions of employ-
ment;
(e) To influence or attempt to influence any person
or entity not to employ any worker who has not applied for
employment through his agency or who has formed, joined
or supported, or has contacted or is supported by any
union or workers' organization;
(f) To engage in the recruitment or placement of
workers in jobs harmful to public health or morality or to
the dignity of the Republic of the Philippines;
(h) To fail to submit reports on the status of
employment, placement vacancies, remittance of foreign
exchange earnings, separation from jobs, departures and
such other matters or information as may be required by
the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the
worker, employment contracts approved and verified by
the Department of Labor and Employment from the time of
126 RECRUITMENT AND PLACEMENT
actual signing thereof by the parties up to and including the
period of the expiration of the same withqut the approval of
the Department of Labor and Employment;
U) For an officer or agent of a recruitment or
placement agency to become an officer or member of the
Board of any corporation engaged in travel agency or to be
engaged directly or indirectly in the management of travel
agency;
(k) To withhold or deny travel documents from
applicant workers before departure for monetary or finan-
cial considerations, or for any other reasons, other than
those authorized under the Labor Code and its implemen-
ting rules and regulations;
(I) Failure to actually deploy a contracted worker
without valid reason as determined by the Department of
Labor and Employment;
(m) Failure to reimburse expenses incurred by the
worker in connection with his documentation and proces-
sing for purposes of deployment, in cases where the dep-
loyment does not actually take place without the worker's
fault. Illegal recruitment when committed by a syndicate or
in large scale shall be considered an offense involving
economic sabotage; and
(n) To allow a non-Filipino citizen to head or
manage a licensed recruitment/manning agency.
Clue: A THIFF Reports DR OCION
Illegal recruitment is deemed committed by a syndi-
cate if carried out by a group of three (3) or more persons
conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or
more persons individually or as a group.
In addition to the acts enumerated above, it shall also
be unlawful for any person or entity to commit the following
prohibited acts:
BAR SYLLABUS-BASED REVIEWER IN 127
LABOR LAW & SOCIAL LEGISLATION
(1) Grant a loan to an overseas Filipino worker with
interest exceeding eight percent (8%) per annum, which
will be used for payment of legal and allowable placement
fees and make the migrant worker issue, either personally
or through a guarantor or accommodation party, postdated
checks in relation to the said loan;
(2) Impose a compulsory and exclusive arrange-
ment whereby an overseas Filipino worker is required to
avail of a loan only from specifically designated institu-
tions, entities or persons;
(3) Refuse to condone or renegotiate a loan in-
curred by an overseas Filipino worker after the latter's em-
ployment contract has been prematurely terminated
through no fault of his or her own;
(4) Impose a compulsory and exclusive arrange-
ment whereby an overseas Filipino worker is required to
undergo health examinations only from specifically desig-
nated medical clinics, institutions, entities or persons, ex-
cept in the case of a seafarer whose medical examination
cost is shouldered by the principal/shipowner;
(5) Impose a compulsory and exclusive arrange-
ment whereby an overseas Filipino worker is required to
undergo training. seminar, instruction or schooling of any
kind only from specifically designated institutions, entities_
or persons, except for recommendatory trainings man-
dated by principals/shipowners where the latter shoulder
the cost of such trainings;
(6) For a suspended recruitment/manning agency
to engage in any kind of recruitment activity including the
processing of pending workers' applications; and
(7) For a recruitment/manning agency or a foreign
principal/employer to pass on the overseas Filipino worker or
deduct from his or her salary the payment of the cost of insu-
rance fees, premium or other insurance related charges, as
provided under the compulsory worker's insurance coverage.
128 RECRUITMENT AND PLACEMENT
Clue: 8 % of Lady Lawyers Have STD
The persons criminally liable for th~ above offenses
are the principals, accomplices and accessories. In case of
juridical persons, the officers having ownership, control,
management or direction of their business who are respon-
sible for the commission of the offense and the responsible
employees/agents thereof shall be liable.
In the filing of cases for illegal recruitment or any of
the prohibited acts under this section, the Secretary of
Labor and Employment, the POEA Administrator or their
duly authorized representatives, or any aggrieved person
may initiate the corresponding criminal action with the ap-
propriate office. For this purpose, the affidavits and testi-
monies of operatives or personnel from the Department of
Labor and Employment, POEA and other law enforcement
agencies who witnessed the acts constituting the offense
shall be sufficient to prosecute the accused.
In the prosecution of offenses punishable under this
section, the public prosecutors of the Department of Justice
shall collaborate with the anti-illegal recruitment branch of
the POEA and, in certain cases, allow the POEA lawyers to
take the lead in the prosecution. The POEA lawyers who act
as prosecutors in such cases shall be entitled to receive
additional allowances as may be determined by the POEA
Administrator.
The filing of an offense punishable under this Act shall
be without prejudice to the filing of cases punishable under
other existing laws, rules or regulations."
Sec 6. Penalties. -
(a) Any person found guilty of illegal recruitment shall
suffer the penalty of imprisonment of not less than twelve (12)
years and one (1) day but not more than twenty (20) years
and a fine of not less than One million pesos (P1 ,000,000.00)
nor more than Two million pesos (P2,000,000.00).
BAR SYLLABUS-BASED REVIEWER IN 129
LABOR LAW & SOCIAL LEGISLATION
(b) The penalty of life imprisonment and a fine of not
less than Two million pesos (P2,000,000.00) nor more than
Five million pesos (P5,000,000.00) shall be imposed if
illegal recruitment constitutes economic sabotage as
defined therein.
Provided, however, That the maximum penalty shall
be imposed if the person illegally recruited is less than
eighteen (18) years of age or committed by a non-licensee
or non-holder of authority.
(c) Any person found guilty of any of the prohibited
acts shall suffer the penalty of imprisonment of not less
than six (6) years and one (1) day but not more than twelve
(12) years and a fine of not less than Five Hundred
Thousand Pesos (P500,000.00) nor more than One Million
Pesos (P1 ,000,000.00).
If the offender is an alien, he or she shall, in addition
to the penalties herein prescribed, be deported without
further proceedings.
In every case, conviction shall cause and carry the
automatic revocation of the license or registration of the
recruitmenUmanning agency, lending institutions, training
school or medical clinic."
Lack of License or Authority
Failure of the prosecution to prove that the accused is
not a licensee or holder of authority is not a defense. In
People v. Dolores Ocden, G.R. No. 173198, 1 June 2011,
two female recruits testified to large scale illegal recruit-
ment. One of them did not complete her direct testimony
and was not cross-examined. Two brothers desisted, but
their mother testified on the failure of the accused to reim-
burse her sons' placement fees. On appeal, the convict
argued that the testimony of the female witness who
denied her the opportunity to cross-examine her should be
excluded. Allegedly too, the mother was not competent to
130 RECRUITMENT AND PLACEMENT
testify on her alleged act of recruitment. Lastly, she should
be acquitted because the prosecutor failed to adduce
evidence that she was not licensed to recruit. Unfortu-
nately, all defenses were dismissed. As to the first, it was
too late to raise it before the Supreme Court. Exclusion of
evidence should have been sought before the trial court.
As to the second, the mother had personal knowledge of
the failure of the accused to reimburse her sons' place-
ment fees (a prohibited practice). Second, since she was
prosecuted based on commission by her of a prohibited
practice, the lack of evidence that she had no license to
recruit was immaterial because any person can commit
illegal recruitment thru the commission of a prohibited
practice regardless of whether he is licensed or not, a
holder of authority or not.
ART. 35. Suspension and/or cancellation of
license or authori'ty.-The Minister of Labor shall have the
power to suspend or cancel any license or authority to recruit
employees for overseas employment for violation of rules and
regulations issued by the Ministry of Labor, the Overseas
Employment Development Board, or for violation of the
provisions of this and other applicable laws, General Orders
and Letters of Instructions.
No recruitment activity shall be conducted in the event
of a suspension or cancellation; otherwise, the recruiter
would be liable for illegal recruitment.
CHAPTER Ill
MISCELLANEOUS PROVISIONS
ART. 36. Regulatory Power.-The Secretary of
Labor shall have the power to restrict and regulate the re-
cruitment and placement activities of all agencies within
the coverage of this Title and is hereby authorized to issue
orders and promulgate rules and regulations to carry out
the objectives and implement the provisions of this Title.
BAR SYLLABUS-BASED REVIEWER IN 131
LABOR LAW & SOCIAL LEGISLATION
Regulation of Overseas Employment
One of the strictures of Art. 12 is the regulation of
overseas employment. Arts 13, 34, 38 and 39 of the Labor
Code serve this purpose. R.A. 10022, on the other hand,
reinforces these provisions.
ART. 37. Visitorial Power.-The Secretary of Labor
or his duly authorized representatives may, at any time,
inspect the premises, books of accounts and records of
any person or entity covered by this Title, require it to sub-
mit reports regularly on prescribed forms, and act on vio-
lation of any provisions of this Title.
Visitorial Power
1. Sources of Visitorial Power
1.1. Art. 37. It authorizes the Secretary of
Labor or his duly authorized representatives to, at any
time, inspect the premises, books of accounts and
records of any person or entity covered by this Title,
require it to submit reports regularly on prescribed
forms, and act on violation of any provisions of this
Title.
1.2. Art. 128. It authorizes the Secretary of
Labor and employment or his duly authorized repre~
sentatives, including labor regulation officers, to have
access to employer's records and premises at any
time of the day or night whenever work is being un-
dertaken therein, and the right to copy therefrom, to
question any employee and investigate any fact, con-
dition or matter which may be necessary to determine
violations or which may aid in the enforcement of this
Code and of any labor law, wage order or rules and
regulations issued pursuant thereto.
132 RECRUITMENT AND PLACEMENT
2. Complaint not Required
Visitorial power is exercisable' sua sponte, or
motu proprio; hence, a complaint is not required to
initiate its exercise. It is also exercisable over
establishments or employers; hence, in the event of a
complaint or appeal, the law does not require that all
employees sign it ( Catholic Vicariate of Baguio v.
Hon. Patricia Sto. Tomas, G.R. No. 167334, 7 March
2008).
ART. 38. Illegal Recruitment.-
a) Any recruitment activities, including the prohibited
practices enumerated under Article 34 of this Code, to be
undertaken by non-licensees or non-holder of authority,
shall be deemed illegal and punishable under Article 39 of
this Code. The Department of Labor and Employment or
any law enforcement officer may initiate complaints under
this Article.
b) Illegal recruitment when committed by a syndi-
cate or in large scale shall be considered an offense invol-
ving economic sabotage and shall be penalized in accor-
dance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndic-
cate if carried out by a group of three (3) or more persons
conspiring and/or confederating with one another in car-
rying out any unlawful or illegal transaction, enterprise or
scheme defined under the first paragraph hereof. Illegal
recruitment is deemed committed in large scale if commit-
ted against three (3) or more persons individually or as a
group.
c) The Secretary of Labor and Employment or his
duly authorized representatives shall have the power to
cause the arrest and detention of such non-licensee or non-
holder of authority if after investigation it is determined that
BAR SYLLABUS-BASED REVIEWER IN 133
LABOR LAW & SOCIAL LEGISLATION
his activities constitute a danger to national security and
public order or will lead to further exploitation of job-seekers.
The Secretary shall order the search of the office or premi-
ses and seizure of documents, paraphernalia, properties
and other implements used in illegal recruitment activities
and the closure of companies, establishments and entities
found to be engaged in the recruitment of workers for over-
seas employment, without having been licensed or autho-
rized to do so. 4
Types of Illegal Recruitment, supra.
1. Simple; and
2. Economic Sabotage
2.1. by a syndicate; or
2.2. in large scale
Illegal recruitment is simple when less than three
persons recruit less than three persons. It is economic
sabotage when committed by three or more conspirators, or
committed against three or more persons whether indivi-
dually or as a group. Art. 38 reads: "Illegal recruitment is
deemed committed by a syndicate if carried out by a group
of three (3) or more persons conspiring and/or confedera-
ting with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the first
paragraph hereof. Illegal recruitment is deemed committed
in large scale if committed against three (3) or more per-
sons individually or as a group." (Par. b).
In People v. Navarra, G.R. No. 119361, 19 February
2001, it was held that life imprisonment was the proper pe-
nalty to impose when less than three (3) persons recruit
more than three (3) persons. The non-prosecution of the
third recruiter was of no consequence.
Declared unconstitutional by the Supreme Court (Salazar v. Achacoso,
G.R.No.81510, March 14, 1990).
134 RECRUITMENT AND PLACEMENT
2015 Bar, Question No. I
X X X
B. When does the recruitment of workers become an
act of economic sabotage? (2%)
Answer
X X X
B. The recruitment of workers becomes economic
sabotage when:
(1) committed by a syndicate, i.e., by three or more
persons acting in conspiracy with one another; and
(2) committed in large scale or qualified, i.e., against
three or more persons, whether dealt with individually or as
a group (Art. 38, Labor Code).
Modes of Committing Illegal Recruitment
1. Commission of an act of recruitment without the
benefit of a license or authority; and
2. Commission of a prohibited practice by any
person.
In Ocden , supra, it was held that if the act subject of
the prosecution was a prohibited act, e.g., failure to reim-
burse placement fees, the accused could not seek acquittal
on the basis of the fact that the prosecution failed to present
a certification from the POEA that she was not a licensee.
There was no need for the prosecution to do that. What
mattered was that it had proven that a prohibited practice
was committed.
201 0 Bar, Part II, Question No. XXI
A was approached for possible overseas deployment
to Dubai by X, an interviewer of job applicants for Alpha
BAR SYLLABUS-BASED REVIEWER IN 135
LABOR LAW & SOCIAL LEGISLATION
personnel Services, Inc., an overseas recruitment agency.
x required A to submit certain documents (passport, NBI
clearance, medical certificate) and to pay P25,000 as pro-
cessing fee. Upon payment of the said amount to the
agency cashier, A was advised to wait for his visa. After five
months, A visited the office of Alpha Personnel Services,
Inc. during which X told him that he could no longer be
deployed for employment abroad. A was informed by the
Philippine Overseas Employment Administration (POEA)
that while Alpha Personnel Services, Inc. was a licensed
agency, X was not registered as its employee, contrary to
POEA Rules and Regulations. Under said rules, the obliga-
tion to register personnel with the POEA belongs to the offi-
cers of a recruitment agency.
a. May X be held criminally liable for illegal recruit-
ment? Explain. (2%)
b. May the officers having control, management or
direction of Alpha Personnel Services, Inc. be held crimi-
nally liable for illegal recruitment? Explain. (3%)
Answer
a. No, X may not be criminally held liable for illegal
recruitment for the following reasons:
(1) Employee status is a defense; provided, the
employee did not take part in the recruitment activity; and
(2) It was not the duty of X to register himself with the
POEA as a personnel of Alpha Personnel Services, Inc. That
obligation is imposed on the corporate officers of recruitment
companies.
b. Yes.
Failure to deploy within a reasonable time, as long as
the recruit is not at fault, is a prohibited act ( Sec. 5, R.A.
10022). Hence, since it was not A's fault that no deploy-
136 RECRUITMENT AND PLACEMENT
ment ensued after paying the required placement fee, the
corporate officers are criminally liable tor illegal recruit-
ment.
2015 Bar, Question No. I
A. Rocket Corporation is a domestic corporation Re-
gistered with the SEC, with 30% of its authorized capital
stock owned by foreigners and 70% of its authorized capi-
tal stock owned by Filipinos. Is Rocket Corporation allowed
to engage in the recruitment and placement of workers,
locally and overseas? Briefly state the basis for your
answer. (2%)
B. When does the recruitment of workers become
an act of economic sabotage? (2%)
Answer
A. No. Foreign ownership of a corporation engaged
in recruitment, whether local or overseas, is limited to 25%
(Art. 27, Labor Code).
B. The recruitment of workers becomes economic
sabotage when:
(1) committed by a syndicate, i.e., by three or
more persons acting in conspiracy with one another;
and
(2) committed in large scale or qualified, i.e.,
against three or more persons, whether dealt with
individually or as a group (Art. 38, Labor Code).
R.A. 10022 v. D.O. 114-14
Overseas recruitment is regulated by R.A. 10022;
whereas, local recruitment is regulated by D.O. 114-14.
Certain additional prohibited acts under Sec. 5, R.A. 10022
have no application to local recruitment, e.g., failure to
deploy.
BAR SYLLABUS-BASED REVIEWER IN 137
LABOR LAW & SOCIAL LEGISLATION
201 0 Bar, Part II, Question No. XXII
A was recruited to work abroad by Speedy Recruit-
ment Agency as a technician for a Saudi Arabian construc-
tion firm, with a monthly salary of $650.00. When she got
to the construction site, the employer compelled her to sign
another contract that referred her to another employer for a
salary of $350.00. She worked for the second employer
and was paid $350.00 until her two-year contract expired.
Upon her return to the Philippines, she filed a case against
the agency and the two employers. May the agency validly
raise the defense that it was not privy to the transfer of A to
the second employer? Explain. (3%)
Answer
No, the defense is untenable.
POEA rule provide that the solidary liability of a recrui-
ter arises from the violation of the terms and conditions of
the POEA-approved employment contract ( Sec. 1(f), Rule
II, Book II, POEA Rules and Regulations). When A's first
employer referred him to his second employer it violated
exactly those terms as it preterminated A's contract without
justification.
Sec. 7, R.A. 10022, imposes on Speedy Recruitment
Agency solidary liability for the consequences of its
principal's contractual breach; hence, it cannot evade that
liability on the pretext that it was not privy to the transfer.
2019 Bar, Part II, Question No. B.13
Mr. A signed a one (1 )-year contract with XYZ Recruit-
ment Co. for deployment as welding supervisor for DEF, Inc.
located in Dubai. The employment contract, which the Philip-
pine Overseas Employment Administration (POEA) ap-
proved, stipulated a salary of US$600.00 a month.
138 RECRUITMENT AND PLACEMENT
Mr. A had only been in his job in Dubai for six (6)
months when DEF, Inc. announced that it was suffering
from severe financial losses and thus intended to retrench
some of its workers, among them Mr. A. DEF, Inc. hinted,
however, that employees who would accept a lower salary
could be retained.
Together with some other Filipino workers, Mr. A
agreed to a reduced salary of US$400.00 a month and
thus, continued with his employment.
(a) Was the reduction of Mr. A's salary valid?
Explain. (2.5%)
(b) Assuming that the reduction was invalid, may Mr.
A hold XYZ Recruitment Co. liable for underpayment of
wages? Explain. (2.5%)
Answer
(a) No, the reduction was not valid. There was a con-
tractual breach. Applying lex ex contractu or lex loci celeb-
rationis, Philippine law controls; hence, the substantial cha-
racter of the alleged financial losses must have been pro-
ven with financial statements duly certified by an indepen-
dent external auditor. Mere announcement of losses would
not suffice. The threat of retrenchment was just a scheme
to conveniently effect the illegal substitution of the POEA-
approved employment contracts.
(b) Yes, Mr. A may hold XYZ Recruitment Co. liable
for the payment of his wages under the rule that a recruiter
is solidarily liable for breaches of the terms and conditions
of the POEA-approved employment contract ( Sec 1 (f),
Rule II, Book II, POEA Rules and Regulations; Datuman v.
First Cosmopolitan Manpower and Promotion Services,
Inc., G.R. No. 156029, 14 Nov. 2008).
BAR SYLLABUS-BASED REVIEWER IN 139
LABOR LAW & SOCIAL LEGISLATION
ART. 39. (Repealed by Republic Act No 8042, Sec. 7,
"An Act to Institute the Policies of Overseas Employment
and Establish a Higher Standard of Protection and Promo-
tion of the Welfare of Migrant Workers, their Families and
Overseas Filipinos in Distress, and for other Purpose)
POEA-SEC of Seafarers
The employment of seafarers is logically a part of
Book I. Its terms and conditions are regulated by the Re-
vised Standard Terms and Conditions Governing the Over-
seas Employment of Filipino Seafarers On-Board Ocean-
Going Ships (POEA-SEC for brevity).
Contractual Employee
In Mil/ares v. CA, G.R. No. 122827, 29 March 1999 ,
the Supreme Court ruled that a seafarer does not become
a regular employee because he is contractual. One of the
fixed-term employees mentioned by Justice Narvasa in
Brent v. Zamora, G.R. No. , is a seafarer. Just like the PE
instructor in said case, a seafarer is bound to the period
stipulated in his employment contract.
2009 Bar, Part II, Question No. XI (a)
TRUE or FALSE. Answer TRUE if the statement is
true, or FALSE if the statement is false. Explain your
answer in not more than two (2) sentences. (5%)
a. Seafarers who have worked for twenty (20) years
on board the same vessel are regular employees.
b. X X X
C. X X X
d. X X X
e. X X X
140 RECRUITMENT AND PLACEMENT BAR SYLLABUS-BASED REVIEWER IN 141
LABOR LAW & SOCIAL LEGISLATION

Answer 2018 Bar, Question No. X

(a) FALSE
Per case law, seafarers are contractual employees;
hence, their length of service does not confer on them re-
gular employment status (Mil/ares v. NLRC, G.R. No.
122827, 29 March 1999).
(b) X X X POEA-SEC). Nonato's last contract (for five months) ex-
(c) X X X pired on November 15, 2016. Nonato was then repatriated
{d) x X X
(e) X X X dizziness, weakness, and difficulty in breathing. The Agen-
2017 Bar, Question No. VIII
Marciano was hired as Chief Engineer on board the
vessel MN Australia. His contract of employment was for
nine months. After nine months, he was re-hired. He was
hired a third time after another nine months. He now claims
entitlement to the benefits of a regular employee based on
his having performed tasks usually necessary and desi-
rable to the employer's business for a continuous period of
more than one year. Is Marciano's claim tenable? Explain
your answer. (3%)
Answer
No, it is not tenable.
Marciano is a seafarer; hence, he is a contractual
employee (Mil/ares v. NLRC, G.R. No.110524, 29 July
2002). As such, the nature of the onboard work performed
by him under his contracts does not give him regular
employment status since Art. 295 of the Labor Code has
no application.
Nonato had been continuously employed and de-
ployed as a seaman who performed services that were ne-
cessary ~nd desirable to the business of N-Train Shipping,
through its local agent, Narita Maritime Services (Agency),
in accordance with the 2010 Philippine Overseas Employ-
ment Administration Standard Employment Contract (2010
due to a "finished contract." He immediately reported to the
Agency and complained that he had been experiencing
cy referred him to Dr.Neri, who examined, treated, and
prescribed him with medications. After a few months of
treatment and consultations, Nonato was declared fit to re-
sume work as a seaman. Nonato went back to the Agency
to ~sk for re-deployment but the Agency rejected his appli-
cation. Nonato filed an illegal dismissal case against the
Agency and its principal, with a claim for total disability
benefits based on the ailments that he developed on board
N-Train Shipping vessels. The claim was based on the cer-
tification of his own physician, Dr. Nunez, that he was unfit
for sea duties because of his hypertension and diabetes.
a) Was Nonato a regular employee of N-Train
Shipping? (2.5%)
b) Can Nonato successfully claim disability benefits
against N-Train Shipping and its agent Narita Maritime
Services? (2.5%)
Answer
a) No.
A seafarer is a contractual employee (Mil/ares v. NLRC,
G.R. No. 110524, 29 July 2002). As such, he is bound to the
period stipulated in his fixed-term employment contract.
Therefore, dissociation by reason of expiration thereof does
142 RECRUITMENT AND PLACEMENT
not constitute dismissal of a regular employee (Alma Covita
v. SSM Maritime Services, Inc., G.R. No. 206600, 7 Decem-
ber 2016).
b) Nonato cannot successfully claim disability com-
pensation for these reasons: First, the requisites for com-
pensability are not present. Second, the Third Physician
Rule was not observed.
The twin-requisites of compensation for disability ari-
sing from disease are: (a) work-connection, and (b) effec-
tivity of contract (Sec. 20 -A, POEA-SEC). For a disease to
be work-connected, it must be listed under Sec. 32-A of
the POEA-SEC, subject to the disputable presumption of
work-connection as to unlisted diseases. To meet the se-
cond requisite, it must have been contracted or aggravated
during the effectivity of the seafarer's employment contract.
Since Nonato finished his contract, i.e., he was not me-
dically repatriated due to a work-connected disease, the
second requisite is absent. Moreover, he should have sub-
mitted himself to a third physician given the conflicting me-
dical assessments made by the company-designated phy-
sician and his physician of choice. He did not. For this ad-
ditional reason, he cannot successfully claim disability
compensation (Philippine Hammonia Ship Agency v.
Eulogio Dumadag, G.R. No. 194362, 26 June 2013).
Money Claims
The money claims seafarers or their heirs usually as-
sert are sickness allowance, disability compensation, death
compensation, and other claims, e.g., reimbursement for
medical, transportation and related expenses, damages and
attorney's fees. The governing provisions of the POEA-SEC
are Sec. 20 and Sec. 32-A.
BAR SYLLABUS-BASED REVIEWER IN 143
LABOR LAW & SOCIAL LEGISLATION
crew Claims
Pre-Employment Medical Examination (PEME)
Situationer: A seafarer contracts TB in just two
months following embarkation resulting in his medical re-
patriation. In denying work-connection, the manning agent
argues that he could not have contracted the disease in so
short a time since TB develops thru time. The seafarer
counter-argues that he could have only contracted his
illness in the course of his employment and by reason of
the conditions of his work because, before deployment, the
PEME doctor issued him a fit to work certification.
Note: PEME is non-exploratory. It cannot detect all
kinds of diseases. Hence, a fit to work certification does
not amount to absence of pre-existing diseases ( Gilbert
Quizora v. Denholm Crew Management (Phils), Inc., G.R.
No. 185412, 16 February 2011). This is the reason a sea-
farer is required to disclose any pre-existing diseases by
ticking the appropriate box on his PEME form. If despite
disclosure, however, the manning agent still hires the
seafarer (this usually happens with high value first engi-
neers and ship captains) then it constitutes a waiver. In this
case, the sick seafarer is deemed hired subject to the risk
of aggravation.
Theory of Aggravation
If it can be shown with substantial evidence that work
conditions have contributed even in a small measure to the
development or aggravation of the disease, it is work-con-
nected. If despite his duty to disclose, however, the seafarer
conceals a pre-existing disease then his claim can be
denied based on concealment. A distinction must be made
between medical condition and medical procedure. If what
is not disclosed is a medical procedure (e.g., stenting) then
there is no concealment. Sec. 20(e) of the POEA-SEC men-
144 RECRUITMENT AND PLACEMENT
tions "pre-exisiting illness or condition." (Leoncio v. MST
Marine Services, Inc., G.R. No. 230357, 6.December 2017).
Jebsens Maritime, Inc. v. Alcibar
G.R. No. 221117, 20 February 2019
"In Leonis Navigation Co., Inc. v. Villamater, this Court
held that under Section 32-A of the POEA Standard Em-
ployment Contract, colon cancer is considered a work-
related disease. This Court explained that the seaman is
entitled to disability benefits if the seaman proves that the
conditions inside the vessel increased or aggravated the
risk of the seaman of colon cancer, thus:
X X X Summary
Diets high in fat are believed to predispose humans to
colorectal cancer. In countries with high colorectal cancer
rates, the fat intake by the population is much higher than
in countries with low cancer rates. It is believed that the
breakdown products of fat metabolism lead to the forma-
tion of cancer-causing chemicals (carcinogens). Diets high
in vegetables and high-fiber foods may rid the bowel of
these carcinogens and help reduce the risk of cancer."
(Citations omitted.)
The Clear Nexus Rule
Jessie M. Dorotea v. Philimare, Inc.
G.R. No. 184917, 13 March 2017
Throat Cancer
Doroteo claims that the engine room was akin to a
gas chamber but only gives a generalized opinion about
the risks inside the engine room. Philimare claims that its
vessel was given health and safety clearances but submit-
ted a certificate issued way past the employment of
Doroteo. Doroteo claims that he was exposed to noxious
substances but fails to substantiate it. Philimare cairns that
BAR SYLLABUS-BASED REVIEWER IN 145
LABOR LAW & SOCIAL LEGISLATION
ooreoteo was a heavy smoker and alcohol user but fails to
link its evidence to throat cancer. Doroteo presents opi-
nions that allege the possibility of short-term aquisition of
cancer, but Philimare presents a diagnosis showing his
cancer seemed to have existed 3 months prior to his
examination.
Based on the foregoing, there is no clear nexus bet-
ween disease and working conditions. The disputable pre-
sumption cannot be applied because the evidence cannot
reasonably support a conclusion that Doroteo's working
conditions caused his throat cancer.
A worker brings with him possible infirmities into his
employment. The employer engages him as found and
assumes the risk of liability. However, the latter must show
credible information that there is probably a relation
between his illness and his work.
Medical Repatriation: Legal Effect
It is the process of signing off a seafarer by reason of
disease or injury so that he could be subjected to further
medical examination and treatment in the Philippines. It is
the company-designated physician who shall conduct post-
employment medical examination.
The legal effect of a medical repatriation is the com-
plete termination of employer-employee relationship. Re-
gardless, the employer is required to pay the seafarer's
basic daily salary by way of sickness allowance while in a
state of disability.
The 3-Day Reporting Requirement
Within 3 days from arrival on Philippine soil, the
seafarer must physically report to his local manning agent
for post-employment medical examination. If impossible,
146 RECRUITMENT AND PLACEMENT
he must effect substantial compliance. If he defaults, he
will forfeit whatever he may be entitled to.,
Abandonment of Medical Examination and Treatment
Unjustifiable abandonment will result in forfeiture of
benefits also. If the seafarer's non-cooperation with the
company-designated physician prevents the latter from
making an assessment within 120 or 240 days, he cannot
claim.
Sickness Allowance
Sec. 20 (B) of the POEA-SEC requires payment of
sickness allowance in the event of a seafarer's medical re-
patriation, i.e., regardless of whether his illness or injury is
work-connected. The law does not qualify, unlike in the
matter of disability and death compensations.
Sickness allowance is essentially an income replace-
ment, paid while the seafarer is prevented by his injury or
disease from doing sea duty. Just as the company-desig-
nated physician has 120 days to examine and resolve his
medical condition, he is entitled to maximum of 120 days
sickness allowance. It follows then that if his condition is
resolved by the company doctor sooner than the lapse of
120 days then his entitlement thereto ceases. It also
follows that if the company doctor needs to extend the 120
days, he shall also be entitled to sickness pay during the
period of such extension (J Brion's decision in Magsaysay
Maritime Corp. v. NLRC, G.R. No. 191903, 19 June 2013.
This challenges (not "overturns" because both are deci-
sions rendered by divisions only) the J Velasco ruling in
Transocean Shipmanagement (Phils), Inc. v. Inocencio
Vedad, G.R. No. 194490, 20 March 2013 which limited the
benefit to 120 days only.
The J Brion decision came 3 months after the J
Velasco decision.
BAR SYLLABUS-BASED REVIEWER IN 147
LABOR LAW & SOCIAL LEGISLATION
Note: Both treatment period and sickness allowance
shall not exceed 240 days.
If the company doctor, without basis, pre-terminates
the treatment resulting in the seafarer seeking medical
consult with his physician of choice, all medical and
transportation expenses incurred in the process - as long
as necessary, reasonable and supported - can be claimed
by him.
Hypothetical Problem
Norman, an able seaman (AB), was medically repat-
riated because both ship doctor and overseas doctor could
not determine the cause of his debilitating medical con-
dition. Within three days from arrival, he reported to his
manning agent which immediately referred him to the ac-
credited hospital for further examination. After all tests
were conducted, it was determined that he was afflicted
with AIDS. He admitted to his counsellor that he had a one
night stand 10 years ago with same Ship Master who must
have infected him. On the 60th day following sign-off,
which was also the day his diagnosis was disclosed to him
and all pre-scheduled consultations with the company doc-
tor were cancelled, he sought payment of his sickness
allowance. However, his manning agent denied his claim
on the ground that his disease was not work-connected. If
he seeks your legal assistance, would you demand for
payment in his behalf? (Usage: In behalf of X means "in
the interest of X"; On behalf of X means "in representation
of X").
Answer
Yes, I will.
AIDS may not be a work-connected disease. How-
ever, since Sec. 20 (B) of the POEA-SEC does not require
that the cause of medical repatriation be a work-connected
disease or injury, Norman is entitled to sickness allowance
148 RECRUITMENT AND PLACEMENT
- at least until his medical condition was declared as not
work-related and his medical management was terminated
for that reason. It does not matter also if he may have con-
tracted his disease 10 years ago under a separate employ-
ment contract. The same provision does not also require
that the cause of medical repatriation be a disease con-
tracted during the effectivity of the current employment
contract. In other words, sickness allowance does not
require both work-connection and effectivity of contract.
Disability Compensation
Situationer
A seafarer, after being issued a fit to work certification
by the pre-employment medical examination (PEME)
doctor, is given a 9-month POEA-approved contract. He
will now be deployed to his assigned vessel. Aboard that
vessel, either he will contract a disease, or he get injured
causing him to be unable to perform sea duty. The ship
doctor will attend to him. If his medical condition requires
more attention, he will be sent to a doctor at a convenient
port. Still, if his condition is beyond resolution aboard or
abroad, he will have to be medically repatriated for further
examination and treatment in the Philippines.
The seafarer is required to report to his manning
agent within three (3) days from. his arrival for medical
referral to the company-designated physician. If physically
unable to do so, he must report in writing; otherwise, his
omission will bar any future disability claim. Once he
submits himself to the company-designated physician, it
becomes his duty to pursue his medical management;
otherwise, he will be deemed as having abandoned his
medical treatment. Similarly, this will be a bar to his future
claim for disability pay.
BAR SYLLABUS-BASED REVIEWER IN 149
LABOR LAW & SOCIAL LEGISLATION
compensation Rules
1. Disease as Cause of Disability
To be compensable, the disability must arise from a
disease that is both (i) work-connected; and (ii) contracted
during the effectivity or period of the employment contract.
Work-Connection Rule
A disease is work-connected if it is listed under Sec. 32-
A of the POEA-SEC. If not listed, there is a disputable pre-
sumption that it is work-connected (Sec. 20-A, POEA-SEC).
Despite the presumption, however, the Supreme Court
has laid the burden of proving work-connection on the
seafarer (2010 Magsaysay Maritime Corp. v. Gedo/; 2011
Quizor v. Denholm Crew Management Services, Inc. and
2012 Casomo v. Career Phils. Shipmanagement, Inc.) But
in the 2013 Race/is Case, infra, it ruled that the employer
had the burden of disputing the presumption; hence,
abandoning its 2010-2012 rulings, supra. However, in Jay
H. Ucayan v. Seacrest Maritime Management, Inc., G.R.
No. 213679, 25 November 2015, it went back to its ruling
that the claimant had the burden of proof. These are
conflicting rulings.
The Romana Clarification
Benedict Romana v. Magsaysay Maritime Corp.
G.R. No. 192442, 9 August 2017
Problem: The "1 2 3 4" Rule (not a legal term)
Despite the disputable presumption of work-connec-
tion for unlisted diseases, the seafarer is still required to
prove 1 2 3 4 so that his disability will be compensable. In
other words, he is required to prove: (1) that his work
involves the risk factors of the unlisted disease; (2) that he
was exposed to said risks; (3) that the period of his
exposure thereto was sufficient for him to contract the
150 RECRUITMENT AND PLACEMENT
unlisted disease; and (4) that he did not contract it due to
his notorious negligence.
Why impose on him the burden of proving even just 1
of the 4 when he is supposed to sit back and enjoy the
benefit of the disputable presumption? Should not his
employer be burdened instead with the task of disputing it?
Explanation (Simplification of Romana v. Magsaysay)
What is disputably presumed is work-connection only.
Compensability is outside the presumption (Atienza v.
Orophil Shipping International Co., Inc., G.R. No. 191049,
7 August 2017). Take note that there are 2 conditions for
compensability, viz., (1) work-connection; and (2) effectivity
of contract. In other words, the disease must be work-con-
nected, and it must have been contracted during the period
of the seafarer's employment contract. For clarity, what the
disputable presumption affects is the first only.
Necessarily, therefore, the seafarer must move for-
ward with evidence that he contracted the unlisted disease
during the effectivity of his contract. How?
There is a prescribed form of evidence to establish
the second requisite, viz., 1 2 3 4, supra. Put simply, bar-
ring notorious negligence (4th requisite), the seafarer con-
tracted the unlisted disease from his exposure to its risk
factors (2nd requisite) for such period of time, i.e., during
the term of his contract, sufficient for him to acquire it (3rd
requisite) - all because his work involved the risk factors of
the disease (1st requisite). Hence, at the end of the day,
the question to ask is: Has performance by the seafarer of
his onboard work increased his risk of contracting the
unlisted disease? If the answer is in the affirmative, then
the resulting disability (if not death) should be compen-
sable.
If the work does not involve the risk factors in ques-
tion, or the exposure thereto is for a period not likely to
BAR SYLLABUS-BASED REVIEWER IN 151
LABOR LAW & SOCIAL LEGISLATION
cause the .seafarer to contract the unlisted disease, the
resulting disability/death would not be compensable. Like-
wise, if the cause of the disability is the seafarer's noto-
rious negligence, e.g., having anal sex with the ship master
knowing him to be HIV positive, then his disability/death
would not be compensable.
In fine, work-connection is different from compensabi-
lity. Thru Atienza and Romana, the SC has adequatey ad-
dressed its seeming flip-flop on the matter. To review, in
the 2014 Race/is Case, the SC required the empoyer to
overcome the disputable presumption; however, in 2015
Ucayan Case, the Supreme Court ruled that, despite the
disputable presumption of work-connection, the seafarer
must prove compensability.
Note:
1 2 3 4 apply to both listed and unlisted diseases
(Atienza, supra). For listed diseases, Sec. 32-A supplies
the lists of their risk factors, e.g., AML (type of cancer) has
for its risk factor exposure to benzyne.
Comment: Is there a shortcut for the 1 2 3 4 Rule?
In Race/is, where the seafarer died after medical re-
patriation, it was held that a medical repatriation was an
exception to the second requisite, i.e., that the disease
must have been contracted during the period of the sea-
farer's employment. Hence, if the purpose of the 1 2 3 4
rule is to establish the second requisite then said purpose
can be equally served with evidence of medical repatria-
tion. Hence, unless the disputable presumption of work-
connection were overcome, compensability should be
deemed established.
If the seafarer is alive, he is around to prove 1 2 3 4.
This must be the reason for the Romana Ruling. After all, it
pertains to disability - not death.
152 RECRUITMENT AND PLACEMENT
Burden of Evidence: Overlapping of Factors
"When the presumption of work-rela!edness is contes-
ted by the employer, the factors which the seafarer needs
to prove to rebut the employer's contestation would n-e-
cessarily overlap with some of the conditions which the
seafarer needs to prove to establish the compensability of
his illness and the resulting disability. In this regard, the
seafarer, therefore, addresses the refutation of the emplo-
yer against the work-relatedness of his illness and, at the
same time, discharges his burden of proving compliance
with certain conditions of compensability." But even if the
employer does not contest the presumption, the seafarer
must still prove 1 2 3 4 (Atienza, supra).
Simplification
For unlisted diseases, there is a disputable presump-
tion that they are work-connected. Necessarily, therefore,
the employer must destroy said presumption. How?
Among others, he may show that the disease was contrac-
ted thru the seafarer's notorious negligence. Now, in the
course of proving 1 2 3 4, the seafarer is not only establi-
shing the compensability of his disability. At the very same
time, he is rebutting his employer's defense. Where lies the
overlapping? By proving 1 2 3 4, compensability is proven.
And since proof of 1 2 3 4, of which 4 is a part, is proof of
all its parts then the defense of notorious negligence is
deemed rebutted at the same time.
Question
'When the presumption of work-relatedness is contes-
ted by the employer, the factors which the seafarer needs to
prove to rebut the employer's contestation would necessarily
overlap with some of the conditions which the seafarer needs
to prove to establish the compensability of his illness and the
r~sulting disability. In this regard, the seafarer, therefore,
addresses the refutation of the employer against the work-
BAR SYLLABUS-BASED REVIEWER IN 153
LABOR LAW & SOCIAL LEGISLATION
relatedness of his illness and, at the same time, discharges
his burden of proving compliance with certain conditions of
compensability." Explain with an illustration (5%).
Answer
For unlisted diseases, there is a disputable presump-
tion that they are work-connected. Necessarily, therefore,
the employer must destroy said presumption. Among
others, he may show that the disease was contracted thru
the seafarer's notorious negligence. Now, in the course of
proving that: (1) his job involves the risk factors of the
unlisted disease; (2) he was exposed thereto; (3) his
period of exposure was sufficient for him to contract the di-
sease; and (4) he is not guilty of gross negligence, the
seafarer is not only establishing the compensability of his
disability. At the very same time, he is rebutting his em-
ployer's defense. The overlapping lies here: proof of the
four requisites is proof of compensability. And since proof
of the 4-item factors, of which lack of notorious negligence
is a part, is proof of all its parts then the defense of
notorious negligence is deemed rebutted at the same time.
Effectivity of Contract Rule
The disease must be contracted by the seafarer du-
ring the stipulated period of his employment contract. Take
note that, if disability results, it is the contracting of the di~
sease which must take place within the period of the sea-
farer's contract whch is the subject of the rule. However, if
death results, the death must occur during same period,
i.e., the seafarer must decide to die while his contract is
effective.
Usual Employer Defenses
(a) Non-compliance with 3-day reporting requirement;
(b) Abandonment of treatment;
154 RECRUITMENT AND PLACEMENT
(c) Fraudulent concealment (of medical condition,
not medical procedure);
(d) Notorious negligence;
(e) Non-use of third physician;
(f) Medical opinion of company physician is more
reliable; and
(g) Extension of 120 days.
2. Injury/Accident as the Cause of Disability
To be compensable, the disability must arise from an
injury that is both (a) work-connected; and (b) sustained
during the effectivity of contract.
Work-Connection Rule
The injury must be sustained (a) at the seafarer's
assigned place of work; and (b) while performing his
assigned work; or (c) sustained elsewhere, as long as
in the course of performing work required by the
employer.
Effectivity of Contract Rule
The injury must be sustained by the seafarer
during the stipulated period of his employment
contract.
Usual Employer Defenses
(a) Non-accident;
(b) Habitual intoxication;
(c) Notorious negligence; and
(d) Wilful intent to injure/kill oneself or another.
BAR SYLLABUS-BASED REVIEWER IN 155
LABOR LAW & SOCIAL LEGISLATION
concept of Disability
Total Disability (TD)
TD is more of an occupational concept than it is a
medical one. It means inability to perform a seafarer's
customary work or work within his training or preparation to
do, and for which he has been contracted to perform.
Illustration
The seafarer is a pianist. He injures his foot in an
accident. Since he can still use his fingers to perform his
contracted work, he is not deemed totally disabled
because, occupationally, he is able. If he injures his fingers
as to make it hard or impossible for him to play the piano,
he is deemed totally disabled. Usually, this will lead to his
medical repatriation.
Permanent Disability (PD)
The old test for determining PD was to count the days
of medical management/inability to work. If the total
disability (inability to perform customary work) exceeded
120 days, the total disability status assumed the character
of permanence. As a result, the seafarer got maximum
compensation of USD60,000.00 per POEA-SEC. Usually,
if there was a CBA, the amount was doubled.
Jurisprudence on Total Permanent Disability
The 120-240 Day Rule
The company-designated physician has an initial pe-
riod of 120 days to conduct further medical examination
and treatment. Within said period, he must: (a) certify that
the disease or injury is not work-connected; (b) he has re-
solved the disability; or (c) assign the disability a grade. If
he does none of these, the total disability becomes per-
manent after 120 days.
156 RECRUITMENT AND PLACEMENT
The 120-day period is extendible by another 120 days
(Jesus Vergara v. Hammonia Maritime Silvices, Inc., G.R.
No. 172933, 6 October 2008); however, the extension
must be justifiable (Paulino M. Aldaba v. Career Philip-
pines Ship-Management, G.R. No. 2017). If justifiable, the
maximum period for medical management shall be 240
days. Within said period, the company-designated physician
must declare that the disability has been resolved, or assign
it a grade. The certification must be final and definite
(Reynaldo Sunit v. OSM Maritime Services, Inc., G.R. No.
223035, 27 February 2017) and categorical, not conditional
or preliminary only.
Note:
If the medical report states that the seafarer's wound
is still open and that he needs to continue his medications,
the assessment is not final ( Carcedo v. Maine Marine
Philippines, Inc., G.R. No. 203804, 15 April 2015).
If the 240-day period is exceeded, the total disability
becomes permanent. Likewise, if the medical opinion is not
final and categorical, the total disability becomes perma-
nent after 240 days.
If the company-designated physician is prevented from
making a final assessment by reason of abandonment of
treatment on the part of the seafarer, the lapse of 120 or 240
days will not result in a total permanent disability finding (CF
Sharp Crew Management, Inc. v. Noel Orbeta, G.R. No.
211111, 25 September 2017).
The Doble Doctrine
The 240-day rule applies only to the company-desig-
nated physician, not to the 3rd physician (Dahle Philman
Manning Agency, Inc., et al. v. Julius Rey Quinal Doble,
G.R. No. 223730, 4 October 2017).
BAR SYLLABUS-BASED REVIEWER IN 157
LABOR LAW & SOCIAL LEGISLATION
The Jebsens Instruction
Jebsens Maritime, Inc., et al. v. F/orving Rapiz
G.R. No. 218871, 11 January 2017
"It is well-settled that the POEA-SEC is the law
between the parties and, as such, its provisions bind both
of them. Under Section 20 (A) (6) of the 2010 POEA-SEC,
the determination of the proper disability benefits to be
given to a seafarer shall depend on the grading system
provided by Section 32 of the said contract, regardless of
the actual number of days that the seafarer underwent
treatment:
X X X
In this case, respondent's disability was already deter-
mined as only permanent and partial, in view of its classifi-
cation as Grade 11 by the company-designated physician
and Grade 10 by the independent physician. As such, the
award of US$60,000.00 representing Grade 1 (i.e., perma-
nent and total disability) benefits in favor of respondent
clearly has no basis and, consequently, must be struck
down."
The Taok List
C.F. Sharp Crew Management, Inc. v. Joel Taok, G.R.
No. 193679, 18 July 2012, lists eight (8) instances when
maximum disability compensation can be awarded as follows:
(a) the company-designated physician failed to issue
a declaration as to his fitness to engage in sea duty or
disability even after the lapse of the 120-day period and
there is no indication that further medical treatment would
address his temporary total disability, hence, justify an
extension of the period to 240 days;
(b) 240 days had lapsed without any certification
being issued by the company-designated physician;
158 RECRUITMENT AND PLACEMENT
(c) the company-designated physician declared that
he is fit for sea duty within the 120-day o~ 240-day period,
as the case may be, but his physician of choice and the
doctor chosen under Section 20-8(3) of the POEA-SEC
are of a contrary opinion;
(d) the company-designated physician acknowledged
that he is partially permanently disabled but other doctors
who he consulted, on his own and jointly with his employer,
believed that his disability is not only permanent but total
as well;
(e) the company-designated physician recognized
that he is totally and permanently disabled but there is a
dispute on the disability grading;
(f) the company-designated physician determined
that his medical condition is not compensable or work-
related under the POEA-SEC but his doctor-of-choice and
the third doctor selected under Section 20-8(3) of the
POEA-SEC found otherwise and declared him unfit to
work;
(g) the company-designated physician declared him
totally and permanently disabled but the employer refuses
to pay him the corresponding benefits; and
(h) the company-designated physician declared him
partially and permanently disabled within the 120-day or
240-day period but he remains incapacitated to perform his
usual sea duties after the lapse of the said periods.
Third Physician Rule
Situationer
The company-designated physician issues a Grade
11 disability assessment. The corresponding disability pay
is USD?,000.00, more or less. Dissatisfied, the seafarer
will seek a second medical consult (consultation) resulting
in a Grade 1 rating. The disability pay increases to USO
BAR SYLLABUS-BASED REVIEWER IN 159
LABOR LAW & SOCIAL LEGISLATION
60,000.00. In light of the conflicting medical opinions, Sec.
20(8) of the POEA-SEC provides the dispute resolution
mechanism, viz., "the parties may agree on a third physi-
cian whose opinion shall be final and binding on them."
Despite the optional tenor ("may") of Sec. 20(8), J
Brion made the dispute resolution mechanism mandatory.
Hence, if the seafarer does not disclose the second medi-
cal opinion and proceeds to file his complaint, it will be
taken against him. The non-disclosure has the effect of
preventing the employer from initiating the selction of a
third physician (Philippine Hammonia Ship Agency, Inc. v.
Eulogio Dumadag, G.R. No.194362, 26 June 2013, J
Brion).
Problem 1
The company-designated physician issues a Grade
11. The physician of choice issues a Grade 1. The seafarer
files a complaint for disability compensation. How would
you resolve the claim?
Answer
I will resolve the claim based on the first medical opi-
nion. The complaint is filed without prior disclosure of the
second medical opinion thereby depriving the employer
(manning agent) of the opportunity to initiate the selection
of a third physician. (Philippine Hammonia Ship Agency,
Inc. v. Eulogio Dumadag, G. R. No. 194362, 26 June 2013,
J Brion). Selection is mandatory despite the use of the
term "may" in Sec. 20(8) of the POEA-SEC. This is a judi-
cial legislation. However, more and more justices have
applied J Brion's interpretation of the rule in subsequent
cases.
Problem 2
The company-designated physician issues a Grade
11. The seafarer files a complaint for disability compensa-
160 RECRUITMENT AND PLACEMENT
tion. Later, the physician of choice issues a Grade 1. How
would you resolve the claim?
Answer
I will dismiss it on the ground of lack of cause of ac-
tion. At the time of the filing of the complaint, the seafafer
has no medical basis yet (Philman Marine Agency, Inc. v.
Armando Cabanban, G.R. No. 186509, 29 July 2013).
Non-Applicability of the Third Physician Rule: Three
Situations
1. The company-designated physician certifies
that the disability is not work-connected.
Three (3) issues might present themselves for resolu-
tion in crew claims cases, viz: (a) the issue of work con-
nection: Is the injury or disease work-connected?; (b) the
issue of fitness to work: Has the company doctor resolved
the medical condition and declared the seafarer fit to work?
; or (c) the issue of grading: Grade 11 or Grade 1?. If the
issue to resolve is work-connection, (a), supra, the Third
Physician Rule does not apply (Leonis Navigation Co., Inc.
and World Marine Panama SA v. Eduardo Obrero and
Mercedita Obrero, G.R. No. 12754, 7 September 2016).
In the situationer, supra, where the issue to resolve is
the proper grading, it has application.
2.The company-designated physician has not
come up with a final, categorical and definite assess-
ment withiri 120/240 days.
"A seafarer's compliance with such procedure presup-
poses that the company-designated physician came up
with an assessment as to his fitness or unfitness to work
before the expiration of the 120-day or 240-day period.
Alternatively put, absent a certification from the company-
designated physician, the seafarer had nothing to contest
BAR SYLLABUS-BASED REVIEWER IN 161
LABOR LAW & SOCIAL LEGISLATION
and the law steps in to conclusively characterize his disabi-
lity as total and p~~m~nent." (Elmer Apines v. Elburg Ship-
management PhJ/1ppmes, Inc. and/or Danilo F. Venida,
G.R. No. 202114, 9 November 2016, citing Island Over-
seas Transport Corporation/Pine Crest Shipping Corpora-
tion/Capt. Emmanuel L. Regio v. Armando M. Beja, G.R.
No. 203115, 7 December 2015).
3. The assessment of the company-designated
physician is not communicated to the seafarer.
J Leonen
In Magsaysay Mo/ Marine, Inc. et al. v. Michael
Paredes Atraje, G.R. No. 229192, 23 July 2018, the com-
pany doctor issued an interim disability grade but did not
disclose it to the seafarer.
Grounds for Contesting Third Medical Opinion
Sunit v. OSM Maritime Services, Inc., G.R. No.
223035, 27 February 2017, gives the grounds as follows:
1. Evident partiality;
2. Corruption;
3. Fraud and other undue means;
4. Lack of basis to support the assessment; and
5. Opinion is contrary to law and jurisprudence.
Death Compensation: Rules
Death, to be compensable, must be caused by a di-
sease or injury that is both (a) work-connected; and (b)
death must occur during the effectivity of the seafarer's
employment contract. Proper Usage: Disease (contracted)·
Injury (sustained). . '
162 RECRUITMENTANDPLACEMENT
Death Outside Period of Contract: When Not Compen-
sable
2005 Hermogenes v. Osco Shipping Services, Inc.
The seafarer died after three (3) years from termination of
his contract; there was no explanation for the termination
of his contract in just two months; and there was no proof
that his illness was contracted during the effectivity of his
contract.
2007 Prudential Shipping Management Corp. v.
Sta. Rita. The seafarer was repatriated due to umbilical
hernia; he died more than a year later; he died of cardio-
pulmonary arrest secondary to metabolic acidosis, acute
renal failure and hepatocellular carcinoma; in other words,
the death was not connected to his umbilical hernia.
2008 Klaveness Maritime Agency, Inc. v. Benefi-
ciaries of Anthony Alias. The seafarer died 1 ½ years af-
ter termination of contract; he died of urinary bladder
cancer; and work-connection was not proven.
Death Outside Period of Contract: When Compensable
In C.F. Sharp Crew Management, Inc. v. Ronald
Austria, et al., G.R. No. 190534, 11 February 2016, the
seafarer was covered by the 1996 POEA-SEC which had no
"effectivity of contract" provision unlike the 2000 POEA-SEC.
1. The 2014 Canuel Case (2nd requisite absent)
The seafarer was medically repatriated due to an on-
board injury. However, he died months after his sign-off/ re-
patriation. Hence, the second requisite was allegedly absent.
Regardless, it was held that his death was compensable. His
medical repatriation was by reason of a work-connected
injury and he died of acute respiratory failure of which his
injury was the proximate cause (Anita Canuel v. Magsaysay
Maritime Corp., G.R. No. 190161, 13 October 2014).
BAR SYLLABUS-BASED REVIEWER IN 163
LABOR LAW & SOCIAL LEGISLATION
Note:
Since medical repatriation terminates the employment
contract, there is no sense talking about "effectivity of
contract" after such termination.
2. The 2014 Racelis Case (both requisites
absent)
The seafarer was repatriated due to extreme pain on
his ear. Months after his repatriation, he died of an unlisted
disease (brainstem cavernous malformation). Hence, both
requisites were absent. Regardless, the Supreme Court
allowed death compensation ( Conchita Race/is v. United
Philippine Lines, Inc., G.R. No. 198408, 12 November
2014).
Note:
The medical repatriation rendered the "effectivity of
contract" requirement inapplicable. Moreover, as to unlis-
ted diseases, there was a disputable presumption of work-
connection which the employer failed to overcome since
the company doctor who ruled out work-connection did not
actually attend to the seafarer. This is a 2014 decision.
In the Canuel Case, the seafarer was repatriated due
to a work-connected injury. He died several months after
his contract was terminated by his medical repatriation. His
death was compensable because medical repatriation is
an exception to the Effectivity of Contract Rule. As ex-
plained above, the subject of the Effectivity of Contract
Rule is the contracting of disease.
In the Race/is Case, the seafarer suffered extreme
pain on his ear; thus, he was medically repatriated. After
several months, he died of an unlisted disease, viz., brain-
stem cavernous malformation. His death was held as com-
pensable because of the presumption of work-connection
which the employer failed to dispute.
164 RECRUITMENT AND PLACEMENT
Previous Bar Questions
2010 Bar, Part I, Question Nos. VII
A was an able seaman contracted by ABC Recruitment
Agency for its foreign principal, Seaworthy Shipping Com-
pany (SSC). His employment contract provided that he
would serve on board the Almieda II for eight (8) months
with a monthly salary of US$450. In connection with his em-
ployment, he signed an undertaking to observe the drug and
alcohol policy which bans possession or use of all alcoholic
beverages, prohibited substances and un-prescribed drugs
on board the ship. The undertaking provided that: (1) discip-
linary action including dismissal would be taken against
anyone in possession of the prohibited substances or who is
impaired by the use of any of these substances, and (2) to
enforce the policy, random test sampling would be done on
all those on board the ship.
On his third month of service while the Almieda II was
docked at a foreign port, a random drug test was conducted
on all members of the crew and A tested positive for
marijuana. He was given a copy of the drug test result. In
compliance with the company's directive, he submitted his
written explanation which the company did not find satisfac-
tory. A month later, he was repatriated to the Philippines.
Upon arrival in the Philippines, A filed with the Na-
tional Labor Relations Commission (NLRC) a complaint
against the agency and the principal for illegal dismissal
with a claim for salaries for the unexpired portion of his
contract.
a. Was A's dismissal valid? Explain. (3%)
b. Is his claim for salaries for the unexpired portion
of his contract tenable? Explain. (3%)
Answer
a. No, A's dismissal was not valid.
BAR SYLLABUS-BASED REVIEWER IN 165
LABOR LAW & SOCIAL LEGISLATION
It was not enough that A tested positive for Marijuana
during the random screening test. The company should
have proceeded to conduct a confirmatory test (DOH D.O.
No. 53-03) without a confirmatory test result; there is no
just cause for dismissing A.
b. Yes, his money claim is tenable.
The illegal dismissal of a seafarer is governed by Sec.
7, R.A. 10022. Pursuant thereto, but as clarified by the
Supreme ~ourt in SAMEER Overseas Placement Agency
v. Joy Cabiles, G.R. No. 5 August 2014, A is entitled to all
salaries he would have earned had his contract not been
illegally preterminated.
201 0 Bar, Part I, Question No. XII
On December 12, 2008, A signed a contract to be
part o_f the crew of ABC Cruises, Inc. through its Philippine
manning agency XYZ. Under the standard employment
contract of the Philippine Overseas Employment Adminis-
tr_ation (POEA), his employment was to commence upon
his actual departure from the port in the point of hire
Manila, from where he would take a flight to the USA t~
join the cruise ship "MS Carnegie." However, more than
three months after A secured his exit clearance from the
POEA ~or his supposed departure on January 15, 2009,
XYZ still had not deployed him for no valid reason. Is A
entitled to relief? Explain. (3%)
Answer
Yes.
The perfection of A's contract has created enfor-
ceable rights, just as it has imposed correlative deman-
dable obligations. Hence, its unjustifiable breach entitles A
to relief. Under Sec. 7, R.A. 10022, he can file a money
complaint with _the Labor Arbiter for the purpose, among
others, of seeking payment of the salaries he would have
earned had he been deployed.
166 RECRUITMENT AND PLACEMENT
2013 Bar, Question No. X
For ten (10) separate but conse~utive yearly con-
tracts, Cesar has been deployed as an able-bodied sea-
man by Meritt Shipping, through its local agent, Ace Mari-
time Services (agency), in accordance with the 2000
Philippine Overseas Employment Administration Standard
Employment Contract (2000 POEA-SEC). Cesar's employ-
ment was also covered by a CBA between the union,
AMOSI.JP, and Meritt Shipping. Both the 2000 POEA-SEC
and the CBA commonly provide the same mode and
procedures for claiming disability benefits. Cesar's last
contract (for nine months) expired on July 15, 2013.
Cesar disembarked from the vessel MN Seven Seas
on July 16, 2013as a seaman on "finished contract". He
immediately reported to the agency and complained that
he had been experiencing spells of dizziness, nausea, ge-
neral weakness, and difficulty in breathing. The agency
referred him to Dr. Sales, a cardio-pulmonary specialist,
who examined and treated him; advised him to take a
complete rest for a while; gave him medications; and
declared him fit to resume work as a seaman.
After a month, Cesar went back to the agency to ask
for re-deployment. The agency rejected his application.
Cesar responded by demanding total disability benefits
based on the ailments that he developed and suffered
while on board Meritt Shipping vessels. The claim was
based on the certification of his physician (internist Dr.
Reyes) that he could no longer undertake sea duties be-
cause of the hypertension and diabetes that afflicted him
while serving on Meritt Shipping vessels in the last 10
years. Rejected once again, Cesar filed a complaint for
illegal dismissal and the payment of total permanent
disability benefits against the agency and its principal.
Assume that you are the Labor Arbiter deciding the
case. Identify the facts and issues you would consider ma-
terial in resolving the illegal dismissal and disability com-
BAR SYLLABUS-BASED REVIEWER IN 167
LABOR LAW & SOCIAL LEGISLATION
plaint. Explain your choices and their materiality, and
resolve the case. (8%)
Answer
As to the tenurial issue, the facts and issues of
consequence are as follows:
(1) Whether or not Cesar was tenured employee;
(2) Whether or not his 10-year service affects the
contractual nature of his employment; and
(3) Whether or not he can be dissociated on the
ground of contract expiration.
As to the remunerative issue, the facts and issues to
consider are as follows:
(1) Whether or not his disability is by reason of a
disease that is both work connected and contracted during
the term of Cesar's employment contract.
(2) Whether or not Cesar's complied with the 3-day
reporting requirement;
(3) Whether or not the company-designated physic-
cian made a final, categorical and definitive assessment
within 120/240 days.
(4) Whether or not Cesar disclosed the medical
assessment of his physician of choice;
(5) Whether or not a third physician was selected
prior to the filing of Cesar's complaint.
2014 Bar, Question No. VI
Lina has been working as a steward with a Miami,
U.S.A.-based Loyal Cruise Lines for the past 15 years.
She was recruited by a local manning agency, Macapagal
Shipping, and was made to sign a 10-month employment
contract everytime she left for Miami. Macapagal Shipping
paid for Lina's round-trip travel expenses from Manila to
168 RECRUITMENT AND PLACEMENT
Miami. Because of a food poisoning incident which
happened during her last cruise assignment, Lina was not
re-hired. Lina claims she has been illegally terminated and
seeks separation pay. If you were the Labor Arbiter
handling the case, how would you decide? (4%)
Answer
I will dismiss the complaint for illegal dismissal.
Lina is a seafarer. As such, she is a contractual em-
ployee who cannot require her employer to enter into
another contract of employment with her under the Prin-
ciple of Freedom of Contracts. In effect, Lina cannot be
awarded separation pay. As an alternative relief, separa-
tion pay is proper only when there is a finding of illegal
dismissal.
2015 Bar, Question No. XV
Victor was hired by a local manning agency as a sea-
farer cook on board a luxury vessel for an eight-month
cruise. While on board, Victor complained of chronic
coughing, intermittent fever, and joint pains. He was advised
by the ship's doctor to take complete bed rest but was not
given any other medication. His condition persisted but the
degree varied from day to day. At the end of the cruise,
Victor went home to lloilo and there had himself examined.
The examination revealed that he had tuberculosis.
a. Victor sued for medical reimbursement, damages
and attorney's fees, claiming that tuberculosis was a com-
pensable illness. Do you agree with Victor? Why or why
not?(2%)
b. Due to his prolonged illness, Victor was unable to
work for more than 120 days. Will this entitle him to claim
total permanent disability benefits? (2%)
BAR SYLLABUS-BASED REVIEWER IN 169
LABOR LAW & SOCIAL LEGISLATION
Answer
(a) TB is listed under Sec. 32-A of the POEA-SEC·
hence, it is a work-related disease. It was also either con~
tracted or aggravated during the effectivity of Victor's con-
tract. Having shown its manifestations on board, Victor
should have been medically repatriated for further exami-
nation and treatment in the Philippines. This obligation was
entirely omitted in bad faith by the company when it waited
for his contract to expire on him before signing him off. On '
this basis, Victor is entitled to medical reimbursement
damages and attorney's fees. '
{b) No. Victor's TB may be work-related and it may
have developed on board, thereby satisfying the twin-re-
quisites of compensability. However, despite his know-
ledge of his medical condition, he failed to report to his
manning agent within three days from his arrival as re-
quired by Sec. 20-8(3) of the POEA-SEC. Since he al-
ready felt the manifestations of TB before his sign-off, he
should have submitted to post-employment medical exami-
nation (Jebsens Maritime Inc. v. Enrique Undag, G.R. No.
191491, 14 December 2011). The effect of his omission is
forfeiture by him of disability benefits (Coastal Safety Ma-
rine Services, Inc. v. Elmer T. Esguerra, G.R. No. 185352,
10 August 2011). In effect, the120-day rule has no appli-
cation at all.
2019 Bar, Part II, Question No. B.16
W Ship Management, Inc. hired Seafarer G as bosun
in its vessel under the terms of the 2010 Philippine Over-
seas Employment Administration-Standard Employment
Contract (POEA-SEC).
On his sixth (6th) month on board, Seafarer G fell ill
while working. In particular, he complained of stomach pain,
general weakness, and fresh blood in his stool. When his
illness persisted, he was medically repatriated on January
170 RECRUITMENT AND PLACEMENT BAR SYLLABUS-BASED REVIEWER IN 171
LABOR LAW & SOCIAL LEGISLATION

15, 2018. On the same day, Seafarer G submitted himself to (b) Yes, it will prosper. The Third Physician Rule has
a post-employment medical examination, wherein he was no application when the company-designated physician ex-
referred for further treatment. As of September 30, 2018, ceeds the 120-day treatment period without making a final,
Seafarer G has yet to be issued any fit-to-work certification categorical and definitive assessment. Here, he allowed 209
by the company-designated physician, much less a final and days to elapse without issuing a fit-to-work assessment or a
definitive assessment of his actual condition. Since Seafarer disability grade (Apines v. Elburg Shipmanagement Phil.,
G still felt unwell, he sought an opinion from a doctor of his Inc., G.R. No. 202114. 9 Nov. 2016).
choice who later issued an independent assessment stating
that he was totally and permanently disabled due to his (c) Non-compliance with the 3-day reporting require-
illness sustained during work. ment results in the forfeiture of G's entitlement to disability
compensation (Sec. 20(8), POEA-SEC).
Seafarer G then proceeded to file a claim for total and
permanent disability compensation. The company asserts
that the claim should be dismissed due to prematurity
since Seafarer G failed to first settle the matter through the
third-doctor conflict resolution procedure as provided under
the 2010 POEA-SEC.
(a) What is the third-doctor conflict resolution proce-
dure under the 2010 POEA-SEC? Explain. (2%)
(b) Will Seafarer G's claim for total and permanent
disability benefits prosper despite his failure to first settle
the matter through the third-doctor conflict resolution
procedure? Explain. (3%)
(c) Assuming that Seafarer G failed to submit himself
to a post-employment medical examination within three (3)
working days from his return, what is the consequence
thereof to his claim? Explain. (2%)

Answer
(a) In the event of conflicting medical assessments,
the parties are required to select a third physician whose
finding shall be final and binding on them. Under Sec. 20
(8) of the 2010 POEA-SEC, the selection is consensual;
however, jurisprudence has made it mandatory (Philippine
Hammonia Ship Agency, Inc. v. Eulogio Dumadag, G.R.
No. 194362, 26 June 2013).
 BAR SYLLABUS-BASED REVIEWER IN 173
LABOR LAW & SOCIAL LEGISLATION

PART Ill Minimum Wage

Payment by Hours Worked
LABOR STANDARDS Payment by Results

A Payment of Wages
Conditions of Employment
Prohibitions Regarding Wages
Hours of Work
Principles on Hours Worked Wage Determination
Compensable Time Wage Order
Normal Hours of Work Wage Distortion
Night Shift Differential
Overtime Work; Built-in Overtime ~
Compressed Work Week Leaves
Meal Break
Power Interruptions or Brownouts Labor Code
Idle Time Service Incentive Leave
Travel Time
Commuting Time Special Laws
Waiting Time Parental Leave for Solo Parents
Expanded Maternity Leave
Rest Periods Paternity Leave
Gynecological Leave
Service Charges Battered Woman Leave

~
Wages NOTES

Concept Coverage
Wage v. Salary
Facility v. Supplement
ART. 82. Coverage.-The prov1s1ons of this Title
Bonus
th
13 Month Pay shall apply to employees in all establishments and under-
Holiday Pay takings whether for profit or not, but not to government
employees, managerial employees, field personnel, mem-
Principles bers of the family of the employer who are dependent on
No work, No Pay him for support, domestic helpers, persons in the personal
Equal Pay for Equal Work service of another, and workers who are paid by results as
Fair Wage for Fair Work determined by the Secretary of Labor in appropriate regu-
Non-Diminution of Benefits lations.
172
174 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 175
LABOR LAW & SOCIAL LEGISLATION

As used herein, "managerial employees" refer to M - Managerial employees

those whose primary duty consists of th.e management of
the establishment in which they are employed or of a de-
partment or subdivision thereof, and to other officers or
members of the managerial staff.
"Field personnel" shall refer to non-agricultural emplo-
yees who regularly perform their duties away from the
principal place of business or branch office of the employer
and whose actual hours of work in the field cannot be
determined with reasonable certainty.
Appendix "A"
Labor Standards Coverage
1
See Appendix "A" for the diagram of Arts 82-95 of
P.O. 442 and its OR/LC, P.O. 851, R.A. 10361 and rele-
vant Supreme Court decisions. Stop reading at this point to
see the diagram which is very much a survival tool. Take a
photograph of it and return to this page.
Explanatory Notes (view your cellphone):
A. The First Circle
Coverage. Pursuant to Art. 82 of the Labor Code, all
employees in all establishments, whether for profit or not,
are covered; hence, they are entitled to Book Ill benefits -
also known as mandatory benefits, statutory benefits, time
benefits, or extra-wage benefits.
Exclusions. MOM GF WPD employees, or those
outside the circle, are not covered.
1
I devised this analytical tool in 2004 when I was teaching at the St. Louis
University. Since then, I kept updating it. Its present form was assisted by Atty.
Bettina "Bea" Marquez, a student of mine at the Faculty of Civil Law, University of
Sto. Tomas.
O - Officers & members of the managerial staff
M - Members of the employer's family dependent
on him for support
G - Government employees
F - Field personnel
W - Workers paid by result
P - Persons in the personal service of another
D - Domestic helpers (but amended by the
Kasambahay Act)
Memory Tool:
-- - - -
Your MOM , GF and the Wild President from Davao
do not have labor standards coverage.
-
Certain Workers:
(a) Manager. He is a top manager, or one who deter-
mines, formulates and adopts management policies, e.g.,
President, CEO, and COO.
(b) Officer or member of the managerial staff. He
is a middle manager, or one who executes management
policies, e.g., project manager.
(c) Workers paid by result. They are the piece:..
raters (PR), workerspaid on task basis {T), workers paid on
purely commission basis (PC), and those engaged on
pakyaw/takay basis or on the basis of the result of their
work.
(d) Domestic. R.A. 10361, the Kasambahay Act, is
the present governing law on workers known as domestic
workers under P.O. 442. Under the new law, a family driver
is no longer a domestic worker but a regular employee.
(e) Field personnel shall refer to non-agricultural
employees who regularly perform their duties away from
176 LABOR STANDARDS
the principal place of business or branch office of the
employer and whose actual hours of. work in the field
cannot be determined with reasonable certainty.
Labor Standards or Extra-Wage Benefits
1. Mandatory Benefits Under P.D. 442
1.1. 8-Hour Work (Art. 83)
1.2. Meal Period (Art. 85)
1.3. Nightshift Differential (Art. 86)
1.4. Overtime Pay (Art. 87)
1.5. Weekly Rest Period (Art. 91)
1.6. Premium Pay (Art. 93)
1. 7. Holiday Pay (Art. 94)
1.8. Service Incentive Leave (Art. 95)
Overtime Pay and Service Charges
Robina Farms Cebu v. Elizabeth Villa
G.R. No. 175869, 18 April 2016
X X X
"Firstly, entitlement to overtime pay must first be es-
tablished by proof that the overtime work was actually per-
formed before the employee may properly claim the be-
nefit. The burden of proving entitlement to overtime pay
rests on the employee because the benefit is not incurred
in the normal course of business. Failure to prove such
actual performance transgresses the principles of fair play
and equity.
And, secondly, the NLRC's reliance on the daily time
records (DTRs) showing that Villa had stayed in the com-
pany's premises beyond eight hours was misplaced. The
DTRs did not substantially prove the actual performance of
overtime work. The petitioner correctly points out that any
BAR SYLLABUS-BASED REVIEWER IN 177
LABOR LAW & SOCIAL LEGISLATION
employee could render overtime work only when there was
a prior authorization therefor by the management. [33J With-
out the prior authorization, therefore, Villa could not validly
claim having performed work beyond the normal hours of
work. Moreover, Section 4(c), Rule I, Book Ill of the Omni-
bus Rules Implementing the Labor Code relevantly states
as follows:
(a) X XX
(b) XX X
(c) If the work performed was necessary, or it bene-
fited the employer, or the employee could not abandon his
work at the end of his normal working hours because he
had no replacement, all time spent for such work shall
be considered as hours worked, if the work was with
the knowledge of his employer or immediate super-
visor. (Emphasis copied.)
Built-in Overtime
In Engineering Equipment, Inc. v. Minister of
Labor, et al., G.R. No. L-64967, 23 September 1985, the
employment contract provided as follows:
1. Work Schedule/Assignment. Your work-
days shall be on a six-day work week basis, with
a working day consisting of ten (10) working
hours. You may be required to work overtime in
excess of ten (10) hours each work day and to
work on your restdays and on Saudi Arabian legal
holidays.
2. A monthly salary of P750.00 plus over-
time pay for work rendered during restdays/holi-
days and/or in excess of ten (10) hours during
regular working days.
In denying the OT claim, the Supreme Court held:
178 LABOR STANDARDS
"Aspera worked ten hours daily for 335 working days.
He claims that his monthly salary sho1.1ld correspond to
eight hours of daily work and that for the additional two
hours daily, he was entitled to overtime pay at $1.2162 per
hour or to $814.85 for 670 hours during 335 working days.
It also asserts that Aspera was one of several emplo-
yees who signed written contracts with a "built-in" overtime
pay in the ten-hour working day and that their basic month-
ly pay was adjusted to reflect the higher amount covering
the guaranteed two-hour extra time whether worked or
unworked."
Note:
Service charges are not labor standards because
there is no law requiring their collection from customers or
guests and their distribution. However, the moment they
are collected, the law comes in to regulate their distribution
(Prof Alcantara). The new distribution law is R.A. 11360
(2019), infra.
2. 13th Month Pay under P.O. 851
Most of the benefits covered by Art. 83 to Art. 95 are
time benefits. Managers and members of the managerial staff
do not get compensation based on number of hours worked
but on work output. Likewise, field personnel are "un-timed";
hence, time cannot be the basis for their pay and benefits.
Workers paid by result, e.g.,pieceraters, workers paid on
task basis, workers paid on purely commission basis,
workers paid on pakyaw basis, and workers paid on takay
basis, are paid based on the result of their work and not on
time.
Reasons for excluding MOM GF WPD
(a) Book Ill benefits are time benefits, i.e., paid on
the basis of the time devoted by one to his employer. Since
BAR SYLLABUS-BASED REVIEWER IN 179
LABOR LAW & SOCIAL LEGISLATION
top managers are not paid based on time but on their work
output, they should be excluded. This also applies to
middle managers. Likewise, since workers paid by result
are not paid based on time but result, they should be
excluded. Finally, persons in the personal service of
another, e.g., personal bodyguards and private nurses, are
not covered because entitlement to wage and extra-wage
benefits is time-based. These workers do not get time-
based pay.
(b) If dependent for support on the employer, an
employee - who is a member of the family of the employer
- will not be allowed to claim mandatory benefits. The ma-
terial support given him takes the place of said benefits.
(c) As to Government employees, Civil Service Law
regulates the terms and conditions of their employment.
However, employees of GOCCs registered with the SEC
are protected by the Labor Code in accordance with the
Manner of Creation Test.
(d) As to field personnel, it is not distance that
excludes them. Rather, it is their employer's lack of the
means to determine their worked hours which does.
Hence, one who works 100 kilometers away from his
employer's principal place of business will not be
disqualified if his time is being registered by biometrics.
Usual Claims of Workers Paid By Result
1. Worker Paid on Purely Commission (PC) Basis
Claims: Holiday Pay (HP) & Service Incentive Leave
(SIL)
Rule: To be excluded, a worker paid on purely commis-
sion (PC) basis must at the same time be a field personnel
(F). In Autobus Transport Systems, Inc. v. Bautista, G.R.
180 LABOR STANDARDS
No. 156367, 16 May 2005 , the Supreme Court ruled that
the bus driver-conductor who was paid or;i purely commis-
sion basis was not a field personnel because he was
timed; hence, not being a field personnel, he was entitled
to HP and SIL.
2. Worker Paid On Task Basis (T)
Claims: Holiday Pay (HP) & Service Incentive Leave
(SIL)
Rule: To be excluded, a worker paid on task basis (T)
must at the same time be a field personnel (F). If he is
both, he would not be entitled to HP and SIL.
Taxi Driver
In R & E Transport, Inc. v. Latag, G.R. No. 155214,
13 February 2004, a taxi driver who waspaid on task basis
was considered as a field personnel too. Therefore, since
he was a worker paid on task basis (T) and a field
personnel (F) at the same time, he had no HP and SIL.
Butcher
In David v. Macasio, G.R. No. 195466, 2 July 2014,
a butcher who was paid P?00.00 per engagement (T)
worked inside his employer's premises and was super-
vised by the latter. He was a worker paid on task basis;
however, being supervised, he was not a field personnel.
Therefore, not being a field personnel at the same time, his
being a worker paid on task basis did not exclude him.
Ejusdem Generis
Ejusdem Generis is a rule of construction which has it
that when a generic term (e.g., worker paid on task basis,
worker paid on purely commission basis) is preceded by a
specific term (e.g., field personnel) then the specific term is
treated as a modifier, limiter or qualifier of the generic term.
BAR SYLLABUS-BASED REVIEWER IN 181
LABOR LAW & SOCIAL LEGISLATION
In the IRRs of both Art. 94 (HP) and Art. 95(SIL),
"field personnel" is ahead of "worker paid on task basis"
and "worker paid on purely commission basis". Applying
EJusdem Generis, therefore, "field personnel" qualifies
"worker paid on task basis" and "worker paid on purely
commission basis". In short, one paid on task basis and
one paid on purely commission basis must be "field per-
sonnel' at the same time in order to be excluded from the
coverage of HP and SIL.
In the Diagram, there is a line with 3 arrows connec-
ting (F) to (T) and (PC). That line represents Ejusdem Ge-
neris ( eyusdemjeneris ).
The Disqualification (DQ) Rules
The worker may not be MOM GF WPD; hence, he
should have labor standards coverage. However, you no-
tice 3 arrows coming from NSD, SIL and HP and pointing
outside the first circle. These arrows are the DQ rules, viz.:
(a) Not More Than 5 Rule
(b) 151 Less Than 10 Rule; and
(c) 2 nd Less Than 10 Rule
Explanation:
(a) A worker who may not be MOM GF WPD will not
get NSD if he is regular Employee No. 5 because he is
disqualified by the Not More Than 5 Rule. 5 is not more
than 5, but 6 is more than 5; hence, Employee No. 6 will
get NSD as long as he is not MOM GF WPD.
(b) A worker who may not be MOM GF WPD will not
get SIL if he is regular Employee No. 9 because he is dis-
qualified by the 1st Less Than 10 Rule. 9 is less than 10,
so is 8 down to 1.
(c) A worker who may not be MOM GF WPD will not
get HP if he is regular Employee No. 9 also because he is
disqualified by the 2 nd Less Than 10 Rule. 9 is less than
182 LABOR STANDARDS
1O, so is 8 down to 1. Employee No. 10 will get HP as long
as he is not MOM GF WPD.
These DQ rules specifically apply to NSD, SIL and
HP. Hence, one should not disqualify a worker for being
Employee No. 9 if the subject of his claim is OT, PP, WRP,
MP or NSD. He should not also deny a claim for OT, PP,
WRP or MP on the ground that the claimant is Employee
No. 5.
Pieceraters (PR): Sec. 8(b), Rule IV, Bk Ill, ORILC
There is an arrow which brings PR into the circle. PR,
a worker paid by result and who is outside the circle, has
no HP coverage. However, Sec. B(b), Rule IV, Bk Ill of
the Omnibus Rules Implementing the Labor ·Code
(OR/LC) has a formula for computing the HP of PR. On
this basis - applying, of course, the Operative Fact
Doctrine - PR has HP coverage. Take note, however, of
the 4 conflicting decisions of the Supreme Court pertaining
to the HP coverage of PRs as follows:
2 foster family arrangements, and are provided access to
1993 Villuga Case No coverage
1998 Labor Congress Case 3 With coverage
1999 Mark Roche lnt'I Case 4 No coverage
1999 Lambo Case 5 With coverage
As to which ruling to apply, one must take note of his
designation in the problem. If counsel for a PR, he must
apply the OR/LC provision and support it with Labor Cong-
ress and Lambo; otherwise, he should apply Art. 82 and
support it with Villuga and Mark Roche Int'/. If judge, it
would be better to apply the OR/LC so that one can display
his knowledge of the Operative Fact Doctrine. If he does
not know it, he should just apply Art. 82.
2 shall be entitled to an aggregate daily rest period of eight
Elias Villuga, et al. v. NLRC, et al., G.R. No. L-75038, 23 August 1993.
3
Labor Congress of the Philippines v. NLRC, et al., G.R. No. 116839, 13 July
1.998.
4
Mark Roche International v. NLRC, G.R. No. 123825, 31 August 1999.
5
Avelino Lambo, et al. v. NLRC, et al., G.R. No. 111042, 26 October 1999.
BAR SYLLABUS-BASED REVIEWER IN 183
LABOR LAW & SOCIAL LEGISLATION
R.A. 10361: SIL & WRP
Whereas, PD 442 excludes domestic helpers from the
coverage of SIL, R.A. 10361 (Kasambahay Act) entitles a
kasambahay to the benefit. As to WRP, Art. 82 appears to
exclude domestic helpers. Under R.A. 10361, by way of
amendment, it is expressly provided that a kasambahay is
entitled to two (2) rest benefits, viz., WRP and Daily Rest
Period (DRP) of not less than eight (8) aggregate hours.
Article I
Domestic worker or "Kasambahay" refers to any per-
son engaged in domestic work within an employment rela-
tionship such as, but not limited to, the following: general
househelp, nursemaid or "yaya", cook, gardener, or laun-
dry person, but shall exclude any person who performs do-
mestic work only occasionally or sporadically and not on
an occupational basis.
The term shall not include children who are under
education and given an allowance incidental to education,
i.e., "baon", transportation, school projects and school
activities (Sec. 4-d).
Employer refers to any person who engages and
controls the services of a domestic worker and is party to
the employment contract (Par. e).Household refers to the
immediate members of the family or the occupants of the
house that are directly provided services by the domestic
worker (Sec. 4- f).
Article IV
SEC. 20. Daily Rest Period.- The domestic worker
(8) hours per day.
SEC. 21. Weekly Rest Period.- The domestic worker
shall be entitled to at least twenty-four (24) consecutive
184 LABOR STANDARDS
hours of rest in a week. The employer and the domestic
worker shall agree in writing on the schedule of the weekly
rest day of the domestic worker: Provided, That the
employer shall respect the preference of the domestic
worker as to the weekly rest day when such preference is
based on religious grounds. Nothing in this provision shall
deprive the domestic worker and the employer from
agreeing to the following:
(a) Offsetting a day of absence with a particular rest
day;
(b) Waiving a particular rest day in return for an
equivalent daily rate of pay;
(c) Accumulating rest days not exceeding five (5)
days; or
(d) Other similar arrangements.
8. The Second Circle
th
Coverage. The other circle is for 13 Month Pay. As a
matter of law, only /and-based rank-and-filers are entitled
to the benefit. Hence, seafarers do not get it because they
are sea~based. Likewise managers (M) and supervisors
(S) will not get it because they are not R-n-F.
Exception: WPD G MES
W - Workers paid by result
P - Persons in the personal service of another
(e.g., bodyguards, private nurses)
D - Domestic (amended by the Kasambahay Act)
G - Government employees
M - Managers
E - Equivalent of 13thMP, those who receive the
S - Supervisors
BAR SYLLABUS-BASED REVIEWER IN 185
LABOR LAW & SOCIAL LEGISLATION
However, as a matter of contract, practice or policy
(matter of right), those who are excluded may get the benefit.
Certainly, a kasambahay has 13th MP (Arl. IV, Sec. 24, R.A.
10361). That is why there is an arrow from D to R.A. 10361.
The arrow means that a kasambahay gets 13thMP, including
WRP, SIL and OT. There is another arrow from PR to the
second circle. It means that PR has 13thMP even if he is a
worker paid by result because his employer is not exempt.
As to T and PC, T will never get 13thMP because his
employer is exempt. PC, if his commission is the wage
type (not bonus type), will get the benefit (5a, Revised
Guidelines on the Implementation of the 13th Month
Pay Law) but not if it is the bonus type.
Pieceraters
The most privileged worker paid by result is PR. Even
if not covered by Art. 82, he is guaranteed holiday pay
bySec. 8 (b), Rule IV, Book Ill of the OR/LC. In contrast, T
and PC, if field personnel, do not get holiday pay.
PR gets 13thMP also because his employer is not
exempt (5a, supra). Twill not get it because his employer
is exempt. PC will get it if his commissions are based on
his performance (wage type) and not business success
(bonus type). If bonus type, it means he has no basic
salary; therefore, there is nothing to compute because
13thMP is total annual basic salary divided by 12. Whether
to add a bonus to basic salary or not depends on its type.
Wage type bonus is added; whereas, bonus type is not
added.
The 13th Month Pay Law (P.D. 851)
1. Matter of Law v. Matter of Right
All land-based rank-and-filers are entitled to 13th
month pay as a matter of Jaw. Such being the case, sea-
farers do not get 13th month pay because they are sea-
186 LABOR STANDARDS
based. Likewise, strictly under P.O. 851, supervisors and
managers do not get the benefit as a matter of law
because only rank-and-filers are legally guaranteed the
benefit. Of course, if their contracts entitle them thereto or
company practice or policy allows them to get it then they
will get it as a matter of right.
Note: A Kasambahaygets 13th month pay as a matter
of law.
2. Computation
2.1. The basis for computing 13th month pay is
basic salary only; hence, extra-compensation benefits
are excluded. A covered employee's total annual ba-
sic salary shall be divided by 12. If one has no basic
salary, e.g., worker paid on purely commission basis,
then there is nothing to add and divide; hence, he will
not get 13th month pay.
2.1.1. Basic Salary. It excludes extra com-
pensation benefits, or money paid on top of pay
for normal hours of work, such as Book Ill bene-
fits and un-integrated bonuses. The total basic
salary actually earned during the year shall be
the basis of the computation.
2.1.2. Extra-compensation, such as man-
datory benefits and payments on top of basic
salary (e.g., overload pay of teachers) are not
included.
Total Annual Basic Salary
12
E.g. Pay Period Basic Salary Actually Earned
March (month employed) ............. P13,000.00
April ......... ....... .......... .. ..... ..... .... .. P15,000.00
May .. ........................... .......... .... .. P12,000.00
BAR SYLLABUS-BASED REVIEWER IN 187
LABOR LAW & SOCIAL LEGISLATION
June ............................................. P 17,000.00
July (month resigned) .................. P 13,000.00
Total Annual Basic Salary ......... P 70,000.00
Proportionate 13th Month Pay= P70,000.00/12
= P 5,833.33
2.2. Overtime (OT) pay is an extra-compensa-
tion because it is money paid on top of basic salary;
hence, it must be excluded.
2.3. For like reason, compensation for a tea-
cher's overload (OL) work must be excluded.
2.4. Overtime (OT) v. Overload (OL)
2.4.1. OT
(a) work beyond normal hours of work;
and
(b) within the same work day.
2.4.2. OL
(a) work beyond normal teaching load
(e.g., 2 units on top of 5 units/week
which is the normal teaching load);
and
(b) within normal hours of work (which is 8
hours/day also).
Caveat: While it is true that OT pay is exclu-
ded when computing 13th month pay because it
is payment for work rendered beyond normal
hours of work (hence, it is an extra-compen-
sation ), it cannot be maintained that OL pay must
be included because it is payment for work within
a teacher's normal hours of work (second ele-
ment of OL), which means that it is not payment
for OT. What must be considered is the fact that
a teacher's basic salary is what he/she gets for
188 LABOR STANDARDS
his/her normal teaching load. Therefore, any
amount paid on top thereof is extra-compensa-
tion just like OT pay is extra-compensation (Let-
ran Calamba Faculty and Employees Assoc.
v. NLRC, G.R. No. 156225, 29 January 2008).
2.4.3. Commissions
(a) Wage-Type Commissions (paid
based on work performance; guaranteed) are part
of basic salary; hence, they shall be included
(Philippine Duplicators, Inc. v. NLRC, et al.,
G. R. No. 110068, 11 November 1993).
(b) Bonus-Type Commissions (paid
based on business success; not guaranteed; in-
centives) are not part of basic salary; hence, they
shall be excluded (Boie-Takeda v. De la Serna,
228 SCRA 329, 10 December 1993).
Uses of the Twin-Diagrams
1. Computation of Retirement Pay under
Art. 302 of the Labor Code.
Under Art. 302, retirement pay is computed
as follows: (22.5 x daily rate) x length of service.
The 22.5 consists of 15 days (half month salary),
5 days (SIL) and 2.5 days (1/12 of 13th month
pay). The 15 days will always be given. However,
as to the 5 days, it will be given if the retiree is
entitled to SIL. And as to the 2.5. days, it will be
given if he is entitled to 13th month pay.
2012 Bar Question No. IX
Dennis was a taxi driver who was being paid on the
"boundary" system basis. He worked tirelessly for Cabrera
Transport Inc. for fourteen (14) years until he was eligible
for retirement. He was entitled to retirement benefits. Du-
BAR SYLLABUS-BASED REVIEWER IN . 189
LABOR LAW & SOCIAL LEGISLATION
ring the entire duration of his service, Dennis was not given
his 13th month pay or his service incentive leave pay.
a. Is Dennis entitled to 13th month pay and service
leave incentive pay? Explain. (5%)
b. Since he was not given his 13th month pay and
service incentive leave pay, should Dennis be paid upon
retirement, in addition to the salary equivalent to fifteen
(15) days for every year of service, the additional 2.5 days
representing one-twelfth ( 1/12) of the 13th month pay as
well as the five (5) days representing the service incentive
leave for a total of 22.5 days? Explain. (5%)
Answer
(a) No.
Being paid on boundary basis, Dennis is a worker
paid on task basis (R&E Transport). As such, his employer
is exempt from the coverage of P.O. 851 (/RR of P.O. 851).
As to service incentive leave, Dennis is not entitled
because he is a worker paid on task basis and a field
personnel at the same time (Ejusdem Generis).
(b) No. Since Dennis is not entitled to both 13 th month
pay and service incentive leave, his retirement benefits
shall be computed based on 15 days only.
2018 Bar, Question No. l(b)
Narciso filed a complaint against Norte University for
the payment of retirement benefits after having been a
part-time professional lecturer in the same school since
1974. Narciso taught for two semesters and a summer
term for the school year 1974-1975, 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 every semester and summer, until November 2005
190 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 191
LABOR LAW & SOCIAL LEGISLATION

when he was told that he could no longer teach because
he was already 75 years old. Norte University also denied
Narciso's claim for retirement benefits stating that only full-
time permanent faculty, who have served for at least five
years immediately preceding the termination of their
employment, can avail themselves of post-employment
benefits. As part-time faculty member, Narciso did not
acquire permanent employment status under the Manual of
Regulations for Private Schools, in relation to the Labor
Code, regardless of his length of service.
2. Computation of Backwages
The logical consequences of a finding of illegal dis-
missal are immediate reinstatement and full backwages.
As to backwages, the computation is based on the salary
at the time of dismissal. To it must be added allowances
and benefits or their monetary equivalent (Art. 294, Labor
Code). Said benefits include SIL and 13th month pay.
Hence, a manager will not get both because he is denied
coverage by Art. 82.

(a) Is Narciso entitled to retirement benefits? (2.5%)

(b) If he is entitled to retirement benefits, how should
retirement pay be computed in the absence of any contract
between him and Norte University providing for such
benefits? (2.5%)

Answer

(a) Yes.
Although not a regular employee, Narciso is entitled
to retirement benefits under the Labor Code. As held in De
La Salle Araneta University vs. Bernardo, G.R. No.
190809, 13 February 2017,Art. 302 of the Labor Code, as
renumbered, is a curative legislation which guarantees
retirement benefits to "any employee" in the absence of a
collective bargaining agreement (CBA) or similar contract.
Moreover, the implementing rules of R.A. 7641 employ the
term "all employees"; hence, non-regular employees are
not set apart from regular employees.

(b) Since Narciso appears to be entitled to both ser-

vice incentive leave (5 days) and 13th month pay (2.5.
days), his retirement benefits shall be computed based on
22.5 days. The same shall be multiplied by his equivalent
qaily rate, the product to be multiplied by his length of
service which shall include his authorized leaves.
192 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 193
LABOR LAW & SOCIAL LEGISLATION

Part 2 iii. Living with the parent; and

Special Leaves
iv. Not gainfully employed.
a. Parental Leave for Solo Parents (Ref. PART VII)
b. Expanded Maternity Leave
General Rights
Under R.A. 8282, the maternity leave is either 60
i. Right against discrimination;
(normal delivery, miscarriage) or 78 days (cesarean sec-
ii. Right to flexible work schedule; and tion). Under R.A. 11210, the 2019 Expanded Maternity
iii. Right to 7-day parental leave. Leave Act, there are now four (4) contingencies, viz., nor-
mal delivery, cesarean section, miscarriage and emergen-
Concept of a Solo Parent cy pregnancy termination. The maternity leave is 105 days
or 60 days depending on the contingency as follows:
A person left alone or solo in discharging parental
responsibility by reason of IF NO DADS Unfair to 105 Days - normal delivery and cesarean section;
Children, i.e.: and
I - Insanity of a spouse 60 Days - miscarriage and emergency pregnancy
F - Family member to whom parental responsibility is termination.
shifted Note: As a practical guide, give 105 because the
baby is alive; hence, the mother needs a longer leave.
N - Nullity/Annulment Give 60 days if the baby is dead.
0 - Other persons to who parental responsibility is
shifted Additional 15 Days with Pay

D - Death of a spouse If the member is a solo parent, supra, she gets an

A - Abandonment for 1 year additional 15 days leave with pay. A member may also
D - Disability avail of an additional 30-day leave; however, it is without
S - Separation (legal or de facto) pay.

U - Unmarried person who assumes parental Unli Deliveries

responsibility The SSS does not count 1 2 3 4 anymore.
C - Crime
Caregiver Leave
Dependent
Hypothetical Problem
. A dependent must be:
Clitty, Friday girl of Mr. Ting who is cohabiting with his
i. Not more than 18 years old; second wife, gave birth to fraternal twins, Kooting and
ii. Unmarried; Mooning, in 2017. Because Mrs. Ting discovered her
194 LABOR STANDARDS
husband's infidelity, she paid one of her security guards to
harass her. Instead, he sexually haras5>ed her until she
gave in to his persistence resulting in an unwanted preg-
nancy which had to be hidden from Mr. Ting. To Kitty's
shock, her ultrasound test showed that she was heavy with
twins again. Later, she gave birth to lcelet and Cheeklet.
For all her deliveries, she was able to avail of paid mater-
nity leave under the Social Security Act of 1997. After her
domestic partner committed suicide owing to the fact that
the twins were female versions of Mr. Ting, Clitty decided
to stay away from Mr. Ting and settle in Pangasinan where
she fell in love with an ex-priest who wedded her in a civil
ceremony only as he had yet to get his dispensation from
Rome. For the third time in her life, she was pregnant
again. To her extreme horror, however, her O8-Gyne an-
nounced that she was expecting triplets. If Clitty delivered
her 5th and 6th babies (John and Matthew) at 7:00 a.m. on 8
December 2018 and her yth baby (Luke) at 7:30 a.m. of the
same day, would she be entitled to maternity leave bene-
fits if she normally delivers her 8th baby sometime in 2020?
Proposed Answer
Yes.
It is not the number of babies but the number of deli-
veries which is taken into account for purposes of mater-
nity leave pay. Hence, under R.A. 8282 (SSS Law), Clitty
would be entitled to the benefit because, assuming Luke
was separately delivered, her delivery of Luke was her
fourth delivery. Her delivery of her 8th baby will be her fifth;
hence, it will not be covered by R.A. 8282. However, with
the advent of R.A. 11210, the Expanded Maternity Leave
Act, number of deliveries is no longer a consideration.
Therefore, she would get 105 paid days by way of mater-
nity leave benefit. At her option, she can avail of an
extension leave of 30 days but without pay.
BAR SYLLABUS-BASED REVIEWER IN 195
LABOR LAW & SOCIAL LEGISLATION
c. Paternity Leave
Under the Paternity Leave Act (R.A.8187), a legally
married man who is cohabiting with his wife, is entitled to a
paid 7-day paternity leave. Under the Expanded Maternity
Leave Act (R.A. 11210), he is entitled to same number of
paid leaves to be taken from the 60/105 maternity leave
benefit of his wife; or, if in a domestic relationship, from the
60/105 maternity leave benefit of his domestic partner;
provided, he serves as her caregiver.
Hypothetical Problem
Cleto and Claro have been domestic partners as early
as when they were OFWs in Dubai. Claro self-repatriated
in order to take care of his sick mother in Quezon City.
Unexpectedly, he fell in love with his mother's stay-out
nurse, Clitty. In time, they became domestic partners and
Clitty continued giving medical care to Clara's mother while
he took care of their baby. When Cleto arrived in the Philip-
pines sometime later, Clitty was heavy with her second
baby already. Being a total Christian, except that he could
not help falling in love with Claro, Cleto quietly stood by the
love of his life thru thick and thin, showing utmost respect
for Clitty. When Clitty gave birth, Cleto who was also a
nurse moved in to take care of Clara's mother whom she
could not attend to in the meantime. Claro, for his part, did
the household chores and took care of the first born.
Likewise, he dressed her cesarean wound and attended to
their newborn. At the end of the day, Cleto was more
exhausted doing Clitty's job than Claro was. Who between
Claro and Cleto would be entitled to the 7-day leave under
the Expanded Maternity Leave Act? Explain. (1%)
Proposed Answer
Neither.
Entitlement to the leave benefit for alternate care-
givers under RA. 11210 presupposes that the beneficiary
196 LABOR STANDARDS
is employed. If circumstances warrant, he is allowed to
leave work but will still get his basic salary for the days
he/she is away. Here, both Claro and Cleta have left their
work in Dubai; hence, there is no occasion for them to
claim the benefit.
Assuming both Claro and Cleta are still employed,
Claro shall be entitled to the benefit to the exclusion of
Cleta. While it is true that Cleta perfomed an act that
relieved Clitty of her caregiving task, he was not into giving
her direct caregiving services. In contrast, Claro directly
assisted Clitty by not only taking over the household
chores and care of their first born but by dressing her
wound and attending to their second baby.
d. Gynecological Leave (R.A. 9710)
Section 18. Special Leave Benefits for Women. - A
woman employee having rendered continuous aggregate
employment service of at least six (6) months for the last
twelve (12) months shall be entitled to a special leave be-
nefit of two (2) months with full pay based on her gross
monthly compensation following surgery caused by gyne-
cological disorders.
D.O. 112-11
Section 1. Definition of terms.- As used in these
Rules, the following terms shall mean:
(a) Special leave benefits for women refers to a
female employee's leave entitlement of two (2) months
with full pay from her employer based on her gross month-
ly compensation following surgery caused by gynecological
disorders, provided that she has rendered continuous ag-
gregate employment service of at least six (6) months for
the last 12 months. This two-month leave is in addition to
leave privileges under existinglaws.
BAR SYLLABUS-BASED REVIEWER IN 197
LABOR LAW & SOCIAL LEGISLATION
(b) Gynecological disorders, refers to disorders that
would require surgical procedures such as, but not limited
to, dilatation and curettage and those involving female rep-
roductive organs such as the vagina, cervix, uterus, fallo-
pian tubes, ovaries, breast, adnexa and pelvic floor, as cer-
tified by a competent physician. For purposes of the Act
and the Rules and Regulations of this Act, gynecological
surgeries shall also include hysterectomy, ovariectomy,
and mastectomy.
Section 2. Conditions to entitlement of special
leave benefits. - Any female employee, regardless of age
and civil status, shall be entitled to a special leave, provi-
ded she has complied with the following conditions:
(a) She has rendered at least six (6) months conti-
nuous aggregate employment service for the last twelve
(12) months prior to surgery;
(b) She has filed an application for special leave in
accordance with Section 3hereof.
(c) She has undergone surgery due to gynecological
disorders as certified by a competent physician.
Section 3. Application for special leave-The em-
ployee shall file her application for leave with her employer
within a reasonable period of time from the expected date
of surgery, or within such period as may be provided by
company rules and regulations or by collective bargaining
agreement.
Prior application for leave shall not be necessary in
cases requiring emergency surgical procedure, provided
that the employer shall be notified verbally or in written
form within a reasonable period of time and provided fur-
ther that after the surgery or appropriate recuperating pe-
riod, the female employee shall immediately file her appli.
cation using the prescribed form.
198 LABOR STANDARDS
Section 4. Availment.-Special leave benefits shall
be granted to the qualified employee after she has under-
gone surgery, without prejudice to an employer allowing an
employee to receive her pay before or during the surgery.
Section 5. Benefits.-The employee is entitled to full
pay for two months based on her gross monthly compen-
sation. Gross monthly compensation refers to the monthly
basic pay plus mandatory allowances fixed by the regional
wage boards.
Section 6. Non-commutation of benefits.-This spe-
cial leave shall be non- cumulative and non-convertible to
cash unless otherwise provided by a collective bargaining
agreement(CBA).
Section 7. Enforcement and monitoring.-The Labor
Inspectorate of the DOLE Regional Offices shall be respon-
sible for the enforcement and monitoring of these Guidelines.
Section 8. Transitory Provision.-Subject to the pro-
visions of Section 2 herein, female employees who have
taken a leave of absence following surgery for gyneco-
logical disorder on or after 15 September 2009 are entitled
to the special leave benefits for women.
Hypothetical Problem (Do not read!)
Cindy, fifth girlfriend of Tommy, delivered her first
baby normally; however, she had to be knifed to create a
better passage for her baby. Months later, she noticed that
the procedure done on her was so bad that her outer labia
behaved like the Mexican flag on a windy day to her acute
discomfort. Since then, to preserve her private space, she
would never agree to be intimate with Tommy. In time, she
had to visit a plastic surgeon to restore her pre-delivery
look. To celebrate her third anniversary as a bank teller,
BAR SYLLABUS-BASED REVIEWER IN 199
LABOR LAW & SOCIAL LEGISLATION
second anniversary as Tommy's girlfriend and first anniver-
sary as a young mother, she and her surgeon set the
procedure on February 14. Can Cindy claim leave benefit
under the Magna Carta of Women? Explain. (1%)
Answer
Yes.
The surgical procedure Cindy is about to undergo is
due to a gynecological disorder. A gynecological disorder
refers to disorders that would require surgical procedures
such as, but not limited to, dilatation and curettage and
those involving female reproductive organs such as the
vagina, cervix, uterus, fallopian tubes, ovaries, breast,
adnexa and pelvic floor, as certified by a competent
physician. Gynecological surgeries shall also include
hysterectomy, ovariectomy, andmastectomy.
Note: Do not underscore anything in your answer.
e. Battered Woman Leave (R.A. 9262)
Sec. 42. Ten-day paid leave in addition to other
leave benefits. - At any time during the application of any
protection order, investigation, prosecution and/or trial of
the criminal case, a victim of VAWC who is employed shall
be entitled to a paid leave of up to ten (10) days in addition
to other paid leaves under the Labor Code and Civil
Service Rules and Regulations and other existing laws and
company policies, extendible when the necessity arises as
specified in the protection order. The Punong Barangay/
kagawad or prosecutor or the Clerk of Court, as the case
may be, shall issue a certification at no cost to the woman
that such an action is pending, and this is all that is
required for the employer to comply with the 10-day paid
leave. For government employees, in addition to the afore-
mentioned certification, the employee concerned must file
an application for leave citing as basis RA 9262. The
200 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 201
LABOR LAW & SOCIAL LEGISLATION

administrative enforcement of this leave entitlement shall Distinctions

be considered within the jurisdiction of the Regional Direc-
tor of the DoLE under Article 129 of the Labor Code of the 1. As to Beneficiary:
Philippines, as amended, for employees in the private Labor Code - male and female
sector, and the Civil Service Commission, for government
Solo Parents Welfare Act - male and female
employees."
Paternity Leave Act - male
Sec. 43. Entitled to Leave. - Victims under this Act Expanded Maternity Leave Act - male and female
shall be entitled to take a paid leave of absence up to ten Magna Carta of Women - male and female
(10) days in addition to other paid leaves under the Labor Battered Women Law - male and female
Code and Civil Service Rules and Regulations, extendible
when the necessity arises as specified in the protection 2. As to Period:
order. Any employer who shall prejudice the right of the per-
Labor Code - 5 days
son under this Sec. shall be penalized in accordance with
the provisions of the Labor Code and Civil Service Rules Solo Parents Welfare Act - 7 days
and Regulations. Likewise, an employer who shall prejudice Paternity Leave Act - 7 days
any person for assisting a co-employee who is a victim Expanded Maternity Leave Act - 60/105 plus 15
under this Act shall likewise be liable for discrimination. (solo), plus 30
(w/o pay)
Certificate of Pending Action
Magna Carta of Women - 2 full months
The VAWC leave may be availed of by a female Battered Women Law - 10 days
employee by presenting a Certificate of Pending Action as
proof that an action is pending relative to the violence, is- 3. As to Requisites:
sued by either the Barangay Chairman/Councilor, Prosec- Labor Code - 12-month service
utor, or Clerk of Court.
Solo Parents Welfare Act - IF NO DAS Undo
Monetization and Commutation Coitus + Less 18
OULU
VAWC leave is not convertible to cash. Nor is it Paternity Leave Act - Legitimate and
commutable. cohabiting
Expanded Maternity Leave Act - Caregiver
Regional Director
Magna Carta of Women - Surgery for
The leave entitlement shall be considered within the gynecological
jurisdiction of the Regional Director of the DoLE under disorder
Article 129 of the Labor Code of the Philippines, as amen- Battered Women Law - Pending action
ded, for employees in the private sector, and the Civil certificate
Service Commission, for government employees
202 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 203
LABOR LAW & SOCIAL LEGISLATION

4. As to Monetization:
Labor Code
Solo Parents Welfare Act
Paternity Leave Act
Expanded Maternity Leave Act
Magna Carta of Women
Battered Women Law
5. As to Commutation:
Labor Code
Solo Parents Welfare Act
Paternity Leave Act
Expanded Maternity Leave Act
Magna Carta of Women
Battered Women Law
Hypothetical Problem
Arbiter as the same has been statutorily placed under the
- convertible to adjudicatory power of the Regional Director. Resolve (1 %)
cash
- XXX Proposed Answer
- XX X The Labor Arbiter can determine the VAWC leave
- in cash issue.
- in cash The issue brought by complaint to the Labor Arbiter is
- XXX the validity of Brenda's unceremonious dismissal. The is-
sue of whether or not she should have been granted a
VAWC leave is just an incidental issue to the core issue of
- commutable whether or not she grossly and habitually neglected her
work. What determine jurisdiction over the issue of a case
- XXX
are the recitals of the complaint or position paper and the
- XXX
relief prayed for. Under Sec. 42 of R.A. 9262, it is only the
- XXX administration of the leave requirement which the Regional
- XXX Director is authorized to perform.
- XXX
Note: See the similar provision of Sec. 7 of D. 0. 112-
11 implementing R.A. 9710, supra.

Brenda, for coming home late by 10 minutes, was A. Sexual Harassment in a Work Environment
pushed down the stairs by her live-in partner Hugh. 1. Definition
Because of the injury she sustained, she could not report
2. Duties and Liabilities of Employers
for work the following couple of days; hence, she notified
her supervisor by SMS thereof. The following month, she
3. Applicable Laws
had to notify the same supervisor of her inability to report
The Anti-Sexual Harassment Act of 1995
because Hugh burned her office uniform in the feat of
(R.A. 7877)
jealousy. Unfortunately, despite her domestic predicament,
the manager dismissed her without prior notice for her
Section 1. Title. - This Act shallbe known as the
gross and habitual neglect of her duty. In the position
"Anti-Sexual Harassment Act of 1995."
paper she submitted to the Labor Arbiter, she claimed that
her SMS to her supervisor included a request to be Sec. 2. Declaration of Policy. - The State shall
granted VAWC leave. In its reply, however, the company value the dignity of every individual, enhance the develop-
argued that she failed to present to her supervisor any ment of it human resources, guarantee full respect for hu-
pendency of action certificate. Any any rate, it submitted man rights, and uphold the dignity of workers, employees,
that the issue was outside the competence of the Labor applicants for employment, students or those undergoing
204 LABOR STANDARDS
training, instruction or education. Towards this end, all
forms of sexual harassment in the employment, education
or training environment are hereby declared unlawful.
Sec. 3. Work, Education or Training-related Sexual
Harassment Defined. - Work, education or training-related
sexual harassment is committed by an employee, manager,
supervisor, agent of the employer, teacher, instructor, pro-
fessor, coach, trainor, or any other person who, having autho-
rity, influence or moral ascendancy over another in a work or
training or education environment, demands, requests or
otherwise requires any sexual favor from the other,
regardless of whether the demand, request or requirement
for submission is accepted by the object of said Act. (a) In a
work-related or employment environment, sexual harassment
is committed when: (1) The sexual favor is made as a
condition in the hiring or in the employment, re-employment
or continued employment of said individual, or in granting
said individual favorable compensation, terms, conditions,
promotions, or privileges; or the refusal to grant the sexual
favor results in limiting, segregating or classifying the
employee which in a way would discriminate, deprive or
diminish employment opportunities or otherwise adversely
affect said employee; (2) The above acts would impair the
employee's rights or privileges under existing labor laws; or
(3) The above acts would result in an intimidating, hostile, or
offensive environment for the employee. (b) In an education
or training environment, sexual harassment is committed: (1)
Against one who is under the care, custody or supervision of
the offender; (2) Against one whose education, training,
apprenticeship or tutorship is entrusted to the offender; (3)
When the sexual favor is made a condition to the giving of a
passing grade, or the granting of honors and scholarships, or
the payment of a stipend, allowance or other benefits,
privileges, or considerations; or (4) When the sexual advan-
ces result in an intimidating, hostile or offensive environment
for the student, trainee or apprentice. Any person who directs
BAR SYLLABUS-BASED REVIEWER IN 205
LABOR LAW & SOCIAL LEGISLATION
or induces another to commit any act of sexual harassment
as herein defined, or who cooperates in the commission
thereof by another without which it would not have been
committed, shall also be held liable under this Act.
Sec. 4. Duty of the Employer or Head of Office in a
Work-related, Education or Training Environment. - It
shall be the duty of the employer or the head of the work-
related, educational or training environment or institution,
to prevent or deter the commission of acts of sexual ha-
rassment and to provide the procedures for the resolution,
settlement or prosecution of acts of sexual harassment.
Towards this end, the employer or head of office shall: (a)
Promulgate appropriate rules and regulations in consulta-
tion with the jointly approved by the employees or students
or trainees, through their duly designated representatives,
prescribing the procedure for the investigation or sexual
harassment cases and the administrative sanctions there-
for. Administrative sanctions shall not be a bar to prosecu-
tion in the proper courts for unlawful acts of sexual harass-
ment. The said rules and regulations issued pursuant to
this section (a) shall include, amongothers, guidelines on
proper decorum in the workplace and educational or trai-
ning institutions. (b) Create a committee on decorum and
investigation of cases on sexual harassment. The commit-
tee shall conduct meetings, as the case may be, with other
officers and employees, teachers, instructors, professors,
coaches, trainers and students or trainees to increase
understanding and prevent incidents of sexual harass-
ment. It shall also conduct the investigation of the alleged
cases constituting sexual harassment. In the case of a
work-related environment, the committee shall be compo-
sed of at least one( 1) representative each from the ma-
nagement, the union, if any, the employees from the
supervisory rank, and from the rank and file employees. In
the case of the educational or training institution, the com-
mittee shall be composed of at least one (1) representative
206 LABOR STANDARDS
from the administration, the trainers, teachers, instructors,
professors or coaches and students or trainees, as the
case maybe. "The employer or head of office, educational
or training institution shall disseminate or post a copy of
this Act for the information of all concerned.
Sec. 5. Liability of the Employer, Head of Office,
Educational or Training Institution. - The employer or
head of office, educational training institution shall be
solidarily liable for damage arising from the acts of sexual
harassment committed in the employment, education or
training environment if the employer or head of office,
educational or training institution is informed of such acts
by the offended party and no immediate action is taken
thereon.
Sec. 6. Independent Action for Damages. - Nothing
in this Act shall preclude the victim of work, education or
training-related sexual harassment from instituting a
separate and independent action for damages and other
affirmative relief.
Sec. 7. Penalties. - Any person who violates the
provisions of this Act shall, upon conviction, be penalized
by imprisonment of not less than one (1) month nor more
than six (6) months, or a fine of not less than Ten thousand
pesos (P10,000) nor more than Twenty thousand pesos
(P20,000), or both such fine and imprisonment at the
discretion of the court. Any action arising from the violation
of the provision of this Act shall prescribe in three (3)
years.
Simplification
This is not an easy law. Did "A" commit theft is a more
manageable question than "Did "B" commit sexual harass-
ment?" The reason is this: a felony is approached with the
use of the list of its elements; hence, the task ahead is to
BAR SYLLABUS-BASED REVIEWER IN 207
LABOR LAW & SOCIAL LEGISLATION
do a one-to-one correspondence between those elements
and the facts of the problem. In a manner of speaking, it is
as neat as that. Based on decided cases, approach to
sexual harassment (SH) is not as neat.
In a case, an element, e.g., demand or request/
requirement for sexual favor, had no factual represent-
tation; however, it was held that there was sexual harass-
ment based on an overarched "other element". In another,
all the elements were established with facts and yet there
was no finding of sexual harassment because there was
an unexplained delay of several months in the filing of the
complaint although the filing was done within the 3-year
prescriptive period. For this reason, a practical tool for
analysis has been devised here. Thus:
Questions to Ask
WHERE was the act complained of committed?
Answer: WET environment (Work, Education,
Training)
WHO committed the act?
Answer: Pastor TETE with MIA (Pastors/Priests,
Teachers, Employers, Trainers, Emplo-
yees with Moral Ascendancy, Influence
or Authority)
HOW was the act committed?
Answer: Thru ORR 4 Sexual Favor (Demand,
Request or Requirement for Sexual
Favor)
WHY should the ORR be granted?
Answer: W Env't - COER (Continuing employ-
ment, Other considerations, Employ-
ment, Re-employment)
208 LABOR STANDARDS
ET Env't - GASHOS (Grade, Allo-
wance, Scholarshipf Honors, Other
considerations, Stipend)
WHAT reaction is generated by the ORR?
Answer: Rejection, or
Acceptance (acceptance is not a
defense)
WHAT was the result of the rejection?
Answer: WET becomes HOI (Hostile, Offen-
sive, or Intimidating)
The Tool for Analysis, supra., has been devised to
help examinees answer hypothetical problems. In this re-
gard, it has been observed that until 2006 (last time a
question on SH was asked), examiners were more inclined
to craft hypos.
WET to HOI Formula
Based on 3 decided cases (the cases of Comm.
Raya/a, Judge Carpio and Justice Acosta), a trusted for-
mula for SH is the transformation of WET Env't to HOI
Env't owing to the respondent's unwelcome acts. If, as
shown by evidence, such transformation does not take
place then SH is not committed:
1. When there is transformation (The 2000 Chua
Case).
By reason of the lady employee's rejection of her
superior's ORR, the latter's attitude towards her changed;
her office table was relocated; and she was ultimately dis-
missed.
2. When there is no transformation (The 2002
Acosta Case; The 2007 Carpio Case).
BAR SYLLABUS-BASED REVIEWER IN 209
LABOR LAW & SOCIAL LEGISLATION
In the first, the lady lawyer continued to report for
work at the CTA without any incident as she and the res-
pondent justice, who made beso-beso on her, were wor-
king on different floors of the CTA building. In the second,
the stenographer continued to enter the chamber of the
respondent judge. That was taken against her.
Totality of Circumstances Rule
In the Raya/a Case, J Nachura concluded the com-
mission of SH from the totality of the circumstances. The
respondent argued that there was no allegation at all that he
demanded, requested or required sexual favour from the
complainant - which was true. However, it was ruled that it
was not necessary that ORR be articulated in a categorical
oral or written statement. "It may be discerned, with equal
certitude, from the acts of the offender."lf the combined
acts"resound with deafening clarity the unspoken
request for sexual·favour", SH is deemed committed.
Burden of Proof
Comm. Rayala argued that there was no proof be-
yond reasonable doubt of ORR. However, J Nachura invi-
ted his attention to the Threefold Liability Rule. Under the
rule, an act may result in 3 types of liabilities, viz., criminal,
civil and administrative liabilities. And they are established
as follows: criminality liability, with proof beyond reason-
nable doubt; civil liability, with preponderance of evidence;
and administrative liability, with substantial evidence. Since
he was dismissed for grave misconduct under Civil Service
Law, his case was an administrative case; hence, the
Court was just looking for substantial evidence.
Note:
If asked whether or not a dismissal for SH is valid
(and one cannot remember any of these), all he has to do
is support a finding of serious misconduct.
210 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 211
LABOR LAW & SOCIAL LEGISLATION

Unsafe Spaces Under R.A. 7877 mentioned above, a complaint was also dismissed be-
1. Under the /RR of R.A. 7877 adopted by the Phi- cause the complaining stenographer continued to enter the
lippine National Science High School, a student can com- chamber of the respondent judge, i.e., regardless of the
mit sexual harassment against his/her teacher. Strictly fact that she was in the faithful performance of duty in
speaking, this is not legally possible because the grava- doing so.
men of the offense is abuse of authority. Absent authority Punishable Acts
to abuse, a student cannot commit the offense against his/
6
her teacher. Likewise, sexual solicitation made by a judge Summary
on another judge of equal rank is "conduct unbecoming of
a member of the judiciary only." (A.M. No. MTJ-12-1813,
22 November 2016). Punishable Acts Penalty
(as further defined in RA No.
2. Stereotyping is allowed by R.A. 7877. In Soriano
11313)
v. Digitel, it was held that the female employee should
have immediately filed her complaint. That she delayed for Gender-based sexual harassment First offense: fine of one
in streets and public spaces: thousand pesos (P1 ,000.00)
11 months rendered her complaint incredible. Were her
Cursing, wolf-whistling, catcalling, and community service of
reasons seriously looked into? leering and intrusive gazing, twelve (12) hours inclusive of
3. In the Carpio Case, the complaining court steno- taunting, unwanted invitations, attendance to a Gender
grapher's act of still entering the chamber of the respon- misogynistic, transphobic, Sensitivity Seminar
dent judge was taken against her. It proved that her work homophobic, and sexist slurs, Second offense: arresto
persistent unwanted comments menor (6 to 10 days) or a fine
environment did not become hostile. Did she have any
on one's appearance, relentless of three thousand pesos
choice? requests for one's personal (P3,000.00)
4. Unwanted sexual attention per se is not sexual details such as name, contact and Third offense: arresto menor
harassment under R.A. 7877. Hence, looking between a social media details or (11 to 30 days) or a fine of ten
destination, the use of words, thousand pesos (P10,000.00)
woman's legs in itself is not yet sexual harassment. What
gestures or actions that ridicule
is sexual harassment in the USA (in the nature of on the basis of sex, gender or
unwanted sexual attention, like calling a woman "Babe") is sexual orientation, identity and/or
not necessarily so in the Philippines. expression including sexist,
homophobic, and transphobic
The Safe Spaces Act of 2019 (R.A. 11~13) statements and slurs, the
persistent telling of sexual jokes,
R.A. 11313 was enacted to address situations in use of sexual names, comments
which R.A. 7877, or its strict textual application, may have and demands, and any statement
created unsafe spaces for persons. For example, a com- that has made an invasion on a
person's personal space or
plaint for sexual harassment may be brought within 3
years; however, in the Digitel Case, delay of 11 months
was taken against the complainant. In the Carpio Case, as 6
Platon Martinez Law, https://platonmartinez.com
212 LABOR STANDARDS
threatens the person's sense of
personal safety
Gender-based sexual harassment
in streets and public spaces:
Making offensive body gestures
at someone, exposing private
parts for the sexual gratification of
the perpetrator with the effect of
demeaning, harassing,
threatening or intimidating the
offended party including flashing
of private parts, public
masturbation, groping, and similar
lewd sexual actions
Gender-based sexual harassment
in streets and public spaces:
Stalking, any of the acts
mentioned in 11 (a) or 11 (b) when
accompanied by touching,
pinching or brushing against the
body of the offended person; any
touching, pinching, or brushing
against the genitalia, face, arms,
anus, groin, breasts, inner thighs,
buttocks or any part of the victim's
body even when not
accompanied by acts mentioned
in 11(a) and 11(b)
Gender-based online sexual
harassment
Qualified gender-based sexual
harassment
First offense: fine of ten
thousand pesos (P10,000.00)
and community service of
twelve (12) hours inclusive of
attendance to a Gender
Sensitivity Seminar
Second offense:
arrestomenor (11 to 30 days)
or a fine of fifteen thousand
pesos (P15,000.00)
Third offense: arresto mayor
(1 month and 1 day to 6
months) and a fine of twenty
thousand pesos (P20,000.00)
First offense: arrestomenor
(11 to 30 days) or a fine of
thirty thousand pesos
(P30,000.00), provided that it
includes attendance in a
Gender Sensitivity Seminar
Second offense: arresto
mayor (1 month and 1 day) or
a fine of fifty thousand pesos
(P50,000.00)
Third offense: arresto mayor
in its maximum period or a
fine of one hundred thousand
pesos (P100,000.00)
Prision correccional in its
medium period or a fine of not
less than one hundred
thousand pesos
(P100,000.00) but not more
than five hundred thousand
pesos (P500,000.00), or both
at the discretion of the court
Penalty next higher in degree
BAR SYLLABUS-BASED REVIEWER IN 213
LABOR LAW & SOCIAL LEGISLATION
Gender-based sexual harassment Administrative penalties as
in the workplace and educational provided for by the
or training institutions employer's Committee on
Decorum and Investigation,
and without prejudice to other
applicable criminal violations
and penalties
Failure of employers or school Fine of not less than five
heads to implement their duties thousand pesos (P5,000.00)
under the Safe Spaces Act (i.e. nor more than ten thousand
including setting of administrative pesos (P10,000.00)
penalties to violations of gender-
based sexual harassment in the
workplace)
Failure of employers or school Fine of not less than ten
heads to take action on reported thousand pesos (P10,000.00)
acts of gender-based sexual nor more than fifteen
harassment committed in the thousand pesos (P15,000.00)
workplace or in the educational
institution
Distinction
In R.A. 7877:
1. The place of commission (environment) is not a
physical place but a relationship, e.g., between an em-
ployer and employee, teacher and student, trainor and trai-
nee, priest and parishioner, etc ...
2. The gravamen of the offense is abuse of moral
ascendancy, influence or authority; and
3. The mode of commission is thru a demand,
request or requirement for sexual favor.
In R.A. 11313:
1. The place of commission is a physical place, e.g.,
streets, public places, workplaces, education and training
institutions. Online is included;
214 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 215
LABOR LAW & SOCIAL LEGISLATION

2. The gravamen of the offense is unwanted sexual proposed Answer

attention (gender-based streets and public places sexual
harassment & online sexual harassment, stalking.etc.), or (a) Outercourse or frottage is the act of rubbing one's
acts of debasement; body part on another's to derive sexual pleasure; hence, it
is a non-penerative sexual act.
3. There are several modes of commission, e.g.,
stalking, cat-calling, wolf-whistling, terrorizing thru physical, (b) I would prosecute Raymund under the Safe
emotional or emotional threat, misogynistic slurs, transpho- Spaces Act of 2019 for the following reasons: Firstly, he
bic slurs, homophobic slurs, etc ... ( Sec. 12), offensive bo- has no authority, moral ascendancy or influence over
dy gestures, intrusive gazing, sexist slurs, persistent telling Haydee; hence, his act is not punishable under the Anti-
of sexual jokes, exposing private parts, public masturba- Sexual Harassment Act of 1995 under which the gravamen
tion, groping, persistent unwanted comments on another's of the offense is abuse of authority and not the violation of
appearance (Sec. 11 ). the victim's sexuality. Secondly, the act complained of was
committed in a public space and it was within the embrace
Hypothetical Problem of " touching, pinching, or brushing against the genitalia,
face, arms, anus, groin, breasts, inner thighs, buttocks or
Raymund and Haydee, both Computer Engineering any part of the victim's body even when not accompanied
graduates of the University of the West, appeared for a job by acts mentioned in 11 (a) and 11 (b)" of the Safe Spaces
interview at the ABS-CBN before the World Health Organi- Act of 2019.
zation (WHO) declared a corona virus pandemic. Despite
uncertainties regarding its franchise renewal, the TV net- (c) It would be stupid to ask this question; hence, do
work decided to hire both of them on probationary basis for not expect it. Besides, the operator of an MRT train is not
a technical position they would alternately occupy on an 8- known hereabouts as a loco engineer but a "drayber".
hour daily work shift. After the lockdown, they were notified
to report for duty. By coincidence, they took the same fully
packed MRT train wherein social distancing was no longer
required. After their train passed by four stations, Haydee
could feel Raymund's manhood on her butt. She then
moved three inches away but she again felt his hardness
in just a second, reminding her of her dog Gaston who
loved to hump visitors.
(a) What is outercourse or frottage? (2%)
(b) As Haydee's lawyer, would you prosecute
Raymund under the Anti-Sexual Harassment Act of 1995
or the Safe Spaces Act of 2019? Explain your choice. (3%)
(c) What, if any, is the liability of the loco engineer?
(0%)
216 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 217
LABOR LAW & SOCIAL LEGISLATION

B than three (3) months of practical training on the job

Working Conditions for Special Grou(:Ss of Employees
Apprentices
Learners
Disabled Workers
Equal Opportunity
Discrimination in Employment
Incentives for Employers
The Law on Special Workers
CHAPTER I
ART. 57. Statement of Objectives.-This
aims:
1) To help meet the demand of the economy for
trained manpower;
2) To establish a national apprenticeship program
through the participation of employers, workers and
government and non-government agencies; and
3) To establish apprenticeship standards for the pro-
tection of apprentices.
supplemented by related theoretical instruction.
d) "Apprenticeship agreement" is an employment
contract wherein the employer binds himself to train the
apprentice and the apprentice in turn accepts the terms of
training.
Apprentice
One is an apprentice if:
1. He is engaged for an apprenticeable occupation;
2. His employment is covered by a written appren-
ticeship agreement;
Title
3. His work consists of practical training on the job
supplemented by related theoretical instruction; and
4. His apprenticeship agreement is approved by the
TESDA.
An "apprenticeable occupation" means any trade,
form of employment or occupation which requires more
than three (3) months of practical training on the job
supplemented by related theoretical instruction.

ART. 58. Definition of Terms.-As used in this TESDA Approval

Title:
a) "Apprenticeship" means practical training on the
job supplemented by related theoretical instruction.
b) An "apprentice" is a worker who is covered by a
written apprenticeship agreement with an individual
employer or any of the entities recognized under this
Chapter.
c) An "apprenticeable occupation" means any trade,
form of employment or occupation which requires more
Without TESDA approval, the worker shall be deemed
a regular employee if engaged to perform work that is ne-
cessary, desirable, vital, or indispensable to the usual
trade of the employer. The difference between a regular
employee and an apprentice is that the former can only be
dismissed for a just or authorized cause and he is entitled
to 100% of the prescribed wage rate; whereas, the latter
has limited tenurial right and is entitled to 75% of the
applicable minimum wage only.
218 LABOR STANDARDS
ART. 59. Qualifications of Apprentice. 7- To qualify
as an apprentice, a person shall:
a) Be at least fourteen (14) years of age;
b) Possess vocational aptitude and capacity for ap-
propriate tests; and
c) Possess the ability to comprehend and follow oral
and written instructions.
Trade and industry associations may recommend to
the Secretary of Labor appropriate educational require-
ments for different occupations.
Employable Age
The employable age is 15 years of age. Under the
Labor Code, a child below 15 cannot be employed except
by his parents or guardian. Under R.A. 10361 (Kasamba-
hay Act), a person below 15 cannot be engaged as a
kasambahay.
The OR/LC of Art. 59 sets the minimum age for ap-
prentices at 15; hence, there is a conflict between the
statutory provision and the ORILC provision. The question
to resolve now is which of the two has preferential applica-
tion. Based on State policy, below 15 cannot be employed
- except by parents or guardian who do not participate in
the apprenticeship program of the government. Logically,
the employable age is 15 also.
ART. 60. Employment of Apprentices.-Only emplo-
yers in the highly technical industries may employ appren-
tices and only in apprenticeable occupations approved by the
Secretary of Labor and Employment. (As amended by
Section 1, Executive Order No. 111, December 24, 1986)
7
See Section 12 of Republic Act No. 7610, as amended by Section 2 of Repub-
lic Act No. 9231.
BAR SYLLABUS-BASED REVIEWER IN 219
LABOR LAW & SOCIAL LEGISLATION
ART. 61. Contents of Apprenticeship Agree-
ments.-Apprenticeship agreements, including the wage
rates of apprentices, shall conform to the rules issued by
the Secretary of Labor and Employment. The period of
apprenticeship shall not exceed six months. Apprentice-
ship agreements providing for wage rates below the legal
minimum wage, which in no case shall start below 75
percent of the applicable minimum wage, may be entered
into only in accordance with apprenticeship programs duly
approved by the Secretary of Labor and Employment. The
Department shall develop standard model programs of
apprenticeship. (As amended by Section 1, Executive
Order No. 111, December 24, 1986).
Regular Employee
The maximum period for the employment of an app-
rentice is 6 months. After 6 months of successful appren-
ticeship, he cannot demand for regularization. However, if
suffered to work beyond 6 months, he will attain regular
employment status. In contrast, the employer of a learner,
infra, is imposed the duty to regularize the latter after the 3-
month period of his learnership.
Apprentice v. Probationary Employee
Unless dismissed for a just or authorized cause, i.e.,
under Art. 297 or Art. 298 of the Labor Code, an appren-
tice shall be allowed to work until the end of the 6-month
apprenticeship period. In contrast, a probationary emplo-
yee can be dismissed even before the lapse of the 6-
month probationary period not only for a just or authorized
cause but also for failure to qualify. If allowed to work be-
yond 6 months, both apprentice and probationary emplo-
yee become regular employees. Thereafter, they can only
be dismissed under Art. 297 or Art. 298. Of course, they
can also be dismissed for a medical cause under Art. 299.
220 LABOR STANDARDS
ART. 62. Signing of Apprenticeship Agreement.
-Every apprenticeship agreement shall be signed by the
employer or his agent, or by an authorized representative
of any of the recognized organizations, associations or
groups and by the apprentice.
An apprenticeship agreement with a minor shall be
signed in his behalf by his parent or guardian, if the latter is
not available, by an authorized representative of the
Department of Labor, and the same shall be binding during
its lifetime.
Every apprenticeship agreement entered into under
this Title shall be ratified by the appropriate apprenticeship
committees, if any, and a copy thereof shall be furnished
both the employer and the apprentice.
ART. 63. Venue of Apprenticeship Programs.-
Any firm, employer, group or association, industry organiza-
tion or civic group wishing to organize an apprenticeship
program may choose from any of the following appren-
ticeship schemes as the training venue for apprentice:
a) Apprenticeship conducted entirely by and within
the sponsoring firm, establishment or entity;
b) Apprenticeship entirely within a Department of
Labor and Employment training center or other public
training institution; or
c) Initial training in trade fundamentals in a training
center or other institution with subsequent actual work
participation within the sponsoring firm or entity during the
final stage of training.
ART. 64. Sponsoring of Apprenticeship Prog-
ram.-Any of the apprenticeship schemes recognized here-
in may be undertaken or sponsored by a single employer
or firm or by a group or association thereof or by a civic
BAR SYLLABUS-BASED REVIEWER IN 221
LABOR LAW & SOCIAL LEGISLATION
organization. Actual training of apprentices may be under-
taken:
a) In the premises of the sponsoring employer in the
case of individual apprenticeship programs;
b) In the premises of one or several designated
firms _in _the case of programs sponsored by a group or
assoc1at1on of employers or by a civic organization; or
. _c) In a Department of Labor and Employment
training center or other public training institution.
ART. 65. Investigation of Violation of Appren-
ticeship Agreement.-Upon complaint of any interested
person or upon its own initiative, the appropriate agency of
the Department of Labor and Employment or its authorized
r~pre~entative shall investigate any violation of an appren-
t1cesh1p agreement pursuant to such rules and regulations
as may be prescribed by the Secretary of Labor and
Employment.
ART. 66. Appeal to the Secretary of Labor and
Employment.-The decision of the authorized agency of
the Department of Labor and Employment may be
appealed by any aggrieved person to the Secretary of
Labor and Employment within five (5) days from receipt of
the decision. The decision of the Secretary of Labor and
Employment shall be final and executory.
Jurisdiction; Exhaustion of Administrative Remedies
It is the DOLE Regional Director which looks into al-
leged violations of apprenticeship agreements. No com-
plaint shall be entertained by the DOLE Regional Director
unless the complaining apprentice has ventilated his cause
before the Plant Apprenticeship Committee (PAC) first.
Non-exhaustion of this remedy will justify the dismissal of
his complaint (Art. 67,infra).
222 LABOR STANDARDS
Appeal
Appeal taken from decisions or orders of the DOLE
Regional Director go up to the Secretary of Labor. The
appeal period is 5 days only, not 10 days.
Certiorari
Since the Secretary's decision is final and executory,
the mode of challenge is a petition for certiorari with the
Court of Appeals under Rule 65 of the Rules of Court.
However, a motion for reconsideration must be filed first.
Certiorari is an extraordinary remedy that is available
when, as here, there is no appeal because the law makes
the Secretary's decision final and executory. In addition,
the petitioner must have no plain, speedy and adequate
remedy in the ordinary course of law. As to this precon-
dition, a motion for reconsideration is such remedy; hence,
one must be filed and denied first before elevating the
case to the Court of Appeals for the correction of the
Secretary's grave abuse of appellate power.
ART. 67. Exhaustion of Administrative Reme-
dies.-No person shall institute any action for the enforce-
ment of any apprenticeship agreement or damages for
breach of any such agreement, unless he has exhausted
all available administrative remedies.
ART. 68. Aptitude Testing of Applicants.-Conso-
nant with the minimum qualifycations of apprentice-appli-
cants required under this Chapter, employers or entities
with duly recognized apprenticeship programs shall have
primary responsibility for providing appropriate aptitude
tests in the selection of apprentices. If they do not have
adequate facilities for the purpose, the Department of
Labor and Employment shall perform the service free of
charge.
BAR SYLLABUS-BASED REVIEWER IN 223
LABOR LAW & SOCIAL LEGISLATION
ART. 69. Responsibility for Theoretical lnstruc-
tion.-Supplementary theoretical instruction to apprentices
in cases where the program is undertaken in the plant may
be done by the employer. If the latter is not prepared to as-
sume the responsibility, the same may be delegated to an
appropriate government agency.
ART. 70. Voluntary Organization of Apprentice-
ship Programs; Exemptions.-
a) The organization of apprenticeship program shall
be primarily a voluntary undertaking by employers;
b) When national security or particular requirements
of economic development so demand, the President of the
Philippines may require compulsory training of apprentices
in certain trades, determined by the Secretary of Labor and
Employment. Appropriate rules in this connection shall be
promulgated by the Secretary of Labor and Employment as
the need arises; and
c) Where services of foreign technicians are utilized
by private companies in apprenticeable trades, said com-
panies are required to set up appropriate apprenticeship
programs.
ART. 71. Deductibility of Training Costs.-An ad-
ditional deduction from taxable income ofone-half (1/2) of
the value of labor training expenses incurred for develo-
ping the productivity and efficiency of apprentices shall be
granted to the person or enterprise organizing an appren-
ticeship program: Provided, further, That such deduction
shall not exceed ten (10%) percent of direct labor wage:
and Provided, finally, That the person or enterprise who
wishes to avail himself or itself of this incentive should pay
his apprentices the minimum wage.
ART. 72. Apprentices Without Compensation.-The
Secretary of Labor and Employment may authorize the
224 LABOR STANDARDS
hiring of apprentices without compensation whose training
on the job is required by the school or training program cur-
riculum or as requisite for graduation or board examination.
CHAPTER II
LEARNERS
ART. 73. Learners Defined.-Learners are persons
hired as trainees in semi-skilled and other industrial occu-
pations which are non-apprenticeable and which may be
learned through practical training on the job in a relatively
short period of time which shall not exceed three (3)
months.
Learner
One is a learner if:
1. He is engaged for a semi-skilled occupation;
2. Said occupation is non-apprenticeable;
3. His work may be learned through practical
training on the job in a relatively short period of
time.
The employment of a person as a learner shall not ex-
ceed three (3) months. After 3 months, he becomes a re-
gular employee.
While Art. 75 requires a learnership agreement, it
need not be approved by the TESDA. Hence, it is possible
to have a learner even without TESDA approval. In con-
trast, without such approval, there can be no apprentice. If
a learner is allowed to work for 2 months and thereafter
gets dismissed without fault on his part, his illegal dis-
missal will make him a regular employee (Art. 75-d).
ART. 74. When Learners May be Hired.-Learners
may be employed when no experienced workers are avai-
lable, the employment of learners is necessary to prevent
BAR SYLLABUS-BASED REVIEWER IN 225
LABOR LAW & SOCIAL LEGISLATION
curtailment of employment opportunities, and the employ-
ment does not create unfair competition in terms of labor
costs or impair or lower working standards.
Right to Hire
While hiring is a management prerogative, the hiring
of learners is regulated. Hence, it is not allowed when it will
create unfair competition in terms of labor costs, or impair or
lower working standards. Unfair competition results when a
company hires learners and pay them 75% of the applicable
minimum wage as law permits while other companies
engaged in the same line of business are paying their
regular workers 100%. Likewise, the hiring of learners is not
permitted when it will result in sub-standard work output.
ART. 75. Learnership Agreement.-Any employer
desiring to employ learners shall enter into a learnership
agreement with them, which agreement shall include:
a) The names and addresses of the learners·
'
b) The duration of the learnership period, which
shall not exceed three (3) months;
c) The wages or salary rates of the learners which
shall begin at not less than seventy-five percent (75%) of
the applicable minimum wage; and
d) A commitment to employ the learners if they so
desire, as regular employees upon completion of the lear-
nership. All learners who have been allowed or suffered to
work during the first two (2) months shall be deemed
regular employees if training is terminated by the employer
before the end of the stipulated period through no fault of
the learners.
The learnership agreement shall be subject to inspec-
tion by the Secretary of Labor and Employment or his duly
authorized representative.
226 LABOR STANDARDS
ART. 76. Learners in Piecework.-Learners em-
ployed in piece or incentive-rate jobs cwring the training
period shall be paid in full for the work done.
ART. 77. Penalty Clause.-Any violation of this
Chapter or its implementing rules and regulations shall be
subject to the general penalty clause provided for in this
Code.
Distinction
Previous Bar problems focused on the distinction bet-
ween learners and apprentices. In this regard, one should be
careful to note what the examiner wants to be compared:
learner v. apprentice, or learnership v. apprenticeship? If the
distinction-type question involves the first, one should not
distinguish between learnership and apprenticeship.
Question: Distinguish a learner from an apprentice.
Answer:
As to a Learner:
1. His engagement is for a period not exceeding 3
months;
2. He is hired to perform a semi-skilled work; and
3. He has the right to be regularized at the end of
the learnership.
As to an Apprentice:
1. His engagement is for a period not exceeding 6
months;
2. He is engaged to perform a highly technical work;
and
3. He cannot demand for regularization at the end of
his apprenticeship.
BAR SYLLABUS-BASED REVIEWER IN 227
LABOR LAW & SOCIAL LEGISLATION
Note: This is the Dean Carlos Ortega Style of answe-
ring a distinction-type question. 1 above must correspond
to 1 below; 2 above must correspond to 2 below; and 3
above must correspond to 3 below. The points of distinc-
tion should not be criss-crossed.
2016 Bar Question No. VIII
Differentiate learnership from apprenticeship with
respect to the period of training, type of work, salary and
qualifications. (5%)
Answer
Learnership differs from apprenticeship as follows:
As to period of training. In learnership, the period shall
not exceed 3 months; whereas, in apprenticeship, the pe-
riod shall not exceed 6 months.
As to type of work. In learnership, the work is semi-
skilled; whereas, in apprenticeship, the work is highly
technical;
As to salary. In learnership, the employer is permitted
to pay 75% of the applicable minimum wage. However, if
the learner is employed in piece or incentive rate jobs, he
must be paid in full. In apprenticeship, on the other hand,
the employer is permitted to pay a starting salary equi-
valent to 75% of the minimum wage. However, the SOLE
may authorize the hiring of apprentices without compensa-
tion if training on the job is required by the school or is a
requisite for graduation or board examination.
As to qualifications. In learnership, the worker must
be able to perform training-on-the job work; whereas, in
apprenticeship, the worker must possess vocational apti-
tude and can comprehend and follow oral and written
instructions.
228 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 229
LABOR LAW & SOCIAL LEGISLATION

2017 Bar Question No. V(B) CHAPTER 111

A. X X X HANDICAPPED WORKERS 8
B. Distinguish a learner from an apprentice. (4%)
ART. 78. Definition.-Handicapped workers are those
C. X X X whose earning capacity is impaired by age or physical or
mental deficiency or injury.
Answer
A. XX X ART. 79. (Superseded by Republic Act No. 7277, as
amended). ·
B. A learner differs from an apprentice as follows:
( 1) A learner is engaged for not more than 3 ART. 80. Employment Agreement.-Any employer
months; whereas, an apprentice is engaged for not who employs handicapped workers shall enter into an em-
more than 6 months; ployment agreement with them, which agreement shall
include:
(2) A learner performs a semi-skilled work;
whereas, an apprentice performs a highly technical a) The names and addresses of the handicapped
work; workers to be employed;

(3) A learner is regularized by the completion of b) The rate to be paid the handicapped workers
his learnership; whereas, the completion of the ap- which shall not be less than seventy five (75%) percent of
prenticeship does not regularize an apprentice; the applicable legal minimum wage;

(4) The illegal dismissal a learner on the third c) The duration of employment period; and
month of his employment regularize him; whereas, d) The work to be performed by handicapped wor-
the illegal dismissal of an apprentice anytime during kers.
the period of his apprentice does not have the same
legal effect; and The employment agreement shall be subject to inspec-
tion by the Secretary of Labor or his duly authorized repre-
(5) In the event of disputes, a learner shall file sentative.
his complaint with the Labor arbiter; whereas, subject
to exhaustion of administrative remedies, an appren- Valid Employment Contract
tice shall file his complaint with the DOLE Regional
Director. The requisites of a valid employment contract with
handicapped workers, now known as persons with disabili-
C. XXX ty, are as follows:
1. The names and addresses of the handicapped
workers to be employed;

6
See also Republic Act No. 7277 (Magna Carta for Persons with Disability), as
amended by RepublicActNo.9442.
230 LABOR STANDARDS
2. The rate to be paid the handicapped workers
which shall not be less than seventy five (75%)
percent of the applicable legal minimum wage;
3. The duration of employment; and
4. The work to be performed by handicapped
workers.
The Brent Ruling
In Brent School, Inc. v. Rona/do Zamora and Doro-
tea Alegre, G.R. No. L-48494, 5 February 1990, it was
held that the period agreed upon in an employment con-
tract was binding on an employee; provided, he dealt with
his employer on an equal footing and there was no evi-
dence of the vitiation of his consent.
The Bernardo Ruling
However, in Bernardo, et al. v. NLRC, et al., G.R. No.
122917, 12 July 1999, involving deaf-mutes, the 6-month
employment contracts were entered into freely, knowingly
and voluntarily and yet the Supreme Court did not bind the
handicapped/disabled workers to the periods of their con-
tracts. The reason was their employment was governed by
Sec. 5 of the Magna Carta for Disabled Persons. Unlike in
the Brent Case, this special law was applied over Art. 1306
of the New Civil Code on freedom of contracts consistent
with the rule of statutory construction to give preferential
application to a special law in conflict with a general law. In
Brent, Art. 1306 of the New Civil Code was applied overArt.
280 (now Art. 295) of the Labor Code although a provision
of a special law.
Magna Carta of Persons with Disability
Sec. 5 of the Magna Carta for Disabled Persons (now
Magna Carta for Persons with Disability) discharges the
equalizing function of social justice by providing that dis-
BAR SYLLABUS-BASED REVIEWER IN 231
LABOR LAW & SOCIAL LEGISLATION
abled workers who are qualified to work enjoy the same
rights enjoyed by able-bodied persons qualified to work.
Hence, just like the latter, if they perform work of such
nature that it is usually necessary or desirable in the usual
trade of the employer then they are regular employees.
And since they are regular employees, they cannot be
dismissed on the ground of the expiration of the periods of
their contracts. As such employees, the only valid grounds
for their termination are the listed causes, i.e., just causes
(Art. 297) and authorized causes (Art. 298 and Art. 299).
Since Bernardo is based on a special law, it is the
correct ruling to apply pursuant to the rule of statutory
construction that, in the event of conflict between a general
law (Art. 1306, New Civil Code) and a special law (Magna
Carta for Persons with Disability), the special law shall be
applied. Therefore, the Brent Ruling should not be applied.
2012 Bar, Question No. VI
a. For humanitarian reasons, a bank hired several
handicapped workers to count and sort out currencies. The
handicapped workers knew that the contract was only for a
period of six-months and the same period was provided in
their employment contracts. After six months, the bank
terminated their employment on the ground that their
contract has expired. This prompted the workers to file with
the Labor Arbiter a complaint for illegal dismissal. Will their
action prosper? Why or why not? (5%)
X X X
Answer
(a) Yes.
The special law to apply is Sec. 5 of the Magna Carta
for Persons with Disability which guarantees to disabled
workers the rights of able-bodied workers, one of which is
the right to regularization by reason of the nature of work
performed. Since sorting out and counting of coins is a job
232 LABOR STANDARDS
that is usually necessary and desirable in the usual trade
of the bank then the complainants are re{Jular employees;
hence, they can only be dismissed for a just of authorized
cause (Art. 294, Labor Code). Since expiration of contract
is not a listed cause, their dissociation can be challenged
via a complaint for illegal dismissal.
X X X (i) A woman worker shall not be dismissed or given
ART. 81. Eligibility for Apprenticeship.-Subject
to the appropriate provisions of this Code, handicapped
workers may be hired as apprentices or learners if their
handicap is not such as to effectively impede the perfor-
mance of job operations in the particular occupations for
which they are hired.
In Bernardo,supra., the work given to the deaf-mutes
was sorting out and counting currencies. Certainly, handi-
capped or disabled workers cannot be engaged to do ha-
zardous and deleterious jobs, e.g., work in high-rise buil-
dings, underground work, production of dynamites, and
like jobs.
The Law on Special Groups of Workers
Women Workers
ART. 158. Women Night Workers.-Measures shall
be taken to ensure that an alternative to night work is avai-
lable to women workers who would otherwise be called upon
to perform such work:
a) Before and after childbirth, for a period of at least
sixteen (16) weeks, which shall be divided between the
time before and after childbirth;
b) For additional periods, in respect of which a medi-
cal certificate is produced stating that said additional pe-
riods are necessary for the health of the mother or child:
1) During pregnancy;
BAR SYLLABUS-BASED REVIEWER IN 233
LABOR LAW & SOCIAL LEGISLATION
2) During a specified time beyond the period, after
childbirth is fixed pursuant to subparagraph (a) above, the
length of which shall be determined by the DOLE after
consulting the labor organizations and employers.
During the periods referred to in this article:
notice of dismissal, except for just or authorized causes
provided for in this Code that are not connected with
pregnancy, childbirth and childcare responsibilities.
(ii) A woman worker shall not lose the benefits regar-
ding her status, seniority, and access to promotion which
may attach to her regular night work position.
Pregnant women and nursing mothers may he al-
lowed to work at night only if a competent physician, other
than the company physician, shall certify their fitness to
render night work, and specify, in the ease of pregnant
employees, the period of the pregnancy that they can
safely work.
The measures referred to in this article may include
transfer to day work where this is possible, the provision of
social security benefits or an extension of maternity leave.
The provisions of this article shall not have the effect
of reducing the protection and benefits connected with
maternity leave under existing laws.
ART. 131. Exceptions.-( Superseded by Social Se-
curity Act of 1997 [Republic Act No. 8292]. See also
Paternity Leave Act of 1996 [Republic Act No. 8187.]
ART. 132. [134] Family Planning Services; in-
centives for Family Planning.-
a) Establishments which are required by law to
maintain a clinic or infirmary shall provide free family plan-
ning services to their employees which shall include, but
234 LABOR STANDARDS
not be limited to, the application or use of contraceptive
pills and intrauterine devices.
b) In coordination with other agencies of the govern-
ment engaged in the promotion of family planning, the De-
partment of Labor and Employment shall develop and
prescribe incentive bonus schemes to encourage family
planning among female workers in any establishment or
enterprise.
Discrimination Prohibited. 9-lt shall
ART. 133. [135]
be unlawful for any employer to discriminate against any
woman employee with respect to terms and conditions of
employment solely on account of her sex.
The following are acts of discrimination:
a) Payment of a lesser compensation, including
wage, salary or other form of remuneration and fringe be-
nefits, to a female employee as against a male employee,
for work of equal value; and
b) Favoring a male employee over a female emplo-
yee with respect to promotion, training opportunities, study
and scholarship grants solely on account of their sexes.
Criminal liability for the wilful commission of any un-
lawful act as provided in this Article or any violation of the
rules and regulations issued pursuant to Section 2 hereof
shall be penalized as provided in Articles 303 [288] and
304 [289] of this Code: Provided, That the institution of any
criminal action under this provision shall not bar the ag-
grieved employee from filing an entirely separate and dis-
tinct action for money claims, which may include claims for
damages and other affirmative reliefs. The actions hereby
authorized shall proceed independently of each other. (As
amended by Republic Act No. 6725, May 12, 1989)
9 (I)
See also Republic Act No. 7877 (Anti-Sexual Harassment Act).
BAR SYLLABUS-BASED REVIEWER IN 235
LABOR LAW & SOCIAL LEGISLATION
ART. 134. [136] Stipulation Against Marriage.-lt
shall be unlawful for an employer to require as a condition of
employment or continuation of employment that a woman
employee shall not get married, or to stipulate expressly or
tacitly that upon getting married, a woman employee shall
be deemed resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman
employee merely by reason of her marriage.
2012 Bar, Question No. VI
X X X
b. Mam-manu Aviation Company (Mam-manu) is a
new airline company recruiting flight attendants for its do-
mestic flights. It requires that the applicant be single, not
more than 24 years old, attractive, and familiar with three
(3) dialects, viz: llonggo, Cebuano and Kapampangan.
lngga, 23 years old, was accepted as she possesses all
the qualifications. After passing the probationary period,
lngga disclosed that she got married when she was 18
years old but the marriage was already in the process of
being annulled on the ground that her husband was afflic-
ted with a sexually transmissible disease at the time of the
celebration of their marriage. As a result of this revelation,
lngga was not hired as a regular flight attendant. Conse-
quently, she filed a complaint against Mam-manu alleging
that the pre-employment qualifications violate relevant pro-
visions of the Labor Code and are against public policy. Is
the contention of lngga tenable? Why? (5%)
Answer
X X X
(b) Yes.
The company's pre-employment policy is not a bona
fide occupational qualification for the following reasons:
it does not serve a legitimate business purpose;
236 LABOR STANDARDS
(II) it is not specific to the occupation at issue; and
(111) it does not reflect an inherent ~uality that would
reasonably guaranteed work efficiency.
2012 Bar Question No. Vl(b)
a. For humanitarian reasons, a bank hired several
handicapped workers to count and sort out currencies. The
handicapped workers knew that the contract was only for a
period of six-months and the same period was provided in
their employment contracts. After six months, the bank ter-
minated their employment on the ground that their contract
has expired. This prompted the workers to file with the
Labor Arbiter a complaint for illegal dismissal. Will their
action prosper? Why or why not? (5%)
b. X X X
Answer
a. Yes.
The special law to apply is Sec. 5 of the Magna Carta
for Persons with Disability which guarantees to disabled
workers the rights of able-bodied workers, one of which is
the right to regularization by reason of the nature of work
performed. Since sorting out and counting of coins is a job
that is usually necessary and desirable in the usual trade
of the bank then the complainants are regular employees;
hence, they can only be dismissed for a just of authorized
cause (Art. 294, Labor Code). Since expiration of contract
is not a listed cause, their dissociation can be challenged
via a complaint for illegal dismissal.
b. X X X debtor, resulting in the disruption of employment, produc-
2017 Bar, Question No. Vl(A)
A. One of Pacific Airline's policies was to hire only
single applicants as flight attendants, and considered as
BAR SYLLABUS-BASED REVIEWER IN 237
LABOR LAW & SOCIAL LEGISLATION
automatically resigned the flight attendants at the moment
they got married. Is the policy valid? Explain your answer.
(2.5%)
B. Tarcisio was employed as operations manager
and received a monthly salary of P25,000.00 through his
payroll account with DB Bank. He obtained a loan from
Roberto to purchase a car. Tarcisio failed to pay Roberto
when the loan fell due. Roberto sued to collect, and moved
to garnish Tarcisio's payroll account. The latter vigorously
objected and argued that salaries were exempt from gar-
nishment. Is Tarcisio correct? Explain your answer. (3%)
Answer
A. No, the policy is not valid.
A single status policy is valid only if it serves a legi-
timate business purpose; otherwise, it is discriminatory as
to be within proscriptive tone ofArt. 134 of the Labor Code,
as renumbered. Since Pacific Airline's policy does not
amounts to a bona fide occupational qualification (BFQQ),
it is productive of disparate treatment; hence, it is void.
(Star Paper Corp., et.al. v. Rona/do Simbol, et.al., G.R. No.
164774, 12 April 2006).
B. Yes, Tarcisio is correct.
The law proscribing garnishment is supposed to per-
tain to a worker's wage only. However, given the purpose
of the prohibition which is to prevent virtual loss of employ-
ment, it also covers salaries. Garnishment as a creditor's
remedy sometimes results in loss of employment by the
tion and consumption which constitutes a substantial bur-
den on local commerce.
ART. 135. [137] Prohibited Acts-
a) It shall be unlawful for any employer:
238 LABOR STANDARDS
1) To deny any woman employee the benefits provi-
ded for in this Chapter or to discharge.any woman em-
ployed by him for the purpose of preventing her from enjo-
ying any of the benefits provided under this Code.
2) To discharge such woman on account of her preg-
nancy, or while on leave or in confinement due to her
pregnancy;
3) To discharge or refuse the admission of such
woman upon returning to her work for fear that she may
again be pregnant.
Two Articles Backward
Due to R.A. 10151, DOLE Advisory 1, s. 2015, has re-
numbered Articles 135, 136 and 137 as Articles 133, 134
and 135, respectively. In the Star Paper Case, the anti-dis-
crimination rule specific to marriage is Art. 136. It should
be cited now as Art. 134. Arts 133 - 135 are the workplace
anti-discrimination provisions on women. Art. 133 is speci-
fic to sex; Art. 134 is specific to marriage; and Art. 135 is
specific to pregnancy.
2016 Bar, Question No. XIV
Tess, a seamstress at Marikit Clothing Factory, be-
came pregnant. Because of morning sickness, she fre-
quently absented herself from work and often came to the
factory only four (4) days a week. After two (2) months, the
personnel manager told her that her habitual absences
rendered her practically useless to the company and, thus,
asked her to resign. She begged to be retained, citing her
pregnancy as reason for her absences. Tess asked for
leave of absence but her request was denied. She went on
leave nevertheless. As a result, she was thus dismissed for
going on leave without permission of management.
Tess filed a complaint for illegal dismissal. The com-
pany's defense: she was legally dismissed because of her
BAR SYLLABUS-BASED REVIEWER IN 239
LABOR LAW & SOCIAL LEGISLATION
numerous absences without leave and not because of her
pregnancy. On the other hand, Tess argues that her dis-
missal was an act of discrimination, based as it was on her
pregnancy which the company treated as a disease.
Whose position is meritorious - the company's or Tess'?
Explain. (5%)
Answer
The position of Tess is meritorious. There is no doubt
that her absences were all pregnancy-related. That she
was dismissed on the basis of said absences constitutes
an act of discrimination against a woman by reason of
pregnancy which is prohibited by Art. 135 of the Labor
Code (See Del Monte Philippines v. Lolita Velasco, G.R.
No. 153477, 6 March 2007).
ART. 136. [138] Classification of Certain Wo-
men Workers.-Any woman who is permitted or suffered to
work, with or without compensation, in any night club,
cocktail lounge, massage clinic, bar or similar establish-
ments under the effective control or supervision of the em-
ployer for a substantial period of time as determined by the
Secretary of Labor and Employment, shall be considered
as an employee of such establishment for purposes of
labor and social legislation.
The Control Test
1. Art. 138 (now Art. 136) is the only provision of the
Labor Code which makes control the determinant of em-
ployer-employee relationship; otherwise, the Control Test
is a judicial invention.
2. NCMB women, whether paid or not, are emplo-
yees; provided they are under the effective supervision or
control for a substantial period of time by the NCMB owner.
240 LABOR STANDARDS
2.1. N - Nightclubs
2.2. C - Cocktail lounges
2.3. M - Massage clinics
2.4. B - Bars, or similar establishments
2012 Bar, Question No IV
a. Juicy Bar and Night Club allowed by tolerance
fifty (50) Guest Relations Officers (GROs) to work without
compensation in its establishment under the direct supervi-
sion of its Manager from 8:00 P.M. To 4:00 A.M. everyday,
including Sundays and holidays. The GROs, however,
were free to ply their trade elsewhere at anytime, but once
they enter the premises of the night club, they Were
required to stay up to closing time. The GROs earned their
keep exclusively from commissions for food and drinks,
and tips from generous customers. In time, the GROs
formed the Solar Ugnayan ng mgaKababaihanglnaapi
(SUKI), a labor union duly registered with DOLE. Subse-
quently, SUKI filed a petition for Certification Election in
order to be recognized as the exclusive bargaining agent
of its members. Juicy Bar and Night Club opposed the peti-
tion for Certification Election on the singular ground of ab-
sence of employer-employee relationship between the
GROs on one hand and the night club on the other hand.
May the GROs form SUKI as a labor organization for pur-
poses of collective bargaining? Explain briefly. (5%)
X X X account of his age.
Answer
(a) No.
The GRO's are employees without a definite emplo-
yer; hence, they cannot organized for purposes of "collec-
tive bargaining" or "dealing" with the JuicyBar and Night
Club over terms and conditions of employment. Art. 253 of
the Labor Code allows them to organize for the limited pur-
BAR SYLLABUS-BASED REVIEWER IN 241
LABOR LAW & SOCIAL LEGISLATION
pose of "mutual aid and protection" only. Since, the ulti-
mate purpose of a certification election is collective bargai-
ning, they are impliedly without the legal personality to
petition for the conduct of one.
X X X
Minor Workers
ART. 137. [139] Minimum Employable Age.-
a) No child below fifteen (15) years of age shall be
employed, except when he works directly under the sole
responsibility of his parents or guardian, and his employ-
ment does not in any way interfere with his schooling.
b) Any person between fifteen (15) and eighteen (18)
years of age may be employed for such number of hours
and such periods of the day as determined by the Secretary
of Labor and Employment in appropriate regulations.
c) The foregoing provisions shall in no case allow
the employment of a person below eighteen (18) years of
age in an undertaking which is hazardous or deleterious in
nature as determined by the Secretary of Labor and Em-
ployment.
ART. 138. [140] Prohibition Against Child Discr-
imination.-No employer shall discriminate against any per-
son in respect to terms and conditions of employment on
1. A child is one who is below 15; whereas, a minor is
15-18. Under the Labor Code, there are two (2) sets of rules
on the employment of children and minors, viz:
1.1. Below 15. They cannot be employed,
except
1.1.1. under the sole supervision of their
parents or guardian;
242 LABOR STANDARDS
1.1.2. in businesses where the employees
are family member$; and
1.1.3. their employment will not interfere
with their schooling.
1.2. 15-18. They can be employed; however,
1.2.1. only under non-hazardous and non-
deleterious conditions; and
1.2.2. only for such number of hours
allowed by the Secretary of Labor.
2. Under R.A. 9231, it is permissible for non-parents
and non-guardians to employ children (below 15) under these
conditions:
2.1. Maximum Hours
4 hours daily and 20 hours weekly only.
2.2. Prohibited Work Period
Cannot be required to work between 8:00 p.m. and
6:00 a.m. the following day.
3. Under R.A. 9231, 15-18 can be employed under
these conditions:
3.1. Maximum Hours
8 hours daily and 40 hours weekly only.
3.2. Prohibited Work Period
They cannot be required to work between 10:00 p.m.
and 6:00 a.m. the following day.
2009 Bar, Part II, Question No. XI (b)
TRUE or FALSE. Answer TRUE if the statement is
true, or FALSE if the statement is false. Explain your
answer in not more than two (2) sentences. (5%)
BAR SYLLABUS-BASED REVIEWER IN 243
LABOR LAW & SOCIAL LEGISLATION
a. Seafarers who have worked for twenty (20) years
on board the same vessel are regular employees.
b. Employment of children below fifteen (15) years
of age in any public or private establishment is absolutely
prohibited.
c. Government employees have the right to orga-
nize and join concerted mass actions without incurring ad-
ministrative liability.
d. A waiver of the right to claim overtime pay is
contrary to law.
e. Agency fees cannot be collected from a non-
union member in the absence of a written authorization
signed by the worker concerned.
Answer
X X X
(b) FALSE
Art. 137 of the Labor Code permits the employment of
children who are below 15 under the conditions therein set,
viz., (i) they work directly under the sole responsibility of
their parents or guardians; and (ii) their co-employees are
family members; and (iii) their employment does not in any
way interfere with their schooling.
X X X
2012 Bar, Question No. IV
X X X
b. A spinster school teacher took pity on one of her
pupils, a robust and precocious 12-year old boy whose
poor family could barely afford the cost of his schooling.
She lives alone at her house near the School after her
housemaid had left. In the afternoon, she lets the boy do
various chores as cleaning, fetching water and all kinds of
244 LABOR STANDARDS
errands after school hours. She gives him rice and P100.
00 before the boy goes home at 7:00,every night. The
school principal learned about it and charged her with vio-
lating the law which prohibits the employment of children
below 15 years of age. In her defense, the teacher stated
that the work performed by her pupil is not hazardous. Is
her defense tenable? Why? (5%)
X X X
Answer
b. No.
The defense is misplaced. Under the Labor Code, a
minor aged below 15 cannot be employed except under
sole of responsibility of his parents or guardian and in a
business where only family members are employed.
Hence, the teacher's defense might be meritorious if she is
the guardian of the pupil. However, she is not.
Likewise, under R.A. 9231, minors of like age can be
employed by any person in essential public entertainment
or information through media. Certainly, the tasks per-
formed by the pupil are outside the letter of R.A. 9231.
2015 Bar, Question No. V
Soledad, a widowed school teacher, takes under her
wing one of her students, Kiko, 13 years old.who was aban-
doned by his parents and has to do odd jobs in order to
study. She allows Kiko to live in her house, provides him
with clean clothes, food, and a daily allowance of 200
pesos. In exchange, Kiko does routine housework consis-
ting of cleaning the house and doing errands for Soledad.
One day, a representative of the DOLE and the DSWD
came to Soledad's house and charged her with violating
the law that prohibits work by minors. Soledad objects and
offers as a defense that she was not requiring Kiko to work
as the chores were not hazardous. Further, she did not
BAR SYLLABUS-BASED REVIEWER IN 245
LABOR LAW & SOCIAL LEGISLATION
give him chores regularly but only intermittently as the
need may arise. Is Soledad's defense meritorious?(4%)
Answer:
No.
Soledad's defense is not meritorious because the
work rendered by Kiko at her house is in the form of
physical exertion requiring compensation. Hence, it is an
employment which no person can contract with a minor
below 15 years of age (Art. 137, Labor Code). Her defense
that his occasional work did not expose him to hazardous
conditions cannot take the place of the defense allowed by
Iaw, viz., the employer is either parent or guardian. She is
neither. Therefore, her defense must fail.
Un-Asked Question
Distinguish between child work and child labor.
Answer
Child work is a permissible work involving a minor
below 15. Under the Labor Code, a child can be employed
under the sole responsibility of his parents or guardian,
subject to stringent conditions. On the other hand, child
labor is a prohibited employment of a person below 15.
Under R.A. 10361, a person below 15 cannot be employed
as a kasambahay. Likewise, he/she cannot be employed
as to be deprived of his/her childhood in agriculture, armed
conflict, commercial sexual exploitation, mining and quar-
rying, and under such other hazardous and deleterious
working conditions detailed by R.A. 9231.
Househelpers (Discussed in PART VII)
Industrial Homeworkers
246 LABOR STANDARDS
ART. 151. [153] Regulation of Industrial Homewor-
kers.- The employment of industrial homeworkers and field
personnel shall be regulated by the government through the
appropriate regulations issued by the Secretary of Labor and
Employment to ensure the general welfare and protection of
homeworkers and field personnel and the industries
employing them.
ART. 152. [154] Regulations of Secretary of
Labor.-The regulations or orders to be issued pursuant to
this Chapter shall be designed to assure the minimum
terms and conditions of employment applicable to the
industrial homeworkers or field personnel involved.
ART. 153. [155] Distribution of Homework.-For
purposes of this Chapter, the "employer" of homeworkers
includes any person, natural or artificial who, for his
account or benefit, or on behalf of any person residing
outside the country, directly or indirectly, or through an
employee, agent contractor, sub-contractor or any other
person:
1) Delivers, or causes to be delivered, any goods,
articles or materials to be processed or fabricated in or
about a home and thereafter to be returned or to be dis-
posed of or distributed in accordance with his directions; or
2) Sells any goods, articles or materials to be
processed or fabricated in or about a home and then
rebuys them after such processing or fabrication, either by
himself or through some other person.
Househelper v. Homeworker
Both work at home. But home for a househelper is the
home of his/her employer; whereas, home for a homeworker
is his home because he works at home or about the pre-
mises of his home. With the advent of the Batas Kasam-
BAR SYLLABUS-BASED REVIEWER IN 247
LABOR LAW & SOCIAL LEGISLATION
bahay under which "househelper'' is now "kasambahay',
however, the distinction is no longer an attractive point of
concern in the Bar. It has lost its magic. But who knows?
Even if "voluntary recognition" had been repealed, a Bar
examiner still asked the examinees to explain "voluntary
recognition, certification election and consent election" as the
modes of selecting an exclusive bargaining representative.
Types of Industrial Homework (Art. 153)
1. IH By Delivery
The principal delivers, or causes to be delivered, any
goods, articles or materials to be processed or fabricated in
or about a home and thereafter to be returned or to be
disposed of or distributed in accordance with his directions; or
2. IH By Sale
The principal sells any goods, articles or materials to
be processed or fabricated in or about a home and then
buys them after such processing or fabrication, either by
himself or through some other person.
Rights of a Homeworker (D.O. 5, s. 1995)
1. Right to compensation;
2. Security of tenure;
3. Self-organization; and
4. SSS coverage.
Bar Trend
The usual question is to distinguish a homeworker
from a househelper. It will not be repeated because the
latter is now called a kasambahay. Hence, the question has
lost its magic.
248 LABOR STANDARDS
Night Worker (R.A. 10151)
ART. 154. Coverage.-This chapter shall apply to
all persons, who shall be employed or permitted or suf-
fered to work at night, except those employed in agricul-
ture, stock, raising, fishing, maritime transport and inland
navigation, during a period of not less than seven (7) con-
secutive hours, including the interval from midnight to five
o'clock in the morning, to be determined by the Secretary
of Labor and Employment, after consulting the worker's
representatives/labor organizations and employers.
"Night Worker" means any employed person whose
work requires performance of a substantial number of
hours of night work which exceeds a specified limit. This
limit shall be fixed by the Secretary of Labor after consul-
ting the worker's representatives/ labor organizations and
employers.
Definition
1. R.A. 10151. Under the definition of Congress, it is
impossible to have a night worker. Per its definition in R.A.
10151, a night worker is one who works for not less than 7
consecutive hours between midnight and 5:00 a.m. the
following day. But since there are 5 hours only in between,
it is impossible to meet the "not less than seven (7)
consecutive hours" part of the definition.
2. D.0. 119-12. The correct definition is supplied by
DOLE. A night worker is one who works for not less than 7
consecutive hours between 10:00 p.m. and 6:00 a.m. the
following day. From 10:00 p.m. to 6:00 a.m., there are 8
hours. Hence, the "not less than seven (7) consecutive
hours" element can be met.
3. FAMIS. Employees in the following industries are
not covered:
F - Fishing
A - Agriculture
BAR SYLLABUS-BASED REVIEWER IN 249
LABOR LAW & SOCIAL LEGISLATION
M - Maritime transport
I Inland navigation
S - Stock raising
Note:
Can an agricultural employee under Art. 6 invoke the
rights of a night worker? Be prepared for FAMIS-based
questions.
Hypothetical Problem
The owner of Lab Bot, Palawan's version of the Love
Boat, hires retired seamen to operate its vessels servicing
the Manila-Puerto Princesa sea lane. Simon, a former Ship
Captain, ends up qualifying as a waiter for an 8-hour daily
work that stretches into the wee hours. Because of
elevated blood pressure which he brought from his
seafaring days into his present job, he requests that he be
assigned to a day shift only; however, the other waiters
insist that rotation is the best work arrangement for all.
Being a former ship head, he would not submit to majority
rule. Hence, he brings out a copy of R.A. 10151 and points
to a provision he has previously highlighted with a Stabile
marker giving him the right to seek job reassignment on
medical grounds. Should Simon be accorded the benefit of
the law he invokes?
Answer
No.
Simon is employed in inland navigation; hence, he is
outside the coverage of R.A. 10151. For this reason, he
cannot seek job reassignment without interfering with the
owner's prerogative to assign its employees. If minded, his
employer may give him a daytime assignment for humani-
tarian reasons only.
250 LABOR STANDARDS
ART. 155. Health Assessment.-At their request,
workers shall have the right to undergo a health assess-
ment, without charge and to receive advice on how to
reduce or avoid health problems associated with their
work;
a) Before taking up an assignment as a night
worker;
b) At regular intervals during such as assignment;
c) If they experience health problems during such
an assignment which are not caused by factors other than
the performance of night work;
With the exception of a finding of unfitness for night
work, the findings of such assessments shall not be trans-
mitted to others without the worker's consent and shall not
be used to their detriment.
ART. 156. Mandatory Facilities.-Suitable first-aid
facilities shall be made available for workers performing night
work, including arrangements where such workers where ne-
cessary, can be taken immediately to a place for appropriate
treatment. The employers are likewise required to provide
safe and healthful working conditions and adequate or
reasonable facilities such as sleeping or resting quarters in
the establishment and transportation from the work premises
to the nearest point of their residence subject to exceptions
and guidelines to be provided by the DOLE.
ART. 157. Transfer.-Night workers who are certi-
fied as unfit for night work, due to health reasons, shall be
transferred, whenever practicable, to a similar job for which
they are fit to work.
If such transfer to a similar job is not practicable, these
workers shall be granted the same benefits as other workers
who are unable to work, or to secure employment during such
period.
BAR SYLLABUS-BASED REVIEWER IN 251
LABOR LAW & SOCIAL LEGISLATION
A night worker certified as temporarily unfit for night
work shall be given the same protection against dismissal
or notice of dismissal as other workers who are prevented
from working for reasons of health.
ART. 158. Women Night Workers.-Measures shall
be taken to ensure that an alternative to night work is avai-
lable to women workers who would otherwise be called
upon to perform such work:
a) Before and after childbirth, for a period of at least
sixteen (16) weeks, which shall be divided between the
time before and after childbirth;
b) For additional periods, in respect of which a medi-
cal certificate is produced stating that said additional pe-
riods are necessary for the health of the mother or child:
1) During pregnancy;
2) During a specified time beyond the period,
after childbirth is fixed pursuant to subparagraph (a)
above, the length of which shall be determined by the
DOLE after consulting the labor organizations and
employers.
During the periods referred to in this article:
(i) A woman worker shall not be dismissed or given
notice of dismissal, except for just or authorized causes
provided for in this Code that are not connected with
pregnancy, childbirth and childcare responsibilities.
(ii) A woman worker shall not lose the benefits
regarding her status, seniority, and access to promotion
which may attach to her regular night work position.
Pregnant women and nursing mothers may he
allowed to work at night only if a competent physician,
other than the company physician, shall certify their fitness
to render night work, and specify, in the ease of pregnant
252 LABOR STANDARDS
employees, the period of the pregnancy that they can
safely work.
The measures referred to in this article may include
transfer to day work where this is possible, the provision of
social security benefits or an extension of maternity leave.
The provisions of this article shall not have the effect
of reducing the protection and benefits connected with
maternity leave under existing laws.
ART. 159. Compensation.-The compensation for
night workers in the form of working time, pay or similar bene-
fits shall recognize the exceptional nature of night work.
ART. 160. Social Services.-Appropriate social ser-
vices shall be provided for night workers and, where
necessary, for workers performing night work.
ART. 161. Night Work Schedules.-Before introdu-
cing work schedules requiring the services of night wor-
kers, the employer shall consult the workers' representa-
tives/labor organizations concerned on the details of such
schedules and the forms of organization of night work that
are best adapted to the establishment and its personnel,
as well as on the occupational health measures and social
services which are required. In establishments employing
night workers, consultation shall take place regularly."
Night Worker (NW) v. Night Shifter (NS)
NW is one who renders not less than 7 consecutive
hours of work between 10:00 p.m. and 6:00 a.m. the
following day (D.O. 119-12; R.A. 10151); whereas, a NS is
one who renders work between 10:00 p.m. and 6:00 a.m.
the following day for less than 7 consecutive hours (implied
definition).
, Among the rights of an employee being assigned to
night work is the right to be medically cleared first; hence,
BAR SYLLABUS-BASED REVIEWER IN 253
LABOR LAW & SOCIAL LEGISLATION
this right cannot be invoked by an NS. Therefore, refusal to
render 2 hours of nightshift when required on justifiable
grounds, e.g., to cover for a late reliever, for want of a
medical clearance can be a ground for disciplinary action
by reason of insubordination.
Hypothetical Problem
Delfin, Rodolfo's reliever, messaged the division
supervisor that he could not report for work because he
had been picked up by tokhang operatives. To have time
to look for a replacement worker, the supervisor instructed
Rodolfo to work beyond 10 p.m., or for two (2) more hours,
which was sufficient time for Alex to report in lieu of Delfin
who was actually killed because "nanlaban." However,
Rodolfo refused the instruction. According to him, he was
being required to do night work; hence, prior medical
clearance as required by R.A. 10151 was needed. Alleged-
ly, the company doctor had gone home already and so
nobody could issue him said clearance. Can Rodolfo be
disciplined for insubordination?
Answer
Yes.
Under the circumstances, the work required of
Rodolfo was not night work as contemplated by R.A.
10151.0.0. 119-12, which implements the Night Work
Law, defines night work as work of not less than seven (7)
consecutive hours rendered between 10:00 p.m. and 6:00
a.m. the following day. A person required to render such
work must be medically cleared first. Here, Rodolfo was
being required to render work for less than seven consecu-
tive hours; hence, he could not qualify as a night worker.
The work required of him was just a night shift.
All said, Rodolfo's refusal to render overtime work at
night is an act of insubordination for which he can be
disciplined.
254 LABOR STANDARDS
Security Guards (D.O. 150-16)
Probationary Employment
The probationary period shall not exceed 6 months. In
the absence of a probationary employment contract, a
security guard or other security personnel shall be deemed
a regular employee.
Security of Tenure
Regular Employment (Hire-Fire-Rehire)
A security guard or other security personnel who is
hired-fired-rehired shall attain regular employment status if
the total aggregate period of his service is at least 6
months.
Off-Detail or Floating Status
It shall not exceed 6 months. Within said period, the
agency must cause the redeployment of the guard on
floating status. If not, he shall be deemed dismissed if the
reason is not lack of a new assignment. If the reason is
lack of a client, the agency shall pay separation pay, infra.
Hypothetical Problem (Pull-Out Certification)
Dennis Hipolito, after submitting his training certifi-
cate, clearances and psychiatric examination result, was
hired as a security guard by the Falcon Security Services,
Inc. He was then given his duty detail order to secure the
premises of the BPI Banawe Branch in Quezon City. Due
to his familiarity with the Banawe Boys, however, the fron-
tage of the bank practically became an extension sala of
their homes. For that reason, the bank manager emailed
his agency to pull him out effective 2 April 2020. Because
of the City-wide lock down, however, he could not be
reposted. To allow him to avail of the government's aid for
the homeless and jobless, his manager issued him a
BAR SYLLABUS-BASED REVIEWER IN 255
LABOR LAW & SOCIAL LEGISLATION
certification on the third month of his off-detail status. It
read: "This is to certify that Dennis Hipolito was hired by
the Falcon Security Services, Inc. as a security guard on 2
January 2020 and was terminated per client request on 2
April 2020." After the lockdown was lifted, he filed a com-
plaint for illegal dismissal owing to his non-deployment.
During the SEnA conference, he exhibited the certification
to the SEnA officer as evidence of his dismissal.
If mediation fails and the matter advances to the filing of
a complaint for illegal dismissal, what defense would you em-
ploy in your position paper as counsel for the company? (1 %)
Answer
I will employ the following dual defenses:
The evidence of Dennis is not a certificate of termina-
tion but a pull-out certification (Canedo v. Kampi/an Secu-
rity & Detective Agency, 31 July 2013). Hence, it does
not prove the complete severance of his employment.
Given the fact that his off-detail status has not yet excee-
ded the maximum period of six (6) months, therefore, his
complaint is premature. Moreover, the Falcon Security Ser-
vices, Inc. did not perform an overt act of dismissal at all.
Hypothetical Problem (General Return-to-Work Order)
During a night inspection, Security Supervisor Manuel
of the Eagle Security and Investigation Agency came upon
SG Santos and SG Domingo. At that time, the two guards
were exchanging jokes. Completely unaware of the arrival
of their supervisor, SG Santos boasted that he was trans-
ferring already to the Falcon Security Services, Inc. When
asked why, he told SG Domingo: "Kasi mas malaki bird ng
Falcon sa Eagle." Although a standard UAAP joke, Manuel
took offense and floated him. Before the lapse of six (6)
months, he sent this SMS to Santos: "REPORT FOR DUTY
ASAP!!!" When Santos appeared at headquarters, however,
Manuel had no duty detail order to give him. After a week,
256 LABOR STANDARDS
Manuel sent a similar message. As at first, however, he had
no posting for Santos. Thus, in order to feed his family, he
joined the other agency - but not after filing a complaint for
constructive dismissal against his former agency. Under the
facts, which defense should respondent agency use to
prevent liability? Explain your non-choices. (2%)
(a) SG Santos did not comply with pre-litigation
requirement by skipping SEnA proceedings.
(b) SG Santos was recalled twice; hence, he could
not have been constructively dismissed;
(c) SG Santos abandoned his job; hence, he has no
cause of action.
Answer
The agency should employ defense (a). It cannot
employ defense (b) because general return-to-work orders
do not suffice as case law requires that a specific assign-
ment be mentioned in the recall order (J Leonen, Padilla
v. Airborne Security Service, Inc., GR. No. 210080, 22
November 2017). It cannot also use defense (c) because
there can be no abandonment of job where a complaint for
illegal dismissal is immediately filed following withholding
of work (id.).
Separation Pay
The basis shall be 1 month salary in the following
cases:
1. Non-assignment by reason of age;
2. Redundancy;
3. Automation;
4. In lieu of reinstatement.
The basis shall be ½ month salary in the following
cases:
BAR SYLLABUS-BASED REVIEWER IN 257
LABOR LAW & SOCIAL LEGISLATION
1. Non-deployment is by reason of lack of client;
2. Retrenchment;
3. Closure not due to serious business losses;
4. Incurable disease.
Head Office Rule
In the event of a transfer, the wage rate most favo-
rable to the security guards and other private security per-
sonnel shall apply. Thus, transfer of security guards and
other private security personnel to areas, out side the re-
gion of the domicile or head office of the agency shall not
result in reduction of the wage rate being enjoyed by the
security guards and other private security personnel prior
to such transfer. Transfer to an area or region with higher
wage rate shall render the higher rate the applicable wage
rate for the transferred security guards and other private
security personnel. (Sec. 7)
SEnA Proceedings
All issues on employment, disciplinary measures, sus-
pension, termination and compliance with labor standards
and occupational health and safety standards between the
SSC/PSA (agency) and its security guards and other pri-
vate security personnel shall be subject to the 30-day man-
datory conciliation-mediation or the Single Entry Approach
(SEnA) of the DOLE pursuant to R.A. 10396 (Sec. 11).
Hypothetical Problem
At the end of five (5) months following his off-detail,
Rodel went to the Office of the DOLE-RD to request for
SEnA assistance for the recovery of his unpaid net salary
of P4,999.00. Mediation conferences ensued; however, the
30-day SEnA period expired on the parties without
success. The failed mediation led to the certification of the
case to the Labor Arbiter on Rodel's announcement that
he was claiming P15.00 more as his unpaid nightshift
258 LABOR STANDARDS BAR SYLLABUS-BASED REVIEWER IN 259
LABOR LAW & SOCIAL LEGISLATION

differential. In the agency's reply to his position paper, the Redel that he was also claiming nightshift differential pay.
Labor Arbiter's attention was invited to the failure of the At any rate, in case of doubt as to whether the additional
complaint to charge illegal dismissal and non-payment of remunerative issue has been properly referred or not, the
nightshift differential; hence, a dismissal was prayed for doubt must be resolved in his favor. Consistent with
due to lack of jurisdiction over the entire case. Identify jurisprudence, since it is treated in Rodel's position paper,
three procedural issues and resolve them. (3%). the Labor Arbiter can resolve it with the issue of unpaid
salary even if not stated in his complaint.
Answer
The procedural issues are as follows:
1. Whether or not the Labor Arbiter has jurisdiction
over a cause of action not stated in the complaint but trea-
ted in the complainant's position paper;
2. Whether or not an issue not covered by the SEnA
proceedings can be brought by complaint; and
3. Whether or not the Labor Arbiter has jurisdiction
over Rodel's case?
In resolution of the foregoing issues, I submit as
follows:
1. Jurisprudence instructs that a complaint is just a
checklist of causes and that it is really the complainant's
position paper that articulates his cause/s of action; hence,
the Labor Arbiter can take cognizance of an unbrought
cause as long as it is treated in the position paper.
2. Art. 234 instructs that labor tribunals shall only
entertain endorsed or referred cases. Since Redel did not
raise the issue of dismissal before the SEnA officer, the
latter could not have endorsed a case of illegal dismissal to
the Labor Arbiter. Therefore, the issue cannot even be sta-
ted in his complaint for being premature.
3. The Labor Arbiter has jurisdiction over the case of
Redel which, even taking away illegal dismissal for being
an un-referred dispute, is for money in excess of the
PS,000.00 jurisdictional threshold. The additional claim of
P'15.00 is deemed referred owing to the announcement of
 BAR SYLLABUS-BASED REVIEWER IN 261
LABOR LAW & SOCIAL LEGISLATION

IV Why: Why did B select A? If for his unique skills,

POST-EMPLOYMENT, talents, or celebrity status then A is not B's
employee.
A
How: How was A selected? If by passing thru
Employer-Employee Relationship
the usual employee selection process of B then
A is the employee of B; if not, A is likely an
Tests to Determine Existence
independent contractor.
Job Contracting v. Labor-only Contracting
Elements What: What can B require A to perform? If the
Trilateral Relationship contracted service only, A is an independent
Liabilities contractor. If he can be assigned other tasks in
the exercise of management prerogative then he
is an employee (Sonza Case)
NOTES
Nature of work as vital, necessary or desirable is not
decisive of employee status. Such kind of work may also
A
be given to an independent contractor. In other words, Art.
Employer-Employee Relationship
280 (now Art. 295) of the Labor Code is not an EER test
(Atok Big Wedge Company, Inc. v. Jesus P. Gison, G.R.
(1)
No. 169510, 8 August 2011).
Tests to Determine Existence

The Fourfold Test

2. Wage Test
Who: Who pays for the personal services of A?
This basic test of employer-employee relationship
If B then A is perhaps B's employee.
(EER) has four component tests, viz., Selection Test, Wage
Test, Dismissal Test and Control Test. The technique 1 is to What: What does B pay A with? Answer: if talent
ask and answer the relevant questions under each test. fee, A is an independent contractor talent; if
Thus: wage/ salary, A is an employee talent.
How much: If huge (P317K/month as in Sonza
1. Selection Test
v. ABS-CBN, G.R. No. 138051, 10 June 2004)
Who: Who selected A? If B then A is perhaps then A is an independent contractor. If not huge
the employee of B. (P28K/ month as in Dumpit-Murillo v. CA, G.R.
No. 164652, 8 June 2007) then A is an
employee. If in between (USD1 ,900 as in Fuji
Television Network v. Espiritu, G.R. No. 204944-
1
I learned the technique of asking the underlying, if component, questions of a 45, 3 December 2014) but A is told what to say
question and answering them in order to arrive at the answer to the main
question from UP Law Professor Perfecto Fernandez, 10th placer in the 1958 Bar
and how to say it on TV, and uses equipment
Examinations. belonging to B, then A is an employee.
260
262 POST-EMPLOYMENT
What: What benefits are stipulated in the con-
tract between A and B? If prpmised employee
benefits, like 13th month pay, but he has free
reign over his means and methods of perfor-
mance, paid huge talent fees, did not pass thru
usual selection process for employees, etc ...
then the stipulation is inconsequential, i.e., A is
still an independent contractor. If an employee,
there would be no need to stipulate on employee
benefits, e.g., 13th month pay, because they are
deemed guaranteed to employees even if not
stipulated (Sonza Case).
How: How was the amount of compensation de-
termined? If thru negotiation then A is an
independent contractor. If A has no choice but to
submit to the wage structure of B then he is an
employee (Dumpit-Murillo Case).
3. Dismissal Test
Who: Who can dismiss A? If B then A is the
employee of B.
What: On what grounds can B dissociate A? If
for violation of his contractual obligations then A
is an independent contractor. If for a just or
authorized cause then A is an employee ( Sonza
Case).
How: How can the legal tie be terminated? If thru
rescission of contract then A is an independent
contractor. If thru notice of dismissal then A is an
employee (Sonza Case).
Why: Why can B not dissociate A under Art. 283
(now Art. 298) of the Labor Code although it is
financially distressed? If the reason is there are
stipulated grounds for rescission of contract then
A is an independent contractor (Sonza Case).
BAR SYLLABUS-BASED REVIEWER IN 263
LABOR LAW & SOCIAL LEGISLATION
4. Control Test
Who: Who controls A's means and methods of
performance? If B then A must be the employee
of B.
What: What type of control does B exercise over
A? If Labor Law concept of control then A must
be B's employee. If other types of control (infra)
then A must be an independent contractor.
Note: Other Types of Control
(a) If post-production control or quality control
then A is an independent contractor ( Sonza v.
ABS-CBN, G.R. No. 138051, 10 June 2004).
(b) If editorial right then A is an independent
contractor ( Orozco v. POI, G.R. No. 155207, 13
August 2008).
(c) If built-in control in insurance then A is an
independent contractor ( Tongko v. Manulife,
G.R. No. 167622, 25 January 2011 ).
(d) If exercise of sound business practice to ensure
a mutually desired result of re-selling purchased
products pursuant to a distributorship agreement
then A is not the employee of the vendor company
but of the vendee company (Nestle Phils v. Puedan,
et al., G.R. No. 220617, 30 January 2017).
How: How does A control B's performance? If by
assigning a manager or supervisor then B is an
employee.
Two-tier Test (Control Test+ Economic Dependence Test)
1. The Control Test
The test of employer-employee relationship (EER) is
"labor law concept of control", or pervasive control over the
264 POST-EMPLOYMENT
means and methods of the worker's performance. The
umbrella test is the Fourfold Test. In determining EER,
these are the basic questions to ask and answer:
(a) Who selected A? If B, perhaps B is the employer
of A.
(b) Who pays for the services of A? If B, perhaps Bis
the employer of A.
(c) Who can dismiss A for a just or authorized
cause? If B, perhaps B is the employer of A.
(d) Who controls the means and methods of perfor-
mance of A? If B, B is very likely to be the
employer of A.
Note:
From (a) to (c), the term used is "perhaps". But in (d),
the term used is "very likely." The reason is "a", "b" and "c"
are not sure determinants of EER just as (d) is.
2. The Economic Dependence Test
In situations where the Control Test is not sufficient to
determine the true status of a worker, e.g., whether an
employee talent or an independent contractor talent, the
Economic Dependence Test is used. The combination of
these two tests is called Two-Tier Test.
2019 Bar, Part. I, Question No. A.3
A, B, and C were hired as resident-doctors by MM
Medical Center, Inc. In the course of their engagement, A,
B, and C maintained specific work schedules as deter-
mined by the Medical Director. The hospital also monitored
their work through supervisors who gave them specific ins-
tructions on how they should perform their respective
tasks, including diagnosis, treatment, and management of
their patients.
BAR SYLLABUS-BASED REVIEWER IN 265
LABOR LAW & SOCIAL LEGISLATION
One day, A, B, and C approached the Medical
Director and inquired about the non-payment of their em-
ployment benefits. In response, the Medical Director told
them that they are not entitled to any because they are
mere "independent contractors" as expressly stipulated in
the contracts which they admittedly signed. As such, no
employer-employee relationship exists between them and
the hospital.
(a) What is the control test in determining the
existence of an employer-employee? (2%)
(b) Is the Medical Director's reliance on the contracts
signed by A, B, and C to refute the existence of an em-
ployer-employee relationship correct? If not, are A, B, and
C employees of MM Medical Center, Inc.? Explain. (3%)
Answer
(a) Under the Control Test, the person who exercises
labor law concept of control, actual or reserved, is the
employer of the person over whom he exercises it. Labor
law concept of control is control over means and methods
of performance (Orozco v. CA, Philippine Daily Inquirer &
Magsanoc G.R. No. 155207, 13 Aug. 2008).
(b) No, the Medical Director is not correct. Employer-
employee relationship is a question of both law and fact.
Law provides its cognitive significance, whereas evidence
gives its out-there representation. Being a matter of law
and evidence, it cannot be the subject of stipulation. A, B
and C, who are not medical specialists, are the employees
of MM Medical Center, Inc. owing to the "means-methods
controf' exercised by the latter over them.
2017 Bar, Question No. I
A. What are the accepted tests to determine the
existence of an employer-employee relationship? (5%)
266 POST-EMPLOYMENT
B. Applying the tests to determine the existence of
an employer-employee relationship, is, a jeepney driver
operating under the boundary system an employee of his
jeepney operator or a mere lessee of the jeepney? Explain
your answer. (3%)
Answer
A. The acceptable tests for determining employer-
employee relationship are as follows:
1. The Fourfold Test. Its component tests are:
(a) the Selection Test;
(b) the Wage Test;
(c) the Dismissal Test; and
(d) the Control Test.
2. Two-Tier Test. It is the combination of
(a) the Control Test; and
(b) the Economic Dependence Test
3. Ecclesiastical Affair Test. It rules out employer-
employee relationship on the basis of the origin of the dis-
pute, viz., ecclesiastical or church matter.
4. lntracorporate Controversy Test. It rules out em-
ployer-employee relationship based on nature of relation-
ship and nature of controversy.
B. A jeepney driver is an employee. The same
State-imposed restrictions which are for the operator to
observe in running his business affair are cross-imposed
by him on his driver. Hence, pursuant to the Control Test,
the latter is an employee under the boundary system.
BAR SYLLABUS-BASED REVIEWER IN 267
LABOR LAW & SOCIAL LEGISLATION
2016 Bar, Question No. XIII
Matibay Shoe and Repair Store, as added service to
its customers, devoted a portion of its store to a shoe shine
stand. The shoe shine boys were tested for their skill
before being allowed to work and given ID cards. They
were told to be present from the opening of the store up to
closing time and were required to follow the company rules
on cleanliness and decorum. They bought their own shoe
shine boxes, polish, and rags. The boys were paid by their
customers for their services but the payment is coursed
through the store's cashier, who pays them before closing
time. They were not supervised in their work by any
managerial employee of the store but for a valid complaint
by a customer or for violation of any company rule, they
can be refused admission to the store. Were the boys
employees of the store? Explain. (5%)
Answer
No, the boys were not employees. They were free-
lance operators because they solicited work from the cus-
tomers of the store on their own initiative and rendered the
contracted services in strict accordance with their means
and methods of performance. Besides non-exercise of
control over their means and methods, the store had no
obligation to pay for their services. The obligation to pay
belonged to the customers who availed of their services.
Thus, under the Two-tier Test, they cannot be considered
as employees.
Alternative Answer
Yes, the boys were employees. They rendered
desirable support services intended to make the shop
relatively a one-stop shop. The circumstances of their work
are indicative of the unitary nature of the services offered
by the store to the public. As to engagement, the boys
were not self-engaged. As to mode of payment, the store
268 POST-EMPLOYMENT
held out to the public that the services paid for were its
services. As to power to dismiss, the prerogative to let the
boys work inside store premises implied the correlative
right to dissociate them. And, as to control, their work did
not require actual control because it was a simple manual
work.
Independent Contractor
2016 Bar, Question No. II
Gregorio was hired as an insurance underwriter by
the Guaranteed Insurance Corporation (Guaranteed). He
does not receive any salary but solely relies on
commissions earned for every insurance policy approved
by the company. He hires and pays his own secretary but
is provided free office space in the office of the company.
He is, however, required to meet a monthly quota of twenty
(20) insurance policies, otherwise, he may be terminated.
He was made to agree to a Code of Conduct for
underwriters and is supervised by a Unit Manager.
a. Is Gregorio an employee of Guaranteed? Explain.
(2.5%)
b. Suppose Gregorio is appointed as Unit Manager
and assigned to supervise several underwriters. He holds
office in the company premises, receives an overriding
commission on the commissions of his underwriters, as
well as a monthly allowance from the company, and is
supervised by a branch manager. He is governed by the
Code of Conduct for Unit Managers. Is he an employee of
Guaranteed? Explain. (2.5%)
Answer
a. No, Gregorio is not an employee. He is an inde-
pendent contractor because the control exercised by the
insurance company over him is not the labor law concept
of control but a legally prescribed control device. In other
BAR SYLLABUS-BASED REVIEWER IN 269
LABOR LAW & SOCIAL LEGISLATION
words, it is not pervasive control over means and methods
of performance. He sold insurance policies free from any
form of company prescriptions or proscriptions as to how to
sell. In fact, he employed his own manpower to be able to
sell insurance policies anywhere. As to his monthly quota
and acquiescence to the code of conduct, the same do not
go into means and methods of performance but into result
of performance only ( See Gregorio Tongko v. Manulife,
G.R. No. 167622, 25 January 2011).
b. No. The supervisory functions of Gregorio did not
invest him with employee status. As leading agent, it was
his duty to oversee the agents under him to ensure their
compliance with legally imposed rules on selling insurance
policies. The attending system of control, including supervi-
sion over him by a branch manager, is inherent in insu-
rance agency. In fact, it is a legally prescribed control de-
vice (See Gregorio Tongko v. Manulife, G.R. No. 167622,
25 January 2011).
Employee of an Independent Contractor
2017 Bar, Question No. VII
Dr. Crisostomo entered into a retainer agreement with
AB Hotel and Resort whereby he would provide medical
services to the guests and employees of AB Hotel and Re-
sort, which, in turn, would provide the clinic premises and
medical supplies. He received a monthly retainer fee of
P60,000.00, plus a 70% share in the service charges from
AB Hotel and Resort's guests availing themselves of the
clinic's services. The clinic employed nurses and allied
staff, whose salaries, SSS contributions and other benefits
he undertook to pay. AB Hotel and Resort issued directives
giving instructions to him on the replenishment of emer-
gency kits and forbidding the clinic staff from receiving
cash payments from the guests.
270 POST-EMPLOYMENT
In time, the nurses and the clinic staff claimed entitle-
ment to rights as regular employees of AB Hotel and Re-
sort, but the latter refused on the ground that Dr.
Crisostomo, who was their employer, was an independent
contractor. Rule with reasons. (4%)
Answer
The "rights" claim is baseless.
The claimants are the employees of Dr. Crisostomo
who is an independent contractor. Under the Fourfold Test,
no legal lie can be established between them and the hotel
which did not select them to be under its employ subject to
its duty to pay them corresponding salaries. Moreover, the
hotel is not contractually given the right to dissociate them
for just or authorized causes. Finally, the hotel does not
exercise control over the means by which they deliver
medical services. On top of these, they are not economi-
cally dependent on the hotel but on Dr. Crisostomo.
Theory of Secondment
Question
Would the transfer of right of control and duty to pay
salary from X Co. to Y Co. by reason of a secondment
given to A affect the employer-employee relationship bet-
ween X Co. and A?
Answer
In a secondment, the sending company (X Co.)
moves its employee to the host company (Y Co.) for further
training, specialization, or like purposes. Usually, the sen-
ding company continues to pay the salaries of the em-
ployee but the host company may choose to discharge the
duty to pay salaries. Invariably, however, the host compa-
ny will control the means and methods of performance of
the employee. Since a secondment is a temporary move-
BAR SYLLABUS-BASED REVIEWER IN 271
LABOR LAW & SOCIAL LEGISLATION
ment or transfer only - subject to right of recall so that if
the employee will not return to the sending company then
the latter can proceed against him for damages - then the
loss of control is temporary also; hence, employer-emplo-
yee relationship is preserved. Therefore, the transfer of
right of control and duty to pay salary from X Co. to Y Co.
by reason of a secondment will not affect the employer-
employee relationship between X Co. and A.
Question
When is there no secondment?
Answer
In Intel Technology Philippines, Inc. v. NLRC, G.R.
No. 200575, 5 February 2014, the first 2 movements of the
employee (from Intel Ph to Intel Arizona, then from Intel Ph
to Intel Chengdu) were upon the instance of Intel Ph which
continued to pay his salaries. In other words, he enjoyed
two secondments or continuity of employment. But his third
movement from Intel Ph (while assigned at Intel Chengdu)
to Intel HK was upon his instance (he accepted a job offer
from Intel HK), and Intel HK assumed payment of his sala-
ries. Thus, he had no third secondment. Indeed, before
accepting the job offer, he wrote Intel Ph to inform it that if
he accepted the offer then he would become a local hire of
HK; he would cut his ties with Intel Ph; and he must
process his exit clearances. These words were manifestta-
tions that he was aware that his acceptance would mean
employment termination.
In Intel, the issue resolved was whether or not the
employee continued to be an employee of Intel Ph beyond
the date of his acceptance of the job offer of Intel HK. If so,
his 9.5 years (service credit before accepting the job offer)
stretched to 10 years and beyond. Hence, he would have
qualified for retirement benefits under the company's retire-
ment plan which required 10 years. However, the SC held
272 POST-EMPLOYMENT
that he had no third secondment. Hence, he was disquali-
fied because he had 9.5 years only.
Quasi-Contract Doctrine
Question
Control is the most important element of the Fourfold
Test; thus, it is determinative of EER. In contrast, the ele-
ment of selection is not as determinative. Cite an instance,
with illustration, when the latter element becomes the
controlling element.
Answer
One particular instance is when control is let to
another party by the engaging party for the purpose of
circumventing the law.
Illustration:
Century Properties Co., a U.S. real estate company not
authorized to do business in the Philippines, hires a Filipino
national. However, the employee is on the payroll of
Robinsons Land Corporation, a local real estate developer,
which supervises his performance at work. The scheme
serves the purpose of letting the foreign company conduct
business in the Philippines without permit, and without having
to pay taxes. Under this scheme, the local company cannot
retrench said employee because the right to dismiss belongs
to the hiring company which is deemed the contractual
employer. If the retrenchment is carried out by the local com-
pany, both companies shall incur liability. "Certain lawful, vo-
luntary and unilateral acts give rise to the juridical relation of
quasi-contract to the end that no one shall be unjustly enriched
at the expense of another." (Art. 2142, New Civil Code).
The foregoing illustration is based on American Power
Qonversion Corp., et al. v. Jason Yu Lim, G.R. No. 214291,
11 January 2018.
BAR SYLLABUS-BASED REVIEWER IN 273
LABOR LAW & SOCIAL LEGISLATION
Characteristics of Employer-Employee Relationship
1. In Personam
2015 Bar, Question No. XII
Blank Garments, Inc. (BLANK), a clothing manufactu-
rer, employs more than 200 employees in its manufactu-
ring business. Because of its high overhead, BLANK deci-
ded to sell its manufacturing business to Bleach Gar-
ments.Inc. (BLEACH) lock, stock and barrel which included
goodwill, equipment, and personnel. After taking on
BLANK's business, BLEACH reduces the workforce by not
hiring half the workers specifically the ones with seniority.
BLANK and BLEACH are still discerned to be sister
companies with identical incorporators. The laid-off emplo-
yees sue both BLANK and BLEACH for unlawful ter-
mination.
a. How would you decide this case? (4%)
b. What is the "successor employer" doctrine? (2%)
Answer
(a) I will resolve the case by applying the Principle of
Total Insulation. Under this principle, BLANK and BLEACH
have distinct and separate legal personalities regardless of
the fact that they have common incorporators. Hence, un-
less BLEACH absorbs all the workers of BLANK then it
does not succeed as employer. Since it has decided not to
employ the complainants, BLEACH is totally insulated from
whatever liabilities BLANK may have incurred by reason of
its closure. There are no facts to justify imposition of un-
altered responsibility on BLEACH since neither Principle of
Piercing the Veil of Corporate Fiction nor Instrumentality
Rule can be applied based on mere perception.
(b) The Successor Employer Doctrine rests on the
in personam character of employer-employee relationship.
274 POST-EMPLOYMENT
A third party that buys the business of the employer does
not become the new employer of the E;lmployees of the
selling employer. For this reason, it is totally insulated from
the liabilities of the latter in relation to its displaced
employees. By way of exception, when established facts
justify the application of the Principle of Piercing the Veil of
Corporate Fiction or Instrumentality Rule then the liability
of the first corporation may be imposed on the second in its
original form pursuant to the Principle of Unaltered
Responsibility.
2. Contractual and Impressed with Public Interest (Art.
1700, New Civil Code)
3. Shared-Responsibility (Sec. 3, Art. XIII, Constitution)
4. Inter-Party (Prof. Azucena)
5. Master-Servant Relationship (Prof. Alcantara)
(2)
Job Contracting v. Labor Contracting
ART. 106. Contractor or Subcontractor.-When-
ever an employer enters into a contract with another person
for the performance of the farmer's work, the employees of
the contractor and of the latter's subcontractor, if any, shall
be paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to
pay the wages of his employees in accordance with this
Code, the employer shall be jointly and severally liable with
his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the
same manner and extent that he is liable to employees
directly employed by him.
The Secretary of Labor and Employment may, by ap-
propriate regulations, restrict or prohibit the contracting-out
of labor to protect the rights of workers established under
BAR SYLLABUS-BASED REVIEWER IN 275
LABOR LAW & SOCIAL LEGISLATION
this Code. In so prohibiting or restricting, he may make ap-
propriate distinctions between labor-only contracting and
job contracting as well as differentiations within these types
of contracting and determine who among the parties
involved shall be considered the employer for purposes of
this Code, to prevent any violation or circumvention of any
provision of this Code.
There is "labor-only" contracting where the person
supplying workers to an employer does not have substan-
tial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the wor-
kers recruited and placed by such person are performing
activities which are directly related to the principal business
of such employer. In such cases, the person or interme-
diary shall be considered merely as an agent of the em-
ployer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed
by him.
Subject Matter
1. The subject matter of Art. 106 is unpaid wages.
Of course, it includes wage-related withholdings.
2. Service contracting contemplates a trilateral rela-
tionship between a Principal (P, user of services), a Con-
tractor (C, supplier of services) and Workers {W, source of
services).
3. A trilateral contracting arrangement is either law-
ful or not. If it is in the nature of a job contractorship, it is
permissible. However, if it has the features of a labor-only
contractorship then it is prohibited, infra.
ART. 107. Indirect Employer.-The provisions of
the immediately preceding article shall likewise apply to
any person, partnership, association or corporation which,
not being an employer, contracts with an independent
276 POST-EMPLOYMENT
contractor for the performance of any work, task, job or
project.
Trilateral Relationship
1. In the trilateral relationship between P, C and W,
there will always be employer-employee relationship (EER)
between P and W. Either that EER is real or statutory only.
2. Where C is a legitimate job contractor, the EER
between P and W is statutory; whereas, where C is a
labor-only contractor then that EER is real.
2.1. Where the EER is statutory, P will be solida-
rily liable with C; however, the extent of that solidary
liability is limited, i.. e., limited to the wages and wage-
related benefits unlawfully withheld by C.
2.2. Where the EER is real, P will be solidarily
liable with C and the extent of its solidary liability is
comprehensive. In other words, it will go beyond un-
paid wages and benefits. Hence, P can be ordered to
pay a monetary award resulting from C's act of ille-
gally dismissing W.
3. A statutory employer is also known as an indirect
employer (Art. 107).
ART. 108. Posting of Bond.-An employer or in-
direct employer may require the contractor or subcontrac-
tor to furnish a bond equal to the cost of labor under con-
tract, on condition that the bond will answer for the wages
due the employees should the contractor or subcontractor,
as the case may be, fail to pay the same.
ART. 109. Solidary Liability.-The provisions of
existing laws to the contrary notwithstanding, every emplo-
yer or indirect employer shall be held responsible with his
contractor or subcontractor for any violation of any provi-
sion of this Code. For purposes of determining the extent
BAR SYLLABUS-BASED REVIEWER IN 277
LABOR LAW & SOCIAL LEGISLATION
of their civil liability under this Chapter, they shall be consi-
dered as direct employers.
Solidary Liability
1. Extent of Solidary Liability in Job Contracting
1.1. Prof Azucena has quarrelled with Art. 109 so far
as it stretches the solidary liability of the principal of a legiti-
mate job contractor to any violation of any provision of P.O.
442. As worded, it means that P can be made to pay back-
wages and separation pay which are the logical consequen-
ces of a finding of illegal dismissal - not withholding of wages
and wage-related benefits as contemplated by Art. 106.
1.2. In Mera/co Industrial Engineering Services, Inc. v.
NLRC, G.R. No. 145402 , 14 March 2008, it was clarified that
P's solidary liability with its job contractor must be limited to
unpaid wages only as contemplated by Art. 106.
2. D.O. 18-A; D.O. 174, s. 2017; E.O. 51, 2018
The law on job contracting, which is a mainstay Bar
area, has been simplified with a diagram, Appendix "B".
One should stop reading at this point again, go to the appen-
dix, and take a clear picture of it before returning to this page.
Explanatory Notes (view your cellphone):
1. Job contractorship (JC) is a trilateral relation-
ship between a principal (P), contractor (C) and workers
(W). In contrast, independent contractorship (IC) is a bila-
teral relationship.
2. There is a line that connects P to W. It represents
EER; hence, P cannot deny EER anymore. That EER may
be real or statutory only. If C is a labor-only contractor
(LoC), it is a real EER because the real employer is P. C is
just his agent or manpower recruiter. However, if C is a
legitimate job contractor (JC), the EER between P and W
is a statutory EER only.
278 POST-EMPLOYMENT
3. C might violate the rights of W under: (a) LSL, as
when he does not pay his wages and benefits; (b) Book IV,
as when he requires him to work under hazardous working
conditions resulting in bodily injury; (c) LRL, as when he
illegally dismisses him; or (d) SocLeg as when he does not
report him for SSS coverage.
4. W will then sue both C and P. In such event, P's
solidary liability with C will be as follows:
4.1. Limited, if C is a JC. Limited solidary liabi-
lity means that P can only be ordered to pay wages
and benefits illegally withheld by C (Art. 106, Labor
Code; Mera/co Industrial Engineering Services, Inc. v.
NLRC, 14 March 2008).
4.2. Comprehensive, if C is an LoC. Compre-
hensive solidary liability means that P can be held
liable for all the violations of C because he (P) is the
real employer of W.
5. The status of C is determined as follows:
5.1. JC if he has substantial capital or invest-
ment; or
5.2. LoC if he is EE + CE1; or EE + CE2 (Prof
Azucena).
6. Substantial capital is P5M under D.O. 174. In-
vestment, owned or leased, must consist of tools, equip-
ment, machineries or work premises.
7. The essential element (EE) of LoC is that C is not
substantially capitalized or not possessed with investment
in the form of tools, equipment, machineries or work pre-
mises. But his LoC status requires attendance of a confir-
ming element (CE). There are 2 CEs, viz.,CE1 (W is per-
forming work directly related to the usual trade of P) and
CE2 (C does not control W's means and methods of per-
formance; it is P who does).
BAR SYLLABUS-BASED REVIEWER IN 279
LABOR LAW & SOCIAL LEGISLATION
7.1. Type 1 LoC. He has no substantial capital
or investment and his workers are performing work
directly related to the trade of his principal.
7.2. Type 2 LoC. He has no substantial capital
or investment and he does not control his workers'
means and methods of performance.
8. Between LoC arrangements and JC arrange-
ments, only the second is allowed. However, there are ap-
parent JC arrangements which are prohibited. C may be
substantially capitalized or possessed with the required
investment. However, the effects of the apparent JC ar-
rangement are disadvantageous to W or the regular wor-
kers of P as follows:
8.1. As to W
C is just an in-house contractor, as when it has
been created by P, funded by P, its policies are deter-
mined by P, and it has only one client, P. Under the
Alter Ego Theory, the arrangement has to be struck
down since it actually amounts to an LoC arrange-
ment disadvantageous to W.
8.2. As to the regular employees of P
The effects of the arrangement between P and C
should be examined. The apparent JC arrangement is
void in the following cases:
8.2.1. Partial Displacement
The supplied manpower (Ws) perform portions of
the work of P's regular employees.
8.2.2. Violation of Tenurial Right
The right to security of tenure of P's regular
workers is violated, as when an overmanning results
leading to the redundation of the positions of those
regular employees; or
8.2.3. Violation of Right to Self-Orga-
nization
 280 POST-EMPLOYMENT
The right to self-organization of P's regular em-
pl~yees is viol~ted, as when Ws are engaged in vio-
lation of the union security clause, e.g., closed shop.
Related Matters:
.. 1. ~ontracting out or outsourcing of services to a
leg1t1mate Job contractor is permissible. Both core and non-
core (peripheral) services can be let to a provider (Alviado
et al. v. Proctor & Gamble Phils., Inc, G.R. No. 160506,
March 2010), except to a labor-only contractor.
2._ Offshoring of services to the Philippines thru in-
formation technology (IT-enabled business outsourcing) is
not cov~red by th~ _rul~s. Likewise, if the provider is regis-
tered with the Ph1/tppme Contractors Accreditation Board
(PCAB) ~hen r~gulatory power shall be exercised by the
board. Finally, Job contracting rules do not cover canteen
concessionaires under a lease contract or contract to
operate (DOLE Advisory 01-203-12).
Example of Offshoring:
An American hospital (the equivalent of a principal)
offs~ores medic~! . transcription services to a Philippine
medical transcription company (the equivalent of a
contractor). Thru IT (email, etc.), voice data consisting of
recorded observations of American doctors during their
rounds get transmitted to the local company for conversion
to read data. Thru IT, the read data are returned to the
hosp_ital. Since this i~ an IT-enabled service outsourcing,
the rights of the medical transcriptionists (the equivalent of
supplied manpower/workers) are not secured by local job
contracting rules.
. 3. D. 0. 174 prohibits "endo" practice or the termina-
tion of an employee after the expiration of his short-term
em~loyment contract which is usually the last of a series.
To illustrate: If the Service Agreement (SA) between the
BAR SYLLABUS-BASED REVIEWER IN 281
LABOR LAW & SOCIAL LEGISLATION
principal (P) and the contractor (C) is good for 2 years, the
Employment Contract (EC) between C and the worker (W)
must be for at least 2 years also, unless W is engaged for
a specific stage of the project. Hence, if W's engagement
has not been limited to a particular stage of the project
then he cannot be engaged and re-engaged under short
term employment contracts. If dissociated during the life of
the SA based on the expiration of his last short-term em-
9 ployment contract, he shall be deemed illegally dismissed.
Under the rules, what controls is completion of project and
not expiration of contract.
E.O. 51, s. 2018 simply echoes anti-labor-only
contracting rules.
4. Within the trilateral relationship established
between P, C and W, there may be violations by C of the
rights of W under: (a) Labor Standards Law (remunerative
type) as when he withholds the salaries and benefits due
W; (b) under health and safety rules (protective type) as
when he requires W to work under hazardous working
conditions resulting in bodily injury; (c) Labor Relations
Law as when he illegally dismisses W; or (d) Social
Legislation is when he omits reporting W for SSS
coverage. In light of these violations, W may take legal
action against Wand P.
5. Questions
5, 1 Is there a need for W to implead both C and
P?
5.2. Can P interpose the defense of lack of
employer-employee relationship between
himself and W?
5.3. What are the liabilities of P if
(a) C is a legitimate job contractor (JC)?
(b) C is a labor-only contractor (LoC)?
282 POST-EMPLOYMENT
BAR SYLLABUS-BASED REVIEWER IN 283
LABOR LAW & SOCIAL LEGISLATION

5.4. What qualifies C as a legitimate JC?

5.5. What makes C an LoC? ' of reinstatement and related relief which are the
Answers
5.1. If C is an LoC, W need not implead C and
P. In labor-only contracting, the legal personality of p
merges with that of C. This is by force of the Principle
of Merger of Legal Personalities ( Coca-Cola Bottlers
(Phils), Inc. v. Dela Cruz, et al., G.R. No. 184977, 7
December 2009). Reason: C is just the agent of P, or
a recruiter of manpower. However, if C is a JC then
W must implead both. Reason: C and P are imposed
solidary liability by Art. 106 of the Labor Code. Signi-
ficantly, solidary liability is the liability of more than
one. In other words, one cannot be held solidarily
liable with himself.
5.2. P can no longer interpose the defense of
lack of EER. Regardless of the status of his contrac-
tor, he shall be treated as the employer of W. If C is
an LoC, he is the real employer of W. On the other
hand, if C is a JC then he shall be deemed as W's
statutory employer.
5.3. With C, P shall be solidarily liable to W as
follows:
(a) If C is an LoC, P's solidary liability
shall be "comprehensive" or a "top to bottom" lia-
bility. This means that he can be held answe-
rable for all the violations of C since he is the real
employer of W.
(b) If C is a JC, P's solidary liability shall
be "limited" only, i.e., to the wages and benefits
unlawfully withheld by C (Mera/co Industrial Engi-
neering Services, Inc. v. NLRC, G.R. No.
145402, 14 March 2008). Hence, he cannot be
ordered to pay backwages, separation pay in lieu
consequences of C's violation of Labor Relations
Law.
Note: Jurisprudence overrides the letter of
Art. 109, Labor Code, which extends P's solidary
liability to violations of "any provision" of the
Labor Code even if C is a JC. Likewise, it
corrects the implementing rules (D.O. 18-02,
D.0. 18-A) which even stretched such liability to
violations of social legislation. Hence, P cannot
be required to report W for SSS coverage if his
contractor is a JC.
5.4. C is a JC if:
(a) It has a D. 0. 174 Certificate of
Registration (CR);
(b) It carries on an independent business
(Polyfoam- RGC International Corp.,
et al. v. Edgardo Concepcion, G.R.
No. 172349, 13 June 2012);
(c) It performs the outsourced service or
work on its own account;
(d) It is free from P's control as to the
means and methods by which it exe-
cutes its work; and
(e) It uses is capital or investment directly
and actually in performing or comple-
ting its work.
5.5. When C is an LoC:
(a) Disputably presumed an LoC if it has
no D.O. 174 CR;
(b) Absolutely an LoC if an EE+ CE1 or
284 POST-EMPLOYMENT
(i) EE- Essential Element (No subs-
tantial capita1I or investment)
(ii) CE- Confirming Element
CE1 (W is performing work directly
related to the trade of P); or
CE2 (C does not control W's
means and methods or perfor-
mance)
6. Case
Manila Memorial Park Cemetery, Inc. v. Lluz, et al.
G.R. No. 208451, 3 February 2016
6.1. P (owner of the memorial park); C (engaged
to bury the dead, exhume them, etc.)
6.2. SA provided:
6.2.1. C shall buy Php1 .4M worth of
equipment from P for its use in the
cemetery;
6.2.2. C must store the equipment inside
P's premises;
6.2.3. C shall hold office inside P's
premises;
6.2.4. C's employees shall be supervised
by P's personnel; and
6.2.5. P can take over the work if not
satisfied with C's performance.
6.3. C is an LoC because:
6.3.1. It is not substantially capitalized. Its
reported profit was P50K only;
hence, it could not have paid for
equipment worth Php1 .4M. Besides,
BAR SYLLABUS-BASED REVIEWER IN 285
LABOR LAW & SOCIAL LEGISLATION
there was no proof that the sale was
actually carried out;
6.3.2. It had no investment in the form of
equipment and no work premises;
6.3.3. It was not independent of P whose
personnel supervised its employees;
and
6.3.4. P reserved the right to perform the
outsourced work.
Note:
Apparent (looks like) JC Arrangement: When Void and
Treated as LoC Arrangement
"C" may be substantially capitalized or possessed
with investment as to qualify as a JC. However, the conse-
quences of the SA it has with P will make the contracting
arrangement an LoC arrangement - hence, prohibited - in
the following instances:
(1) C, which is a JC on the surface, is an "in-house"
contractor. It was organized by P; it is funded by P; its poli-
cies are determined by P; and it has one client only, viz., P.
In this situation, the supposed JC arrangement is a circum-
vention of law.
(2) Apparent JC arrangement will introduce Ws into
the manpower of. P. Where P has regular employees
(REs ), the effects of the entry of Ws are:
(a) Ws will start performing portions of the work
being performed by REs;
(b) Entry of Ws will result in the violation of
RE's right to security of tenure, as when the apparent
JC arrangement results in over-manning as to justify
the redundation of positions. However, REs are
286 POST-EMPLOYMENT
dismissed instead of Ws;
(c) Entry of Ws will violate RE's right to self-
organization, as when the entry of Ws will render a
strike ineffective.
Legal Significance of a Certificate of Registration
To prove JC status, it is not enough to present the
contr~ctor's D.O. 174 Certificate of Registration (CR). A
CR will only prevent the presumption that the contractor is
an Loe from arising (Philippine Pizza, Inc. v. Cayetano, et
al., G.R. No. 230030, 29 August 2018). Hence, It must also
be proven that it carries on an independent business (Poly-
f~am- RGC International Corp., et al. v. Edgardo Concep-
cion, G.R. No. 172349, 13 June 2012); it performs the out-
sourced service or work on its own account; it is free from
P's control as to the means and methods by which it exe-
cutes its wor_k; and It ~ses is capital or investment directly
and actually in performing or completing its work.
Hypothetical Question
A D.O. 174 Certificate of Registration (CR) prevents
the presumption that the contractor is a labor-only
contractor from arising.
a. Does it necessarily follow that the registrant can
be presumed a legitimate job contractor?
b. If any burden has to be discharged at all, what is
that burden and how should it be discharged?
Proposed Answer
a. A D.O. 174 CR enjoys the presumption of validity
owing to the presumption that the DOLE-RD regularly per-
formed his work in qualifying the registrant. In other words,
his determination that the latter has the requisite net con-
tracting financial capacity, i.e., substantial capital or invest-
ment, is presumed to have been regularly arrived at. Since
BAR SYLLABUS-BASED REVIEWER IN 287
LABOR LAW & SOCIAL LEGISLATION
there are two kinds of contractors only, viz., job contractor
and labor-only contractor, the failed presumption that the
registrant is a labor-only contractor logically and necessari-
ly gives rise to the disputable presumption that it is a
legitimate contractor (Principle of Elimination; or Disjunc-
tive Syllogism: (p or q; not p; ergo, q )2.
b. The burden is to overcome the disputable pre-
sumption that the contractor is a legitimate job contractor.
Hence, the other party, e.g., worker, must prove that: the
contractor is an in-house contractor; it does not carry on an
independent business; it does not perform its work inde-
pendently of its principal as to means and methods of
performance; it has no work premises; its supposed wor-
kers use materials and equipment supplied by its principal;
and it does not use its capital or investment actually and
directly in performing its work.
Service Agreement (SA) v. Distributorship Agreement
(DA)
Based on Nestle Philippines, Inc. v. Benny Puedan, Jr.,
et al, G.R. No. 220617, 30 January 2017 and related cases,
the following are the distinctions between an SA and DA:
1. Points of Distinction
1.1. As to Legal Tie
In SA, the primary parties are the principal (P) and
the contractor (C); in DA, the primary parties are the Manu-
facturerNendor (MN) and the DistributorNendee (ON);
1.2. As to Business
In SA, P outsources services to C; in DA, MN
sells goods to DN to be sold to the public.
2
Symbolic Logic, Disjunctive Syllogism:
pvq
-p
ergo, q
288 POST-EMPLOYMENT
1.3. As to Manpower
In SA, C provides manpower to perform the
service outsourced by P to it; in DA, DN's workers
sell the goods it purchased from MN.
1 .4. As to Regulatory Law
SA is regulated by Labor Law; DA is regulated by
Civil Law.
2. Rights of Workers
In SA, the workers are the statutory employees of P;
hence, they can seek relief from him for wages and benefits not
paid by C. In DA, they are the employees of DN; hence, they
have no recourse against MN under Art. 106, Labor Code.
Previous Bar Questions
(2008-2019)
2008 Bar, Question No. V
The Pizza Corporation (PizCorp) and Ready Supply
Cooperative (RSC) entered into a "service agreement"
where RSC in consideration of service fees to be paid by
PizCorp's will exclusively supply PizCorp with a group of
RSC motorcycle-owning cooperative members who will
henceforth perform PizCorp's pizza delivery service. RSC
assumes under the agreement full obligation for the
payment of the salaries and other statutory monetary
benefits of its members deployed to PizCorp. The parties
also stipulated that there shall be no employer-employee
relationship between PizCorp and the RSC members.
However, if PizCorp is materially prejudiced by any act of
the delivery impose disciplinary sanctions on, including the
power to dismiss, the erring RSC member/s.
a. Is the contractual stipulation that there is no em-
ployer-employee relationship binding on labor officials?
Why? Explain fully. (3%)
BAR SYLLABUS-BASED REVIEWER IN 289
LABOR LAW & SOCIAL LEGISLATION
b. Based on the testis for employer-employee rela-
tionship, determine the issue of who is the employer of the
RSC members. (4%)
c. Assume that RSC has a paid-up capitalization of
P1 ,000,000.00. Is RSC engaged in "labor only" contrac-
ting, permissible job contracting, or simply recruitment?
(3%)
Answer
(a) No.
The stipulation against employer-employee relation-
ship is not valid for these reasons: (1) employer-employee
relationship is a question of law; and (2) it is a question of
fact. As a question of law, controlling case law supplies its
cognitive significance; hence, if it exists within the contem-
plation of the Four-fold Test then it exists in law. As a
question of fact, actual work circumstances determine
whether its legal meaning has factual representation in the
affair between two persons; hence, if the control element is
actualized in said affair then employer-employee relation-
ship exists as a fact.
For the foregoing reasons, parties to contracts cannot
stipulate against the existence of employer-employee
relationship.
(b) PizCorp is the employer of the RSC members.
Since PizCorp exercises labor law concept of control -
or control over means and methods of performance as
distinct from other types of control, e.g., editorial right,
built-in control in insurance, sound business practice, and
post production control - then it is the actual employer of
the supplied manpower.
The exercise by PizCorp of disciplinary powers does
not evidence its right to dismiss only. It also manifests its
right of control because the grounds for its exercise cover
290 POST-EMPLOYMENT
an unspecified number of infractions, foremost of which is
non-observance of directives and orders, on how the con-
tractor-supplied employees should perform their assigned
tasks.
(c) RSC is engaged in labor-only contracting.
RSC's paid-up capital of P1 ,000,000.00 falls short of
the contracting financial capacity of P5,000,000.00 pres-
cribed by 0.0. 174. Moreover, not only does it lack subs-
tantial capital; its manpower is also controlled by its princi-
pal as to means and methods of performing its work.
In sum, the illegal status of RSC is evidenced by its
having both the essential and confirming elements of a
labor-only contractor.
2009 Bar, Question No. XIV
Jolli-Mac Restaurant Company (Jolli-Mac) owns and
operates the largest food chain in the country. It engaged
Matiyaga Manpower Services, Inc. (MMSI), a job contrac-
tor registered with the Department of Labor and Employ-
ment, to provide its restaurants the necessary personnel,
consisting of cashiers, motorcycle delivery boys and food
servers, in its operations. The Service Agreement war-
rants, among others, that MMSI has a paid- up capital of
P2,000,000.00; that it would train and determine the
qualification and fitness of all personnel to be assigned to
Jolli-Mac; that it would provide these personnel with proper
Jolli-Mac uniforms; and that it is exclusively responsible to
these personnel for their respective salaries and all other
mandatory statutory benefits.
After the contract was signed, it was revealed, based
on research conducted, that MMSI had no other clients
except Jolli-Mac, and one of its major owners was a mem-
ber of the Board of Directors of Jolli-Mac.
BAR SYLLABUS-BASED REVIEWER IN 291
LABOR LAW & SOCIAL LEGISLATION
a. Is the Service Agreement between Jolli-Mac and
MMSI legal and valid? Why or why not? (3%)
b. If the cashiers, delivery boys and food servers are
not paid their lawful salaries, including overtime pay, holi-
day pay, 13th month pay, and service incentive leave pay,
against whom may these workers file their claims? Explain.
(2%)
Answer
(a) No, the SA is not legal and valid for the following
reasons:
First, MMSI is an in-house contractor owing to the fact
that it is co-owned by Jolli-Mac which happens to be its
sole client;
Second, MMSI is not substantially capitalized since its
paid-up capital is below the required P5M capitalization;
and
Third, the workers supplied by MMSI to Jolli-Mac are
performing work directly related to the latter's trade.
(b) The unpaid workers can proceed against Jolli-
Mac for the payment of their salaries and mandatory bene-
fits since it is their actual employer. In labor-only contrac-
ting, which obtains in the premises, the legal personality of
the labor-only contractor mergers with that of its principal.
Hence, its violations of Labor Law will impose on its princi-
pal the comprehensive solidary liability of rectifying said
violations thru payment.
2012 Bar, Question No. I
a. Distinguish Labor-Only contracting and Job-Only
contracting. (5%)
b. X X X
292 POST-EMPLOYMENT
Answer
(a) In labor-only contracting:
1. The contractor is not substantially capitalized or
possessed with the investment in the form of tools, equip-
ment machineries or work premises and, in confirmation of
its labor-only contractor status, he does not exercise con-
trol over the means and methods of performance of the
workers it supplies to its principal, or said workers perform
work directly related to the latter's trade;
2. The contractor is a mere agent who recruits wor-
kers for its principal; hence, pursuant to the Principle of
Merger of Legal Personalities, its violations of Labor Law
and Social Legislation are attributable to its principal.
In job contracting:
1. The contractor is issued a certificate of Registra-
tion to protect public interest, the secretary of Labor can
exercise his discretionary power to assume jurisdiction
over the dispute.
2. The strikers' pending motion for reconsideration
does not affect the immediate character of the Secretary's
Return to Work Order. In fact, said order has an injunctive
effect; hence, immediately upon valid service thereof on
the union (University of the Immaculate Conception v. Sec.
of Labor, G.R. No 151379, 14 Jan. 2005)
3. Non-compliance with the Return to Work Order
amounts to non-compliance with an injunction. Hence, pur-
suant to the Injunction Test, the union's defiance thereof
renders its strike illegal. Being illegal, the union officers can
be dismissed. As to the union members, they cannot be
dismissed unless they have committed acts of illegality in
the course of the strike.
(b) X X X ~enewed every three months. However, in the bidding held
BAR SYLLABUS-BASED REVIEWER IN 293
LABOR LAW & SOCIAL LEGISLATION
2012 Bar, Question No. X
a. XYZ Manpower Services (XYZ) was sued by its
employees together with its client, ABC Polyester Manu-
facturing Company (ABC). ABC is one of the many clients
of XYZ. During the proceedings before the Labor Arbiter,
XYZ was able to prove that it had substantial capital of
Three Million Pesos. The Labor Arbiter ruled in favor of the
employees because it deemed XYZ as a labor only con-
tractor. XYZ was not able to prove that it had invested in
tools, equipment, etc. Is the Labor Arbiter's ruling valid?
Explain. (5%)
b. Does the performance by a contractual emplo-
yee, supplied by a legitimate contractor, of activities direct-
ly related to the main business of the principal make him a
regular employee of the principal? Explain. (5%)
Answer
(a) Yes. With a capital of less than Five Million
Pesos, XYZ is a labor-only contractor, (D.O. 174). On top
of this, it has no investment in the form of tools, equipment,
machineries and work premises. Lacking in net financial
contracting capacity, it cannot overcome the presumption
that it is a labor-only contractor.
(b) No. When the contractor, who is substantially
capitalized or possessed with investment, carries on a
business independent of its principal's, it does not matter if
its workers are performing tasks directly related to the
business of said principal as long as the latter does not
control their means and methods of performance.
2014 Bar, Question No. IV
Linis Manpower, Inc. (LMI) had provided janitorial
services to the Philippine Overseas Employment Adminis-
tration (POEA) since March 2009. Its service contract was
in June 2012, LMI was disqualified and excluded. In 2013,
294 POST-EMPLOYMENT
six janitors of LMI formerly assigned at POEA filed a com-
plaint for underpayment of wages. Both LMI and POEA
were impleaded as respondents. Should POEA, a govern-
ment agency subject to budgetary appropriations from
Congress, be held liable solidarity with LMI for the payment
of salary differentials due the complainant? Cite the legal
basis of your answer. (4%)
Answer
Yes.
The POEA, although a government agency, is a
statutory employer by operation of Article 106 of the Labor
Code, as implemented by D.O. 18-A (now D.O. 174). As
such, it can be held solidarity liable for salary differentials
resulting from its job contractor's underpayment of salaries
due its workers (Meralco Industrial Eng'g ruling, 14 March
2008).
2014 Bar, Question No. IX
Luisa Court is a popular chain of motels. It employs
over 30 chambermaids who, among others, help clean and
maintain the rooms. These chambermaids are part of the
union rank-and-file employees which has an existing
collective bargaining agreement (CBA) with the company.
While the CBA was in force, Luisa Court decided to abolish
the position of chambermaids and outsource the cleaning
of the rooms to Malinis Janitorial Services, a bona fide
independent contractor which has invested in substantial
equipment and sufficient manpower. The chambermaids
filed a case of illegal dismissal against Luisa Court. In
response, the company argued that the decision to
outsource resulted from the new management's directive
to streamline operations and save on costs. If you were the
Labor Arbiter assigned to the case, how would you
decide? (4%)
BAR SYLLABUS-BASED REVIEWER IN 295
LABOR LAW & SOCIAL LEGISLATION
Answer
I would declare the chambermaids to have been
illegally dismissed.
The chambermaids are regular employees for
performing work necessary or desirable to the main trade
of the Luisa Court. As such, they enjoy security of tenure.
The job contracting arrangement between Luisa Court and
Malinis Janitorial Services is prohibited by D.O. 18-A
because it has the effect of introducing workers to displace
Luisa Court's regular workers.
2015 Bar, Question No. VII
Don Don is hired as a contractual employee of
CALLHELP, a call center. His contract is expressly for a
term of 4 months. Don Don is hired for 3 straight contracts
of 4 months each but at 2-week intervals between con-
tracts. After the third contract ended, Don Don is told that
he will no longer be given another contract because of
"poor performance." Don Don files a suit for "regulariza-
tion" and for illegal dismissal, claiming that he is a regular
employee of CALLHELP and that he was dismissed
without cause. You are the Labor Arbiter. How would you
decide the case? (4%)
Answer
I will decide the case by applying the contract of ad-
hesion rule. Given the nature of Don Don's work , which is
usually necessary and desirable in the usual trade of
HELPCALL, as well as the short intervals between his
fixed-term contracts, there is no doubt that periods were
resorted to for purposes of circumventing the law on te-
nure. Therefore, since it was the company that prepared
the three contracts, with Don Don's participation being limi-
ted to affixing his signature thereto only, the 4-month
periods must be takeri against it. Having attained tenure,
therefore, Don Don cannot be dismissed for poor perfor-
296 POST-EMPLOYMENT
mance because said ground is neither a just nor an autho-
rized cause.
2016 Bar, Question No. XVIII
Empire Brands (Empire) contracted the services of
Style Corporation (Style) for the marketing and promotion
of its clothing line. Under the contract, Style provided
Empire with Trade Merchandising Representatives (TMRs)
whose services began on September 15, 2004 and ended
on June 6, 2007, when Empire terminated the promotions
contract with Style.
Empire then entered into an agreement for manpower
supply with Wave Human Resources (Wave). Wave owns
its condo office, owns equipment for the use by the TMRs,
and has assets amounting to Pl,000,000.00. Wave provi-
ded the supervisors who supervised the TMRs, who, in
tum, received orders from the Marketing Director of Em-
pire. In their agreement, the parties stipulated that Wave
shall be liable for the wages and salaries of its employees
or workers, including benefits, and protection due them, as
well as remittance to the proper government entities of all
withholding taxes, Social Security Service, and Philhealth
premiums, in accordance with relevant laws.
As the TMRs wanted to continue working at Empire,
they submitted job applications as TMRs with Wave. Con-
sequently, Wave hired them for a term of five (5) months,
or from June 7, 2007 to November 6, 2007, specifically to
promote Empire's products.
When the TMRs' 5-month contracts with Wave were
about to expire, they sought renewal thereof, but were
refused. Their contracts with Wave were no longer re-
newed as Empire hired another agency. This prompted
them to file complaints for illegal dismissal, regularization,
non-payment of service incentive leave and 13th month
pay against Empire and Wave.
BAR SYLLABUS-BASED REVIEWER IN 297
LABOR LAW & SOCIAL LEGISLATION
a. Are the TMRs employees of Empire? (2.5%)
b. Were the TMRs illegally dismissed by Wave?
(2.5%)
Answer
(a) Empire is the employer of the TMRs. When it
entered into a contracting arrangement with Style, an ap-
parent labor-only contractor for want of substantial capital
or investment, it became the TMR's employer pursuant to
the Principle of Merger of Legal Personalities (Coca-Co/a
Bottlers Phil., Inc. v. Ricky E. de/a Cruz, et al., 7 December
2009). Albeit Wave was a legitimate job contractor, the
service contract between them did not novate the legal
obligations imposed by the first contract on Empire. Hence,
it continued to be the employer of the TMRs beyond the
date of termination of its contract with Style. As a result, it
can be ordered to pay the withheld benefits.
(b) Yes. The TMRs' fixed-term employment contracts
are void. First, employer-employee relationship is a ques-
tion of law. Since it existed as early as the time the TMRs
were supplied by Style to Empire, its continuing existence
cannot be stipulated against in the fixed-term employment
contracts subsequently given the former. Setting aside the
pre-existence of the relationship, the service agreement
between Empire and Wave has no period. Therefore, the
5-month limit on the TMRs' tenure is without basis. As a
consequence, they are deemed to have been engaged as
long as the task or undertaking contracted out to Wave
subsists. Under D.O. 174, it is the completion of said
undertaking and not the expiration of the TMRs' contracts
which controls.
2016 Bar, Question No. XX
Mario Brothers, plumbing works contractor, entered
into an agreement with Axis Business Corporation (Axis)
for the plumbing works of its building under construction.
Mario Brothers engaged the services of Tristan, Arthur,
298 POST-EMPLOYMENT
and Jojo as plumber, pipe fitter, and threader, respectively.
These workers have worked for Mario Brothers in nume-
rous construction projects in the past but because of their
long relationship, they were never asked to sign contracts
for each project. No reports to government agencies were
made regarding their work in the company.
During the implementation of the works contract, Axis
suffered financial difficulties and was not able to pay Mario
Brothers its past billings. As a result, the three (3) emplo-
yees were not paid their salaries for two (2) months and
their 13th month pay. Because Axis cannot pay, Mario
Brothers cancelled the contract and laid off Tristan, Arthur,
and Jojo. The 3 employees sued Mario Brothers and Axis
for illegal dismissal, unpaid wages, and benefits.
a. Mario Brothers claims the 3 workers are project
employees. It explains that the agreement is, if the works
contract is cancelled due to the fault of the client, the
period of employment is automatically terminated. Is the
contractor correct? Explain. (2.5%)
b. Can Axis be made solidarily liable with Mario
Brothers to pay the unpaid wages and 13 th month pay of
Tristan, Arthur, and Jojo? Explain. (2.5%)
Answer
(a) The contractor is not correct. The three workers
are regular employees for having rendered services neces-
sary, desirable, vital and indispensable to the usual busi-
ness of Mario Brothers for several years (Art. 295, Labor
Code). Hence, they cannot be terminated except for a just
or authorized cause (Art. 294, Labor Code). Since mere
cancellation of the works contract is neither just nor
authorized cause, they are deemed illegally dismissed.
(b) As the principal of a legitimate job contractor,
Axis is imposed the solidary liability to pay the wages and
benefits withheld by its contractor (Art. 106, Labor Code;
BAR SYLLABUS-BASED REVIEWER IN 299
LABOR LAW & SOCIAL LEGISLATION
Mera/co Industrial Engineering Setvices Corp. v. NLRC,
G.R. No. 145402, 14 March 2008). Hence, Axis can be
made solidarily liable with Mario Brothers for payment of
the wages and 13th month pay of Tristan, Arthur and Jojo.
2017 Bar, Question No. X(A)
A. The labor sector has been loudly agitating for the
end of labor-only contracting, as distinguished from job
contracting. Explain these two kinds of labor contracting,
and give the effect of a finding that one is a labor-only
contractor. Explain your answers. (4%)
X X X
Answer
A. Distinction:
Job contracting entails a trilateral affair between a
principal, contractor and worker. In this type of contracting,
the contractor is substantially capitalized or possesses
investment in the form of tools, equipment, machineries
and work premises as to have contracting capacity. In
addition, it controls the means and methods of the worker
who renders services in a business undertaking indepen-
dently carried out by the contractor. In contrast, labor-only
contracting is prohibited because the contractor lacks
substantial capital or investment and his worker performs
work directly related to the trade of his principal, or he does
not exercise labor law concept of control over the latter.
The finding that one is a labor-only contractor results
in merger of legal personalities, i.e., the principal's legal
personality mergers with that of his labor-only contractor.
In a case initiated by the worker's complaint, therefore, the
contractor is not a necessary party. (Coca-Co/a Bottlers
Phils., Inc. v. Dela Cruz, et.al., G.R. No.184977, 7 Decem-
ber 2009).
X X X
300 POST-EMPLOYMENT
2018 Bar Question No. VIII
Nathaniel has been a salesman assigned by
Newmark Enterprises (Newmark) for nearly two years at
the Manila office of Nutrition City, Inc. (Nutrition City). He
was deployed pursuant to a service agreement between
Newmark and Nutrition City, the salient provisions of which
were as follows:
a) the Contractor (Newmark) agrees to perform and
provide the Client (Nutrition City), on a non-exclusive
basis, such tasks or activities that are considered contrac-
tible under existing laws, as may be needed by the Client
from time to time;
b) the Contractor shall employ the necessary per-
sonnel like helpers, salesmen, and drivers who are deter-
mined by the Contractor to be efficiently trained;
c) the Client may request replacement of the Con-
tractor's personnel if quality of the desired result is not
achieved;
d) the Contractor's personnel will comply with the
Client's policies, rules, and regulations; and
e) the Contractor's two service vehicles and neces-
sary equipment will be utilized in carrying out the provi-
sions of this Agreement
When Newmark fired Nathaniel, he filed an illegal
dismissal case against the wealthier company, Nutrition
City, Inc., alleging that he was a regular employee of the
same. Is Nathaniel correct? (2.5%).
Answer
No.
In job-contracting, the principal is a statutory employer
but for a limited purpose only, i.e., to ensure payment of
the wages unlawfully withheld by its service provider as
required by Art. 106 of the Labor Code (Mera/co Industrial
BAR SYLLABUS-BASED REVIEWER IN 301
LABOR LAW & SOCIAL LEGISLATION
Engineering Services, Inc. v. NLRC, G.R. No. 145402, 14
March 2008). Being substantially capitalized or in posses-
sion of required investment, Newmark is a legitimate job
contractor. Hence, applying Art. 106, its act of illegally dis-
missing Nathaniel will not create comprehensive solidary
liability on the part of its principal as to be liable therefor.
2019 Bar Question No. A. 7 (Part 1)
W Gas Corp. is engaged in the manufacture and dis-
tribution to the general public of various petroleum pro-
ducts. On January 1, 2010, W Gas Corp. entered into a
Service Agreement with Q Manpower Co., whereby the lat-
ter undertook to provide utility workers for the maintenance
of the farmer's manufacturing plant. Although the workers
were hired by Q Manpower Co., they used the equipment
owned by W Gas Corp. in performing their tasks, and were
likewise subject to constant checking based on W Gas
Corp. 's procedures.
On February 1, 2010, Mr. R, one of the utility
workers, was dismissed from employment in line with the
termination of the Service Agreement between W Gas
Corp. and Q Manpower Co. Thus, Mr. R filed a complaint
for illegal dismissal against W Gas Corp., claiming that Q
Manpower Co. is only a labor-only contractor. In the course
of the proceedings, W Gas Corp. presented no evidence to
prove Q Manpower Co.'s capitalization.
(a) Is Q Manpower Co. a labor-only contractor?
Explain. (2.5%)
(b) Will Mr. R's complaint for illegal dismissal against
W Gas Corp. prosper? Explain. (2.5%)
Answer
(a) Q Manpower Co., not being substantially capi-
talized and possessed with investment in the form of tools,
302 POST-EMPLOYMENT
equipment, machineries or work premises, is a labor-only
contractor. Relevantly, its apparent labor-only contractor
status is confirmed by the fact that it does not control the
means and methods of performance of the manpower it
supplied. Since both essential element and confirming
element are present, it is a labor-only contractor (Prof C.A.
Azucena, Book /).
(b) Yes, it will prosper. In labor-only contracting, the
legal personality of the principal merges with that of its
labor-only contractor who is just its agent ( Coca-Co/a
Bottlers Phils., Inc. v. de/a Cruz, et /., G.R. No. 184977, 7
Dec. 2009). Hence, pursuant to the Principle of Merger of
Legal Personalities, the former as the real employer can be
proceeded against for illegal dismissal despite the
termination of subject contracting agreement.
Independent Contractor
2016 Bar, Question No. II
Gregorio was hired as an insurance underwriter by
the Guaranteed Insurance Corporation (Guaranteed). He
does not receive any salary but solely relies on commis-
sions earned for every insurance policy approved by the
company. He hires and pays his own secretary but is
provided free office space in the office of the company. He
is, however, required to meet a monthly quota of twenty
(20) insurance policies, otherwise, he may be terminated.
He was made to agree to a Code of Conduct for under-
writers and is supervised by a Unit Manager.
a. Is Gregorio an employee of Guaranteed? Explain.
(2.5%)
b. Suppose Gregorio is appointed as Unit Manager
and assigned to supervise several underwriters. He holds
office in the company premises, receives an overriding
commission on the commissions of his underwriters, as
well as a monthly allowance from the company, and is
BAR SYLLABUS-BASED REVIEWER IN 303
LABOR LAW & SOCIAL LEGISLATION
supervised by a branch manager. He is governed by the
code of Conduct for Unit Managers. Is he an employee of
Guaranteed? Explain. (2.5%)
Answer
(a) No, Gregorio is not an employee. He is an inde-
pendent contractor because the control exercised by the
insurance company over him is not the labor law concept
of control but a legally prescribed control device. In other
words, it is not pervasive control over means and methods
of performance. He sold insurance policies free from any
form of company prescriptions or proscriptions as to how to
sell. In fact, he employed his own manpower to be able to
sell insurance policies anywhere. As to his monthly quota
and acquiescence to the code of conduct, the same do not
go into means and methods of performance but into result
of performance only ( See Gregorio Tongko v. Manulife,
G.R. No. 167622, 25 January 2011).
(b) No. The supervisory functions of Gregorio did not
invest him with employee status. As leading agent, it was
his duty to oversee the agents under him to ensure their
compliance with legally imposed rules on selling insurance
policies. The attending system of control, including supervi-
sion over him by a branch manager, is inherent in insu-
rance agency. In fact, it is a legally prescribed control de-
vice (See Gregorio Tongko v. Manulife, G.R. No. 167622,
25 January 2011).
2017 Bar, Question No. VII
Dr. Crisostomo entered into a retainer agreement with
AB Hotel and Resort whereby he would provide medical
services to the guests and employees of AB Hotel and Re-
sort, which, in turn, would provide the clinic premises and
medical supplies. He received a monthly retainer fee of
P60,000.00, plus a 70% share in the service charges from
304 POST-EMPLOYMENT
AB Hotel and Resort's guests availing themselves of the
clinic's services. The clinic employed nurses and allied
staff, whose salaries, SSS contributions and other benefits
he undertook to pay. AB Hotel and Resort issued directives
giving instructions to him on the replenishment of emer-
gency kits and forbidding the clinic staff from receiving
cash payments from the guests.
In time, the nurses and the clinic staff claimed entitle-
ment to rights as regular employees of AB Hotel and Re-
sort, but the latter refused on the ground that Dr.
Crisostomo, who was their employer, was an independent
contractor. Rule with reasons. (4%)
Answer
The "rights" claim is baseless.
The claimants are the employees of Dr. Crisostomo
who is an independent contractor. Under the Fourfold Test,
no legal lie can be established between them and the hotel
which did not select them to be under its employ subject to
its duty to pay them corresponding salaries. Moreover, the
hotel is not contractually given the right to dissociate them
for just or authorized causes. Finally, the hotel does not
exercise control over the means by which they deliver
medical services. On top of these, they are not economi-
cally dependent on the hotel but on Dr. Crisostomo.
Analysis of the Previous Bar Questions
Based on the questions given between 2008 and
2019, contracting law is a mainstay. Therefore, its four
corners must be mastered. The following were the points
of interest of the Bar examiners:
1. Employer-Employee Relationship
Employer-employee relationship (EER) is very much a
Bar area. It is asked every year, except in early 2000 when it
BAR SYLLABUS-BASED REVIEWER IN 305
LABOR LAW & SOCIAL LEGISLATION
was replaced with a misplaced question on FTAA. One way
of asking a question on employer-employee relationship is to
give a worker (VV) and to ask whether EER resides in his
affair with his engager (contractor or C), or his tie to the
actual user of his services (principal or P).
1.1. Regular Employee
If, aside from the fact that C is not substantially capita-
lized or not possessed with investment, it lets P supervise W
in performing work directly related to its trade then W is a
regular employee of P.
1.2. Project Employee
Either W is deployed to P from C's pool of regular
employees or not. If W is not a member of that pool, he may
be a project-based employee depending on whether his en-
gagement is for a specific project or undertaking the com-
pletion of which has been predetermined or is determinable.
If a member of the pool, he will be covered by the "On Leave
Without Pay Employees" rule. Hence, completion of the
project he has been deployed to will not validly terminate his
employment.
1.3. Termination/Cancellation of SA
If the period of the service agreement (SA) is 2 years
and that of W's employment contract (EC) is 1 year, the rule
to apply is "completion of SA over expiration of EC'. Hence,
W cannot be terminated upon the expiration of his 1-year EC
as long as the SA is still ongoing - unless he was engaged
for a specific stage thereof.
2. Job Contracting v. Labor-Only Contracting
This has been repeatedly asked in the Bar. So if asked
as many times as it has been asked, it is a Bar area which
one must master.
306 POST-EMPLOYMENT
3. Contractual Stipulations
3.1. Freedom of Contracts. A sl:lrvice agreement
(SA) is contractual; whereas, an employment contract (EC) is
statutory. A such, the termination of an SA is covered by the
Principle of Freedom of Contracts; whereas, the termination
of an EC is regulated by tenurial law. Since EER is a question
of both law and fact, parties to an SA cannot stipulate against
its existence.
3.2 Contracts of Adhesion
4. Liabilities
4.1. Money Claims
Money cairns must be classified into labor standards
claims, labor relations claims, and social legislation claims.
To the first belong claims for salary differentials occasioned
by underpayment and illegal withholding of mandatory bene-
fits; to the second, backwages and separation pay in lieu of
reinstatement; and to the third, disability claims. Whether or
not to hold P liable for a money claim depends on his status,
i.e., real employer or statutory employer only. If real emplo-
yer, it must be imposed comprehensive solidary liability;
hence, it can be ordered to pay all the money claims of W. If
statutory employer, it cannot be ordered to pay backwages
and separation pay because its solidary liability is limited to
unpaid wages only. In practice, we also include unpaid
benefits.
4.2. Termination
The focal points are reinstatement and backwages, the
necessary consequences of a finding of illegal dismissal.
Whether to order P to reinstate illegally dismissed Ws and to
pay their backwages depends on the status of the contractor.
If LoC, P can be ordered to reinstate and pay backwages
because it is the real employer; whereas, these liabilities
BAR SYLLABUS-BASED REVIEWER IN 307
LABOR LAW & SOCIAL LEGISLATION
cannot be imposed on P if his contractor is a JC pursuant to
the limited liability rule.
4.3. sss
Sec. 8, R.A. 8282, conditions the duty to report another
for SSS coverage on EER. For purposes of coverage, EER
exists between two persons when one uses the services of
the other and controls the latter's means and methods of
performance. If the contractor not only falls short of the
required substantial capital or investment but also allows its
principal to exercise labor law concept of control over the Ws
it supplies then it is an LoC. As the real employer, therefore,
p must report W for SSS coverage; otherwise, it cannot be
imposed that duty.
4.4. 10% Attorney's Fees
Under Art. 111, entitlement to 10% attorney's fees is
based on the employer's unlawful withholding of salaries and
benefits. If he fails to prove payment, he· can be imposed the
10% without need to establish anything except the particulars
and basis of the money claim. Needless to stress, Art. 111
applies to Labor Standards cases. Regardless, it can also be
imposed in Labor Relations cases; hence, backwages can
earn 10% extraordinary attorney's fees for the illegally
dismissed employee. This time, however, he must prove his
employer's furtive design to cause him legal injury or prove
that he was compelled to initiate litigation necessitating legal
representation and expense.
5. Procedure
5.1. Jurisdiction
The defense of lack of jurisdiction interposed by P will
always fail because P will always be related to W as an
employer. Whether it likes it or not, it will either be a real
employer or a statutory employer. Its real employer status
308 POST-EMPLOYMENT
attaches when its contractor is an LoC; whereas, its statutory
employer status attaches when its contractor is a JC.
5.2. Cause of Action
For the same reason, the defense of lack of cause of
action is likely to fail, i.e., depending on the nature of the
complaint. This is discussed under "Liabilities", supra.
6. Remedies
The question to answer, and this was asked by Prof.
Azucena when he was the bar examiner in Labor Law, is
whether C is a necessary party. This is answerable with the
Principle of Merger of Legal Personalities. Hence, if the
contractor is an LoC then C is not a necessary party.
7. Job Contractor (JC) v. Independent Contractor (IC)
One cannot bring his case to a labor tribunal or claim
under Labor Law if he is an IC. In the case of Sonza v. ABS-
CBN, an IC went to the Labor Arbiter. He claimed that he
could not be an IC because he had no substantial capital or
investment. That he lost his case was for obvious reasons,
viz., he used the wrong qualifiers and forgot about the Theory
of Novation. One is a JC if he has substantial capital or
investment; he is an IC if his engagement is by reason of his
unique skills, talents, celebrity status, or specialization. Since
ABS-CBN raised the IC defense, Sonza should have denied
that he was engaged for his unique skills, talents or celebrity
status. He could have also invoked the Theory of Novation.
Before becoming a talent by virtue of the civil contract his
corporation entered into with the TV network, he had already
been working for the company. Did that civil contract novate
his employment contract? This was never raised.
Un-Asked Questions
. The following are just "window problems" to invite
attention to some of the areas which have not been inquired
BAR SYLLABUS-BASED REVIEWER IN 309
LABOR LAW & SOCIAL LEGISLATION
into yet. Hence, being sketchy only, they should be taken for
whatever worth they may have.
1. 3-Month Floating Status
Hypothetical Problem
After completion of the condominium project scoped in
the project employment contracts of Jude and George, they
were advised to go home to their families in Davao City and
await their notice to report for their next assignment. Not
receiving any call or message from Manila even after a
couple of months, they inquired from the head office if they
should return to Manila already. When told that there was still
no project to which they could be assigned, they requested
for SEnA assistance preparatory to the filing of their com-
plaint for constructive dismissal. When SEnA failed, as ex-
pected, they filed their complaint on the 85th day of their lay-
off. Will their complaint prosper? Explain your answer. (1% )
Answer
No, it will not prosper for being premature. Under D. 0.
174, the maximum period for floating status is three (3)
months, or ninety (90) days.
2. On Leave Without Pay Employees
Hypothetical Problem
Criminally charged under R.A. 8282 for not remitting the
SSS contributions of 150 laid off construction workers, the
President of the Liwayway Construction & Development
Corp., interposed the defense that the concerned workers
were no longer its employees since date of completion of the
project to which they were last assigned. As the private
prosecutor, what evidence should you present to ensure a
conviction? (1%)
310 POST-EMPLOYMENT
Answer
I will present evidence that the 150 workers are
members of the pool of regular employees of the company
and that they are just "on leave without pay" status; hence,
they have not ceased to be employees. I will also prove that
the duty to remit subject contributions had already attached
before the lay-off.
3. Social Legislation
Hypothetical Problem
The St. Luke's Medical Center, Inc. (St. Luke's) contrac-
ted out to the Prismodial Construction & Development Corp.
(Prismodial) its 20-storey hospital building to rise in San Juan
City. Although substantially capitalized, Prismodial neglected
to report its new hires to the SSS. One day, a workplace
accident occurred resulting in serious injury to Ompong who
was one of its old hires. When he applied for sickness bene-
fits, however, he discovered that he was not also reported.
What, if any, is the liability of St. Luke's in the premises? (1 %)
Answer
The principal of a legitimate job contractor, like Prismo-
dial, is not liable for the violations of its contractor of social
legislation. Art. 106 of the Labor Code limits its liability as a
statutory employer to unpaid wages only.
4. Distinctions
4.1. Service Agreement v. Distributorship
Agreement
Hypothetical Problem
Goldilocks sells its products to Mr. Gorio under a written
agreement requiring the latter to use refrigerated delivery
vans to ensure the safe quality of its perishable products. The
agreement, among others, stipulates that unsold goods be
BAR SYLLABUS-BASED REVIEWER IN 311
LABOR LAW & SOCIAL LEGISLATION
disposed 2 days before their expiry date as shown on their
labels; otherwise, Goldilocks will terminate the agreement
without need for prior notice. Goldilocks deploys safety
personnel to see to his letter compliance with his obligation
and to check on his sales force if they are complying with the
sales protocol of the company. Mr. Gorio complies by
donating unsold goods to the retired nuns of the Immaculate
Heart of Mary Convent, counting only on their prayers in
return. In addition, he holds regular meetings with his crew to
review Goldilock's protocol.
If Mr. Gorio goes bankrupt and fails to pay the wages of
his employees, can they file a recovery case against
Goldilocks on the basis of principal- contractor relationship
making Art. 106 of the Labor Code applicable? Explain (1 % )
Answer
No.
The conract between Goldilocks and Mr. Gorio is not a
service agreement (SA) but a distributorship agreement (DA)
which is beyond the scope of Art. 106 of the Labor Code.
Goldilocks does not pay any service fee to Mr. Gorio; on the
contrary, it is he who pays it money for its goods. Hence, their
relationship is not a principal-contractor relationship but a
vendor-vendee relationship. Incidentally, the control exer-
cised by Goldilocks over the sales personnel of Mr. Gorio is
in the nature of sound business practice; hence, it is not
Labor Law concept of control
4.2. Service Agreement v. Warehousing
Agreement
Hypothetical Problem
A warehousing agreement is inked by and between San
Miguel Corporation (SMC) and the Prime Warehousing Co.
(PWC) located in Urdaneta City, Pangasinan, for the storage
of the farmer's products to be sold in Northern Luzon. When
312 POST-EMPLOYMENT
can their warehousing agreement be treated as a service
agreement for the purpose of applying D. 0. 174?
Answer
The warehousing capacity of PWC should be looked
into. If the warehouse and the equipment used therein belong
to SMC and its personnel are supervised by SMC personnel
as to be under the control of SMC as regards the means and
methods by which they perform their tasks then the agree-
ment can be treated as a service agreement. Thus, D. 0. 174
will govern it.
5. Completion Bonus
Hypothetical Problem
The service agreement (SA) between the University of
Sta. Tomas (UST) and Manila Builders, Inc. (MBI) is for a
period of two (2) years. The rector required the latter to sub-
mit its clearances from the DOLE and PCAB, as well as the
signed employment contracts of its workers. Satisfied that the
contractor was fair to its workers who were given co-terminus
contracts, the rector finally issued the notice to proceed
(NTP). Due to its efficiency and proper management of its
manpower, MBI finished UST's building in just 1 ½ years. As
a result, it terminated its construction workers.
(a) Is the termination valid? (.5%)
(b) What relief are the workers entitled to, if any? (.5%)
Answer
(a) The termination is valid. Since there was no work to
do anymore owing to the early completion of the project,
which is not prohibited by any law, MBI could not be required
to maintain on its payroll its project employees; otherwise, it
would result in its oppression or self-destruction.
BAR SYLLABUS-BASED REVIEWER IN 313
LABOR LAW & SOCIAL LEGISLATION
(b) The terminated workers are entitled to their last
salaries and accrued benefits, if any, plus completion bonus.
6. Offshoring
Hypothetical Problem
Due to the acute demand for face masks, the Italian
Health Ministry contracted the services of the Philippine
Cotton Co. (PCC) to mass-produce the needed masks. To be
able to comply with its contractual obligations, PCC screened
250 urban poor residents to render round -the -clock sewing
services. When the City Mayor learned of the presence of the
workers inside the factory of PCC, she dispatched one of her
staff to specifically demand that PCC produce its D. 0. 174
Certificate of Registration; otherwise, she would request the
DOLE to order its immediate closure. Comment on the
mindset of the City Mayor. (1%)
Answer
The contractual arrangement between the Italian Health
Ministry is an offshoring arrangement. Hence, it is outside the
purview of 0.0. 174 (Dept. Circular 01-17). For this reason,
the City Mayor was wrong to think that lack of a 0.0. 174
certificate of registration could be relied upon by the DOLE in
closing the establishment.
7. PCAB
Hypothetical Problem
The DOLE Regional Director (DOLE-RD) issued a com-
pliance order to the DMCI upon his finding of safety viola-
tions. The company questioned the jurisdiction of the DOLE-
RD. According to the company engineers , DMCI was PCAB-
registered; hence, it was answerable only to the PCAB to the
exclusion of the DOLE. The in-house counsels, who main-
tained that 0. 0. 174 simply exempted PCAB-registered con-
314 POST-EMPLOYMENT
tractors from contracting rules but not from the visitorial and
enforcement power of the DOLE-RD, sought to correct the
view of the engineers. You are the company CEO. Whose
advice will you take? Do not explain your bias. (.001%)
Answer
On matters of law, I will listen to the lawyers.
8. In-House Contractor
Hypothetical Problem
Jack and Jill are siblings. After the death of their father,
they invested their huge inheritance in the build-build-build
wagon of the Duterte administration. Jack was schooled in
the construction business unlike Jill who was very dependent
on their father when he was still alive. Unfamiliar with the
trade, Jill decided to re-invest her money in the stock market.
In the meantime, Jack was flooded with projects. Over-
whelmed, he asked Jill to act as his sub-contractor with the
assurance that he would lend her his manpower and
resources, i.e., if necessary. Jill, who had yet to totally retire
her business permit and surrender her registration as a bona
fide contractor, notified her other clients that she was
pursuing their shelved contracts. In no time, the siblings
hugged on their deal.
(a) Who is an in-house contractor?
(b) Is Jill an in-house contractor?
Answer
(a) An in-house contractor is an instrumentality or
adjunct contractor; it is usually organized by its principal or
main contractor; it is funded by the latter; its business policies
are determined by the latter; and it has only one client, viz.,
its principal or main contractor.
BAR SYLLABUS-BASED REVIEWER IN 315
LABOR LAW & SOCIAL LEGISLATION
(b) The circumstances of Jill do not fit the concept of an
in-house contractor. Hence, she cannot be considered as
one.
9. Prohibited JC Arrangements
Hypothetical Problem
X Co. Employees Union sued X Co. for unfair labor
practice ( ULP) under Art. 259 of the Labor Code based on
the fact that workers were deployed to X Co. under its service
agreement (SA) with X Manpower, Inc., a recognized job
contractor. Allegedly, the company violated the closed shop
agreement stipulated in the subsisting CBA prohibiting hiring
of new employees from outside the membership of the union.
Will the complaint prosper?
Answer
No.
The arrangement is a prohibited contracting arrange-
ment regardless of the fact that the contractor may be a legi-
timate job contractor. Regardless, the company is not liable
for ULP. For a CBA violation to constitute ULP, it must be a
violation of an economic provision; provided, it is gross and
flagrant. A union security clause is a political provision;
hence, its violation is not a ULP.
10. Burden of Proof
Hypothetical Problem
A certificate of registration (CR) issued under 0.0. 174
prevents the presumption that the holder is a labor-only
contractor from arising. Said certificate enjoys the presump-
tion that it was regularly issued.
A. Since a contractor is either a job contractor or a
labor-only contractor, is the holder of a CR correlatively
316 POST-EMPLOYMENT BAR SYLLABUS-BASED REVIEWER IN 317
LABOR LAW & SOCIAL LEGISLATION

presumed a job contractor as to lay the burden of proving State which enjoyed immunity from the suit, the NLRC
otherwise on the shoulder of the worker? , Chairman instructed the Labor Arbiter to deny MSl's motion
B. Depending on who has the burden of proof, what to implead. Should the Labor Arbiter obey the Chairman?
should be proven in its/his own interest?
Answer
Answer No.
3
A. No. The holder cannot rely solely on its CR. The When the State enters into a civil contract with a private
law requires it to prove that: it carries on an independent entity thru any of its instrumentalities, it descends to the level
business; it works on its own account; it is independent of its of a private citizen. Therefore, an instrumentality cannot avoid
principal as to the means and methods of performing its liability under Labor Laws by invoking State immunity from
work; and it uses it capital or investment directly and actually suit. This said, the Labor Arbiter should be allowed to acquire
in performing its work. jurisdiction over its person by granting the motion to implead
so that, if warranted, he can impose on the NLRC the soli-
B. To secure his position, the worker must prove that: dary liability of paying the unpaid salaries and 13th month pay.
the holder does not carry on an independent business; it
does not work on its own account; it is not independent of its
principal as to the means and methods of performing its
work; and it does not use it capital or investment directly and
actually in performing its work. In addition, he must prove
that: the holder does not control his means and methods of
performing his work; that his work is directly related to the
trade of the principal; and that he works within the premises
of the principal, using materials and equipment it supplies.

11. Immunity from Suit

Hypothetical Problem
The NLRC, thru public bidding, engaged the security
services of the Magnum Services, Inc. (MSI). For not paying
the salaries and 13th month pay of its security guards, MSI
became the sole respondent in a recovery case filed with the
Labor Arbiter. MSI moved to implead the NLRC so that it
could assert a cross-claim against it. Allegedly, NLRC failed
to pay its service fees which was the reason it could not pay
its guards. Claiming that the NLRC is an instrumentality of the

3
Alternative view
318 POST-EMPLOYMENT
8 considered a regular employee with respect to
Kinds of Employment
Regular
Casual
Contractual
Project
Seasonal
Fixed-Term
Probationary
Private School Teachers
NOTES
The Labor Code provides:
Art. 295. Regular and casual employment. -
The provisions of written agreement to the con-
trary notwithstanding and regardless of the oral
agreement of the parties, an employment shall
be deemed to be regular where the employee
has been engaged to perform activities which are
usually necessary or desirable in the usual busi-
ness or trade of the employer, except where the
employment has been fixed for a specific project
or undertaking the completion or termination of
which has been determined at the time of the
engagement of the employee or where the work
or service to be performed is seasonal in nature
and the employment is for the duration of the
season.
An employment shall be deemed to be
casual if it is not covered by the preceding para-
graph: Provided, That any employee who has
rendered at least one year of service, whether
such service is continuous or broken, shall be
BAR SYLLABUS-BASED REVIEWER IN 319
LABOR LAW & SOCIAL LEGISLATION
the activity in which he is employed and his
employment shall continue while such activity
exists.
"The aforecited provision contemplates four (4) kinds
of employees: (1) regular employees or those who have
been engaged to perform activities which are usually ne-
cessary or desirable in the usual business or trade of the
employer; (2) project employees or those whose employ-
ment has been fixed for a specific project or undertaking,
the completion or termination of which has been deter-
mined at the time of the engagement of the employee; (3)
seasonal employees or those who work or perform servi-
ces which are seasonal in nature, and the employment is
for the duration of the season; and (4) casual employees
or those ~ho are not regular, project, or seasonal emplo-
yees. Jurisprudence later add~d a fifth (5 th ) kind, the fixed-
term employee. Based on Article 295, the law determines
the nature of the employment, regardless of any agree-
ment expressing otherwise. The supremacy of the law over
the nomenclature of the contract and its pacts and condi-
tions is to bring life to the policy enshrined in the Constitu-
tion to afford full protection to labor. Thus, labor contracts
are placed on a higher plane than ordinary contracts since
these are imbued with public interest and, therefore, sub-
ject t? the police power of the State." (/nnodata Knowledge
Services, Inc. v. Socorro D'Marie lnting, et al., G.R. No.
211892, 6 December 2017. Underscoring copied.)
"Project employment contracts, which fix the employ-
ment for a specific project or undertaking, are valid under
the law. By entering into such a contract, an employee is
deemed to understand that his employment is coterminous
with the project. He may no longer be employed after the
?ompletion of the project for which he was hired. But pro-
Ject employment contracts are not lopsided agreements in
favor of only one party. The employer's interest is equally
320 POST-EMPLOYMENT
important as that of the employees'. While it may be true
that it is the employer who drafts project.employment con-
tracts with its business interest as overriding consideration,
such contracts must not prejudice the employee." (id.)
Regular Employees
The types of regular employees are as follows:
1. Regular by reason of the nature of work
performed;
2. Regular after 1 year of work as a casual
employee (limited regular employment status);
3. Regular after period of probation (see teachers,
infra);
4. Regular seasonal by reason of repeated
engagement; and
5. Regular by reason of termination of a leaner on
the third month of employment.
2019 Bar, Part II, Question No. B.17
Ms. A is a volleyball coach with five (5) years of expe-
rience in her field. Before the start of the volleyball season
of 2015, she was hired for the sole purpose of overseeing
the training and coaching of the University's volleyball
team. During her hiring, the Vice-President for Sports ex-
pressed to Ms. A the University's expectation that she
would bring the University a championship at the end of
the year.
In her first volleyball season, the University placed
ninth (9th) out of 10 participating teams. Soon after the end
of the season, the Vice-President for Sports informed Ms.
A that she was a mere probationary employee and hence,
she need not come back for the next season because of
the poor performance of the team.
BAR SYLLABUS-BASED REVIEWER IN 321
LABOR LAW & SOCIAL LEGISLATION
In any case, the Vice-President for Sports claimed
that Ms. A was a fixed-term employee whose contract had
ended at the close of the year.
(a) Is Ms. A a probationary, fixed-term, or regular
employee? Explain your reasons as to why she is or she is
not such kind of an employee for each of the types of
employment given. (5%)
(b) Assuming that Ms. A was dismissed by the Uni-
versity for serious misconduct but was never given a notice
to explain, what is the consequence of a procedurally
infirm dismissal from service under our Labor law and juris-
prudence? Explain. (2%)
Answer
(a) Ms. A is a regular employee. She cannot be consi-
dered a fixed-term employee in the absence of a fixed-term
employment contract, nor a probationary employee because
it was not expressly communicated to her upon her engage-
ment that her tenure was for six (6) months unless she
survived pre-disclosed standards for regularization. When
an employee is hired without being apprised of such stan-
dards, he is deemed a regular employee regardless of the
employer's intent to hire him as a probationary employee
(Abbott Laboratories v. Alcaraz, G.R. No. 192 571, 23 July
2013).
(b) The violation of Mr. A's right to statutory due
process requires the assessment of the University with no-
minal damages. The amount is P30,000.00 because a dis-
missal for failure to qualify is akin to a dismissal for a just
cause (Abbott Laboratories v. Alcaraz, G.R. No. 192571,
23 July 2013).
2015 Bar, Question No. VII
Don Don is hired as a contractual employee of
CALLHELP, a call center. His contract is expressly for a
322 POST-EMPLOYMENT
term of 4 months. Don Don is hired for 3 straight contracts
of 4 months each but at 2-week intervals between con-
tracts. After the third contract ended, Don Don is told that
he will no longer be given another contract because of
"poor performance." Don Don files a suit for "regulariza-
tion" and for illegal dismissal, claiming that he is a regular
employee of CALLHELP and that he was dismissed with-
out cause. You are the Labor Arbiter. How would you de-
cide the case? (4%)
Answer
I will decide the case by applying the contract of
adhesion rule. Given the nature of Don Don's work , which
is usually necessary and desirable in the usual trade of
HELPCALL, as well as the short intervals between his
fixed-term contracts, there is no doubt that periods were
resorted to for purposes of circumventing the law on
tenure. Therefore, since it was the company that prepared
the three contracts, with Don Don's participation being
limited to affixing his signature thereto only, the 4-month
periods must be taken against it. Having attained tenure,
therefore, Don Don cannot be dismissed for poor
performance because said ground is neither a just nor an
authorized cause.
Project Employee
Alejandro Maraguinot, Jr., et al. v. NLRC, et al.
G.R. No. 120969 January 22, 1998
A work pool may exist although the workers in the
pool do not receive salaries and are free to seek other em-
ployment during temporary breaks in the business, provi-
ded that the worker shall be available when called to report
for a project. Although primarily applicable to regular sea-
sonal workers, this set-up can likewise be applied to
project workers insofar as the effect of temporary cessation
BAR SYLLABUS-BASED REVIEWER IN 323
LABOR LAW & SOCIAL LEGISLATION
of work is concerned. This is beneficial to both the emplo-
yer and employee for it prevents the unjust situation of
"coddling labor at the expense of capital" and at the same
time enables the workers to attain the status of regular
employees.
The Court's ruling here is meant precisely to give life
to the constitutional policy of strengthening the labor sec-
tor, but, we stress, not at the expense of management.
Lest it be misunderstood, this ruling does not mean that
simply because an employee is a project or work pool em-
ployee even outside the construction industry, he is
deemed, ipso jure, a regular employee. All that we hold
today is that once a project or work pool employee has
been: (1) continuously, as opposed to intermittently, re-
hired by the same employer for the same tasks or nature of
tasks; and (2) these tasks are vital, necessary and indis-
pensable to the usual business or trade of the employer,
then the employee must be deemed a regular employee,
pursuant to Article 280 of the Labor Code and jurispru-
dence. To rule otherwise would allow circumvention of
labor laws in industries not falling within the ambit of Policy
Instruction No. 20/Department Order No. 19, hence allo-
wing the prevention of acquisition of tenurial security by
project or work pool employees who have already gained
the status of regular employees by the employer's conduct.
Seasonal Employees
Zenaida Paz v. Northern Tobacco Redrying Co.,
Inc. et al.
G.R. No. 199554, 18 February 2015
Leonen,J
Jurisprudence also recognizes the status of regular
seasonal employees.
Mercado, Sr. v. National Labor Relations Commission
did not consider as regular employees the rice and sugar
324 POST-EMPLOYMENT
farmland workers who were paid with daily wages. This
was anchored on the Labor Arbiter's findings that "petitio-
ners were required to perform phases of agricultural work
for a definite period, after which their services [were]
available to any farm owner."
This court explained that the proviso in the second pa-
ragraph of Article 280 in that "any employee who has
rendered at least one year of service, whether such service
is continuous or broken, shall be considered a regular em-
ployee" applies only to "casual" employees and not "project"
and regular employees in the first paragraph of Article 280.
On the other hand, the workers of La Union Tobacco
Redrying Corporation in Abasolo v. National Labor Rela-
tions Commission were considered regular seasonal em-
ployees since they performed services necessary and in-
dispensable to the business for over 20 years, even if their
work was only during tobacco season. This court applied
the test laid down in De Leon v. National Labor Relations
Commission for determining regular employment status:
[T]he test of whether or not an employee is a regular em-
ployee has been laid down in De Leon v. NLRC, in which
this Court held:
The primary standard, therefore, of determining regu-
lar employment is the reasonable connection between the
particular activity performed by the employee in relation to
the usual trade or business of the employer. The test is
whether the former is usually necessary or desirable in the
usual business or trade of the employer. The connection
can be determined by considering the nature of the work
performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has
been performing the job for at least a year, even if the per-
formance is not continuous and merely intermittent, the law
deems repeated and continuing need for its performance
~s sufficient evidence of the necessity if not indispen-
sability of that activity to the business. Hence, the employ-
BAR SYLLABUS-BASED REVIEWER IN 325
LABOR LAW & SOCIAL LEGISLATION
ment is considered regular, but only with respect to such
activity, and while such activity exists.
Thus, the nature of one's employment does not de-
pend solely on the will or word of the employer. Nor on the
procedure for hiring and the manner of designating the
employee, but on the nature of the activities to be per-
formed by the employee, considering the employer's na-
ture of business and the duration and scope of work to be
done.
In the case at bar, while it may appear that the work
of petitioners is seasonal, inasmuch as petitioners have
served the company for many years, some for over 20
years, performing services necessary and indispensable to
LUTORCO's business, serve as badges of regular em-
ployment. Moreover, the fact that petitioners do not work
continuously for one whole year but only for the duration of
the tobacco season does not detract from considering
them in regular employment since in a litany of cases this
Court has already settled that seasonal workers who are
called to work from time to time and are temporarily laid off
during off-season are not separated from service in said
period, but are merely considered on leave until re-em-
ployed. Private respondent's reliance on the case of
Mercado v. NLRC is misplaced considering that since in
said case of Mercado, although the respondent company
therein consistently availed of the services of the petitio-
ners therein from year to year, it was clear that petitioners
therein were not in respondent company's regular employ.
Petitioners therein performed different phases of agricultu-
ral work in a given year. However, during that period, they
were free to contract their services to work for other farm
owners, as in fact they did. Thus, the Court ruled in that
case that their employment would naturally end upon the
completion of each project or phase of farm' work for which
they have been contracted. (Emphasis supplied, citations
omitted)
326 POST-EMPLOYMENT
The sugarcane workers in Hacienda Fatima v. Natio-
nal Federation of Sugarcane Workers-Food and Genera/
Trade were also considered as regular employees since
they performed the same tasks every season for several
years:
For respondents to be excluded from those classified
as regular employees, it is not enough that they perform
work or services that are seasonal in nature. They must
have also been employed only for the duration of one sea-
son.... Evidently, petitioners employed respondents for
more than one season. Therefore, the general rule of
regular employment is applicable
2019 Bar, Part I, Question No. A.1
Define, explain or distinguish the following terms:
(a) X X X
(b) Seasonal and project employees (2%)
X X X the Social Security Commission. Baldo, a regular seasonal
Answer
(a) X X X
(b) A seasonal employee is one engaged for the
duration of the season for which he has been engaged;
whereas, a project employee is one whose employment is
co-terminus with the specific project or undertaking for
which he has been engaged; provided, its scope or dura-
tion was made known to him upon engagement (Art. 295,
Labor Code).
X X X
2016 Bar, Question No. XVII
Baldo, a farm worker on pakyaw basis, had been wor-
king on Dencio's land by harvesting abaca and coconut,
processing copra, and clearing weeds from year to year
BAR SYLLABUS-BASED REVIEWER IN 327
LABOR LAW & SOCIAL LEGISLATION
starting January 1993 up to his death in 2007. He worked
continuously in the sense that it was done for more than
one harvesting season.
a. Was Dencio required to report Baldo for compulso-
ry social security coverage under the SSS law? Explain.
(2.5%)
b. What are the liabilities of the employer who fails
to report his employee for social security coverage? Ex-
plain. (2.5%)
Answer
(a) Dencio was required to report his employee Baldo
for SSS coverage. Only the following are excluded from
SSS coverage: purely casual employees, Filipinos em-
ployed by foreign vessels while outside Philippine territory,
employees of foreign governments and international or-
ganizations unless covered by administrative agreements,
government employees, and other employees excluded by
employee, was not one of the excluded employees.
(b) The Social Security Act is a penal law. Hence, an
employer who does not report his employee for SSS cove-
rage shall incur criminal liability. In addition, he shall pay
the benefit if the latter dies, becomes disabled, gets sick or
retires. He shall also pay all contributions, plus 3% penalty
per month.
Casual Employees
A casual employee is one who is engaged to perform
a job, work, or service which is merely incidental to the
business of the employer, and such job, work or service is
for a definite period made known to the employee at the
time of engagement. (Conti v. NLRC, et al. G.R. 119253,
10 April 1997). In other words, his position is not usually
necessary or desirable in the usual trade or business of the
employer.
328 POST-EMPLOYMENT
If allowed to work beyond 1 year, a casual employee
attains regular employment status, i.e., in a limited manner
only because he is deemed regular only in connection with
the job he performs and while it lasts (Art. 295, Labor
Code).
Hypothetical Problem
The Good Shepherd Convent in Baguio City is known
for its ube jam. But tourists visit it also for its other pro-
ducts, like strawberry jam, peanut brittle, mango tarte and
many other home-made products. The nuns are assisted
by young lasses from the Cordilleras whom they send as
their scholars to the four universities in town. However,
they also have non-student employees. Production and
sales take place inside a building that sits atop a hill, under
tall pine trees. Because of the volume of pine needles that
drop on the roof of the building daily, the nuns decided to
hire Ton Ton to declog the gutters. He also picks the trash
of litterbugs. On his 13th month of work, Ton Ton was
replaced by Dan Dan who removed the gutters to solve the
clogging problem and used a megaphone thru which he
pleasantly announced "Bawa/ Ang Dugyot. Pulutin ang
Sariling Ka/at!" to solve the trash problem. It was Sister
Ma. Virginia Madonna, the only Virgin in the convent, who
conceived of the solutions that Dan Dan executed to her
extreme pleasure. As to Ton Ton, who came from a
warring tribe in the Mt. Province, she opined after deep
prayer that he had no carpentry skills and that his bontokis
tone would evoke violent reaction.
Identify the issue extant in the premises and resolve
it. (1 %)
Answer
The issue is whether or not Ton Ton was illegally
dismissed.
BAR SYLLABUS-BASED REVIEWER IN 329
LABOR LAW & SOCIAL LEGISLATION
Ton Ton was not illegally dismissed. Having been hired
to perform work not connected to the usual business of the
Good Shepherd Convent, viz., production of food products,
he was a casual employee. That he was allowed to work
beyond 1 year as to regularize him did not give him
unqualified tenurial status. His regular employment status
was limited in that it was good for the work for which he had
been hired and until it lasted. When Sister Madonna devised
ways and means of solving the clogging and littering prob-
lems, for which she needed the services of Dan Dan, Ton
Ton's services ceased to be in demand. Hence, not being fit
for the new job, he could be dissociated.
Fixed-Term Employees
1. The Brent Case: Freedom of Contracts
Brent School, Inc., et al. v. Ronaldo Zamora, et al.
G.R. No. L-48494, 5 February 1990
As it is evident from even only the three examples
already given that Article 280 of the Labor Code, under a
narrow and literal interpretation, not only fails to exhaust
the gamut of employment contracts to which the lack of a
fixed period would be an anomaly, but would also appear
to restrict, without reasonable distinctions, the right of an
employee to freely stipulate with his employer the duration
of his engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law
must be given a reasonable interpretation, to preclude
absurdity in its application. Outlawing the whole concept of
term employment and subverting to boot the principle of
freedom of contract to remedy the evil of employer's using
it as a means to prevent their employees from obtaining
security of tenure is like cutting off the nose to spite the
face or, more relevantly, curing a headache by lopping off
the head.
330 POST-EMPLOYMENT
It is a salutary principle in statutory construction that
there exists a valid presumption that undesirable conse-
quences were never intended by a legislative measure,
and that a construction of which the statute is fairly suscep-
tible is favored, which will avoid all objectionable mischie-
vous, undefensible, wrongful, evil and injurious conse-
quences.
Nothing is better settled than that courts are not to
give words a meaning which would lead to absurd or un-
reasonable consequences. That is a principle that dates
back to In re Allen decided oil October 27, 1903, where it
was held that a literal interpretation is to be rejected if it
would be unjust or lead to absurd results. That is a strong
argument against its adoption. The words of Justice Laurel
are particularly apt. Thus: "The fact that the construction
placed upon the statute by the appellants would lead to an
absurdity is another argument for rejecting it.. .. "
... We have, here, then a case where the true intent of
the law is clear that calls for the application of the cardinal
rule of statutory construction that such intent of spirit must
prevail over the letter thereof, for whatever is within the
spirit of a statute is within the statute, since adherence to
the letter would result in absurdity, injustice and contradic-
tions and would defeat the plain and vital purpose of the
statute.
Accordingly, and since the entire purpose behind the
development of legislation culminating in the present Ar-
ticle 280 of the Labor Code clearly appears to have been,
as already observed, to prevent circumvention of the em-
ployee's right to be secure in his tenure, the clause in said
article indiscriminately and completely ruling out all written
or oral agreements conflicting with the concept of regular
employment as defined therein should be construed to
refer to the substantive evil that the Code itself has singled
out: agreements entered into precisely to circumvent secu-
rity of tenure. It should have no application to instances
BAR SYLLABUS-BASED REVIEWER IN 331
LABOR LAW & SOCIAL LEGISLATION
where a fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without any force,
duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating
his consent, or where it satisfactorily appears that the em-
ployer and employee dealt with each other on more or less
equal terms with no moral dominance whatever being
exercised by the former over the latter. Unless thus limited
in its purview, the law would be made to apply to purposes
other than those explicitly stated by its framers; it thus
becomes pointless and arbitrary, unjust in its effects and
apt to lead to absurd and unintended consequences. (Cita-
tions omitted.)
2. The Dumpit-Murillo Case: Contracts of Adhesion
Thelma Dumpit-Murillo v. Court of Appeals, et al.
G.R. No. 164652, 8 June 2007
In the case at bar, it does not appear that the emplo-
yer and employee dealt with each other on equal terms.
Understandably, the petitioner could not object to the
terms of her employment contract because she did not
want to lose the job that she loved and the workplace that
she had grown accustomed to, which is exactly what hap-
pened when she finally manifested her intention to nego-
tiate. Being one of the numerous newscasters/ broad-
casters of ABC and desiring to keep her job as a broad-
casting practitioner, petitioner was left with no choice but to
affix her signature of conformity on each renewal of her
contract as already prepared by private respondents;
otherwise, private respondents would have simply refused
to renew her contract. Patently, the petitioner occupied a
position of weakness vis - a -vis the employer. Moreover,
private respondents' practice of repeatedly extending
petitioner's 3-month contract for four years is a circum-
vention of the acquisition of regular status. Hence, there
332 POST-EMPLOYMENT
was no valid fixed-term employment between petitioner
and private respondents.
While this Court has recognized the validity of fixed-
term employment contracts in a number of cases, it has
consistently emphasized that when the circumstances of a
case show that the periods were imposed to block the
acquisition of security of tenure, they should be struck
down for being contrary to law, morals, good customs,
public order or public policy. (Citations omitted.)
3. The Bernardo Case: Sec. 5, Magna Carta of Persons
with Disability
Maritess Bernardo, et al. v. NLRC, et al
G.R. No. 122917, 12 July 1999
At this juncture, the leading case of Brent School, Inc.
v. Zamora proves instructive. As reaffirmed in subsequent
cases, this Court has upheld the legality of fixed-term em-
ployment. It ruled that the decisive determinant in term
employment should not be the activities that the employee
is called upon to perform but the day certain agreed upon
the parties for the commencement and termination of their
employment relationship. But this Court went on to say that
where from the circumstances it is apparent that the pe-
riods have been imposed to preclude acquisition of tenurial
security by the employee, they should be struck down or
disregarded as contrary to public policy and morals.
In rendering this Decision, the Court emphasizes not
only the constitutional bias in favor of the working class,
but also the concern of the State for the plight of the dis-
abled. The noble objectives of Magna Carta for Disabled
Persons are not based merely on charity or accommoda-
tion, but on justice and the equal treatment of qualified per-
sons, disabled or not. In the present case, the handicap of
petitioners (deaf-mutes) is not a hindrance to their work.
The eloquent proof of this statement is the repeated
BAR SYLLABUS-BASED REVIEWER IN 333
LABOR LAW & SOCIAL LEGISLATION
renewal of their employment contracts. Why then should they
be dismissed, simply because they are physically impaired?
The Court believes, that, after showing their fitness for the
work assigned to them, they should be treated and granted
the same rights like any other regular employees.
4. The Espiritu Case: Inconsistent Defenses
Fuji Television Network, Inc. v. Arlene Espiritu
G.R. No. 204944, 3 December 2014
Leonen,J
Fuji's argument that Arlene was an independent con-
tractor under a fixed-term contract is contradictory. Emplo-
yees under fixed-term contracts cannot be independent
contractors because in fixed-term contracts, an employer-
employee relationship exists. The test in this kind of con-
tract is not the necessity and desirability of the employee's
activities, "but the day certain agreed upon by the parties
for the commencement and termination of the employment
relationship." For regular employees, the necessity and de-
sirability of their work in the usual course of the employer's
business are the determining factors. On the other hand,
independent contractors do not have employer-employee
relationships with their principals. Hence, before the status
of employment can be determined, the existence of an
employer-employee relationship must be established.
Contractual Employees
1. Seafarers
2. Kasambahay
3. Deans
2017 Bar, Question No. VIII
Marciano was hired as Chief Engineer on board the
vessel MN Australia. His contract of employment was for
334 POST-EMPLOYMENT
nine months. After nine months, he was re-hired. He was
hired a third time after another nine months. He now claims
entitlement to the benefits of a regular employee based on
his having performed tasks usually necessary and desi-
rable to the employer's business for a continuous period of
more than one year. Is Marciano's claim tenable? Explain
your answer. (3%)
Answer
No, it is not tenable.
Marciano is a seafarer; hence, he is a contractual
employee (Mi/fares v. NLRC, G.R. No.110524, 29 July
2002). As such, the nature of the onboard work performed
by him under his contracts does not give him regular em-
ployment status since Art. 295 of the Labor Code has no
application.
Probationary Employees
1. Private School Teachers (MORPHE)
University of the East, et al. v. Analiza Pefanio, et al.
G.R. No. 193897, 23 January 2013
Respondents argue that UE hired them in 1997 and
2000, when what was in force was the 1994 CBA between
UE and the faculty union. Since that CBA did not yet require
a master's degree for acquiring a regular status and since
respondents had already complied with the three require-
ments of the CBA, namely, (a) that they served full-time; (b)
that they rendered three consecutive years of service; and (c)
that their services were satisfactory,1§ they should be
regarded as having attained permanent or regular status.
But the policy requiring postgraduate degrees of
college teachers was provided in the Manual of Regula-
tions as early as 1992. Indeed, recognizing this, the 1994
CBA provided even then that UE was to extend only se-
BAR SYLLABUS-BASED REVIEWER IN 335
LABOR LAW & SOCIAL LEGISLATION
mester-to-semester appointments to college faculty staffs,
like respondents, who did not possess the minimum qualifi-
cations for their positions.
Besides, as the Court held in Escorpizo v. University
of Baguio.a school CBA must be read in conjunction with
statutory and administrative regulations governing faculty
qualifications. Such regulations form part of a valid CBA
without need for the parties to make express reference to
it. While the contracting parties may establish such stipu-
lations, clauses, terms and conditions, as they may see fit,
the right to contract is still subject to the limitation that the
agreement must not be contrary to law or public policy.
The State through Batas Pambansa Bilang 232 (The
Education Act of 1982) delegated the administration of the
education system and the supervision and regulation of
educational institutions to the Ministry of Education,
Culture and Sports (now Department of Education). Accor-
dingly, in promulgating the Manual of Regulations, DECS
was exercising its power of regulation over educational
institutions, which includes prescribing the minimum aca-
demic qualifications for teaching personnel. 20
In 1994 the legislature transferred the power to pres-
cribe such qualifications to the Commission on Higher Edu-
cation (CHED). CHED's charter authorized it to set mini-
mum standards for programs and institutions of higher
learning. The Manual of Regulations continued to apply to
colleges and universities and suppletorily the Joint Order
until 2010 when CHED issued a Revised Manual of
Regulations which specifically applies only to institutions
involved in tertiary education.
The requirement of a masteral degree for tertiary
education teachers is not unreasonable. The operation of
educational institutions involves public interest. The go-
vernment has a right to ensure that only qualified persons,
in possession of sufficient academic knowledge and tea-
ching skills, are allowed to teach in such institutions. Go-
336 POST-EMPLOYMENT
vernment regulation in this field of human activity is de-
sirable for protecting, not only the students, but the public
as well from ill-prepared teachers, who are lacking in the
required scientific or technical knowledge. They may be
required to take an examination or to possess postgra-
duate degrees as prerequisite to employment.
Respondents were each given only semester-to-se-
mester appointments from the beginning of their employ-
ment with UE precisely because they lacked the required
master's degree. It was only when UE and the faculty
union signed their 2001 CBA that the school extended peti-
tioners a conditional probationary status subject to their
obtaining a master's degree within their probationary pe-
riod. It is clear, therefore, that the parties intended to sub-
ject respondents' permanent status appointments to the
standards set by the law and the university.
2. DOLE Advisory 14, s. 2020
On 30 March 2020, the DOLE issued Advisory 14
stating that for purposes of counting the 6-month period of
probation, the period of the ECQ shall be excluded.
Hypothetical Problem
DOLE Advisory 14 was issued to exclude the period
of the Enhanced Community Quarantine (ECQ) from the 6-
month probationary period under Art. 296 of the Labor
Code. Joaquin and Mario were hired on 31 November
2019 under 6-month probationary employment contracts
that would end on 31 May 2020. Joaquin continued wor-
king at the Shell Station at Cor. D. Tuazon and E. Rodri-
guez Sts in Quezon City because he lived nearby. Mario,
on the other hand, was locked down in Pasig and could not
report. On 15 June 2020, both were dismissed for failure to
qualify based on their poor work performance as of end of
February 2020. Incidentally, the lockdown was reported to
be indefinite. Is the dismissal valid?
BAR SYLLABUS-BASED REVIEWER IN 337
LABOR LAW & SOCIAL LEGISLATION
Answer
As to Joaquin, the dismissal is not valid.
Since Joaquin continued working, DOLE Advisory 14 has
no application to him. Hence, the 6-month period of his pro-
bationary employment continued to run without interruption
until 31 May 2020. Since he was allowed to work beyond said
date, he attained tenure as early as 1 June 2020 (Art. 296,
Labor Code). Resultantly, he could no longer be dismissed on
the ground of failure to qualify. Thus, absent just or authorized
cause, his dismissal is illegal. (Art. 294, Labor Code).
As to Mario, he is covered by the advisory; hence,
since the 6-month period of his probationary employment
was interrupted by the ECQ then he was still a probatio-
nary employee as of 15 June 2020. For that reason, he
could be dismissed for failure to qualify.
Corporate Employee
2019 Bar, Part II, Question No. 8.12
Due to serious business reverses, ABC Co. decided
to terminate the services of several officers receiving "fat"
compensation packages. One of these officers was Mr. X,
its Vice-President for External Affairs and a member of the
Board of Directors. Aggrieved, Mr. X filed a complaint for
illegal dismissal before the National Labor Relations Com-
mission (NLRC) - Regional Arbitration Branch.
ABC Co. moved for the dismissal of the case on the
ground of lack of jurisdiction, asserting that since Mr. X oc-
cupied the position of Vice-President for External Affairs
which is listed in the by-laws of the corporation, the case
should have been tiled before the Regional Trial Court.
The Labor Arbiter (LA) denied ABC Co. 's motion and
proceeded to rule that Mr. X was illegally dismissed. Hence,
he was reinstated in ABC Co. 's payroll pending its appeal to
the NLRC.
338 POST-EMPLOYMENT
(a) Did the LA err in denying ABC Co.'s motion to
dismiss on the ground of lack of jurisdiction? Explain.
(2.5%)
(b) Assuming that jurisdiction is not at issue and that
the NLRC reverses the LA's ruling of illegal dismissal with
finality, may ABC Co. claim reimbursement for the amounts
it paid to Mr. X during the time that he was on payroll reins-
tatement pending appeal? Explain. (2.5%)
Answer
(a) The LA did not err. Even if the office occupied by
Mr. X may have been listed in the corporate by-laws as a
corporate office, it should have been shown that he was
appointed to it by the Board of Directors. Absent evidence,
Mr. X was a corporate employee; hence, the tenurial issue
he brought to the LA was not an intra-corporate issue.
(Cesare v. Broadcom Asia, Inc., et al., G.R. No. 2011298,
5 Feb. 2014). Moreover, mere membership in the gover-
ning board does not make one a corporate officer. Unless
elected as President, Secretary or Treasurer, a member of
the board would not qualify as a corporate officer (Sec. 24,
Revised Corporation Code).
(b) ABC Co. cannot claim reimbursement because
Mr. X had nothing to do with the reinstatement given him.
On the contrary, the company exercised its exclusive right
to determine which type of reinstatement to give him. Had
it informed him of the possibility of a reimbursement, he
would not have chosen to be driven to penury at the end of
the day thru a reimbursement by compulsion. In this case,
the Principle of Unjust Enrichment has no application;
hence, he can keep the salaries he received. (Garcia, et al.
v. PAL, G.R. No. 164856, 20 Jan. 2009).
Cleric: Principle of Amovibility
BAR SYLLABUS-BASED REVIEWER IN 339
LABOR LAW & SOCIAL LEGISLATION
Hypothetical Problem
While Victor was studying Theology at the San Jose
seminary on Katipunan St., Quezon City, he was sent by his
Jesuit formators to depressed communities in Metro Manila
for social immersion. When he returned to the Diocese of
Baguio-Benguet where he was ordained priest, his heart
could not rest as life there was practically an un-challenged
day-to-day existence. After a year of serving as Dean of
Studies at the San Pablo Seminary, he was designated Asst.
Parish Priest of the St. Joseph Parish, Pacdal, Baguio City.
At the same time, he was appointed School Director of the
St. Louis High School-Pacdal. This time, he was so
immersed in parish life to the point that he officiated sub
secreto the wedding of Piolo and George. Unfortunately, a
90-year old member of the Holy Family Name Society told on
him. For that, he was immediately banished by the Bishop to
the farthest and poorest parish as his punishment. While re-
planning his life, he remembered that the father of his co-
seminarian Dick was a Labor Arbiter at the NLRC-CAR. He
surmised that, thru a complaint for reinstatement, he might be
able to regain his first parish ever. What advice would you
give Fr. Victor if he engages you to represent him? (1%)
Proposed Answer
I would remind him that a Catholic priest is governed
by the ecclesiastical norm of ad nutum episcopi ( Catholic
Encyclopedia).
Under Church law, Fr. Victor's office is subject to the
Principle of Amovibility which is an aspect of his sharing in
his Bishop's ministries of leading, instructing and sancti-
fying the faithful. Hence, the control exercised over his
assignment is not an aspect of management prerogative.
Neither is the Bishop's control over his administration of
the sacraments an exercise of Labor Law concept of con-
trol, just as imposing on him punishment is not an aspect
of the disciplinary element of the Fourfold Test. Therefore,
340 POST-EMPLOYMENT BAR SYLLABUS-BASED REVIEWER IN 341
LABOR LAW & SOCIAL LEGISLATION

his tenurial issue with his Bishop is not a labor dispute over C
which the Labor Arbiter has jurisdiction ,as it is a purely POST EMPLOYMENT
disciplinary matter that is ecclesiastical in character
(Dominador Taruc, et al. v. Bishop Porfirio de/a Cruz, et al., Termination by Employer
G.R. NO. 144801, 10 March 2005). Substantive Due Process
I will then dissuade Fr. Victor from filing the intended Procedural Due Process
complaint. Instead, I will advise him to be more circums- Illegal Dismissal
pect in administering the sacred sacrament of matrimony in Direct Dismissal
the future.
Constructive Dismissal
Complete Severance Test
Preventive Suspension
Floating Status
Burden of Proof
Fact of Dismissal
Validity of Dismissal
Liability of Officers
Sec. 30, Revised Corporation Code
Sec. 7, R.A. 10022
Money Claims
Backwages
Separation Pay
Financial Assistance
Damages
Attorney's Fees

NOTES

Valid Dismissal: Requisites

1. Pre-Wenphil Rule
To be valid, a dismissal must be both substantially and
procedurally valid, i.e., for a just or authorized cause and ef-
342 POST-EMPLOYMENT BAR SYLLABUS-BASED REVIEWER IN 343
LABOR LAW & SOCIAL LEGISLATION

fected after compliance with prescribed pre-termination pro- B. What are the grounds for validly terminating the
cedure. services of an employee based on a just cause? (5%)

2. Wenphil Rule C. Give the procedure to be observed for validly termi-

nating the services of an employee based on a just cause? (4%)
Even if pre-termination procedure is not complied
with, or incompletely complied with, a dismissal is valid as Answer
long as it is for a just or authorized cause. Non-compliance
with statutory due process warrants assessment of A. X X X

indemnity of P1 ,000.00 only.

B. The specific just causes for employee termination
3. Post-Wenphil Rule are the following:

As long as grounded on a just or authorized cause, a (1) Serious misconduct;

dismissal is valid regardless of the employer's non-com-
pliance with applicable pre-termination procedure. Non-
compliance with applicable procedure will justify an award
of nominal damages only. If the ground relied upon, and
proven, is a just cause, the violation of statutory due pro-
cess will justify nominal damages of P30,000.00. On othe
other hand, if the ground relied upon and proven is an
authorized cause, the violation of the 30-day notice
requirement will justify nominal damages of P50,000.00
In the first, the amount of nominal damages is P30,
000.00 only because the employee is at fault or is cul-
pable. In contrast, the award is P50,000.00 in the second
because the employee is faultless. (See the development
of jurisprudence under "Due Process", infra.)
Termination by Employer: Requisites of a Valid
Dismissal
(2) Fraud or loss of trust and confidence;
(3) Willful disobedience;
(4) Gross and habitual neglect of duty;
(5) Crime or offense against the employer, imme-
diate member of his family, or authorized repre-
sentative; and
(6) Other analogous causes,
C. The prescribed pre-termination procedure for a
dismissal for a just cause is as follows:
(1) Service of a Notice to Explain (NTE);
(2) Ample opportunity to be heard in person or with
the assistance of counsel; and
(3) Notice of Termination (NT).

1. Substantive Due Process Breach of Trust

1.1. Just Causes Yolando Bravo v. Urios College

(now Father Saturnino Urios University), et al.
2017 Bar Question No. X G.R. No. 198066, 7 June 2017

A. X X X
344 POST-EMPLOYMENT
Leonen,J
A dismissal based on willful breach 6f trust or loss of
trust and confidence under Article 297 of the Labor Code
entails the concurrence of two (2) conditions.
First, the employee whose services are to be termi-
nated must occupy a position of trust and confidence.
There are two (2) types of positions in which trust and
confidence are reposed by the employer, namely,
managerial employees and fiduciary rank-and-file emplo-
yees. Managerial employees are considered to occupy
positions of trust and confidence because they are
"entrusted with confidential and delicate matters." On the
other hand, fiduciary rank-and-file employees refer to those
employees, who, "in the normal and routine exercise of
their functions, regularly handle significant amounts of [the
employer's] money or property." Examples of fiduciary
rank-and-file employees are "cashiers, auditors, property
custodians," selling tellers, and sales managers. It must
be emphasized, however, that the nature and scope of
work and not the job title or designation determine whether
an employee holds a position of trust and confidence.
The second condition that must be satisfied is the
presence of some basis for the loss of trust and
confidence. This means that "the employer must establish
the existence of an act justifying the loss of trust and
confidence." Otherwise, employees will be left at the mercy
of their employers.
Different rules apply in determining whether loss of
trust and confidence may validly be used as a justification
in termination cases. Managerial employees are treated
differently than fiduciary rank-and-file employees. In Caoile
v. National Labor Relations Commission:
[W]ith respect to rank-and-file personnel,
loss of trust and confidence as ground for valid
dismissal requires proof of involvement in the
BAR SYLLABUS-BASED REVIEWER IN 345
LABOR LAW & SOCIAL LEGISLATION
alleged events in question, and that mere
uncorroborated assertions and accusations by
the employer will not be sufficient. But, as
regards a managerial employee, mere existence
of a basis for believing that such employee has
breached the trust of his employer would suffice
for his dismissal. Hence, in the case of manage-
rial employees, proof beyond reasonable doubt
is not required, it being sufficient that there is
some basis for such loss of confidence, such as
when the employer has reasonable ground to
believe that the employee concerned is respon-
sible for the purported misconduct, and the
nature of his participation therein renders him
unworthy of the trust and confidence demanded
by his position.(Citations omitted)
Although a less stringent degree of proof is required
in termination cases involving managerial employees, em-
ployers may not invoke the ground of loss of trust and
confidence arbitrarily. The prerogative of employers in
dismissing a managerial employee "must be exercised
without abuse of discretion."
Set against these parameters, this Court holds that
petitioner was validly dismissed based on loss of trust and
confidence. Petitioner was not an ordinary rank-and-file
employee. His position of responsibility on delicate finan-
cial matters entailed a substantial amount of trust from
respondent. The entire payroll account depended on the
accuracy of the classifications made by the Comptroller. It
was reasonable for the employer to trust that he had basis
for his computations especially with respect to his own
compensation. The preparation of the payroll is a sensitive
matter requiring attention to detail. Not only does the
payroll involve the company's finances, it also affects the
welfare of all other employees who rely on their monthly
salaries.
346 POST-EMPLOYMENT BAR SYLLABUS-BASED REVIEWER IN 347
LABOR LAW & SOCIAL LEGISLATION

Petitioner's act in assigning to himself a higher salary Nicodemus still filed a motion for execution to with respect
rate without proper authorization is a clear breach of the to his accrued backwages.
trust and confidence reposed in him. In addition, there was
no reason for the Comptroller's Office to undertake the (a) Were there valid legal grounds to dismiss
preparation of its own summary table because this was a Nicodemus from his employment? (2.5%)
function that exclusively pertained to the Human Resour-
ces Department. Petitioner offered no explanation about (b) Should Nicodemus' motion for execution be
the Comptroller's Office's deviation from company proce- granted? (2.5%)
dure and the discrepancies in the computation of other
employees' salaries. Petitioner's position made him ac- Answer
countable in ensuring that the Comptroller's Office ob- (a) Yes.
served the company's established procedures. It was rea-
The acts of Nicodemus constituted willful disobe-
sonable that he should be held liable by respondent on the
dience. The company rule he violated was a reasonable
basis of command responsibility. (Citations omitted.)
workplace rule; it pertained to his duty; it was made known
to him; he wilfully violated it; and his wilful violation is cha-
Willful Disobedience
racterized by wrongful and perverse mental attitude (Man-
ta/Jana v. La Consolacion College Manila, et al., G.R. No.
2018 Bar, Question No. XIII
208890, 8 December 2014) as shown by his persistence
Nicodemus was employed as a computer program- and incorrigibility. In fact, habituality is not even an element
mer by Network Corporation, a telecommunications firm. of insubordination. (Aparente v. NLRC, G.R. No. 117652,
He has been coming to work in shorts and sneakers, in 27 April 2000)
violation of the "prescribed uniform policy" based on com-
pany rules and regulations. The company human resour- (b) Yes.
ces manager wrote him a letter, giving him 10 days to
Nicodemus is entitled to reinstatement wages. Had
comply with the company uniform policy. Nicodemus as-
Network Corporation complied with the reinstatement
serted that wearing shorts and sneakers made him more
order, he would have been momentarily restored to both
productive, and cited his above-average output. When he
his work and pay. Absent justification for the non-reinstate-
came to work still in violation of the uniform policy, the
ment, the duty to pay the wages he would have earned
company sent him a letter of termination of employment.
had he been reinstated and allowed to work until reversal
Nicodemus filed an illegal dismissal case. The Labor
of the judgment must be imposed on the company( Garcia,
Arbiter ruled in favor of Nicodemus and ordered his
et al. v. PAL, Inc., G.R. No. 164856, 20 January 2009,
reinstatement with backwages. Network Corporation, how-
Footnote No. 12).
ever, refused to reinstate him. The NLRC 1st Division
sustained the Labor Arbiter's judgment. Network Corpora-
2015 Bar, Question No. IX
tion still refused to reinstate Nicodemus. Eventually, the
Court of Appeals reversed the decision of the NLRC and Din Din is a single mother with one child. She is em-
ruled that the dismissal was valid. Despite the reversal, ployed as a sales executive at a prominent supermarket.
348 POST-EMPLOYMENT
She and her child live in Quezon City and her residence
and workplace are a 15-minute drive apart. One day, Din
Din is informed by her boss that she is being promoted to a
managerial position but she is now being transferred to the
Visayas. Din Din does not want to uproot her family and
refuses the offer. Her boss is so humiliated by Din Din's
refusal of the offer that she gives Din Din successive
unsatisfactory evaluations that result in Din Din being
removed from the supermarket.
Din Din approaches you, as counsel, for legal advice.
What would you advise her? (4%)
Answer
Din Din's transfer to the Visaya's is a scalar transfer
because it is a promotion. As such, it can be refused by her
especially because her compliance therewith will entail
hardship on her part as a single parent. Performance by her
of the lawful act of refusing a promotion, therefore, should not
be punished with poor performance evaluations.
As a sales executive, Din Din's office entails perfor-
mance of work usually necessary and desirable in the
usual trade of the company. On this basis, she is tenured.
Hence, she cannot be dismissed on the ground of poor
performance which is neither a just nor authorized cause.
For this reason, she may file a complaint for illegal
dismissal.
Serious Misconduct
2016 Bar Question No. XII
Amaya was employed as a staff nurse by St. Francis
Hospital (SFH) on July 8, 2014 on a probationary status for
six (6) months. Her probationary contract required, among
others, strict compliance with SFH's Code of Discipline.
BAR SYLLABUS-BASED REVIEWER IN 349
LABOR LAW & SOCIAL LEGISLATION
On October 16, 2014, Dr.Ligaya, filed a Complaint
with the SFH Board of Trustees against Amaya for uttering
slanderous remarks against the former. Attached to the
complaint was a letter of Minda, mother of a patient, who
confirmed the following remarks against Dr.Ligaya:
"Bakit si Dr.Ligaya pa ang napili mong 'pedia' eh ang
tanda tanda na n'un? E makakalimutin na yun xxx Alam
mo ba, kahit wala naming diperensya yung baby, ipinapa-
isolate nya?"
The SFH President asks you, being the hospital's
counsel, which of these two (2) options is the legal and
proper way of terminating Amaya: a) terminate her for a
just cause under Article 282 (Art. 297) of the Labor Code
(Termination by Employer); orb) terminate her for violating
her probationary contract. Explain. (5%)
Answer
Of the two remedies, the more defensible is the first,
i.e., dismissal for a just cause. The second may not pros-
per because it cannot be lightly assumed that the Code of
Discipline was made known to Amaya upon her engage-
ment. Hence, it is more difficult to justify her dismissal on
the ground of failure to qualify. In contrast, her act of
causing intrigue on the professional ability of Dr.Ligaya can
be used to prove serious misconduct. Dr. Ligaya is held
out by the hospital to the public as its employee. Hence,
Amaya's act of discrediting her is an act directed against
the hospital too.
Alternative Answer
Amaya should be dismissed for failure to qualify,
albeit the company's standards for regularization have not
been communicated to her upon her engagement. Her
position is self-descriptive. Even without such standards,
the nature of her position did not permit her to subject Dr.
Ligaya to uncalled for comment. Common sense required
350 POST-EMPLOYMENT
her to keep to herself information hurtful to the professional
reputation of another, especially because Dr. Ligaya must
have had valid reasons - which Amaya had no right to
review - for managing her patients the way she did. Com-
mon sense is a judicially recognized measure of human
conduct (Wal/em Maritime Services, Inc., et al. v.
Donabelle Pedrajas, G. R. No. 192993, 6 April 2015).
2016 Bar, Question No. XI
Dion is an Accounting Supervisor in a trading com-
pany. He has rendered exemplary service to the company
for 20 years. His co-employee and kumpadre, Mac, called
him over the phone and requested him to punch his
(Mac's) daily time card as he (Mac) was caught in a mon-
strous traffic jam. Dion acceded to Mac's request but was
later caught by the Personnel Manager while punching
Mac's time card. The company terminated the employment
of Dion on the ground of misconduct. Is the dismissal valid
and just? Explain. (5%)
Answer
No. The dismissal of Dion for serious misconduct is
baseless. Serious misconduct is a dereliction of duty, or a
knowing, intentional and purposeful transgression of a
prescribed rule or norm of conduct. Hence, if the emplo-
yee's conduct is attended by carelessness, heedlessness,
inadvertence or thoughtlessness then it amounts to mere
error of judgment only. Likewise, if not attended by corrupt
or improper motive, it amounts to simple misconduct only
(See NLRC v. Bernadette Salgarino, G.R. No. 164376, 31
July 2006).
Dion is not guilty of serious misconduct because his
act is more trivial than it is of grave and aggravated
character. Given his length of service and the isolated
nature of his act, the Principle of Proportionality militates
against the imposition of the extreme penalty of dismissal.
In other words, he should have been imposed a less
BAR SYLLABUS-BASED REVIEWER IN 351
LABOR LAW & SOCIAL LEGISLATION
drastic penalty. In effect, therefore, he was illegally dis-
missed.
Union Expulsion
2016 Bar, Question No. VII
Forbes Country Club (Club) owns a golf course and
has 250 rank-and-file employees who are members of the
Forbes Country Club Union (Union). The Club has a CBA
with the Union and one of the stipulations is a Union
Security Clause, which reads: "All regular rank-and-file em-
ployees who are members of the union shall keep their
membership in good standing as a condition for their conti-
nued employment during the lifetime of this agreement."
Peter, Paul and Mary were the Treasurer, Assistant
Treasurer, and Budget Officer of the Union, respectively.
They were expelled by the Board of Directors of the Union
for malversation. The Union then demanded that the Club
dismiss said officials pursuant to the Union Security Clause
that required maintenance of union membership. The Club
required the three officials to show cause in writing why
they should not be dismissed. Later, the Club called the
three Union officials for a conference regarding the char-
ges against them. After considering the evidence submit-
ted by the parties and their written explanations, the Club
dismissed the erring officials. The dismissed officials sued
the Club and the Union for illegal dismissal because there
was really no malversation based on the documents pre-
sented and their dismissal from the Union was due to the
fact that they were organizing another union.
a. Is the dismissal of Peter, Paul and Mary by the
Club valid? (2.5%)
b. If the expulsion by the Union was found by the
Labor Arbiter to be baseless, is the Club liable to Peter,
Paul and Mary? Explain. (2.5%)
352 POST-EMPLOYMENT
Answer
(a) Yes. A dismissal based on the contracting union's
request under the union security clause is a contractual
obligation of the company. It is valid provided these requi-
sites are in attendance: (a) the union security clause is
applicable; (b) a request to dismiss on the ground of expul-
sion is made; and (c) the employer verifies the ground for
expulsion (See Alabang Country Club, Inc. v. NLRC, et al.,
G.R. No. 170287, 14 February 2008). All requisites are
present; hence, the dismissal is valid.
(b) Yes. If the requested dismissal is recklessly or
perfunctorily carried out on doubtful grounds and the Labor
Arbiter formally declares the expulsion as baseless, the
Club shall be liable to Peter, Paul and Mary. To free the
Club of liability is to leave the trio without means of reclai-
ming their jobs. The very means is a reinstatement order
issued in a termination case in which the Club must be the
party respondent (Art. 294, Labor Code).
Gross and Habitual Neglect of Duty
2016 Bar, Question No. XIV
Tess, a seamstress at Marikit Clothing Factory,
became pregnant. Because of morning sickness, she
frequently absented herself from work and often came to
the factory only four (4) days a week. After two (2) months,
the personnel manager told her that her habitual absences
rendered her practically useless to the company and, thus,
asked her to resign. She begged to be retained, citing her
pregnancy as reason for her absences. Tess asked for
leave of absence but her request was denied. She went on
leave nevertheless. As a result, she was thus dismissed for
going on leave without permission of management.
Tess filed a complaint for illegal dismissal. The com-
pany's defense: she was legally dismissed because of her
BAR SYLLABUS-BASED REVIEWER IN 353
LABOR LAW & SOCIAL LEGISLATION
numerous absences without leave and not because of her
pregnancy. On the other hand, Tess argues that her dis-
missal was an act of discrimination, based as it was on her
pregnancy which the company treated as a disease.
Whose position is meritorious - the company's or Tess'?
Explain. (5%)
Answer
The position of Tess is meritorious. There is no doubt
that her absences were all pregnancy-related. That she
was dismissed on the basis of said absences constitutes
an act of discrimination against a woman by reason of
pregnancy which is prohibited by Art. 135 of the Labor
Code (See Del Monte Philippines v. Lolita Velasco, G.R.
No. 153477, 6 March 2007).
Crime
2014 Bar, Question No. XXIV
Lanz was a strict and unpopular Vice-President for
Sales of Lobinsons Land. One day, Lanz shouted invec-
tives against Lee, a poor performing sales associate, cal-
ling him, among others, a "brown monkey." Hurt, Lee deci-
ded to file a criminal complaint for grave defamation
against Lanz. The prosecutor found probable cause and
filed an information in court. Lobinsons decided to termi-
nate Lanz for committing a potential crime and other illegal
acts prejudicial to business. Can Lanz be legally termina-
ted by the company on these grounds? (4%)
Answer
As to the first ground, crime to be a just cause for
dismissal must be against the employer, members of his
immediate family or representative (Article 288, LC, as re-
numbered). Since the potential crime of Lanz is not against
Lobinsons or its duly authorized representatives, it cannot
of itself justify his termination.
354 POST-EMPLOYMENT
As to the second ground, Lanz's dysfunctional con-
duct has made the work environment at Lobinsons hostile
as to adversely affect other employees, like Lee. There-
fore, he can be dismissed on the ground of s~rious
misconduct and loss of trust and confidence.
Alternative Answer
As to the first ground, crime to be a just cause for dis-
missal must be against the employer, members of his im-
mediate family or representative (Article 297, LC, as re-
numbered). Since the potential crime of Lanz is not against
Lobinsons or its duly authorized representatives, it cannot
of itself justify his termination. However, it can be treated
as a cause analogous to serious misconduct or loss of
trust and confidence. Therefore, Lanz can be dismissed on
this ground.
As to the second ground, Lanz's dysfunctional beha-
vior has made the work environment at Lobinsons hostile
as to adversely affect other employees, like Lee. There-
fore, he can be dismissed also on the ground of serious
misconduct and loss of trust and confidence.
2015 Bar, Question No. XI
Rico has a temper and, in his work as Division
Manager of Matatag Insurance, frequently loses his temper
with his staff. One day, he physically assaults his staff
member by slapping him. The staff member sues him for
physical injuries. Matatag Insurance decides to terminate
Rico, after notice and hearing, on the ground of loss of
trust and confidence. Rico claims that he is entitled to the
presumption of innocence because he has not yet been
convicted. Comment on Matatag's action in relation to
Rico's argument.(4%)
BAR SYLLABUS-BASED REVIEWER IN 355
LABOR LAW & SOCIAL LEGISLATION
Answer
Matatag Insurance does not have to await the result
of the criminal case before exercising its prerogative to
dismiss. Under the Three-fold Liability Rule, a single act
may result in three liabilities, two of which are criminal and
administrative. To establish these liabilties, the evidence of
the crime must amount to proof beyond reasonable doubt;
whereas, the evidence of the ground for dismissal is
substantial evidence only. In this regard, the company has
some basis already for withholding the trust it has reposed
in its manager. Hence, Rico's conviction need not precede
the execution of his intended dismissal. Criminal and labor
cases involving an employee arising from the same
infraction are separate and independent proceedings that
should not arrest any judgment from one to the other ( St.
Luke's Medical Center, Inc. v. Sanchez, G.R. No. 212054,
11 March 2015).
Inefficiency
Sameer Overseas Placement Agency v. Joy Cabiles
G.R. No. 170139, 5 August 2014
Leonen,J
To show that dismissal resulting from inefficiency in
work is valid, it must be shown that: 1) the employer has
set standards of conduct and workmanship against which
the employee will be judged; 2) the standards of conduct
and workmanship must have been communicated to the
employee; and 3) the communication was made at a
reasonable time prior to the employee's performance
assessment.
This is similar to the law and jurisprudence on proba-
tionary employees, which allow termination of the emplo-
yee only when there is "just cause or when [the probatio-
nary employee] fails to qualify as a regular employee in
accordance with reasonable standards made known by the
356 POST-EMPLOYMENT
employer to the employee at the time of his [or her]
engagement."
However, we do not see why the application of that
ruling should be limited to probationary employment. That
rule is basic to the idea of security of tenure and due
process, which are guaranteed to all employees, whether
their employment is probationary or regular.
The pre-determined standards that the employer sets
are the bases for determining the probationary employee's
fitness, propriety, efficiency, and qualifications as a regular
employee. Due process requires that the probationary
employee be informed of such standards at the time of his
or her engagement so he or she can adjusthis or her
character or workmanship accordingly. Proper adjustment
to fit the standards upon which the employee's qualifica-
tions will be evaluated will increase one's chances of being
positively assessed for regularization by his or her
employer.
Assessing an employee's work performance does not
stop after regularization. The employer, on a regular basis,
determines if an employee is still qualified and efficient,
based on work standards. Based on that determination,
and after complying with the due process requirements of
notice and hearing, the employer may exercise its
management prerogative of terminating the employee
found unqualified.
The regular employee must constantly attempt to
prove to his or her employer that he or she meets all the
standards for employment. This time, however, the stan-
dards to be met are set for the purpose of retaining em-
ployment or promotion. The employee cannot be expected
to meet any standard of character or workmanship if such
standards were not communicated to him or her. Courts
should remain vigilant on allegations of the employer's
failure to communicate work standards that would govern
BAR SYLLABUS-BASED REVIEWER IN 357
LABOR LAW & SOCIAL LEGISLATION
one's employment "if [these are] to discharge in good faith
[their] duty to adjudicate."
In this case, petitioner merely alleged that respondent
failed to comply with her foreign employer's work
requirements and was inefficient in her work. No evidence
was shown to support such allegations. Petitioner did not
even bother to specify what requirements were not met,
what efficiency standards were violated, or what particular
acts of respondent constituted inefficiency.
There was also no showing that respondent was
sufficiently informed of the standards against which her
work efficiency and performance were judged. The parties'
conflict as to the position held by respondent showed that
even the matter as basic as the job title was not clear.
The bare allegations of petitioner are not sufficient to
support a claim that there is just cause for termination.
There is no proof that respondent was legally terminated.
(Citations omitted.)
Special Rules
1. Analogous Causes Rule
A dismissal for a just cause is valid. In turn, a just cause
is a listed cause for dismissal (Art. 297, Labor Code). Re-
gardless, there can be a valid dismissal even if grounded on
an unlisted cause. If the ground is analogous to any of the
listed cause then it justifies a dismissal.
One is analogous to another if it is susceptible of
comparison with the latter, either in general as in some
specific detail, or has a relationship with the latter.
(Lim v NLRC, G.R. No. 118434, ). The determination of
whether the cause for terminating employment is analo-
gous to any of those enumerated in Art 282 will depend on
the circumstances of each case (Nadura vs. Benguet
Consolidated, G.R. No. L-17780, ).
358 POST-EMPLOYMENT BAR SYLLABUS-BASED REVIEWER IN 359
LABOR LAW & SOCIAL LEGISLATION

Elements: and 24 March 1995) for incurring cash shortages of P61.00

1. the unlisted cause must be' susceptible of and P80.00 and a written warning (11 January 1995) for
comparison with a listed cause under Article 297· incurring a cash shortage of P52.00. Furthermore,
' respondent was given five (5) verbal warnin_gs for reporting
2. the act or omission must be voluntary and/ or late for work on 01 December 1993, 25 March, 02 May, 17
wilful; and July and 05 November, all in the year 1994. xx x.
3. the act or omission must show fault or culpability.
The resort by petitioners to respondent's past conduct
is a desultory attempt to explain their drastic action.
Examples: Previous offenses may be used as valid justification for
1. Abandonment of work; dismissal from work only if they are related to the subse-
2. Gross inefficiency; quent infraction-basis of the termination of employment.
Previous infractions, in other words, may be used if they
3. Theft committed against a co-employee; have a bearing on the proximate offense warranting dis-
4. Quarrelsome attitude; missal. No such bearing exists, however, between the
5. Use of shabu above-detailed alleged infractions with respondent's meal
policy violation.
Note: Parenthetically, the employment record of respondent
D.O. 147-15 expressly provides that analogous reflects her fairly outstanding work ethic and performance
causes be specified in company rules and regulations. which is punctuated by at least counts of commendation~
Illness is an authorized cause under Art. 299 of the Labor from the management no less.
Code, not an analogous cause under Art. 297. In fine, given the totality of respondent's employment
record, the penalty of dismissal is too discordant with the
2. Cognate Offenses Rule infraction she committed. (Footnotes omitted.)

McDonald's (Katipunan Branch) v. Dulce Alba 3. Totality of Infractions Rule

G. R. No. 156382, 18 December 2008
Petitioners finally harp on the supposed checkered
employment record of respondent to justify her dismissal,
viz:
x x x Her employment record was marred by
numerous infractions of Company rules for which she was
repeatedly sanctioned by her superiors, to wit: a written
warning for failing to report for work (07 December 1994);
a three-day suspension (14 to 16 February 1995) for incur-
ring several absences; two (2) verbal warnings (1 0 January
Ricardo Sy, et al. v. Neat, Inc., et al.
G.R. No. 213748, 27 November 2017
In determining the sanction imposable on an employ-
yee, the employer may consider the farmer's past miscon-
duct and previous infractions. Also known as the principle
of totality of infractions, the Court explained such concept
in Merin v. National Labor Relations Commission, et al.,
thus:
360 POST-EMPLOYMENT
The totality of infractions or the number of
violations committed during the periop of employ-
ment shall be considered in determining the
penalty to be imposed upon an erring employee.
The offenses committed by petitioner should not
be taken singly and separately. Fitness for con-
tinued employment cannot be compartmenta-
lized into tight little cubicles of aspects of cha-
racter, conduct and ability separate and indepen-
dent of each other. While it may be true that
petitioner was penalized for his previous infrac-
tions, this does not and should not mean that his
employment record would be wiped clean of his
infractions. After all, the record of an employee is
a relevant consideration in determining the pe-
nalty that should be meted out since an emplo-
yee's past misconduct and present behavior
must be taken together in determining the proper
imposable penalty. Despite the sanctions im-
posed upon petitioner, he continued to commit
misconduct and exhibit undesirable behavior on
board. Indeed, the employer cannot be com-
pelled to retain a misbehaving employee, or one
who is guilty of acts inimical to its interests. It has
the right to dismiss such an employee if only as a
measure of self-protection.
A closer look into the entirety of the violations imputed
against Sy shows that respondents failed to prove with
substantial evidence that the totality of infractions commit-
ted by him constitutes as a just cause for his dismissal
under the Labor Code. In fact, even by its own standards,
respondents' dismissal of Sy fails to measure up to Neat,
lnc.'s Guide to the Administration of Code of Conduct,
which states that the "termination of employment of the
employee by the Company is usually imposed when the
employee's record over the period of time shows clearly
that the amount of warnings and other disciplinary actions
BAR SYLLABUS-BASED REVIEWER IN 361
LABOR LAW & SOCIAL LEGISLATION
has not made the employee understand the error of his
ways and/or for the first offense which is such a serious
error that cannot be ignored.'' There is no dispute that Sy
was properly warned twice and aptly sanctioned with a 3-
day suspension for violation of the company dress code
which he committed on January 29,2009, May 28,2009
and May 30, 2009. There is also no question that Sy is
guilty of insubordination for not following the instruction of
Operation Assistant Cesca Abuan on July 28, 2011 as to
the swapping of his assigned delivery utility, and for
insisting on his preferred delivery utility. Because of such
incident, a Memorandum dated July 29, 2011 was issued
to Sy (1) suspending him for 3 days starting on even date
until August 2, 2011; (2) requiring him to report to the head
office on August 3, 2011 to discuss the grounds and
degree of violation, and (3) warning him that further viola-
tion of policies will result in disciplinary action up to and
including immediate termination of employment. Unfortu-
nately, Sy was terminated the following day, August 4,
2011, due to the 5 written warnings previously issued to
him - 3 of which were due to wearing of improper uniform
in 2009, 1 for insubordination on July 28, 2011, and the
last for supposed poor performance evaluation on August
3, 2011. (Citations omitted.)
Hypothetical Problem
After plant-level investigation, Donald is served a shot-
gun termination notice based on serious misconduct, wilful
disobedience, gross and habitual negect of duty, breach of
trust, and crime. He submits his position paper before the
Labor Arbiter and traverses therein his employer's grounds
as follows: As to serious misconduct, his act is not attended
by improper or corrupt motive; as to wilful disobedience, his
act is not attended by wrongful and perverse mental attitude;
as to gross and habitual neglect of duty, his act is isolated
only; as to breach of trust, he is neither a manager nor an
occupant of a position of trust and confidence; and as to
362 POST-EMPLOYMENT
crime, the property he took belonged to a co-employee and
not to his employer, immediate member, of his family, or
authorized representative. Therefore, for lack of a just cause,
his dismissal must be declared as illegal. How will you
address Donald's argument in your reply? Explain. (1%)
Proposed Answer
I will invite the attention of the Labor Arbiter to this
rule: 'The totality of infractions or the number of violations
committed during the period of employment shall be consi-
dered in determining the penalty to be imposed upon an
erring employee. The offenses committed by petitioner
should not be taken singly and separately. Fitness for con-
tinued employment cannot be compartmentalized into tight
little cubicles of aspects of character, conduct and ability
separate and independent of each other." (Merin v. MRC,
G.R. No. 171790, 17 October 2008).
I will argue that while, standing separately and inde-
pendently of each other, none of the grounds constitutes a
just cause under Art. 297 of the Labor Code for want of cer-
tain elements, still Donald's unfitness for continued em-
ployment can be ascertained from the totality of his acts. In
fact, taken in their entirety, they amount to serious miscon-
duct. But even if taken individually, some of the grounds are
analogous causes, e.g., taking of property belonging to a
co-employee. (Cosmos Bottling Corp. v. Wilson Fermin,
G.R. No. 193676, 20 June 2012).
When Totality of Infractions Rule Does Not Apply
a. Past Misconduct Not Established
"Respondent cannot invoke the principle of totality of
infractions considering that petitioner's alleged previous
acts of misconduct were not established in accordance
with the requirements of procedural due process. In fact,
respondent conceded that he "was not even censured for
BAR SYLLABUS-BASED REVIEWER IN 363
LABOR LAW & SOCIAL LEGISLATION
any infraction in the past." (Leo Mau/a v. Ximex Delivery
Express, Inc., G.R. No. 207838, 25 January 2017).
b. Dismissal is Disproportionate
"While previous infractions may be used to support an
employees dismissal from work in connection with a sub-
sequent similar offense, we cautioned employers in an
earlier case that although they enjoy a wide latitude of dis-
cretion in the formulation of work-related policies, rules and
regulations, their directives and the implementation of their
policies must be fair and reasonable; at the very least,
penalties must be commensurate to the offense involved
and to the degree of the infraction.
As we earlier expressed, we do not consider Michelles
dismissal to be commensurate to the four absences she
incurred for her six years of service with the company, even
granting that she failed to submit on time a medical certificate
for her May 8, 2000 absence. We note that she again did not
report for work on May 15 to 27, 2000 due to illness. When
she reported back for work, she submitted the necessary
medical certificates. The reason for her absence on May 8,
2000 due to illness and not for her personal convenience all
the more rendered her dismissal unreasonable as it is clearly
disproportionate to the infraction she committed." (Cavite
Apparel, Inc. v. Michelle Marquez, G.R. No. 172044, 6 Feb-
ruary 2013).
4. Substantial Identity Rule
Surigao Del Norte Electric Cooperative, Inc. v.
Teofilo Gonzaga
G.R. No. 187722, 10 June 2013
Management issued Gonzaga a memorandum to ex-
plain his remittance shortages of P314,252.23. After inves-
tigation, he was served his termination notice based on the
investigating committee's report finding him guilty of gross
364 POST-EMPLOYMENT BAR SYLLABUS-BASED REVIEWER IN 365
LABOR LAW & SOCIAL LEGISLATION

and habitual neglect of duty, misappropriation of comp nay X X X

funds, and remittance shortages. He argued that while he
was given the opportunity to explain the alleged remittance Answer
shortages, he was not heard on the additional charges of
(a) A just cause is a fault-based ground for dismissal
gross and habitual neglect of duty and misappropriation of
under Art. 297, Labor Code; whereas, an authorized cause
company funds.
is a non-fault ground for dismissal under Articles 298 and
The SC held: 299 of the Labor Code.
"While the actual grounds of Gonzaga's dismissal,
(b) x X X
i.e., gross and habitual neglect of duties and responsibi-
lities, misappropriation of REC funds and failure to remit X X X
collections/monies, were not explicitly stated in Memoran-
dum 34-01, these infractions are, however, implicit in the 2. Authorized Causes (Art. 298 & Art. 299, Labor Code)
charge of cash shortage. Due to the direct and logical
2.1. The difference between a just cause and an
relation between these grounds, Gonzaga could not have
authorized cause lies in fault or culpability. A dismissal for
been misled to proffer any mistaken defense or contrive
just cause is based on the employee's fault or culpability.
any weakened position. Rather, precisely because of the
In contrast, one for an authorized cause is not fault-based.
substantial identity of these grounds, any defense to the
For example, it is not the employee's fault that he should
charge of cash shortage equally constitutes an adequate
lose his livelihood by retrenchment for the reason that his
defense to the charges of gross and habitual neglect of
employer has mismanaged his business resulting in
duties and responsibilities, misappropriation of REC funds
serious business losses. It is not his fault that his employer
and failure to remit collections/monies. It stands to reason
has fallen in love with Miss Africa as to decide shutting
that the core of all these infractions is similar - that is, the
down his factory to be with her in Uganda.
loss of money to which Gonzaga was accountable - such
that by reconciling the amounts purportedly missing, 2.2. For above reason, violation of pre-termination
Gonzaga would have been exculpated from all these procedure yields different amounts of nominal damages
charges. Therefore, based on these considerations, the depending on the ground relied upon and proven by the
Court finds that the first notice requirement had been employer. Thus, it is 30K when it is an Art. 297 ground;
properly met." (Underscored) whereas, it is 50K when it is an Art. 298 ground. In other
words, the employee at fault is given the lesser amount.
1.2. Authorized Causes
Medical Termination
2019 Bar, Part I, Question No. A.1
Art. 299 (medical termination) provides yet another
Define, explain or distinguish the following terms: authorized cause.
(a) Just and authorized causes (2%)
(b) X X X
366 POST-EMPLOYMENT
Business-Related Authorized Causes
Authorized causes can be grouped 'into two: (a) re-
trenchment and closure; and (b) automation and redun-
dancy. This grouping of authorized causes is important be-
cause the amount of separation pay rests on it. In the first
group, the employer is in financial trouble; whereas, in the
second, he is not, i.e., he is financially good as to afford to
over-hire employees (redundancy) or to buy machines
(automation). Separation pay in the first is based on ½
month salary - unless the closure is by reason of serious
business losses, in which case no separation pay is
required. In contrast, the basis in the second is 1 month
salary.
The pre-termination procedure is service of notices to
both DOLE-RD and the affected employees 30 days
before the intended cessation of employment. Where one
is notified 30 days before and the other is notified much
later, nominal damages shall be ordered paid due to the
defective compliance (Plastimer Industrial Corp., et al. v.
Gopo, et al., G.R. No. 183390, 16 February 2011).
1. Redundancy
Moises B. Panlilio v. NLRC
G.R. No. 117459, 17 October 1997
Questions to Ask
(a) Is there a feasibility study?
(b) Is it approved by higher management?
(c) Does it show that the reduced manpower (new
staffing pattern) can still meet the company's
usual business target?
(d) Was the reduction of personnel (manpower
downsizing) based on rational criteria, e.g., less
preferred status?
BAR SYLLABUS-BASED REVIEWER IN 367
LABOR LAW & SOCIAL LEGISLATION
(e) Was the manpower downsizing done in good
faith?
(f) Was separation pay delivered?
The Redundancy Rule
Subject to compliance with procedural requirements
and use of reasonable retention criteria, red circle positions
can be redundated resulting in the lawful termination of
their occupants. If the new staffing pattern cannot meet the
company's usual business target, there is no justification
for the manpower downsizing. Therefore, the red-circling of
positions, redundation thereof, and termination of their
occupants is unlawful.
Selection Criteria
Abbott Laboratories, Inc. v. Torralba, et al.
G.R. No. 229746, 11 October2017
When two divisions are merged for a valid business
reason, retention of all the members of one division and
redundation of the positions of members of the other -
even if based on less preferred status, efficiency and
seniority - makes the redundancy illegal. Not only should
individual performance be subjected to evaluation but the
performance of the divisions as well. Said illegality is
compounded by the hiring of additional employees after
the redundancy. The same contradicts the employer's
ground for dismissal.
2. Retrenchment: "In the Red" v. "In the Black"
Dismissal by retrenchment is allowed if the employer
is in the red but not when in the black only. When in the
red, its losses are substantial; whereas, when in the black,
they are de minimis only. The evidence of substantial los-
ses must be in the form prescribed by jurisprudence: fi-
nancial statements certified by an independent exter-
368 POST-EMPLOYMENT
nal auditor. Said statements must cover several years of
operation as to be representative of actwal business los-
ses. Where the capital of the company is 1B whereas its
alleged total losses, sustained during 1 year of operation
only, is just 3M then it is in the black only, especially if its
income is still enough to cover salaries. Hence, it cannot
adopt a Compressed Work Week schedule (Linton Com-
mercial Company, Inc. v. Hel/era, et al., G.R. No. 16147,
10 October 2007). With more reason that it cannot retrench
if in the black only.
Note:
In FASAP v. NLRC, G.R. No.178083, 13 March
2018, PAL did not submit financial statements duly certified
by an independent external auditor. But since the SEC,
NLRC and CA found substabtial losses even without them,
the en bane accorded their factual findings respect.
3. Closure
An employer can close his business for any reason
under the sun, as long as he acts in good faith, serves the
required notices, and pays separation pay. However, if the
closure is by reason of serious business losses (in the red,
or financially bleeding), the duty to pay separation pay is
not imposed on him.
4. Automation
Health-Related Authorized Cause
Medical termination is allowed when continuing em-
ployment is prejudicial to the health of the employee or his
illness poses health risk to his co-employees. This hap-
pens when he has contracted a disease of such nature, or
at such stage, that it is incurable within six (6) months
even with adequate medical attention. It is a competent
public health authority, not the company doctor (Pedro
BAR SYLLABUS-BASED REVIEWER IN 369
LABOR LAW & SOCIAL LEGISLATION
Solis v. NLRC, G.R. No. 116175, 28 October 1996), who
issues the required medical certificate.
1. Dismissal is Contested
Where the medical termination is contested, the
employer must prove that he has served a first notice,
together with the required medical certificate, informing the
sick employee of his intent to dismiss him on medical
grounds; he must prove that the required notice has given
the employee the opportunity to submit his own medical
certificate to prove absence of, if not resolution of the
medical ground relied upon; and that he has served a
second notice to effect the medical termination. On top of
these, he must prove payment of separation pay.
2. Dismissal is not Contested
Where the medical termination sits well with the sick
employee, the employer cannot withhold the required
separation pay until the employee submits a medical
certificate issued by a competent public health authority to
the effect that he is afflicted with a disease of such nature
or at such stage that it is incurable in six (6) months even
with adequate medical attention. This obligation is not
imposed on sick employees.
Hypothetical Problem
Mico was served the first of two notices required in
medical terminations. The accompanying medical certifi-
cate issued by PGH stated that his coronary heart disease
was incurable even if medically managed by PGH, or any
heart doctor for that matter, for the next six (6) months. To
avert his dismissal, he secured a medical certificate from
St. Luke's Medical Center to the effect that his heart con-
dition has been resolved already. Despite receipt of his ex-
planation accompanied by the original copy of his second
medical certificate, he was still served a notice to dismiss.
In said second notice, his employer reasoned that the first
370 POST-EMPLOYMENT
medical certificate was superior to the second because St.
Luke's Medical Center was not a competent public health
authority. Decide (1.5 %).
Proposed Answer
A sick employee is not required to secure his
explanatory medical certificate from a competent public
health authority. Only the medical certificate supporting his
intended dismissal is required to be so procured. Hence,
since the medical ground relied upon has been disproven,
Mice's dismissal is illegal.
Comment:
In this situation, there is no third physician rule to
apply. Hence, the conflicting medical opinions must simply
be treated as a source of doubt. Consequently, said doubt
must be resolved in favour of the employee pursuant to the
Liberal Interpretation Rule.
Prolonged Sick Leave
Medical leave under Art. 299 is for a maximum period
of six (6) months. Where an employee granted said leave
unjustifiably exceeds it, he can be terminated on the
ground of gross and habitual neglect of duty, if not
abandonment.
2. Procedural Due Process
Pre-Termination Procedure Under Under Art. 297
2016 Bar, Question No. VI
Pedro, a bus driver of Biyahe sa Langit Transport,
was involved in a collision with a car, damaging the bus.
The manager accused him of being responsible for the da-
mage and was told to submit his written explanation within
48 hours. Pedro submitted his explanation within the
period. The day after, Pedro received a notice of termina-
BAR SYLLABUS-BASED REVIEWER IN 371
LABOR LAW & SOCIAL LEGISLATION
tion stating that he is dismissed for reckless driving resul-
ting to damage to company property, effective immediately.
Pedro asks you, as his counsel, if the company complied
with the procedural due process with respect to dismissal
of employees.
a. Explain the twin notice and hearing rule. (2.5%)
b. Did the Biyahe sa Langit Transport comply with
the prior procedural requirements for dismissal? (2.5%)
Answer
(a) An employee sought to be dismissed has the sta-
tutory right to be accorded ample opportunity to be heard
(Art. 292, Labor Code). Said right translates to service
upon him of two written notices, viz., notice of intent to dis-
miss and notice of dismissal. The first serves the purpose
of apprising him of the employer's ground for the intended
dismissal. On the other hand, the second communicates
the employer's final decision to dismiss him. In between
said notices, he must be accorded all reasonable means
and assistance as might help him come to the defense of
his employment. If he requests for a formal hearing, the
same must be granted ( See King of Kings Transport, Inc.
v. Mamac, G.R. No. 166208, 29 June 2009; Citibank v.
Genuino, G.R. No. 142753-54, 4 December 2007; Perez v.
PT& T, G.R. No. 152048, 7 April 2009).
(b) No. Biyahe sa Langit Transport transgressed the
rule that opportunity to be heard not be perfunctory, pro
forma or meaningless (See Genuino v. NLRC, G.R. No.
142732-33, 4 December 2007) . Since it can only be pre-
sumed that the company simply received Pedro's explana-
tion and nothing else more then it is doubtful if he was
heard at all. The rule observed in this forum is that all
doubts arising from evidence in labor proceedings must be
resolved in favor of the workingman (See Hocheng Phil.
Corp. v. Farra/es, G.R. No. 211497, 18 March 2015) .
 372 POST-EMPLOYMENT
BAR SYLLABUS-BASED REVIEWER IN 373
LABOR LAW & SOCIAL LEGISLATION

Hypothetical Problem
served another NTE for poor services to. another client.
The No~ice to Explain served on• Roger reads: "You This time, she did not submit and explanation; hence, she
are hereby given three (3) calendar days from receipt here- was directed to appear at the Head Office of the company.
of to explain why you should not be disciplined for violation However, she did not. Later, on the same day, sh~ was
of the Safe Spaces Act of 2019, copy whereof (with under- served an NTE for her non-appearance and a notice of
scored portions showing your violations) is hereto attached termination on the ground of insubordination.
for your perusal." His answer reads: "Subject to my right to
It was held that Sta. Isabel's non-appearance at the
a bill of particulars, I am denying all allegations against
hearing was not insubordination but a waiver of her right to
me." His Notice of Dismissal reads: "For having exhibited a
be heard only.
smart alecky attitude, evading your directive, you are here-
by dismissed on the ground of serious misconduct." Do the
Seafarers
facts present any issue? If so, identify and resolve it.

Answer Maersk-Filipinas Crewing, Inc. et al. v. Toribio Avestruz

G.R. No. 207010, 18 February 2015
The facts present a due process issue, viz., whether
Similarly, the Court affirms the finding of the CA that
or not Roger was given a meaningful notice to explain.
Avestruz was not accorded procedural due process, there
Based on content, his notice is pro forma; it is perfunctory;
being no compliance with the provisions of Section 17 of
it is vague; and, if at all, it gives him "mere opportunity" and
the POEA-SEC as above-cited, which requires the "two-
not "ample opportunity" to be heard (Marilou Genuino v.
notice rule." As explained in Skippers Pacific, Inc. v. Mira:
NLRC, et al., , G.R. No. 142732-33, 4 December 2007).
An erring seaman is given a written noti~e of the ch_arge
Even if given a copy of the Safe Spaces Act of 2019, with
against him and is afforded a~ opportu~Ity to explain or
underscored portions, he would not know what exactly to
defend himself. Should sanctions be imposed, then a
explain. Hence, the total denial unto him of his right to be
written notice of penalty and the reasons for it shall be
informed of his supposed manner of violating the law is a
furnished the erring seafarer. It is only in the exceptional
fair play issue that should be resolved in his favor.
case of clear and existing danger to the safety of the crew
Waiver or vessel that the required notices are dispensed with; but
just the same, a complete report sho~ld b~ sent to the
manning agency, supported by substantial evidence of the
Jinky Sta. Isabel v. Perla Campania de Seguro, Inc.
findings.
G.R. No. 219430, 7 November 2016
In this case, there is dearth of evidence to show that
Sta. Isabel, a Claims Adjuster, received a Notice to Avestruz had been given a written notice of the charge
Explain (NTE) why no disciplinary action should be taken
against him, or that he was given the opp_ortunity to expla~n
against her for her poor services towards the clients of an or defend himself. The statement given by Captain
insurance agency, to which she submitted her written
Woodward requiring him to explain in writing the events
explanation. Subsequently, she attended a meeting with
that transpired at the galley in the morning of June 22,
Perla's officers concerning the two incidents. She was
2011 hardly qualifies as a written notice of the charge
 374 POST-EMPLOYMENT
against him, nor was it an opportunity for Avestruz to ex-
plain or defend himself. While Captain \,Oloodward claimed
!n his. e-mail that he c~nd_ucted a "disciplinary hearing"
1nform1ng Avestruz of hrs inefficiency, no evidence was
presented to support the same.
Neither was Avestruz given a written notice of penalty
and the reasons for its imposition. Instead, Captain
Woodward verbally informed him that he was dismissed
from service and would be disembarked from the vessel. It
bears stressing that only in the exceptional case of clear
and existing danger to the safety of the crew or vessel that
the required notices may be dispensed with, and, once
again, records are bereft of evidence showing that such
was the situation when Avestruz was dismissed. (Citations
omitted.)
Clear and Existing Danger
EVIC Human Resource Management, Inc., et al. v.
Rogelio Panahon
G.R. No. 206890, 31 July 2017
The POEA-SEC provides:
Section 17. DISCIPLINARY PROCEDURES
The Master shall comply with the following disciplinary
procedures against an erring seafarer:
A The Master shall furnish the seafarer with a written
notice containing the following:
1. Grounds for the charges as listed in Section 31 of
this Contract.
2. Date, time and place for a formal investigation of
the charges against the seafarer concerned.
B. The Master or his authorized representative shall
conduct the investigation or hearing, giving the seafarer
the opportunity to explain or defend himself against the
BAR SYLLABUS-BASED REVIEWER IN 375
LABOR LAW & SOCIAL LEGISLATION
charges. An entry on the investigation shall be entered into
the ship's logbook.
C. If, after the investigation or hearing, the Master is
convinced that imposition of a penalty is justified, the
Master shall issue a written notice of penalty and the
reasons for it to the seafarer, with copies furnished to the
Philippine agent.
D. Dismissal for just cause may be effected by the
Master without furnishing the seafarer with a notice of
dismissal if doing so will prejudice the safety of the crew or
the vessel. This information shall be entered in the ship's
logbook. The Master shall send a complete report to the
manning agency substantiated by witnesses, testimonies
and any other documents in support thereof. 55
Explaining the foregoing rules, the Court in Skippers
Pacific, Inc. v. Mira, held:
Note that under Section 17 of what is termed the
Standard Format, the "two - notice rule" is indicated. An
erring seaman is given a written notice of the charge
against him and is afforded an opportunity to explain or
defend himself. Should sanctions be imposed, then a
written notice of penalty and the reasons for it shall be
furnished the erring seafarer. It is only in the exceptional
case of clear and existing danger to the safety of the
crew or vessel that the required notices are dispensed
with; but just the same, a complete report should be sent
to the manning agency, supported by substantial evidence
of the findings.
In the case at bar, the records are bereft of any
evidence showing that respondent was given a written
notice of the charges against him, or that he was given an
opportunity to explain or defend himself. Neither is there
proof that respondent was furnished with a written notice of
the penalty imposed against him and the reasons for its
imposition. Indeed, petitioners admit that these required
 376 POST-EMPLOYMENT
notices were dispensed with because, according to them
there was a clear and existing danger to the safety of th~
crew or vessel. Unfortunately for petitioners, however
there is, again, no evidence that was presented to prov~
such was the situation when respondent was terminated.
(Footnotes omitted.)
Under Art. 298: Authorized Cause
2019 Bar, Part II, Question No. B. 19.
Because of dwindling sales and the consequent limi-
tation of production, rumors were rife that XYZ, Inc. would
reduce its employee force. The next day, the employees of
XYZ, Inc. received a notice that the company will have a
winding down period of 10 days, after which there will be a
six (6)-month suspension of operations to allow the com-
pany to address its precarious financial position.
On the fourth (4th) month of suspension of its opera-
tions XYZ, Inc. posted announcement that it will resume its
operations in 60 days but at the same time announced that
instead of closing down due to financial losses, it will
retrench 50% of the work force.
(a) Is the announcement that there would be ret-
renchment affecting 50% of the work force sufficient
compliance with the legal requirements for retrenchment?
Explain. (2.5%)
(b) Assuming that XYZ, Inc., instead of retrenchment,
extended the suspension of its operations from six (6)
months to eight (8) months, would the same be legally
permissible? If not, what are the consequences? (2.5%)
Answer
(a) No. The 30-day notice requirement is a written
notice that must be served on both the Department of
BAR SYLLABUS-BASED REVIEWER IN 377
LABOR LAW & SOCIAL LEGISLATION
Labor and Employment and the affected employees (Art.
298, Labor Code). Hence, the posted announcement is a
violation of the prescribed pre-termination procedure.
(b) Temporary suspension of business operations
under Art. 301 of the Labor Code should not exceed 6
months; otherwise, the suspension would ripen to cons-
tructive dismissal after the period expires. In such case,
the company would be ordered to reinstate and pay
backwages.
2016 Bar, Question No. IV
Hagibis Motors Corporation (Hagibis) has 500 regular
employees in its car assembly plant. Due to the Asian
financial crisis, Hagibis experienced very low car sales
resulting to huge financial losses. It implemented several
cost-cutting measures such as cost reduction on use of
office supplies, employment hiring freeze, prohibition on
representation and travel expenses, separation of casuals
and reduced work week. As counsel of Hagibis, what are
the measures the company should undertake to implement
a valid retrenchment? Explain. (5%)
Answer
I will advise the following measures:
(a) Notify the DOLE-RD and the concerned emplo-
yees in writing of the intended retrenchment 30 days
before actual termination;
(b) Establish the substantial losses incurred during 3
years of operation with financial statements duly certified
by an independent external auditor;
(c) Employ fair and reasonable criteria on the selec-
tion of employees to be separated;
(d) Pay separation pay; and
(e) Observe good faith.
378 POST-EMPLOYMENT
Note: Payment of one month salary is not a valid
substitute for the required 30-day notice, (Mobilia Products
Inc. v. Alan Demecil/o, et al., G.R. No. 170669, 4 February
2009). Acceptance by an employee of the validity of his em-
ployer's authorized cause, e.g., retrenchment, and receipt by
him of separation pay do not dispense with the 30-day notice.
The statement of the Supreme Court to this effect in Inter-
national Harware, Inc. and reiterated in Dole Phil., Inc. was
an obiter dictum only. The sole issue in International Hard-
ware, Inc. was separation pay. (Ocean East Agency Corp., et
al. v. Allan Lopez, G.R. No. 194410, 14 October 2015).
Defective Notice
Hypothetical Problem
Due to low enrollment occasioned by the socio-eco-
nomic impact of the Covid19, the Prima Luce Bar Assist
decided to shut down and endorsed its 25 enrollees to the
Corona Bar Review Center. Consequently, it had to termi-
nate 8 employees assigned to supervise its five centers in
the North and in the South. Thus, it gave the required 30-
day notice to the Office of the DOLE-RD. Due to inadver-
tence, however, Mario and Mary were not notified as the
others were. Realizing the omission, it served a late notice
on Mario who was still in town on 1 May 2020, or a day be-
fore date of effectivity of its closure. As to Mary, she agreed
to receive a month's salary in lieu of a notice. In an
unexpected turn of events, 3 review centers in the Visayas
retired their outfits and endorsed a total of 300 reviewees to
the Prima Luce Bar Assist two weeks before the start of the
2020 review season prompting it to recall its former
employees before it could give them their separation pay.
Unfortunately for Mario and Mary, they were retiring in two
more seasons; hence, they were not recalled anymore.
They then sued for illegal dismissal, praying for nominal da-
mages as well. Are they entitled to reinstatement back-
wages and nominal damages? Explain. (2%) '
BAR SYLLABUS-BASED REVIEWER IN 379
LABOR LAW & SOCIAL LEGISLATION
Proposed Answer
Since the closure did not push thru despite prior
notice, there was no complete severance of employer-em-
ployee relationship between the parties. Hence, Mario and
Mary should have been recalled to their respective posi-
tions. However, despite absence of any just or authorized
cause, they were walled out. It appearing that their non-
recall served the purpose of evading the duty to pay retire-
ment benefits in two years, they are deemed dismissed
sans just cause; hence, they are entitled to immediate
reinstatement and full backwages. As to nominal damages,
the supposed curative measures adopted by the Prima
Luce Bar Assist are of no consequence because they
pertained to a dismissal for an authorized cause. Assuming
- and to this extent only - that they could substitute for the
required 30-day notice, they could not substitute for the
required "ample opportunity to be heard" which is the
applicable pre-termination procedure in the premises.
Hence, Mario and Mary should be awarded P30,000.00
nominal damages each.
Under Art. 299: Medical Termination
Pedro Solis v. NLRC, et al.
G.R. No. 116175, 28 October 1996
Pedro Solis was employed since August of 1972 as
an underground miner by Philex. Due to constant exposure
to the elements in the mining area, he became ill and was
diagnosed with "Koch's infection, exudative type, minimal
(R)". The examining physicians recommended that he be
assigned to surface work to facilitate his speedy recovery
from the illness. Philex did not heed. His illness aggrava-
ted. The Baguio General Hospital and Medical Center
diagnosed him with TB and declared him "unfit to continue
working for underground mine". He was accordingly dis-
380 POST-EMPLOYMENT
missed by Philex and given P55, 121.85 as his separation
pay.
After his dismissal, Solis submitted himself for medi-
cal examination in at the Baguio Filipino Chinese Hospital,
which issued a medical certificate declaring him physically
fit. Armed with said new medical certificate, he went back
to Philex demanding reinstatement but to no avail. Thus,
he sued Philex for illegal dismissal.
Be that as it may, Article 284 (now art. 298) of the
Labor Code provides:
Disease as ground for termination. - An employer
may terminate the services of an employee who has been
found to be suffering from any disease and whose conti-
nued employment is prohibited by law or is prejudicial to
his health as well as to the health of his co-employees:
Provided, That he is paid separation pay equivalent to at
least one (1) month salary or to one-half (1/2) month salary
for every year of service, whichever is greater, a fraction of
at least six (6) months being considered as one (1) whole
year.
The implementing rule states:
Disease as a ground for dismissal. - Where the em-
ployee suffers from a disease arid his continued employ-
ment is prohibited by law or prejudicial to his health or to
the health of his co-employees, the employer shall not
terminate his employment unless there is a certification by
a competent public health authority that the disease is of
such nature or at such a stage that it cannot be cured
within a period of six (6) months even with proper medical
treatment. If the disease or ailment can be cured within the
period, the employer shall not terminate the employee but
shall ask the employee to take a leave. The employer shall
reinstate such employee to his former position immediately
upon the restoration of his normal health. (Book VI, Rule 1,
Sec. 8 of the Implementing Rules)
BAR SYLLABUS-BASED REVIEWER IN 381
LABOR LAW & SOCIAL LEGISLATION
The above rule states several requirements before
the dismissal of an employee due to disease will be
considered valid. Two of which are: (a) the employee is
afflicted with a disease that cannot be cured within six (6)
months, and (b) a certification to that effect must be issued
by a competent public health authority.
We find nothing in the medical certificate issued by
the Baguio General Hospital which states that Solis'
ailment cannot be cured within six months. The statement
that Solis was "unfit to work underground" does not mean
that his ailment cannot be cured within six months. In fact,
a subsequent medical examination from another hospital
less than six months from the first medical check-up
showed that Solis was still physically fit. This negates
Philex's assertion that the dismissal is valid. In dismissal
cases, the employer has the burden of proving that the
termination from service of an employee is for a valid or
authorized cause. Philex failed to discharge that burden in
the case at bench.
Fuji Television Network, Inc. v. Arlene Espiritu
G.R. No. 204944, 3 December 2014
Leonen,J
In 2005, Arlene S. Espiritu ("Arlene") was engaged by
Fuji Television Network, Inc. ("Fuji") asa news correspon-
dent/producer "tasked to report Philippine news to Fuji
through its Manila Bureau field office." Arlene's employ-
ment contract initially provided for a term of one (1) year
but was successively renewed on a yearly basis with sala-
ry adjustment upon every renewal. Sometime in January
2009, Arlene was diagnosed with lung cancer. She in-
formed Fuji about her condition. In turn, the Chief of News
Agency of Fuji, Yoshiki Aoki, informed Arlene "that the
company will have a problem renewing her contract" since
it would be difficult for her to perform her job. She "insisted
382 POST-EMPLOYMENT
that she was still fit to work as certified by her attending
physician."
After several verbal and written communications,
Arlene and Fuji signed a non-renewal contract on May 5,
2009 where it was stipulated that her contract would no
longer be renewed after its expiration on May 31, 2009.
The contract also provided that the parties release each
other from liabilities and responsibilities under the employ-
ment contract.
In consideration of the non-renewal contract, Arlene
"acknowledged receipt of the total amount of US$ 18,
050.00 representing her monthly salary from March 2009
to May 2009, year-end bonus, mid-year bonus, and sepa-
ration pay." However, Arlene affixed her signature on the
nonrenewal contract with the initials "U.P." for "under
protest."
On May 6, 2009, the day after Arlene signed the non-
renewal contract, she filed a complaint for illegal dismissal
and attorney's fees with the National Capital Region Arbit-
ration Branch of the National Labor Relations Commission.
She alleged that she was forced to sign the non renewal
contract when Fuji came to know of her illness and that
Fuji withheld her salaries and other benefits for March and
April 2009 when she refused to sign.
Arlene claimed that she was left with no other
recourse but to sign the non-renewal contract, and it was
only upon signing that she was given her salaries and
bonuses, in addition to separation pay equivalent to four
(4) years.
For dismissal under Article 284 to be valid, two re-
quirements must be complied with: (1) the employee's
disease cannot be cured within six (6) months and his
"continued employment is prohibited by law or prejudicial
.to his health as well as to the health of his co-employees";
and (2) certification issued by a competent public health
BAR SYLLABUS-BASED REVIEWER IN 383
LABOR LAW & SOCIAL LEGISLATION
authority that even with proper medical treatment, the
disease cannot be cured within six (6) months. The burden
of proving compliance with these requisites is on the
employer. Noncompliance leads to the conclusion that the
dismissal was illegal.
There is no evidence showing that Arlene was accor-
ded due process. After informing her employer of her lung
cancer, she was not given the chance to present medical
certificates. Fuji immediately concluded that Arlene could
no longer perform her duties because of chemotherapy. It
did not ask her how her condition would affect her work.
Neither did it suggest for her to take a leave, even though
she was entitled to sick leaves. Worse, it did not present
any certificate from a competent public health authority.
What Fuji did was to inform her that her contract would no
longer be renewed, and when she did not agree, her salary
was withheld.
Observation:
The rule is that non-compliance with due process will
not invalidate a dismissal (Serrano, Agabon and Jaka
Food Rulings). Take note that, as implied by the case,
when an employer does not accord a sick employee the
opportunity to prove that he is fit to work with his own
medical certificate, what he violates is not the prescribed
medical pre-termination procedure, supra. What he
violates is jurisprudence on fair play. The violation is
entirely different from a violation of a mere termination
procedure; hence, it should not be covered by Agabon and
the like. (It seems!)
Burden of Proof
Hypothetical Problem
The Philippine General Hospital (PGH) certified that
Rolly, a casino dealer and who was earlier diagnosed with
384 POST-EMPLOYMENT
essential hypertension by the St. Luke's Medical Center,
could no longer resume work as the resultant impairment
of his eyes would hinder him from efficiently performing his
job. Fearing that its Chinese patrons might be enraged by
any visual mistake he might commit on the playing table,
the City of Dreamers served him a termination letter based
on the certification issued by PGH to take effect on 13
June 2020. On 12 June 2020, he returned with a medical
certificate issued by the St. Luke's Medical Center that his
eye problem had been resolved. Regardless, the City of
Dreamers proceeded to dismiss him. It disregarded his
latest medical certificate on the ground that it was not is-
sued by a competent public health authority. Resolve. (1 % )
Proposed Answer
The contention of the City of Dreamers is misplaced.
The obligation to procure a medical certificate from a com-
petent public health authority is imposed on employers, not
on employees. Hence, a sick employee who has recovered
can prove his ability to resume work with a medical certifi-
cate issued by any competent health authority, like St.
Luke's Medical Center. In effect, the reasonless denial of
his right to prove his fitness to work renders his dismissal
illegal (2014 Fuji Television Network, Inc. v. Arlene
Espiritu). Moreover, there is nothing in the medical certifi-
cate issued by PGH that states that Rolly's eye problem is
incurable in six months even with adequate medical
attention (1996 Solis v. NLRC).
2. Preventive Suspension
2015 Bar, Question No. X
Karina Santos is a famous news anchor appearing
nightly in the country's most watched newscast. She is sur-
prised, after one newscast, to receive a notice of hearing
before the station's Vice-President for Human Resources
and calls the VP immediately to ask what was wrong.
BAR SYLLABUS-BASED REVIEWER IN 385
LABOR LAW & SOCIAL LEGISLATION
Karina is told over the phone that one of her crew filed a
complaint against her for verbal abuse and that manage-
ment is duty- bound to investigate and give her a chance
to air her side. Karina objects and denies that she had ever
verbally assaulted her crew. The VP then informed her that
pending the investigation she will be placed on a 30-day
preventive suspension without pay and that she will not be
allowed to appear in the newscast during this time.
Is the preventive suspension of Karina valid? Discuss
the reasons for your answer. (4%)
Answer
Yes.
Preventive suspension is justified where the employ-
yee's continued employment poses serious and imminent
threat to the life or property of the employer or of the
employee's co-workers. It may be imposed in the course of
an investigation for a serious offense in order to prevent him
from causing harm or injury to the company or fellow emplo-
yees (Secs. 8 & 9, Rule XXIII, Bk V, OR/LC; Marica/um
Mining Corp. v. Decorion, G.R. No. 158673, 12 April 2006;
Artificio v. NLRC, G.R. No. 172988, 26 July 2010). Given the
physical proximity between Karina Santos and the complai-
ning crew, and the likelihood of a disciplinary action, the latter
must be protected from further verbal abuse.
3. Illegal Dismissal: Kinds
3.1. Direct Dismissal
3.2. Constructive Dismissal (CD)
Right to Quit (Art. 300, Labor Code)
CD thru Quitting
386 POST-EMPLOYMENT
Philippine Japan Active Carbon Corp.,
et al. v. NLRC, et al.,
G.R. No. 83239, 8 March 1989
A constructive discharge is defined as: "A quitti119.
because continued employment is rendered impossible,
unreasonable or unlikely; as, an offer involving a demotion
in rank and a diminution in pay." (Moreno's Philippine Law
Dictionary, 2nd Ed., p. 129, citing the case of Alia v. Salani
Una Transportation Co., 39527-R, 29 Jan. 1971.)
CD without Quitting
The Orchard Golf & Country Club v. Amelia Francisco
G.R. No. 178125, 18 March 2013
Constructive dismissal occurs not when the em-
ployee ceases to report for work, but when the unwar-
ranted acts of the employer are committed to the end that
the employee's continued employment shall become so
intolerable. In these difficult times, an employee may he
left with no choice but to continue with his employment
despite abuses committed against him by the employer,
and even during the pendency of a labor dispute between
them. This should not be taken against the employee. Ins-
tead, we must share the burden of his plight, ever aware of
the precept that necessitous men are not free men.
At the outset, it must be emphasized that Francisco's
two suspensions, i.e., for her failure to draft the SGV letter
and for being absent without prior leave, is no longer at
issue before this Court. Records show that after the NLRC
declared the same as valid in its November 19, 2002
Resolution, Francisco moved for reconsideration but to no
avail. After the denial of her motion, Francisco no longer
brought the issue or appealed the same to the CA. Hence,
the only issues for our resolution are the propriety of
Francisco's transfer to the position of Cost Controller and
the award of attorney's fees.
BAR SYLLABUS-BASED REVIEWER IN 387
LABOR LAW & SOCIAL LEGISLATION
There was constructive dismissal when Francisco
was transferred to the Cost Accounting Section.
We agree with the NLRC and the CA that Francisco's
transfer to the position of Cost Controller was without valid
basis and that it amounted to a demotion in rank (from Club
Accountant). Hence, there was constructive dismissal.
Other CDs
CD thru Unlawful Withholding of Work
Mindanao Terminal and Brokerage Service, Inc., et al.
v. Nagkakaisang Mamumuo Sa Minterbro-Southern
Philippines Federation of Labor, et al.
G.R. No. 174300, 5 December 2012
When petitioners failed to make work available to
the union members for a period of more than six months
starting April 14, 1997 by failing to call the attention of Del
Monte on the latter's obligations under the Contract of Use
of Pier and to undertake a timely rehabilitation of the pier,
they are deemed to have constructively dismissed the
union members.
Six months is the period set by law that the operation
of a business or undertaking may be suspended thereby
suspending the employment of the employees concerned.
The temporary lay-off wherein the employees likewise
cease to work should also not last longer than six months.
After six months, the employees should either be recalled
to work or permanently retrenched following the require-
ments of the law, and that failing to comply,with this would
be tantamount to dismissing the employees and the em-
ployer would thus he liable for such dismissal.
Note:
Under D.O. 174, workers hired under job contracting
arrangements shall be provided new work assignments in
388 POST-EMPLOYMENT
3 months following expiration of the corresponding service
agreements; otherwise, they shall be separated and paid
separation pay. If the period is unjustifiably exceeded, as
when there is available work yet the "on leave without pay
employees" are not re-assigned, constructive dismissal
results.
CD thru Floating Status
Leopard Security and Investigation Agency
v. Quitoy, et. al.
G.R. No. 186344, 20 February 2013
Applying Article 286 of the Labor Code of the Philip-
pines by analogy, this Court has repeatedly recognized
that security guards may be temporarily sidelined by their
security agency as their assignments primarily depend on
the contracts entered into by the latter with third parties.
Temporary "off-detail" or "floating status" is the period of
time when security guards are in between assignments or
when they are made to wait after being relieved from a
previous post until they are transferred to a new one. It
takes place when, as here, the security agency's clients
decide not to renew their contracts with the agency, re-
sulting in a situation where the available posts under its
existing contracts are less than the number of guards in its
roster. For as long as such temporary inactivity does not
continue for a period exceeding six months, it has been
ruled that placing an employee on temporary "off-detail" or
"floating status" is not equivalent to dismissal.
Note:
D.O. 150-16. Security guards and other security per-
sonnel can be placed on floating status or placed in a
work pool for not more than 6 months after end of the
service agreement between the security agency and its
principal. Floating of guards is not allowed in the following:
BAR SYLLABUS-BASED REVIEWER IN 389
LABOR LAW & SOCIAL LEGISLATION
(i) There are principals to which they can be
assigned;
(ii) If the purpose is to effect a constructive dismissal;
or
(iii) As a retaliatory measure for having filed a labor
complaint.
If no work assignment can be provided in 6 months,
they shall be separated and paid separation pay. If as-
signed as reliever guards within the period, it will not in-
terrupt the 6 months.
General Return To Work Order
Macario S. Padilla v. Airborne Security Service, Inc.
G.R. No. 210080, 22 November 2017
Leonen,J
Padilla rendered continuous service until June 15,
2009, when he was relieved from his post at City Adver-
tising Ventures Corporation and was advised to wait for his
re-assignment order. On July 27, 2009, he received a letter
from Airborne directing him to report for assignment and
deployment. He called Airborne's office but was told that
he had no assignment yet. On September 9, 2009, he re-
ceived another letter from Airborne asking him to report to
its office. He sent his reply letter on September 22, 2009
and personally reported to the office to inquire on the
status of his deployment with a person identified as Mr.
Dagang, Airborne's Director for Operations. He was told
that Airborne was having a hard time finding an assign-
ment for him since he was already over 38 years old.
Padilla added that he was advised by Airborne's personnel
to resign, but he refused. In December 2009, when he
reported to the office to collect his 13th month pay, he was
again persuaded to hand in his resignation letter. Still not
390 POST-EMPLOYMENT
having been deployed or re-assigned, on February 23,
2010, Padilla filed his complaint for illega~ dismissal.
To prove that petitioner was offered a new assign-
ment, respondents presented a series of letters requiring
petitioner to report to respondent Airborne's head office.
These letters merely required petitioner to report to work
and to explain why he had failed to report to the office.
These letters did not identify any specific client to which
petitioner was to be reassigned. The letters were, at best,
nothing more than general return-to-work orders.
Jurisprudence is consistent in its disapproval of gene-
ral return-to-work orders as a justification for failure to
timely render assignments to security guards.
2014 Bar, Question No. XXI
An accidental fire gutted the JKL factory in Caloocan.
JKL decided to suspend operations and requested its
employees to stop reporting for work. After six (6) months,
JKL resumed operations but hired a new set of employees.
The old set of employees filed a case for illegal dismissal.
If you were the Labor Arbiter, how would you decide the
case? (4%)
Answer
I will decide in favor of the employees.
The fire has not resulted in complete destruction of
employer-employee relationship. Said relationship has
temporarily ceased only. When JKL resumed operations,
therefore, it became its obligation to recall its old emplo-
yees instead of replacing them with new employees.
Withholding of work beyond six (6) months amounts
to constructive dismissal. Hence, I will order JKL to pay the
complainants' full backwages, separation pay because
their positions are occupied already, nominal damages for
non-observance by JKL of prescribed pre-termination
BAR SYLLABUS-BASED REVIEWER IN 391
LABOR LAW & SOCIAL LEGISLATION
procedure, moral and exemplary damages for its bad faith
(Lynvil Fishing Enterprises, Inc., et al. vs. Ariola, et al.,
G.R. No. 181974, 1 February 2012), and 10% attorney's
fees for compelling its employees to litigate against it (Art.
111, LC).
3.3. When Not Deemed Dismissed (Floating Status)
The Complete Severance Test
A dismissal implies complete destruction of EER (Jo
Cinema Corp., et al. v. Lolita Abe/Jana, et al., G.R. No.
132837, 28 June 2001). The exception is an unlawful de-
motion amounting to constructive dismissal (Orchard Golf
& Country Club Case, supra).
Cessation of Work Without Dismissal
1. Temporary suspension of business operations by
reason of repair of machineries that does not exceed 6
months (Art. 301, Labor Code);
2. Temporary suspension of business operations by
reason of conduct of inventory that does not exceed 6
months (id.);
3. Rendition of civic duty (id.). The worker must
resume work within 30 days from termination of duty;
4. Rendition of military duty (id.). The worker must
resume work within 30 days reckoned from relief from duty;
5. Preventive suspension (PS) that does not exceed
30 days;
Note:
If the suspension is a PS, the employer cannot inter-
pose the defense that 6 months have not yet elapsed;
hence, the complaint for illegal dismissal is premature
(Marica/um Mining Corp. v. Antonio Decorion, G.R. No.
158637, 12 April 2006).
392 POST-EMPLOYMENT
6. Lockout. It is a temporary withholding of work
only;
7. On Leave Without Pay Employee Rule. Mem-
bers of a contractor's work pool who cannot be assigned
work for lack of a project are not deemed dismissed. Ins-
tead, they are just deemed on leave without pay. They are
allowed to offer their services to other employers while on
leave without pay. D.O 174 requires re-assignment in 3
months. If there is work but they are not re-assigned
thereto within said period, they are deemed dismissed.
4. Burden of Proof
Rules of Thumb
1. "If there is no dismissal, then there can be no
question as to the legality or illegality thereof." (MZR Indus-
tries, et al. v. Majen Colambot, G.R. No. 179001, 28
August 2013). In other words, the duty to prove the validity
of the dismissal complained of comes next to the duty to
prove the fact of said dismissal. To discharge his burden of
proof, the complainant must prove: (a) EER, unless
admitted; (b) complete cessation of EER, unless admitted;
and (c) overt act of dismissal, unless admitted. Thereafter,
the duty to prove just or authorized cause can be imposed
on the respondent.
2. Both duties must be discharged with substantial
evidence, defined as "that amount of relevant evidence
which a reasonable mind might accept as adequate to
support a conclusion even if other minds, equally reason-
nable, might conceivably opine otherwise." (Ma. Melissa
Galang v. Julia Malasugui, G.R. No. 174173, 7 March
2012, citing AMA Computer College-East Rizal v. Ignacio).
Substantial evidence is more than scintilla evidence
(heard-and-said evidence or hearsay, unsigned resignation
letter, etc.). Appearance of evidence is surface evidence;
hence, it is not one to be relied upon by a reasonable mind
BAR SYLLABUS-BASED REVIEWER IN 393
LABOR LAW & SOCIAL LEGISLATION
in drawing the conclusion that a submission (e.g., Hans
was illegally dismissed) is sufficiently supported.
3. As to rules observed in criminal cases:
3.1. They fil2J2!y if: conspiracy is charged
(Sargasco Construction & Dev't Corp. v. NLRC, G.R.
No. 164118, 9 February 2010); presumption of inno-
cence is invoked by one accused of theft (Benecio
Gubac v. NLRC, G.R. No. 81946, 13 July 1990);
Note: Negligence and conspiracy are inconsis-
tent defenses ( Sargasco Ruling).
3.2. They do not apply if: graphology (hand-
writing expert) is demanded (Mitsubishi Motors Phils.
Corp v. Rolando Simon, et al., G.R. No. 164081, 16
April 2008); instigation is used as a defense (Roquero
v. PAL, G.R. No. 152329, 22 April 2003).
4. Onus probandi incumbit ei qui dicit, non ei qui
negat. The burden of proof is on him who alleges, not on
him who denies. Thus, in:
4.1. Direct Dismissal. The employee must prove
the fact of his dismissal.
4.2. Constructive Dismissal (Art. 300, Labor
Code). If the reason for quitting is
4.2.1. Crime or Offense. The employer
cannot be required to prove his crime or offense.
4.2.2. Serious Insult. The burden is on the
employee to prove overt acts.
4.2.3. Inhuman and Unbearable Treat-
ment. The burden is on the employee.
4.2.4. Analogous Causes
394 POST-EMPLOYMENT
(a) Unlawful Demotion. It is the em-
ployer's burden to prove, that there is no
rank or salary downgrade.
(b) Salary/Wage Rule Violation. It is
the employee's burden to prove late pay-
ment or non-payment.
(c) Unlawful Transfer. It is the em-
ployer's burden to prove that the transfer is
not prejudicial to the employee, not inconve-
nient to him, for a legitimate business
purpose, and in good faith.
Note: To determine if a transfer is a
demotion, the totality of circumstances must
be considered; hence, these must be looked
into: economic significance of the work;
duties and responsibilities conferred; as well
as rank and salary.
(d) Clear Discrimination. The emplo-
yee must prove the disparate treatment or
disparate impact, infra.
(e) Insensibility. It is a state of the
employer's mind which the employee must
prove with overt acts.
(f) Disdain. It is also a state of mind
of the employer requiring overt act as its
manifestation. Hence, the employee has the
burden of proof.
Question
What are the theories of workplace discrimination?
Explain (2.5%)
Answer
Workplace discrimination admits of two theories, viz.:
BAR SYLLABUS-BASED REVIEWER IN 395
LABOR LAW & SOCIAL LEGISLATION
1. Disparate Treatment. This is the direct and inten-
tional type of discrimination consisting of refusal to hire,
transfer, demotion or termination based on sex, marriage,
pregnancy, race, creed, political belief, and the like.
2. Disparate Impact. This is the indirect and uninten-
tional type of discrimination arising from an employment
policy.
Question
Distinguish Direct Evidence Theory from Adverse
Impact Theory (2.5%).
Answer
Direct Evidence Theory. To establish disparate treat-
ment, it must be shown that the employer has committed
the discriminatory act as when the employee belonged to
the class (e.g., married women) denied the right in
question, e.g., continuing employment.
Adverse Impact Theory. To establish disparate im-
pact, it must be shown that the policy may be facially
neutral; however, its adverse impact is greater to one class
than it is to others.
5. Burden of Proof v. Burden of Evidence
Burden of proof does not shift, but burden of evidence
does. A principal can shift the burden of showing the labor-
only contractor status of his contractor by (a) presenting
the latter's D.O. 174 certificate of registration; (b) establi-
shing that he carries on an independent business; (c)
showing that he works on his own account; (d) exhibiting
that he works independently of him as to means and
methods of performance; and demonstrating that he uses
his capital or investment actually and directy in performing
his work - in order to avoid liability arising from his
contractor's dismissal of the workers supplied to him. To
discharge the shifted burden of evidence, the complainant
396 POST-EMPLOYMENT
may prove that the contractor is actually an in-house con-
tractor because (a) it has been organized by the principal;
(b) it is being funded by the principal; (c) its business po-
licies have been predetermined by the principal; and (d) it
has only one client, viz., the principal. If the principal does
not rebut the in-house contracting with substantial evi-
dence, not to mention his complete silence on his contrac-
tor's just or authorized cause, he is deemed not to have
discharged his burden of proving the validity of the dismis-
sal complained of. In other words, the burden of "eviden-
cing" labor-only contracting can be shifted but not the bur-
den of "proving" just or authorized cause.
5. Liability of Officers
Sec. 30, Revised Corporation Code v. Sec. 7, R.A.
10022
Hypothetical Problem
Arthur Ang, COO of the Cosmopolitan International
Manpower Services, Inc., was told by his personal secretary
that retired NLRC Commissioner Pablo Espiritu, the newly
engaged labor consultant-specialist of the company, was
lambasting an in-house counsel for mishandling an OFW
case. At that time, Arthur Ang was busy preparing a very
urgent report to be presented to the Board of Directors the
following day; hence, although he could hear the commotion,
he could not intervene. Before entering the board room the
following morning, he got two messages from the Personnel
Manager: first, the in-house counsel had quit; and, second, a
company recruit had self-repatriated because her Saudi
employer attempted to rape her. In time, Arthur Ang was co-
impleaded in two cases for constructive dismissal against his
company. The first was upon the verified complaint of the in-
house counsel, and the second was upon the verified com-
plaint of the OFW under Sec. 7, R.A. 10022. Discuss the per-
sonal liabilities, if any, of Arthur Ang in the two cases. (2%)
BAR SYLLABUS-BASED REVIEWER IN 397
LABOR LAW & SOCIAL LEGISLATION
Answer
In the first case, the personal liability of Arthur Ang is
determinable under Sec. 30 of the Revised Corporation
Code (formerly Sec. 31 of the Corporation Code). In the
second case, on the other hand, it is determinable under
Sec. 7, R.A. 10022.
Under Sec. 30 of the Revised Corporation Code, the
personal liability of a corporate officer arises from his partici-
pation in the illegality of his company; or where he has no
such participation, from his ratification thereof; or else from
acting in a grossly negligent manner as to cause legal injury
to another person (Carag v. NLRC, G.R. No. 147590, 2 April
2007). In this regard, the non-intervention by Arthur Ang with
the event afoot was with reasonable explanation; hence, it
cannot be said that he either ratified the maltreatment of the
in-house counsel or acted in a grossly negligent manner as to
result in his forced resignation. Upon these considerations,
he has no personal liability in the first case.
Under Sec. 7, R.A. 10022, the personal liability of a
corporate officer is one imposed by law and it attaches ir-
respective of his participation or non-participation, ratifica-
tion or non-ratification, diligence or negligence relative to
the act complained of. Hence, in the second case, Arthur
Ang is solidarily liable with his company for the OFW's
forced repatriation.
6. Relief from Illegal Dismissal
Question
Answer the following briefly:
1. How immediate is immediate reinstatement? (1%)
2. How full are full backwages? (1%)
398 POST-EMPLOYMENT
Answer
1. When reinstatement is ordered by the Labor
Arbiter, it must be complied with by the employer even
pending appeal. This rule, which is a social justice mea-
sure, equally applies to a reinstatement order issued by the
Voluntary Arbitrator because the basis of an immediate
reinstatement is the same provision of the Labor Code.
2. Backwages are full in the sense that: (a) the
computation base has been expanded to salary, allowan-
ces and benefits or their monetary equivalent; (b) the 3-
year limit has been removed; (c) backwages continue to
accrue until finality of judgment in the event of non-reins-
tatement; and (d) in case of non-payment after final
judgment, they earn 6% annual legal interest until full
satisfaction of judgment.
2019 Bar Part I, Question No. A.9
After due proceedings, the Labor Arbiter (LA) dec-
lared Mr. K to have been illegally dismissed by his former
employer, AB , Inc. As a consequence, the LA directed
ABC, Inc. to pay Mr. K separation pay in lieu of reinstate-
ment as well as his full backwages.
While ABC, Inc. accepted the finding of illegal dis-
missal, it nevertheless filed a motion for reconsideration4,
claiming that the LA erred in awarding both separation pay
and full back wages, and instead, should have ordered Mr.
K's reinstatement to his former position without loss of
seniority rights and other privileges, but without payment of
backwages. In this regard, ABC, Inc. pointed out that the
LA 's ruling did not contain any finding of strained relations
or that reinstatement was no longer feasible. In any case, it
appears that no evidence was presented on this score.
4
One does not file a motion for reconsideration (MR) with the Labor Arbiter. It
is. only with the Voluntary Arbitrator that he can file an MR (2018 Guagua
National Colleges v. CA). It is a prohibited pleading, being dilatory, under 0.0.
183-17; hence, one cannot also file an MR with the DOLE-RD.
BAR SYLLABUS-BASED REVIEWER IN 399
LABOR LAW & SOCIAL LEGISLATION
(a) Is ABC, lnc.'s contention to delete the separation
pay, and instead, order reinstatement without backwages
correct? Explain. (3%)
(b) Assuming that on appeal, the National Labor
Relations Commission (NLRC) upholds the decision of the
LA, where, how, and within what timeframe should ABC,
Inc. assail the NLRC ruling? (2%)
Answer
(a) As to separation pay, the LA's decision fails to
state that there is a bar to reinstatement; hence, he should
have ordered reinstatement pursuant to the general rule
prescribed by Art. 294 of the Labor Code. Since the alter-
native relief of separation pay is an exception, it must be
justified with a reinstatement bar. As to backwages, how-
ever, it cannot be deleted because it is a logical conse-
quence of a finding of illegal dismissal (/CT Marketing Ser-
vices, Inc. v. Mariphil Sales, G.R. No. 202090, 9 Sept.
2015). Hence, absent any reason for limiting or withholding
it, it should be awarded as it was awarded by the LA.
(b) After the denial of the appellant's motion for
reconsideration, the NLRC's decision and order of denial can
be assailed under Rule 65 of the Rules of Court thru the filing
of a petition for certiorari within 60 days from receipt of said
denial order. Correction of error of jurisdiction, resulting in the
nullification of the assailed dispositions, should be sought
based on the NLRC's grave abuse of its appellate power
amounting to lack of, or excess of jurisdiction.
2017 Bar, Question No. XII
A. Juanito initiated a case for illegal dismissal against
Mandarin Company. The Labor Arbiter decided in his
favor, and ordered his immediate reinstatement with full
backwages and without loss of seniority and other benefits.
Mandarin Company did not like to allow him back in its
premises to prevent him from influencing his co-workers to
400 POST-EMPLOYMENT
move against the interest of the company; hence, it direc-
ted his payroll reinstatement and paid his full backwages
and other benefits even as it appealed to the NLRC.
A few months later, the NLRC reversed the ruling of
the Labor Arbiter and declared that Juanito's dismissal was
valid. The reversal ultimately became final.
May Mandarin Company recover the backwages and
other benefits paid to Juanito pursuant to the decision of
the Labor Arbiter in view of the reversal by the NLRC?
Rule with reasons. (2.5%)
8. X X X of living allowance and representation allowance
X X X
Answer
A. No.
Mandarin Company cannot recover the wages and
benefits it paid Juanito under the payroll reinstatement for
these reasons:
(1) It was its exclusive prerogative to choose the kind
of reinstatement to give Juanito who would have chosen
actual reinstatement if he had his way; hence, he cannot
be punished for helplessly submitting to the payroll
reinstatement imposed on him; and
(2) No employee would ever agree to a payroll reins-
tatement if, at the end of the day, he would be compelled
to reimburse as to be driven to penury (PAL v. Garcia,
et.al., G.R. No. 164856, 20 January 2009).
Separation Pay
2014 Bar, Question No. XXV
Lizzy Lu is a sales associate for Luna Properties. The
latter is looking to retrench Lizzy and five other sales asso-
BAR SYLLABUS-BASED REVIEWER IN 401
LABOR LAW & SOCIAL LEGISLATION
ciates due to financial losses. Aside from a basic monthly
salary, Lizzy and her colleagues receive commissions on
the sales they make as well as cost of living and represen-
tation allowances. In computing Lizzy's separation pay,
Luna Properties should consider her: (1 %)
(A) monthly salary only
(8) monthly salary plus sales commissions
(C) monthly salary plus sales commissions, plus cost
of living allowance
(D) monthly salary plus sales commissions, plus cost
Answer
(A). "Monthly salary only."
Explanation:
Not (8) because the basis of separation pay under
Art. 289 (renumbered), LC, is monthly salary only.
Not (C) because monthly salary means basic salary
which excludes commissions and allowances.
Not (D) because monthly salary excludes commis-
sions and allowances.
2014 Bar, Question No. XXII
Despite a reinstatement order, an employer may
choose not to reinstate an employee if:
(A) there is a strained employer-employee relation-
ship
(8) the position of the employee no longer exists
(C) the employer's business has been closed
(D) the employee does not wish to be reinstated.
402 POST-EMPLOYMENT
Answer:
(A). "There is strained employer-employee relation-
ship."
Explanation:
Not (B) because the stem implies that the employer
has a choice between reinstatement and non-reinstate-
ment. Here, he has no option at all because the position in
question no longer exists.
Not (C) because the employer has no option due to
the closure of his business.
Not (D) because the employer cannot choose not to
reinstate due to his employee's decision not to be
reinstated
7. Money Claims Arising from Employer-Employee
Relationship (See Procedure and Remedies, infra.)
Fuji Television Network, Inc. v. Arlene Espiritu
G.R. No. 204944-45, 3 December 2014
J Leonen
Separation Pay in lieu of Reinstatement
The NLRC awarded separation pay in lieu of rein-
statement on the ground that the filing of the complaint for
illegal dismissal may have seriously strained relations bet-
ween the parties. Backwages were also awarded, to be
computed from date of dismissal until the finality of the
NLRC's decision. However, only backwages were included
in the dispositive portion because the NLRC recognized
that Arlene had received separation pay in the amount of
US$7,600.00. The CA affirmed the NLRC's decision but
modified it by awarding moral and exemplary damages and
attorney's fees, and all other benefits Arlene was entitled
to under her contract with Fuji. The CA also ordered reins-
tatement, reasoning that the grounds when separation pay
BAR SYLLABUS-BASED REVIEWER IN 403
LABOR LAW & SOCIAL LEGISLATION
was awarded in lieu of reinstatement were not proven. The
modification of the NLRC's decision was proper because
separation pay in lieu of reinstatement is allowed only in
instances such as (1) when the employer has ceased ope-
rations; (2) when the employee's position is no longer avai-
lable; (3) strained relations; and (4) a substantial period
has lapsed from date of filing to date of finality.
On this matter, J Leanen cited Quijano v. Mercury
orug Corp. as instructive: "To protect labor's security of
tenure, we emphasize that the doctrine of "strained rela-
tions" should be strictly applied so as not to deprive an
illegally dismissed employee of his right to reinstatement.
Every labor dispute almost always results in "strained rela-
tions" and the phrase cannot be given an overarching in-
terpretation, otherwise, an unjustly dismissed employee
can never be reinstated." No evidence was presented by
Fuji to prove that reinstatement was no longer feasible. Fuji
did not allege that it ceased operations or that Arlene's po-
sition was no longer available. Nothing in the records
showed that Arlene's reinstatement would cause an atmos-
phere of antagonism in the workplace. Arlene filed her
complaint in 2009. Five (5) years were not yet a substantial
period to bar reinstatement.
Damages
Fuji argued that Arlene was not entitled to damages
and attorney's fees because the non-renewal agreement
she signed contained a quitclaim. However, her quitclaim
did not bar her claims. As explained by her, she signed the
non-renewal agreement out of necessity. Quitclaims are
commonly frowned upon as contrary to public policy and
are ineffective to bar claims for the full measure of the
workers' legal rights because the employer and the
employee obviously do not stand on the same footing.
404 POST-EMPLOYMENT
Moral Damages
Moral damages are awarded "when the dismissal is
attended by bad faith or fraud or constitutes an act oppres-
sive to labor, or is done in a manner contrary to good mo-
rals good customs or public policy." On the other hand,
exe~plary damages may be awarded when the dismissal
was effected "in a wanton, oppressive or malevolent
manner."
Arlene had informed Fuji of her cancer. On that occa-
sion she was informed that there would be problems in
ren~wing her contract on account of her condition. This
information caused her mental anguish, serious anxiety,
and wounded feelings. Apart from her illegal dismissal, the
manner of her dismissal was effected in an oppressive
approach with her salary and other benefits being withheld
until May 5, 2009, when she had no other choice but to
sign the non-renewal contract.
Attorney's Fees
Article 111 of the Labor Code provides that "[i]n
cases of unlawful withholding of wages, the culpable party
may be assessed attorney's fees equivalent to ten percent
of the amount of wages recovered." Likewise, "in actions
for recovery of wages or where an employee was forced to
litigate and, thus, incur expenses to protect his rights and
interest, the award of attorney's fees is legally and morally
justifiable." Due to her illegal dismissal, Arlene was forced
to litigate.
Legal Interest
The CA awarded legal interest at the rate of 12% per
annum. In view of the Court's ruling in Nacar v. Gallery
Frames lowering legal interest to 6% per annum starting 1
July 2013, however, the legal interest was reduced to 6%
per annum.
BAR SYLLABUS-BASED REVIEWER IN 405
LABOR LAW & SOCIAL LEGISLATION
Financial Assistance
Zenaida Paz v. Northern Tobacco Redrying Co., Inc.
G.R. No. 199554, 18 February 2015
J Leonen
In Eastern Shipping Lines, Inc. v. Sedan, Sedan was
granted equitable assistance equal ~o on~-half-month pay
for each year of his 23 years of service with no derogatory
record. This court discussed jurisprudence on the grant of
financial assistance:
We are not unmindful of the rule that finan-
cial assistance is allowed only in instances
where the employee is validly dismissed for
causes other than serious misconduct or those
reflecting on his moral character. Neither are we
unmindful of this Court's pronouncements in Arc-
Men Food Industries Corporation v. NLRC, and
Lemery Savings and Loan Bank v. NLRC, where
the Court ruled that when there is no dismissal to
speak of, an award of financial assistance is not
in order.
But we must stress that this Court did allow,
in several instances, the grant of financial
assistance. In the words of Justice Sabino de
Leon,· Jr., now deceased, financial assistance
may be allowed as a measure of social justice
and exceptional circumstances, and as an
equitable concession. The instant case equally
calls for balancing the interests of the employer
with those of the worker, if only to approximate
what Justice Laurel calls justice in its secular
sense.
In this instance, our attention has been
called to the following circumstances: that private
respondent joined the company when he was a
406 POST-EMPLOYMENT BAR SYLLABUS-BASED REVIEWER IN 407
LABOR LAW & SOCIAL LEGISLATION

young man of 25 years and stayed on until he POST EMPLOYMENT

was 48 years old; that he had given to the
C
company the best years of his youth, working on
Termination by Employee
board ship for almost 24 years; that in those
(1)
years there was not a single report of him trans-
With Noti~e to the Employer
wessing any of the company rules and regula-
(2)
tions; that he applied for optional retirement
Without Notice to the Employer
under the company's non-contributory plan when
(3)
his daughter died and for his own health rea-
Voluntary Resignation v. Constructive Dismissal
sons; and that it would appear that he had
served the company well, since even the com-
pany said that the reason it refused his appli-
NOTES
cation for optional retirement was that it still
needed his services; that he denies receiving the
Termination by Employee
telegram asking him to report back to work; but
that considering his age and health, he preferred
1. With Notice to the Employer (Resignation)
to stay home rather than risk further working in a
ship at sea. Resignation is the voluntary act of an employee who
is in a situation where he believes that personal reasons
In our view, with these special circumstances, we can
cannot be sacrificed in favor of the exigency of the service,
?all upon the same "social and compassionate justice" cited
and he has no other choice but to dissociate himself from
1n several cases allowing financial assistance. These
employment. It is a formal pronouncement or relinquish-
circumstances indubitably merit equitable concessions via
ment of an office, with the intention of relinquishing the
the principle of "compassionate justice" for the working class.
office accompanied by the act of relinquishment. As the
Thus, we agree with the Court of Appeals to grant financial
intent to relinquish must concur with the overt act of
assistance to private respondent. (Citations omitted)
relinquishment, the acts of the employee before and after
the alleged resignation must be considered in determining
whether, in fact, he intended to sever his employment.
(1/adan v. La Suerte International Manpower Agency, Inc.,
et. al., G.R. No. 203882, 11 January 2016).

2. Without Notice to the Employer (Constructive

Dismissal)

CD thru Quitting
408 POST-EMPLOYMENT
Philippine Japan Active Carbon Corp.,
et al. v. NLRC, et al. ,
G.R. No. 83239, 8 March 1989
A constructive discharge is defined as: "A quitting be-
cause continued employment is rendered impossible, un-
reasonable or unlikely; as, an offer involving a demotion in
rank and a diminution in pay." (Moreno's Philippine Law
Dictionary, 2nd Ed., p. 129, citing the case of Alia v. Salani
Una Transportation Co., 39527-R, 29 Jan. 1971.)
CD without Quitting
The Orchard Golf & Country Club v. Amelia Francisco
G.R. No. 178125, 18 March 2013
Constructive dismissal occurs not when the emplo-
yee ceases to report for work, but when the unwarranted
acts of the employer are committed to the end that the
employee's continued employment shall become so in-
tolerable. In these difficult times, an employee may he left
with no choice but to continue with his employment despite
abuses committed against him by the employer, and even
during the pendency of a labor dispute between them. This
should not be taken against the employee. Instead, we
must share the burden of his plight, ever aware of the
precept that necessitous men are not free men.
At the outset, it must be emphasized that Francisco's
two suspensions, i.e., for her failure to draft the SGV letter
and for being absent without prior leave, is no longer at
issue before this Court. Records show that after the NLRC
declared the same as valid in its November 19, 2002
Resolution, Francisco moved for reconsideration but to no
avail. After the denial of her motion, Francisco no longer
brought the issue or appealed the same to the CA. Hence,
the only issues for our resolution are the propriety of
Francisco's transfer to the position of Cost Controller and
the award of attorney's fees.
BAR SYLLABUS-BASED REVIEWER IN 409
LABOR LAW & SOCIAL LEGISLATION
There was constructive dismissal when Francisco
was transferred to the Cost Accounting Section.
We agree with the NLRC and the CA that Francisco's
transfer to the position of Cost Controller was without
valid basis and that it amounted to a demotion in rank
(from Club Accountant). Hence, there was constructive
dismissal.
Other CDs
CD thru Unlawful Withholding of Work
Mindanao Terminal and Brokerage Service, Inc., et al.
v. Nagkakaisang Mamumuo Sa Minterbro-Southern
Philippines Federation of Labor, et al.
G.R. No. 174300, 5 December 2012
When petitioners failed to make work available to
the union members for a period of more than six months
starting April 14, 1997 by failing to call the attention of Del
Monte on the latter's obligations under the Contract of Use
of Pier and to undertake a timely rehabilitation of the pier,
they are deemed to have constructively dismissed the
union members.
Six months is the period set by law that the operation
of a business or undertaking may be suspended thereby
suspending the employment of the employees concerned.
The temporary lay-off wherein the employees likewise
cease to work should also not last longer than six months.
After six months, the employees should either be recalled
to work or permanently retrenched following the require-
ments of the law, and that failing to comply with this would
be tantamount to dismissing the employees and the em-
ployer would thus he liable for such dismissal.
410 POST-EMPLOYMENT
Note:
Under D.O. 174, workers hired under job contracting
arrangements shall be provided new work assignments in
3 months following expiration of the corresponding service
agreements; otherwise, they shall be separated and paid
separation pay. If the period is unjustifiably exceeded, as
when there is available work yet the "on leave without pay
employees" are not re-assigned, constructive dismissal
results.
CD thru Floating Status
Leopard Security and Investigation Agency v. Quitoy,
et. al.
G.R. No. 186344, 20 February 2013
Applying Article 286 of the Labor Code of the Philip-
pines by analogy, this Court has repeatedly recognized
that security guards may be temporarily sidelined by their
security agency as their assignments primarily depend on
the contracts entered into by the latter with third parties.
Temporary "off-detail" or "floating status" is the period of
time when security guards are in between assignments or
when they are made to wait after being relieved from a
previous post until they are transferred to a new one. It
takes place when, as here, the security agency's clients
decide not to renew their contracts with the agency,
resulting in a situation where the available posts under its
existing contracts are less than the number of guards in its
roster. For as long as such temporary inactivity does not
continue for a period exceeding six months, it has been
ruled that placing an employee on temporary "off-detail" or
"floating status" is not equivalent to dismissal.
Note:
D.O. 150-16. Security guards and other security
personnel can be placed on floating status or placed in a
work pool for not more than 6 months after end of the
BAR SYLLABUS-BASED REVIEWER IN 411
LABOR LAW & SOCIAL LEGISLATION
service agreement between the security agency and its
principal. Floating of guards is not allowed in the following:
(i) There are principals to which they can be
assigned;
(ii) If the purpose is to effect a constructive dismissal;
or
(iii) As a retaliatory measure for having filed a labor
complaint.
If no work assignment can be provided in 6 months,
they shall be separated and paid separation pay. If
assigned as reliever guards within the period, it will not
interrupt the 6 months.
2014 Bar, Question No. XXI
An accidental fire gutted the JKL factory in Caloocan.
JKL decided to suspend operations and requested its
employees to stop reporting for work. After six (6) months,
JKL resumed operations but hired a new set of employees.
The old set of employees filed a case for illegal dismissal.
If you were the Labor Arbiter, how would you decide the
case? (4%)
Answer
I will decide in favor of the employees.
The fire has not resulted in complete destruction of
employer-employee relationship. Said relationship has
temporarily ceased only. When JKL resumed operations,
therefore, it became its obligation to recall its old
employees instead of replacing them with new employees.
Withholding of work beyond six (6) months amounts
to constructive dismissal. Hence, I will order JKL to pay the
complainants' full backwages, separation pay because
their positions are occupied already, nominal damages for
non-observance by JKL of prescribed pre-termination pro-
412 POST-EMPLOYMENT
cedure, moral and exemplary damages for its bad faith
(Lynvil Fishing Enterprises, Inc., et al. J,/S. Ariola, et al
G.R. No. 1819~4, 1. February 2012), and 10% attorney•~
fees for compelling its employees to litigate against it (Art
111, LC).
3. Voluntary Resignation v. Constructive Dismissal
"To begin with, constructive dismissal is defined as
quitting or cessation of work because continued employ-
ment is ren?ered imp~ssi?le, unreasonable or unlikely;
when there 1s ~ demot~on ~n rank or a diminution of pay
and other benefits. It exists 1f an act of clear discrimination
insensibility, or disdain by an employer becomes so unbea~
rable on the part of the employee that it could foreclose
any choice b~ hi_m except to forego his continued employ-
ment. There 1s involuntary resignation due to the harsh
hostile, and unfavorable conditions set by the employer'.
The test of constructive dismissal is whether a reasonable
person in the employee's position would have felt com-
pelled to give up his employment/position under the
circumstances.
On the other hand, "[r]esignation is the voluntary act
of an employee who is in a situation where one believes
that personal reasons cannot be sacrificed in favor of the
exigency of the service, and one has no other choice but to
dissociate oneself from employment. It is a formal pro-
nouncement or relinquishment of an office, with the inten-
tio~ of. relinquishing the office accompanied by the act of
relinquishment. As the intent to relinquish must concur with
the overt act of relinquishment, the acts of the employee
before and after the alleged resignation must be consi-
dered in determining whether he or she, in fact, intended to
s~ver his or her employment." (Gan v. Galderma Philip-
pmes, Inc., 25 thus: 25 701 Phil. 612 (2013), cited in Luis
Doble, Jr. V. ABB, Inc., G.R. No. 215627, 5 June 2017).
BAR SYLLABUS-BASED REVIEWER IN 413
LABOR LAW & SOCIAL LEGISLATION
2019 Bar, Part I, Question No. A.8
Ms. T was caught in the act of stealing the company
property of her employer. When Ms. T admitted to the
. commission of the said act to her manager, the latter
advised her to just tender her resignation; otherwise, she
would face an investigation which would likely lead to the
termination of her employment and the filing of criminal
charges in court.
Acting on her manager's advice, Ms. T submitted a
letter of resignation. Later on, Ms. T filed a case for
constructive dismissal against her employer. While Ms. T
conceded that her manager spoke to her in a calm and
unforceful manner, she claimed that her resignation was
not completely voluntary because she was told that should
she not resign, she could be terminated from work for just
cause and worse criminal charges could be filed against
her.
(a) What is the difference between resignation and
constructive dismissal? (2%)
(b) Will Ms. Is claim for constructive dismissal
prosper? Explain. (3%)
Answer
(a) A resignation is a voluntary self-termination when
personal reasons cannot be sacrificed in favor of the exi-
gency of the employer's business (Gan v. Galderma Philip-
pines, Inc., et al., G.R. No.177167, 17 Jan. 2013). In con-
trast, a constructive dismissal is a quitting because the em-
ployer makes continued employment impossible, unreaso-
nable or unlikely (Phil. Japan Active Carbon Corp. v.
NLRC, G.R. No. 83239, 8 March 1989).
(b) No, Ms. T's claims will not prosper. She was not
placed in a situation that left her no option except to self-
terminate. Instead, she was just given a graceful exit. A
graceful exit is within the prerogative of an employer to
414 POST-EMPLOYMENT
give instead of binding an employee to his fault, or filing an
action for redress against him (Central Azucarera de Bais
Inc., et al. v. Janet T. Siason, G.R. No. 215555, 29 July
2015).
Lourdes Rodriguez v. Park N Ride, Inc., et al.
G.R. No. 222980, 20 March 2017
J Leonen
There is constructive dismissal when an employer's
act of clear discrimination, insensibility or disdain becomes
so unbearable on the part of the employee so as to fore-
close any choice on his part except to resign from such
employment. It exists where there is involuntary resigna-
tion because of the harsh, hostile and unfavorable condi-
tions set by the employer. We have held that the standard
for constructive dismissal is "whether a reasonable person
in the employee's position would have felt compelled to
give up his employment under the circumstances."
The unreasonably harsh conditions that compel resig-
nation on the part of an employee must be way beyond the
occasional discomforts brought about by the misunderstan-
dings between the employer and employee. Strong words
may sometimes be exchanged as the employer describes
her expectations or as the employee narrates the condi-
tions of her work environment and the obstacles she en-
counters as she accomplishes her assigned tasks. As in
every human relationship, there are bound to be disagree-
ments.
However, when these strong words from the employer
happen without palpable reason or are expressed only for
the purpose of degrading the dignity of the employee, then
a hostile work environment will be created. In a sense, the
doctrine of constructive dismissal has been a consistent
vehicle by this Court to assert the dignity of labor.
However, this is not the situation in this case.
BAR SYLLABUS-BASED REVIEWER IN 415
LABOR LAW & SOCIAL LEGISLATION
The National Labor Relations Commission did not
commit a grave abuse of discretion in finding that petitioner
was not constructively dismissed but that she voluntarily
resigned from employment.
The affidavits of petitioner's former co-workers were
mere narrations of petitioner's various duties. Far from
showing the alleged harsh treatment that petitioner
suffered, the affidavits rather reveal the full trust and confi-
dence reposed by respondents on petitioner. Petitioner
was entrusted with respondents' assets, the care and safe-
guarding of their house during their trips abroad, custody
of company files and papers, and delicate matters such as
the release, deposit, and withdrawals of checks from their
personal accounts as well as accounts of their companies.
Indeed, it was alleged that petitioner was treated by the
respondents as part of the family.
Petitioner's unequivocal intent to relinquish her posi-
tion was manifest when she submitted her letters of resig-
nation. The resignation letters dated May 1, 2008 and
March 25, 2009 contained words of gratitude, which could
hardly come from an employee forced to resign. These
letters were reinforced by petitioner's very own act of not
reporting for work despite respondents' directive.
As correctly appreciated by Labor Arbiter Macam:
Complainant was not pressured into re-
signing. It seems that the complainant was not
comfortable anymore with the fact that she was
always at the beck and call of the respondent
Javier spouses. Her supervisory and managerial
functions appear to be impeding her time with
her family to such extent that she was always
complaining of her extended hours with the
company. It is of no moment that respondent
spouses in many occasions reprimanded com-
plainant as long as it was reasonably connected
and an offshoot of the work or business of
416 POST-EMPLOYMENT BAR SYLLABUS-BASED REVIEWER IN 417
LABOR LAW & SOCIAL LEGISLATION

respondents ... Keeping in mind that she enjoyed

the privilege of working closely with respondents D
and had their full trust and confidence, the Retirement
summary of evidence points to the existence of
voluntariness in complainant's resignation, more
for personal reasons rather than the existence of NOTES
a hostile and frustrating working environment
From the representation of petitioner, what triggered Retirement
her resignation was the incident on September 22, 2009 1. Retirement Age: In general (60-65); underground/
when Estelita told her "Kung ayaw mo na ng ginagawa mo, surface miner (50-60); licensed racehorse jockey (55).
we can manage! " These words, however, are not suffi-
cient to make the continued employment of petitioner im- 2. Retirement is contractual; whereas, termination is
possible, unreasonable, or unlikely. (Citations omitted.) statutory.

Edwin Barroga v. Quezon Colleges of the North, et al.

G.R. no. 235572, 5 December 2018
"While retirement from service is similar to termina-
tion of employment insofar as they are common modes of
ending employment, they are mutually exclusive, with
varying juridical bases and resulting benefits. Retirement
from service is contractual, while termination of employ-
ment is statutory. Verily, the main feature of retirement is
that it is the result of a bilateral act of both the employer
and the employee based on their voluntary agreement that
upon reaching a certain age, the employee agrees to sever
his employment. Since the core premise of retirement is
that it is a voluntary agreement, it necessarily follows that if
the intent to retire is not clearly established or if the
retirement is involuntary, it is to be treated as a discharge.
The line between "voluntary" and "involuntary" retire-
ment is thin but it is one which case law had already
drawn. On the one hand, voluntary retirement cuts the em-
ployment ties leaving no residual employer liability; on the
other, involuntary retirement amounts to a discharge, ren-
dering the employer liable for termination without cause.
The employee's intent is decisive. In determining such
intent, the relevant parameters to consider are the fairness
418 POST-EMPLOYMENT
of the process governing the retirement decision, the
payment of stipulated benefits, and the absence of badges
of intimidation or coercion." (Citations omitted.)
Computation Under Art. 302
Article 302. Retirement. - Any employee may be
.retired upon reaching the retirement age established in
the collective bargaining agreement or other applicable
employment contract.
"In case of retirement, the employee shall be entitled
to receive such retirement benefits as he may have earned
under existing laws and any collective bargaining agree-
ment and other agreements: Provided, however, That an
employee's retirement benefits under any collective bargai-
ning and other agreements shall not be less than those
provided herein.
"In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the estab-
lishment, an employee upon reaching the age of sixty (60)
years or more, but not beyond sixty-five (65) years which is
hereby declared the compulsory retirement age, who has
served at least five (5) years in the said establishment,
may retire and shall be entitled to retirement pay equiva-
lent to at least one-half (1/2) month salary for every year of
service, a fraction of at least six (6) months-being con-
sidered as one (1) whole year.
"Unless the parties provide for broader inclusions, the
term 'one-half (1/2) month salary shall mean fifteen (15)
days plus one-twelfth (1/12) of the 13th month pay and the
cash equivalent of not more than five (5) days of service
incentive leaves.
"An underground or surface mining employee upon
reaching the age of fifty (50) years or more, but not beyond
sixty (60) years which is hereby declared the compulsory
retirement age for both underground and surface mine
BAR SYLLABUS-BASED REVIEWER IN 419
LABOR LAW & SOCIAL LEGISLATION
workers, who has served at least five (5) years as
underground or surface mine worker may retire and shall
be entitled to all the retirement benefits provided for in this
Article.
"For purposes of this Act, surface mine workers shall
only include mill plant workers, electrical, mechanical and
tailings pond personnel.
"Retail, service and agricultural establishments or
operations employing not more than ten (10) employees or
workers are exempted from the coverage of this provision.
"Violation of this provision is hereby declared unlawful
and subject to the penal provisions provided under Article
302 of this Code."
"Nothing in this Article shall deprive any employee of
benefits to which he may be entitled under Section 12-8 of
Republic Act No. 1161, as amended, otherwise known as
the Social Security Act of 1997 and other existing laws or
company policies or practices."
Prerequisites:
1. There is no retirement plan or agreement pro-
viding for retirement benefits of employees in the establish-
ment;
2. The employee has reached age sixty (60) years
or more, but not beyond sixty-five (65) years;
3. The employee has served at least five (5) years
in the said establishment;
4. If the employer is engaged in retail or service, the
employee is Employee No. 10 or above.
Formula: (22.5. days x Average Daily Rate) x No. of years
in service
Note: A fraction of at least six (6) months is consi-
dered as one ( 1) whole year.
420 POST-EMPLOYMENT
Components of the 22.5 Days:
15 Days ½ Month Sa1ary
5 Days Service Incentive Leave (SIL)
th
2.5 Days 1/12 of 13 Month Pay
Note: The 15 days will always be given. As to the 5
days, it depends on whether the employee is entitled to
SIL or not. If not, they will not be added. Likewise, if the
employee is not entitled to 13th month pay then the 2.5.
days will not be added.
Hypothetical Problem: (Using Ejusdem Generis)
David, the first to be hired among 11 butchers, signi-
fies his intention to retire after 15 years of service. Goliath
has been paying him a fixed amount per engagement. On
the average, David's daily take-home pay for butchering
pigs inside Goliath's premises and under his supervision
the past three (3) years is P600.00.
What other information would you need to be able to
compute David's retirement benefits under the Labor
Code? Show your computation (1%)
Answer
The missing information is David's present age. He
must be at least 60 years of age.
David's retirement benefits shall be computed as
follows: (20 days x P600.00) x 15 years, or P12,000.00 x
15 years = P180,000.00.
As a worker paid on task basis, and who is not a field
personnel at the same time, David is entitled to service
incentive leave; hence, he should be given the 5 days in
addition to the 15 days, which is a mainstay, for a total of
20 days. However, he should not be given the 2.5 days,
BAR SYLLABUS-BASED REVIEWER IN 421
LABOR LAW & SOCIAL LEGISLATION
th
which is 1/12 of 13 month pay, because his employer is
exempt from the coverage of P.O. 851.
Involuntary Retirement Plan
Alpha Jaculbe v. Silliman University
G.R. No. 156934, 16 March 2007
Since 1958, Jaculbe worked for the university's
medical center as a nurse. In a 1992 , HR informed her
that she was approaching her 35th year of service and was
due for automatic retirement on 18 November 1993, at
which time she would be 57 years old. This was pursuant
to the university's retirement plan which provided that its
members could be automatically retired "upon reaching the
age of 65 or after 35 years of uninterrupted service to the
university." Jaculbe insisted that the compulsory retirement
under the plan was tantamount to a dismissal and pleaded
with respondent to be allowed to work until the age of 60
because this was the minimum age at which she could
qualify for SSS pension. But the university stood pat on its
decision to retire her, citing "company policy."
Art. 302 (formerly Art. 287), Labor Code
It was held that retirement plans allowing employers
to retire employees who are less than the compulsory
retirement age of 65 are not per se repugnant to the cons-
titutional guaranty of security of tenure. Article 287 (now
Art. 302) of the Labor Code provides:
ART. 287. Retirement - Any employee may
be retired upon reaching the retirement age es-
tablished in the collective bargaining agreement
or other applicable employment contract. xxx
By its express language, the Labor Code permits em-
ployers and employees to fix the applicable retirement age
at below 60 years. However, after reviewing the CA's deci-
sion together with the rules and regulations of the retire-
422 POST-EMPLOYMENT
ment plan, the plan ran afoul of the constitutional guaranty
of security of tenure contained in Article Xl,11, also known as
the provision on Social Justice and Human Rights. The
CA, in ruling against Jaculbe, premised its decision to up-
hold the retirement plan on the fact that it had been there
for 30 years as to be integrated in her contract and that
she voluntarily participation therein by voluntarily contribu-
ting to it.
The Retirement Plan
A perusal of the rules and regulations of the plan
showed that participation therein was not voluntary at all.
Rule Ill of the plan, on membership, stated:
SECTION 1 - MEMBERSHIP
All full-time Filipino employees of the
University will automatically become members
of the Plan, provided, however, that those who
have retired from the University, even if rehired,
are no longer eligible for membership in the Plan.
A member who continues to serve the
University cannot withdraw from the Plan.
XXX XXX XXX
SECTION 2 - EFFECTIVITY OF MEMBERSHIP
Membership in the Plan starts on the day a
person is hired on a full-time basis by the
University.
SECTION 3-TERMINATION OF MEMBERSHIP
Termination of membership in the Plan
shall be upon the death of the member, resig-
nation or termination of employee's contract
by the University, or retirement from the Uni-
versity. (Emphasis by SC).
Rule IV, on contributions, stated:
BAR SYLLABUS-BASED REVIEWER IN 423
LABOR LAW & SOCIAL LEGISLATION
The Plan is contributory. The University
shall set aside an amount equivalent to 3½% of
the basic salaries of the faculty and staff. To this
shall be added a 5% deduction from the basic
salaries of the faculty and staff.
A member on leave with the University ap-
proval shall continue paying, based on his pay
while on leave, his leave without pay should pay
his contributions to the Plan. However, a mem-
ber, who has been on leave without pay should
pay his contributions based on his salary plus the
University's contributions while on leave or the
full amount within one month immediately after
the date of his reinstatement. Provided[,] further
that if a member has no sufficient source of
income while on leave may pay within six months
after his reinstatement..1§
From the language of the foregoing retirement plan
rules, the compulsory nature of both membership in and
contribution to the plan debunked the CA's theory that
petitioner's "voluntary contributions" were evidence of her
willing participation therein. It was through no voluntary act
of her own that petitioner became a member of the plan. In
fact, the only way she could have ceased to be a member
thereof was if she stopped working for the university
altogether. Furthermore, in the rule on contributions, the
repeated use of the word "shall" ineluctably pointed to the
conclusion that employees had no choice but to contribute
to the plan (even when they were on leave).
The retirement plan came into being in 1970 or 12
years after Jaculbe was employed. In short, it was not part
of the terms of employment to which she agreed when she
started working for respondent. Neither did it become part
of those terms shortly thereafter.
424 POST-EMPLOYMENT
Bilateral Act
Retirement is the result of a bilateral act of the parties,
a voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age
agrees to sever his or her employment with the former.~ In
Pantranco North Express, Inc. v. NLRC, to which both the
CA and the university referred, the imposition of a retire-
ment age below the compulsory age of 65 was deemed
acceptable because this was part of the CSA between the
employer and the employees. The consent of the emplo-
yees, as represented by their bargaining unit, to be retired
even before the statutory retirement age of 65 was laid out
clearly in black and white and was therefore in accord with
Article 287 (now Art. 302).
Illegal Dismissal
An employer is free to impose a retirement age less
than 65 for as long as it has the employees' consent.
Stated conversely, employees are free to accept the em-
ployer's offer to lower the retirement age if they feel they
can get a better deal with the retirement plan presented by
the employer. Thus, having terminated Jaculbe solely on
the basis of a provision of a retirement plan which was not
freely assented to by her, Silliman University was guilty of
illegal dismissal.
Principle of Least Transmission of Rights
Marilyn Odchimar Gerlach v. Reuters Limited, Phils.
G.R. No. 148542, 17 January 2005
In 1982, Reuters Limited, Phils. (Reuters), a company
engaged in news dissemination with offices worldwide,
hired Marilyn Odchimar Gerlach, as its local correspon-
dent. In 1983, it implemented a local Retirement Benefit
Pl.an (Plan) for its Philippine-hired employees. The Plan
was funded by the company, but an employee-participant
BAR SYLLABUS-BASED REVIEWER IN 425
LABOR LAW & SOCIAL LEGISLATION
may volunteer to contribute a percentage of his basic
monthly salary to the fund. Gerlach was automatically co-
vered by the Plan by reason of her age and length of ser-
vice. However, she opted not to contribute to the fund. She
worked at Reuters Philippines up to 23 December 1983.
On 1984, Reuters assigned Gerlach as a journalist to
Reuters Singapore. Before leaving, Rachel Addison,
Reuters' Eastern Region Staff Manager, apprised her of the
details of her forthcoming assignment, specifically that her
home base will always be the Philippines. She was informed
that from 16 January her Philippine salary would cease and
she would receive a Singapore salary of Singapore Dollars
3,500 per month, paid 13 times a year.
While in Singapore, where she stayed up to December
1985, Gerlach received a letter of 15 April 1985 informing
her of the corresponding increases in her actual and notio-
nal salaries, thus: "Following your Singapore salary increase
in January, I am writing to confirm that your notional Peso
salary has been increased to 6,900 per month and pension
contributions will be adjusted accordingly."
From March 26 to June 4, 1986, Gerlach was as-
signed to Reuters Hongkong. Thereafter, or in July 1986,
she was appointed correspondent in Sri Lanka and was
informed that her Peso salary was increased to P12,
600.00 per month. , thus: "From 1 October 1986, you will
be paid a salary of Rupees 212,000 per annum which will
be drawn locally and which will be subject to Sri Lankan
income tax from the same date." While in Shri Lanka, her
notional Peso salary was increased twice.
On 12 October 1988, Gerlach was directed to return
to Manila and resume her post by 15 December 1988.
However, she requested to be assigned to the Reuters
Office either in Bonn, West Germany or in London. But due
to the worldwide reduction of personnel, Reuters denied
her request. She then applied for a 14-month study leave
to take up economic subjects at Bonn University. Reuters
426 POST-EMPLOYMENT
approved her request for a 14-month leave without pay
from 1 January 1989 to 1 March 1990. On 20 May 1990,
she resigned from Reuters. Thus, on 1 March 1991, she
received her retirement benefits under the Plan in the
amount of P79,228.04, which amount was determined by
the trustee bank (Bank of the Philippine Island) in
accordance with the provisions of the Plan. The computa-
tion was based on her notional salary. However, she
questioned the amount she received as well as her entitle-
ment to a disturbance grant, contending that her retirement
benefits must be computed on the basis of her actual
salary abroad, not on her notional salary.
Eventually, Gerlach filed a money claim against
Reuters with the Office of the Labor Arbiter who ordered
the latter to pay her additional retirement benefits in the
sum of P436,000.00, which amount was based on her
actual salary abroad. 91 On appeal, the NLRC set aside the
appealed decision and remanded the case for trial on the
merits. After hearing, the Labor Arbiter made the same
award. On appeal, the NLRC reversed the Labor Arbiter
and dismissed Gerlach's complaint for lack of merit. On
MR, however, the NLRC granted her money claim.
In its resolution of Reuter's petition for certiorari, the
CA held:
"If the rules were solely to be considered,
there is reason to uphold private respondent's
claim that the computation of her retirement
benefits must be based on her basic annual
salary while stationed abroad which was much
higher than the notional salary imposed on her.
However, considering the surrounding circum-
stances of this case, We are inclined to agree
with petitioner when it insists that the computa-
tion of said benefits must be based on private
respondent's notional Philippine salary.
BAR SYLLABUS-BASED REVIEWER IN 427
LABOR LAW & SOCIAL LEGISLATION
We recall that from the very start of her first
assignment overseas, private respondent was
apprised of a notional Philippine salary upon
which the company's contribution to her retire-
ment fund would be based (Letter dated Decem-
ber 7, 1983; Annex '3', p. 47, ibid.). And the re-
cords are clear that private respondent was al-
ways informed of said notional Philippine salary
whenever she was to be transferred to her next
overseas assignment or when there were increa-
ses in her salary, both actual and notional
(Annex '4' to '7', pp. 47-52, ibid.). It has also
been established that this notional salary upon
which is based the company's contribution to the
retirement plan of a local employee detailed
abroad is a practice of Reuters worldwide (pp.
85-92, ibid.) and that private respondent was not
being discriminated against when such was ap-
plied to her case. From these attendant factors, it
can be gleaned that imputing a notional salary is
actually a company policy which should be
deemed incorporated in the rules governing
petitioner's Retirement Plan."
"Further, that it is the notional salary and not
the actual salary upon which private respon-
dent's retirement benefit should be based is also
justified by the application of the rules on cons-
truction. Petitioner's retirement plan is that agree-
ment between the employer and employee men-
tioned in the law in force at that time on emplo-
yer-initiated retirement benefits (Article 287
Labor Code, prior to its amendment by RA No.
7641 ). Since only the company is obliged to
contribute to the fund of the retirement plan, the
agreement is a gratuitous contract between the
petitioner and the employees qualified thereto.
As such, it should be construed in a manner that
428 POST-EMPLOYMENT
the least transmission of rights and interests
shall prevail (Article 1378, New Civil Code). Con-
sidering that the application of the notional Philip-
pine salary will result in the least transmission of
rights and interests between the parties, it is that
interpretation that is best in accord with the law."
Types of Retirement Schemes
The SC held that there are three kinds of retirement
schemes. The first type is compulsory and contributory in
character. The second type is one set up by agreement bet-
ween the employer and the employees in collective bargaining
agreements or other agreements between them. The third
type is one that is voluntarily given by the employer, expressly
as in an announced company policy or impliedly as in a failure
to contest the employee's claim for retirement benefits.
The SC found that it was the third type of retirement
scheme which covered Reuter's Plan. "In case of retirement,
the employee shall be entitled to receive such retirement
benefits as he may have earned under existing laws and any
collective bargaining agreement and other agreements."
Citing Art. 287 (now Art. 302), Labor Code), it stressed that
the first paragraph of the provision deals with the retirement
age of an employee established in (a) a collective bargaining
agreement or (b) other applicable employment contract. The
second paragraph deals with the retirement benefits to be
received by a retiring employee which he may have earned
under (a) an existing law, (b) a collective bargaining or (c)
other agreements. Section 14 (a), Rule 1 of the Rules and
Regulations Implementing Book VI of the Labor Code, pro-
vides:
"Sec. 14. Retirement benefits. - (a) An employee who
is retired pursuant to a bona fide retirement plan or in
accordance with the applicable individual or collective
agreement or established employer policy shall be entitled
to all the retirement benefits provided therein ... "
BAR SYLLABUS-BASED REVIEWER IN 429
LABOR LAW & SOCIAL LEGISLATION
Notional Rate
The SC agreed with the CA that Gerlach's retirement
benefits must be based on her notional Philippine salary. It
is very clear that from the very start of her first assignment
overseas, Reuters apprised her that the company's contri-
bution to the Plan is based on her notional Philippine
salary. In fact, under the Plan, the company's contribution
to the fund is 10% of the basic monthly salary of each par-
ticipant. It also informed her of the amount of her notional
Philippine salary whenever she was transferred to her next
overseas assignment or when there were increases in her
salary, both actual and notional. Significantly, it was able to
prove that it has been its practice worldwide that the notio-
nal salary of an employee was its basis in computing its
contribution to the retirement plan for a local employee
detailed abroad.
Compulsory Retirement v. Voluntary Retirement
2019 Bar, Part II, Question No. 8.20
Discuss the differences between compulsory and vo-
luntary/optional retirement as well as the minimum benefits
provided under the Labor Code for retiring employees of
private establishments. (2.5%)
Answer
A voluntary/optional retirement is a termination of em-
ployment based on a bilateral agreement to terminate
employment at an agreed age regardless of years in ser-
vice, or after a certain number of years in service regard-
less of age. It is a matter of contract. In contrast, a
compulsory retirement is a termination of employment by
operation of law. It is a matter of statute.
Under Art. 302 of the Labor Code, retiring employees
shall be paid retirement benefits computed as follows: (22.5
days x Daily Rate) x Length of Service. The 22.5 days consist
430 POST-EMPLOYMENT
of 15 days representing half-month salary, 5 days as service
incentive leave, and 2.5 days representing 1/12 of 13th month
pay. The full 22.5. days shall be used if the retiree is entitled
to both service incentive leave and 13th month pay.
Meantime, the 15 days must always be used.
2018 Bar, Question No . I
Narciso filed a complaint against Norte University for
the payment of retirement benefits after having been a
part-time professional lecturer in the same school since
1974. Narciso taught for two semesters and a summer
term for the school year 1974-1975, 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 every semester and summer, until November 2005
when he was told that he could no longer teach because
he was already 75 years old. Norte University also denied
Narciso's claim for retirement benefits stating that only full-
time permanent faculty, who have served for at least five
years immediately preceding the termination of their
employment, can avail themselves of post-employment
benefits. As part-time faculty member, Narciso did not
acquire permanent employment status under the Manual of
Regulations for Private Schools, in relation to the Labor
Code, regardless of his length of service.
(a) Is Narciso entitled to retirement benefits? (2.5%)
(b) If he is entitled to retirement benefits, how should
retirement pay be computed in the absence of any contract
between him and Norte University providing for such
benefits? (2.5%)
Answer
(a) Yes.
Although not a regular employee, Narciso is entitled
to retirement benefits under the Labor Code. As held in De
BAR SYLLABUS-BASED REVIEWER IN 431
LABOR LAW & SOCIAL LEGISLATION
La Salle Araneta University vs. Bernardo, G.R. No. 190
809, 13 February 2017, Art. 302 of the Labor Code, as re-
numbered, is a curative legislation which guarantees retire-
ment benefits to "any employee" in the absence of a collec-
tive bargaining agreement (CBA) or similar contract.
Moreover, the implementing rules of R.A. 7641 employ the
term "all employees"; hence, non-regular employees are
not set apart from regular employees.
(b) Since Narciso appears to be entitled to both ser-
th
vice incentive leave (5 days) and 13 month pay (2.5.
days), his retirement benefits shall be computed based on
22.5 days. The same shall be multiplied by his length of
service which shall include his authorized leaves.
2018 Bar, Question No. IV
Natasha Shoe Company adopted an organizational
streamlining program that resulted in the retrenchment of
550 employees in its main plant. After having been paid
their separation benefits, the retrenched workers deman-
ded payment of retirement benefits under a CBA between
their union and management. Natasha Shoe Company
denied the workers' demand.
(a) What is the most procedurally peaceful means to
resolve this dispute? (2.5%)
(b) Can the workers claim both separation pay and
retirement benefits? (2.5%)
Answer
(a) Since the establishment is organized, the mode
of settlement most procedurally peaceful is recourse to the
grievance machinery. If the dispute be not resolved within
seven (7) calendar days, the same shall be elevated to
voluntary arbitration.
(b) Unless expressly prohibited by the CBA, both se-
paration pay and retirement benefits can be claimed ( Good
432 POST-EMPLOYMENT
Year v. Marina Angus, 185499, 14 November 2014). This
is in keeping with both the Social Justice, Clause and the
Full Protection Clause.
Principle of Compassionate Justice
Zenaida Paz v. Northern Tobacco Redrying Co.,
Inc. et al.
G.R. No. 199554, 18 February 2015
J Leonen
NTRCI hired Paz in 1974 as a seasonal sorter and
paid her P185.00 daily. It regularly re-hired her every
tobacco season since then. She signed a seasonal job
contract at the start of her employment and a pro-forma
application letter prepared by NTRCI in order to qualify for
the next season. On 18 May 2003, when she was 63
already, NTRCI informed her that she was considered
retired under company policy. A year later, it told her she
would receive P12,000.00 as retirement pay.
Paz, with two other complainants, filed a Complaint
for illegal dismissal against NTRCI on 4 March 2004. She
amended her Complaint on 27 April 2004 into a Complaint
for payment of retirement benefits, damages, and attor-
ney's fees as the P12,000.00 seemed inadequate for her
29 years of service. NTRCI countered that no CBA existed
between NTRCI and its workers. Thus, it computed the
retirement pay of its seasonal workers based on Article
287 now Art. 302) of the Labor Code.
NTRCI raised the requirement of at least six months
of service a year for that year to be considered in the
retirement pay computation. It claimed that Paz only
worked for at least six months in 1995, 1999, and 2000 out
of the 29 years she rendered service. Thus, Paz's
retirement pay amounted to P12,487.50 after multiplying
her P185.00 daily salary by 221/2 working days in a month,
for three years.
BAR SYLLABUS-BASED REVIEWER IN 433
LABOR LAW & SOCIAL LEGISLATION
The Labor Arbiter ruled that Paz was entitled to
P12,487.50. The NLRC modified the appealed decision by
crediting Paz 28 years of service resulting in retirement
benefits of P60,356.25" pursuant to RA 7641.lt added all
the months she was engaged to work for the company for
the last 28 years and divided the total by six (for a fraction
of six months is considered as one year) to get the number
of years of her service.
The CA dismissed the company's petition and modi-
fied the NLRC's decision by awarding P60,356.25 this time
as financial assistance. It found that while applying the
clear text of Article 287 resulted in the amount of
P12,487 .50 as retirement pay, "this amount [was] so
meager that it could hardly support ... Paz, now that she
is weak and old, unable to find employment." It discussed
jurisprudence on financial assistance and deemed it
appropriate to apply the formula: One half-month pay mul-
tiplied by 29 years of service divided by two yielded
P60,356.25 as Paz's retirement pay.
Paz went up to te Sc to seek the reinstatement of the
NLRC's decision. She argued that NTRCI failed to prove
the alleged company policy on compulsory retirement for
employees who reached 60 years of age or who rendered
30 years of service, whichever came first. Consequently,
Article 287, as amended by Republic Act No. 7641, applied
and entitled her to "retirement pay ... equivalent to [at
least] one-half month salary for every year of service, a
fraction of at least six (6) months being considered as one
whole year." She added that she was then 63 years old,
and while one may opt to retire at 60 years old, the com-
pulsory retirement age was 65 years old under Article 287,
as amended. She also argued that NTRCI misread Philip-
pine Tobacco Flue-Curing & Redrying Corp. v. National
Labor Relations Commission as that case involved sepa-
ration pay computation. Lastly, she pointed to the lack of
legal basis that "an employee should have at least worked
434 POST-EMPLOYMENT

for six (6) months for a particular season for that season to PARTV
be included in the computation of retirement pay[.]" alle-
gedly, regular seasonal employees were still considered LABOR RELATIONS
employees during off season, and length of service deter-
mination should be applied in the retiree's favor. A
Right to Self-Organization
NTRCI argued that the proviso "a fraction of at least
six (6) months being considered as one (1) whole year" Coverage
appears in both Article 287 on retirement pay and Articles Doctrine of Necessary Implication
283 and 284 on separation pay. NTRCI argued also that Mixed- Membership
unlike regular employees, seasonal workers like petitioner Rights and Conditions of Membership
Paz could offer their services to other employers during off. Nature of Relationship
Member & Labor Union
season. Thus, the six-month rule avoided the situation
Charter/Local & Federation
wherein seasonal workers received retirement pay twice - Disaffiliation
an even more favorable position compared with regular Substitutionary Doctrine
employees.
The SC held: B
Collective Bargaining Unit
Even as the NLRC proposed a formula for determi-
ning the length of service of Paz, no one bothered to deter- C
mine her actual years of service. Hence, she should be Exclusive Bargaining Representative
given her retirement pay of P12,487.50. However, aside Determination of Majority Representative Status
from her backwages and nominal damages as she had
D
been illegally dismissed and denied due process, she must
Rights of Legitimate-Labor Organizations
be awarded financial assistance of P60,356.25 pursuant to
the Principle of Compassionate Justice. Check-off, Assessment, Agency Fees
Collective Bargaining
Duty to Bargain Collectively
Collective Bargaining Agreement
(Mandatory Provisions)

g
Unfair Labor Practice

Nature
ULP of Employer
ULP of Labor Organizations
435
436 LABOR RELATIONS BAR SYLLABUS-BASED REVIEWER IN 437
LABOR LAW & SOCIAL LEGISLATION

f. 2. Specific Coverage under the Labor Code, R.A.

Peaceful Concerted Activities 10361 & E.O. 180 (KATo SINGS)

Strike & Picketing K Kasambahay

Lockout A - Aliens
T - Terminated employees

NOTES S - Supervisors
I INC members
A N - New employees
Right to Self-Organization G - Government employees
S - Security guards
(Ryt 2 JAF LOs 4 CB-D-MAP)
Exclusions (MACHEEN)
The right to self-organization is the right to join,
assist or form labor organizations for purposes of collective M - Managers
bargaining, dealing with the employer, or for mutual aid or A - Armed Forces
protection. C - Confidential employees (Doctrine of
Necessary Implication)
Coverage H High-level government employees
E - Employees of foreign governments &
1. General Coverage (Labor Code) lnt'I organizations
1.1. Art. 253 (All employees of CIA establish- E - Employees of cooperatives who are
ments CREM institutions & All AIRWIS) members
N - Non-employees
CIA - Commercial, Industrial & Agri-
cultural Confidential Employee
CREM - Charitable, Religious, Educa- One is disqualified for being a confidential employee
tional & Medical because, by force of the Doctrine of Necessary Implication,
AIRWIS - Ambulant, ltenerant, Rural, he is like a disqualified manager. For the disqualification to
Workers with no definite apply: (a) he must be in a fiduciary relationship with
employers, Intermittent & Self- another to whom he reports or whom he assists; (b) the
employed latter possesses labor-management relations information;
and (c) he has access to that information by reason of his
1.2. Art. 254 (All employees of GOCCs) position, i.e., his ability to access it is inherent in the
1.3. Art. 255 (Supervisors) position he occupies.
438 LABOR RELATIONS
The disqualification will not apply if: (a) the informa-
tion is business information; or (b) the information may be
labor-management relations in nature but the employee's
access thereto is accidental only.
Hypothetical Problem
CBA negotiations at Z Shipbuilders Corporation would
commence in a couple of weeks. Mr. Cruz, the Manager,
invited his former classmate in Law school to assist him in
crafting the economic provisions which the governing board
wanted to be included in the renewal CBA. In the course of
their brainstorming, he mentioned to his friend that his
company's earnings have breached the 5B mark already. It
was at that precise moment that his personal secretary Katy
entered his inner room to hand him the mobile phone that
he had earlier asked her to charge as usual.
On leaving the room, Katy approached Perry who was
a juris doctor to ask him what 5B mark meant. She also
asked him what surface bargaining and Hobson's choice
meant, explaining that the visiting lawyer, Atty. Pardo, had
passionately suggested them to Mr. Cruz. Unfortunately,
Perry could not recall the book definitions. To save face,
he smartly warned her never to tell anyone that she had
asked him about those terms. He dishonestly explained
that they were indecent, whispering to her that the first
pertained to prostitutes who just went through the motions
without any emotion; hence, well-bred women like her
should never utter it to anyone. As to the second, he ex-
plained in a restraining tone that it was a trading technique
employed by shabu dealers and she might end up being
investigated by the PDEA; hence, she should never utter it
to anyone also. Impressed by Perry's mastery of legal
terms, Katy asked if the two of them could assist the union.
(a) Assuming you are not like Perry, what would be
your answer to Katy's query? Explain. (1%)
BAR SYLLABUS-BASED REVIEWER IN 439
LABOR LAW & SOCIAL LEGISLATION
(b) Suppose Katy and Perry were inseparable do-
mestic partners for 5 long years, would their relationship
have any effect on the organizational capacity of Perry?
Explain. (1%)
Proposed Answer
(a) Katy is a confidential employee; hence, by force
of the Doctrine of Necessary Implication, she is disqualified
from joining, assisting or forming a labor organization. All
the informations she has heard are labor-management
relations informations as they all pertain to the upcoming
collective bargaining negotiations. The 5B mark is an
information that is expected to give the union the
confidence to demand for commensurate economic terms.
Likewise, both surface bargaining and hobsonic attitude
are bargaining strategies; hence, the information will likely
place the union on guard and prompt it to adopt counter-
strategies. Moreover, Katy's access to these informations
is inherent in her job as the personal secretary of the
Manager. As to the fact that Perry has dissuaded her from
disclosing what she has heard, there is no assurance that
she will not reveal the informations. Assuming she would
keep silent about the supposed indecent terms, the 5B
mark was never within Perry's restraining words; hence, it
is likely said information will reach the union.
As to Perry, he can assist the union because he is not
a confidential employee like Katy. Firstly, he is not in a
fiduciary relationship with the Manager. Secondly, his
access to the informations was not inherent in his job at all.
In fact, it was by accident that he heard them.
(b) If Katy and Perry were long-time inseparable
domestic partners, Perry's right to self-organization would
be affected in that he would also be disqualified. On the
surface, he may not be a confidential employee. However,
the reason for the disqualification under the Doctrine of
Necessary Implication very much applies to him, i.e., to
440 LABOR RELATIONS
prevent the leakage of labor-management relations infor-
mation to the union. In other words, the Gompany must be
protected from the likelihood that he would review the
meanings of the terms and forewarn the union thereof -
not to mention the likelihood of him revealing the admitted
corporate income.
Mixed-Membership
Mixed-membership is not a ground for the cancella-
tion of a union's certificate of registration (CR). The
grounds are limited to Mis-Mis-Vol only:
Mis - Misrepresentation, false statement or fraud
relative to the adoption of the constitution and by-laws
(CBL);
Mis - Misrepresentation, false statement or fraud
relative to the election of union officers; and
Vol - Voluntary dissolution
The effect of mixed-membership is that the non-mem-
bers of the collective bargaining unit (CBU) who join the
wrong union are deemed automatically removed.
Rights and Conditions of Membership
ART. 250. [241] Rights and Conditions of Member-
ship in a Labor Organization. The following are the rights
and conditions of membership in a labor organization:
(a) No arbitrary or excessive initiation fees shall be
required of the members of a legitimate labor organization
nor shall arbitrary, excessive or oppressive fine and for-
feiture be imposed; E
(b) The members shall be entitled to full and detailed
reports from their officers and representatives of all finan-
cial transactions as provided for in the constitution and by-
laws of the organization; I
BAR SYLLABUS-BASED REVIEWER IN 441
LABOR LAW & SOCIAL LEGISLATION
(c) The members shall directly elect their officers in
the local union, as well as their national officers in the
national union or federation to which they or their local
union is affiliated, by secret ballot at intervals of five (5)
years. No qualification requirement for candidacy to any
position shall be imposed other than membership in good
standing in subject labor organization. The secretary or
any other responsible union officer shall furnish the Sec-
retary of Labor and Employment with a list of the newly-
elected officers, together with the appointive officers or
agents who are entrusted with the handling of funds within
thirty (30) calendar days after the election of officers or
from the occurrence of any change in the list of officers of
the labor organization; P
(d) The members shall determine by secret ballot,
after due deliberation, any question of major policy affect-
ting the entire membership of the organization, unless the
nature of the organization or force majeure renders such
secret ballot impractical, in which case, the board of direc-
tors of the organization may make the decision in behalf of
the general membership; P
(e) No labor organization shall knowingly admit as
members or continue in membership any individual who
belongs to a subversive organization or who is engaged
directly or indirectly in any subversive activity; P
(f) No person who has been convicted of a crime
involving moral turpitude shall be eligible for election as a
union officer or for appointment to any position in the
union; P
(g) No officer, agent or member of a labor organi-
zation shall collect any fees, dues, or other contributions in
its behalf or make any disbursement of its money or funds
unless he is duly authorized pursuant to its constitution
and by-laws; E
442 LABOR RELATIONS
(h) Every payment of fees, dues or other contribu-
tions by a member shall be evidenced by, a receipt signed
by the officer or agent making the collection and entered
into the record of the organization to be kept and main-
tained for the purpose; E
(i) The funds of the organization shall not be applied
for any purpose or object other than those expressly provi-
ded by its constitution and by-laws or those expressly au-
thorized by written resolution adopted by the majority of the
members at a general meeting duly called for the purpose;
E ment, custody or control of the funds, moneys and other
U) Every income or revenue of the organization shall
be evidenced by a record showing its source, and every
expenditure of its funds shall be evidenced by a receipt
from the person to whom the payment is made, which shall
state the date, place and purpose of such payment. Such
record or receipt shall form part of the financial records of
the organization. I
Any action involving the funds of the organization
shall prescribe after three (3) years from the date of
submission of the annual financial report to the Department
of Labor and Employment or from the date the same
should have been submitted as required by law, whichever
comes earlier: Provided, That this provision shall apply
only to a legitimate labor organization which has submitted
the financial report requirements under this Code:
Provided, further.That failure of any labor organization to
comply with the periodic financial reports required by law
and such rules and regulations promulgated thereunder six
(6) months after the effectivity of this Act shall
automatically result in the cancellation of union registration
of such labor organization; C
(k) The officers of any labor organization shall not be
paid any compensation other than the salaries and expen-
ses due to their positions as specifically provided for in its
constitution and by-laws, or in a written resolution duly
BAR SYLLABUS-BASED REVIEWER IN 443
LABOR LAW & SOCIAL LEGISLATION
authorized by a majority of all the members at a general
membership meeting duly called for the purpose. The
minutes of the meeting and the list of participants and
ballots cast shall be subject to inspection by the Secretary
of Labor or his duly authorized representatives. Any iregu-
larities in the approval of the resolutions shall be a ground
for impeachment or expulsion from the organization; C
(I) The treasurer of any labor organization and every
officer thereof who is responsible for the account of such
organization or for the collection, management, disburse-
properties of the organization, shall render to the organi-
zation and to its members a true and correct account of all
moneys received and paid by him since he assumed office
or since the last day on which he rendered such account,
and of all bonds, securities and other properties of the
organization entrusted to his custody or under his control.
The rendering of such account shall be made: I
(1) At least once a year within thirty (30) days after
the close of its fiscal year;
(2) At such other times as may be required by a
resolution of the majority of the members of the organi-
zation; and
(3) Upon vacating his office.
The account shall be duly audited and verified by
affidavit and a copy thereof shall be furnished the
Secretary of Labor.
(m) The books of accounts and other records of the
financial activities of any labor organization shall be open
to inspection by any officer or member thereof during office
hours; I
(n) No special assessment or other extraordinary
fees may be levied upon the members of a labor organi-
zation unless authorized by a written resolution of a majo-
444 LABOR RELATIONS
rity of all the members in a general membership meeting
duly called for the purpose. The secretary of the organi-
zation shall record the minutes of the meeting including the
list of all members present, the votes cast, the purpose of
the special assessment or fees and the recipient of such
assessment or fees. The record shall be attested to by the
president; E
(o) Other than for mandatory activities under the
Code, no special assessments, from any amount due to an
employee without an individual written authorization duly
signed by the employee. The authorization should specifi-
cally state the amount, purpose and beneficiary of the
deduction; and E
(p) It shall be the duty of any labor organization and
its officers to inform its members on the provisions of its
constitution and by-laws, collective bargaining agreement,
the prevailing labor relations system and all their rights and
obligations under existing labor laws. I
For this purpose, registered labor organizations may
assess reasonable dues to finance labor relations semi-
nars and other labor education activities. C
Any violation of the above rights and conditions of
membership shall be a ground for cancellation of union
registration or expulsion of officers from office, whichever
is appropriate. At least thirty percent (30%) of the members
of a union or any member or members specially concerned
may report such violation to the Bureau. The Bureau shall
have the power to hear and decide any reported violation
to mete the appropriate penalty. (COMMENT: Mis Mis Vol
Rule)
Criminal and civil liabilities arising from violations of
above rights and conditions of membership shall continue
to be under the jurisdiction of ordinary courts.
BAR SYLLABUS-BASED REVIEWER IN 445
LABOR LAW & SOCIAL LEGISLATION
1. Rights of Members
1.1 ... Political rights .......................... Pars. (d), (e) & (f)
1.2. Economic rights ....................... Pars. (a), (g), (h),
(i), (n) & (o)
1.3. Right to participate .................. Pars. (c) & (d)
1.4. Right to information .................. Pars. (b), U), (I),
(m) & (p)
2. Conditions of Membership
2.1. Par. (c)
2.2. Par. (p)
3. Nature of Relationship
3.1. Member & Labor Union (principal-client relation-
ship); hence, a union cannot waive the personal rights of a
member, e.g., right to reinstatement, by choosing separa-
tion pay for him.
3.2. Charter/Local & Federation (principal-client rela-
tionship); hence, a federation cannot sequester the assets
of a local to punish it.
4. Disaffiliation
The right to join a union implies the right not to join
one; hence, a member can dissociate subject to the union
security clause, if any, and the Substitutionary Doctrine in
the event of mass-resignation.
5. Substitutionary Doctrine
"... This principle, formulated by the NLRB as its initial
compromise solution to the problem facing it when there
occurs a shift in employees' union allegiance after the exe-
cution of a bargaining contract with their employer, merely
446 LABOR RELATIONS
states that even during the effectivity of a collective bargai-
ning agreement executed between employer and emplo-
yees thru their agent, the employees can change said
agent but the contract continues to bind then up to its expi-
ration date. They may bargain however for the shortening
of said expiration date.
In formulating the "substitutionary" doctrine, the only
consideration involved as the employees' interest in the
existing bargaining agreement. The agent's interest never
entered the picture. In fact, the justification for said doctrine
was:
... that the majority of the employees, as an
entity under the statute, is the true party in
interest to the contract, holding rights through the
agency of the union representative. Thus, any
exclusive interest claimed by the agent is
defeasible at the will of the principal."
X X X the matter abound .. (to which resort may be had) consi-
(Benguet Consolidated Inc. vs. BC/ Employees & W
Union-PAFLU 23 SCRA, 465,471).
Collective Bargaining Unit
1. Meaning
A "bargaining unit" has been defined as a group of
employees of a given employer, comprised of all or less
than all of the entire body of employees, which the collec-
tive interest of all the employees, consistent with equity to
the employer, indicate to be the best suited to serve the
reciprocal rights and duties of the parties under the collec-
tive bargaining provisions of the law. (Rothenberg on La-
bor Relations, 482, cited in Fernandez & Quiazon, The
Law of Labor Relations, 1963 ed., p. 281, cited in Univer-
sity of the Philippines v. Hon. Pura Ferrer-Calleja, et al.,
G.R. No. 96189, 14 July 1992).
BAR SYLLABUS-BASED REVIEWER IN 447
LABOR LAW & SOCIAL LEGISLATION
American Concept
A bargaining unit, in labor relations, is a group of em-
ployees with a clear and identifiable community of interests
who are (under U.S. law) represented by a single labor
union in collective bargaining and other dealings with ma-
nagement.
Appropriateness Tests
University of the Philippines v. Hon. Pura Ferrer-
Calleja, et al.
G.R. No. 96189, 14 July 1992
" ... In Democratic Labor Association vs. Cebu Steve-
doring Company, Inc., decided on February 28, 1958, the
Court observed that "the issue of how to determine the
proper collective bargaining unit and what unit would be
appropriate to be the collective bargaining agency" ... "is
novel in this jurisdiction; however, American precedents on
dering that our present Magna Carta has been patterned
after the American law on the subject." Said the Court:
. .. Under these precedents, there are various factors
which must be satisfied and considered in determining the
proper constituency of a bargaining unit. No one particular
factor is itself decisive of the determination. The weight
accorded to any particular factor varies in accordance with
the particular question or questions that may arise in a
given case. What are these factors? Rothenberg mentions
a good number, but the most pertinent to our case are: (1)
will of the employees (Globe Doctrine); (2) affinity and unit
of employees' interest, such as substantial similarity of
work and duties, or similarity of compensation and working
conditions; (3) prior collective bargaining history: and (4)
employment status, such as temporary, seasonal probatio-
nary employees ....
XXX XXX XXX
448 LABOR RELATIONS
The Court further explained that "(t)he test of the
grouping is community or mutuality of interests. And this is
so because 'the basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the com-
bination which will best assure to all employees the exer-
cise of their collective bargaining rights' (Rothenberg on
Labor Relations, 490)." Hence, in that case, the Court
upheld the trial court's conclusion that two separate bar-
gaining units should be formed, one consisting of regular
and permanent employees and another consisting of
casual laborers or stevedores.
Since then, the "community or mutuality of interests"
test has provided the standard in determining the proper
constituency of a collective bargaining unit. In Alhambra
Cigar & Cigarette Manufacturing Company, et al. vs.
Alhambra Employees' Association (PAFLU), 107 Phil. 23,
the Court, noting that the employees in the administrative,
sales and dispensary departments of a cigar and cigarette
manufacturing firm perform work which have nothing to do
with production and maintenance, unlike those in the raw
lead (malalasi), cigar, cigarette, packing (precintera) and
engineering and garage departments, authorized the
formation of the former set of employees into a separate
collective bargaining unit. The ruling in the Democratic
Labor Association case, supra, was reiterated in Philippine
Land-Air-Sea Labor Unit vs. Court of Industrial Relations,
11 0 Phil. 176, where casual employees were barred from
joining the union of the permanent and regular employees.
Applying the same "community or mutuality of inte-
rests" test, but resulting in the formation of only one collec-
tive bargaining units is the case of National Association of
Free Trade Unions vs. Mainit Lumber Development Com-
pany Workers Union-United Lumber and General Workers
of the Phils., G. R. No. 79526, December 21, 1990, 192
SCRA 598. In said case, the Court ordered the formation
of a single bargaining unit consisting of the Sawmill Divi-
BAR SYLLABUS-BASED REVIEWER IN 449
LABOR LAW & SOCIAL LEGISLATION
sion in Butuan City and the Logging Division in Zapanta
Valley, Kitcharao, Agusan Norte of the Mainit Lumber De-
velopment Company. The Court reasoned:
Certainly, there is a mutuality of interest among the
employees of the Sawmill Division and the Logging Divi-
sion. Their functions mesh with one another. One group
needs the other in the same way that the company needs
them both. There may be difference as to the nature of
their individual assignments but the distinctions are not
enough to warrant the formation of a separate bargaining
unit.
In the case at bar, the University employees may, as
already suggested, quite easily be categorized into two
general classes: one, the group ?o~pos~d. of employees
whose functions are non-academic, 1.e., Janitors, messen-
gers, typists, clerks, receptionists, carpenters, electricians,
grounds-keepers, chauffeurs, mechanics, plumbers; and
two, the group made up of those performing acade~ic
functions, i.e., full professors, associate professors, assis-
tant professors, instructors - who may be j~dges or go-
vernment executives - and research, extension and pro-
fessorial staff. Not much reflection is needed to perceive
that the community or mutuality of interests which justifies
the formation of a single collective bargaining unit is wan-
ting between the academic and non-academic personnel
of the university. It would seem obvious that teachers
would find very little in common with the University clerks
and other non-academic employees as regards respon-
sibilities and functions, working conditions, compensation
rates social life and interests, skills and intellectual pur-
suits,' cultural activities, etc. On the contrary, the dichotomy
of interests, the dissimilarity in the nature of the work and
duties as well as in the compensation and working con-
ditions of the academic and non-academic personnel dic-
tate the separation of these two categories of employees
for purposes of collective bargaining. The formation of two
450 LABOR RELATIONS BAR SYLLABUS-BASED REVIEWER IN 451
LABOR LAW & SOCIAL LEGISLATION

separate bargaining units, the first consisting of the rank- election between the participating unions and No Union.
and-file non-academic personnel, and th.e second, of the The winner is the participant that gets majority vote based
rank-and-file academic employees, is the set-up that will on the valid votes cast.
best assure to all the employees the exercise of their col-
(3) Consent Election. During a pre-election conference,
lective bargaining rights. These special circumstances, i.e.,
the Med-Arbiter may ask the concerned unions if they would
the dichotomy of interests and concerns as well as the dis-
rather agree on ground rules for the conduct among them-
similarity in the nature and conditions of work, wages and
selves of an election. If minded to, either they engage the
compensation between the academic and non-academic
supervision of the DOLE Regional Director or not.
personnel, bring the case at bar within the exception con-
templated in Section 9 of Executive Order No. 180. It was B. X X X
grave abuse of discretion on the part of the Labor Rela-
C. X X X
tions Director to have ruled otherwise, ignoring plain and
patent realities." (Underscored.)
1. Certification Election (CE)
Exclusive Bargaining Representative A CE is investigative. As such, the employer is a
standby; hence, he cannot move to dismiss the CE
Determination of Majority Representative Status petition, or appeal the CE order, i.e., in unorganized estab-
lishments (The Heritage Hotel Manila, et al v. SOLE, et al.,
2017 Bar, Question No. XI G.R. No. 172132, 23 July 2014). A CE is just a mode of ve-
rification and not a litigation. Being so, an EER finding
A. The modes of determining the exclusive bargai-
made by the Med-Arbiter does not ar:nount to res judicata
ning agent of the employees in a business are: (a) volunta-
in a case before the NLRC ( Sandoval Shipyards, Inc. v.
ry recognition; (b) certification election; and (c) consent
Pepito, G. R. No. 143428, 25 June 2001).
election. Explain how they differ from one another. (4%)
Jurisdiction over CE petitions is vested upon the Med-
B. X X X
Arbiter. SEnA is not required since a CE petition is not a
C. X X X complaint but a means of verification only (supra) which is
investigative in character (supra).
Answer
The rules require a CE petition to be verified. If not
A. Before the SEBA rule, the modes of EBR selec- verified, however, the Med-Arbiter should not dismiss the
tion were as follows: petition because it does not initiate a litigation. It is just a
means of verification as to the workers' will on which union
(1) Voluntary Recognition. Thru this mode of elec-
must represent them.
tion, the lone legitimate labor organization is given recogni-
tion by the employer as the workers' sole representative for
2018 Bar, Question No. II
purposes of collective bargaining.
Nayon Federation issued a charter certificate creating
(2) Certification Election. After the Med-Arbiter allows
a rank-and-file Neuman Employees Union. On the same
a CE petition, the assigned election officer will conduct an
452 LABOR RELATIONS
day, New Neuman Employees Union filed a petition for
certification election with the Department pf Labor and Em-
ployment (DOLE) Regional Office, attaching the appro-
priate charter certificate.
a) The employer, Neuman Corporation, filed a mo-
tion to dismiss the petition for lack of legal personality on
the part of the petitioner union. Should the motion be
granted? (2.5%)
b) The employer likewise filed a petition for cancella-
tion of union registration against New Neuman Employees
Union, alleging that Nayon Federation already had a char-
tered local rank-and-file union, Neuman Employees Union,
pertaining to the same bargaining unit within the establish-
ment. Should the petition for cancellation prosper? (2.5%)
Answer
a) No.
For the limited purpose of filing a petition for certifica-
tion election, a charter has the legal personality even be-
fore it can formally be issued its certificate of registration
(Art. 241, Labor Code). Moreover, a certification election is
a mode of verification only. Being investigative in charac-
ter, which does not initiate a litigation between the union
and the employer, the latter cannot move to dismiss the
petition because it is just a standby (Heritage Hotel Manila
v. Sec. of Labor, et al., G.R. No. 172132, 23 July 2014).
Finally, the relationship between a federation and its char-
ter is that of an agency wherein the latter is the principal.
As such, it can take back from its agent the delegated
power to file a certification election petition on its behalf.
b) No.
The only recognized grounds for cancellation of a
certificate of registration under Art. 247 of the Labor Code,
as renumbered, are: (a) misrepresentation, false statement
BAR SYLLABUS-BASED REVIEWER IN 453
LABOR LAW & SOCIAL LEGISLATION
or fraud relative to the adoption or ratification of the union's
constitution and by-laws (CBL); (b) misrepresentation,
false statement, or fraud relative to the election of its union
officers; and (c) voluntary dissolution. The ground invoked
being outside the statutory list, the cancellation petition
filed by the federation should not be allowed to prosper.
2. Valid CE Petition
2.1. Formal Requisites: The petition must
2.1.1. be in writing;
2.1.2. be signed and verified.
2.2. Substantial Requisites: The petition must state:
2.2.1. that the petitioner is a legitimate labor
organization with CR;
2.2.2. that the petition is not barred;
2.2.3. the name, address and nature of business
of employer;
2.2.4. a description of the CBU sought to be
represented;
2.2.5. approximate number of employees in the
CBU;
2.2.6. the names and addresses of other LLOs
in the CBU;
2.2.7. that the establishment is organized or
unorganized;
2.2.8. if organized, it is supported by 25% of the
CBU members whose names must be
submitted.
2016 Bar, Question No. X
Lazaro, an engineer, organized a union in Garanti-
sado Construction Corporation (Garantisado) which has
200 employees. He immediately filed a Petition for Certifi-
454 LABOR RELATIONS
cation Election, attaching thereto the signatures of 70
employees. Garantisado vehemently opposed the petition,
alleging that 25 signatories are probationary employees,
while 5 are supervisors. It submitted the contracts of the 25
probationary employees and the job description of the
supervisors. It argued that if 30 is deducted from 70, it
gives a balance of 40 valid signatures which is way below
the minimum number of 50 signatories needed to meet the
alleged 25% requirement. If you are the Director of Labor
Relations, will you approve the holding of a Certification
Election. Explain your answer. (5%)
Answer
I will grant the petition.
First, the establishment is unorganized absent a pre-exis-
ting CSA. Therefore, I am required to grant the petition auto-
matically, provided it is sufficient in both form and substance.
Second, the petition is sufficient in substance. The 25
probationary employees belong to the collective bargaining
unit (CSU) sought to be represented. Even if the 5 super-
visors were counted out, and rightly so, the remainder will
be 195 and 25% thereof is 49, more or less. Therefore,
since the support of 70 CSU members was obtained by the
petitioner then the minimum number of supporting signa-
tures was far exceeded.
Requisites of a Valid CE
1. It is not barred; and
2. Majority of the eligible voters cast their votes
(Major ELVOT CASVOT). The following are
Non-ELVOTs:
Non Con Less3; Non Leg SubDis
2.1. Non-employees
2.2. Non-members of the CSU involved
BAR SYLLABUS-BASED REVIEWER IN 455
LABOR LAW & SOCIAL LEGISLATION
2.3. CSU members of less than 3 months
2.4. Confidential employees;
2.5. Legal secretaries; corporate secretaries
2.6. Subversives (this will not be given in light of
the repeal of the Anti-Subversion Act)
2.7. Dismissed employees, unless: dismissed by
reason of ULP or current labor dispute; no
substantially equivalent and regular employ-
ment yet; and they contested their dismissal
before a forum of appropriate jurisdiction.
CE Winner: Union with majority vote based on the
valid votes (Major VOT VALVOT)
Illustration:
X Co. has 1,000 rank-and-filers. Of said number, 100
consist of Non Con Less3; Non Leg SubDis. Only 900
were allowed to cast their ballots. And of said 900 ballots,
20 had to be excluded because they were blank, torn and
marked. The participants were Union A which got 400
votes; Union S which got 241 votes; Union C which got
239 votes; and No Union which got zero votes.
(a) Is the CE valid? (1%)
(b) If so, is there a winner? (1 % )
Answer
(a) The CE is valid because none of the CE bars is in
attendance and majority of the eligible voters cast their (its)
votes. Since 900 cast their ballots, the required 451 votes
(Major VOT CASVOT) has been met.
(b) There is no winner. For a CE participant to win
the election, it must get majority vote (50% + 1) based on
the valid votes (Major VOT VALVOT). Since the valid
votes are 880 (900 less 20 invalid votes) then the winner is
456 LABOR RELATIONS
the union that gets 441 votes. In the problem, none got at
least 441 votes; hence, there is no winner.
2014 Bar, Question No. V
Liwayway Glass had 600 rank-and-file employees.
Three rival unions - A, B, and C participated in the certifi-
cation elections ordered by the Med-Arbiter. 500 emplo-
yees voted. The unions obtained the following votes: A-
200; B-150; C-50; 90 employees voted "no union"; and 1O
were segregated votes. Out of the segregated votes, four
(4) were cast by probationary employees and six (6) were
cast by dismissed employees whose respective cases are
still on appeal. (10%)
(A) Should the votes of the probationary and dis-
missed employees be counted in the total votes cast for
the purpose of determining the winning labor union?
(B) Was there a valid election?
(C) Should Union A be declared the winner?
(D) Suppose the election is declared invalid, which of
the contending unions should represent the rank-and-file
employees?
(E) Suppose that in the election, the unions obtained
the following votes: A-250; B-150; C-50; 40 voted "no
union"; and 10 were segregated votes. Should Union A be
certified as the bargaining representative?
Answer
(A) Yes. The segregated votes should be counted as
valid votes. Probationary employees are not among the em-
ployees who are ineligible to vote. Likewise, the pendency
of the appeal of the six dismissed employees indicates that
they have contested their dismissal before a forum of appro-
priate jurisdiction; hence, they continue to be employees for
purposes of voting in a certification election (D.O. 40-03).
BAR SYLLABUS-BASED REVIEWER IN 457
LABOR LAW & SOCIAL LEGISLATION
(B) Yes. The certification election is valid because it
is not a barred election and majority of the eligible voters
cast their votes.
(C) No. Union A should not be declared the winner
because it failed to garner majority of the valid votes. The
majority of 500 votes, representing valid votes, is 251
votes. Since Union A received 200 votes only, it did not win
the election.
(D) None of the participating unions can represent
the rank-and-file employees for purposes of collective bar-
gaining because none of them enjoys majority represen-
tative status.
(E) If the 10 votes were segregated on the same
grounds, Union A cannot still be certified as the bargaining
representative because its vote of 250 is still short of the
majority vote of 251. However, if the 10 votes were validly
segregated, majority vote would be 246 votes. Since Union
A received more than majority vote then it won the
election.
2018 Bar, Question No. VI
A certification election was conducted in Nation
Manufacturing Corporation, whereby 55% of eligible voters
in the bargaining unit cast their votes. The results were as
follows:
Union Nana: 45 votes
Union Nada: 40 votes
Union Nara: 30 votes
No Union: 80 votes
Union Nana moved to be declared as the winner of
the certification election.
a) Can Union Nana be declared as the winner?
(2.5%)
458 LABOR RELATIONS
b) Assume that the eligibility of 30 voters was chal-
lenged during the pre-election conference. The ballots of
the 30 challenged voters were placed inside an envelope
sealed by the DOLE Election Officer. Considering the said
envelope remains sealed, what should be the next course
of action with respect to the said challenged votes? (2.5%)
Answer
(a) No.
To win a certification election, a participant must gar-
ner so much number of votes comprising majority of all
valid votes. In this case, the majority vote is 97.5. With just
45 votes, Union Nana lost the election; hence, it cannot be
certified.
(b) The necessity of opening the sealed envelopes
must be determined. If the 30 challenged votes could ma-
terially alter the result of the election then they have to be
opened. Since there is a possibility that at least 17.5 of the
challenged votes were cast in favour of No Union, the
envelopes must be opened. If added to its 80 votes, No
Union would win the CE with 97.5 votes. Needless to say,
No Union can win a certification election.
2. Consent Election
See 2017 Bar, Question No. XI, supra.
3. SEBA Request
Per D.O. 40-1-15, Voluntary Recognition has been re-
placed by SEBA Request. A union makes such request
before the DOLE Regional Director. A distinction must be
made between organized establishment (OE) and unorga-
nized establishment (UE). Thus:
OE - The SEBA request shall be referred to the Med-
Arbiter to determine the propriety of a CE.
BAR SYLLABUS-BASED REVIEWER IN 459
LABOR LAW & SOCIAL LEGISLATION
UE - If there is 1 union only, the RD shall call a
conference for the submission of (i) names of employees
comprising majority of the CSU membership involved who
support certification; (ii) certification under oath by the pre-
sident that the documents submitted are true and correct
based on his personal knowledge. If documents are not
submitted, the request shall be referred to an election offi-
cer for the conduct of CE (Rule IX).
If there are 2 or more unions, a certification election
shall be conducted instead.
3. Rights of Labor Organizations
ART. 251. [242] Rights of Legitimate Labor Organiza-
tions. A legitimate labor organization shall have the right:
(a) To act as the representative of its members for
the purpose of collective bargaining;
(b) To be certified as the exclusive representative of
all the employees in an appropriate bargaining unit for pur-
poses of collective bargaining;
(c) To be furnished by the employer, upon written
request, with its annual audited financial statements, inclu-
ding the balance sheet and the profit and loss statement,
within thirty (30) calendar days from the date of receipt of
the request, after the union has been duly recognized by
the employer or certified as the sole and exclusive bargai-
ning representative of the employees in the bargaining
unit, or within sixty (60) calendar days before the expiration
of the existing collective bargaining agreement, or during
the collective bargaining negotiation;
(d) To own property, real or personal, for the use and
benefit of the labor organization and its members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to be-
nefit the organization and its members, including coope-
460 LABOR RELATIONS
rative, housing, welfare and other projects not contrary to
law. Notwithstanding any provision of a general or special
law to the contrary, the income and the properties of legiti-
mate labor organizations, including grants, endowments,
gifts, donations and contributions they may receive from
fraternal and similar organizations, local or foreign, which
are actually, directly and exclusively used for their lawful
purposes, shall be free from taxes, duties and other
assessments. The exemptions provided herein may be
withdrawn only by a special law expressly repealing this
provision.
Hypothetical Problem
One of the rights of a legitimate labor organization
under Art. 251 of the Labor Code is the right to sue and be
sued in its name (Par. e ). If being sued is a statutory right,
no one is expected to exercise it. Cite a single instance
when a legitimate labor organization might invoke its right
to be sued. (1%)
Proposed Answer
When a rival union challenges the legal personality of
the petitioning union in a certification election proceeding,
the latter may invoke the No Collateral Attack Rule. In
effect, its opposition to the challenge will be grounded on
its right to be made a respondent in a cancellation procee-
ding before the DOLE Regional Director who has juris-
diction over cancellations of certificates of registration. To
use such defense, therefore, is to invoke its right to be
sued before the proper forum.
Check-off, Assessment, Agency Fees
Union dues are assessed from members of the exclu-
sive bargaining representative (EBR) which has concluded
a .CSA with the company; whereas, agency fees are col-
lected from members of other unions in exchange for being
BAR SYLLABUS-BASED REVIEWER IN 461
LABOR LAW & SOCIAL LEGISLATION
recipients of the same benefits secured by the EBR thru
collective bargaining.
Collective Bargaining
1. Duty to Bargain Collectively
ART. 263. [252] Meaning of Duty to Bargain Col-
lectively. The duty to bargain collectively means the per-
formance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of
work and all other terms and conditions of employment inc-
luding proposals for adjusting any grievances or questions
arising under such agreement and executing a contract
incorporating such agreements if requested by either party
but such duty does not compel any party to agree to a
proposal or to make any concession.
ART. 264. [253] Duty to Bargain Collectively When
There Exists a Collective Bargaining Agreement. When
there is a collective bargaining agreement, the duty to bar-
gain collectively shall also mean that neither party shall ter-
minate nor modify such agreement during its lifetime. How-
ever, either party can serve a written notice to terminate or
modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to keep
the status quo and to continue in full force and effect the
terms and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached by
the parties.
Collective Bargaining Agreement
ART. 265. [253-A] Terms of a Collective Bargai-
ning Agreement. Any Collective Bargaining Agreement
that the parties may enter into shall, insofar as the repre-
sentation aspect is concerned, be for a term of five (5)
years. No petition questioning the majority status of the in-
cumbent bargaining agent shall be entertained and no
462 LABOR RELATIONS
certification election shall be conducted by the Department of
Labor and Employment outside of the sixty-day period im-
mediately before the date of expiry of such five-year term of
the Collective Bargaining Agreement. All other provisions of
the Collective Bargaining Agreement shall be renegotiated
not later than three (3) years after its execution. Any agree-
ment on such other provisions of the Collective Bargaining
Agreement entered into within six (6) months from the date of
expiry of the term of such other provisions as fixed in such
Collective Bargaining Agreement, shall retroact to the day
immediately following such date. If any such agreement is
entered into beyond six months, the parties shall agree on
the duration of retroactivity thereof. In case of a deadlock in
the renegotiation of the Collective Bargaining Agreement, the
parties may exercise their rights under this Code. (Incorpo-
rated as a new article by Sec. 21 of RA No. 6715 (1989)).
1. Mandatory Provisions
1.1. Union Security Clause
1.1.1. Closed Shop. The employer cannot hire
from outside the membership of the EBR.
1.1.2. Union Shop. The employer can hire from
outside, subject to the duty of the new hire
to join the EBR.
1.1.3. Maintenance of Membership Shop. Con-
tinuing employment is conditioned on conti-
nuing membership in the EBR.
1.1.4 Agency Shop. A new employee, if he re-
fuses to join the EBR, must pay union dues.
1.1.5. Hiring Hall Provision. The employer shall
hire workers referred by the EBR.
Note:
1. Between a Closed Shop Agreement and a Union
Shop Agreement, the first is more onerous to the em-
BAR SYLLABUS-BASED REVIEWER IN 463
LABOR LAW & SOCIAL LEGISLATION
player. Under the first, the employer cannot hire outside
the membership of the EBR. Hence, a position requiring
qualifications not pos~essed by a~~ of its members. ~ill
have to be filled up with an unqualified or under-qual1f1ed
employee. Under the second, the company can hire fr?m
outside. Hence, it can match the requirements of the Job
with the skills of its chosen employee - subject, of course,
to the obligation of the the new hire to join the EBR; other-
wise, his dismissal can be requested by the EBR.
2. In deadlocked CBA negotiations where the SOLE
assumes jurisdiction, stipulations already reached by the
parties, e.g., maintenance of membership clause, ~~nnot
be changed by the SOLE to more onerous provIsIons.
Hence, he cannot change Union Shop to Closed Shop, or
Maintenance of Membership to Closed Shop as it would
make the CBA more burdensome for the employer. This
constitutes grave abuse of discretion correctible by
certiorari (Mera/co v. Secretary of Labor, G.R. No. 127598,
27 January 1999).
1.2. Others
1.2.1. Remunerative Provisions
Wages and extra-wage benefits.
1.2.2. Leave Benefits
Sick leave, vacation leave and other
leaves not granted by law.
1.2.3 Automatic Renewal Clause
1.2.4. No Strike- No Lockout Clause I Conclu-
sive Arbitration Clause
1.2.5. Management Prerogatives
Hiring (BFOQ); transfers (secondment);
outsourcing; drug testing; medical scree-
ning; non-compete and similar clauses;
lay-off; closure; etc ...
464 LABOR RELATIONS
1.2.6. Grounds for Disciplinary Action
Particularization of just' and authorized
causes; list of analogous causes; etc ...
1.2. 7. Pre-Disciplinary Procedure
Contractual Due Process; schedule of
penalties; etc ...
2. Non-Mandatory Provisions
Based on the CBA history, they are non-subjects.
2008 Bar, Question No. I
a. Explain the automatic renewal clause of collective
bargaining agreements. (3%)
b. X X X
Answer
(a) Automatic Renewal Clause
When the political life of a collective bargaining
agreement (CBA) expires, all provisions will continue to be
effective until a new CBA is concluded. This rules applies
to both original and renegotiated or extended CBAs.
(b) X X X which has the effect of re-executing an expired CBA until a
Hold-Over Doctrine
Economic provisions shall be renegotiated not later
than 3 years from "date of execution" of the CBA. If the new
economic provisions are "entered into" within 6 months from
date of expiry of the old economic provisions, they shall be
retroacted to the day immediately following the date of
expiry. If "entered into" after 6 months, they shall take effect
as agreed upon by the parties.
BAR SYLLABUS-BASED REVIEWER IN 465
LABOR LAW & SOCIAL LEGISLATION
The parties are free to retroact the new economic pro-
visions to the day immediately following the expiry of the
old. Should they agree that said provisions shall take effect
later, there will be a period between date of expiry of the
old and date of effectivity of the new without economic pro-
visions. In such event, said period shall be governed by
the old economic provisions pursuant to the Hold-Over
Doctrine.
Question
Distinguish the following:
1. Automatic Renewal Clause from Hold-Over Doctrine
2. Grievance Machinery from Administrative Machinery
3. SEBA Request from SEnA Request
4. Political Provisions from Economic Provisions of
CBAs
5. Mandatory Subjects from Non-Mandatory Subjects
of CB
Answer
1. Automatic Renewal Clause is an evergreen clause
new one is entered into; whereas, Hold-Over Doctrine
allows expired economic provisions to govern periods
between their date of expiry and date agreed upon as the
effectivity date of the new economic provisions.
2. The Grievance Machinery which Art. 265 of the
Labor Code contemplates is a mandatory subject of a
CBA, without which registration will be denied, the purpose
of which is to resolve all grievable disputes at the plant
level; whereas, the Administrative Machinery whereof Art.
218 of the Labor Code speaks pertains to any of the labor
tribunals established to adjudicate labor issues after a
failed mediation.
466 LABOR RELATIONS
3. SEBA Request is a mode of selecting the workers
exclusive bargaining representative; wh~reas, SEnA Re-
quest is a pre-litigation mechanism.
4. Political Provisions are the non-remunerative CBA
provisions which are effective for 5 years; whereas, Eco-
nomic Provisions are the remunerative CBA provisions
which are effective for 3 years.
5. Mandatory Provisions are generally the historically
mainstay CBA provisions; whereas, Non-Mandatory Provi-
sions are the relatively trivial provisions.
Unfair Labor Practices
Art. 258 (n) of the Labor Code spells the nature of
ULP, i.e., it is a violation of workers' right to self-organiza-
tion. This is also the characterization given in Nelson Cu/iii
v. Eastern Telecommunications Phil., Inc., G.R. No.
165381, 9 February 2011. A practice, however unfair it
may be, is not ULP unless listed as ULP under Art. 259
(ULP of employers) and Art. 260 (ULP of labor organiza-
tions). Considering that ULP is a crime, the listings must be
strictly treated.
EER is an Element of Art. 259 ULPs.
Since the violator is an employer and the victim is
generally an employee, EER is an element. EER is not an
element of Art. 260 ULPs because the violator is a labor
organization. EER is an element only if the victim is the
employer, i.e., (a) when the labor organization violates its
duty to collectively bargain; (b) when it violates the CBA;
and (c) when it commits featherbedding. Where the victim
is a worker or the union membership, EER is obviously not
an element.
Even before the birth of EER, an employer can
commit ULP to a non-employee as when he engages in
yellow dog practice, or when he exhibits yellow dog
attitude.
BAR SYLLABUS-BASED REVIEWER IN 467
LABOR LAW & SOCIAL LEGISLATION
1. ULP by Employers (Art. 259, Labor Code)
Article 229. Unfair labor practices of employers. It
shall be unlawful for an employer to commit any of the
following unfair labor practice:
To interfere with, restrain or coerce employees in the
exercise of their right to self-organization; (1, CIR)
To require as a condition of employment that a person
or an employee shall not join a labor organization or shall
withdraw from one to which he belongs; (2, Yellow Dog
Condition)
To contract out services or functions being performed
by union members when such will interfere with, restrain or
coerce employees in the exercise of their rights to self-
organization; (3, CIR)
To initiate, dominate, assist or otherwise interfere with
the formation or administration of any labor organization,
including the giving of financial or other support to it or its
organizers or supporters;(4, CIR)
To discriminate in regard to wages, hours of work and
other terms and conditions of employment in order to
encourage or discourage membership in any labor organi-
zation. Nothing in this Code or in any other law shall stop
the parties from requiring membership in a recognized col-
lective bargaining agent as a condition for employment,
except those employees who are already members of
another union at the time of the signing of the collective
bargaining agreement. Employees of an appropriate bar-
gaining unit who are not members of the recognized collec-
tive bargaining agent may be assessed a reasonable fee
equivalent to the dues and other fees paid by members of
the recognized collective bargaining agent, if such non-
union members accept the benefits under the collective
bargaining agreement: Provided, that the individual autho-
rization required under Article 242, paragraph (o) of this
■
468 LABOR RELATIONS
Code shall not apply to the non-members of the recog-
nized collective bargaining agent; (5, CIR)
To dismiss, discharge or otherwise prejudice or discri-
minate against an employee for having given or being
about to give testimony under this Code; (6, R)
To violate the duty to bargain collectively as pres-
cribed by this Code; (7, CB Duty)
To pay negotiation or attorney's fees to the union or
its officers or agents as part of the settlement of any issue
in collective bargaining or any other dispute; or (8, CIR)
To violate a collective bargaining agreement. (9, CBA)
The provisions of the preceding paragraph notwith-
standing, only the officers and agents of corporations, as-
sociations or partnerships who have actually participated
in, authorized or ratified unfair labor practices shall be held
criminally liable. (As amended by Batas Pambansa Bilang
130, August 21, 1981)
1.1. CIR ULPs (Act Nos. 1-3-4-5 & 8)
1.1. 1. Acts of Coercion
1.1.2. Acts of Interference
1.1.3. Acts of Restraint
1.2. Violation ULPs
1.2.1. Violation of duty to collectively bargain
(Act No. 7)
1.2.2. Violation of the CBA (Act No. 9)
1.3. Reprisal ULP (Act No. 6)
1.4. Yellow Dog Condition (Act No. 2)
Note: ULP committed thru CBA violation
BAR SYLLABUS-BASED REVIEWER IN 469
LABOR LAW & SOCIAL LEGISLATION
BPI v. BPI Employees Union - Davao Chapter
G.R. No. 164301, 10 August 2010
BPI survived its merger with Far East Bank. In a
merger, there is automatic absorption of the employees
of the company absorbed. It is an exception to the No Suc-
cessor Employer Rule. The absorbed employees become
members of the contracting union too. In this case, how-
ever, absorbed employees refused to join the contracting
union. Hence, the union requested BPI to dismiss them;
however, it did not act on the request.
The Union Shop Clause provided:
"New employees falling within the bargai-
ning unit as defined in Article I of this Agreement,
who may hereafter be regularly employed by
the Bank shall, within thirty (30) days after they
become regular employees, join the Union as a
condition of their continued employment. It is un-
derstood that membership in good standing in
the Union is a condition of their continued em-
ployment with the Bank."
Because of BPl's inaction, the matter was brought to
the GM and then to the VA. The VA ruled that the USC ap-
plied to new hires who subsequently became regular em-
ployees and not to regular employees absorbed by virtue
of a merger. The CA, which found no substantial distinction
between the two groups of employees, reversed the VA.
Note: Violation of CBA: Commission of ULP v.
LA's Jurisdiction
As to ULP, whether the CBA violation is a ULP or not
depends on which provision of the CBA has been violated.
It is ULP if an economic provision is violated; provided, the
violation is gross and flagrant. Hence, a CBA violation is
not ULP if:
1. What is violated is a political provision; or
470 LABOR RELATIONS
2. What is violated is an economic provision; how-
ever, its violation is not gross and flagrant
Economic provisions are the 3-year money provi-
sions, or money-ralated provisions. In contrast, the 5-year
political provisions are all other provisions, e.g., union
security clause, grievance machinery.
As to jurisdiction, the LA has jurisdiction if what is vio-
lated is an economic provision and the violation is
gross and flagrant. If what is violated is a political provi-
sion; or even if an economic provision but the violation is
not gross and flagrant, the case shall be mediated before
the GM and then elevated to the VA.
Illustration:
ULP based on violation of political provisions commit-
ted by the employer (e.g., by violating union security
clause as when it hires from outside the union member-
ship); or by the EBR (e.g., by violating the grievance
machinery as when it prematurely files a notice to arbitrate
prior to termination of GM proceedings) - is for the GM
then the VA (not LA) to hear and resolve. In the BPI case,
a political provision was violated by BPI, viz., Union Shop
Clause; hence, it was the GM and then the VA who heard
the dispute. Appeal was then brought to the CA, not
NLRC.
2015 Bar, Question No. XVII
The Collective Bargaining Agreement (CSA) between
Libra Films and its union, Libra Films Employees' Union
(LFEU), contains the following standard clauses:
1. Maintenance of membership;
2. Check off or union dues and agency fees; and
3. No strike, no lock-out.
While Libra Films and LFEU are in re-negotiations for
BAR SYLLABUS-BASED REVIEWER IN 471
LABOR LAW & SOCIAL LEGISLATION
an extension of the CBA, LFEU discovers that some of its
members have resigned from the union, citing their consti-
tutional right to organize (which includes the right NOT to
organize). LFEU demands that Libra Films institute admi-
nistrative proceedings to terminate those union members
who resigned in violation of the CBA's maintenance of
membership clause. Libra Films refuses, citing its obliga-
tion to remain a neutral party. As a result, LFEU declares a
strike and after filing a notice of strike and taking a strike
vote, goes on strike. The union claims that Libra Films
grossly violated the terms of the CSA and engaged in
unfair labor practice.
a. Are LFEU's claims correct? Explain.(4%)
b. Distinguish between a "closed shop" clause and a
"maintenance of membership" clause.(2%)
c. Distinguish between "union dues" and "agency
fees. "(2%)
Answer
a. LFEU's claim that Libra Films committed ULP
based on its violation of the CBA is not correct. For viola-
tion of a CBA to constitute ULP, the violation must be a
violation of its economic provisions. Moreover, said viola-
tion must be gross and flagrant. Based on the allegation of
the union, what was violated was the maintenance of
membership clause which was a political provision; hence,
no ULP was committed (BPI Employees Union - Davao
City v. BPI, G.R. No. 174912, 24 July 2013).
b. A Closed Shop clause requires an employer to
hire from the union membership only; on the other hand,
Maintenance of Membership clause requires as a condition
for continued employment continued membership in the
contracting union. Both are union security clauses.
c. Union dues are assessed from members of the
exclusive bargaining representative (EBR) which has con-
472 LABOR RELATIONS
eluded a CBA with the company; whereas, agency fees are
collected from members of other unions in exchange for
being recipients of the same benefits secured by the EBR
thru collective bargaining.
2. ULP by Labor Organizations (Art. 260, Labor Code)
Article 249. Unfair labor practices of labor organiza-
tions. It shall be unfair labor practice for a labor organiza-
tion, its officers, agents or representatives:
To restrain or coerce employees in the exercise of
their right to self-organization. However, a labor organiza-
tion shall have the right to prescribe its own rules with res-
pect to the acquisition or retention of membership; (1, W)
To cause or attempt to cause an employer to discrimi-
nate against an employee, including discrimination against
an employee with respect to whom membership in such or-
ganization has been denied or to terminate an employee
on any ground other than the usual terms and conditions
under which membership or continuation of membership is
made available to other members; (2, W)
To violate the duty, or refuse to bargain collectively
with the employer, provided it is the representative of the
employees; (3, Er)
To cause or attempt to cause an employer to pay or
deliver or agree to pay or deliver any money or other things
of value, in the nature of an exaction, for services which
are not performed or not to be performed, including the
demand for fee for union negotiations; (4, Er)
To ask for or accept negotiation or attorney's fees
from employers as part of the settlement of any issue in
collective bargaining or any other dispute; (5, M) or
To violate a collective bargaining agreement (6, Er).
The provisions of the preceding paragraph notwith-
standing, only the officers, members of governing boards,
BAR SYLLABUS-BASED REVIEWER IN 473
LABOR LAW & SOCIAL LEGISLATION
representatives or agents or members of labor associa-
tions or organizations who have actually participated in,
authorized or ratified unfair labor practices shall be held
criminally liable. (As amended by Batas Pambansa Bilang
130, August 21, 1981)
Victims:
2.1. ULP against a Worker (Act Nos. 1 & 2)
2.2. ULP against the Union Membership (Act No. 5)
2.3. ULP against the Employer (Act Nos. 3, 4 & 6)
Note: ULP Based on Violation of Duty to Collectively
Bargain
Questions
1. Why are workers equally imposed the duty?
It is understandable why employers must be imposed
the duty, i.e., to allow for economic concessions. In turn,
however, it is not clear what can be imposed on employees
by way of duty? Suppose they evade being imposed
anything, would they be liable for ULP?
On a practical note, employees must equally perform
CB duty to allow the employer to gain from the plant law
effect of a CBA, e.g., a no strike clause, grievance
machinery, particularization of just causes for termination,
selection criteria for authorized causes, list of analogous
causes for dismissal, et cetera.
2. When is the duty exactly imposed?
Neither refusal nor evasion would amount to ULP
unless its subject is CB duty that is actually imposed al-
ready. By implication, the CB duty of an employer starts
when served a demand to bargain with a list of specific de-
mands (Art. 261, Labor Code). Absent particulars, it does
not commit ULP if it does not reply in 10 days.
474 LABOR RELATIONS
On the part of employees, it is implied that the duty is
imposed once they have selected their CB representative_
as certified by the Med-Arbiter. And to stress once more
why an employer would want that representative to come
to the bargaining table (to the point that, absent an EBR to
contract with, it is allowed to file a CE petition in an
unorganized setting) CB leads to CBA, the law of the plant.
Hence, an employer who believes in the advantages of
plant law would call out the EBR to negotiate. What if the
EBR/SEBA is not inclined to co-produce that plant law,
could it be deemed liable for ULP? Can the employer serve
it a demand to bargain also? This is unknown under Art.
261 of the Labor Code. Hence, the exact point CB duty is
imposed on employees is unknown too.
Notably, these are violations of employees' CB duty:
blue sky bargaining and bad faith bargaining. But they are
committed after CB has started. So they do not help
answer the question of when exactly employees are im-
posed the duty to bargain. In other words, not one of them
can answer whether or not the EBR/SEBA's refusal to ne-
gotiate a CBA - assuming it happens in real life - is a ULP.
Guide Questions on Employer's:
1. Refusal to Bargain
Q: Did the EBR comply with the Jurisdictional
Preconditions by:
(i) possessing majority representative
status;
(ii) proving its EBR/SEBA status with its
certification document; and
(iii) serving a demand to bargain with a list
of its demands?
A: If No then there is No ULP.
Q: Is the refusal reasonable?
BAR SYLLABUS-BASED REVIEWER IN 475
LABOR LAW & SOCIAL LEGISLATION
A: If Yes then there is no ULP.
Q: Is the act refusal or mere failure?
A: If mere failure then it is not ULP.
2. Evasion of Duty to Bargain
Q: Is the subject of the demand a mandatory or
non-mandatory subject of collective bargai-
ning?
A: If mandatory then the evasion is ULP; other-
wise, it is not.
Note:
1. CBA history serves these two purposes: (a) it
helps determine CBU appropriateness; and (b) it helps
determine mandatory subjects of collective bargaining. If,
historically, a subject is a CB subject then it is a mandatory
subject.
2. A mere proposal to exclude a mandatory subject
is not necessarily a ULP based on evasion (Nestle
Ruling).
3. ULP Remedies
3.1. a labor complaint for ULP; and
3.2. a criminal complaint for ULP.
4. Prerequisite of Criminal Action
A criminal complaint for ULP cannot be filed unless
there is a final judgment of ULP rendered by an appro-
priate labor forum.
The Non-Prejudicial Rule
However final that judgment might be, it will be non-
prejudicial, i.e., it cannot be relied upon by the trial court
hearing the criminal case. The reason is, being the out-
476 LABOR RELATIONS
come of an administrative proceedings, it is based on sub-
stantial evidence only. Since conviction rnquires proof be-
yond reasonable doubt, it cannot be relied upon by the trial
court.
Hypothetical Question
What would be the effect of the pendency of a labor
complaint for ULP on the criminal aspect of said ULP?
Answer
Since the labor case is still pending, the victim cannot
yet initiate a criminal action for ULP. A final judgment fin-
ding ULP rendered by a labor tribunal is a prerequisite for
its initiation.
Note:
1. One would know absence of final judgment from
the body of the Bar problem. If it mentions an appeal, the
labor case is still pending. Even if a second motion for re-
consideration cannot be filed with the Supreme Court, the
pendency of that prohibited motion negates finality of
judgment. In this regard, there are grounds for admitting
second MRs (FASAP v. PAL, G.R. No. 178083, 13 March
2018).
2. In one Bar year, this was the question: What
would be the effect of the pendency of a complaint for ULP
before the DOLE on the civil and criminal aspects of said
ULP? That question was defective. The examiner erro-
neously presumed that ULP had three (3) aspects, viz.,
administrative, civil and criminal aspects. Truth is, it has
two (2) only, viz., civil (which is the labor aspect) and crimi-
nal aspect. Hence, one who files a labor complaint for ULP
with the LA or VA can claim civil damages.
A Likely Problem (using the structure of the defective Bar
problem)
BAR SYLLABUS-BASED REVIEWER IN 477
LABOR LAW & SOCIAL LEGISLATION
What would be the effect of the pendency of a com-
plaint for sexual harassment at the_ ~ommitte_e ?n Decorum
and Investigation (CODI) on the c1v1I and criminal aspects
of said sexual harassment?
Answer
None. The civil aspect under Sec. 6 of R.A. 7877 and
the criminal aspect under Sec. 5 thereof can proceed inde-
pendently of the administrative aspect. In the event the
CODI makes a final factual finding of sexual harassment,
such finding will also be non-prejudicial because the civil
case requires preponderance of evidence, while the
criminal case requires proof beyond reasonable doubt.
Peaceful Concerted Activities
1. Strike
1.1. Elements of a Strike
(a) Temporary stoppage of work; hence, if
the stoppage is permanent then it is a mass
resignation or mass abandonment;
(b) Concerted activity; hence, if it is the
activity of 2 only then it is insubordination or
serious misconduct;
(c) Labor dispute; hence, if there is no
labor dispute then the mass action cannot be a
violation of the no strike clause.
1.2. Validity of a Strike (MISPAP Tests)
Means Test
A strike may be valid in all respects, except that ille-
galities have been committed in its course, e.g., blocking
ingress or egress as to compel the employer to fly out its
managers with the use of a chopper. Said illegalities will
make the strike illegal.
 478 LABOR RELATIONS
The Principle of Vicarious Liability is not observed
anymor~; hence, in an illegal strike, the wnion officers will
lose their employment while mere members will not, unless
they have committed illegalities. Reason: the officers ought
to know better than stage an illegal strike.
Injunction Test
. A~ AJO has_ an injunctive effect; hence, if not com-
plI~~ with, the strike becomes illegal. A TRO or injunctive
writ issued under Arts. 225 & 279, Labor Code, if violated
will render the strike illegal. This is discussed in Part VIII
(Labor Procedure).
Statutory Prohibition Test (E.O. 180)
These employees cannot strike: (i) SSS employees·
(ii) Manila public school teachers. ' Can the intended strike be staged on August 28?
Procedure Test
1. Conversion Rule
. Wh~n _the NCMB converts a notice of strike to preven-
tive med1at1on, a new notice has to be served. If not the
strike that ensues will be illegal. ' Agreement Test
2. Cooling-Off Period and Strike Ban
S~ould the 7-day strike ban be added to the cooling-
off period or should it run with it? The debate is an
unfinished business. The practical solution is to simply
apply these rules:
Note:
2.1. Both periods are mandatory; hence, they must
be allowed to lapse; and
2.2. The union may take a vote during the cooling-
off period.
BAR SYLLABUS-BASED REVIEWER IN 479
LABOR LAW & SOCIAL LEGISLATION
Question
The applicable cooling-off period is 30 days to end on
August 30. The strike vote result is filed on August 25. Can
the intended strike be staged on August 31?
Answer
No. The earliest it can be staged is on September 2
because by then both periods would have lapsed. The 30-
day cooling off period ends on August 30 while the 7-day
strike ban ends on September 1.
Question
The applicable cooling period is 30 days to end on
August 30. The strike vote result is reported on August 20.
Answer
No. The earliest date it can be staged is August 31.
As of August 28, the strike ban ends but the cooling-off pe-
riod has yet to end on August 30.
It is applicable to economic strike only. A No Strike-
No Lockout provision is different from a Conclusive Arbit-
ration Clause.
Purpose Test
These are non-strikable: (a) Wage distortion; (b)
Inter-union matters; (c) Intra-union matters; and (d) Labor
Standards matters.
Doctrine of Preferred Freedoms
The exact nature of a concerted activity must be de-
termined in order to know if strike rules apply. This is im-
480 LABOR RELATIONS
portant because there are other constitutionally guaran-
teed activities that border on a strike. In the Toyota Case,
infra., the union desperately claimed that it was in the
exercise of other constitutionally guaranteed rights; hence,
it could not be bound to rules governing strikes. However,
it was held that its activity was a strike. Hence, absent prior
notice, the strike was declared as illegal. In the Philippine
Blooming Mills Case, infra., the union was freed from
liability under the No Strike, No Lockout Clause of the CBA
because its activity was not a strike.
An activity is a strike if it has these elements: (a) Tem-
porary stoppage of work; (b) Concerted activity; and (c)
Labor dispute.
In a mass resignation, the employees cannot reclaim
their positions on the pretext of abandoning their strike.
Once a resignation is accepted, there is permanent stop-
page of work. Hence, the strikers must apply as new em-
ployees.
There can be no strike in the hands of just two rebel-
lious and recalcitrant union members blocking ingress.
Hence, the union cannot be held liable under the No Strike
Clause of the CSA.
Where all the union members leave their posts and go
to Malacanang in order to air their grievances against the
police despite the request of the company that some of
them stay behind to man important facilities, the No Strike
Clause has no application because the dispute is between
union members and the police. Hence, the third element is
absent.
2017 Bar, Question No. XIII
A. Given that the liability for an illegal strike is indivi-
dual, not collective, state when the participating union
officers and members may be terminated from employment
because of the illegal strike. Explain your answer. (4%)
BAR SYLLABUS-BASED REVIEWER IN 481
LABOR LAW & SOCIAL LEGISLATION
B. A sympathetic strike is stoppage of work to make
common cause with other strikers in another establishment
or business. Is the sympathetic strike valid? Explain your
answer. (1%)
C. Due to business recession, Ballistic Company re-
trenched a part of its workforce. Opposing the retrench-
ment, some of the affected employees staged a strike.
Eventually, the retrenchment was found to be justified, and
the strike was declared illegal; hence, the leaders of the
strike, including the retrenched employees, were declared
to have lost their employment status.
Are the striking retrenched employees still entitled to
separation pay under Sec. 298 (283) of the Labor Code
despite the illegality of their strike? Explain your answer.
(2%)
Answer
A. The individual liabilities of the participants in an
illegal strike are as follows:
As to union officers, they shall lose their employment
on the basis of their knowing participation in the illegal
strike.
As to union members, they shall lose their employ-
ment based on their participation and act of committing
illegalities in the course of the illegal strike.
B. No, a sympathetic strike is not valid.
Of the three elements of a strike, the required labor
dispute is lacking. A labor dispute is understood as one
arising from a bargaining deadlock or unfair labor practice.
There can be no such type of dispute between parties not
related as employer and employee.
C. Yes.
482 LABOR RELATIONS
Since the retrenchment preceded the strike, the lia-
bility of the company to pay separation pay under Art. 298
of the Labor Code has attached already. Hence, regard-
less of the outcome of its complaint for illegal strike, it must
discharge said duty. An illegal strike staged by retrenched
employees will not extinguish said obligation.
2. Picketing
Marching to-and-fro with placards that make known
the issues between the establishment and the workers. If
interviewed "Ano pinaglalaban nyo?", the answer is
"Basta!" (Sandoval Doctrine). Note: There is no Sandoval
Doctrine. "Basta" is just the expression of Prof. Edwin
Sandoval. Another thing, picketing is not marching "thru
and thru". What is the lesson? Take care of simple things
because they can be the most difficult in the Bar.
2016 Bar, Question No. V
Asia Union (Union) is the certified bargaining agent of
the rank-and-file employees of Asia Pacific Hotel (Hotel).
The Union submitted its Collective Bargaining Agree-
ment (CBA) negotiation proposals to the Hotel. Due to the
bargaining deadlock, the Union, on December 20, 2014,
filed a Notice of Strike with the National Conciliation and
Mediation Board (NCMB). Consequently, the Union con-
ducted a Strike Vote on January 14, 2015, when it was
approved.
The next day, waiters who are members of the Union
came out of the Union office sporting closely cropped hair
or cleanly shaven heads. The next day, all the male Union
members came to work sporting the same hair style. The
Hotel prevented these workers from entering the premises,
claiming that they violated the company rule on Grooming
Standards.
BAR SYLLABUS-BASED REVIEWER IN 483
LABOR LAW & SOCIAL LEGISLATION
On January 1'6, 2015, the Union subsequently staged
a picket outside the Hotel premises and prevented other
workers from entering the Hotel. The Union members
blocked the ingress and egress of customers and emplo-
yees to the Hotel premises, which caused the Hotel severe
lack of manpower and forced the Hotel to temporarily
cease operations resulting to substantial losses.
On January 20, 2015, the Hotel issued notices to
Union members, preventively suspending them and char-
ging them with the following offenses: (1) illegal picket; (2)
violation of the company rule on Grooming Standards; (3)
illegal strike; and (4) commission of illegal acts during the
illegal strike. The Hotel later terminated the Union officials
and members who participated in the strike. The Union
denied it engaged in an illegal strike and countered that
the Hotel committed an unfair labor practice (ULP) and a
breach of the freedom of speech.
a. Was the picketing legal? Was the mass action of
the Union officials and members an illegal strike? Explain.
(2.5%)
b. Rule on the allegations of ULP and violation of
freedom of speech. Explain. (2.5%)
Answer
a. Given the substance of the activity, which was
carried out by blocking ingress and egress, it was not a
picket. A picket is limited to harmless marching to and fro
by employees who carry placards or use speech to attract
the public to their cause. Based on substance, the activity
was a strike because: (a) there was temporary stoppage of
work; (b) it was carried out thru concerted activity; and (c)
there was a labor dispute between the union and the com-
pany arising from a bargaining deadlock (See Philippine
Blooming Mills Employment Organization, et al. v. Phi-
lippine Blooming Mills, et al., G.R. No. L-31195, 5 June
1973).
484 LABOR RELATIONS BAR SYLLABUS-BASED REVIEWER IN 485
LABOR LAW & SOCIAL LEGISLATION

b. The union's allegation of ULP and violation of
freedom of speech is baseless. As to the first, the dismis-
sal was for serious misconduct because the union staged
an economic strike on 16 January 2015, or on the 27th day
following service of its notice of strike on the NCMB on 20
December 2014. In effect, it did not observe the 30-day
cooling-off period as to make the strike illegal. In this
connection, an illegal strike amounts to serious misconduct
which is a just cause for foreclosing tenurial security.
As to the second, there was no violation of freedom of
speech. When the employees started blocking ingress and
egress in the course of staging a strike without prior com-
pliance with prescribed pre-strike procedure, their activity
was not protected preferred freedom. It was a strike made
doubly illegal by the union's violation of prescribed proce-
dure and employment of illegal means.
Lockout
1. Requisites
Art. 278 provides:
X X X
seven days before the intended strike or lockout, subject to
the cooling-off period herein provided. (As amended by
Batas Pambansa Bilang 130, August 21, 1981 and further
amended by Executive Order No. 111, December 24, 1986)
2. Another Conversion Rule
As a result of mediation, and by reason of the no
strike clause in the parties' CBA, the strikers abandon their
economic strike and return to their work. However, the
company does not admit back the union officers. Hence,
the members resume the strike in protest. The illegal lock-
out (no voting) converts the economic strike to a ULP
strike. In this case, the no strike clause will not apply any-
more. But if the clause is a conclusive arbitration clause
(e.g., "All disputes (must be enumerated) shall be sub-
mitted to voluntary arbitration."), a distinction shall not be
made anymore between economic strike and ULP strike.

A decision to declare a strike must be approved by a

majority of the total union membership in the bargaining unit
concerned, obtained by secret ballot in meetings or
referenda called for that purpose. A decision to declare a
lockout must be approved by a majority of the board of
directors of the corporation or association or of the partners
in a partnership, obtained by secret ballot in a meeting
called for that purpose. The decision shall be valid for the
duration of the dispute based on substantially the same
grounds considered when the strike or lockout vote was
taken. The Ministry may, at its own initiative or upon the
request of any affected party, supervise the conduct of the
secret balloting. In every case, the union or the employer
shall furnish the Ministry the results of the voting at least
 BAR SYLLABUS-BASED REVIEWER IN 487
LABOR LAW & SOCIAL LEGISLATION

PART VI worth of the job. As a result, all positions were re-evaluated

' and all employees were granted salary adjustments and
MANAGEMENT PREROGATIVE increases in benefits commensurate to their actual duties
and functions. With the JEP, the supervisory employees,
A who were members of the Union and who were formerly
Discipline treated in the same manner as rank and file employees,
~ were considered no longer entitled to overtime, rest day
Transfer of Employees and holiday pay but their basic salaries increased by 50%.
~ They sued for recovery of those benefits.
Productivity Standards
Q In upholding management's prerogative to implement
Bonus the JEP, the Court held:
.5 "In the case at bar, private respondent union
Change of Working Hours has miserably failed to convince this Court that
.E the petitioner acted in bad faith in implementing
Bona Fide Occupational Qualification the JE Program. There is no showing that the JE
G Program was intended to circumvent the law and
Post-Employment Restrictions deprive the members of respondent union of the
.ti benefits they used to receive.
Marriage Between Employees of Competitor-Employers
x x x It is the prerogative of management to
regulate, according to its discretion and
NOTES 1 judgment, all aspects of employment. This flows
from the established rule that labor law does not
Management Prerogative authorize the substitution of the judgment of the
employer in the conduct of its business. Such
National Sugar Refineries Corp. v. NLRC management prerogative may be availed of
G.R. No. 101761, 24 March 1993 2 without fear of any liability so long as it is exer-
cised in good faith for the advancement of the
"The (company) implemented a job evaluation prog- employers' interest and not for the purpose of
ram (JEP) affecting all employees, from rank and file to defeating or circumventing the rights of emplo-
department heads. The JEP was designed to rationalize yees under special laws or valid agreement and
the duties and functions of all positions, re-establish levels are not exercised in a malicious, harsh, oppres-
of responsibility, and reorganize both wage and opera- sive, vindictive or wanton manner or out of
tional structures. Jobs were ranked according to effort, res- malice or spite." (Footnotes omitted.)
ponsibility, training and working conditions and relative
1
· This part consists of 22 pages only but it requires reading of relatively long
disquisitions to re-train the eyes of readers in reading long writings.
486
488 MANAGEMENT PREROGATIVE
A. Discipline
1. Conduct of Investigations
Philippine Span Asia Carriers Corp. v. Heidi Pelayo
G.R. No. 212003, 28 February 2018
Leonen,J
"Not every inconvenience, disruption, difficulty, or dis-
advantage that an employee must endure sustains a fin-
ding of constructive dismissal." It is an employer's right to
investigate acts of wrongdoing by employees. Employees
involved in such investigations cannot ipso facto claim that
employers are out to get them. Their involvement in inves-
tigations will naturally entail some inconvenience, stress,
and difficulty. However, even if they might be burdened -
and, in some cases, rather heavily so - it does not neces-
sarily mean that an employer has embarked on their cons-
tructive dismissal.
X X X as an employer. An employer has the prerogative to prescribe
An employer who conducts investigations following
the discovery of misdeeds by its employees is not being
abusive when it seeks information from an employee in-
volved in the workflow which occasioned the misdeed.
Basic diligence impels an employer to cover all bases and
inquire from employees who, by their inclusion in that
workflow, may have participated in the misdeed or may
have information that can lead to the perpetrator's identifi-
cation and the employer's adoption of appropriate respon-
sive measures. An employee's involvement in such an
investigation will naturally entail difficulty. This difficulty
does not mean that the employer is creating an inhospi-
table employment atmosphere so as to ease out the em-
ployee involved in the investigation."
BAR SYLLABUS-BASED REVIEWER IN 489
LABOR LAW & SOCIAL LEGISLATION
2. Choice of Sanction
SMC v. NLRC
G.R Nos. 146121-22, 16 April 2008
Tinga, J
"What the lower tribunals perceived as laxity, we
consider as leniency. SMC's tendency to excuse justified
absences actually redounded to the benefit of respondent
since the imposition of the corresponding penalty would
have been deleterious to him. In a world where "no work-
no pay" is the rule of thumb, several days of suspension
would be difficult for an ordinary working man like respon-
dent. He should be thankful that SMC did not exact from
him almost 70 days suspension before he was finally dis-
missed from work.
In any case, when SMC imposed the penalty of dismissal
for the 12'h and 13th AWOPs, it was acting well within its rights
reasonable rules and regulations necessary for the proper
conduct of its business, to provide certain disciplinary mea-
sures in order to implement said rules and to assure that the
same would be complied with. An employer enjoys a wide
latitude of discretion in the promulgation of policies, rules and
regulations on work-related activities of the employees.
It is axiomatic that appropriate disciplinary sanction is
within the purview of management imposition. Thus, in the
implementation of its rules and policies, the employer has the
choice to do so strictly or not, since this is inherent in its right
to control and manage its business effectively. Consequently,
management has the prerogative to impose sanctions lighter
than those specifically prescribed by its rules, or to condone
completely the violations of its erring employees. Of course,
this prerogative must be exercised free of grave abuse of
discretion, bearing in mind the requirements of justice and fair
play. Indeed, we have previously stated:
490 MANAGEMENT PREROGATIVE
Management also has its own rights, which,
as such, are entitled to respect and ,enforcement
in the interest of simple fair play. Out of its
concern for those with [fewer] privileges in life,
the Supreme Court has inclined more often than
not toward the worker and upheld his cause in
his conflicts with the employer. Such favoritism,
however, has not blinded the Court to rule that
justice is in every case for the deserving, to be
dispensed in the light of the established facts
and applicable law and doctrine.
All told, we find that SMC acted well within its rights
when it dismissed respondent for his numerous absences.
Respondent was afforded due process and was validly
dismissed for cause." (Citations omitted.)
8. Transfer of Employees
1. Kinds of Transfer
1.1. Lateral. A movement from one position to an
equivalent position.
1.2. Scalar. A movement from a position to a higher
position; hence, it is a promotion, i.e., whether
or not accompanied by a pay increase.
2. Requisites of a Valid Lateral Transfer
Jenny Peckson v. Robinsons Supermarket Corp., et al.
G.R. No. 198534, 3 July 2013
"Concerning the transfer of employees, these are the
following jurisprudential guidelines: (a) a transfer is a
movement from one position to another of equivalent rank,
level or salary without break in the service or a lateral
movement from one position to another of equivalent rank
or salary; (b) the employer has the inherent right to transfer
or reassign an employee for legitimate business purposes;
(c) a transfer becomes unlawful where it is motivated by
BAR SYLLABUS-BASED REVIEWER IN 491
LABOR LAW & SOCIAL LEGISLATION
discrimination or bad faith or is effected as a form of
punishment or is a demotion without sufficient cause; (d)
the employer must be able to show that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee.
(Citations omitted)
X X X
It is the employer's prerogative, based on its assess-
ment and perception of its employees' qualifications, apti-
tudes, and competence, to move them around in the va-
rious areas of its business operations in order to ascertain
where they will function with maximum benefit to the
company. An employee's right to security of tenure does
not give him such a vested right in his position as would
deprive the company of its prerogative to change his
assignment or transfer him where he will be most useful.
When his transfer is not unreasonable, nor inconvenient,
nor prejudicial to him, and it does not involve a demotion in
rank or a diminution of his salaries, benefits, and other
privileges, the employee may not complain that it amounts
to a constructive dismissal.
X X X
If the transfer of an employee is not unreasonable, or
inconvenient, or prejudicial to him, and it does not involve
a demotion in rank or a diminution of his salaries, benefits
and other privileges, the employee may not complain that it
amounts to a constructive dismissal."
C. Productivity Standards
Armando Aliling v. Jose Feliciano , et al.
G.R. No. 185829, 25 April 2012
"In Lim v. National Labor Relations Commission, the
Court considered inefficiency as an analogous just cause for
termination of employment under Article 282 of the Labor
Code:
492 MANAGEMENT PREROGATIVE
We cannot but agree with PEPSI that "gross
inefficiency" falls within the purview of "other
causes analogous to the foregoing," this consti-
tutes, therefore, just cause to terminate an em-
ployee under Article 282 of the Labor Code. One
is analogous to another if it is susceptible of
comparison with the latter either in general or in
some specific detail; or has a close relationship
with the latter. "Gross inefficiency" is closely
related to "gross neglect," for both involve speci-
fic acts of omission on the part of the employee
resulting in damage to the employer or to his
business. In Buiser vs. Leogardo, this Court
ruled that failure to observed prescribed stan-
dards to inefficiency may constitute just cause for
dismissal. (Emphasis supplied.)
It did so anew in Leonardo v. National Labor Rela-
tions Commission on the following rationale:
An employer is entitled to impose productivity stan-
dards for its workers, and in fact, non-compliance may be
visited with a penalty even more severe than demotion.
Thus, [t]he practice of a company in laying off workers
because they failed to make the work quota has been re-
cognized in this jurisdiction. (Philippine American Embroi-
deries vs. Embroidery and Garment Workers, 26 SCRA
634, 639). In the case at bar, the petitioners' failure to meet
the sales quota assigned to each of them constitute a just
cause of their dismissal, regardless of the permanent or
probationary status of their employment. Failure to observe
prescribed standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute just cause
for dismissal. Such inefficiency is understood to mean
failure to attain work goals or work quotas, either by failing
to complete the same within the allotted reasonable period,
or by producing unsatisfactory results. This management
prerogative of requiring standards may be availed of so
BAR SYLLABUS-BASED REVIEWER IN 493
LABOR LAW & SOCIAL LEGISLATION
long as they are exercised in good faith for the advance-
ment of the employer's interest. (Emphasis supplied.)
In fine, an employee's failure to meet sales or work
quotas falls under the concept of gross inefficiency, which
in turn is analogous to gross neglect of duty that is a just
cause for dismissal under Article 282 of the Code. How-
ever, in order for the quota imposed to be considered a
valid productivity standard and thereby validate a dis-
missal, management's prerogative of fixing the quota must
be exercised in good faith for the advancement of its inte-
rest. The duty to prove good faith, however, rests with
WWWEC as part of its burden to show that the dismissal
was for a just cause. WWWEC must show that such quota
was imposed in good faith. This WWWEC failed to do
perceptibly because it could not. The fact of the matter i~
that the alleged imposition of the quota was a desperate
attempt to lend a semblance of validity to Aliling's illegal
dismissal. It must be stressed that even WWWEC's sales
manager, Eve Amador (Amador), in an internal e-mail to
San Mateo, hedged on whether petitioner performed below
or above expectation:
Could not quantify level of performance as he as was
tasked to handle a new product (GX). Revenue report is
not yet administered by IT on a month-to-month basis.
Moreover, this in a way is an experimental activity. Practi-
cally you have a close monitoring with Armand with
regards to his performance. Your assessment of him would
be more accurate.
Being an experimental activity and having been
launched for the first time, the sales of GX services could
not be reasonably quantified. This would explain why
Amador implied in her email that other bases besides sales
figures will be used to determine Aliling's performance.
And yet, despite such a neutral observation, Aliling was still
dismissed for his dismal sales of GX services. In any
494 MANAGEMENT PREROGATIVE
event, WWWEC failed to demonstrate the reasonableness
and the bona fides on the quota imposition.
Employers must be reminded that while probationary
employees do not enjoy permanent status, they enjoy the
constitutional protection of security of tenure. They can
only be terminated for cause or when they otherwise fail to
meet the reasonable standards made known to them by
the employer at the time of their engagement. Respondent
WWWEC miserably failed to prove the termination of
petitioner was for a just cause nor was there substantial
evidence to demonstrate the standards were made known
to the latter at the time of his engagement. Hence, petition-
ner's right to security of tenure was breached." (Footnotes
omitted.)
D. Bonus
Mega Magazine Publications, Inc., et al. v. Margaret
Defensor
G.R. No. 162021, 16 June 2014
"The grant of a bonus or special incentive, being a
management prerogative, is not a demandable and enfor-
ceable obligation, except when the bonus or special incen-
tive is made part of the wage, salary or compensation of
the employee, or is promised by the employer and expres-
sly agreed upon by the parties. By its very definition, bonus
is a gratuity or act of liberality of the giver, and cannot be
considered part of an employee's wages if it is paid only
when profits are realized or a certain amount of producti-
vity is achieved. If the desired goal of production or actual
work is not accomplished, the bonus does not accrue.
Due to the nature of the bonus or special incentive
being a gratuity or act of liberality on the part of the giver,
the respondent could not validly insist on the schedule
proposed in her memorandum of April 5, 1999 considering
that the grant of the bonus or special incentive remained a
BAR SYLLABUS-BASED REVIEWER IN 495
LABOR LAW & SOCIAL LEGISLATION
management prerogative. However, the Court agrees with
the CA's ruling that the petitioners had already exercised
the management prerogative to grant the bonus or special
incentive. At no instance did Yap flatly refuse or reject the
respondent's request for commissions and the bonus or
incentive. This is plain from the fact that Yap even "bar-
gained" with the respondent on the schedule of the rates
and the revenues on which the bonus or incentive would
be pegged. What remained contested was only the sche-
dule of the rates and the revenues. In her initial memoran-
dum of February 25, 1999, the respondent had suggested
the following schedule, namely: (a) 0.05% outright com-
mission on total revenue of P28-P29 million; (b) 0.075% on
P30-P34 million; (c) 0.1% on P35-P38 million; (d) 0.1% on
P39-P41 million pesos; and (f) 0.1 % on P41 million or
higher, but Yap had countered by revising the schedule to
start at 0.1 % as outright commissions on a total revenue of
P35-P38 million, and the special incentive bonus to start at
revenues of P35-P38 million. Moreover, on December 8,
1999, Yap sent to the respondent a memorandum entitled
Re: Formalization of my handwritten approval of 1999 In-
centive scheme dated 25 February 1999. Such actuations
and actions by Yap indicated that, firstly, the petitioners
had already acceded to the grant of the special incentive
bonus; and, secondly, the only issue still to be threshed
out was at which point and at what rate the respondent's
outright commissions and the special incentive bonus for
the sales staff should be given.
For sure, Yap's memorandum dated December 8,
1999, aside from being the petitioners' categorical admis-
sion of the grant of the commissions and the bonus or
incentives, laid down the petitioners' own schedule of the
commissions and the bonus or incentives ...
X X X
Accordingly, the Court concludes that the respondent
was entitled to her 0.05% outright commissions and to the
496 MANAGEMENT PREROGATIVE
special incentive bonus of P8,500.00 based on MMPI ha-
ving reached the minimum target of P35 million in gross
revenues paid in "bartered goods and cash in direct pro-
portion to percentage of cash and bartered goods revenue
for the year," as provided in Yap's memorandum of De-
cember 8, 1999." (Citations omitted.)
E. Change of Working Hours
Coca-Cola Bottlers Philippines, Inc. v. ICCPELU
G.R. No.195297, 5 December2018
Issues:
First, whether or not the CA erred in ruling that under
the CBA between the parties, scheduling Saturday work for
CCBPl's employees is mandatory on the part of the
Company.
Second, whether scheduling Saturday work has
ripened into a company practice, the removal of which con-
stituted a diminution of benefits, to which CCBPI is likewise
liable to the affected employees for, including the corres-
ponding wage for the Saturday work which was not per-
formed pursuant to the policy of the Company to remove
Saturday work based on operational necessity.
Held:
" ... In Article 10 of the CBA, the company work week
is elaborated while also defining how a Saturday is treated
and in fact delineating the same from the other days of the
work week:
ARTICLE 10
Hours of Work
SECTION 1. Work Week. For daily paid workers,
the normal work week shall consist of five (5)
BAR SYLLABUS-BASED REVIEWER IN 497
LABOR LAW & SOCIAL LEGISLATION
consecutive days (Monday to Friday) of eight (8)
hours and each and one (1) day (Saturday) of
four (4) hours, provided, however, that any wor-
ker required to work on Saturday must complete
the scheduled shift for the day and shall be
entitled to the premium pay provided in Article IX
hereof.
X X X
(c) Saturdays. Saturday is a premium day but
shall not be considered as a rest day or equi-
valent to a Sunday. It is further agreed that ma-
nagement has the option to schedule work on
Saturdays on-the basis of operational necessity.
Section 5 of Article 9 of the CBA, explicitly
referred to in Article 10 states:
SECTION 5. Special Bonus. When a regular
employee goes out on his route on a Saturday,
Sunday, or Legal Holiday, either because he is
so required by District Sale Supervisor or be-
cause, after securing approval from the District
Sales Supervisor. He voluntarily chooses to do
so. He shall be entitled to a special bonus of
P280.00.
In making its decision, the CA reasoned that had it
really been the intention that Saturday work, by itself, is
optional on CCBPl's part, then there would have been no
need to state under the CBA that Saturday is part of the,
normal work week together with the Monday to Friday
schedule, and that if Saturday work is indeed optional,
then it would have expressly stipulated the same. Accor-
ding to the CA's interpretation, the provision wherein
CCBPI had the option to schedule work on Saturdays on
the basis of operational necessity, simply meant that
CCBPI could schedule the mandated four (4) hours work
498 MANAGEMENT PREROGATIVE
any time within the 24-hour period on that day, but not
remove the hours entirely.
For the CA, to interpret the phrase "option to
schedule" as limited merely to scheduling the time of work
on Saturdays and not the option to allow or disallow or to
grant or not to grant the Saturday work itself, is more
consistent with the idea candidly stated in the CBA regar-
ding the work week which is comprised of five (5) conse-
cutive days (Monday to Friday) of eight (8) hours each and
one (1) day (Saturday) of four (4) hours. The foregoing in-
terpretation, as held by the CA, is in harmony with the
context and the established practice in which the CBA is
negotiated, and that, based on the foregoing, CCBPI
should comply with the provisions respecting its normal
work week, that is, from Monday to Friday of eight (8)
hours a day and on Saturdays for four (4) hours. CCBPI
thus should allow the concerned union members to render
work for four (4) hours on Saturday.
The Court disagrees with the interpretation of the CA.
In the perusal of the same, the Court finds that a more
logical and harmonious interpretation of the CBA provi-
sions wherein Saturday work is optional and not mandatory
keeps more with the agreement between the parties.
To note, the CBA under Article 11, Section 1(c), clear-
ly provides that CCBPI has the option to schedule work on
Saturdays based on operational necessity. There is no
ambiguity to the provision, and no other interpretation of
the word "work" other than the work itself and not the
working hours. If the parties had truly intended that the
option would be to change only the working hours, then it
would have so specified that whole term "working hours"
be used, as was done in other provisions of the CBA. By
comparison, there is a provision in Article 10 that states:
SECTION 2. Changes in Work Schedule.
The present regular working hours shall be
maintained for the duration of this Agreement.
BAR SYLLABUS-BASED REVIEWER IN 499
LABOR LAW & SOCIAL LEGISLATION
However, it is hereby agreed that the COMPANY
may change the prevailing working hours, if in its
judgment, it shall find such change or changes
advisable or necessary either as a permanent or
temporary measure, provided at least twelve (12)
hours notice in advance is given of such change
or changes, and provided, further, that they are
in accordance with law.
Here, hours are specified as that which can be
changed regarding the work schedule. The Court com-
pares this to Article 11 , where it is expressly stated' that
management has the option to schedule work on Satur-
days on the basis of operational necessity. To emphasize,
if it is only the hours that management may amend, then it
would have been so stated, with that specific term used
instead of just merely "work," a more general term.
Also, as correctly pointed out by CCBPI, if Saturday
work is indeed mandatory under the CBA, the phrase
"required to work on a Saturday" in Article 10, Section 1
would be superfluous. The same phrase is also found in
Article 11 , Section 2( c) which provides that "a worker paid
on daily basis required to work on a Saturday shall be paid
his basic hourly rate plus fifty (50%) percent thereof."
For the Court, the phrase "schedule work on Satur-
days based on operational necessity," by itself, is union
recognition that there are times when exigencies of the
business will arise requiring a manning complement to
suffer work for four additional hours per week. Necessarily,
when no such exigencies exist, the additional hours of
work need not be rendered.
As such, the provisions' tenor and plain meaning give
company management the right to compel its employees to
suffer work on Saturdays. This necessarily includes the
prerogative not to schedule work. Whether or not work will
be scheduled on a given Saturday is made to depend on
operational necessity. The CBA therefore gives CCBPI the
500 MANAGEMENT PREROGATIVE
management prerogative to provide its employees with
Saturday work depending on the exlgencies of the
business.
This reading of the CBA is made even more apparent
by the fact that workers who are required to work on
Saturdays are paid a premium for such work. Notably, in
the section on Premium Pay, it is stated:
(c) Saturdays. Even though Saturday is not
his rest day - A worker paid on daily basis
required to work on a Saturday shall be paid his
basic hourly rate plus fifty (50%) percent thereof
for each hour worked not in excess of eight
hours; if he is required to work more than eight
(8) hours, he shall be paid his basic hourly rate
plus seventy-five (75%) thereof for each hour
worked in excess of eight (8) hours.
If Saturday was part of the regular work week and not
dependent on management's decision to schedule work,
there would be no need to give additional compensation to
employees who report to work on that day. The CA erred in
taking into account that employees required to work on
that day but who would fail to report, would be marked
down as having gone on leave. The Court agrees with
CCBPI that such conclusion is non sequitur and that the
markings merely indicated the fact that they did not report
for work (even if required) and the reasons for their
absence, whether legitimate or not. This understanding is
bolstered by the fact that not all daily-paid workers were
required to report for work, which and if indeed Saturday
was to be considered a regular work day, all these
employees should have been required to report for work.
In sum, by not taking these provisions into account,
the CA ignored the well-settled rule that the various
stipulations of a contract must be interpreted together. The
Court finds that relying on the interpretation of the CA
would result in the patent absurdity that the company
BAR SYLLABUS-BASED REVIEWER IN 501
LABOR LAW & SOCIAL LEGISLATION
would have to look for work for the employees to do even if
there is none, on the Saturday as stated. Even if one were
to downplay the lack of logic with this assertion, as
mentioned the CBA provisions are clear and unambiguous,
leaving no need for a separate interpretation of the same.
F. Bona fide Occupational Qualifications
1. Single Status (infra)
2. Solo Parents (infra)
3. Anti-Age Discrimination in Employment
Note: Verbatim Reproduction of ZG Law's Article
R.A. No. 10911: Eliminating Age Discrimination in
Employment2
It is a widespread and usual practice by companies to
advertise jobs by indicating the preferred age and other
personal criteria for the positions they offer. As a result of
the selective age preference, employment opportunities
were limited only to those who would fit the specified age
group. However, with Republic Act No. 10911 or the "Anti-
age Discrimination In Employment Act" having lapsed into
law on 21 July 2016, such practice is now expressly consi-
dered as unlawful.
The Act mandates the elimination of age-based discri-
mination not only by employers, but also by labor contrac-
tors or subcontractors. Echoing the mandate of the Philip-
pine Constitution, it aims to promote equal work opportuni-
ties for everyone by prohibiting arbitrary age limitations in
the hiring of applicants, as well as, the dismissal and retire-
ment of employees.
2
ZG Law, Zambrano, Gruba, Caganda & Advincula Law Offices, Posted by
Jack Advincula, Dec 26, 2018.
502 MANAGEMENT PREROGATIVE
Prohibited Acts
When it comes to hiring of applicants, the Act prohi-
bits (1) printing or publishing of any notice or advertise-
ment relating to employment which suggests age preferen-
ces, (2) requiring the applicant to disclose his/her age or
birth date, and (3) declining any employment applicant be-
cause of his/her age. Labor organizations are also pros-
cribed from denying membership of a person, or causing or
attempting to cause an employer to discriminate individuals
on account of their age.
With regard to the status of an employee, employers
are prohibited from discriminating an employee in terms of
compensation, work terms and conditions, privileges, pro-
motion or training opportunities, by reason of age.
In terms of dismissal and retirement of employees,
the Act provides that it is unlawful for employers to forcibly
lay off an employee or impose early retirement because of
the employee's old age.
It must be noted that the Labor Code provides that
any employee may be retired upon reaching the retirement
age established in the collective bargaining agreement or
other applicable contract. In the absence of such, an em-
ployee may retire at the optional retirement age of 60 (50
years for underground mine workers) but not beyond the
compulsory retirement age of 65 years. A retirement age
lower than 60 is allowed provided the agreement is part of
the collective bargaining agreement voluntarily entered into
and ratified by the employees (Pantranco North Express v.
NLRC, G.R. No. 95940, 24 July 1996). It appears that
these rules still hold true, since R.A. No. 10911 neither
amends nor repeals the Labor Code other than requiring
that there should not be any forcible early retirement moti-
vated by age discrimination.
Case law provides that, in the hiring, status, and dis-
missal or retirement of employees, the burden to prove that
BAR SYLLABUS-BASED REVIEWER IN 503
LABOR LAW & SOCIAL LEGISLATION
there is discrimination is with the applicant or employee
who alleges that he/she is denied privileges or opportu-
nities given to others under identical or similar conditions
(Caltex [Phil.], Inc. v. Philippine Labor Organization, G.R.
No. L-5206, 29 April 1953). There must be clear proof then
that such denial was motivated by bad faith and discrimi-
nation on account of age.
Exempted Discriminations
On the other hand, the new law also admits certain
exceptions and allows the setting of age limitations by
employers under the following circumstances:
1. When age is a bona fide occupational quailfica-
tion ("BFOQ") necessary in the normal operation of a spe-
cific business, or where the differentiation depends on
reasonable factors other than age;
2. When the purpose is not to evade the law, but to
observe the terms of a bona fide seniority system, or em-
ployee retirement plan which is also in accordance with
labor laws; or
3. When the action is certified by the Secretary of
Labor and Employment in accordance with the Act.
The concept of BFOQ is not new in Philippine labor
law. One can say that the test of reasonableness is parallel
to it. For example, in the case Yrasuegui v. Philippine Air-
lines Inc. (G.R. No. 168081, 17 October 2008), the Sup-
reme Court upheld the defense of BFOQ when the airline
company dismissed a flight steward whose weight was
over the required set standard for the job. The Court held
that the company's weight standards are reasonable and
necessary considering that public policy requires airline
companies to exercise extraordinary diligence for the
safety of the passengers especially in case of emergen-
cies. In another case, the Court upheld the policy of a
pharmaceutical company prohibiting marriage with employ-
504 MANAGEMENT PREROGATIVE
yees of rival companies because its purpose is to protect
the company's trade secrets and formula ,from being com-
promised and infiltrated (Duncan Association of Detailman-
PTGWO v. Glaxo Wei/come Philippines, Inc., G.R. No.
162994, 17 September 2004).
In order to justify the BFOQ defense, the employer
must prove there is "compelling business necessity for
which no alternative exists other than the discriminatory
practice" (Star Paper Corporation v. Simbol, G.R. No.
164774, 12 April 2006). Ultimately, the test of whether the
BOFQ defense is valid or not will depend on the circums-
tances, even with the passage of R.A. No. 10911.
Penalties and Implementing Rules
The penalty for violators of the said Act shall be a fine
ranging from PhP50,000 to PhP500,000, and/or imprison-
ment of 3 months to 2 years.
As of date, the implementing rules and regulations
("IRR") of the Act has yet to be crafted.
It is a well-settled rule that the determination of quailfi-
cations of applicants and employees for hiring, promoting
and dismissing is a prerogative of the management
(NAFLU et. al. v NLRC, G.R. No. 90739, 3 October 1991).
But while such prerogative is inherent in business enterpri-
ses, it is also subject to limitations by law, collective bargai-
ning agreements, and general principles of fairness and
justice (Norkis Trading Co., Inc. et.al. v Melvin Gnilo, G.R.
No. 159730, 11 February 2008). At this instance, the Act
serves as a positive pronouncement for both employees
and employers, that age-based discrimination in employ-
ment is now undeniably unlawful." (Footnotes omitted.)
G. Post-Employment Restrictions
BAR SYLLABUS-BASED REVIEWER IN 505
LABOR LAW & SOCIAL LEGISLATION
Rolando Rivera v. Solidbank Corporation
G.R. No. 163269, 19 April 2006
Callejo, Sr., J
"As gleaned from the records, petitioner made two un-
dertakings. The first is incorporated in the Release, Waiver
and Quitclaim that he signed, to wit:
4. I will not, at any time, in any manner
whatsoever, directly or indirectly engage in any
unlawful activity prejudicial to the interest of the
BANK, its parent, affiliate or subsidiary compa-
nies, their stockholders, officers, directors,
agents or employees, and their successors-in-in-
terest and will not disclose any information con-
cerning the business of the BANK, its manner or
operation, its plans, processes or data of any
kind.
The second undertaking is incorporated in the Under-
taking following petitioner's execution of the Release,
Waiver and Quitclaim which reads:
4. That as a supplement to the Release and
Quitclaim, I executed in favor of Solidbank on
FEBRUARY 28, 1995, I hereby expressly under-
take that I will not seek employment with any
competitor bank or financial institution within one
(1) year from February 28, 1995.
In the Release, Waiver and Quitclaim, petitioner de-
clared that respondent may bring "an action for damages
which may include, but not limited to the return of whatever
sums he may have received from respondent under said
deed if he breaks his undertaking therein." On the other
hand, petitioner declared in the Undertaking that "any
breach on his part of said Undertaking or the terms and
conditions of the Release, Waiver and Quitclaim will entitle
506 MANAGEMENT PREROGATIVE
respondent to a cause of action against [petitioner] for
protection before the appropriate courts of,law."
Article 1306 of the New Civil Code provides that the
contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem conve-
nient, provided they are not contrary to law, morals, good
customs, public order or public policy. The freedom of con-
tract is both a constitutional and statutory right. A contract
is the law between the parties and courts have no choice
but to enforce such contract as long as it is not contrary to
law, morals, good customs and against public policy.
The well-entrenched doctrine is that the law does not
relieve a party from the effects of an unwise, foolish or
disastrous contract, entered into with full awareness of
what he was doing and entered into and carried out in
good faith. Such a contract will not be discarded even if
there was a mistake of law or fact. Courts have no jurisdic-
tion to look into the wisdom of the contract entered into by
and between the parties or to render a decision different
therefrom. They have no power to relieve parties from obli-
gation voluntarily assailed, simply because their contracts
turned out to be disastrous deals.
On the other hand, retirement plans, in light of the
constitutional mandate of affording full protection to labor,
must be liberally construed in favor of the employee, it
being the general rule that pension or retirement plans
formulated by the employer are to be construed against it.
Retirement benefits, after all, are intended to help the
employee enjoy the remaining years of his life, releasing
him from the burden of worrying for his financial support,
and are a form of reward for being loyal to the employer.
In Ferrazzini v. Gsell, the Court defined public policy
in civil law countries and in the United States and the
Philippines:
BAR SYLLABUS-BASED REVIEWER IN 507
LABOR LAW & SOCIAL LEGISLATION
By "public policy," as defined by the courts in the
United States and England, is intended that principle of the
Iaw which holds that no subject or citizen can lawfully do
that which has a tendency to be injurious to the public or
against the public good, which may be termed the "policy
of the law," or "public policy in relation to the administration
of the law." (Words & Phrases Judicially Defined, vol. 6, p.
5813, and cases cited.) Public policy is the principle under
which freedom of contract or private dealing is restricted by
law for the good of the public. (Id., Id.) In determining
whether a contract is contrary to public policy the nature of
the subject matter determines the source from which such
question is to be solved. (Hartford Fire Ins. Co. v. Chicago,
M. & St. P. Ry. Co., 62 Fed. 904, 906.)
The foregoing is sufficient to show that there is no
difference in principle between the public policy (orden
publico) in the two jurisdictions (the United States and the
Philippine Islands) as determined by the Constitution, laws,
and judicial decisions.
The Court proceeded to define "trade" as follows:
xx x In the broader sense, it is any occupa-
tion or business carried on for subsistence or
profit. Anderson's Dictionary of Law gives the
following definition: "Generally equivalent to oc-
cupation, employment, or business, whether
manual or mercantile; any occupation, employ-
ment or business carried on for profit, gain, or
livelihood, not in the liberal arts or in the learned
professions." In Abbott's Law Dictionary, the
word is defined as "an occupation, employment
or business carried on for gain or profit." Among
the definitions given in the Encyclopaedic Dictio-
nary is the following: "The business which a per-
son has learnt, and which he carries on for sub-
sistence or profit; occupation; particularly em-
ployment, whether manual or mercantile, as dist-
508 MANAGEMENT PREROGATIVE
inguished from the liberal arts or the learned
professsions and agriculture." Bouvier limits the
meaning to commerce and traffic, and the handi-
craft of mechanics. (In re Pinkney, 47 Kan., 89.)
We are inclined to adopt and apply the broader
meaning given by the lexicographers.
In the present case, the trial court ruled that the prohi-
bition against petitioner accepting employment with a com-
petitor bank or financial institution within one year from
February 28, 1995 is not unreasonable. The appellate
court held that petitioner was estopped from assailing the
post-retirement competitive employment ban because of
his admission that he signed the Undertaking and had
already received benefits under the SRP.
The rulings of the trial court and the appellate court
are incorrect.
There is no factual basis for the trial court's ruling, for
the simple reason that it rendered summary judgment and
thereby foreclosed the presentation of evidence by the
parties to prove whether the restrictive covenant is reaso-
nable or not. Moreover, on the face of the Undertaking, the
post-retirement competitive employment ban is unreaso-
nable because it has no geographical limits; respondent is
barred from accepting any kind of employment in any
competitive bank within the proscribed period. Although
the period of one year may appear reasonable, the matter
of whether the restriction is reasonable or unreasonable
cannot be ascertained with finality solely from the terms
and conditions of the Undertaking, or even in tandem with
the Release, Waiver and Quitclaim.
Undeniably, petitioner retired under the SRP and re-
ceived P-963,619.28 from respondent. However, petitioner
is not proscribed, by waiver or estoppel, from assailing the
post-retirement competitive employment ban since under
Article 1409 of the New Civil Code, those contracts whose
cause, object or purpose is contrary to law, morals, good
BAR SYLLABUS-BASED REVIEWER IN 509
LABOR LAW & SOCIAL LEGISLATION
customs, public order or public policy are inexistent or void
from the beginning. Estoppel cannot give validity to an act
that is prohibited by law or one that is against public policy.
Respondent, as employer, is burdened to establish that
a restrictive covenant barring an employee from accepting a
competitive employment after retirement or resignation is
not an unreasonable or oppressive, or in undue or unreaso-
nable restraint of trade, thus, unenforceable for being repug-
nant to public policy. As the Court stated in Ferrazzini v.
Gsell, cases involving contracts in restraint of trade are to be
judged according to their circumstances, to wit:
x x x There are two principal grounds on
which the doctrine is founded that a contract in
restraint of trade is void as against public policy.
One is, the injury to the public by being deprived
of the restricted party's industry; and the other is,
the injury to the party himself by being precluded
from pursuing his occupation, and thus being
prevented from supporting himself and his family.
And in Gibbs vs. Consolidated Gas Co. of Baltimore,
supra, the court stated the rule thus:
Public welfare is first considered, and if it be
not involved, and the restraint upon one party is
not greater than protection to the other party re-
quires, the contract may be sustained. The ques-
tion is, whether, under the particular circumstan-
ces of the case and the nature of the particular
contract involved in it, the contract is, or is not,
unreasonable.
In cases where an employee assails a contract con-
taining a provision prohibiting him or her from accepting
competitive employment as against public policy, the
employer has to adduce evidence to prove that the restric-
tion is reasonable and not greater than necessary to
protect the employer's legitimate business interests. The
510 MANAGEMENT PREROGATIVE
restraint may not be unduly harsh or oppressive in curtai-
ling the employee's legitimate efforts to, earn a livelihood
and must be reasonable in light of sound public policy.
Courts should carefully scrutinize all contracts limiting
a man's natural right to follow any trade or profession any-
where he pleases and in any lawful manner. But it is just
as important to protect the enjoyment of an establishment
in trade or profession, which its employer has built up by
his own honest application to every day duty and the
faithful performance of the tasks which every day imposes
upon the ordinary man. What one creates by his own labor
is his. Public policy does not intend that another than the
producer shall reap the fruits of labor; rather, it gives to him
who labors the right by every legitimate means to protect
the fruits of his labor and secure the enjoyment of them to
himself. Freedom to contract must not be unreasonably
abridged. Neither must the right to protect by reasonable
restrictions that which a man by industry, skill and good
judgment has built up, be denied.
The Court reiterates that the determination of reason-
nableness is made on the particular facts and circumstan-
ces of each case. In Esmerson Electric Co. v. Rogers, it
was held that the question of reasonableness of a restraint
requires a thorough consideration of surrounding circums-
tances, including the subject matter of the contract, the
purpose to be served, the determination of the parties, the
extent of the restraint and the specialization of the busi-
ness of the employer. The court has to consider whether
its enforcement will be injurious to the public or cause
undue hardships to the employee, and whether the res-
traint imposed is greater than necessary to protect the
employer. Thus, the court must have before it evidence re-
lating to the legitimate interests of the employer which
might be protected in terms of time, space and the types of
activity proscribed.
BAR SYLLABUS-BASED REVIEWER IN 511
LABOR LAW & SOCIAL LEGISLATION
Consideration must be given to the employee's right
to earn a living and to his ability to determine with certainty
the area within which his employment ban is restituted. A
provision on territorial limitation is necessary to guide an
employee of what constitutes as violation of a restrictive
covenant and whether the geographic scope is co-exten-
sive with that in which the employer is doing business. In
considering a territorial restriction, the facts and circums-
tances surrounding the case must be considered.
Thus, in determining whether the contract is reason-
nable or not, the trial court should consider the following
factors: (a) whether the covenant protects a legitimate
business interest of the employer; (b) whether the cove-
nant creates an undue burden on the employee; (c) whe-
ther the covenant is injurious to the public welfare; (d) whe-
ther the time and territorial limitations contained in the
covenant are reasonable; and (e) whether the restraint is
reasonable from the standpoint of public policy.
Not to be ignored is the fact that the banking business
is so impressed with public interest where the trust and
interest of the public in general is of paramount importance
such that the appropriate standard of diligence must be
very high, if not the highest degree of diligence.
We are not impervious of the distinction between
restrictive covenants barring an employee to accept a post-
employment competitive employment or restraint on trade
in employment contracts and restraints on post-retirement
competitive employment in pension and retirement plans
either incorporated in employment contracts or in collective
bargaining agreements between the employer and the union
of employees, or separate from said contracts or collective
bargaining agreements which provide that an employee who
accepts post retirement competitive employment will forfeit
retirement and other benefits or will be obliged to restitute the
same to the employer. The strong weight of authority is that
forfeitures for engaging in subsequent competitive employ-
512 MANAGEMENT PREROGATIVE
ment included in pension and retirement plans are valid even
though unrestricted in time or geography. T,he raison d'etre is
explained by the United States Circuit Court of Appeals in
Rochester Corporation v. W.L. Rochester, Jr.:
x x x The authorities, though, generally draw
a clear and obvious distinction between res-
traints on competitive employment in employ-
ment contracts and in pension plans. The strong
weight of authority holds that forfeitures for enga-
ging in subsequent competitive employment, inc-
luded in pension retirement plans, are valid, even
though unrestricted in time or geography. The
reasoning behind this conclusion is that the
forfeiture, unlike the restraint included in the
employment contract, is not a prohibition on the
employee's engaging in competitive work but is
merely a denial of the right to participate in the
retirement plan if he does so engage. A leading
case on this point is Van Pelt v. Berefco, Inc.,
supra, 208 N.E.2d at p. 865, where, in passing
on a forfeiture provision similar to that here, the
Court said:
"A restriction in the contract which does not
preclude the employee from engaging in compe-
titive activity, but simply provides for the loss of
rights or privileges if he does so is not in restraint
of trade." (emphasis added)
A post-retirement competitive employment restriction
is designed to protect the employer against competition by
former employees who may retire and obtain retirement or
pension benefits and, at the same time, engage in compe-
titive employment.
We have reviewed the Undertaking which respondent
impelled petitioner to sign, and find that in case of failure to
comply with the promise not to accept competitive employ-
ment within one year from February 28, 1995, respondent
BAR SYLLABUS-BASED REVIEWER IN 513
LABOR LAW & SOCIAL LEGISLATION
will have a cause of action against petitioner for "protection
in the courts of law." The words "cause of action for protec-
tion in the courts of law" are so broad and comprehensive,
that they may also include a cause of action for prohibitory
and mandatory injunction against petitioner, specific per-
formance plus damages, or a damage suit (for actual,
moral and/or exemplary damages), all inclusive of the
restitution of the P963,619.28 which petitioner received
from respondent. The Undertaking and the Release,
Waiver and Quitclaim do not provide for the automatic for-
feiture of the benefits petitioner received under the SRP
upon his breach of said deeds. Thus, the post-retirement
competitive employment ban incorporated in the Under-
taking of respondent does not, on its face, appear to be of
the same class or genre as that contemplated in
Rochester." (Citations omitted.)
H. Marriage Between Employees of Competitor-
Employers
Duncan Assoc. of Detailman-PTGWO, et al.
v. Glaxo Wellcome Phils, Inc.
G.R. No. 162994, 17 September 2004
Tinga, J
"The stipulation in Tecson's contract of employment
with Glaxo being questioned by petitioners provides:
10. You agree to disclose to management
any existing or future relationship you may have,
either by consanguinity or affinity with co-emplo-
yees or employees of competing drug compa-
nies. Should it pose a possible conflict of interest
in management discretion, you agree to resign
voluntarily from the Company as a matter of
Company policy.
The same contract also stipulates that Tescon agrees
to abide by the existing company rules of Glaxo, and to
514 MANAGEMENT PREROGATIVE
study and become acquainted with such policies. In this re-
gard, the Employee Handbook of Glaxo expressly informs
its employees of its rules regarding conflict of interest:
1. Conflict of Interest
Employees should avoid any activity,
investment relationship, or interest that may run
counter to the responsibilities which they owe
Glaxo Wellcome.
Specifically, this means that employees are
expected:
a. To avoid having personal or family
interest, financial or otherwise, in any competitor
supplier or other businesses which may cons-
ciously or unconsciously influence their actions
or decisions and thus deprive Glaxo Wellcome of
legitimate profit.
b. To refrain from using their position in
Glaxo Wellcome or knowledge of Company
plans to advance their outside personal interests,
that of their relatives, friends and other busi-
nesses.
c. To avoid outside employment or other
interests for income which would impair their
effective job performance.
d. To consult with Management on such
activities or relationships that may lead to conflict
of interest.
1.1. Employee Relationships
Employees with existing or future relation-
ships either by consanguinity or affinity with co-
employees of competing drug companies are
expected to disclose such relationship to the Ma-
nagement. If management perceives a conflict or
BAR SYLLABUS-BASED REVIEWER IN 515
LABOR LAW & SOCIAL LEGISLATION
potential conflict of interest, every effort shall be
made, together by management and the emplo-
yee, to arrive at a solution within six (6) months,
either by transfer to another department in a non-
counter checking position, or by career prepara-
tion toward outside employment after Glaxo
Wellcome. Employees must be prepared for
possible resignation within six (6) months, if no
other solution is feasible.
No reversible error can be ascribed to the Court of
Appeals when it ruled that Glaxo's policy prohibiting an
employee from having a relationship with an employee of a
competitor company is a valid exercise of management
prerogative.
Glaxo has a right to guard its trade secrets, manufac-
turing formulas, marketing strategies and other confidential
programs and information from competitors, especially so
that it and Astra are rival companies in the highly competi-
tive pharmaceutical industry.
The prohibition against personal or marital relation-
ships with employees of competitor companies upon
Glaxo's employees is reasonable under the circumstances
because relationships of that nature might compromise the
interests of the company. In laying down the assailed com-
pany policy, Glaxo only aims to protect its interests against
the possibility that a competitor company will gain access
to its secrets and procedures.
That Glaxo possesses the right to protect its econo-
mic interests cannot be denied. No less than the Constitu-
tion recognizes the right of enterprises to adopt and en-
force such a policy to protect its right to reasonable returns
on investments and to expansion and growth. Indeed,
while our laws endeavor to give life to the constitutional
policy on social justice and the protection of labor, it does
not mean that every labor dispute will be decided in favor
of the workers. The law also recognizes that management
516 MANAGEMENT PREROGATIVE
has rights which are also entitled to respect and enforce-
ment in the interest of fair play.
As held in a Georgia, U.S.A case, it is a legitimate
business practice to guard business confidentiality and
protect a competitive position by even-handedly disquali-
fying from jobs male and female applicants or employees
who are married to a competitor. Consequently, the court
ruled than an employer that discharged an employee who
was married to an employee of an active competitor did not
violate Title VII of the Civil Rights Act of 1964. The Court
pointed out that the policy was applied to men and women
equally, and noted that the employer's business was highly
competitive and that gaining inside information would
constitute a competitive advantage.
The challenged company policy does not violate the
equal protection clause of the Constitution as petitioners
erroneously suggest. It is a settled principle that the
commands of the equal protection clause are addressed
only to the state or those acting under color of its authority.
Corollarily, it has been held in a long array of U.S.
Supreme Court decisions that the equal protection clause
erects no shield against merely private conduct, however,
discriminatory or wrongful. The only exception occurs when
the state in any of its manifestations or actions has been
found to have become entwined or involved in the wrongful
private conduct. Obviously, however, the exception is not
present in this case. Significantly, the company actually
enforced the policy after repeated requests to the emplo-
yee to comply with the policy. Indeed, the application of the
policy was made in an impartial and even-handed manner,
with due regard for the lot of the employee.
In any event, from the wordings of the contractual pro-
vision and the policy in its employee handbook, it is clear
that Glaxo does not impose an absolute prohibition against
relationships between its employees and those of competi-
tor companies. Its employees are free to cultivate relation-
BAR SYLLABUS-BASED REVIEWER IN 517
LABOR LAW & SOCIAL LEGISLATION
ships with and marry persons of their own choosing. What
the company merely seeks to avoid is a conflict of interest
between the employee and the company that may arise
out of such relationships. As succinctly explained by the
appellate court, thus:
The policy being questioned is not a policy
against marriage. An employee of the company
remains free to marry anyone of his or her
choosing. The policy is not aimed at restricting a
personal prerogative that belongs only to the
individual. However, an employee's personal de-
cision does not detract the employer from exer-
cising management prerogatives to ensure maxi-
mum profit and business success ...
The Court of Appeals also correctly noted that the
assailed company policy which forms part of respondent's
Employee Code of Conduct and of its contracts with its
employees, such as that signed by Tescon, was made
known to him prior to his employment. Tecson, therefore,
was aware of that restriction when he signed his employ-
ment contract and when he entered into a relationship with
Bettsy. Since Tecson knowingly and voluntarily entered
into a contract of employment with Glaxo, the stipulations
therein have the force of law between them and, thus,
should be complied with in good faith." He is therefore
estopped from questioning said policy.
The Court finds no merit in petitioners' contention that
Tescon was constructively dismissed when he was trans-
ferred from the Camarines Norte-Camarines Sur sales
area to the Butuan City-Surigao City-Agusan del Sur sales
area and when he was excluded from attending the
company's seminar on new products which were directly
competing with similar products manufactured by Astra.
Constructive dismissal is defined as a quitting, an involun-
tary resignation resorted to when continued employment
becomes impossible, unreasonable, or unlikely; when
518 MANAGEMENT PREROGATIVE
there is a demotion in rank or diminution in pay; or when a
clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee. None of these
conditions are present in the instant case. The record does
not show that Tescon was demoted or unduly discrimina-
ted upon by reason of such transfer. As found by the appe-
llate court, Glaxo properly exercised its management pre-
rogative in reassigning Tecson to the Butuan City sales
area:
. . . In this case, petitioner's transfer to
another place of assignment was merely in
keeping with the policy of the company in avoi-
dance of conflict of interest, and thus valid ...
Note that [Tecson's] wife holds a sensitive super-
visory position as Branch Coordinator in her
employer-company which requires her to work in
close coordination with District Managers and
Medical Representatives. Her duties include
monitoring sales of Astra products, conducting
sales drives, establishing and furthering relation-
ship with customers, collection, monitoring and
managing Astra's inventory ... she therefore takes
an active participation in the market war charac-
terized as it is by stiff competition among phar-
maceutical companies. Moreover, and this is
significant, petitioner's sales territory covers
Camarines Sur and Camarines Norte while his
wife is supervising a branch of her employer in
Albay. The proximity of their areas of responsi-
bility, all in the same Bicol Region, renders the
conflict of interest not only possible, but actual,
as learning by one spouse of the other's market
strategies in the region would be inevitable.
[Management's] appreciation of a conflict of
interest is therefore not merely illusory and
wanting in factual basis ...
BAR SYLLABUS-BASED REVIEWER IN 519
LABOR LAW & SOCIAL LEGISLATION
In Abbott Laboratories (Phils. ), Inc. v. National Labor
Relations Commission, which involved a complaint filed by
a medical representative against his employer drug com-
pany for illegal dismissal for allegedly terminating his
employment when he refused to accept his reassignment
to a new area, the Court upheld the right of the drug com-
pany to transfer or reassign its employee in accordance
with its operational demands and requirements. The ruling
of the Court therein, quoted hereunder, also finds applica-
tion in the instant case:
By the very nature of his employment, a
drug salesman or medical representative is ex-
pected to travel. He should anticipate reassign-
ment according to the demands of their busi-
ness. It would be a poor drug corporation which
cannot even assign its representatives or detail
men to new markets calling for opening or ex-
pansion or to areas where the need for pushing
its products is great. More so if such reassign-
ments are part of the employment contract.
As noted earlier, the challenged policy has been
implemented by Glaxo impartially and disinterestedly for a
long period of time. In the case at bar, the record shows
that Glaxo gave Tecson several chances to eliminate the
conflict of interest brought about by his relationship with
Bettsy. When their relationship was still in its initial stage,
Tecson's supervisors at Glaxo constantly reminded him
about its effects on his employment with the company and
on the company's interests. After Tecson married Bettsy,
Glaxo gave him time to resolve the conflict by either
resigning from the company or asking his wife to resign
from Astra. Glaxo even expressed its desire to retain
Tecson in its employ because of his satisfactory perfor-
mance and suggested that he ask Bettsy to resign from her
company instead. Glaxo likewise acceded to his repeated
requests for more time to resolve the conflict of interest.
520 MANAGEMENT PREROGATIVE

When the problem could not be resolved after several PART VII
years of waiting, Glaxo was constrained to reassign
Tecson to a sales area different from that handled by his SOCIAL LEGISLATION
wife for Astra. Notably, the Court did not terminate Tecson
from employment but only reassigned him to another area 8
where his home province, Agusan del Sur, was included. Social Security Act of 1997
In effecting Tecson's transfer, Glaxo even considered the Coverage
welfare of Tecson's family. Clearly, the foregoing dispels Dependents and Beneficiaries
any suspicion of unfairness and bad faith on the part of Benefits
Glaxo." (Citations omitted.)
B
Government Service Insurance System Act of 1997
Coverage
Dependents and Beneficiaries
Benefits

C
Limited Portability Law

D
Disability and Death Benefits
Labor Code
Amended Rules on Employee Compensation
State Insurance Fund
POEA-Standard Employment Contract

5
Solo Parents Welfare Act

.E
Batas Kasambahay

G
Comprehensive Agrarian Reform Law
Agrarian Reform
Agricultural Tenancy Relationship
521
522 SOCIAL LEGISLATION
Rights of Agricultural Tenants
Farmworkers
H It does not distinguish between:
Universal Health Care Act
Policy
Coverage
National Health Insurance Program
NOTES
A during the minority of the deceased adopted SSS
The Social Security Act of 1997
(R.A. 8282) 1
Policy
Sec. 2 is a window provision on the social justice
purpose of social legislation. It provides: The State shall
EDPP an SSS that is SVT to promote SP against the
hazards of D SODOM resulting in LF.
The State shall Evolve, Develop, Perfect and Promote
(EDPP)
a Social Security System (SSS)
that is Sound, Viable and Tax-exempt (SVT)
to promote Social Justice (S) and the Protection of
members and their dependents (P)
against the hazards of Death, Sickness, Old Age,
Disability, Other Contingencies & Maternity (D SODOM)
resulting in Loss of Income (L) or Financial Burden (F)
1
Amended by R.A. 11199
BAR SYLLABUS-BASED REVIEWER IN 523
LABOR LAW & SOCIAL LEGISLATION
Characteristics of the Social Security Law
1. Non-discriminatory
1.1 . Married Women and Unmarried Women;
hence, the maternity leave benefits claim of a single
mom (always given in the Bar) must be granted;
provided she has complied with the reportorial
requirements and paid the required contributions;
1. 2. Natural Parents and Adoptive Parents;
hence, in the event of the death of the adoptive parent
member, his natural parent shall be granted death
benefits per Bartolome v. SSS, G.R. No. 192531, 12
November 2014 (not yet given in the Bar); and
1.3. Legitimate Children and I/legitimate Children;
hence, subject to the 1:1/2 sharing rule, all kinds of
children are considered as primary beneficiaries.
2. Morality-free
2.1. A Law student, an SSS member since
joining "The unFirm" as an under-Bar associate, ends
up being impregnated by the married 75-year old
Managing Partner (MP). Even if immoral, she will get
maternity benefits as many times as MP's wife does
not storm the firm to prevent her from delivering
babies.
2.2. If she delivers twins on 1 January 2019 and
another set of twins on 31 December 2019, she has 2
more deliveries to enjoy, i.e, even if the third yields
triplets and the fourth yields quadruplets. What is the
lesson? Do not count her babies, just her ouches.
Take note, however, that under R.A. 11210 (Expan-
ded Maternity Leave Act), deliveries are not counted
anymore.
524 SOCIAL LEGISLATION
2.3. On 1 January 2019, the member delivered
Baby Angel at 6:00 a.m. and Baby Lyn at 6:00 p.m.
On 31 December 2019, she delivered Baby Sonia at
6:00 p.m. and Baby Mariel at 6:00 a.m. the next day.
If she delivers again in 2020, would she be entitled to
maternity benefits?
Note: If given a crazy question, do not make the
examiner feel that he is crazy. He is. No need to
confirm! In one Bar exam, the examiner brought a
case from the LA to the NLRC via a petition for
review. There was, and there is still, no such remedy.
Would you have made him feel that he did not know
his procedure? Of course, not.
Reckless Answer
Medically speaking, it was unlikely of the attending
OB-Gyne not to have made it possible for Baby Lyn and
Baby Mariel to leave the birth canal of the SSS member in
just 12 minutes. The interval of 12 hours is too long.
Impossible!!! HIGHLY IMPOSSIBLE!!! So I would count 2
deliveries only. Medical science and law considered, the
latter can deliver 2 more times in 2020 and be entitled to
maternity benefits each time.
The examines, who is a doctor, has not only insulted
the examiner. He has also marked his notebook with un-
derscored caps and 6 exclamation marks as to be disqua-
lified for marking. In the 2017 Bar, somebody was given a
Zero (0) in Labor Law. This imaginary doctor is likely to be
given the same rating.
2010 Bar, Question No. Ill (Part 1)
A, single, has been an active member of the Social
Security System for the past 20 months. She became
pr(;lgnant out of wedlock and on her 7th month of pregnan-
cy, she was informed that she would have to deliver the
BAR SYLLABUS-BASED REVIEWER IN 525
LABOR LAW & SOCIAL LEGISLATION
baby through caesarean section because of some compli-
cations. Can A claim maternity benefits? If yes, how many
days can she go on maternity leave? If not, why is she not
entitled? (3%)
Answer
Yes.
Although single, A can claim maternity benefits under
the system because social security law is morality-free and
non-discriminatory, i.e., as long as she has complied with
the reportorial requirements and has paid at least 3 month-
ly contributions during the 12-month period immediately
preceding her caesarian section.
Pursuant to R.A. 11210, known as the Expanded
Maternity Leave Act of 2019, her maternity benefits will
consist of 60 paid days of leave, plus 15 paid days if she
qualifies as a solo parent. If the leave period is not enough,
she is allowed 30 more days but without pay.
Coverage
1. Compulsory: Start of Coverage
1.1. Employers
All employers shall be covered on the first
day of their business operations.
1.2. Employees
1.2.1. With employers. Their coverage
starts on the first day of work.
1.2.2. Self-employed and Voluntary Mem-
bers. Their coverage starts on the first day they
report themselves for SSS coverage.
Compulsory SSS employee coverage ap-
plies to: (i) employees who are not over 60 years
old; (ii) self-employed; and (iii) kasambahay.
526 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 527
LABOR LAW & SOCIAL LEGISLATION

2. Voluntary church the other day looking for work. He contacted Lando
2.1. Spouses of SSS members who fully devote who immediately attended to Don Luis's garden and
their time to the management of the home and family finished the job in three days. (4%)
affairs; (A) Is there an employer-employee relationship bet-
2.2. OFWs and Seafarers; ween Don Luis and Lando?

2.3. Employees of foreign governments and
international organizations covered by administrative
agreements between their employers and the SSS.
Compulsory Coverage (CC) v. Voluntary Coverage
(VC)
Members with CC will get 2 sets of benefits, viz., SSS
benefits and EC benefits. On the other hand, members
with VC will only get SSS benefits. EC benefits are: cash
income benefit, rehabilitation benefit, hospitalization
benefit, and funeral benefit.
Disqualification: CAFGO
1. Purely casual employees;
2. Filipinos hired by alien vessels while outside
Philippine territory;
3. Employees of foreign governments and interna-
tional organizations (without administrative agree-
ments);
4. Government employees; and
5. Other employees excluded by the Social Security
Commission.
2014 Bar, Question No. XIII
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 remembered that Lando, a
17-year old out-of-school youth, had contacted him in
(B) Does Don Luis need to register Lando with the
Social Security System (SSS )?
Answer
(A) There is employer-employee relationship between
Don Luis and Lando. Firstly, Lando who was looking for
work finally rendered personal services for Don Luis. Se-
condly, Lando could not have been the master of his time,
means and methods under the circumstances (Sec. 8, RA
8282).
(B) Don Luis does not need to register Lando with the
SSS because he is a purely casual employee, hence out-
side SSS coverage (RA 8282). Neither should he report
Lando for SSS coverage under the Kasambahay Act be-
cause, although a gardener, he is an occasional if not spo-
radic employee. Therefore, he is not a kasambahay who is
entitled to SSS coverage (RA 10361).
2015 Bar, Question No. VI
Ador is a student working on his master's degree in
horticulture. To make ends meet, he takes on jobs to come
up with flower arrangements for friends. His neighbor,
Nico, is about to get married to Lucia and needs a floral ar-
ranger. Ador offers his services and Nico agrees. They
shake hands on it, agreeing that Nico will pay Ador P20,
000.00 for his services but that Ador will take care of
everything. As Ador sets about to decorate the venue, Nico
changes all of Ador's plans and ends up designing the
arrangements himself with Ador simply executing Nico's
instructions.
528 SOCIAL LEGISLATION
a. Is there an employer-employee relationship bet-
ween Nico and Ador? (4%)
b. Will Nico need to register Ador with the Social Se-
curity System (SSS)? (2%)
Answer
a. Ador is a worker paid on task basis; hence, there
is employer-employee relationship between him and Nico.
When the latter assumed the control of both result and
manner of performance from Ador, all vestiges of the initial
independent contractorship arrangement disappeared.
What replaced it was employer-employee relationship.
b. Ador is a purely casual employee; hence, Nico
need not report him for SSS coverage.
Comment:
The structure of the 2014 and 2015 Bar questions is
similar in that letter (A)/(a) asks if the parties are related as
employer and employee, and letter (B)/(b) asks if there is a
duty to report the worker for SSS coverage.
In 2014, the examiner was targeting "purely casual
employee", one who has no SSS coverage. Lando, in the
problem, was a purely casual employee. But to be such, he
must be considered an employee first because a casual
employee is an employee. So the answer to (A) must be Yes.
Just tell the examiner that Don Luis would not have allowed
Lando to trim his plants without exercising control over his
means and methods, or else he would ruin the plants
(Control Test). Lando was also a gardener. Regardless, he
was not a kasambahay with SSS coverage because his
engagement was occasional or sporadic only. Hence, the
answer to (B) must be No. Firstly, Lando was a purely casual
employee; hence, he had no SSS coverage. Secondly, he
was hired occasionally or sporadically as a gardener; hence,
he was not a kasambahay with SSS Coverage.
BAR SYLLABUS-BASED REVIEWER IN 529
LABOR LAW & SOCIAL LEGISLATION
In 2015, the examiner created a "purely casual
employee" by transforming an independent contractorship
into an employer employee-employee relationship.
Benefits
1. Maternity Benefit
1.1. Nature
The benefit is an income replacement (daily cash
allowance) given to a member who cannot work by
reason of normal delivery, miscarriage, or cesarean
section. Under the Expanded Maternity Leave Act, a
fourth is added, viz., emergency pregnancy termina-
tion.
1.2. Requisites
1.2.1. Reportorial Requirements
The employee shall immediately report the
fact of her pregnancy and expected date of
delivery to her employer thru the SSS Maternity
Notification Form (SSS MNF). The employer, in
turn, shall immediately submit to the SSS said
form with proof of pregnancy thru the SSS
counter or online.
If self-employed, unemployed or voluntary
member, she must file the SSS MNF directly with
the SSS.
1.2.2. Payment of 3 Monthly Contributions
If the employer does not remit the contri-
butions, the SSS will advance the benefit. How-
ever, the employer will be proceeded against for
damages equivalent to the benefit paid (called
damages), legal interest, and penalty.
1.3. Computation: Steps
530 SOCIAL LEGISLATION
1.3.1. Determine the semester of delivery,
miscarriage or cesarean section (1 st Sem:
January - June; 2nd Sem: July - December).
E.g. Delivery takes place in March; hence, 1st
Semester.
1.3.2. Count 12 months back from start of
the semester of contingency.
Since the semester of contingency is 1st
Semester (January-June), the 12 months shall
be counted from January backwards.
1.3.3. Within said 12-month period, look
for:
(a) 3 monthly contributions; and
(b) the 6 highest average monthly salary
credits (AMSC).
1.3.4. Add the 6 highest AMSCs and divide
the sum by 180 days to arrive at average daily
salary credit (ADSC);
1.3.5. Multiply ADSC by 100%
1.3.6. Multiply the product by:
60 days if normal delivery or mis-
carriage; or
78 days if cesarean section.
Update:
Under the 2019 Expanded Maternity Leave Act (R.A.
11210), multiply by:
105 days if normal delivery or cesarean section;
60 days if miscarriage or emergency pregnancy termi-
nation.
BAR SYLLABUS-BASED REVIEWER IN 531
LABOR LAW & SOCIAL LEGISLATION
In either case, if the member is a solo parent, she
gets 15 more days with pay. In addition, she has the option
of going on extended maternity leave for 30 days without
pay.
Subject to reimbursement by the SSS, the employer
shall advance the benefit within 30 days from the filing of
the corresponding maternity leave application. Payment
shall bar any claim for sickness benefits.
Question
When is Mommy D, a solo parent, entitled to mater-
nity pay? How much? Is it taxable? Illustrate. (10 %).
Answer
As to coverage, Mommy D must be an employee in
the private sector and duly reported to the SSS. Moreover,
she must be pregnant.
As to prerequisites, Mommy D must have reported the
fact of her pregnancy and her expected date of delivery to
her employer. Secondly, she and her employer must have
paid at least 3 monthly contributions.
As to computation, assuming Mommy D's 6 highest
average monthly salary credits (AMSC) during the 12-
month period immediately preceding the semester of her
delivery, miscarriage, cesarean section or emergency
pregnancy termination total P180,000.00, said amount
shall be divided by 180 days to arrive at her average daily
salary credit (ADSC). Hence, her ADSC will be P1 ,000.00
and this amount should be multiplied by 100%. If she
delivers her baby normally or she has a caesarean section,
her maternity benefit shall be (P1 ,000.00 x 100%) x 105
days, or P105,000.00. However, if she has a miscarriage
or emergency pregnancy termination then her benefit shall
be (P1,000.00 x 100%) x 60 days; hence, her maternity
benefit will be P60,000.00. Because she is a solo parent,
she will get additional 15 days with pay or P15,000.00.
532 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 533
LABOR LAW & SOCIAL LEGISLATION

Mommy D's maternity pay, although in the nature of Sickness Benefits

income replacement, is not subject to income tax pursuant
to Sec. 2, R.A. 8282. 1. Nature
It is an income replacement occasioned by a mem-
Beneficiaries ber's inability to work by reason of his confinement, at
1. Primary Beneficiaries home or in a hospital, for at least 4 days due to sickness.

1.1. Spouses Unlike under the POEA-SEC and Amended Rules on

Employees' Compensation (AREC), we do not ask whether
1.1.1. Legal; and the illness is work-connected. What controls is SSS mem-
1.1.2. Living with the member ( Signey bership only. Hence, there is no list of diseases similar to
Ruling). Sec. 32-A of the POEA-SEC and Annex "A" of the Amen-
ded Rules on Employees Compensation (AREC).
1.2. Children (all kinds)
1.2.1. Below 21; 1.2. Requisites

1.2.2. Unmarried; and 1.2.1. The member is confined (at home or

at a hospital) for at least 4 days;
1.2.3. Unemployed (not gainfuly
employed). 1.2.2. He/she has exhausted all his/her
sick leave credits.
2. Secondary Beneficiaries 1.3. Computation: Steps
Parents, who must be wholly dependent for support 1.3.1. Determine the semester of confine-
on the member. ment (1 st Sem: January - June; 2 nd Sem: July -
December).
3. Order of Succession
1.3.2. Count 12 months back from start of
3.1. Primary beneficiaries; the semester of contingency.
3.2. Secondary beneficiaries;
1.3.3. Within said 12-month period, look for:
3.3. Whoever is instituted as beneficiary;
(a) 3 monthly contributions; and
3.4. Heirs (in accordance with the law on inte-
(b) the 6 highest average monthly
state succession); and
salary credits (AMSC).
3.5. The State.
1.3.4. Add the 6 highest AMSCs and divide
the sum by 180 days to arrive at average daily
Note: The Signey Ruling: "Living with" is not a quailfi- salary credit (ADSC);
cation for children. 1.3.5. Multiply ADSC by 90%; and
534 SOCIAL LEGISLATION
1.3.6. Multiply the product by the number
of days of confinement.
Maternity Benefits (MB) v. Sickness Benefits (SB)
As to the 1st multiplier, MB's multiplier is 100%·
whereas, SB's multiplier is 90%. ' compel contribution from the salary of an employee while
As to the 2nd multiplier, MB's multiplier is 105/60 days;
whereas, SB's multiplier is number of days confined.
Other Benefits
1. Death Benefits
2. Retirement Benefits
2.1. Retirement benefits under R.A. 8282 are
apart from the retirement benefits under P.O. 442
(Masing & Sons Oev't Corp. v. Gregorio Rogelio, G.R.
No. 161787, 27 April 2011).
2.2. Retirement benefits under the Pag-lbig
Fund Act are substitutes for retirement benefits under
P.O. 442 (Sec. 21). In the event Pag-lbig pays less
than what P.O. 442 requires, the employer shall pay
the deficiency.
3. Pension and 13th Month Pension
2008 Bar, Question No. VII
Tito Paciencioso is an employee of a foundry shop in
Malabon, Metro Manila. He is barely able to make ends
meet with his salary of P4,000.00 a month. One day, he
asked his employer to stop deducting from his salary his
SSS monthly contribution, reasoning out that he is waiving
his social security coverage.
If you were Tito's employer, would you grant his
request? Why? (6%)
BAR SYLLABUS-BASED REVIEWER IN 535
LABOR LAW & SOCIAL LEGISLATION
Answer
I would not grant Tito's request.
SSS contribution is compulsory for both covered em-
ployer and covered employee. The purpose of the law is to
he is productive in order to establish a contingency fund
from which he or his dependents can draw for income rep-
lacement in the event of retirement, sickness, disability,
maternity, or death resulting in loss of income or financial
burden (Sec. 2, R.A. 8282).
2008 Bar, Question No. VIII
Carol de la Cruz is the secretary of the proprietor of
an auto dealership in quezon City. She resides in
Caloocan City. Her office hours start at 8 a.m. and end at 5
p.m. On July 30, 2008, at 7 a.m. while waiting for public
transport at Rizal Avenue Extension as has been her
routine, she was sideswiped by a speeding taxicab resul-
ting in her death. The father of Carol filed a claim for em-
ployee's compensation with the Social Security System.
Will the claim prosper? Why? (6%)
Answer
The compensation claim will proper.
Carol's death is occupational under the Continuing
Act Rule. Unless her death resulted from unreasonable de-
parture or unreasonable diversion, her act of leaving her
home to go to her workplace and her act of leaving her
workplace to get back home are continuing acts. Neither
exception obtains; hence, her death is subject to compen-
sation.
2008 Bar, Question No. IX
Assume that in Problem 5, Mario, an RSC member
disgusted with the non-payment of his night shift diffe-
536 SOCIAL LEGISLATION
rential and overtime pay, filed a complaint with the DOLE
Regional Office against RSC and PizCorp. After inspec-
tion, it was found that indeed Mario was not getting his
correct differential and overtime pay and that he was not
declared an SSS member (so that no premiums for SSS
membership were ever remitted). On this basis, the Regio-
nal Director issued a compliance order holding PizCorp
and RSC solidarily liable for the payment of the correct
differential and overtime pay and ordering PizCorp to
report Mario for membership with SSS and remit overdue
SSS premiums.
Who has the obligation to report the RSC members
for membership with the SSS, with the concomitant
obligation to remit SSS premiums? Why? (6%)
Answer
PizCorp has the obligation to report all the RSC
members for SSS coverage and to remit the concomitant
SSS contributions.
The obligation to report another for SSS coverage
and to remit the corresponding contributions arises from
one's being an employer. Under Sec. 8 of R.A. 8282, such
status attaches when one uses the services of another and
controls the latter's means and methods of performance.
Since, based on control, the locus of employer-employee
relationship is the affair between Pizcorp and the RSC
members then the obligations in question should be
imposed on PizCorp as employer.
2009 Bar, Part I, Question No. X
a. X X X lifies as a solo parent. If the leave period is not enough,
b. Can a member of a cooperative be deemed an
employee for purposes of compulsory coverage under the
S.ocial Security Act? Explain. (2%)
BAR SYLLABUS-BASED REVIEWER IN 537
LABOR LAW & SOCIAL LEGISLATION
Answer
a. X X X
b. Yes. A cooperative member whose personal ser-
vices are utilized by the cooperative and whose means
and methods of performing his work are controlled by it is a
cooperative employee (Sec. 8, R.A. 8282). Hence, being
an employee, he has compulsory SSS coverage.
2010 Bar, Question No. Ill
A, single, has been an active member of the Social
Security System for the past 20 months. She became
pregnant out of wedlock and on her 7th month of pregnan-
cy, she was informed that she would have to deliver the
baby through caesarean section because of some compli-
cations. Can A claim maternity benefits? If yes, how many
days can she go on maternity leave? If not, why is she not
entitled? (3%)
Answer
Yes.
Although single, A can claim maternity benefits under
the system because social security law is morality-free and
non-discriminatory, i.e., as long as she has complied with
the reportorial requirements and has paid at least 3 month-
ly contributions during the 12-month period immediately
preceding her caesarian section.
Pursuant to R.A. 11210, known as the Expanded Ma-
ternity Leave Act of 2019, her maternity benefits will con-
sist of 60 paid days of leave, plus 15 paid days if she qua-
she is allowed 30 more days but without pay.
538 SOCIAL LEGISLATION
2013 Bar, Question No. Vl(a)
Because of the stress in caring for her four (4) gro-
wing children, Tammy suffered a miscarriage late in her
pregnancy and had to undergo an operation. In the course
of the operation, her obstetrician further discovered a sus-
picious-looking mass that required the subsequent removal
of her uterus (hysterectomy). After surgery, her physician
advised Tammy to be on full bed rest for six (6) weeks.
Meanwhile, the biopsy of the sample tissue taken from the
mass in Tammy's uterus showed a beginning malignancy
that required an immediate series of chemotherapy once a
week for four (4) weeks.
a. What benefits can Tammy claim under existing
social legislation? (4%)
b. What can Roger - Tammy's 2nd husband and the
father of her two (2) younger children - claim as benefits
under the circumstances? (4%)
Answer
a. On the assumption that tammy has an employer,
she can avail of gynaecological leave under R.A. 971 O, or
the Magna Carta for Women, as to be entitled to two full
monthly salaries. Moreover, for her miscarriage, she can
avail of the 60-day maternity leave guaranteed by R.A.
11210, or the Expanded Maternity Leave Act. Should the
period be insufficient, she can avail of additional 15 days
leave with pay if she happens to be a solo parent and
another 30 days without pay.
b. Roger has two leave benefits, viz., 7-day leave
with pay under the Paternity Leave Act conditioned on his
being the legitimate spouse of Tammy and cohabitation
with her and 7-day leave with pay to be taken from the
maternity leave of Tammy under the Expanded Maternity
Leave Act.
BAR SYLLABUS-BASED REVIEWER IN 539
LABOR LAW & SOCIAL LEGISLATION
2014 Bar, Question No. XIII
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 remembered that Lando, a
17-year old out-of-school youth, had contacted him in
church the other day looking for work. He contacted Lando
who immediately attended to Don Luis's garden and
finished the job in three days. (4%)
(A) Is there an employer-employee relationship
between Don Luis and Lando?
(B) Does Don Luis need to register Lando with the
Social Security System (SSS)?
Answer
(A) There is employer-employee relationship bet-
ween Don Luis and Lando. Firstly, Lando who was looking
for work finally rendered personal services for Don Luis.
Secondly, Lando could not have been the master of his
time, means and methods under the circumstances ( Sec.
8, RA 8282).
(B) Don Luis does not need to register Lando with the
SSS because he is a purely casual employee, hence
outside SSS coverage (RA 8282). Neither should he report
Lando for SSS coverage under the Kasambahay Act be-
cause, although a gardener, he is an occasional if not
sporadic employee. Therefore, he is not a kasambahay
who is entitled to SSS coverage (RA 10361 ).
Comment:
The question is tricky. The examiner wants to lead the
examinees into considering Lando as a kasambahay be-
cause he is listed (gardener), and giving him SSS coverage
pursuant to RA 10361. However, Lando is an occasional or
sporadic gardener; hence, he is not a kasambahay.
540 SOCIAL LEGISLATION
2015 Bar, Question No. VI
Ador is a student working on his master's degree in
horticulture. To make ends meet, he takes on jobs to come
up with flower arrangements for friends. His neighbor,
Nico, is about to get married to Lucia and needs a floral
arranger. Ador offers his services and Nico agrees. They
shake hands on it, agreeing that Nico will pay Ador
P20,000.00 for his services but that Ador will take care of
everything. As Ador sets about to decorate the venue, Nico
changes all of Ador's plans and ends up designing the
arrangements himself with Ador simply executing Nico's
instructions.
a. Is there an employer-employee relationship bet-
ween Nico and Ador? (4%)
b. Will Nico need to register Ador with the Social
Security System (SSS)? (2%)
Answer
a. Ador is a worker paid on task basis; hence, there
is employer-employee relationship between him and Nico.
When the latter assumed the control of both result and
manner of performance from Ador, all vestiges of the initial
independent contractorship arrangement disappeared.
What replaced it was employer-employee relationship.
b. Ador is a purely casual employee; hence, Nico
need not report him for SSS coverage.
2015 Bar, Question No. XIII
Luisa is an unwed mother with 3 children from differ-
rent fathers. In 2004, she became a member of the Social
Security System (SSS). That same year, she suffered a
miscarriage of a baby out of wedlock from the father of her
third child. She wants to claim maternity benefits under the
SSS Act. Is she entitled to claim? (3%)
BAR SYLLABUS-BASED REVIEWER IN 541
LABOR LAW & SOCIAL LEGISLATION
Answer
Yes.
Provided Luisa has reported to her employer her
pregnancy and date of expected delivery and paid at least
three monthly contributions during the 12-month period
immediately preceding her miscarriage then she is entitled
to maternity benefits up to four deliveries, i.e., under R.A.
8282. As to the fact that she got pregnant outside wedlock,
as in her past three pregnancies, this will not bar her claim
because the SSS is non-discriminatory. Likewise, the sys-
tem is morality-free; hence, the several men in her life are
immaterial. Incidentally, under the Expanded Maternity
Leave Act of 2019 (R.A. 11210), the number of contingen-
cies is immaterial.
Therefore, regardless of non-marriage and lack of
morals, Luisa is entitled to claim maternity benefits under
the Social Security Act.
Note: SSS pays for benefits under R.A. 11210.
2016 Bar, Question No. XVII
Baldo, a farm worker on pakyaw basis, had been wor-
king on Dencio's land by harvesting abaca and coconut,
processing copra, and clearing weeds from year to year
starting January 1993 up to his death in 2007. He worked
continuously in the sense that it was done for more than
one harvesting season.
(a) Was Dencio required to report Baldo for compul-
sory social security coverage under the SSS law? Explain.
(2.5%)
(b) What are the liabilities of the employer who fails to
report his employee for social security coverage? Explain.
(2.5%)
542 SOCIAL LEGISLATION
Answer
a. Dencio was required to report his employee
Baldo for SSS coverage. Only the following are excluded
from SSS coverage: purely casual employees, Filipinos
employed by foreign vessels while outside Philippine terri-
tory, employees of foreign governments and international
organizations unless covered by administrative agree-
ments, government employees, and other employees ex-
cluded by the Social Security Commission. Baldo, a regu-
lar seasonal employee, was not one of the excluded em-
ployees.
b. The Social Security Act is a penal law. Hence, an
employer who does not report his employee for SSS cove-
rage shall incur criminal liability. In addition, he shall pay
the benefit if the latter dies, becomes disabled, gets sick or
retires. He shall also pay all contributions, plus 3% penalty
per month.
2017 Bar, Question No. XII (8)
A. X X X to Africa compensable? Explain your answer. (2.5%)
B. Gene is a married regular employee of Matibay
Corporation. The employees and Matibay Corporation had
an existing CBA that provided for funeral or bereavement
aid of P15,000.00 in case of the death of a legal depen-
dent of a regular employee. His widowed mother, who had
been living with him and his family for many years, died;
hence, he claimed the funeral aid. Matibay Corporation
denied the claim on the basis that she had not been his
legal dependent as the term legal dependent was defined
by the Social Security Law.
(a) Who may be the legal dependents of Gene under
the Social Security Law? (2.5%)
(b) Is Gene entitled to the funeral aid for the death of
his widowed mother? Explain your answer. (2%)
BAR SYLLABUS-BASED REVIEWER IN 543
LABOR LAW & SOCIAL LEGISLATION
C. Rosa was granted vacation leave by her employer
to spend three weeks in Africa with her family. Prior to her
departure, the General Manager of the company requested
her to visit the plant of a client of the company in
Zimbabwe in order to derive best manufacturing practices
useful to the company. She accepted the request because
the errand would be important to the company and
Zimbabwe was anyway in her itinerary. It appears that she
contracted a serious disease during the trip. Upon her
return, she filed a claim for compensation, insisting that
she had contracted the disease while serving the interest
of her employer.
Under the Labor Code, the sickness or death of an
employee, to be compensable, must have resulted from an
illness either definitely accepted as an occupational
disease by the Employees' Compensation Commission, or
caused by employment subject to proof that the risk of
contracting the same is increased by working conditions.
Is the serious disease Rosa contracted during her trip
Answer
A. X X X
B.
(a) Gene's legal dependents under the Social
Security Law are as follows: (I) Primary Beneficiaries, who
are his legitimate spouse who lives with him and all types
of children who are below 21, unmarried, and unemployed;
and (II) Secondary Beneficiaries, who are his parents as
long as wholly dependent on him for support.
(b) . Yes, Gene is entitled to the funeral aid because
his deceased mother was wholly dependent on him for
support until her death. Being his legal dependent, she is
covered by the provision of the CBA on funeral or
bereavement aid.
544 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 545
LABOR LAW & SOCIAL LEGISLATION

C. Yes, it is compensable. remarries; provided, she was living with him at the time of
Under the Amended Rules on Employee Compensa- his death ( Sec. 8(k), R.A. 8282; Yolanda Signey v. SSS,
tion (AREC), disability or death arising from disease is G.R. No. 173582, 28 January 2008).
compensable if the disease is an occupational one, i.e., it
is listed under Annex ':A" I "1" of the AREC as such. If un-
listed, it is still an occupational disease if covered by the Analysis of Previous Questions
Proximate Cause Theory or the Increased Risk Theory. In The general points of interest in the Bar are Ben
Rosa's case, she contracted the disease as a result of her Cover PP Co Ben (Benefits, Coverage, Prescription, Pe-
performance of a work-related task. Hence, there being no nalties, Contributions and Beneficiaries). From 2008 to
efficient intervening cause breaking the chain of causes 2019, the following were the points of inquiry:
connecting that performance to her disease, the occupa-
tional character of her medical condition is beyond doubt 1. Coverage
(Proximate Cause Theory). 1.1. 2008 Bar, Quetion No. VII (Compulsory
Contribution)
2019 Bar, Part I, Question No. A.2
1.2. 2008 Bar, Question No. IX (Employer
X is a member of the Social Security System (SSS). Coverage)
In 2015, he died without any spouse or children. Prior to 1.3. 2009 Bar, Question No. X (Coop Member-
the semester of his death, X had paid 36 monthly contri- Employee)
butions. His mother, M, who had previously been receiving
regular support from X, filed a claim for the latter's death 1.4. 2014 Bar, Question No. XIII (Purely
Casual/Sporadic)
benefits.
1.5. 2015 Bar, Question No. VI (Purely Casual)
(a) Is M entitled to claim death benefits from the
SSS? Explain. (2.5%) 1.6. 2016 Bar, Question No. XVII (Pakyaw)

(b) Assuming that X got married to his girlfriend a few 2. Benefits

days before his death, is M entitled to claim death benefits 2.1. 2008 Bar, Question No. VIII (Death
from the SSS? Explain. (2.5%) Benefits)
2.2. 2010 Bar, Question No. 111 (Maternity
Answer
Benefits)
(a) M is entitled to the death benefits. Being the
2.3. 2013 Bar, Question No. VI (a) (Maternity
mother of X, who was single and without issue, she is Benefits)
elevated to the status of sole beneficiary ( Sec. 8 (k), R.A.
8282). 2.4. 2015 Bar, Question No. XIII (Maternity
Benefits)
(b) In view of the marriage of X to his girlfriend, M is
deemed restored to her secondary beneficiary status. 2.5. 2017 Bar, Question No. XII (C) (Sickness
Benefits)
Hence, X's wife will be his primary beneficiary until she
546 SOCIAL LEGISLATION
3. Beneficiaries
3.1. 2017 Bar, Question No. XII (B) (Mother)
3.2. 2019 Bar, Part I, Question No. A.2 (Mother
& Wife)
In other words, from 2008 to 2019, the points of inquiry
have been Ben-Cov-Ben. As to benefits, the favourite has
been maternity benefits. As to coverage, exemptions have
been attractive to examiners. The un-asked are PP Con or
prescription, penalties and contributions. Hence, the following
may be the next points of inquiry:
1. Prescription
The prescriptive period is 3 years. As to the reckoning
point, it depends on the nature of the contingency.
2. Penalties
As to penalties, double jeopardy might be asked. If an
employer is prosecuted under R.A. 8282 and the Revised
Penal Code at the same time, he cannot cry violation of his
right against double jeopardy because the first is a
prosecution under a special law while the second is under
the RPC. Likewise, prior SSS consent as a precondition for
a criminal prosecution might be asked. As to this, there is
no need to get the prior consent of the System. Finally, the
personal liability of corporate officers is a possible problem
anchor.
3. Contributions
The possible points of inquiry are: (a) the basis of
contribution which is compensation (broader than basic
salary); and (b) the due date. Pursuant to SSS Board
Resolution 549, s. 2019, the SSS issued Circular 2019-12
on 6 August 2019 revising the deadline for late payments.
Otherwise, contributions must be paid monthly or quarterly
- or even in advance. This part will make an examiner
uncomfortable; hence, he will avoid it.
BAR SYLLABUS-BASED REVIEWER IN 547
LABOR LAW & SOCIAL LEGISLATION
B
The Government Service Insurance System Act of
1997 (R.A. 8291)
Coverage. All government employees: (a) appointive or
elective; (b) not over 65; and (c) with basic salary.
The Four-Fold Test is used to determine EER.
Exclusions. Those paid honoraria/per diems only are not
covered.
Benefits
1. Disability/Death Benefits
1.1. Caused by Disease
Rule: To be compensable, the disability or death
must be caused by an AOO (Arising Out Of) Disease.
An AOO disease is a listed disease (Annex "1 ':
Amended Rules on Employees' Compensation).
If not listed, there is no disputable presumption of
work-connection unlike under the POEA-SEC. Hence,
the claimant must prove work-connection outside
Annex "A" with substantial evidence by employing
either Proximate Cause Theory or Increased Risk
Theory.
Proximate Cause Theory
Question: Is their a chain of causes, unbroken by any
efficient intervening cause (notorious negligence, intentio-
nal attempt against the member's life or that of another, or
intoxication) connecting the member's performance of his
work and his disability or death?
Answer: If Yes, the disability or death is compen-
sable.
548 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 549
LABOR LAW & SOCIAL LEGISLATION

Increased Risk Theory is no longer a consideration under Resolution 3914-A

Question: Has performance by the member of his which presumes that the contingency (injury) could have
work increased his risk of contracting the unlisted disease? only resulted from one's having to go to work, or his having
to come from work. In other words, going to work and the
Answer: If Yes, it is compensable. injury are deemed as continuing acts, just as coming from
work and injury are continuing acts. Hence, distances are
1.2. Caused by Injury not measured anymore.
Rule: To be compensable, the disability or death
must be caused by an ICO (In the Course Of) injury. An Exceptions & Illustrations:
ICO injury is one which is sustained at the member's 1.1. Unreasonable Diversion
place of work, while performing his assigned work; or
elsewhere, as long as he is performing an assigned work. Instead of going straight to work following his
usual route, a member makes a side trip to drop off
Note: Off-Premises Rules, infra. his paramour. At the drop-off point, he is shot to death
by his paramour's husband.
2. Other Benefits (DR SUDS) 1.2. Unreasonable Departure
D - Disability (supra) Instead of going straight home from work, a
R - Retirement member joins a shabu session and gets killed in an
anti-drugs operation.
S - Sickness
U - Unemployment 2. Marked Men Rule (Resolution 3908)
D - Death (supra) Claims by or on behalf of men in uniform used to be
S - Separation denied for the simple reason that their injuries or deaths
took place outside their official places of assignment.
Employees Compensation Rules: ECC Board Under Resolution 3908, they are now considered marked
Resolutions for liquidation; hence, it does not matter where they are
killed. In fact, they are deemed on 24-hour duty under the
The following Board Resolutions are among the social
24-Hour Duty Rule, unless on official leave (De La Rea
justice measures adopted by the Employees Compensa-
Ruling).
tion Commission (ECC) to address disadvantageous situa-
tions in the past resulting in the denial of compensation
3. No Reimbursement Rule (Resolution 14-07-20)
claims:
Should a member be presumed dead after four years
1. Continuing Act Rule (Resolution 3914-A)
and the corresponding benefit be paid, the beneficiaries
Compensation claims used to be denied under the shall not be made to reimburse if he reappears.
Going To-Coming From Rule by reason of lack of proximity
between place of work and place of contingency. Proximity
550 SOCIAL LEGISLATION
4. Personal Comfort Doctrine (Resolution 93-08-
0068)
Acts of self-ministration performed outside the as-
signed place of work, as long as performed within the time
and space limits of a member's employment, will not bar
EC claims. Hence, in a case where a member cannot use
any of the comfort rooms of the company for being occu-
pied and, for this reason, he has to do his thing behind a
perimeter fence - where he gets injured - his compensa-
tion claim cannot be denied on the ground that he is
injured outside company premises.
Exceptions:
4.1. Outside the time limit of employment.
If the member is on the 8:00 a.m. to 5:00 p.m.
work shift and he gets injured at 7:00 p.m., the resul-
ting disability or death is not compensable - unless
required to render overtime work.
4.2. Outside the space limit of employment.
If the injury is sustained inside a comfort room of
SM which is 5 kilometers away from the government
office, the resulting disability or death is not compen-
sable - unless expressly instructed to go to SM.
5. Successive Disability Rule (Resolution 10-09-
114)
The GSIS used to deduct benefits paid for temporary
total disability (TTD) from benefits to be paid should such
disability become permanent partial disability (PPD). Under
Resolution 14-07-20, no such deduction shall be made.
6. Incidental Findings Rule (Resolution 10-05-65)
The denial of a claim for the reason that the disease
complained of is not work-related is without prejudice to
BAR SYLLABUS-BASED REVIEWER IN 551
LABOR LAW & SOCIAL LEGISLATION
compensation based on an incidental medical finding that
the member is afflicted with other work-related diseasels.
2009 Bar, Part. I, Question No. X
a. State briefly the compulsory coverage of the Go-
vernment Service Insurance Act. (2%)
b. Can a member of a cooperative be deemed an
employee for purposes of compulsory coverage under the
Social Security Act? Explain. (2%)
Answer
a. The compulsory coverage of the GSIS is as
follows:
(I) All government employees, appointive or
elective;
(11) Who are not more than 65 years old; and
(111) they receive basic salary.
The following are excluded:
(I) government employees who are paid
honoraria;
(11) government employees who are paid per
diem;
b. Yes. A cooperative member whose personal ser-
vices are utilized by the cooperative and whose means
and methods of performing his work are controlled by it is a
cooperative employee ( Sec. 8, R.A. 8282). Hence, being
an employee, he has compulsory SSS coverage.
2015 Bar, Question No. XIV
Luis, a PNP officer, was off duty and resting at home
when he heard a scuffle outside his house. He saw two of
his neighbors fighting and he rushed out to pacify them.
One of the neighbors shot Luis by mistake, which resulted
552 SOCIAL LEGISLATION
in Luis's death. Marian, Luis's widow, filed a claim with the
GSIS seeking death benefits. The GSIS denied the claim
on the ground that the death of Luis was not service-
related as he was off-duty when the incident happened. Is
the GSIS correct? (3%)
Answer
No.
The GSIS is not correct because Luis was just off-
duty. A policeman, just like a soldier, is covered by the 24-
Hour Duty Rule. He is deemed on round-the-clock duty
unless on official leave, in which case his death outside
performance of official peace-keeping mission will bar
death claim. In this case, Luis was not on official leave and
he died in the performance of a peace-keeping mission.
Therefore, his death is compensable.
Note: Soldiers and policemen are not under the GSIS
anymore.
2018 Bar, Question No. IX
Sgt. Nemesis was a detachment non-commissioned
officer of the Armed Forces of the Philippines in Nueva
Ecija. He and some other members of his detachment
sought permission from their Company Commander for an
overnight pass to Nueva Vizcaya to settle some important
matters. The Company Commander orally approved their
request and allowed them to carry their firearms as the
place they were going to was classified as a "critical
place." They arrived at the place past midnight; and as
they were alighting from a tricycle, one of his companions
accidentally dropped his rifle, which fired a single shot, and
in the process hit Sgt. Nemesis fatally. The shooting was
purely accidental. At the time of his death, he was still
legally married to Nelda, but had been separated de facto
from her for 17years. For the last 15 years of his life, he
BAR SYLLABUS-BASED REVIEWER IN 553
LABOR LAW & SOCIAL LEGISLATION
was living in with Narda, with whom he has two minor chil-
dren. Since Narda works as a kasambahay, the two chil-
dren lived with their grandparents, who provided their daily
support. Sgt. Nemesis and Narda only sent money to them
every year to pay for their school tuition. Nelda and Narda,
both for themselves and the latter, also on behalf of her
minor children, separately filed claims for compensation as
a result of the death of Sgt. Nemesis. The Line of Duty
Board of the AFP declared Sgt. Nemesis' death to have
been "in line of duty", and recommended that all benefits
due Sgt. Nemesis be given to his dependents. However,
the claims were denied by GSIS because Sgt. Nemesis
was not in his workplace nor performing his duty as a
soldier of the Philippine Army when he died.
(a) Are the dependents of Sgt. Nemesis entitled to
compensation as a result of his death? (2.5%)
(b) As between Nelda and Narda, who should be
entitled to the benefits? (2.5%)
(c) Are the minor children entitled to the benefits con-
sidering that they were not fully dependent on Sgt.
Nemesis for support? (2.5%)
Answer
(a) Only the primary and secondary dependents of
Sgt. Nemesis, meeting prescribed qualifications, are en-
titled to compensation. As to Nelda, she must be his legal
spouse and she must be living with him. As to his children,
both legitimate and illegitimate, they must be below 21,
unmarried, and not gainfully employed.
(b) Neither Nelda nor Nard a is entitled to the benefit.
As to Nelda, she is not living with the member; hence,
lacking the second requisite, she is not a primary depen-
dent. As to Narda, she is not the legal spouse; hence,
lacking the first requisite, she is not also a primary depen-
dent.
554 SOCIAL LEGISLATION
BAR SYLLABUS-BASED REVIEWER IN 555
LABOR LAW & SOCIAL LEGISLATION

(c) The minor children, even if not fully dependent on

Sgt. Nemesis, are entitled to the benefits because they are
all below 21, unmarried and not gainfully employed. Being The Limited Portability Law
fully dependent, or living with the member, is not a requi- (R.A. 7699)
site as to them.
Question
Points of Interest
What is limited and what is portable in the Limited
1. Coverage Portability Law?
2009 Bar, Part I, Question No. X(a)
Answer
2. Dependents 1. Portability. As one moves from one system (SSS/
2018 Bar, Question No. IX (member's children GSIS) to another (GSIS/SSS), he carries with him: (a) his
and his women) length of service; and (b) his contributions. As to length of
service, he will be allowed to totalize his service credits
3. Compensation Rules under SSS with his service credits under GSIS, infra. As to
contributions, they are his property which he carries with
2015 Bar, Question No. XIV (24-Hour Duty Rule) him wherever he goes. In L/edo v. Lledo, A.M. No. P-95-
Obviously, previous Bar examiners were more 1167, 9 February 2010, the SC ordered the GSIS to return
excited to give SSS questions than GSIS questions. the personal contributions of a dismissed clerk of court
There should be more in subsequent examinations (despite the forfeiture rule) because they were Atty. Lledo's
given the recent developments in compensation rules, property.
supra. 2. Limited. Totalization of service credits can only be
availed of once, and only if a member is disqualified from
availing of a benefit (e.g., retirement benefit) by reason of
lack of length of service - and nothing else more.

Gamogamo v. PNOC
G.R. No.141707, 7 May2002
After 14 years with DOH, Dr. Gamogamo joined
LUSTEVECO which was later absorbed by PNOC Ship-
ping & Transport Corp. Subsequently, PNOC floated a
Manpower Reduction Program which promised separation
pay based on 2 months salary. Dr. Gamogamo applied for
retrenchment but his application was denied. As a result,
he continued working for PNOC until he retired. Upon
retirement, he was paid retirement pay based on 1 month
556 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 557
LABOR LAW & SOCIAL LEGISLATION

salary. Later, two of his former co-employees were re- Answer

trenched and paid separation pay based on 2 months sa-
lary. He then sued PNOC for full retirement pay, arguing
that his 14 years with DOH should have been totalized with
his 17 years with LUSTEVECO and PNOC as provided by
the Limited Portability Law.
The money claim was dismissed.
The totalization provision of the Limited Portability
Law has a limited purpose. It applies only when a member
is disqualified from availing of a benefit due to lack of
length of service (Sec. 3, R.A. 7699). But in the case of Dr.
Gamogamo, he had the requisite service credits (14 years)
to avail of GSIS retirement pay, i.e., if he had not yet
availed thereof. Sec. 12 (old GSIS Act) qualified for
retirement pay a member with 3-15 years of service.
I would tell Luisito that, under the Limited Portability
Law, he will carry with him his creditable service and paid
contributions as he moves from one system to the other.
Hence, he may accept the job offer without fearing that he
would lose his years of service in the private sector.
Actually, they can be totalized with his years of service in
the public sector in the event that he would not be able to
qualify for benefits due solely to insufficiency of creditable
service.

Questions Asked Already & Answers

1. What are the benefits under the Limited Portability
Law?
1.1. Portability of both service credits and contribu-
tions; and
1.2. Tacking of creditable service.
2. How many times can service credits be tacked?
Once only.

2014 Bar, Question No. XIV

Luisito has been working with Lima Land for 20 years.
Wanting to work in the public sector, Luisito applied with
and was offered a job at Livecor. Before accepting the
offer, he wanted to consult you whether the payments that
he and Lima Land had made to the Social Security System
(SSS) can be transferred or credited to the Government
Service Insurance System (GSIS). What would you ad-
vice? (4%)
558 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 559
LABOR LAW & SOCIAL LEGISLATION

D e. XX X
Disability and Death Benefits
Labor Code Answer
(Treated in PART II)
(a) FALSE
Employees Compensation and State Insurance Fund Per case law, seafarers are contractual employees;
(Covered under GSIS, Compensation Rules) hence, their length of service does not confer on them
regular employment status (Mil/ares v. NLRC, G.R. No.
POEA-Standard Employment Contract 122827, 29 March 1999).
(b) XX X
POEA-SEC of Seafarers
(c) XX X
The employment of seafarers is logically a part of
(d) XX X
Book I. Its terms and conditions are regulated by the
Revised Standard Terms and Conditions Governing the (e) XX X
Overseas Employment of Filipino Seafarers On-Board
Ocean-Going Ships (POEA-SEC for brevity). 2017 Bar, Question No. VIII
Marciano was hired as Chief Engineer on board the
Contractual Employee vessel MN Australia. His contract of employment was for
In Mi/fares v. CA, G.R. No. 122827, 29 March 1999, nine months. After nine months, he was re-hired. He was
the Supreme Court ruled that a seafarer does not become a hired a third time after another nine months. He now claims
regular employee because he is contractual. One of the entitlement to the benefits of a regular employee based on
fixed-term employees mentioned by Justice Narvasa in his having performed tasks usually necessary and desi-
Brent v. Zamora, G.R. No.48494, 5 Feb. 1990 is a seafarer. rable to the employer's business for a continuous period of
Just like the PE instructor in said case, a seafarer is bound more than one year. Is Marciano's claim tenable? Explain
to the period stipulated in his employment contract. your answer. (3%)

2009 Bar, Part II, Question No. XI (a) Answer

TRUE or FALSE. Answer TRUE if the statement is No, it is not tenable.

true, or FALSE if the statement is false. Explain your
answer in not more than two (2) sentences. (5%)
a. Seafarers who have worked for twenty (20) years
on board the same vessel are regular employees.
b. xx X
Marciano is a seafarer; hence, he is a contractual em-
ployee (Mi/fares v. NLRC, G.R. No.110524, 29 July 2002).
As such, the nature of the onboard work performed by him
under his contracts does not give him regular employment
status since Art. 295 of the Labor Code has no application.

C. X XX

d. xx X
560 SOCIAL LEGISLATION
2018 Bar, Question No. X
Nonato had been continuously employed and de-
ployed as a seaman who performed services that were ne-
cessary and desirable to the business of N-Train Shipping,
through its local agent, Narita Maritime Services (Agency),
in accordance with the 2010 Philippine Overseas Employ-
ment Administration Standard Employment Contract (201 o
POEA-SEC). Nonato's last contract (for five months)
expired on November 15, 2016. Nonato was then repatria-
ted due to a "finished contract." He immediately reported to
the Agency and complained that he had been experiencing
dizziness, weakness, and difficulty in breathing. The
Agency referred him to Dr.Neri, who examined, treated,
and prescribed him with medications. After a few months of
treatment and consultations, Nonato was declared fit to
resume work as a seaman. Nonato went back to the
Agency to ask for re-deployment but the Agency rejected
his application. Nonato filed an illegal dismissal case
against the Agency and its principal, with a claim for total
disability benefits based on the ailments that he developed
on board N-Train Shipping vessels. The claim was based
on the certification of his own physician, Dr. Nunez, that he
was unfit for sea duties because of his hypertension and
diabetes.
a) Was Nonato a regular employee of N-Train Ship-
ping? (2.5%)
b) Can Nonato successfully claim disability benefits
against N-Train Shipping and its agent Narita Maritime
Services? (2.5%)
Answer
a) No.
A seafarer is a contractual employee (Mil/ares v. NLRC,
G.R. No. 110524, 29 July 2002). As such, he is bound to the
period stipulated in his fixed-term employment contract.
BAR SYLLABUS-BASED REVIEWER IN 561
LABOR LAW & SOCIAL LEGISLATION
Therefore, dissociation by reason of expiration thereof
does not constitute dismissal of a regular employee (Alma
Covita v. SSM Maritime Services, Inc., G.R. No. 206600, 7
December 2016).
b) Nonato cannot successfully claim disability com-
pensation for these reasons: First, the requisites for com-
pensability are not present. Second, the Third Physician
Rule was not observed.
The twin-requisites of compensation for disability ari-
sing from disease are: (a) work-connection, and (b) effecti-
vity of contract ( Sec. 20 -A , POEA-SEC). For a disease to
be work-connected, it must be listed under Sec. 32-A of
the POEA-SEC, subject to the disputable presumption of
work-connection as to unlisted diseases. To meet the se-
cond requisite, it must have been contracted or aggravated
during the effectivity of the seafarer's employment contract.
Since Nonato finished his contract, i.e., he was not me-
dically repatriated due to a work-connected disease, the
second requisite is absent. Moreover, he should have
submitted himself to a third physician given the conflicting
medical assessments made by the company-designated
physician and his physician of choice. He did not. For this
additional reason, he cannot successfully claim disability
compensation (Philippine Hammonia Ship Agency v.
Eulogio Dumadag, G.R. No. 194362, 26 June 2013).
Money Claims
The money claims seafarers or their heirs usually as-
sert are sickness allowance, disability compensation, death
compensation, and other claims, e.g., reimbursement for
medical, transportation and related expenses, damages
and attorney's fees. The governing provisions of the
POEA-SEC are Sec. 20 and Sec. 32-A
562 SOCIAL LEGISLATION
Crew Claims
Pre-Employment Medical Examination (PEME)
Situationer: A seafarer contracts TB in just two
months following embarkation resulting in his medical re-
patriation. In denying work-connection, the manning agent
argues that he could not have contracted the disease in so
short a time since TB develops over time. The seafarer
counter-argues that he could have only contracted his
illness in the course of his employment and by reason of
the conditions of his work because, before deployment, the
PEME doctor issued him a fit to work certification.
Note: PEME is non-exploratory. It cannot detect all
kinds of diseases. Hence, a fit to work certification does not
amount to absence of pre-existing diseases (Gilbert Quizora
v. Denholm Crew Management (Phils), Inc., G.R. No. 185
412, 16 February 2011). This is the reason a seafarer is re-
quired to disclose any pre-existing diseases by ticking the
appropriate boxes on his PEME form. If despite disclosure,
however, the manning agent still hires the seafarer (this
usually happens with high value first engineers and ship
captains) then it constitutes a waiver. In this case, the sick
seafarer is deemed hired subject to the risk of aggravation.
Theory of Aggravation
If it can be shown with substantial evidence that work
conditions have contributed even in a small measure to the
development or aggravation of the disease, it is work-con-
nected. If despite his duty to disclose, however, the seafarer
conceals a pre-existing disease then his claim can be de-
nied based on concealment. A distinction must be made
between medical condition and medical procedure. If what
is not disclosed is a medical procedure (e.g., stenting) then
there is no concealment. Sec. 20(e) of the POEA-SEC men-
tions "pre-exisiting illness or condition." (Leoncio v. MST
Marine Services, Inc., G.R. No. 230357, 6 December 2017).
BAR SYLLABUS-BASED REVIEWER IN 563
LABOR LAW & SOCIAL LEGISLATION
Jebsens Maritime, Inc. v. Alcibar
G.R. No. 221117, 20 February 2019
Colon Cancer
"In Leonis Navigation Co., Inc. v. Villamater, this Court
held that under Section 32-A of the POEA Standard Em-
ployment Contract, . colon cancer_ is considered a wor~-
related disease. This Court explained that the seaman 1s
entitled to disability benefits if the seaman proves that the
conditions inside the vessel increased or aggravated the
risk of the seaman contracting colon cancer, thus:
X X X
Diets high in fat are believed to predispose humans to
colorectal cancer. In countries with high colorectal cancer
rates, the fat intake by the population is much higher than
in countries with low cancer rates. It is believed that the
breakdown products of fat metabolism lead to the forma-
tion of cancer-causing chemicals (carcinogens). Diets high
in vegetables and high-fiber foods may rid the bowel of
these carcinogens and help reduce the risk of cancer."
(Citations omitted.)
The Clear Nexus Rule
Jessie M. Doroteo v. Philimare, Inc.
G.R. No. 184917, 13 March 2017
Throat Cancer
Dorotea claims that the engine room was akin to a
gas chamber but only gives a generalized opinion about
the risks inside the engine room. Philimare claims that its
vessel was given health and safety clearances but submit-
ted a certificate issued way past the employment of
Dorotea. Dorotea claims that he was exposed to noxious
substances but fails to substantiate it. Philimare cairns that
Doreoteo was a heavy smoker and alcohol user but fails to
564 SOCIAL LEGISLATION
link its evidence to throat cancer. Dorotea presents opinions
that allege the possibility of short-term aquisition of cancer,
but Philimare presents a diagnosis showing his cancer
seemed to have existed 3 months prior to his examination.
Based on the foregoing, there is no clear nexus
between disease and working conditions. The disputable
presumption cannot be applied because the evidence
cannot reasonably support a conclusion that Dorotea's
working conditions caused his throat cancer.
Summary
A worker brings with him possible infirmities into his
employment. The employer engages him as found and
assumes the risk of liability. However, the latter must show
credible information that there is probably a relation
between his illness and his work.
Medical Repatriation: Legal Effect
It is the process of signing off a seafarer by reason of
disease or injury so that he could be subjected to further
medical examination and treatment in the Philippines. It is
the company-designated physician who shall conduct post-
employment medical examination.
The legal effect of a medical repatriation is the
complete termination of employer-employee relationship.
Regardless, the employer is required to pay the seafarer's
basic daily salary by way of sickness allowance while in a
state of disability.
The 3-Day Reporting Requirement
Within 3 days from arrival on Philippine soil, the
seafarer must physically report to his local manning agent
for post-employment medical examination. If impossible,
he must effect substantial compliance. If he defaults, he
will forfeit whatever benefit he may be entitled to.
BAR SYLLABUS-BASED REVIEWER IN 565
LABOR LAW & SOCIAL LEGISLATION
Abandonment of Medical Examination and Treatment
Unjustifiable abandonment will result in forfeiture of
benefits also. If the seafarer's non-cooperation with the
company-designated physician prevents the latter from
making an assessment within 120 or 240 days, he cannot
claim.
Sickness Allowance
Sec. 20 (8) of the POEA-SEC requires payment of
sickness allowance in the event of a seafarer's medical
repatriation, i.e., regardless of whether his illness or injury
is work-connected. The law does not qualify, unlike in the
matter of disability and death compensations.
Sickness allowance is essentially an income replace-
ment, paid while the seafarer is prevented by his injury or
disease from doing sea duty. Just as the company-desig-
nated physician has 120 days to examine and resolve his
medical condition, he is entitled to maximum of 120 days
sickness allowance. It follows then that if his condition is
resolved by the company doctor sooner than the lapse of
120 days then his entitlement thereto ceases. It also
follows that if the company doctor needs to extend the 120
days, he shall also be entitled to sickness pay during the
period of such extension (J Brion's decision in Magsaysay
Maritime Corp. v. NLRC, G.R. No. 191903, 19 June 2013.)
This challenges (not "overturns" because both are deci-
sions rendered by divisions only) the J Velasco ruling in
Transocean Shipmanagement (Phils), Inc. v. Inocencio
Vedad, G.R. No. 194490, 20 March 2013 which limited the
benefit to 120 days only.
The J Brion decision came 3 months after the J
Velasco decision.
Note: Both treatment period and sickness allowance
shall not exceed 240 days.
566 SOCIAL LEGISLATION
If the company doctor, without basis, pre-terminates
the treatment resulting in the seafarer seeking medical
consult with his physician of choice, all medical and
transportation expenses incurred in the process - as long
as necessary, reasonable and supported - can be claimed
by him.
Hypothetical Problem
Norman, an able seaman (AB), was medically repat-
riated because both ship doctor and overseas doctor could
not determine the cause of his debilitating medical con-
dition. Within three days from arrival, he reported to his
manning agent which immediately referred him to the
accredited hospital for further examination. After all tests
were conducted, it was determined that he was afflicted
with AIDS. He admitted to his counsellor that he had a one
night stand 1O years ago with same Ship Master who must
have infected him. On the 60th day following sign-off,
which was also the day his diagnosis was disclosed to him
and all pre-scheduled consultations with the company
doctor were cancelled, he sought payment of his sickness
allowance. However, his manning agent denied his claim
on the ground that his disease was not work-connected. If
he seeks your legal assistance, would you demand for
payment in his behalf? (Usage: In behalf of X means "in
the interest of X"; On behalf of X means "in representation
of X").
Answer
Yes, I will.
AIDS may not be a work-connected disease. How-
ever, since Sec. 20 (B) of the POEA-SEC does not require
that the cause of medical repatriation be a work-connected
disease or injury, Norman is entitled to sickness allowance
- at least until his medical condition was declared as not
work-related and his medical management was terminated
BAR SYLLABUS-BASED REVIEWER IN 567
LABOR LAW & SOCIAL LEGISLATION
for that reason. It does not matter also if he may have con-
tracted his disease 10 years ago under a separate employ-
ment contract. The same provision does not also require
that the cause of medical repatriation be a disease con-
tracted during the effectivity of the current employment
contract. In other words, sickness allowance does not re-
quire both work-connection and effectivity of contract.
Disability Compensation
Situationer
A seafarer, after being issued a fit to work certification
by the pre-employment medical examination (PEME)
doctor, is given a 9-month POEA-approved contract. He
will now be deployed to his assigned vessel. Aboard that
vessel, either he will contract a disease, or will get injured
causing him to be unable to perform sea duty. The ship
doctor will attend to him. If his medical condition requires
more attention, he will be sent to a doctor at a convenient
port. Still, if his condition is beyond resolution aboard or
abroad, he will have to be medically repatriated for further
examination and treatment in the Philippines.
The seafarer is required to report to his manning
agent within three (3) days from his arrival for medical re-
ferral to the company-designated physician. If physically
unable to do so, he must report in writing; otherwise, his
omission will bar any future disability claim. Once he sub-
mits himself to the company-designated physician, it be-
comes his duty to pursue his medical management; other-
wise, he will be deemed as having abandoned his medical
treatment. Similarly, this will be a bar to his future claim for
disability pay.
Compensation Rules
1. Disease as Cause of Disability
568 SOCIAL LEGISLATION
To be compensable, the disability must arise from a
disease that is both (i) work-connected; and (ii) contracted
during the effectivity or period of the employment contract.
Work-Connection Rule
A disease is work-connected if it is listed under Sec. 32-
A of the POEA-SEC. If not listed, there is a disputable pre-
sumption that it is work-connected (Sec. 20-A, POEA-SEC).
Despite the presumption, however, the Supreme
Court has laid the burden of proving work-connection on
the seafarer (2010 Magsaysay Maritime Corp. v. Gedo!;
2011 Quizor v. Denholm Crew Management Services, Inc.
and 2012 Casomo v. Career Phi/s. Shipmanagement, Inc.)
But in the 2013 Race/is Case, infra, it ruled that the emplo-
yer had the burden of disputing the presumption; hence,
abandoning its 2010-2012 rulings, supra. However, in Jay
H. Ucayan v. Seacrest Maritime Management, Inc., G.R.
No. 213679, 25 November 2015, it went back to its ruling
that the claimant had the burden of proof. These are
conflicting rulings.
The Romana Clarification
Benedict Romana v. Magsaysay Maritime Corp.
G.R. No. 192442, 9 August 2017
Problem: The "1 2 3 4" Rule (not a legal term)
Despite the disputable presumption of work-
connection for unlisted diseases, the seafarer is
still required to prove 1 2 3 4 so that his disability
will be compensable. In other words, he is re-
quired to prove: (1) that his work involves the risk
factors of the unlisted disease; (2) that he was
exposed to said risks; (3) that the period of his
exposure thereto was sufficient for him to
contract the unlisted disease; and (4) that he did
not contract it due to his notorious negligence.
BAR SYLLABUS-BASED REVIEWER IN 569
LABOR LAW & SOCIAL LEGISLATION
Why impose on him the burden of proving
even just 1 of the 4 when he is supposed to sit
back and enjoy the benefit of the disputable pre-
sumption? Should not his employer be burdened
instead with the task of disputing it?
Explanation (Simplification of Romana v. Magsaysay)
What is disputably presumed is work-connection only.
Compensability is outside the presumption (Atienza v.
Orophil Shipping International Co., Inc., G.R. No. 191049,
7 August 2017). Take note that there are 2 conditions for
compensability, viz., (1) work-connection; and (2) effectivity
of contract. In other words, the disease must be work-con-
nected, and it must have been contracted during the period
of the seafarer's employment contract. For clarity, what the
disputable presumption affects is the first only.
Necessarily, therefore, the seafarer must move for-
ward with evidence to prove that he contracted the unlisted
disease during the effectivity of his contract. How?
There is a prescribed form of evidence to establish
the second requisite, viz., 1 2 3 4, supra. Put simply, bar-
ring notorious negligence (4th requisite), the seafarer con-
tracted the unlisted disease from his exposure to its risk
factors (2nd requisite) for such period of time, i.e., during
the term of his contract, sufficient for him to acquire it (3rd
requisite) - all because his work involved the risk factors of
the disease (1st requisite). Hence, at the end of the day,
the question to ask is: Has performance by the seafarer of
his onboard work increased his risk of contracting the
unlisted disease? If the answer is in the affirmative, then
the resulting disability (if not death) should be compen-
sable.
If the work does not involve the risk factors in ques-
tion, or the exposure thereto is for a period not likely to
cause the seafarer to contract the unlisted disease, the re-
sulting disability/death would not be compensable. Like-
570 SOCIAL LEGISLATION
wise, if the cause of the disability is the seafarer's noto-
rious negligence, e.g., having anal sex with the ship master
knowing him to be HIV positive, then his disability/death
would not be compensable.
In fine, work-connection is different from compensabi-
lity. Thru Atienza and Romana, the SC has adequatey ad-
dressed its seeming flip-flop on the matter. To review, in
the 2014 Race/is Case, the SC required the empoyer to
overcome the disputable presumption; however, in the
2015 Licayan Case, the Supreme Court ruled that, despite
the disputable presumption of work-connection, the sea-
farer must prove compensability.
Note:
1 2 3 4 apply to both listed and unlisted diseases
(Atienza, supra). For listed diseases, Sec. 32-A supplies
the lists of their risk factors, e.g., AML (type of cancer) has
for its risk factor exposure to benzyne.
Comment: Is there a shortcut to the 1 2 3 4 Rule?
In Race/is, where the seafarer died after medical
repatriation, it was held that a medical repatriation was an
exception to the second requisite, i.e., that the disease
must have been contracted during the period of the sea-
farer's employment. Hence, if the purpose of the 1 2 3 4
rule is to establish the second requisite then said purpose
can be equally served with evidence of medical repatria-
tion. Hence, unless the disputable presumption of work-
connection were overcome, compensability should be
deemed established.
If the seafarer is alive, he is around to prove 1 2 3 4.
This must be the reason for the Romana Ruling. After all, it
pertains to disability - not death.
BAR SYLLABUS-BASED REVIEWER IN 571
LABOR LAW & SOCIAL LEGISLATION
Burden of Evidence: Overlapping of Factors
"When the presumption of work-relatedness is
contested by the employer, the factors which the seafarer
needs to prove to rebut the employer's contestation would
necessarily overlap with some of the conditions which the
seafarer needs to prove to establish the compensability of
his illness and the resulting disability. In this regard, the
seafarer, therefore, addresses the refutation of the
employer against the work-relatedness of his illness and,
at the same time, discharges his burden of proving
compliance with certain conditions of compensability." But
even if the employer does not contest the presumption, the
seafarer must still prove 1 2 3 4 (Atienza, supra).
Simplification
For unlisted diseases, there is a disputable presump-
tion that they are work-connected. Necessarily, therefore,
the employer must destroy said presumption. How?
Among others, he may show that the disease was contrac-
ted thru the seafarer's notorious negligence. Now, in the
course of proving 1 2 3 4, the seafarer is not only estab-
lishing the compensability of his disability. At the very
same time, he is rebutting his employer's defense. Where
lies the overlapping? By proving 1 2 3 4, compensability is
proven. And since proof of 1 2 3 4, of which 4 is a part, is
proof of all its parts then the defense of notorious negli-
gence is deemed rebutted at the same time.
Question
'When the presumption of work-relatedness is contes-
ted by the employer, the factors which the seafarer needs to
prove to rebut the employer's contestation would necessarily
overlap with some of the conditions which the seafarer needs
to prove to establish the compensability of his illness and the
resulting disability. In this regard, the seafarer, therefore,
addresses the refutation of the employer against the work-
572 SOCIAL LEGISLATION
BAR SYLLABUS-BASED REVIEWER IN 573
LABOR LAW & SOCIAL LEGISLATION

relatedness of his illness and, at the same time, discharges (c) Fraudulent concealment (of medical condition,
his burden of proving compliance with certain conditions of not medical procedure);
compensability." Explain with an illustration (5%).
(d) Notorious negligence;
Answer (e) Non-use of third physician;
For unlisted diseases, there is a disputable presump- (f) Medical opinion of company physician is more
tion that they are work-connected. Necessarily, therefore, reliable; and
the employer must destroy said presumption. Among (g) Extension of 120 days.
others, he may show that the disease was contracted thru
the seafarer's notorious negligence. Now, in the course of
2. Injury/Accident as the Cause of Disability
proving that: (1) his job involves the risk factors of the
unlisted disease; (2) he was exposed thereto; (3) his To be compensable, the disability must arise from an
period of exposure was sufficient for him to ~ontract the injury that is both (a) work-connected; and (b) sustained
disease; and (4) he is not guilty of gross negligence, the during the effectivity of contract.
seafarer is not only establishing the compensability of his
disability. At the very same time, he is rebutting his Work-Connection Rule
employer's defense. The overlapping lies here: proof of the
The injury must be sustained (a) at the seafarer's
four requisites is proof of compensability. And since proof assigned place of work; and (b) while performing his
of the 4-item factors, of which lack of notorious negligence
assigned work; or (c) sustained elsewhere, as long as in
is a part, is proof of all its parts then the defense of noto-
the course of performing work required by the employer.
rious negligence is deemed rebutted at the same time.
Effectivity of Contract Rule
Effectivity of Contract Rule
The injury must be sustained by the seafarer during
The disease must be contracted by the seafarer
the stipulated period of his employment contract.
during the stipulated period of his employment contract.
Take note that, if disability results, it is the contracting of Usual Employer Defenses
the disease which must take place within the period of the
seafarer's contract whch is the subject of the rule. (a) Non-accident;
However, if death results, the death must occur during (b) Habitual intoxication;
same period, i.e., the seafarer must decide to die while his
contract is effective. (c) Notorious negligence; and
(d) Wilful intent to injure/kill oneself or another.
Usual Employer Defenses
(a) Non-compliance with 3-day reporting require-
ment;
(b) Abandonment of treatment;
574 SOCIAL LEGISLATION
Concept of Disability
Total Disability (TD)
TD is more of an occupational concept than it is a
medical one. It means inability to perform a seafarer's
customary work or work within his training or preparation to
do, and which he has been contracted to perform.
Illustration:
The seafarer is a pianist. He injures his foot in an ac-
cident. Since he can still use his fingers to perform his con-
tracted work, he is not deemed totally disabled because,
occupationally, he is able. If he injures his fingers as to
make it hard or impossible for him to play the piano, he is
deemed totally disabled. Usually, this will lead to his medi-
cal repatriation.
Permanent Disability (PD)
The old test for determining PD was to count the days
of medical management/inability to work. If the total disa-
bility (inability to perform customary work) exceeded 120
days, the total disability status assumed the character of
permanence. As a result, the seafarer got maximum com-
pensation of USD60,000.00 per POEA-SEC. Usually, if
there was a CBA, the amount was doubled.
Jurisprudence on Total Permanent Disability
The 120-240 Day Rule
The company-designated physician has an initial
period of 120 days to conduct further medical examination
and treatment. Within said period, he must: (a) certify that
the disease or injury is not work-connected; (b) he has re-
solved the disability; or (c) assign the disability a grade. If
he does none of these, the total disability becomes perma-
nent after 120 days.
BAR SYLLABUS-BASED REVIEWER IN 575
LABOR LAW & SOCIAL LEGISLATION
The 120-day period is extendible by another 120 days
(Jesus Vergara v. Hammonia Maritime Sevices, Inc., G.R.
No. 172933, 6 October 2008); however, the extension
must be justifiable (Paulino M. Aldaba v. Career Philip-
pines Ship-Management, G.R. No. 2017). If justifiable, the
maximum period for medical management shall be 240
days. Within said period, the company-designated physi-
cian must declare that the disability has been resolved, or
assign it a grade. The certification must be final and de-
finite (Reynaldo Sunit v. OSM Maritime Services, Inc., G.R.
No. 223035, 27 February 2017) and categorical, not condi-
tional or preliminary only.
Note:
If the medical report states that the seafarer's wound
is still open and that he needs to continue his medications,
the assessment is not final (Carcedo v. Maine Marine
Philippines, Inc., G.R. No. 203804, 15 April 2015).
If the 240-day period is exceeded, the total disability
becomes permanent. Likewise, if the medical opinion is not
final and categorical, the total disability becomes perma-
nent after 240 days.
If the company-designated physician is prevented
from making a final assessment by reason of abandon-
ment of treatment on the part of the seafarer, the lapse of
120 or 240 days will not result in a total permanent
disability finding ( CF Sharp Crew Management, Inc. v.
Noel Orbeta, G.R. No. 211111, 25 September 2017).
The Doble Doctrine
The 240-day rule applies only to the company-
designated physician, not to the 3rd physician (Dohle
Philman Manning Agency, Inc., et al. v. Julius Rey Quinal
Doble, G.R. No. 223730, 4 October 2017).
576 SOCIAL LEGISLATION
The Jebsens Instruction
Jebsens Maritime, Inc., et al. v. Florving Rapiz
G.R. No. 218871, 11 January 2017
"It is well-settled that the POEA-SEC is the law
between the parties and, as such, its provisions bind both
of them. Under Section 20 (A) (6) of the 2010 POEA-SEC,
the determination of the proper disability benefits to be
given to a seafarer shall depend on the grading system
provided by Section 32 of the said contract, regardless of
the actual number of days that the seafarer underwent
treatment:
X X X
In this case, respondent's disability was already deter-
mined as only permanent and partial, in view of its classifi-
cation as Grade 11 by the company-designated physician
and Grade 10 by the independent physician. As such, the
award of US$60,000.00 representing Grade 1 (i.e., perma-
nent and total disability) benefits in favor of respondent
clearly has no basis and, consequently, must be struck
down."
The Taok List
C.F. Sharp Crew Management, Inc. v. Joel Taok,
G.R. No. 193679, 18 July 2012, lists eight (8) instances
when maximum disability compensation can be awarded
as follows:
(a) the company-designated physician_ failed to issue
a declaration as to his fitness to engage in sea duty or
disability even after the lapse of the 120-day period and
there is no indication that further medical treatment would
address his temporary total disability, hence, justify an
extension of the period to 240 days;
BAR SYLLABUS-BASED REVIEWER IN 577
LABOR LAW & SOCIAL LEGISLATION
(b) 240 days had lapsed without any certification
being issued by the company-designated physician;
(c) the company-designated physician declared that
he is fit for sea duty within the 120-day or 240-day period,
as the case may be, but his physician of choice and the
doctor chosen under Section 20-8(3) of the POEA-SEC
are of a contrary opinion;
(d) the company-designated physician acknowledged
that he is partially permanently disabled but other doctors
who he consulted, on his own and jointly with his employer,
believed that his disability is not only permanent but total
as well;
(e) the company-designated physician recognized
that he is totally and permanently disabled but there is a
dispute on the disability grading;
(f) the company-designated physician determined
that his medical condition is not compensable or work-
related under the POEA-SEC but his doctor-of-choice and
the third doctor selected under Section 20-8(3) of the
POEA-SEC found otherwise and declared him unfit to
work;
(g) the company-designated physician declared him
totally and permanently disabled but the employer refuses
to pay him the corresponding benefits; and
(h) the company-designated physician declared him
partially and permanently disabled within the 120-day or
240-day period but he remains incapacitated to perform his
usual sea duties after the lapse of the said periods.
Third Physician Rule
Situationer
The company-designated physician issues a Grade
11 disability assessment. The corresponding disability pay
578 SOCIAL LEGISLATION
is USD?,000.00, more or less. Dissatisfied, the seafarer
will seek a second medical consult (consultation) resulting
in a Grade 1 rating. The disability pay increases to USO
60,000.00. In light of the conflicting medical opinions, Sec.
20(8) of the POEA-SEC provides the dispute resolution
mechanism, viz., "the parties may agree on a third physi-
cian whose opinion shall be final and binding on them."
Despite the optional tenor ("may") of Sec. 20(8), J
Brion made the dispute resolution mechanism mandatory.
Hence, if the seafarer does not disclose the second medi-
cal opinion and proceeds to file his complaint, it will be
taken against him. The non-disclosure has the effect of
preventing the employer from initiating the selection of a
third physician (Philippine Hammonia Ship Agency, Inc. v.
Eulogio Dumadag, G.R. No. 194362, 26 June 2013, J
Brion).
Problem 1
The company-designated physician issues a Grade
11. The physician of choice issues a Grade 1. The seafarer
files a complaint for disability compensation. How would
you resolve the claim?
Answer
I will resolve the claim based on the first medical
opinion. The complaint is filed without prior disclosure of
the second medical opinion thereby depriving the employer
(manning agent) of the opportunity to initiate the selection
of a third physician. (Philippine Hammonia Ship Agency,
Inc. v. Eulogio Dumadag, G.R. No.194362, 26 June 2013,
J Brion). Selection is mandatory despite the use of the
term "may" in Sec. 20(8) of the POEA-SEC. This is a
judicial legislation. However, more and more justices have
applied J Brion's interpretation of the rule in subsequent
cases.
BAR SYLLABUS-BASED REVIEWER IN 579
LABOR LAW & SOCIAL LEGISLATION
Problem 2
The company-designated physician issues a Grade
1_ 1. The seafarer files a complaint for disability compensa-
tion. Later, the physician of choice issues a Grade 1. How
would you resolve the claim?
Answer
I will dismiss it on the ground of lack of cause of ac-
tion. At the time of the filing of the complaint, the seafafer
has no medical basis yet (Philman Marine Agency, Inc. v.
Armando Cabanban, G.R. No. 186509, 29 July 2013).
Non-Applicability of the Third Physician Rule: Three
Situations
1. The company-designated physician certifies
that the disability is not work-connected.
Three (3) issues might present themselves for resolu-
tion in crew claims cases, viz: (a) the issue of work con-
~ection: I~ the injury or disease work-connected?; (b) the
issue of fitness to work: Has the company doctor resolved
the medical condition and declared the seafarer fit to
work?; or (c) the issue of grading: Grade 11 or Grade 1?. If
the issue to resolve is work-connection, (a), supra, the
Third Physician Rule does not apply (Leonis Navigation
Co., Inc. and World Marine Panama SA v. Eduardo Obrero
and Mercedita Obrero, G.R. No. 12754, 7 September
2016).
In the situationer, supra, where the issue to resolve is
the proper grading, it has application.
2. The company-designated physician has not
come up with a final, categorical and definite
assessment within 120/240 days.
580 SOCIAL LEGISLATION
"A seafarer's compliance with such procedure presup-
poses that the company-designated physician came up
with an assessment as to his fitness or unfitness to work
before the expiration of the 120-day or 240-day period. Al-
ternatively put, absent a certification from the company-
designated physician, the seafarer had nothing to contest
and the law steps in to conclusively characterize his disabi-
lity as total and permanent." (Elmer Apines v. Elburg Ship-
management Philippines, Inc. and/or Danilo F. Venida,
G.R. No. 202114, 9 November 2016, citing Island Over-
seas Transport Corporation/Pine Crest Shipping Corpora-
tion/Capt. Emmanuel L. Regio v. Armando M. Beja, G.R.
No. 203115, 7 December 2015).
3. The assessment of the company-designated
physician is not communicated to the seafarer.
J Leonen
In Magsaysay Mo/ Marine, Inc. et al. v. Michael Paredes
Atraje, G.R. No. 229192, 23 July 2018, the company doctor
issued an interim disability grade but did not disclose it to the
seafarer.
Grounds for Contesting Third Medical Opinion
Sunit v. OSM Maritime Services, Inc., G.R. No.
223035, 27 February 2017, gives the grounds as follows:
1. Evident partiality;
2. Corruption;
3. Fraud and other undue means;
4. Lack of basis to support the assessment; and
5. Opinion is contrary to law and jurisprudence.
Death Compensation: Rules
Death, to be compensable, must be caused by a di-
sease or injury that is (a) work-connected; and (b) death
BAR SYLLABUS-BASED REVIEWER IN 581
LABOR LAW & SOCIAL LEGISLATION
must occur during the effectivity of the seafarer's
employment contract. Proper Usage: Disease (contracted);
Injury (sustained).
Death Outside Period of Contract: When Not Compen-
sable
2005 Hermogenes v. Osco Shipping Services, Inc.
The seafarer died after three (3) years from termination of
his contract; there was no explanation for the termination
of his contract in just two months; and there was no proof
that his illness was contracted during the effectivity of his
contract.
2007 Prudential Shipping Management Corp. v.
Sta. Rita. The seafarer was repatriated due to umbilical
hernia; he died more than a year later; he died of cardio-
pulmonary arrest secondary to metabolic acidosis, acute
renal failure and hepatocellular carcinoma; in other words,
the death was not connected to his umbilical hernia.
2008 Klaveness Maritime Agency, Inc. v. Benefi-
ciaries of Anthony Atlas. The seafarer died 1 ½ years
after termination of contract; he died of urinary bladder
cancer; and work-connection was not proven.
Death Outside Period of Contract: When Compensable
In C.F. Sharp Crew Management, Inc. v. Ronald
Austria, et al., G.R. No. 190534, 11 February 2016, the
seafarer was covered by the 1996 POEA-SEC which had
no "effectivity of contract" provision unlike the 2000 POEA-
SEC.
1. The 2014 Canuel Case (2nd requisite absent)
The seafarer was medically repatriated due to an on-
board injury. However, he died months after his sign-off/
repatriation. Hence, the second requisite was allegedly ab-
sent. Regardless, it was held that his death was compen-
582 SOCIAL LEGISLATION
sable. His medical repatriation was by reason of a work-
connected injury and he died of acute respiratory failure of
which his injury was the proximate cause (Anita Canuel v.
Magsaysay Maritime Corp., G.R. No. 190161, 13 October
2014).
Note:
Since medical repatriation terminates the employment
contract, there is no sense talking about "effectivity of
contract" after such termination.
2. The 2014 Racelis Case (both requisites absent)
The seafarer was repatriated due to extreme pain on
his ear. Months after his repatriation, he died of an unlisted
disease (brainstem cavernous malformation). Hence, both
requisites were absent. Regardless, the Supreme Court
allowed death compensation (Conchita Race/is v. United
Philippine Lines, Inc., G.R. No. 198408, 12 November
2014).
Note:
The medical repatriation rendered the "effectivity of
contract" requirement inapplicable. Moreover, as to unlis-
ted diseases, there was a disputable presumption of work-
connection which the employer failed to overcome since
the company doctor who ruled out work-connection did not
actually attend to the seafarer. This is a 2014 decision.
In the Canuel Case, the seafarer was repatriated due
to a work-connected injury. He died several months after
his contract was terminated by his medical repatriation. His
death was compensable because medical repatriation is
an exception to the Effectivity of Contract Rule. As ex-
plained above, the subject of the Effectivity of Contract
Rule is the contracting of disease.
In the Race/is Case, the seafarer suffered extreme
· pain on his ear; thus, he was medically repatriated. After
BAR SYLLABUS-BASED REVIEWER IN 583
LABOR LAW & SOCIAL LEGISLATION
several months, he died of an unlisted disease, viz., brain-
stem cavernous malformation. His death was held as com-
pensable because of the presumption of work-connection
which the employer failed to dispute.
Previous Bar Questions
2010 Bar, Part I, Question Nos. VII
A was an able seaman contracted by ABC Recruit-
ment Agency for its foreign principal, Seaworthy Shipping
Company (SSC). His employment contract provided that
he would serve on board the Almieda II for eight (8)
months with a monthly salary of US$450. In connection
with his employment, he signed an undertaking to observe
the drug and alcohol policy which bans possession or use
of all alcoholic beverages, prohibited substances and un-
prescribed drugs on board the ship. The undertaking
provided that: ( 1) disciplinary action including dismissal
would be taken against anyone in possession of the prohi-
bited substances or who is impaired by the use of any of
these substances, and (2) to enforce the policy, random
test sampling would be done on all those on board the
ship.
On his third month of service while the Almieda II was
docked at a foreign port, a random drug test was conduc-
ted on all members of the crew and A tested positive for
marijuana. He was given a copy of the drug test result. In
compliance with the company's directive, he submitted his
written explanation which the company did not find
satisfactory. A month later, he was repatriated to the
Philippines.
Upon arrival in the Philippines, A filed with the
National Labor Relations Commission (NLRC) a complaint
against the agency and the principal for illegal dismissal
with a claim for salaries for the unexpired portion of his
contract.
584 SOCIAL LEGISLATION
a. Was A's dismissal valid? Explain. (3%)
b. Is his claim for salaries for the unexpired portion
of his contract tenable? Explain. (3%)
Answer
a. No, A's dismissal was not valid.
It was not enough that A tested positive for Marijuana
during the random screening test. The company should
have proceeded to conduct a confirmatory test (DOH D.O.
No. 53-03). Without a confirmatory test result, there is no
just cause for dismissing A.
b. Yes, his money claim is tenable.
The illegal dismissal of a seafarer is governed by Sec.
7, R.A. 10022. Pursuant thereto, but as clarified by the
Supreme Court in SAMEER Overseas Placement Agency
v. Joy Cabiles, G.R. No. 5 August 2014, A is entitled to all
salaries he would have earned had his contract not been
illegally preterminated.
201 0 Bar, Part I, Question No. XII
On December 12, 2008, A signed a contract to be
part of the crew of ABC Cruises, Inc. through its Philippine
manning agency XYZ. Under the standard employment
contract of the Philippine Overseas Employment Adminis-
tration (POEA), his employment was to commence upon
his actual departure from the port in the point of hire,
Manila, from where he would take a flight to the USA to
join the cruise ship "MS Carnegie." However, more than
three months after A secured his exit clearance from the
POEA for his supposed departure on January 15, 2009,
XYZ still had not deployed him for no valid reason. Is A
entitled to relief? Explain. (3%)
BAR SYLLABUS-BASED REVIEWER IN 585
LABOR LAW & SOCIAL LEGISLATION
Answer
Yes.
The perfection of A's contract has, created enfor-
ceable rights, just as it has imposed correlative deman-
dable obligations. Hence, its unjustifiable breach entitles A
to relief. Under Sec. 7, R.A. 10022, he can file a money
complaint with the Labor Arbiter for the purpose, among
others, of seeking payment of the salaries he would have
earned had he been deployed.
2013 Bar, Question No. X
For ten (10) separate but consecutive yearly con-
tracts, Cesar has been deployed as an able-bodied sea-
man by Meritt Shipping, through its local agent, Ace
Maritime Services (agency), in accordance with the 2000
Philippine Overseas Employment Administration Standard
Employment Contract (2000 POEA-SEC). Cesar's employ-
ment was also covered by a CBA between the union,
AMOSI.JP, and Meritt Shipping. Both the 2000 POEA-SEC
and the CBA commonly provide the same mode and
procedures for claiming disability benefits. Cesar's last
contract (for nine months) expired on July 15, 2013.
Cesar disembarked from the vessel MN Seven Seas
on July 16, 2013 as a seaman on "finished contract". He
immediately reported to the agency and complained that
he had been experiencing spells of dizziness, nausea,
general weakness, and difficulty in breathing. The agency
referred him to Dr. Sales, a cardio-pulmonary specialist,
who examined and treated him; advised him to take a
complete rest for a while; gave him medications; and de-
clared him fit to resume work as a seaman.
After a month, Cesar went back to the agency to ask
for re-deployment. The agency rejected his application.
Cesar responded by demanding total disability benefits
based on the ailments that he developed and suffered
586 SOCIAL LEGISLATION
while on board Meritt Shipping vessels. The claim was
based on the certification of his physician (internist Dr.
Reyes) that he could no longer undertake sea duties
because of the hypertension and diabetes that afflicted him
while serving on Meritt Shipping vessels in the last 10
years. Rejected once again, Cesar filed a complaint for
illegal dismissal and the payment of total permanent disa-
bility benefits against the agency and its principal.
Assume that you are the Labor Arbiter deciding the
case. Identify the facts and issues you would consider
material in resolving the illegal dismissal and disability
complaint. Explain your choices and their materiality, and
resolve the case. (8%)
Answer
As to the tenurial issue, the facts and issues of
consequence are as follows:
(1) Whether or not Cesar was a tenured employee;
(2) Whether or not his 10-year service affects the
contractual nature of his employment; and
(3) Whether or not he can be dissociated on the
ground of contract expiration.
As to the remunerative issue, the facts and issues to
consider are as follows:
(1) Whether or not Cesar's disability is by reason of a
disease that is both work connected and contracted during
the term of his employment contract.
(2) Whether or not Cesar complied with the 3-day
reporting requirement;
(3) Whether or not the company-designated physi-
cian made a final, categorical and definitive assessment
within 120/240 days.
BAR SYLLABUS-BASED REVIEWER IN 587
LABOR LAW & SOCIAL LEGISLATION
(4) Whether or not Cesar disclosed the medical
assessment of his physician of choice;
(5) Whether or not a third physician was selected
prior to the filing of Cesar's complaint.
2014 Bar, Question No. VI
Lina has been working as a steward with a Miami,
U.S.A.-based Loyal Cruise Lines for the past 15 years. She
was recruited by a local manning agency, Macapagal Ship-
ping, and was made to sign a 10-month employment con-
tract everytime she left for Miami. Macapagal Shipping
paid for Lina's round-trip travel expenses from Manila to
Miami. Because of a food poisoning incident which hap-
pened during her last cruise assignment, Lina was not re-
hired. Lina claims she has been illegally terminated and
seeks separation pay. If you were the Labor Arbiter hand-
ling the case, how would you decide? (4%)
Answer
I will dismiss the complaint for illegal dismissal.
Lina is a seafarer. As such, she is a contractual em-
ployee who cannot require her employer to enter into
another contract of employment with her under the Prin-
ciple of Freedom of Contracts. In effect, Lina cannot be
awarded separation pay. As an alternative relief, sepa-
ration pay is proper only when there is a finding of illegal
dismissal.
2015 Bar, Question No. XV
Victor was hired by a local manning agency as a
seafarer cook on board a luxury vessel for an eight-month
cruise. While on board, Victor complained of chronic
coughing, intermittent fever, and joint pains. He was
advised by the ship's doctor to take complete bed rest but
was not given any other medication. His condition persis-
588 SOCIAL LEGISLATION
ted but the degree varied from day to day. At the end of the
cruise, Victor went home to lloilo and there had himself exa-
mined. The examination revealed that he had tuberculosis.
a. Victor sued for medical reimbursement, damages
and attorney's fees, claiming that tuberculosis was a com-
pensable illness. Do you agree with Victor? Why or why
not?(2%)
b. Due to his prolonged illness, Victor was unable to
work for more than 120 days. Will this entitle him to claim
total permanent disability benefits? (2%)
Answer
(a) TB is listed under Sec. 32-A of the POEA-SEC;
hence, it is a work-related disease. It was also either con-
tracted or aggravated during the effectivity of Victor's con-
tract. Having shown its manifestations on board, Victor
should have been medically repatriated for further exami-
nation and treatment in the Philippines. This obligation was
entirely omitted in bad faith by the company when it waited
for his contract to expire on him before signing him off. On
this basis, Victor is entitled to medical reimbursement, da-
mages and attorney's fees.
(b) No. Victor's TB may be work-related and it may
have developed on board, thereby satisfying the twin-requi-
sites of compensability. However, despite his knowledge of
his medical condition, he failed to report to his manning
agent within three days from his arrival as required by Sec.
20-8(3) of the POEA-SEC. Since he already felt the mani-
festations of TB before his sign-off, he should have sub-
mitted to post-employment medical examination (Jebsens
Maritime Inc. v. Enrique Undag, G.R. No. 191491, 14 De-
cember 2011). The effect of his omission is forfeiture by him
of disability benefits (Coastal Safety Marine Services, Inc. v.
Elmer T. Esguerra, G.R. No. 185352, 10 August 2011). In
effect, the120-day rule has no application at all.
BAR SYLLABUS-BASED REVIEWER IN 589
LABOR LAW & SOCIAL LEGISLATION
2019 Bar, Part II, Question No. 8.16
W Ship Management, Inc. hired Seafarer G as bosun
in its vessel under the terms of the 2010 Philippine Over-
seas Employment Administration- Standard Employment
Contract (POEA-SEC).
On his sixth (6th) month on board, Seafarer G fell ill
while working. In particular, he complained of stomach pain,
general weakness, and fresh blood in his stool. When his
illness persisted, he was medically repatriated on January 15,
2018. On the same day, Seafarer G submitted himself to a
post-employment medical examination, wherein he was re-
ferred for further treatment. As of September 30, 2018, Sea-
farer G has yet to be issued any fit-to-work certification by the
company-designated physician, much less a final and defini-
tive assessment of his actual condition. Since Seafarer G still
felt unwell, he sought an opinion from a doctor of his choice
who later issued an independent assessment stating that he
was totally and permanently disabled due to his illness sus-
tained during work.
Seafarer G then proceeded to file a claim for total and
permanent disability compensation. The company asserts
that the claim should be dismissed due to prematurity
since Seafarer G failed to first settle the matter through the
third-doctor conflict resolution procedure as provided under
the 2010 POEA-SEC.
(a) What is the third-doctor conflict resolution proce-
dure under the 2010 POEA-SEC? Explain. (2%)
(b) Will Seafarer G's claim for total and permanent
disability benefits prosper despite his failure to first settle
the matter through the third-doctor conflict resolution pro-
cedure? Explain. (3%)
(c) Assuming that Seafarer G failed to submit himself
to a post-employment medical examination within three (3)
working days from his return, what is the consequence
thereof to his claim? Explain. (2%)
590 SOCIAL LEGISLATION
Answer
(a) In the event of conflicting medical assessments,
the parties are required to select a third physician whose
finding shall be final and binding on them. Under Sec.
20(8) of the 2010 POEA-SEC, the selection is consensual;
however, jurisprudence has made it mandatory (Philippine
Hammonia Ship Agency, Inc. v. Eulogio Dumadag, G.R.
No. 194362, 26 June 2013).
(b) Yes, it will prosper. The Third Physician Rule has
no application when the company-designated physician
exceeds the 120-day treatment period without making a
final, categorical and definitive assessment. Here, he al-
lowed 209 days to elapse without issuing a fit-to-work as-
sessment or a disability grade (Apines v. Elburg Shipma-
nagement Phil., Inc., G.R. No. 202114. 9 Nov. 2016).
(c) Non-compliance with the 3-day reporting require-
ment results in the forfeiture of G's entitlement to disability
compensation (Sec. 20(8), POEA-SEC).
BAR SYLLABUS-BASED REVIEWER IN 591
LABOR LAW & SOCIAL LEGISLATION
. g_
The Solo Parents Welfare Act
(R.A. 8972)
Policy
Section 2. Declaration of Policy. - It is the policy of
the State to promote the family as the foundation of the
nation, strengthen its solidarity and ensure its total deve-
lopment. Towards this end, it shall develop a comprehen-
sive program of services for solo parents and their children
to be carried out by the Department of Social Welfare and
Development (DSWD), the Department of Health (DOH),
the Department of Education, Culture and Sports (DECS),
the Department of the Interior and Local Government
(DILG), the Commission on Higher Education (CHED), the
Technical Education and Skills Development Authority
(TESDA), the National Housing Authority (NHA), the De-
partment of Labor and Employment (DOLE) and other
related government and non-government agencies.
Coverage
Circumstances
Section 3. Definition of Terms. - Whenever used in
this Act, the following terms shall mean as follows:
(a) "Solo parent" - any individual who falls under any
of the following categories:
(1) A woman who gives birth as a result of rape
and other crimes against chastity even without a final
conviction of the offender: Provided, That the mother
keeps and raises the child;
(2) Parent left solo or alone with the responsi-
bility of parenthood due to death of spouse;
(3) Parent left solo or alone with the respon-
sibility of parenthood while the spouse is detained or
592 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 593
LABOR LAW & SOCIAL LEGISLATION

is serving sentence for a criminal conviction for at Clue: IF NO DADS Unfair to Children
least one (1) year;
I Incapacity (Par. 4)
(4) Parent left solo or alone with the respon-
sibility of parenthood due to physical and/or mental iD.:
F - Family Member (Par. 10)
capacity of spouse as certified by a public medical
N - Nullity/Annulment (Par. 6)
practitioner;
0 - Other Person (Par. 9)
(5) Parent left solo or alone with the respon-
sibility of parenthood due to legal separation or de D - Death (Par. 2)
facto separation from spouse for at least one ( 1) year,
as long as he/she is entrusted with the custody of the A - Abandonment (Par. 7)
children; D - Detention/Service of Sentence (Par. 3)
(6) Parent left solo or alone with the respon- s - Separation (Par. 5)
sibility of parenthood due to declaration of nullity or
annulment of marriage as decreed by a court or by a u - Unmarried (Par. 8)
church as long as he/she is entrusted with the C - Crime (Par. 1)
custody of the children;
(7) Parent left solo or alone with the respon- Qualifications of Dependent
sibility of parenthood due to abandonment of spouse (b) "Children" - refer to those living with and depen-
for at least one ( 1) year; dent upon the solo parent for support who are unmarried,
(8) Unmarried mother/father who has preferred unemployed and not more than eighteen (18) years of age,
to keep and rear her/his child/children instead of ha- or even over eighteen (18) years but are incapable of self-
ving others care for them or give them up to a welfare support because of mental and/or physical defect/disability.
institution;
Parental Responsibility
(9) Any other person who solely provides
parental care and support to a child or children; (c) "Parental responsibility" - with respect to their
minor children shall refer to the rights and duties of the pa-
(10) Any family member who assumes the res- rents as defined in Article 220 of Executive Order No. 209,
ponsibility of head of family as a result of the death, as amended, otherwise known as the "Family Code of the
abandonment, disappearance or prolonged absence Philippines."
of the parents or solo parent.
A change in the status or circumstances of the parent Benefits
claiming benefits under this Act, such that he/she is no (d) "Parental leave" - shall mean leave benefits gran-
longer left alone with the responsibility of parenthood, shall ted to a solo parent to enable him/her to perform parental
terminate his/her eligibility for these benefits. duties and responsibilities where physical presence is
required.
594 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 595
LABOR LAW & SOCIAL LEGISLATION

(e) "Flexible work schedule" - is the right granted to a (b) Suppose Covid Byant lives with Clitty in an apart-
solo parent employee to vary his/her arrival and departure ment paid for by Mr. Ting, with an accompanying kasam-
time without affecting the core work hours as defined by bahay, would it be of any significance to her leave appli-
the employer. cation? Explain. (1%)
Note: A woman may have been raped by a group of (c) Was Clitty's application for 7 days reasonable
drug addicts; however, if her dependent (result of crime) when, as she admitted, she needed a couple of days only?
turns 18, lives permanently with his grandparents, etc. then (0%)
she would lose the rights of a solo parent. A single mom is
not necessarily a solo parent; hence, attending circumstan- Proposed Answer
ces must be looked into. The target of the examiner will be
(a) No.
the 7-day parental leave or right to flexy time; hence, it is
likely he will lay the trap on IF NO DADS Unfair to While adultery is a crime, it is not the crime whereof
Children or the qualifications of a dependent. the Solo Parents Welfare Act speaks. Hence, while Clitty is
a single mom, she cannot be classified as a solo parent.
Hypothetical Problem Likewise, she cannot be such parent owing to the fact that
her child is not living with her as he has been surrendered
Clitty, single and pretty, is a sales lady of the Pines
to the DSWD. Upon these premises, she is not entitled to
Supermart in Baguio City which is owned by Mr. Ting but
the 7-day parental leave applied for by her. Therefore, Mrs.
entirely managed by Mrs. Ting. In March 2020, while the
Ting has not violated any of her rights.
wife was in China to buy test kits for Covid 19, her
husband and Clitty took to each other's arms. Their 2-week (b) No, it would not be of any significance.
rendezvous resulted in a positive test result. Meantime,
Even if Covid Bryant meets all the qualifications of a
Mrs. Ting received a positive test result also - but this time
dependent under the Solo Parents Welfare Act, the fact
for Covid 19. Months later, Clitty gave birth to Covid
remains that Clitty has not been made to discharge paren-
Bryant. In order to prevent a scandal, the baby was falsely
tal responsibility by any of the circumstances listed under
declared to the DSWD as an abandoned child. Unknown to
said law. For this basic reason, she is not a solo parent.
Clitty, a jealous security guard told on her and Mr. Ting
which caused Mrs. Ting to harbor ill feelings towards her. (c) Caveat: In answering Bar questions, you ignore
In December 2020, after Mr. Ting left Baguio City for a 7- irrelevancies.
day Lion's convention in Manila, Clitty informed Mrs. Ting
that she was availing of her solo parent's 7-day leave be-
cause she needed a couple of days to nurse her bruised
legs; however, Mrs. Ting outrightly denied her leave
request.
(a) Has Mrs. Ting violated Clitty's right to a parental
leave under the Solo Parents Welfare Act? Explain. (99%)
596 SOCIAL LEGISLATION 597
BAR SYLLABUS-BASED REVIEWER IN
LABOR LAW & SOCIAL LEGISLATION

E th
Batas Kasambahay (R.A. 10361)
The new law for househelpers is R.A. 10361, otherwise
known as the Kasambahay Act. It is important to know
whether a person rendering services for a household is a
kasambahay or not. If unpaid of wages, does he/she bring
her money complaint to the DOLE Regional Director or the
Labor Arbiter? If found to have been illegally dismissed,
should he/she be reinstated and awarded backwages?
These are crucial questions.
Coverage
A kasambahay is HelLau GarCYa, except a family
driver, one engaged occasionally or sporadically, one under
a foster family home arrangement, and a service provider.
Hel - Helpers, domestic house (Art. 139, supra)
Lau - Laundry personnel
Gar - Gardeners
C - Cooks
Ya - Yayas
Rights and Benefits
The Implementing Rules and Regulations of R.A.
10361 spells out the basic rights of a kasambahay as
follows:
1. Conditions of Employment
RULE IV
RIGHTS OF THE KASAMBAHAY
SECTION 1. Rights and Privileges of Kasambahay.
- The rights and privileges of the Kasambahay are as
follows: (a) Minimum wage;(b) Other mandatory benefits,
such as the daily and weekly rest periods, service incentive
leave, and 13 month pay; (c) Freedom from employers'
interference in the disposal of wages;(d) Coverage under
the SSS, PhilHealth and Pag-lBIG laws;(e) Standard of
treatment;(f) Board, lodging and medical attendance;(g)
Right to privacy;(h) Access to outside communication;(i)
Access to education and training;U) Right to form, join, or
assist labor organization; (k) Right to be provided a copy of
the employment contract as required in Section 7, Rule II;
(I) Right to certificate of employment as required in Section
5, Rule VII; (m) Right to terminate the employment as
provided in Section 2, Rule VII; and (n) Right to exercise
own religious beliefs and cultural practices.
SECTION 11. Standard of Treatment. -The Kasam-
bahay shall be treated with respect by the employer or any
member of the household. He/she shall not be subjected to
any kind of abuse, including repeated verbal or psychologi-
cal, nor be inflicted with any form of physical violence or
harassment or any act tending to degrade his/her dignity,
as defined under the Revised Penal Code, Violence
Against Women and their Children Law (RA 9262), Special
Protection of Children Against Child Abuse, Exploitation
and Discrimination Act (RA 7610) as amended by RA
9231, Anti-Trafficking in Persons Act of 2003 (RA 9208),
and other applicable laws.
SECTION 12. Board, Lodging and Medical Atten-
dance. - The Kasambahay shall be provided by the
employer free basic necessities to include the following:(a)
At least three (3) adequate meals a day taking into consi-
deration the Kasambahay's religious beliefs and cultural
practices; (b) Humane sleeping condition that respects the
person's privacy for live-in arrangement; and (c) Appro-
priate rest and medical assistance, including first-aid medi-
cine, in case of illnesses and injuries sustained during
service without loss of benefits. For Kasambahay under
live-out arrangement, he/she shall be provided space for
rest and access to toilet. At no instance shall the employer
598 SOCIAL LEGISLATION
withdraw or hold in abeyance the provision of these basic
necessities as punishment or disciplinary action to the
Kasambahay.
X X X
SECTION 15. Opportunities for Education and
Training.-The Kasambahay shall be afforded the
opportunity to finish basic education, consisting of elemen-
tary and secondary education. He/she may be allowed
access to alternative learning systems and, as far as prac-
ticable, higher education or technical vocational education
and training. The employer shall adjust the work schedule
of the Kasambahay to allow his/her access to education or
training without hampering the services required by the
employer. Access to education may include financial assis-
tance at the option of the employer. The Department of
Education (DepEd) shall ensure continued access of
Kasambahay to alternative learning system education.
SECTION 16. Membership in Labor Organization.
- The Kasambahay shall have the right to join a labor
organization of his/her own choosing for purposes of
mutual aid and collective negotiation. The Kasambahay
shall be afforded opportunity to attend organization mee-
tings. The Regional Tripartite Industrial Peace Council
(RTIPC), chaired by the DOLE Regional Director, shall
create within the council a sub-committee to ensure ade-
quate representation of the Kasambahay in social dialogue
on issues and concerns peculiar to Kasambahay work and
their welfare.
2. Security of Tenure
RULE VII
POST EMPLOYMENT
SECTION 1. Pre-Termination of Employment. - (a)
In case the duration of employment is specified in the con-
tract, the Kasambahay and the employer may mutually ag-
BAR SYLLABUS-BASED REVIEWER IN 599
LABOR LAW & SOCIAL LEGISLATION
ree upon notice to terminate the contract of employment
before the expiration of its term.(b) In case the duration is
not determined by stipulation or by nature of service, the
employer or the Kasambahay may give notice to end the
employment relationship five (5) days before the intended
termination of employment.
SECTION 2. Termination of Employment Initiated
by the Kasambahay.- The Kasambahay may terminate
the employment relationship at any time before the expira-
tion of the contract for any of the following causes: (a)
Verbal or emotional abuse of the Kasambahay by the em-
ployer or any member of the household;(b) Inhuman treat-
ment including physical abuse of the Kasambahay by the
employer or any member of the household; (c) Commis-
sion of a crime or offense against the Kasambahay by the
employer or any member of the household;_ (d) Violation by
the employer of the terms and conditions of the employ-
ment contract and other standards set forth under this IRR;
(e) Any disease prejudicial to the health of the Kasam-
bahay, the employer, or member/s of the household; and
(f) Other causes analogous to the foregoing. If the Ka-
sambahay leaves without cause, any unpaid salary due,
not exceeding the equivalent of fifteen (15) days work,
shall be forfeited. In addition, the employer may recover
from the Kasambahay deployment expenses, if any, if the
services have been terminated within six (6) months from
employment.
SECTION 3. Termination of Employment Initiated
by the Employer. -An employer may terminate the em-
ployment of the Kasambahay at any time before the
expiration of the contract for any of the following causes:
(a) Misconduct or willful disobedience by the Kasambahay
of the lawful order of the employer in connection with the
farmer's work; (b) Gross or habitual neglect or inefficiency
by the Kasambahay in the performance of duties; (c) Fraud
or willful breach of the trust reposed by the employer on
600 SOCIAL LEGISLATION
the Kasambahay; (d) Commission of a crime or offense by
the Kasambahay against the person of the employer or
any immediate member of the employer's family; (e) Viola-
tion by the Kasambahay of the terms and conditions of the
employment contract and other standards set forth under
this IRR; (f) Any disease prejudicial to the health of the
Kasambahay, the employer, or member/s of the house-
hold; and (g) Other causes analogous to the foregoing. If
the employer dismissed the Kasambahay for reasons other
than the above, he/she shall pay the Kasambahay earned
compensation plus indemnity in the amount equivalent to
fifteen (15) days work.
SECTION 4. Invalid Ground for Termination. -
Pregnancy and Marriage of the Kasambahay are not
considered valid grounds for termination of employment.
SECTION 5. Employment Certification. - Upon the
termination of employment, the employer shall issue the
Kasambahay, within five (5) days from request, a certifi-
cate of employment (Form BK-3) indicating the nature,
duration of the service and work description.
Jurisdiction
Sec. 37 of R.A. 10361 vests jurisdiction on the
Regional Director over the complaint of a kasambahay.
2009 Bar, Question No. VI (Part I)
Albert, a 40-year old employer, asked his domestic
helper, lnday, to give him a private massage. When lnday
refused, Albert showed her Article 141 of the Labor Code,
which says that one of the duties of a domestic helper is to
minister to the employer's personal comfort and conve-
nience.
a. Is lnday's refusal tenable? Explain. (3%)
b. Distinguish briefly, but clearly, a "househelper"
from a "homeworker." (2%)
BAR SYLLABUS-BASED REVIEWER IN 601
LABOR LAW & SOCIAL LEGISLATION
Answer
a. lnday's refusal is tenable. Art. 141 does not con-
template the rendition by a domestic helper of indecent
service. At any rate, the provisions of the Labor Code on
domestic helpers have been supplanted by R.A. 10361, or
the Kasambahay Act. Under said law, a kasambahay is
entitled to humane treatment by the members of the
household she ministers to.
b. The two may be distinguished from each other as
follows:
(1) A domestic helper (kasambahay) ministers to the
personal comfort and convenience of the members of a
household; in contrast, a homeworker processes or fabric-
cates raw materials into finished products;
(2) A domestic helper (kasambahay) works at the
house of the household served; in contrast, a homeworker
works at home or about the premises of his home; and
(3) The terms and conditions of employment of a
domestic helper (kasambahay) are regulated by R.A.
10361; in contrast, those of homeworker are regulated by
P.O. 442.
2012 Bar, Question No. V (Part 11)
The weekly work schedule of a driver is as follows:
Monday, Wednesday, Friday - drive the family car to bring
and fetch the children to and from school. Tuesday, Thurs-
day, Saturday - drive the family van to fetch merchandise
from suppliers and deliver the same to a boutique in a mall
owned by the family.
a. Is the driver a house helper? (5%)
b. The same driver claims that for work performed
on Tuesday, Thursday and Saturday, he should be paid
the minimum daily wage of a driver of a commercial estab-
lishment. Is the claim of the driver valid? (5%)
602 SOCIAL LEGISLATION
Answer
a. Under R.A. 10361, or the Kasambahay Act a fa-
mily driver is not a domestic worker or kasambahay - with
more reason if required to perform tasks directly related to
the business of his employer.
b. The driver's claim is valid. In fact, he can claim the
same commercial pay rate for his work on Monday, Wed-
nesday and Friday because he no longer works as a do-
mestic on said days pursuant to R.A. 10361.
2014 Bar, Question No. I
Linda was employed by Sectarian University (SU) to
cook for the members of a religious order who teach and
live inside the campus. While performing her assigned
task, Linda accidentally burned herself. Because of the
extent of her injuries, she went on medical leave. Mean-
while, SU engaged a replacement cook. Linda filed a
complaint for illegal dismissal, but her employer SU con-
tended that Linda was not a regular employee but a do-
mestic househelp. Decide. (4%)
Answer
Linda is a regular employee.
SU's contention that Linda is a domestic helper is
without basis because the latter did not minister to the per-
sonal comfort of the members of any household as con-
templated by the Kasambahay Act (R.A. 10361). Although
a cook, hence listed, she cannot be classified as a kasam-
bahay because she rendered services for resident religious
teachers in a university which was not a household.
2018 Bar, Question No. Xl(C)
Your favorite relative, Tita Nilda, approaches you and
seeks your advice on her treatment of her kasambahay,
Noray. Tita Nilda shows you a document called a "Contract
BAR SYLLABUS-BASED REVIEWER IN 603
LABOR LAW & SOCIAL LEGISLATION
of Engagement" for your review. Under the Contract of
Engagement, Noray shall be entitled to a rest day every
week, pr~vid~d th_at she may be requested to work on a
r~st d~y 1f T1ta N1l~a should need her services that day.
T1ta Nilda also claims that this Contract of Engagement
should embody all terms and conditions of Noray's work as
the engagement of a kasambahay is a private matter and
should not be regulated by the State.
a) Is Tita Nilda correct in saying that this is a private
matter and should not be regulated by the State? (2.5%)
b) Is the stipulation that she may be requested to
work on a rest day legal? (2.5%)
c) Are stay-in family drivers included under the
Kasambahay Law?
Answer
a) No.
The engagement of an employee is not a contractual
matter only; it is, at the same time, impressed with public
interest to the end that stipulations in employment con-
tracts are subject to special laws for the protection of labor
(Art. 1700, New Civil Code).
b) Yes.
The stipulation is reasonable. A kasambahay is en-
titled to a weekly rest period of a 24 consecutive hours fol-
lowing 6 consecutive days of work. However, for justifiable
ends, a worker's scheduled rest day may be moved to
another day. Hence, unless the stipulation is abused as to
amount to deprivation on a regular basis, it is valid.
c) No.
Stay-in family drivers are not kasambahays. They are
regular employees pursuant to R.A. 10361.
604 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 605
LABOR LAW & SOCIAL LEGISLATION

2019 Bar, Part I, Question No. A.4
Mrs. B, the personal cook in the household of X, filed
a monetary claim against her employer, X, for denying her
service incentive leave pay. X argued that Mrs. B did not
avail of any service incentive leave at the end of her one
(1) year of service and hence, not entitled to the said
monetary claim.
(a) Is the contention of X tenable? Explain. (2.5%)
(b) Assuming that Mrs. B is instead a clerk in X's
company with at least 30 regular employees, will her
monetary claim prosper? Explain (2.5%)
Answer
(a) No, X's contention is not tenable. As a kasam-
bahay, Mrs. B is entitled to service incentive leave (R.A.
10361). As such, she has the prerogative to use it, mone-
tize it after 12 months of service, or commute it until sepa-
ration from service. If she elects the second, she has three
(3) years from demand for payment to avail of the benefit
(Lourdes Rodriguez v. Park N Ride, G.R. No. 222980, 20
March 2017). Hence, not being a prescribed claim, its
withholding is unlawful.
(b) Being a corporate employee, Mrs. Bis a covered
employee. And not being one of the less than ten (10)
regular employees, as her employer has at least 30 regular
employees, she is qualified. Hence, prescription being a
non-issue, she is entitled to service incentive leave.
guidan_ce of Sister Pia of the Religious of the Assumption.
The girls call her Mama Pia. While the children sleep
separately from their mothers, they take their meals with
them inside a common refectory. Every other day, the
Bishop (who is the uncle of Papa Matt and the nephew by
affinity of Mama Pia) whom everyone calls Lola lsko visits
the two homes. For the domestic needs of everybody,
including going to the market, Lo/o /ska hired Amanda as a
stay-in. The children call her Yaya Mandy. In her text
messages to her best friend, Chizy Mosa, she refers to the
little kids as "Mga Germs Ni Papa Matt" because of their
uncanny similarity in facial appearance.
(a) Is Yaya Mandy a kasambahay?
(b) How much should she be paid?
(c) Should Lolo lsko report her to the SSS for
coverage?
Answer
Your answers are as good as mine. You practise
formatting; avoid malicious thoughts; disregard irrelevan-
cies; and show your answers to your friends.

Hypothetical Problem
Right after his ordination on 8 December 2019, Fr.
Matthew was assigned to the St. Francis Xavier Angels
Home. He takes care of the children of unwed girls. The
children fondly call him Papa Matt. Just a few meters
away, in the Bahay Na Ano, the young mothers do cottage
work as their penance for their carnal sins under the
606 SOCIAL LEGISLATION
D own directly or collectively the lands they till or, in the case of
The Comprehensive Agrarian Reform Law
(R.A. 6657)
Constitutional Mandate (Art. XIII)
Section 4
"The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farm-
workers who are landless, to own directly or collectively the
lands they till or, in the case of other farmworkers, to
receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of
all agricultural lands, subject to such priorities and reaso-
nable retention limits as the Congress may prescribe,
taking into account ecological, developmental, or equity
considerations, and subject to the payment of just compen-
sation. In determining retention limits, the State shall res-
pect the right of small landowners. The State shall further
provide incentives for voluntary land-sharing."
Policy
Section 2
"It is the policy of the State to promote social justice ...
thru the establishment of owner cultivatorship of economic-
size farms as the basis of Philippine agriculture. To this
end, a more equitable distribution and ownership of land,
with due regard to the rights of landowners to just compen-
sation and to the ecological needs of the nation, shall be
undertaken to provide farmers and farmworkers with the
opportunity to enhance their dignity and improve the
quality of their lives through greater productivity of agricul-
tural lands."
"The agrarian reform program is founded on the right
of farmers and regular farmworkers, who are landless, to
BAR SYLLABUS-BASED REVIEWER IN 607
LABOR LAW & SOCIAL LEGISLATION
other farm workers, to receive a just share of the fruits
thereof. To this end, the State shall encourage and undertake
the just distribution of all agricultural lands, subject to the
priorities and retention limits set forth in this Act, having taken
into account ecological, developmental, and equity consi-de-
rations, and subject to the payment of just compensation.
The State shall respect the right of small landowners, and
shall provide incentives for voluntary land-sharing." (Sec. 2)
Social Function of Land
The State shall be guided by the principles that land
has a social function and land ownership has a social res-
ponsibility. Owners of agricultural lands have the obligation
to cultivate directly or through labor administration the lands
they own and thereby make the land productive, supra.
Concept of Land Reform
"Agrarian Reform means redistribution of lands, regard-
less of crops or fruits produced, to farmers and regular farm-
workers who are landless, irrespective of tenurial arrange-
ment, to include the totality of factors and support services
designed to lift the economic status of the beneficiaries and
all other arrangements alternative to the physical redistribu-
tion of lands, such as production or profit-sharing, labor admi-
nistration, and the distribution of shares of stocks, which will
allow beneficiaries to receive a just share of the fruits of the
lands they work." (Sec. 3-a; underscored.)
Stock Distribution Option
Hacienda Luisita, Inc., et al. v. Presidential Agrarian
Reform Council (PARC), et al.
G.R. No.171101, 22 November2012
Under Section 31 of RA 6657, a corporation owning
agricultural land may distribute among the qualified benefi-
608 SOCIAL LEGISLATION
ciaries such proportion or percentage of its capital stock
that the value of the agricultural land actually devoted to
agricultural activities bears in relation to the corporation's
total assets via a stock distribution plan (SOP) to be
approved by the PARC.
On 21 November 1989, the PARC approved HLl's
SOP. However, due to HLl's failure to perform certain
obligations, PARC nullified the SOP and issued a Notice of
Coverage in 2006. In its 22 November 2011 resolution in
this case, the Supreme Court affirmed PARC and ordered
land distribution.
In the present case, the issue is just compensation -
more specifically, the date of taking. HLI maintains that the
date of taking was not the date of PARC's approval of the
SOP (1989) because it was not yet deprived of property
then. It maintains that the date of taking is the date of the
Notice of Coverage (2006) because it was then that its
property was subjected to compulsory coverage. 2 The
Supreme Court held that the taking took place in 1989
when PARC approved the SOP.
Note: SOO is no longer a mode of distribution per
amendment of R.A. 6657.
Coverage
The Comprehensive Agrarian Reform Law of 1989
shall cover, regardless of tenurial arrangement and com-
modity produced, all public and private agricultural lands,
as provided in Proclamation No. 131 and Executive Order
No. 229, including other lands of the public domain sui-
table for agriculture (Sec. 4). More specifically the following
lands are covered by the Comprehensive Agrarian Reform
Program (CARP):
2
If the date of taking was 1989, HLI would be paid just compensation based on
P40,000.00 per hectare only.
BAR SYLLABUS-BASED REVIEWER IN 609
LABOR LAW & SOCIAL LEGISLATION
(a) All alienable and disposable lands of the public
domain devoted to or suitable for agriculture. No reclassifi-
cation of forest or mineral lands to agricultural lands shall
be undertaken after the approval of this Act until Congress,
taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific
limits of the public domain.
(b) All lands of the public domain in excess of the
specific limits as determined by Congress in the preceding
paragraph;
(c) All other lands owned by the Government devo-
ted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agri-
culture regardless of the agricultural products raised or that
can be raised thereon. (Sec. 4)
Mechanism
Agrarian law struggles with the problem of soil bondage.
Tersely put, to liberate the farmworker from his bondage to
the farm he toils, that land must be liberated from its owner
first. Thereafter, after just compensation, the State shall deli-
ver it to him. However, he does not get it for free as he has to
pay for it with government assistance. This is accomplished
thru the following provisions of the CARL: (a) rules of identifi-
cation, (b) rules of acquisition, and (c) rules of distribution.
1. Rules of Identification
To be distributed, an agricultural land must be ac-
quired first; however, only covered lands can be acquired.
Thus, it must be determined if they have "social function"
and if their owners have the "social responsibility" to give
them up after just compensation.
Covered lands are: (a) agricultural lands devoted to
agricultural activity; and (b) which are outside the retention
right of the owner and his child/children.
610 SOCIAL LEGISLATION
1.1. Agricultural Land
"Agricultural Land refers to land devoted to
agricultural activity as defined in this Act and not classified
as mineral, forest, residential, commercial or industrial
land." (Sec. 2-c)
1.2. Agricultural Activity
"Agricultural Activity means the cultivation of the soil,
planting of crops, growing of fruit trees, raising of livestock,
poultry or fish, including the harvesting of such farm
products, and other farm activities and practices performed
by a farmer in conjunction with such farming operations
done by person whether natural or juridical."
Livestock, Poultry and Swine
Luz Farms v. Hon. Secretary of the Department of
Agrarian Reform
G.R. No. 86889, 4 December 1990
Luz Farms, a corporation engaged in the livestock
and poultry business, questioned the following provisions
of R.A. 6657: (a) Section 3(b) which included the "raising
of livestock (and poultry)" in the definition of "Agricultural,
Agricultural Enterprise or Agricultural Activity; (b) Section
11 which defined "commercial farms" as "private agricultu-
ral lands devoted to commercial, livestock, poultry and
swine raising ... "; (c) Section 13 which required it to exe-
cute a production-sharing plan; (d) Section 16(d) and 17
which vested on the Department of Agrarian Reform the
authority to summarily determine the just compensation to
be paid for lands covered by the Comprehensive Agrarian
Reform Law; and (e) Section 32 which spelled out the
production-sharing plan mentioned in Section 13.
The issue resolved was whether or not agricultural
activity included the raising of livestock, poultry and swine.
BAR SYLLABUS-BASED REVIEWER IN 611
LABOR LAW & SOCIAL LEGISLATION
It was held that, based on the deliberations of the
Constitutional Commission on the meaning of agricultural
activity, Luz Farms' activity was never intended by the
framers of the Constitution to be included.
Commercial Farming
Commercial farms, which are private agricultural lands
devoted to commercial livestock, poultry and swine raising,
and aquaculture including saltbeds, fishponds and prawn
ponds, fruit farms, orchards, vegetable and cut-flower farms,
and cacao, coffee and rubber plantations, shall be subject to
immediate compulsory acquisition and distribution after (10)
years from the effectivity of the Act. (Sec. 11 )
Aquaculture Land; Aquaculture Employees
Atlas Fertilizer Corporation v. Hon. Sec. of the
Department of Agrarian Reform
G.R. No. 93100, 19 June 1997
Philippine Federation of Fishfarm Producers, Inc. v.
Hon. Sec. of the Department of Agrarian Reform
G.R. No. 97855, 19 June 19, 1997
Petitioners Atlas Fertilizer Corporation, Philippine Fe-
deration of Fishfarm Producers, Inc. and petitioner-in-inter-
vention Archies Fishpond, Inc. and Arsenic Al. Acuna, en-
gaged in the aquaculture industry utilizing fishponds and
prawn farms, assailed Sections 3 (b), 11, 13, 16 (d), 17
and 32 of R.A. 6657, as well as the implementing guide-
lines and procedures contained in Administrative Order
Nos. 8 and 10 Series of 1988 issued by the DAR Secre-
tary, as unconstitutional.
Petitioners claimed that the questioned provisions of
CARL violated the Constitution in the following manner:
1. Sections 3 (b), 11, 13, 16 (d), 17 and 32 of CARL
extended agrarian reform to aquaculture lands even as
612 SOCIAL LEGISLATION
Section 4, Article XIII of the constitution limits agrarian
reform only to agriculture lands.
2. The questioned provisions similarly treated aqua-
culture lands and agriculture lands when they were diffe-
rently situated, and differently treated aquaculture lands
and other industrial lands, when they were similarly situa-
ted in violation of the constitutional guarantee of the equal
protection of the laws.
3. The questioned provisions distorted employment
benefits and burdens in favor of aquaculture employees
and against other industrial workers even as Section 1 and
3, Article XIII of the Constitution mandated the State to
promote equality in economic and employment opportu-
nities.
4. The questioned provisions deprived petitioners of
their government-induced investments in aquaculture even
as Sections 2 and 3, Article XIII of the Constitution man-
dated the State to respect the freedom of enterprises and
the right of enterprises to reasonable returns on invest-
ments and to expansion and growth.
The constitutionality of the above-mentioned provisions
was ruled upon in the case of Luz Farms, Inc. v. Secretary of
Agrarian Reform regarding the inclusion of land devoted to
the raising of livestock, poultry and swine in its coverage.
The issue resolved was the constitutionality of the
same above-mentioned provisions insofar as they included
in their coverage lands devoted to the aquaculture Indus-
try, particularly fishponds and prawn farms.
The Supreme Court, avoiding the constitutional issue,
noted that on February 20, 1995, R.A. 7881 was approved
by Congress amending Sec. 3(b) of R.A. 6657 to exclude
private lands actually, directly and exclusively used for
prawn farms and fishponds; provided, said prawn farms
and fishponds have not been distributed and no CLOAs
have been issued to beneficiaries.
BAR SYLLABUS-BASED REVIEWER IN 613
LABOR LAW & SOCIAL LEGISLATION
R.A. 7881 amended Sec. 11 (1) also as follows:
Sec. 11. Commercial Farming.- Commercial Farms,
which are private agricultural lands devoted to salt beds,
fruit farms, orchards, vegetable and cut-flower farms, and
cacao, coffee and rubber plantations, shall be subject to
immediate compulsory acquisition and distribution after ten
(10) years from the effectivity of this Act. In the case of
new farms, the ten-year period shall begin from the first
year of commercial production and operation, as deter-
mined by the DAR. During the ten-year period, the Gover-
ment shall initiate steps necessary to acquire these lands,
upon payment of just compensation for the land and the
improvements thereon, preferably in favor of organized
cooperatives or associations, which shall thereafter
manage the said lands for the workers-beneficiaries.
Hypothetical Problem
Retired RTC Judge Nicodemo Ferrer maintains a
prawn farm in Binmaley, Pangasinan. Jun Agaylay, his
former utility personnel at Branch 8 of the Benguet RTC,
found it convenient to resign and work on the farm. For his
services, the judge gives him a good share in his prawn
harvest approximating a quarter of 1% of his harvest per
season and which Jun sells to his former officemates. The
monthly equivalent of his compensation is something that
minimum wage earners in Binmaley envy. In addition, the
judge gives him a regular monthly allowance of P10,000.
00 to cover the cost of his city services, transportation and
mobile communication.
Due to the Covid 19 pandemic, Binmaley has to be
locked down. Jun .requests that his 13th month pay for the
past three (3) years be given him. He confides that he has
to send money to Maine Jalteng, his paramour. Convinced
that Jun is his agricultural farmworker whose remunerative
rights are not covered by Labor Law, let alone by P.O. 851,
Judge Ferrer tells him to await his final decision on his
614 SOCIAL LEGISLATION
request. Meantime, he calls you up for advice. What advice
will you give the good judge? (1%)
Proposed Answer
I will advise Judge Ferrer that Jun is his aquaculture
employee whose rights are secured by Labor Law (Art. 6,
Labor Code); and that his prawn farming activity is a com-
mercial activity and not an agricultural activity. For these
reasons, agrarian law has no application. Regardless, Jun
is not covered by P.O. 851 because his compensation ap-
proximates that of a pure commission. Being a worker paid
on purely commission basis, with his allowance being
deemed as extra-compensation in nature, he has no basic
th
salary to divide by 12 to arrive at his 13 month pay;
hence, the judge is exempt.
1.3. Right of Retention (5 has; 3 has)
No person may own or retain agricultural land exceeding
five (5) hectares. Three (3) hectares may be awarded to each
child of the landowner, subject to the following qualifications:
(1) that he is at least fifteen (15) years of age; and
(2) that he is actually tilling the land or directly mana-
ging the farm: provided, that landowners whose lands have
been covered by Presidential Decree No. 27 shall be
allowed to keep the areas originally retained by them
thereunder: provided, further, that original homestead
grantees or their direct compulsory heirs who still own the
original homestead at the time of the approval of this Act
shall retain the same areas as long as they continue to
cultivate said homestead. (Sec. 6)
Right to Choose
The right to choose the area to be retained, which
shall be compact or contiguous, shall pertain to the land-
owner: provided, however, that in case the area selected
BAR SYLLABUS-BASED REVIEWER IN 615
LABOR LAW & SOCIAL LEGISLATION
for retention by the landowner is tenanted, the tenant shall
have the option to choose whether to remain therein or be
a beneficiary in the same or another agricultural land with
similar or comparable features. In case the tenant chooses
to remain in the retained area, he shall be considered a
leaseholder and shall lose his right to be a beneficiary
under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right
as a leaseholder to the land retained by the landowner.
The tenant must exercise this option within a period of one
(1) year from the time the landowner manifests his choice
of the area for retention. (id.)
2. Rules of Acquisition
2.1. Notice of Coverage
A Notice of Coverage (NoC) is necessary to give the
landowner the opportunity to contest the inclusion of his
land for the reason that it is not an agricultural land; or,
even if it is, it is within his right of retention. If the land-
owner is a corporation, the NoC will give it the opportunity
to prove that the land comes within the purview of Sec. 8,
i.e., its lease contract over the land has not expired yet.
2.2. Notice to Acquire
For purposes of acquisition of private lands, the
following procedure shall be followed:
(a) After having identified the landowners and the be-
neficiaries, the DAR shall send its notice to acquire the
land to the owners thereof, by personal delivery or Regis-
tered mail, and post the same in a conspicuous place in
the municipal building and barangay hall of the place
where the property is located. Said notice shall contain the
offer of the DAR to pay a corresponding value in accor-
dance with the valuation set forth in Sections 17, 18, and
other pertinent provisions hereof.
616 SOCIAL LEGISLATION
Acceptance or Rejection
(b) Within thirty (30) days from the date of receipt of
written notice by personal delivery or registered mail, the
landowner, his administrator or representative shall inform
the DAR of his acceptance or rejection of the offer.
Landowner Accepts
(c) If the landowner accepts the offer of the DAR, the
Land Bank of the Philippines (LBP) shall Qfil'.. the land-
owner the purchase price of the land within thirty (30) days
after he executes and delivers a deed of transfer in favor of
the government and surrenders the Certificate of Title and
other muniments of title.
Landowner Rejects or Fails to Reply
(d) In case of rejection or failure to reply, the DAR
shall conduct summary administrative proceedings to de-
termine the compensation for the land requiring the land-
owner, the LBP and other interested parties to submit evi-
dence as to the just compensation for the land, within
fifteen ( 15) days from the receipt of the notice. After the ex-
piration of the above period, the matter is deemed submit-
ted for decision. The DAR shall decide the case within
thirty (30) days after it is submitted for decision.
Payment/Deposit and Possession of Land
(e) Upon receipt by the landowner of the corresponding
payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank design-
nated by the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR shall take imme-
diate possession of the land and shall request the proper
Register of Deeds to issue a Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. The
DAR shall thereafter proceed with the redistribution of the
land to the qualified beneficiaries.
BAR SYLLABUS-BASED REVIEWER IN 617
LABOR LAW & SOCIAL LEGISLATION
Just Compensation
(f) Any party who disagrees with the decision may
bring the matter to the court of proper jurisdiction for final de-
termination of just compensation. (Sec. 16; underscored.)
Factors
In determining just compensation, the cost of acquisi-
tion of the land, the current value of the like properties, its
nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by
government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farm-
workers and by the Government to the property as well as
the non-payment of taxes or loans secured from any
government financing institution on the said land shall be
considered as additional factors to determine its valuation.
(Sec. 17)
Due Process
Due process must be observed in the service of the
required notices. Proper service upon the proper persons
must be observed.
1. Corporate Owner: Persons Who Can Be Served
Summonses, pleadings and notices in cases against
a private domestic corporation before the DARAS and the
regular courts are served on the president, manager, sec-
retary, cashier, agent or any of its directors. These persons
are those through whom the private domestic corporation
or partnership is capable of action. (Roxas, infra.)
2. Service on Mere Administrator
Roxas & Co., Inc. v. Court of Appeals., et al.
G.R. No. 127876, 17 December 1999
618 SOCIAL LEGISLATION
Jaime Pimentel is not the president, manager, secre-
tary, cashier or director of petitioner corporation. Is he, as
administrator of the two Haciendas, considered an agent of
the corporation?
The purpose of all rules for service of process on a cor-
poration is to make it reasonably certain that the corporation
will receive prompt and proper notice in an action against it.
Service must be made on a representative so integrated
with the corporation as to make it a priori supposable that he
will realize his responsibilities and know what he should do
with any legal papers served on him, and bring home to the
corporation notice of the filing of the action. Petitioner's
evidence does not show the official duties of Jaime Pimentel
as administrator of petitioner's haciendas. The evidence
does not indicate whether Pimentel's duties is so integrated
with the corporation that he would immediately realize his
responsibilities and know what he should do with any legal
papers served on him. At the time the notices were sent and
the preliminary conference conducted, petitioner's principal
place of business was listed in respondent DAR's records
as "Soriano Bldg., Plaza Cervantes, Manila," and "7th Fir.
Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro
Manila." Pimentel did not hold office at the principal place of
business of petitioner. Neither did he exercise his functions
in Plaza Cervantes, Manila nor in Cacho-Gonzales Bldg.,
Makati, Metro Manila. He performed his official functions
and actually resided in the haciendas in Nasugbu,
Batangas, a place over two hundred kilometers away from
Metro Manila.
Payment of Compensation by Beneficiaries Under
Voluntary Land Transfer
Direct payments in cash or in kind may be made by
the farmer-beneficiary to the landowner under terms to be
mutually agreed upon by both parties, which shall be
binding upon them, upon registration with the approval by
BAR SYLLABUS-BASED REVIEWER IN 619
LABOR LAW & SOCIAL LEGISLATION
the DAR. Said approval shall be considered given, unless
notice of disapproval is received by the farmer-beneficiary
within thirty (30) days from the date of registration.
In the event they cannot agree on the price of land, the
procedure for compulsory acquisition as provided in Section
16 shall apply. The LBP shall extend financing to the
beneficiaries for purposes of acquiring the land. (Sec. 21)
Note: A beneficiary does not get the land for free.
3. Rules of Distribution
Qualified Beneficiaries
1. A beneficiary shall have these basic quailfica-
tions: willingness, aptitude, and ability to cultivate and
make the land as productive as possible.
Landless Farmers
2. The lands covered by the CARP shall be distribu-
ted as much as possible to landless residents of the same
barangay, or in the absence thereof, landless residents of
the same municipality in the following order of priority:
(a) agricultural lessees and share tenants;
(b) regular farmworkers;
(c) seasonal farmworkers;
(d) other farmworkers;
(e) actual tillers or occupants of public lands;
(f) collectives or cooperatives of the above benefi-
ciaries; and
(g) others directly working on the land.
Provided, however, that the children of landowners
who are qualified under Section 6 of this Act shall be given
preference in the distribution of the land of their parents:
and provided, further, that actual tenant-tillers in the land-
620 SOCIAL LEGISLATION
holdings shall not be ejected or removed therefrom.
Beneficiaries under Presidential Decree No. 27 who
have culpably sold, disposed of, or abandoned their land
are disqualified to become beneficiaries under this Prog-
ram. (Sec. 22)
Distribution Limit
No qualified beneficiary may own more than three (3)
hectares of agricultural land. (Sec. 23)
Collective Ownership
The beneficiaries may opt for collective ownership,
such as co-ownership or farmers cooperative or some
other form of collective organization: provided, that the to-
tal area that may be awarded shall not exceed the total
number of co-owners or members of the cooperative or
collective organization multiplied by the award limit above
prescribed, except in meritorious cases as determined by
the PARC. Title to the property shall be issued in the name
of the co-owners or the cooperative or collective organiza-
tion as the case may be. (Sec. 25)
Transferability of Awarded Lands
1. Lands acquired by beneficiaries under this Act
may not be sold, transferred or conveyed except through
hereditary succession, or to the government, or the LBP, or
to other qualified beneficiaries for a period of ten (10)
years: provided, however, that the children or the spouse
of the transferor shall have a right to repurchase the land
from the government or LBP within a period of two (2)
years.
2. If the land has not yet been fully paid by the
beneficiary, the rights to the land may be transferred or
conveyed, with prior approval of the DAR, to any heir of the
beneficiary or to any other beneficiary who, as a condition
BAR SYLLABUS-BASED REVIEWER IN 621
LABOR LAW & SOCIAL LEGISLATION
for such transfer or conveyance, shall cultivate the land
himself. Failing compliance herewith, the land shall be
transferred to the LBP which shall give due notice of the
availability of the land in the manner specified in the
immediately preceding paragraph.
In the event of such transfer to the LBP, the latter
shall compensate the beneficiary in one lump sum for the
amounts the latter has already paid, together with the
value of improvements he has made on the land. (Sec. 27)
Administrative Adjudication
The DAR is vested with the primary jurisdiction to
determine and adjudicate agrarian reform matters and
shall have exclusive original jurisdiction over all matters
involving. the implementation of agrarian reform except
those falling under the exclusive jurisdiction of the Depart-
ment of Agriculture (DA) and the Department of Environ-
ment and Natural Resources (DENR).
Agrarian Dispute
"Agrarian Dispute refers to any controversy relating
to tenurial arrangements, whether leasehold, tenancy, ste-
~ards_hip ~r otherwise, over lands devoted to agriculture,
1nclud1ng disputes concerning farmworkers' associations or
representation of persons in negotiating, fixing, maintai-
ning, changing, or seeking to arrange terms or conditions
of such tenurial arrangements.
It includes any controversy relating to compensation
of lands acquired under this Act and other terms and con-
ditions of transfer of ownership from landowners to farm-
workers, tenants and other agrarian reform beneficiaries
whether the disputants stand in the proximate relation of
farm operator and beneficiary, landowner and tenant, or
lessor and lessee." (Sec. 2-d)
Note: Labor Dispute (Art. 219 (I), Labor Code)
622 SOCIAL LEGISLATION
"Labor dispute includes any controversy or matter
concerning terms or conditions of employment or the asso-
ciation or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions
of employment, regardless of whether the disputants stand in
the proximate relation of employer and employee."
Finality of Determination
Any case or controversy before it shall be decided
within thirty (30) days after it is submitted for resolution.
Only one (1) motion for reconsideration shall be allowed.
Any order, ruling or decision shall be final after the lapse of
fifteen ( 15) days from receipt of a copy thereof. (Sec. 51)
Frivolous Appeals
To discourage frivolous or dilatory appeals from the
decisions or orders on the local or provincial levels, the
DAR may impose reasonable penalties, including but not
limited to fines or censures upon erring parties. (Sec. 52)
Certification of the BARC
The DAR shall not take cognizance of any agrarian
dispute or controversy unless a certification from the BARC
that the dispute has been submitted to it for mediation and
conciliation without any success of settlement is presented:
provided, however, that if no certification is issued by the
BARC within thirty (30) days after a matter or issue is
submitted to it for mediation or conciliation the case or
dispute may be brought before the PARC. (Sec. 53)
Note: This is the counterpart of SEnA.
Judicial Review
Certiorari
Any decision, order, award or ruling of the DAR on
any agrarian dispute or on any matter pertaining to the
BAR SYLLABUS-BASED REVIEWER IN 623
LABOR LAW & SOCIAL LEGISLATION
application, implementation, enforcement, or interpretation
of this Act and other pertinent laws on agrarian reform may
be brought to the Court of Appeals by certiorari except as
otherwise provided in this Act within fifteen (15) days from
the receipt of a copy thereof.
The findings of fact of the DAR shall be final and
conclusive if based on substantial evidence. (Sec. 54)
Note: See Sec. 60, infra.
No Restraining Order or Preliminary Injunction
No court in the Philippines shall have jurisdiction to is-
sue any restraining order or writ of preliminary injunction
against the PARC or any of its duly authorized or desig-
nated agencies in any case, dispute or controversy arising
from, necessary to, or in connection with the application,
implementation, enforcement, or interpretation of this Act
and other pertinent laws on agrarian reform. (Sec. 55)
Special Agrarian Court
The Supreme Court shall designate at least one (1)
branch of the Regional Trial Court (RTC) within each pro-
vince to act as a Special Agrarian Court.
The Supreme Court may designate more branches to
constitute such additional Special Agrarian Courts as may
be necessary to cope with the number of agrarian cases in
each province. In the designation, the Supreme Court shall
give preference to the Regional Trial Courts which have
been assigned to handle agrarian cases or whose pre-
siding judges were former judges of the defunct Court of
Agrarian Relations.
The Regional Trial Court (RTC) judges assigned to
said courts shall exercise said special jurisdiction in addi-
tion to the regular jurisdiction of their respective courts.
624 SOCIAL LEGISLATION
The Special Agrarian Courts shall have the powers
and prerogatives inherent in or belonging to the Regional
Trial Courts. (Sec. 56)
Special Jurisdiction
The Special Agrarian Courts shall have original and
exclusive jurisdiction over all petitions for the determination
of just compensation to landowners, and the prosecution of
all criminal offenses under this Act. The Rules of Court
shall apply to all proceedings before the Special Agrarian
Courts, unless modified by this Act.
The Special Agrarian Courts shall decide all appro-
priate cases under their special jurisdiction within thirty (30)
days from submission of the case for decision. (Sec. 57)
Appointment of Commissioners
The Special Agrarian Courts, upon their own initiative
or at the instance of any of the parties, may appoint one or
more commissioners to examine, investigate and ascertain
facts relevant to the dispute including the valuation of
properties, and to file a written report thereof with the court.
(Sec. 58)
Orders of the Special Agrarian Courts
No order of the Special Agrarian Courts on any issue,
question, matter or incident raised before them shall be ele-
vated to the appellate courts until the hearing shall have been
terminated and the case decided on the merits. (Sec. 59)
Appeals
An appeal may be taken from the decision of the Spe-
cial Agrarian Courts by filing a petition for review with
the Court of Appeals within fifteen (15) days receipt of no-
tice. of the decision; otherwise, the decision shall become
final.
BAR SYLLABUS-BASED REVIEWER IN 625
LABOR LAW & SOCIAL LEGISLATION
An appeal from the decision of the Court of Appeals,
or from any order, ruling or decision of the DAR, as the
case may be, shall be by a petition for review with the Sup-
reme Court within a non-extendible period of fifteen (15)
days from receipt of a copy of said decision. (Sec. 60)
Note: Sec. 54 pertains to dispositions of the DAR.
They are reviewable by the CA via certiorari; however,
Rule 43 of the Rules of Court provides that decisions of the
DAR shall be reviewed via a petition for review. In contrast,
Sec. 60 pertains to the decisions of the RTC sitting as a
special agrarian court.
Possible Bar Areas
Applicability of Laws
The Labor Code provides:
ARTICLE 6. Applicability. - All rights and bene-
fits granted to workers under this Code, shall except as
may otherwise be provided herein, apply alike to all wor-
kers, whether agricultural or non-agricultural. (As amen-
ded by Presidential Decree No. 570-A, November 1, 1974).
Agricultural employees, as distinguished from
agricultural tenants, get protection from Labor Law too. If a
farmworker has a money claim to assert against the owner
of the land he tills, one has to know when to apply Labor
Law and when to apply agrarian law.
Sample Claims: Overtime pay, 13th month pay, and
holiday pay.
1. Agricultural Employee
Agricultural tenancy is not a purely factual relation-
ship. The written agreement of the parties is far more im-
portant as long it is complied with and not contrary to law.
626 SOCIAL LEGISLATION
Rafael Gelos v. Court of Appeals
G.R. No. 86186, 8 May 1992
Ernesto Alzona and his parents engaged Gelos as
their laborer on a 25,000-sq. m farmland. They executed a
written contract in which it was stipulated that he would be
paid a wage of P5.00 daily. After three years, they in-
formed him of the termination of his services and was
asked to vacate the property. Refusing to vacate, he conti-
nued working on the land. Consequently, Alzona filed a
complaint for illegal detainer. The court found he was a
tenant who had the right to remain on the land as such.
The contract was one of employment. The tasks men-
tioned in the agreement are the work of a mere hired
laborer. They are not peculiar to tenancy. What a tenant
may do may also be done by a hired laborer working under
the direction of the landowner. It is not the nature of the
work involved but the intention of the parties that deter-
mines the relationship between them. Tenancy is not a
purely factual relationship dependent on what the alleged
tenant does upon the land. It is also a legal relationship.
The intent of the parties, the understanding when the far-
mer is installed, their written agreements, provided these
are complied with and are not contrary to law, are even
more important."
2. Agricultural Tenant
Under R.A. 1199, an agricultural tenant is a natural
person in physical possession of land devoted to agricul-
ture, belonging to or legally possessed by another for the
purpose of production through the labor of the former and
of the members of his immediate farm household in consi-
deration of which the former agrees to share the harvest
with the latter or to pay a price certain or ascertainable,
whether in produce or in money, or both. (Sec. 3)
BAR SYLLABUS-BASED REVIEWER IN
627
LABOR LAW & SOCIAL LEGISLATION
Elements of Agricultural Tenancy Relationship
The LACAPH Test
(Memory Tool Only)
L - the relationship is between a Lessor and a
Lessee ( land owner and tenant);
A - the subject of the relationship is an Agricul-
tural Land;
C - the relationship is established by Consent;
A its purpose if Agricultural Production;
P - the service rendered is Personal Cultivation;
and
H - the compensation is a share in the Harvest
or Money.
Note:
1. These are concurrent elements; hence, absent,
one, there can be no tenancy. (Yolanda Caballes v. DAR,
G.R. No. 78214, 5 December 1988)
2. Watch out for AHA (agricultural land, share in
harvest, and agricultural production).
Agricultural Land (AL). AL is a non-MinFoReColnAn
land (non-Mineral, Forest, Residential, Commercial, Indus-
trial, Ancestral) which is devoted to agricultural activity;
Harvest (H). An employee is paid a wage; whereas, a
tenant gets a share in the harvest or money (not wage);
Agricultural Activity (AA). The following are AAs:
production of rice, production of corn, and the like, which
involve plowing, planting and harvesting.
Fidel Teodoro v. Felix Macaraeg
G.R. No. L-207000, 27 February 1969
628 SOCIAL LEGISLATION
After 7 years of leasehold over the property of
Teodoro, Macaraeg was advised to vacate in favour of
another tenant. The new tenant was installed and barred
him from the riceland. Teodoro denied that he was his te-
nant. Allegedly, their contract was a civil lease. Allegedly,
when it expired in 1961, it was no longer renewed.
The Contract of Lease contained the essential ele-
ments of a leasehold tenancy agreement. The land was an
agricultural land; it was devoted to agricultural production;
the parties stipulated that "the property leased shall be
used or utilized for agricultural enterprise only"; the parties
also agreed that the farmland must be used for rice pro-
duction as could be inferred from the stipulation that "the
rental of nine (9) cavans of pa/ay per hectare for one agri-
cultural year ... must be of the same variety (of palay) as
that produced by the LESSEE" which meant that the inten-
tion of the parties was that Macaraeg personally work the
land, which he did; the land was susceptible of cultivation
by a single person as it measured 4 ½ has only. Even a
bigger area may be cultivated personally by the tenant,
singly or with the help of the members of his immediate
farm household; Teodoro was the registered owner of the
landholding and he delivered its possession to Macaraeg
in consideration of a rental certain to be paid in produce.
Farmerworker
1. Farmworker is a natural person who renders ser-
vice for value as an employee or laborer in an agricultural
enterprise or farm regardless of whether his compensation
is paid on a daily, weekly, monthly or "pakyaw" basis. The
term includes an individual whose work has ceased as a
consequence of, or in connection with, a pending agrarian
dispute and who has not obtained a substantially equi-
valent and regular farm employment. (Sec. 2-d)
Note: Art. 219 (f) , Labor Code
BAR SYLLABUS-BASED REVIEWER IN 629
LABOR LAW & SOCIAL LEGISLATION
"Employee" includes any person in the employ of an
employer. The term shall not be limited to the employees of a
particular employer, unless this Code so explicitly states. It
shall include any individual whose work has ceased as a
result of or in connection with any current labor dispute or
because of any unfair labor practice if he has not obtained
any other substantially equivalent and regular employment.
Agricultural Tenancy Relationship (ATR) v.
Employer-Employee Relationship (EER)
Agricultural tenancy relation is different from farm
employer - farm employee relation. In Ge/os vs. CA, supra,
the Supreme Court clarified thus:
"On the other hand, the indications of an employer-
employee relationship are: 1) the selection and engage-
ment of the employee; 2) the payment of wages; 3) the
power of dismissal; and 4) the power to control the emplo-
yee's conduct - although the latter is the most important
element. Tenancy relationship is distinguished from farm
employer-farmworker relationship in that: "In farm emplo-
yer-farmworker relationship, the lease is one of labor with
the agricultural laborer as the lessor of his services and the
farm employer as the lessee thereof. In tenancy relation-
ship, it is the landowner who is the lessor, and the tenant
the lessee of agricultural land. The agricultural worker
works for the farm employer and for his labor he receives a
salary or wage regardless of whether the employer makes
a profit. On the other hand, the tenant derives his income
from the agricultural produce or harvest."
Personal Cultivation
Victoriano Zamoras v. Roque Su, Jr., et al.
G.R. No. 85611, 6 April 1990
Su hired Zamoras to oversee his coconut land in
Dapitan City. He paid him a salary of P2,400 per month
630 SOCIAL LEGISLATION
plus 1/3 of the proceeds of the sales of the copra. Later, he
temporarily laid him off which prompted his filing of an
illegal dismissal complaint with the Labor Arbiter who ruled
in his favour. The NLRC reversed for lack of jurisdiction,
holding that the parties were landlord and tenant.
As overseer, Zamoras hired the tenants and assigned
their respective portions which they cultivated under his
supervision. The tenants dealt directly with him and received
their one-third share of the copra produce from him. Aside
from his administrative work, he regularly managed the sale
of copra processed by the tenants. He did not cultivate any
portion of Su's land personally or with the aid of his imme-
diate farm household. There was no tenancy relation be-
cause the element of personal cultivation was absent.
Consent
Graciano Bernas v. Court of Appeals
G.R. No. 85041, 5 August 1993
Natividad Deita was the owner of a 5,831-sq m
property which she entrusted to her brother, Benigno, so
that he could use the fruits thereof to defray the cost of his
children's education in Manila. The property was leased by
Bernas pursuant to a production sharing arrangement exe-
cuted between Bernas and Benigno. Natividad played no
part in this arrangement. In 1985, the lots were returned by
Benigno to his sister but when the owners sought to take
possession, Bernas refused to relinquish the property.
Bernas was claiming that he was an agricultural lessee
entitled to security of tenure. Natividad filed an action for
recovery of possession. The trial court ruled in favor of
Bernas but this was subsequently reversed by the CA.
Issue:
Is consent by a legal possessor, even if without the
consent of the landowner, sufficient to create tenancy
relationship?
BAR SYLLABUS-BASED REVIEWER IN 631
LABOR LAW & SOCIAL LEGISLATION
Held:
Yes. As legal possessor of the property, Benigno had
the authority and capacity to enter into an agricultural
leasehold relation with Bernas. "The law expressly grants
him, as legal possessor, authority and capacity to institute
an agricultural leasehold lessee on the property he legally
possessed." (at 125-126)
In Hilario vs. JAG, 148 SCRA 573 (1987), the Sup-
reme Court held that tenancy relation does not exist where
a usurper cultivates the land.
Sps. Titus Endaya, et al. v. Court of Appeals
G.R. No. 88113, 23 October 1992
Sps. San Diego owned a rice and corn land which
was cultivated by Pedro Fideli, their tenant, under a 50-50
sharing agreement. In 1974, a lease contract was execu-
ted between the spouses and Regino Cassanova for a
period of four years at P400.00. The contract was re-
newed. Fideli signed both contracts as a witness. Fideli
continuously worked on the property, sharing equally with
Cassanova the net produce of the harvests.
In 1980, Cassanova sold the land to Sps. Endaya
who demanded that Fideli vacate the property; however,
he refused to leave. Instead, he deposited with the Luzon
Development Bank the landowner's share in the harvests.
He then filed a complaint to be declared as the agricultural
tenant of the Endayas.
The issue resolved was whether or not Fideli was an
agricultural lessee entitled to security of tenure.
It was ruled that agricultural tenancy is not created
where the consent of the true and lawful owners is absent.
But this doctrine contemplates a situation where an
untenanted farm land is cultivated without the landowner's
knowledge or against her will or although permission to
632 SOCIAL LEGISLATION
work on the farm was given, there was no intention to
constitute the worker as the agricultural lessee of the farm
land. The rule finds no application in the case at bar where
the petitioners are successors-in-interest to a tenanted
land over which an agricultural leasehold has long been
established. The consent given by the original owners to
constitute private respondent as the agricultural lessee of
the subject landholding binds private respondents who, as
successors-in-interest of the Spouses San Diego, step into
the latter's shoes, acquiring not only their rights but also
their obligations.
Agricultural Land
Under RA 6657, an agricultural land is a "land
devoted to agricultural activity as defined in this Act and
not classified as mineral, forest, residential, commercial or
industrial land." Under RA 3844, "agricultural land" refers
to land devoted to any growth, including but not limited to
crop lands, salt beds, fish ponds, idle land and abandoned
land.
Agricultural Production
Tenancy status arises only if the primary purpose is
agricultural production.
Yolanda Caballes v. Department of Agrarian Reform
G.R. No. 78214, 5 December 1988
Abajon constructed his house on a portion of the pro-
perty of the Millenes family, paying a monthly rental to the
owner. He was also allowed to plant on a portion of the
land and that the produce thereof would be shared by
them on a 50-50 basis. Spouses Caballes bought the land.
The new owners took over and told Abajon to transfer his
dwelling to the southern portion of the property because
th~y would be building a poultry near his house. Abajon
refused. During the trial, the former landowner testified that
BAR SYLLABUS-BASED REVIEWER IN 633
LABOR LAW & SOCIAL LEGISLATION
Abajon dutifully gave her 50% share of the produce of the
land under his cultivation.
It was held that the fact of sharing alone was not
sufficient to establish a tenancy relationship. Abajon's sta-
tus was more of a caretaker who was allowed by the owner
out of benevolence to occupy the land and to plant there-
on. Absent agricultural production, as the primary purpose
being of the parties, there was no tenancy relationship.
Compensation in Money and/or Produce
Jose Matienzo v. Martin Servidad
G.R. No. L-28135, 10 September 1981
A tenant is defined under section 5(a) of Republic Act
No. 1199 as a person who, himself, and with the aid avai-
lable from within his immediate household, cultivates the
land belonging to or possessed by another, with the latter's
consent for purposes of production, sharing the produce
wit~ the landholder under the share tenancy system, or
paying to the landholder a price certain or ascertainable in
produce or in money or both, under the leasehold tenancy
system. From the above definition of a tenant, it is clear
that absent ~ sharing arrangement, no tenancy relationship
had ever existed between the parties. What transpired was
that plaintiff was made overseer over a ?-hectare land
area; he was to supervise applications for loans from those
residing therein; he was allowed to build his house thereon
and to plant specified plants without being compensated;
he was free to clear and plant the land as long as he
wished; he had no sharing arrangement between him and
defendant; and he was not obligated to pay any price
certain to nor share the produce, with the latter.
Hypothetical Question
lslaw wakes up at 4:00 a.m. daily. After breakfast, he
gathers his farm implements and proceeds to plow Ago's
634 SOCIAL LEGISLATION
3-hectare land. Sometimes, he gets an overseas call from
Ago who usually asks him about Noah, the white carabao
he has entrusted to him. When the soil is ready for
planting, Ago's brother-in-law tells him what variety of rice
to plant. At harvest time, he instructs him on how to use
the thresher, how to dry the palay on the highway, and
where to bring it for milling. For his services, !slaw is given
the cash equivalent of 25% of the gross harvest which is
his pre-arranged compensation. On a yearly basis, his
compensation is roughly P36,000.00. Since he works from
Monday to Saturday, his yearly compensation translates to
a daily pay of P115.38 only. Can Ago be criminally prose-
cuted under the Double Indemnity Law (OIL) based on
wage underpayment?
Proposed Answer
No. Ago cannot be criminally prosecuted under the
OIL because there is no underpayment of wages to speak
of. While !slaw is paid in cash, same is just the money
conversion of his 25% share in the harvest generated by
his agricultural activity on the agricultural land of Ago. In
other words, he is not an employee being paid a wage but
a tenant being compensated with a share in the harvest.
Therefore, subject wage law does not apply to him.
Money is not necessarily Wage
Wage is remuneration however designated capable of
being expressed in terms of money, whether on a fixed
basis or ascertained on some other basis, payable under a
contract of employment for work done or to be done or
services rendered or to be rendered, including the
reasonable value of facilities customarily provided by the
employer (Art. 97, Labor Code).
Memory Tool: ReMon HowDesi FixAs PayCon Worser
Fae
BAR SYLLABUS-BASED REVIEWER IN 635
LABOR LAW & SOCIAL LEGISLATION
Termination of Tenancy Relation
Sec. 8 of RA 3844 provides that agricultural leasehold
relation shall be extinguished by the following acts or
omissions:
a) Abandonment of the landholding without the
knowledge of the agricultural lessor;
b) Voluntary surrender of the landholding by the
agricultural lessee, written notice of which shall be served
three months in advance; or
c) Absence of an heir to succeed the lessee in the
event of his/her death or permanent incapacity.
Disturbance Compensation
Conversion of the land to non-agricultural uses also
extinguishes the leasehold relation because the subject
land is no longer an agricultural land and the purpose is no
longer agricultural production. However, under Sec. 16 of
DAR AO 1 (1999), the tenant affected by the conversion is
entitled to disturbance compensation which must be paid
within sixty (60) days from the issuance of the order of
conversion.
Abandonment
In the case of Teodoro vs. Macaraeg, supra, it was
held that the word "abandon," in its ordinary sense, means
to forsake entirely, to forsake or renounce utterly. "The em-
phasis is on the finality and the publicity with which some
thing or body is thus put in the control of another, and
hence the meaning of giving up absolutely, with intent
never again to resume or claim one's rights or interests." In
other words, the act of abandonment constitutes actual,
absolute and irrevocable desertion of one's right or
property."
"Likewise, failure to cultivate the land by reason of
the forcible prohibition to do so by a third party cannot also
636 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN
637
LABOR LAW & SOCIAL LEGISLATION

amount to abandonment, for abandonment presupposes Possible Bar Questions

free will."
Voluntary Surrender of Property
The tenant's intention to surrender landholding cannot
be presumed, much less determined by mere implication,
but must be convincingly and sufficiently proved.
Sps. Nisnisan, et al. v. Court of Appeals
G.R. No. 126425, 12 August 1998
Sps. Gavina and Florencia Nisnisan owned a 4.9774-
hectare land in Davao del Sur. Policarpio, the son of
Gavina, had been cultivating one (1) ha. of said land since
1961. In 1976, Gavina and Policarpio executed a lease-
hold contract which stipulated a sharing arrangement of
1/3:2/3 of the harvest. In 1978, Gavina sold 2 has of the
land, including the land tenanted by Policarpio, to Sps.
Mancera. As a result, Policarpio and family were ejected.
They then filed an action for reinstatement of tenancy
against the Manceras. The Manceras maintained that they
had no cause of action because they voluntarily surren-
dered their landholding.
It was held that, other than their bare allegations, the
Mancera couple failed to present any evidence to show
that Policarpio's family surrendered the landholding volun-
tarily after the private respondents purchased subject
property. Moreover, the filing of the complaint for reinstate-
ment of leasehold tenancy militated against the alleged vo-
luntary surrender. Under Sec. 8 of RA 3844, voluntary sur-
render, as a mode of extinguishing agricultural leasehold
tenancy relations, must be convincingly and sufficiently
proved by competent evidence. The tenant's intention to
surrender the landholding cannot be presumed, much less
determined by mere implication.
Distinctions
Distinguish:
(a) Agricultural tenant from agricultural employee;
(b) Agrarian dispute from labor dispute;
(c) Agricultural land from commercial land;
(d) Just compensation from disturbance compensa-
tion;
(e) Notice of Coverage (NoC) from Notice of Acqui-
sition (NoA);
(f) Agricultural Tenancy Relationship from Employer-
Employee Relationship;
(g) Abandonment under Labor Law from abandon-
ment under Agrarian Law;
(h) CARP from CARPER;
(i) Employer-employee relationship as a matter of
law from agricultural tenancy relationship as a
matter of contract.
Note: Practise formatting your answers.
Hypothetical Problems
1. On Social Legislation
Hypothetical Problem
Following the death of his father, Atty. Anselmo Rey~s
assumed the cultivation of the cacao farm whereof his
deceased father was a beneficiary under R.A. 6657 • Because
he could not yet give up his Law pra~tice in ~anila, Law
classes, and Bar review lectures at various review centers,
638 SOCIAL LEGISLATION
he decided to engage his law student Edward Guiniguin to
help him out, i.e., in the meantime that the latter was still
unsure of challenging the 2020 Bar examinations. Having
been taught by his father the means and methods of planting,
harvesting and marketing cacao, he invited Edward to his
farm and taught him the same techniques which he learned
from his father. Before review classes could open, Edward
started working on the farm of Atty. Reyes on the latter's
undertaking to shoulder the cost of his review, reviewers,
online tutorials, board and lodging, and allowances should he
decide to take the Bar examinations. Time and again, his
observance of the farming methods was checked by Atty.
Reyes who always reminded him that he could always quit if
he found that his job was interfering with his Bar review.
(a) Is there an employer-employee relationship bet-
ween Atty. Reyes and Edward? (1%)
(b) Does Atty. Reyes have to report Edward for SSS
coverage? (2%)
Proposed Answer
(a) Yes.
Employer-employee relationship is a matter of law while
agricultural tenancy relationship is a matter of contract. As a
matter of law, control over means and methods of per-
formance is what indicates the first; whereas, as a matter of
contract, it is the parties' consent to a lessor-lessee affair or
landowner-tenant tie that gives birth to the second.
The relationship entered into by Atty. Reyes and
Edward did not contemplate a permanent landowner-te-
nant relationship or lessor-lessee relationship in which
Edward would be given a share in the harvest of cacao or
paid its money equivalent as his compensation. On the
contrary, he was engaged temporarily to render personal
service - subject to the exercise of Labor Law concept of
control by Atty. Reyes and subject also to his right to
BAR SYLLABUS-BASED REVIEWER IN
639
LABOR LAW & SOCIAL LEGISLATION
resign. Thus, the law vests that tie with the character of
employer-employee relationship.
(b) Yes
Edward is entitled to SSS coverage because he can-
not be classified _as a purely c~sual employee. A purely ca-
sual e~ployee Is one ":'ho Is. engaged occasionally or
sporadically for a very brief period of time. In the case of
Edward, his engagement as an agricultural employee is for
an entire planting season.
2. On Remuneration
Hypothetical Problem
The ACCRA prepared a Kasunduan between the Lutz
Farms and 100 of its farm workers over a 20-hectare
pineapple plantation in General Santos City. The contract
stipulated that the relationship between the parties shall
strictly and exclusively be an agricultural tenancy relation-
ship. As to the workers who had no farming experience,
their individual contracts stipulated a pay rate of P300.00
per day. As to the experienced ones, their contracts gua-
ranteed them a daily pay of P350.00.
After a year, Lutz Farms noticed that the first group
was performing beyond its expectations; hence, it granted
them a pay hike of P26.00 per day. Disadvantaged, or so
they claimed, the second group demanded for the resto-
ration of the wage gap advantage they enjoyed from Day
1. The company refused to adjust because Art. 124 of the
Labor Code had no application to the agricultural tenancy
relationship established by the Kasunduan which every-
body freely, knowing and voluntarily signed. Represented
by Atty. Rigoberto Santiago, Jr., the workers argued that
employer-employee relationship was a question of law;
hence, it could not be stipulated against in any agreement.
Is the compression of the pay gap a wage distortion
that requires an adjustment? Explain. (1%)
640 SOCIAL LEGISLATION
Answer
No.
The facts do not fit the concept of a wage distortion.
In a wage distortion, the wage gap enjoyed by one wage
group over another is either eliminated or seriously con-
tracted, i.e., compressed by more than 50%. Said elimina-
tion or compression is caused by a wage law, wage order,
CBA renegotiation, or merger of companies. When Lutz
Farms gave an across the board pay increase to the group
of inexperienced workers, it did not do so to favour a
particular wage group as that group was not a wage group
at all. The difference in pay did not result from a wage
structure, or hierarchy of positions assigned different wage
rates based on rational considerations as contemplated by
Art. 124 of the Labor Code.
A wage structure implies that the compensation given
is a wage, defined as remuneration capable of being ex-
pressed in terms of money, whether on a fixed basis or
determined on the basis of result of work or time, payable
under a contract of employment - not compensation under
an agricultural tenancy contract, which Atty. Santiago erro-
neously disregarded - for work done or to be done, or
services rendered or to be rendered, including the reaso-
nable value of facilities customarily provided by the
employer. Thus, a wage distortion is possible only within
the concept of a wage which, in turn, is possible only within
employer-employee relationship.
3. On Tenurial Security
Hypothetical Problem
In order to have peace of mind over what was left of
his agricultural land in Bauang, La Union, i.e., after a
forced acquisition by the DAR, Mr. Mario Macayan hired
Atty. Larry Gacayan to cause its conversion to residential
use so that he could sell it to Sen. Manny Villar for a higher
BAR SYLLABUS-BASED REVIEWER IN 641
LABOR LAW & SOCIAL LEGISLATION
price. The area converted embraced all the lands retained
by Mr. Macayan and his 15 children. For humanitarian rea-
sons, he allowed his agricultural lessees to stay in order to
help remove all vestiges of what used to be a rice land pre-
paratory to an expected site inspection by Sen. Villar's
company. Hence, for the next couple of months, they elimi-
nated the irrigation canals, dismantled the huge kamaring,
jack-hammered off the drying pavement, and transferred
all the carabaos of Mr. Macayan to the farm of BM Zander
Fianza in Dalupirip, ltogon, Benguet.
After a successful sale, Mr. Macayan offered P75,
000.00 to each of his workers and advised them to pur-
chase tricycles in order to have a replacement livelihood.
All of them, except Mang Agaton, accepted the offer and
went away to re-plan their lives. As to Mang Agaton, he
went to the Public Attorney's Office (PAO) which invited
Mr. Macayan to a pre-litigation conference to discuss the
separation pay due its client who had 20 years of service
behind him.
(a) What are the Roman rights of a land owner and
which of them includes the right to convert? (1 %)
(b) Does Mr. Macayan have any monetary obligation
to Mang Agaton? (2%)
Proposed Answer
(a) The Roman rights of owners, including land ow-
ners, are: jus utendi, jus abutendi, just fruendi, and jus
possidendi. The right to convert is part of the land owner's
jus abutendi.
(b) While it is defensible position to maintain that the
new work arrangement between Mr. Macayan and Mang
Agaton has novated the agricultural tenancy tie between
them, and that there was a termination of the new relation-
ship for an authorized cause under Art. 298 of the Labor
Code owing to the sale, the PAO should not have cast its
642 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 643
LABOR LAW & SOCIAL LEGISLATION

eyes on separation pay as Mang Agaton had only worked
as an employee for two months. Instead, it should have
invited Mr. Macayan to consider complying with his legal
duty to pay disturbance compensation equivalent to five (5)
times the average of the gross harvest on his landholding
during the last five (5) preceding calendar years to its client
pursuant to Sec. 36 (1) of R.A. 3844, as amended by R.A.
6389.
4. On Procedure
Hypothetical Problem
Under the facts in Question No. 3, the PAO deter-
mined that it needed to file a money action against Mr.
Macayan for his uncompromising stand that either Mang
Agaton lived with the idea of ferrying passengers aboard a
tricycle or that they saw each other in court. After all, he
had millions to spend on any case that the PAO would file.
Fearing a dismissal by the Labor Arbiter of a claim for
disturbance compensation for lack of jurisdiction, which it
finally decided to file, the PAO was still worried that even
the DAR might dismiss the intended complaint because the
future parties were no longer related as landlord and
tenant. What advise will you give the PAO? (1%)
Hypothetical Problem
For impairing the productivity of the rice land subject
of his leasehold contract with its owner by culturing suso,
yoyo and giant snails that proved to be harmful not only to
his farm but also to adjoining farms, Ka Dungkoy was ins-
tantly dispossessed thereof by the owner. Consequently,
the land was leased to a deserving neighbour who imme-
diately eliminated the menace with the help of the Muni-
cipal Agriculturist. Do the facts present a tenurial issue? If
so, articulate and resolve it. ( 1% )
Answer
Yes, they do.
The tenurial issue presented is whether or not the
dispossession is in accordance with law.
Based on the facts, it is not in accordance with law.
Under Sec. 36 of R.A. 3844, dispossession of tenants must
be authorized by the court in a judgment that is final and
executory based, among others, on the lessee's failure to
adopt proven farm practices necessary to conserve the
land, improve its fertility, and increase its productivity.

Answer
I will advise the PAO to unload the case to a sea-
soned agrarian law practitioner. (Erase. Be humble, sim-
ple, and gracious.) I will advise the PAO to file the com-
plaint with the DAR because the money dispute is an agra-
rian dispute regardless of the fact that the future parties no
longer stand in the proximate relation of landlord and te-
nant or lessor and lessee. Moreover, the remunerative is-
sue is resolvable thru the application solely of agrarian law.

5. On Due Process
644 SOCIAL LEGISLATION
H Guiding Principles
Universal Health Care Act
The National Health Insurance Act of 1995
(R.A. 7875, as amended by R.A. 10606)
The Concept of Philhealth
Philhealth is a purchaser of health services. "Purcha-
sing is not about procurement of commodities, supplies,
civil works, or technical services for use in the health sec-
tor. Nor is it about the recruitment of health workers or
managers. It is more encompassing than these, and more
strategic. Purchasing is about how it should buy health ser-
vices on behalf of a group of people which has contributed
resources, either through taxes, premiums, or point-of-ser-
vice payments, in exchange for anticipated health ser-
vices."3
The parties involved are: Philhealth as the purchaser
of health services; beneficiary who is a Philhealth member;
and a Philhealth- accredited health provider. The provider
renders the covered service and Philhealth pays for it.
Policy
Sec. II, Art. XIII of the 1987 Constitution declares that
the State shall adopt an integrated and comprehensive
approach to health development which shall endeavor to
make essential goods, health and other social services
available to all the people at affordable cost; that priority of
the needs of the underprivileged, sick, elderly, disabled,
women, and children shall be recognized; and it shall be
the policy of the State to provide free medical care to
paupers. Pursuant to this policy, the Philippine National
Health Insurance Program was set up.
3
"A Critical Analysis of Purchasing of Health Se,vices in the Philippines: A Case
Study of Phi/Health" by Oscar F. Picazo, Valerie Gilbert T. Ulep,lda Marie
Pantig, and Beverly Lorraine Ho.
BAR SYLLABUS-BASED REVIEWER IN 645
LABOR LAW & SOCIAL LEGISLATION
1. Universality. The Program shall provide all citi-
zens with the mechanism to gain financial access to health
services, in combination with other government health
programs. The National Health Insurance Program shall
give the highest priority to achieving coverage of the entire
population with at least a basic minimum package of health
insurance benefits;
2. Equity. The Program shall provide for uniform
basic benefits. Access to care must be a function of a
person's health needs rather than his ability to pay;
3. Responsiveness. The Program shall adequately
meet the needs for personal health services at various
stages of a member's life;
4. Social Solidarity. The Program shall be guided
by community spirit. It must enhance risk sharing among
income groups, age groups, and persons of differing health
status, and residing in different geographic areas;
5. Effectiveness. The Program shall balance
economical use of resources with quality of care;
6. Innovation. The Program shall adapt to changes
in medical technology, health service organizations, health
care provider payment systems, scopes of professional
practice, and other trends in the health sector. It must be
cognizant of the appropriate roles and respective strengths
of the public and private sectors in healthcare, including
people's organizations and community-based health care
organizations;
7. Devolution. The Program shall be implemented in
consultation with local government units (LG Us), subject to
the overall policy directions set by the National Government;
8. Fiduciary Responsibility. The Program shall
provide effective stewardship, funds management, and
maintenance of reserves;
646 SOCIAL LEGISLATION
9. Informed Choice. The Program shall encourage
members to choose from among accredited health care
providers. The Corporation's local offices shall objectively
apprise its members of the full range of providers involved
in the Program and of the services and privileges to which
they are entitled as members. This explanation, which the
members may use as a guide in selecting the appropriate
and most suitable provider, shall be given in clear and
simple Filipino and in the local languages that is
comprehensible to the member;
10. Maximum Community Participation. The Prog-
ram shall build on existing community initiatives for its
organization and human resource requirements;
11. Compulsory Coverage. All citizens of the Philip-
pines shall be required to enroll in the National Health In-
surance Program in order to avoid adverse selection and
social inequity;
12. Cost Sharing. The Program shall continuously
evaluate its cost sharing schedule to ensure that costs
borne by the members are fair and equitable and that the
charges by health care providers are reasonable;
Note: USE IC
The most likely question on this is "Give five (5)
Philhealth guiding principles and explain each. Take note
of the underscored principles.
Terms
1. Means Test. A protocol administered at the ba-
rangay level to determine the ability of individuals or house-
holds to pay varying levels of contributions to the Program,
ranging from the indigent in the community whose contribu-
tions should be totally subsidized by government, to those
who. can afford to subsidize part but not all the required
contributions for the Program.
BAR SYLLABUS-BASED REVIEWER IN 647
LABOR LAW & SOCIAL LEGISLATION
2. Portability. The enablement of a member to avail
of Program benefits in an area outside the jurisdiction of
his Local Health In·surance Office.
Coverage (Art. 111)
SEC. 7. Enrollment. - The Corporation shall enroll
beneficiaries in order for them to avail of benefits under
this Act with the assistance of the financial arrangements
provided by the Corporation under the following catego-
ries: "(a) Members in the formal economy; "(b) Members in
the informal economy; "(c) Indigents; "(d) Sponsored mem-
bers; and "(e) Lifetime members. (As amended by Sec. 5,
R.A. 10606).
Note:
R.A. 11223 (2019) entitled •~n Act Instituting Universal
Health Care for All Filipinos, Prescribing Reforms in the
Health Care System, and Appropriating Funds Therefor" or
simply "Universal Health Care Act" seeks to "ensure that all
Filipinos are guaranteed equitable access to quality and
affordable health care goods and services, and protected
against financial risks". The law guarantees full range of high
quality health care services - from preventive to promotive,
curative, rehabilitative, and palliative - at affordable cost.
Dependents
1) the legitimate spouse who is not a member;
2) the unmarried and unemployed legitimate, legiti-
mated, illegitimate, acknowledged children as appearing in
the birth certificate; legally adopted or stepchildren below
twenty-one (21 ) years of age;
3) children who are twenty-one (21) years old or
above but suffering from congenital disability, either physi-
648 SOCIAL LEGISLATION BAR SYLLABUS-BASED REVIEWER IN 649
LABOR LAW & SOCIAL LEGISLATION

cal or mental, or any disability acquired that renders them Excluded Personal Health Services
totally dependent on the member for support;
The Corporation shall not cover expenses for health
4) the parents who are sixty (60) years old or above services which the Corporation and the DOH consider
whose monthly income is below an amount to be deter- cost-ineffective through health technology assessment.
mined by the Corporation in accordance with the guiding "The Corporation may institute additional exclusions and
principles set-forth in Article I of this Act. limitations as it may deem reasonable in keeping with its
protection objectives and financial sustainability." ( Sec. 11,
Benefits as amended by Sec. 8, R.A. 10606)
1. Inpatient Benefits
2. Outpatient Benefits
3. Z Benefits
The Z-Benefit packages include mandatory services
for the totality of care that are essential for the treatment of
the condition, hospital services such as accommodation,
medicines, laboratories and professional fees and other
services or alternative guideline recommendations that
may be needed by the patient.

Entitlement to Benefits
A member whose premium contributions for at least
three (3) months have been paid within six (6) months prior
to the first day of availment, including those of the depen-
dents, shall be entitled to the benefits of the Program:
Provided, That such member can show that contributions
have been made with sufficient regularity: Provided, fur-
ther, That the member is not currently subject to legal pe-
nalties as provided for in Section 44 of this Act. "The fol-
lowing need not pay the monthly contributions to be en-
titled to the Program's benefits:
(a) Retirees and pensioners of the SSS and GSIS
prior to the effectivity of this Act; and
(b) Lifetime members. (Sec. 12, as amended by Sec.
9, R.A. 10606)
 BAR SYLLABUS-BASED REVIEWER IN 651
LABOR LAW & SOCIAL LEGISLATION

PART VIII NOTES

JURISDICTION AND REMEDIES With due respect, I have taken the liberty of simpli-
fying the syllabus on "Jurisdiction and Remedies", as well
8 as of presenting this part as:
Labor Arbiter
LABOR PROCEDURE 1
B
Regional Director Overview

C Since the Bar examiner is not expected to ask for a

Voluntary Arbitrator definition, this practical definition of labor procedure can be
proposed without citation because there is none: Labor
D procedure is the means by which the power to hear and
National Conciliation-and Mediation Board resolve labor disputes is conferred, acquired, and exer-
cised resulting in a disposition or judgment, as well as the
g means by which said outcome may be challenged.
Med-Arbiter
A diagram for Labor Procedure, Appendix "C", has
.E been devised to serve as a visual aid .
Bureau of Labor Relations
Explanatory Notes:
G
National Labor Relations Commission Twin-Jurisdictional Rules
1. Reasonable Causal Connection Rule
H
Secretary of Labor and Employment Labor jurisdiction is determined by employer-em-
ployee relationship (SMC v. Etcuban, G.R No.
127639, 3 December 1999; Sonza v. ABS-CBN, G.R.
! No. 138051, 10 June 2004; Bar 2015, Question No.
Court of Appeals
XXI; Bar 2015, Question No. XXII). It requires that the
matter brought to a labor tribunal or agency must
4 have reasonable causal connection to EER, i.e., it
Supreme Court
arose from it.

650 1.1. Exceptions

1
This is a reproduction of 80 pages of my Survival Notes in Labor Law 2020
~- '
652 JURISDICTION AND REMEDIES
1.1.1. DOLE Advisory 4, s. 2016 (even
independent contractor talents are allowed to file
complaints with the DOLE- RD).
1.1.2. Sec. 7, R.A 10022. Deployment of
OFWs make them employees. If undeployed,
they are not. Regardless, undeployed OFWs can
file money claims with the LA.
1.1.3. Art. 219 (e), Labor Code. There can
be a labor dispute "regardless of whether the
disputants stand in the proximate relation of
employer and employee" as in
(a) Inter-union disputes
(b) Intra-union disputes
These disputes do not arise from EER. Re-
gardless, the disputants are heard by the RD or
BLR.
1.1.4. Art. 260, Labor Code. ULPs of
labor organizations v. workers and union mem-
bership. EER is not an element of these ULPs.
But they are for the LA or VA to hear and resolve
because they generate labor disputes "regard-
less of whether the disputants stand in the proxi-
mate relation of employer and employee."
1.1.5. Medical Repatriation. A medically
repatriated seafarer is no longer an employee. If
he dies outside the period of his employment
contract, his dependents can litigate before the
Labor Arbiter to claim death compensation.
1.2. Post- Employment Claims
1.2.1. Portillo v. Lietz, G.R. No. 196539,
10 Oct. 2012. A claim for liquidated damages ari-
sing from breach of a Non-Compete Clause
(NCC) is a post-employment claim; hence, an
BAR SYLLABUS-BASED REVIEWER IN 653
LABOR LAW & SOCIAL LEGISLATION
employer cannot interpose it as a counterclaim in
a labor case for payment of withheld salaries.
Reason: NCC can only be violated after termi-
nation of EER.
1.2.2. Century Properties, Inc. v.
Babiano, et al., G.R. No. 220978, 5 July 2016. If
the NCC provides that the employee shall not
join a competitor company during and after his
employment as an employee, agent or consul-
tant and he violates his undertaking by joining
another company engaged in the same line of
business as an agent or consultant (not as an
employee), the claim for liquidated damages is
no longer a post-employment claim. Reason: the
NCC can be violated even during employment.
2. Sole Reference to Labor Law Rule
The core issue of the case must be resolvable
thru the application solely of Labor Law. If resolvable
thru the application also of other laws, e.g., NCC,
Constitution and CEDAW, the case should be brought
to a regular court (Halaguena, et al. v. PAL, 2
October 2009).
Note:
2.1. Labor Issue. It is an issue pertaining to
renumeration, health and safety, self-organization,
representation (Art. 292, Labor Code) or tenure (Art.
294, Labor Code).
Habeas Data
Meralco v. Lim
G.R. No. 184769, 5 October 2010
(En Banc)
Meralco directed the transfer of Lim from
Bulacan to Laguna based on a report that she was
654 JURISDICTION AND REMEDIES
under threat by unknown persons. She regarded her
transfer as punitive and not attended by due process.
She also downplayed the threat, calling it a joke. In
order to frustrate her transfer, she demanded for a
copy of the alleged report. However, Meralco deemed
it wise not to accede to her demand. Consequently,
she filed a petition for writ of habeas data with the
Bulacan RTC, praying for a TRO also to stop her
transfer. The court gave her a TRO as well as a writ
of habeas data.
The Supreme Court held that the writ of habeas
data was not available for the protection of property or
commercial interests. Since employment is a property
right then the remedy was not proper. Moreover,
Meralco was not engaged in collecting and storing of
data or information; hence, it could not be proceeded
against via a petition for a writ of habeas data. Finally,
the RTC had no jurisdiction because the dispute was
a labor dispute because it arose from the alleged
violation of tenurial right and statutory due process.
2.2. Civil Issue. One that does not arise from
matters pertaining to working hours, wage and bene-
fits (remunerative labor standards issue), health and
safety (protective labor standards issue), right to orga-
nize (organizational issue), right to represent workers
for purposes of collective bargaining (representation
issue), or right to tenure (tenurial issue).
The NLRC can determine the civil issue of pro-
perty ownership if necessary in resolving a labor is-
sue, e.g., propriety of withholding an employee's last
salary.
Milan v. NLRC
G. R. No. 202961, 4 February 2015
The NLRC can determine the issue of property
ownership when it aids it in resolving a labor issue.
BAR SYLLABUS-BASED REVIEWER IN 655
LABOR LAW & SOCIAL LEGISLATION
Whether or not to order the payment of an employee's
last salary which has been withheld for lack of
clearance over properties in his possession is
resolvable by first determining the ownership of said
properties.
Hypothetical Problem
For violating a non-compete clause, a resigned
employee's last pay was withheld. This prompted him
to file a recovery complaint with the LA. In the case,
the employer interposed a counterclaim for liquidated
damages based on said violation. It also argued that
payment of the salary required prior processing of
clearance which was not likely to be issued owing to
the employee's continued possession of company
laptop and files. In defense, the employee argued that
subject properties were his. Does the LA have
jurisdiction over the case?
Note:
The problem involves three issues: (a) the em-
ployee's money claim; (b) the employer's counter-
claim; and (c) the ownership issue.
Answer
The answers to the three underlying questions
are as follows:
(a) The LA has jurisdiction to hear and resolve
the issue of unlawful withholding of salary because
the claim has reasonable causal connection to emplo-
yer-employee relationship and the alleged illegal with-
holding is resolvable thru the application solely of Art.
113 of the Labor Code.
(b) The LA has no jurisdiction over the counter-
claim because it is a post-employment claim.
656 JURISDICTION AND REMEDIES BAR SYLLABUS-BASED REVIEWER IN 657
LABOR LAW & SOCIAL LEGISLATION

(c) The LA can preliminarily resolve the pro- 1.2.2. Inter-party (Party autonomy;
perty issue because it is necessary to the resolution preferential use of voluntary modes)
of the issue of unlawful withholding of salary.
1.2.3. Contractual & Impressed with
public interest (Art. 1700, NCC)
Related Matters
1.2.4. In Personam (Principle of Total
1. Pointers on Employer-Employee Relationship Insulation; Principle of Limited Liability; Prin-
1.1 A Question of ciple of Unaltered Responsibility; Principle
of Separate Legal Personalities; Principle of
Fact. Surrounding facts determine the factual Piercing the Veil of Corporate Fiction;
existence of EER. Administrative agencies determine Instrumentality Rule)
its factual existence, subject to the duty of the courts
to respect that finding and, if based on substantial 2. EER Tests
evidence, to accord it finality. 2.1. Four-Fold Test: Its Component Tests
Law. If law ordains that it exists then parties to 2 .1 .1. Selection Test
agreements cannot stipulate against it.
2.1.2. Wage Test
Note: 2.1.3. Dismissal Test
As a question of law, EER is "intended" by law, 2.1.4. Control Test (CT)
i.e., law gives it its meaning, signification or concept.
It is a fact if the "intention" has an "extension" or an 2.2. Economic Dependence Test (EDT)
'out there" counterpart or representation. Hence, the 2.3. Two-tier Test (CT + EDT)
law conceptualizes EER as a legal tie that rests on
2.4. Ministerial Exception Rule/Ecclesiastical
Labor Law concept of control, i.e., means and me-
Affair Test
thods control. Does the relationship between A and B
represent this legal tie? If yes, because B controls Note:
both result and A's means of attaining it, "intention"
1. Art. 295, Labor Code (formerly Art. 280) is an
and "extension" are deemed connected. Therefore, a
employee status test and not an EER test. In other words,
real EER obtains between A and B.
the nature of work as necessary or desirable does not
1.2. Important Characteristics of EER signal EER because such kind of work can be contracted
out to an independent contractor as well.
1.2.1. Assymetrical (Milan v. NLRC, G.R.
No. 202961, 4 Feb. 2015). Asymmetrical or 2. If an employee works for less than 8 hours daily,
relation between non-equals. (Apply: Social it does not destroy his employee status (Legend Hotel
Utility Theory, J. Leonen; Theory of Manila Case, J Bersamin).
Compassionate Justice)
658 JURISDICTION AND REMEDIES
3. A stipulation in a contract that the personal ser-
vices of the party engaged be paid with talent fees does
not rule out EER if the amount of the fee approximates that
of a wage only. Art. 97 of the Labor Code, on wage, uses
the term "however designated" which includes talent fees if
of such amount only (id.).
4. Mode of compensation, e.g., payment based on
result, does not contradict EER. Hence, pieceraters, wor-
kers paid on task basis, and workers paid on purely com-
mission basis are employees. Their classification as such
simply affects their entitlement to labor standards benefits.
Hence, they cannot be denied tenure on that basis alone.
5. Designation of pay as "salary" on payslips is not
an evidence of EER (Reyes v. Glaucoma Foundation,
Inc.).
6. Stipulations on mandatory employee benefits,
e.g., 13th month pay, will not make a bona fide talent an
employee (Sonza).
3. Uses
3.1. Art. 82 (Labor Standards Claims)
3.1.1. Jurisdiction (Reasonable Causal
Connection Rule, supra)
3.1.2. Cause of Action
Questions to Ask:
(a) Is the claimant an employee?
(b) Is he covered?
(c) Is he suffering from a special disquali-
fication? (Less than 10 Rule for HP;
Less than 10 Rule for SIL; and Not
More Than 5 Rule for NSD)
BAR SYLLABUS-BASED REVIEWER IN 659
LABOR LAW & SOCIAL LEGISLATION
(d) Has he complied with the prerequisites
of his claim (e.g., rendition of work bet-
ween 10:00 p.m. and 6:00 a.m. for
NSD)
(e) Does the employer have a valid de-
fense? (prescription, waiver, payment,
res judicata, etc.)
3.2. Coverage of Right to Self-Organization
3.2.1. Right to join (right of workers)
3.2.2. Right to Vote in a CE (right of
employees)
3.2.3. Right to Participate in a Strike (right
of employees; RTC can issue TRO to bar non-
employees)
3.3. Coverage of 13th Month Pay (PD 851)
3.3.1. Right of all land-based employees
receiving basic salary
3.3.2. Agricultural lessees do not get 13th
month pay
3.3.3. Independent contractor talents (non-
employees) get it under Advisory 4, s. 2016
3.4. SSS Coverage (R.A 8282)
All employees enjoy SSS coverage, except
CAFGO (purely Casual employees, Filipinos engaged
by Alien vessels while outside Philippine territory,
employees of Foreign governments & international
organizations (unless covered by administrative ag-
reements between their employers and SSS), Go-
vernment employees and other employees excluded
by the Commission (e.g., employees of a job con-
tractor vis-a-vis the latter's principal).
660 JURISDICTION AND REMEDIES
2014 Bar {Purely Casual Employee)
Simplification:
Don Luis was approached by Lando for a job.
The former had no need for the latter's services then.
Realizing later there was a need to trim his plants, he
looked for Lando and engaged him.
(a) Was there employer-employee relationship
between Don Luis and Lando?
(b) Did Don Luis have the duty to report Lando
for SSS coverage?
Note:
Since it is obvious that the examiner had wanted
to surface "purely casual employee", the answer to
Letter "a" should be Yes; otherwise, one could not
speak of a purely casual employee if Lando was not
an employee. To Letter "b", therefore, the answer
should be No because Lando was a purely casual
employee. Note that the Bar problem used past tense;
hence, the answer should be past tense.
Hypothetical Question {Connecting R.A. 8282 to
R.A. 10361)
The examiner can always repeat the 2014 Bar
problem. If inclined to, he might increase the points
assignment. As to why, he would want the Kasamba-
hay Act to be mentioned also in the answer. To earn
maximum points, one should add that Lando has no
SSS coverage (although a gardener, hence, a kasam-
bahay) because his casual engagement is at the
same time sporadic or occasional only.
3.5. GSIS Coverage (R.A 8291)
BAR SYLLABUS-BASED REVIEWER IN 661
LABOR LAW & SOCIAL LEGISLATION
The Four-Fold Test is also used to determine
EER. The following have GSIS coverage:
3.5.1. Appointive and elective government
employees;
3.5.2. Receiving basic salary; and
3.5.3. Not over 65 years of age.
Aspects of Labor Procedure
1. Conferment of Jurisdiction
Subject to the Express Stipulation Rule or Vivero
Ruling Uurisdiction by stipulation), the rule has always
been that law confers jurisdiction over the subject matter of
a case. Jurisdiction is conferred as follows:
1.1. Voluntary Arbitrator {VA): Subject to
Grievance Machinery & SEnA
1.1.1. Traditional Jurisdiction over (a)
CBA interpretation or implementation; and (b)
enforcement or implementation of company
personnel policy (Art. 274, Labor Code).
Note:
RTC has jurisdiction over a petition for dec-
laratory relief seeking nullification of a CBA provi-
sion. Nullification is neither interpretation nor im-
plementation (Halaguena, et al. v. PAL, 2
October 2009).
Jurisdiction by Stipulation (Express
Stipulation Rule, Vivero v. CA, G.R. No. 138938,
24 October 2000). VA can hear and resolve pre-
agreed disputes (Art. 275, Labor Code).
1.2. Labor Arbiter (LA): Subject to SEnA
662 JURISDICTION AND REMEDIES BAR SYLLABUS-BASED REVIEWER IN 663
LABOR LAW & SOCIAL LEGISLATION

1.2.1. Cases conferred by 1.3.8. CBA Deregistration

(a) Art. 224, Labor Code;
1.4. Med-Arbiter (CE Petitions): No SEnA since
(b) Sec. 7, R.A. 10022 (OFW money a CE petition is not a complaint.
claims);
1.4.1. CE Petition
(b) PO EA-SEC (Seafarers' money claims)
If not verified, Med-Arbiter should not dis-
(c) NLRC Rules of Procedure miss the petition because CE does not initiate a
(i) Referred wages distortion disputes litigation. It is just a means of verification as to
in UE; and the workers' will on which union must represent
them.
(ii) Enforcement of compromise
agreements. 1.4.2. Valid CE Petition

1.2.2. Except intracorporate controversies (a) Formal Requisites: The petition

(Matling Industrial & Commerical Corp. v. must
Coros, 13 October 2010) (i) be in writing;

1.3. Regional Director (RD): Subject to SEnA (ii) be signed and verified.

1.3.1. Kasambahay (Sec. 37, R.A. 10361) (b) Substantial Requisites: The
petition must state
1.3.2. Media Talents (Advisory 4, S. 2016)
(i) that the petitioner is a
1.3.3. Apprentices (after exhaustion of legitimate labor organiza-
administrative remedies) tion with CR;
1.3.4. Art. 128 (money claims and health & (ii) that the petition is not
safety issues) barred;
1.3.5. Art. 129 (subject to SEnA, simple (iii) name, address and nature
money claims) of business of employer;
1.3.6. WACLIU Disputes (inter & intra (iv) a description of the CBU
union disputes involving Workers sought to be represented;
Associations (WA), Charters &
Locals (CL) and Independent Unions (v) approximate number of
(IU) employees in the CBU;

1.3.7. CR Cancellation (Direct Attack (vi) the names and addres-

Rule) ses of other LLOs in the
CBU;
664 JURISDICTION AND REMEDIES BAR SYLLABUS-BASED REVIEWER IN 665
LABOR LAW & SOCIAL LEGISLATION

(vii) that the establishment is
organized or unorganized;
(viii) if organized, it is supported
by 25% of the CBU mem-
bers whose names must
be submitted.
1.4.3. Nature of CE.
CE is investigative. Being so, the employer
is a standby; hence, he cannot move to dismiss
a CE petition, or appeal a CE order, i.e., in un-
organized establishments (The Heritage Hotel
Manila, et al v. SOLE, et al., G.R. No. 172132,
23 July 2014). A CE is just a mode of verification
and not a litigation. Being so, an EER finding
made by the Med-Arbiter does not amount to res
judicata in a case before the NLRC (Sandoval
Shipyards, Inc. v. Pepito, G. R. No. 143428, 25
June 2001 ).
1.4.4. Valid CE Requisites
(a) Not barred; and
(b) Majority of the eligible voters
cast their votes (Major ELVOT
CASVOT)
Non-ELVOTs:
(i) Non-employees
(ii) Non-members of the CBU involved
(iii) CBU members of less than 3 months
(vi) Subversives (this will not be given in
light of the repeal of the Anti-Subver-
sion Act)
(vii) Dismissed employees, unless: dis-
missed by reason of ULP or current
labor dispute; no substantially equiva-
lent and regular employment yet; and
they contested their dismissal before a
forum of appropriate jurisdiction.
1.4.5. CE Winner: Union with majority vote
based on the valid votes (Major
VOTVALVOT)
2. Acquisition of Jurisdiction
Jurisdiction conferred must be lawfully acquired;
otherwise, it cannot be exercised. The filing of a veri-
fied complaint bearing a non-forum shopping certifica-
tion is the usual manner of initiating acquisition of
labor jurisdiction.
By way of exception, the Regional Director
acquires visitorial jurisdiction by serving a notice of
inspection on establishments.
1. Voluntary Arbitrator (VA)
1.1. Modes of Acquisition
1.1.1. Thru a Submission Agreement
(SA) if both employer and contracting union
are willing to submit their dispute to
voluntary arbitration.

(iv) Confidential employees; 1.1.2. Thru a Notice to Arbitrate (NTA) if

one of them is unwilling. Only the exclusive
(v) Legal secretaries; corporate secreta- bargaining representative (EBR) or sole
ries exclusive bargaining agent (SEBA) can
666 JURISDICTION AND REMEDIES
serve an NTA (Tabigue vs. lnterco, G.R.
No. 183335, 23 December 2009).
1.1.3. By Appointment if both are
unwilling despite their contractual obligation
to go to the VA. If before the LA, they can
appoint the LA as their VA.
1.2. Appeal of the Decision of the LA appointed
as VA. Same rules.
1.2.1. Appeal shall be to the CA, not NLRC
because the LA's decision is that of an "LA
sitting as VA by appointment".
1.2.2. Appeal period: VA to CA under Rule
43, Rules of Court, is 15 days. The 10 days
under Art. 276 Labor Code, is the period for
filing an MR with the VA. (Guagua National
Colleges v. CA, 28 Aug. 2018)
1.2.3. Rule 43 does not require an appeal
bond.
2. Labor Arbiter (LA)
2.1. Complaint & Summons
Jurisdiction is acquired thru the filing of a verified
complaint (Sec. 1, Rule Ill, 2011 NLRC Rules of Pro-
cedure, as amended) and service of summons (Sec.
3, Rule V, 2011 NLRC Rules of Procedure, as
amended) following referral for filing of complaint
after a failed SEnA (Sec. 1, R.A. 10396; Art. 234,
Labor Code). Only matters included in the complaint
are deemed brought; hence, un-brought causes can-
not be prosecuted in the complainant's position paper
(Sec. 12 (c), Rule V, 2011 NLRC Rules of Pro-
cedure, as amended) and relief not prayed for
cannot be awarded, unless implied. For example, the
complaint charges illegal dismissal but does not
BAR SYLLABUS-BASED REVIEWER IN 667
LABOR LAW & SOCIAL LEGISLATION
include a prayer for backwages. Even the complai-
nant's position paper does not ask for it. In such case,
backwages can be awarded being a logical conse-
quence of a finding of illegal dismissal per Santos v.
NLRC which is based on Art. 279 (old) of the Labor
Code.
2.2. General Prayer for Relief (GPR)
A relief not specifically prayed for can be awar-
ded by virtue of the GPR if the facts alleged in the
complaint and the evidence introduced so warrant
(BPI Family Savings Bank v. Buenaventura, 508
Phil. 423, 2005). But its basis must at least be
touched upon in the position paper or memorandum.
3. Regional Director (RD)
3.1. Visitorial Power (Art. 128)
3.1.1. Service of Notice of Inspection (D.O
183, s.2017)
3.1.2. Initiation
(a) Routine Inspection (motu proprio).
(b) Complaint Inspection (by
complaint; when there is a SEnA
referral).
3.2. Adjudicatory Power (Art. 129)
3.2.1. Bringing ("must be brought") of the
Simple Money Claim.
3.2.2. Initiated by Complaint.
4. Med-Arbiter
Filing of verified CE Petition
668 JURISDICTION AND REMEDIES
5. Bureau of Labor Relations (BLR)
5.1. Original Jurisdiction. Jurisdiction is ac-
quired thru the filing of a verified FlnTCAM
petition, infra.
5.2. Appellate Jurisdiction. Jurisdiction is ac-
quired thru the perfection of a WACLIU
appeal, infra.
6. National Labor Relations Commission (NLRC)
6.1. Appeals (thru perfection of appeals from Art.
129 and Art. 224 decisions).
6.2. Injunction (by verified petition).
6.3. Extraordinary Remedies (by verified peti-
tion).
6.4. Certified Cases (thru a certification order
from SOLE).
7. Secretary of Labor and Employment (SOLE)
7.1. Review Power. Acquired thru the perfection
of an appeal. Under D.O. 183, s. 2017, an
employer is not allowed to file a motion to
reduce appeal bond when appealing a visi-
torial order of the RD. No filing of MRs also
with the RD for being dilatory (D.O. 183, s.
2017).
7.2. Assumption Power. Acquired whether
there is a petition to assume or not. The
remedy is given to the State and not to the
parties to the dispute.
7 .3. Suspension Power. Exercisable based on
a report from below that an intended dis-
missal is in implementation of mass lay-off
BAR SYLLABUS-BASED REVIEWER IN 669
LABOR LAW & SOCIAL LEGISLATION
or will cause a serious labor dispute (Art.
292, Labor Code).
7.4. Control & Supervision Power is exerci-
sable sua sponte.
3. Exercise of Jurisdiction
Jurisdiction must be exercised without grave abuse;
otherwise, the effect would be ouster of jurisdiction resul-
ting in a void judgment. Hence, that judgment can be va-
cated on appeal. And if it is an appellate tribunal that
gravely abuses its review power, its judgment can be
nullified by the certiorari or Rule 65 court.
3.1. Voluntary Arbitrator (VA)
3.1.1. After a failed Grievance Machinery (GM)
proceedings, the VA shall hear and resolve the
case. There is no need to refer the case to the
GM if the VA has already acquired jurisdiction
over it.
3.1.2. Per Abalos, et al. v. Philex Mining
Corp., the VA can issue an alias writ of execu-
tion ordering separation pay due to impossibility
of reinstatement without violating:
(a) Principle of Finality of Judgments;
and
(b) Principle of Immutability of Final
Judgments.
3.1.3. Immediate Reinstatement. The VA's reins-
tatement order is no different from the LA's reins-
tatement order due to the Full Protection Clause
(Baronda v. CA, G.R No. 161006, 14 October
2015).
3.2. Labor Arbiter (LA)
3.2.1. Reception of Evidence and Judgment
670 JURISDICTION AND REMEDIES BAR SYLLABUS-BASED REVIEWER IN 671
LABOR LAW & SOCIAL LEGISLATION

3.2.2. Contempt (No TRO & injunctive power); Note:

3.2.3. Residual Power to execute the reinstate-
ment order, i.e., despite appeal;
3.2.4. He must use every means to ascertain the
facts of a case, including admission of a late
position paper (Immaculate Concepcion Ru-
ling).
3.3. Regional Director (RD)
If found liable resulting in suspension or
closure of his business, the employer shall be
ordered to pay replacement wages to affected
workers. This obligation attaches only if the order
of suspension or closure is issued by the RD but
not when it is issued by the DENR (NAMAWU v.
Marcopper Mining Corp., G.R. No. 174641, 11
November 2008).

3.3.1. Visitorial Power: How enforced 3.3.4. Ouster of Jurisdiction

(a) Issuance of compliance orders Sec. 3, Rule II of the Rules on the Dis-
(COs); and position of Labor Standards Cases in the Re-
(b) Issuance of writs of execution in the gional Offices requires referral of cases to the
event of non-rectification of violations. LA when employer-employee relationship no
longer exists. However, if cessation of the rela-
3.3.2. Prohibited Pleadings (D.O. 183, s. 2017) tionship occurs in the course of the proceedings,
(a) Motion to reduce appeal bond not before, the RD shall not be ousted of his
jurisdiction (Rizal Security & Protective Servi-
(b) Motion to dismiss ces, Inc. v. Hon. Director Alex E. Maraan, G.R.
(c) Motion for bill of particulars No. 124915, 18 February 2008). In Catholic
Vicariate of Baguio v. Hon. Sec. Sto. Tomas,
(d) Motion for intervention 2008, certain workers went home to their pro-
(e) Motion for inhibition vinces in the course of the proceedings before
the RD resulting in termination of EER. For that
(f) MR of interlocutory orders
reason, they were unable to verify the appeal
(g) Motion to quash writ of execution subsequently taken to the SOLE. Yet they were
equally granted relief. All said, cessation of EER
(h) Dilatory and obstructive motions
must take place before the RD takes cognizance
3.3.3. Powers (exercisable when health and of the case in order to validly support an ouster.
safety rules are violated):
3.3.5 Visitorial Power is Exercisable Over
(a) Suspend business operations; and
Establishments
(b) Close establishments.
Visitorial power is not exercisable over indi-
vidual workers but over establishments. Hence,
once vaidly acquired, even if workers do not sign
672 JURISDICTION AND REMEDIES
complaints or not all of them verify their appeal,
they can be granted relief. (Catholic Vicariate,
supra).
3.3.6. Adjudicatory Power (Art. 129)
It is the power to adjudicate simple money
claims brought by complaint. Jurisdiction is
based on "individual aggregate claims"; hence,
the RD must refer the case to the LA if the total
amount exceeds P5,000.00. Unlike visitorial
power, adjudicatory power is not shared by the
RD with the SOLE. Adjudicatory power does not
cover health and safety issues; hence, the RD
cannot suspend business operations or close
establishments based on violations of Remune-
rative rules. Neither can he order payment of
replacement wages.
3.3.7. Visitorial Power (VP) v. Adjudicatory
Power (AP)
(a) As to exercisability, VP is exerci-
sable over establishments; whereas, AP is
exercisable over individual workers. Hence, once
a Notice of Inspection has been served, verifi-
cation by all employees of the appeal taken from
the RD to the SOLE is not required. Less than all
can verify it (Catholic Vicariate of Baguio v.
Sec. Sto. Tomas, G.R. No. , 2008).
(b) As to appeal, a VP order is ap-
pealable to the SOLE in 10 days; whereas, an
AP decision is appealable to the NLRC in 5
days.
(c) As to motion to reduce appeal
bond, it is not available in VP appeals; whereas,
it is available in AP appeals because NLRC rules
govern said appeals.
BAR SYLLABUS-BASED REVIEWER IN 673
LABOR LAW & SOCIAL LEGISLATION
(d) As to extent of power, VP covers
money claims and health & safety issues; where-
as, AP covers simple money claims only.
(e) As to power of suspension & clo-
sure, it is part of VP; whereas, AP does not
allow the RD to suspend or close.
3.4. Med-Arbiter
3.4.1. Resolution of CE Petitions
(a) Must hear and resolve, if the es-
tablishment is organized.
(b) Must automatically grant, if the es-
tablishment is unorganized.
3.4.2. Certification of Winner
(a) EBR by virtue of CE or Con-EL
(Run-off Election)
Where the mode of selection is
traditional CE or Con-El, EBR status is
conferred thru certification by the Med-
Arbiter.
(b) EBR by virtue of SEBA Request
A SEBA request is addressed to
the RD. If granted, the Med-Arbiter will
certify the requesting union as the
EBR/SEBA.
3.5. Secretary of Labor & Employment (SOLE)
3.5.1. Powers
(a) Review Power
In The Heritage Hotel Manila v. NUWHRAIN-
HHMSC, G.R. No. 178296, 12 January 2011, the RD
reviewed the CE Order of the Med-Arbiter. In turn, the
674 JURISDICTION AND REMEDIES
BLR reviewed the decision of the RD. When the BLR
Director inhibited, being former counsel of the
respondents, the SOLE reviewed the case.
(b) Assumption Power (Art. 278(9),
Labor Code)
Characteristics: broad, plenary, extraordinary
and discretionary (omit "full" because "plenary" means
"full" as in "Ave Maria, gratia plena ... Hail Mary, full of
grace."
Limit to Discretionary Power. "Where anything
is left to any person to be done according to his
discretion, the law intends it must be done with a
sound discretion, and according to law... It is not a
mental discretion to be exercised ex gratia, but a
legal discretion to be exercised in conformity with
the spirit of the law, and in a manner to subserve and
not to impede or defeat the ends of substantial
justice." (Lamb v. Phipps, 22 Phil 488, cited in PLDT
v. CA, et al., G.R. No. 162783, 14 July 2005).
(c) Suspension Power (Art. 292,
Labor Code)
In the event of a prima facie finding that the
intended dismissal in implementation of a mass lay-off
or will cause a serious labor dispute, the SOLE's
representatives, e.g., RD, can submit a report to that
effect. Acting on said report, the SOLE may suspend
the effects of the dismissal (Art. 292, Labor Code).
The NLRC cannot TRO an intended dismissal.
Neither can the RD TRO a dismissal for an authorized
cause even if he should find same to be in bad faith.
There are no such remedies. So if the examiner will
ask for a remedy, one may give him the suspension
power of the SOLE, i.e., convince the RD/LA to make
BAR SYLLABUS-BASED REVIEWER IN 675
LABOR LAW & SOCIAL LEGISLATION
and submit such report so that, on its basis, the SOLE
may exercise his power to suspend.
(d) Control and Supervision Power
In the event of inhibition by the BLR Director in
an appeal, the case can be brought up to the SOLE
for resolution in the exercise of his power of control
and supervision over the BLR. However, if the BLR
Director is incapacitated, the case should be brought
down to his subordinates (The Heritage Hotel Manila
v. NUWHRAIN-HHMSC, G.R. No. 178296, 12
January 2011 ).
3.6. Med-Arbiter
3.6.1. Powers
(a) Issue CE Orders
The Med-Arbiter hears and resolves verified
CE petitions. If not verified, he should not dis-
miss the petition because CE is not a litigation
but a mode of verification only to determine
the workers' choice as to which union should
represent them for purposes of collective
bargaining. A CE order is not a judgment on the
merits; hence, his finding of £ER does not
amount to res Judicata (Sandoval Shipyards,
Inc. v. Pepito, et al., G.R. No. 143428, 25 June
2001 )..
(b) Certify the CE Winner
The Med-Arbiter does not conduct the elec-
tion. After allowing the petition thru his CE
Order, the case goes to an election officer of
the DOLE-RD who conducts it. If the election
yields a winner, the Med-Arbiter will certify it as
the EBR.
676 JURISDICTION AND REMEDIES BAR SYLLABUS-BASED REVIEWER IN 677
LABOR LAW & SOCIAL LEGISLATION

3.6.2. No Collateral Attack Rule (NCAR) Answer

The legal personality of the petitioning union XYZ Union may file a petition for decertification with
cannot be challenged in the CE proceedings the Med-Arbiter.
pursuant to the NCAR. Only a direct attack is
allowed. Why? To attack means to seek CR 3.6.5. CBA Deregistration
cancellation which is for the RD to grant. The
basis of the NCAR, therefore, is lack of Hypothetical Problem
jurisdiction. Suppose, after certification, a CSA is entered into
3.6.3. No Prejudicial Questions Rule followed by the cancellation of the CR of ABC Union, what
(NPQR) would be the remedy of XYZ Union?

Hypothetical Problem Answer

ABC Union files a CE petition with the Med-Arbiter. XYZ Union may filed a petition for CSA deregistration
XYZ Union files a CR cancellation petition/complaint with the RD.
against it with the RD. Thereafter, it moves for the Note: CSA deregistration will destroy the Contract
suspension of the CE proceedings on the ground that the Bar; hence, XZY Union can file a CE petition before the
cancellation proceedings is a prejudicial question. Should onset of the freedom period of subject CBA.
the Med-Arbiter suspend?
3.7. Bureau of Labor Relations (BLR)
Answer
3.7.1. Original Jurisdiction over FlnTCAM
No. Under D.O. 40-03, prejudicial questions have Cases
been unrecognized unlike under the regime of the Fortune
(a) FlnTCAM (Federations, Industry
Tobacco Case. So the CE proceedings must continue,
Unions, Trade Centers & Chapters,
subject to the outcome of the cancellation proceedings.
Affiliates, Members)
3.6.4. EBR Decertification (b) Cases
(i) Inter-Union Cases (e.g., CAM v.
Hypothetical Problem
FlnT).
Suppose the CE petition is resolved ahead of the
(ii) Intra-Union Cases (e.g., FlnT
cancellation petition resulting in the certification of ABC
members v. FlnT officers).
Union as the EBR, what would be the remedy of XYZ
Union? 3.7.2. Appellate Jurisdiction over decisions
in WACLIU Cases
(a) WACLIU (Workers Associations, Char-
ters. Locals, Independent Unions)
678 JURISDICTION AND REMEDIES
(b) WACLIU Decisions
(i) Inter-Union decisions of RD
(XYZ Union v. ABC Union for CR
cancellation).
(ii) Intra-Union decisions of RD
(Members of XYZ Union v.
Officers of XYZ Union for
disciplinary action due to misuse
of union funds).
3.7.3. CE Appeals and CE Protests
Appeals from CE orders go up to the SLR;
whereas, orders disposing of protests challenging
CE results go up to the SOLE.
Reason: CE order is issued by the Med-Arbiter
who is under the SLR; whereas, election protests
are resolved by the RD who is under the SOLE.
3.7.4. CE Petitions in the Public Sector
The Med-Arbiter does not hear and resolve CE
petitions under E.O. 180. It is the SLR which has
jurisdiction.
3.8. National Labor Relations Commission
3.8.1. Appellate Power
(a) Art. 225(c), formerly Art. 218(c), of
the Labor Code allows the NLRC to "correct,
amend, or waive any error, defect or irregularity
whether in substance or in form" in the exercise
of its appellate power.
(b) Art. 225(c) shall not be interpreted
to mean that the NLRC can open a case for
total review, including un-brought issues. In
fact, Sec. 4(d), Rule VI of the 2011 NLRC
BAR SYLLABUS-BASED REVIEWER IN 679
LABOR LAW & SOCIAL LEGISLATION
Rules of Procedure, as amended, now
provides that "it shall limit itself to reviewing and
deciding only the specific issues that were
elevated on appeal." (Rodolfo Luna v. Allado
Construction, Inc., G.R. No. 175251, 30 May
2011 ).
Illustration
The LA awarded salaries for the unexpired por-
tion of an OFW's pre-terminated contract. The re-
cruiter appealed the money judgment, questioning the
LA's straight computation insisting that the Lesser
Amount Rule should have been observed. Meantime
'
the OFW took no appeal even if the LA did not order
reimbursement of her placement fee and plane fare.
On appeal, the NLRC modified the decision by or-
dering the reimbursements withheld by the LA. Sec.
4(d), Rule VI, supra, does not allow the total review
made. This rule was found also in the 2002 and 2005
NLRC Rules.
3.8.2. Compulsory Arbitration Power (Rule
VIII, 2011 NLRC Rules of Procedure,
as amended)
(a) Certified Labor Disputes (Sec. 2). Cer-
tified disputes are cases certified to the Commission
for compulsory arbitration under Art 263 (now 278) (g)
of the Labor Code, as amended.
(b) Effects of Certification (Sec. 3)
(i) The intended strike or lockout is
automatically enjoined, i.e., even pending reso-
lution or non-resolution of an MR. If effected
already, all striking or locked out employees
shall immediately return to work and the em-
ployer shall immediately resume operations and
admit all workers under the same terms and
conditions;
680 JURISDICTION AND REMEDIES
(ii) Except where the CO states other-
wise, all cases between the same parties so far
as they are relevant or are proper incidents of
the certified case, shall be subsumed to the cer-
tified case. The parties shall inform their coun-
sels and the Division concerned of all pending
cases of said nature between the before the LA
or VA.
(c) Effects of Defiance (Sec. 4). Non-com-
pliance with the CO shall be considered as an illegal
act committed in the course of the strike or lockout
and shall authorize the Commission to enforce the
same under pain of immediate disciplinary action,
including dismissal or loss of employment status, or
payment of backwages by the locking-out employer,
inluding damges - even criminal prosecution of the
liable parties.
(d) Execution of Judgment (Sec. 6). Upon
issuance of the entry of judgment, the Commission,
motu proprio or on motion, may cause the execution
of the judgment in the certified case.
3.8.3. Injunctive Power of the NLRC
(a) Types of Injunctive Power
(i) Ordinary, e.g., restraining an illegal
strike;
(ii) Ancillary, as an incident of its
appellate power; and
(iii) Extraordinary, Rule XII, 2011 NLRC
Rules, as amended.
(b) The Dollar Smuggling Case
Under present law, an employee cannot invoke
the injunctive power of the NLRC to stop his dis-
BAR SYLLABUS-BASED REVIEWER IN 681
LABOR LAW & SOCIAL LEGISLATION
missal. Given its character as an ancillary remedy
only, injunction cannot issue before a principal case is
born of an actual dismissal. In PAL v. NLRC, G.R.
No. 120567 20 March 1998, the PAL management
rendered a resolution to dismiss two flight stewards
for their alleged involvement in the 3 April 1993 cur-
rency smuggling in Hong Kong. Instead of filing a
complaint for illegal dismissal, the latter filed with the
NLRC a petition for injunction praying that a TRO be
issued prohibiting PAL from carrying out its resolution
to dismiss them. The NLRC granted their petition,
reasoning that to file an illegal dismissal suit with the
Labor Arbiter was not an "adequate" remedy since it
took three years before it could be disposed of. The
Supreme Court brushed that aside. An "adequate"
remedy at law has been defined as one "that affords
relief with reference to the matter in controversy,
and which is appropriate to the particular circum-
stances of the case." It is a remedy which is equally
beneficial, speedy and sufficient which will promptly
relieve the petitioner from the injurious effects of the
acts complained of. In Lamb vs. Phipps, it ruled that if
the remedy is specifically provided by law, it is
presumed to be adequate.
The Court said that the petition could also be
entertained by the Labor Arbiter who had the ancillary
power to issue preliminary injunctions or restraining
orders as an incident in the cases pending before him
in order to preserve the rights of the parties during the
pend ency of the case.
Note:
1. Under the new rules, a Labor Arbiter has no
TRO and injunction powers anymore.
2. In like manner, the DOLE-RD cannot restrain
an intended retrenchment upon his finding that the
good faith character of the intended dismissal is in
682 JURISDICTION AND REMEDIES BAR SYLLABUS-BASED REVIEWER IN 683
LABOR LAW & SOCIAL LEGISLATION

question. However, based on his report to the SOLE Employer's TRO from the CA, a money judgment
that the intended dismissal would likely result in a can be enforced notwithstanding the pendency of the
mass lay-off or would aggravate a current labor dis- employer's petition for certiorari. If, at the end of the day,
pute, the latter may exercise his suspension power the employer gets a final reversal of the judgment, he
under Art. 292 of the Labor Code. In the exercise of can move for the restitution of the money paid to satisfy
said power, the SOLE may suspend the effects of the it. However, Sec. 18, Rule XI requires that the reversal
dismissal. judgment must direct restitution. In other words, if it is
3. In SMC v. NLRC, G.R. No. 119293, 10 June silent as to restitution, the LA cannot order restitution.
2003), the employer invoked the NLRC's ordinary Note:
injunctive power to enjoin an illegal strike, e.g., one
Wallem, supra, allows restitution even without
about to be carried out even after the NCMB has
judicial order of restitution.
converted the union's notice of strike to preventive
mediation. The effect of the conversion was it
(b) Rule XII (Extraordinary Remedies)
dropped the strike notice from the roll of strike
notices; hence, as though none had been served at
When jurisdiction is not exercised because:
all.
1. It cannot be exercised by reason of -
4. Art. 218, now Art. 255, gives the NLRC the
power to enjoin or restrain actual or threatened 1.1. Immunity from Suit
commission of any or all prohibited or unlawful acts.
Note: Foreign Gov't-Owned Corporation
Art. 264(a), now Art. 279(a), enumerates prohibited
activities of employers and labor organizations, e.g.,
Deutsche Gesellschaft Fur Tech niche
strike sans notice.
Zusammenarbeit, also known as German Agency for
5. Sec. 2(a), Rule X, 2011 NLRC Rules of Technical Cooperation (GTZ), et al. v. CA
Procedure, as amended, expressly allows the NLRC G.R. 152318, 16 April 2009
to TRO prohibited or unlawful acts. However, it cannot
Questions to Ask:
issue a writ of injunction without prior notice and
hearing. This time, unlike before the LA, a party has 1.1.1. Is the foreign-owned corporation incorporated?
the right to cross-examine.
No. It must be treated as an extension of the
6. Rule XII, 2011 NLRC Rules of Procedure, foreign government; hence, it must be
as amended, allows the NLRC to TRO or enjoin by accorded immunity.
writ any order issued by the LA.
Yes. Perhaps it enjoys immunity.
3.8.4. Contempt Power (Rule IX) 1.1.2. If registered, does the private law under which
it was incorporated give it the power to sue and be sued?
3.8.5. Rule-Making Power
No. It has immunity.
(a) Sec. 18, Rule XI (Restitution)
684 JURISDICTION AND REMEDIES
Yes. It has no immunity (if it can sue then it
can be sued also).
1.1.3. What if the foreign private law cannot be
found, or is silent on power to sue and be sued?
If the foreign private law cannot be found or is
silent on power to sue and be sued, it shall be
presumed to be the same as the Corporation Code
which gives corporations that power. Hence, the
foreign corporation should not be accorded immunity.
How Immunity is Proven
World Health Organization v. Aquino, 40 SCRA
242 (1972). The DFA Secretary sent the trial court a
telegram to convey respondents' immunity.
lnt'I Catholic Migration Commission v. Calleja, 190
SCRA 130 (1990). The DFA Secretary sent a letter directly
to the DOLE Secretary that respondent enjoyed diplomatic
immunity.
Baer v. Tizon, 57 SCRA 1 (1974). The U.S. Embassy
asked the DFA Secretary to request the SoLGen to make a
suggestion to the trial judge for the Commander of the US
Naval Base in Olongapo City. The SolGen submitted a Mani-
festation and Memorandum as amicus curiae embodying
the suggestion.
Processual Presumption Theory/ Presumed Identity
Approach
Edi-StaffBuilders International, Inc. v. NLRC, et al.
G.R. No. 145587, 26 October 2007
A Saudi labor law, alleged but not proven, shall be
presumed to be the same as Philippine labor law. 2 Based
2
Immunity Cases: China National Machinery & Equipment Corp (Group) v. Hon.
Cesar D. Purisima, et al. (en bane), G.R. No. 185572, 7 February 2012; Holy See
v. Rosario, G.R. No. 101949, 1 December 1994 (Jus lmperii v. Jus Gestionis).
BAR SYLLABUS-BASED REVIEWER IN 685
LABOR LAW & SOCIAL LEGISLATION
on Philippine law, a dismissal must be for a just or
authorized cause to be valid.
Curious Question
Is there a right to be sued? If so, who would exercise
it?
Comment:
The No Collateral Attack Rule (NCAR) in certifica-
tion elections may give meaning where there is no appa-
rent meaning. When a rival union challenges the legal per-
sonality of the petitioner union, the latter will most probably
invoke the NCAR and move that the challenge be dis-
missed. But what exactly is the foundation of the rule (aka
Direct Attack Rule) invoked? It is lack of jurisdiction, plain
and simple. It is the DOLE-RD who can pass upon the
issue. Hence, the counter challenge to the challenge can
be reduced to this: "Sue me before the DOLE-RD. I have
the right to be sued there."
1.2. Commencement Order (CO)
A CO shall include a Suspension or Stay Order
prohibiting the sale or disposition of assets of the
debtor and ordering the suspension of all actions
against the debtor and/or the debtor's estate (FRIA).
Exceptions: Sec. 18, FRIA
1.2.1. Cases already pending appeal in the
Supreme Court as of commencement date: Provided,
That any final and executory judgment arising from
such appeal shall be referred to the court for
appropriate action;
1.2.2. Subject to the discretion of the court,
cases pending or filed at a specialized court or quasi-
judicial agency which, upon determination by the
court, is capable of resolving the claim more quickly,
686 JURISDICTION AND REMEDIES
fairly and efficiently than the court: Provided, That any
final and executory judgment of such court or agency
shall be referred to the court and shall be treated as a
non-disputed claim;
1.2.3. Enforcement of claims against sureties
and other persons solidarily liable with the debtor, and
third party or accommodation mortgagors as well as
issuers of letters of credit, unless the property subject
of the third party or accommodation mortgage is ne-
cessary for the rehabilitation of the debtor as deter-
mined by the court upon recommendation by the
rehabilitation receiver;
1.2.4. Any form of action of customers or clients
of a securities market participant to recover or other-
wise claim moneys or securities entrusted to the latter
in the ordinary course of the latter's business as well
as any action of such securities market participant or
the appropriate regulatory agency or self-regulating
organization to pay of settle such claims or liabilities;
1.2.5. The actions of a licensed broker or dealer
to sell pledged securities of a debtor pursuant to a
securities pledge.
Note:
Philippine Airlines v. Court of Appeals
G.R. No. 150592, 20 January 2009
The stay order suspends the proceedings and not just
the enforcement of the claim. However, the 2008 Rules
allow the commencement of actions to prevent prescription
of actions.
1.3. TRO or lnjuntive Writ under Rule XII,
2011 NLRC Rules of Procedure, as
amended
BAR SYLLABUS-BASED REVIEWER IN 687
LABOR LAW & SOCIAL LEGISLATION
When proceedings of the Labor Arbiter are en-
joined under this rule, he cannot act on the case.
Hence, if despite a timely objection to venue, he still
proceeds to receive evidence without resolving the
motion to dismiss first then a Rule XII order will stop
him in his tracks. In this regard, improper venue can
only be challenged via a motion to dismiss on that
ground filed before the first preliminary mandatory
conference before the Labor Arbiter, i.e., after SEnA
conference/s. Venue is never questioned during
SEnA even if conducted by a SEnA officer (SEADO)
not belonging to the Arbitration Branch/Regional
Office having territorial jurisdiction over the potential
case. Hence, a SEnA request can be made in Baguio
City by a worker whose place of work is the NCR.
However, when SEnA fails and a complaint for illegal
dismissal becomes unavoidable, it must be filed with
the NCR. If filed in Baguio, venue can be challenged.
1.4. Sec. 1, R.A. 10396 (now in Art. 234, Labor
Code)
No complaint shall be admitted unless the
disputants have undergone SEnA proceedings first. If
the complaint is improvidently admitted and raffled,
the respondent can invoke the provision and ask for
the dismissal of the case. In such situation, the Labor
Arbiter cannot receive evidence and render judgment.
If he issues an order for the submission of position
papers, it can be assailed under Rule XII of the 2011
NLRC Rules of Procedure, as amended.
1.5. Non-exhaustion of Administrative Reme-
dies
The RD has jurisdiction over complaints based
on violations of the terms and conditions of appren-
ticeship agreements. On the other hand, the LA has
jurisdiction over the complaints of learners. An app-
rentice has an administrative remedy (ventilation of
688 JURISDICTION AND REMEDIES
his cause before the plant apprenticeship committee
or PAC); whereas, a learner has none. The RD must
dismiss the complaint of an apprentice who has not
used his PAC remedy first.
1.6. Assumption of Jurisdiction Order (AJO)
When the SOLE assumes jurisdiction, all pen-
ding cases before the RD, LA and VA shall be put on
hold and transmitted to the SOLE for resolution. As-
sumption power is a comprehensive and plenary
power; hence, all issues between the parties else-
where shall be subsumed to the NI case for orderly
administration of justice.
1.7. Ouster of Jurisdiction
Under Art. 128, Labor Code, the visitorial and
enforcement power of the RD can be challenged via a
motion for ouster of jurisdiction, or a motion for refer-
ral to the LA. There are two grounds: (a) cessation of
EER to support the first; and (c) unresolved issues
arising from unverifiable documentary evidence to
support the second.
Anent the first ground, when EER has ceased
prior to the RD's taking cognizance of the case, i.e.,
prior to the service of a notice of inspection - which is
what allows him to acquire jurisdiction over establish-
ments - the case should be referred to the LA who
shall hear and resolve it. In effect, the RD shall
dismiss it for lack of jurisdiction but it will be heard
and resolved by the LA even if EER has ceased. The
LA has jurisdiction because the money claim has
reasonable causal connection to EER. As respects
the second, when referral is requested for evidentiary
reasons, the RD has jurisdiction; however, due
process requires him to allow the employer to submit
.to the LA evidence not available - hence, not veri-
fiable - during inspection.
BAR SYLLABUS-BASED REVIEWER IN 689
LABOR LAW & SOCIAL LEGISLATION
The RD's Art. 128 power requires continuing
EER. Hence, if it has ceased then he has no juris-
diction - except, however, if the cessation follows
service of the inspection notice in which case he shall
continue to hear the case (Catholic Vicariate of
Baguio v. Hon. Patricia Sto. Tomas, G.R. No.
167334, 7 March 2008). In contrast, the LA's jurisdic-
tion always survives EER. Hence, even if it has
ceased, he can hear and resolve claims for unpaid
salaries and benefits totalling more than PS,000.00
per complainant.
2. It should not be exercised.
A labor tribunal may have been conferred jurisdiction
over a particular case, which case may have been properly
brought to it as to acquire the power to hear and resolve it.
However, that power ought not to be exercised in the
following:
2.1. The tribunal is a forum non conveniens.
Forum non conveniens, usually a transnational
matter, is not a jurisdictional matter. A Philippine labor
tribunal may be conferred jurisdiction; however, it
should not exercise it -although it has acquired it -
because it is not a convenient forum. If it cannot
enforce its judgment outside Philippine territory, it
should not hear and resolve the case before it (Prin-
ciple of Effectivity of Judgments). In the Manila
Hotel Case, infra, the elements of the case were all
foreign save that the complainant was a Filipino
national. On that basis, among others, the NLRC was
deemed a forum non conveniens.
Courts have the discretionary power to decline
resolution of a case by reason of forum non cove-
niens, i.e., where another court or forum is much
more suited to hear and resolve it. This discretionary
power will not be exercised by them on motion by a
690 JURISDICTION AND REMEDIES
party or sua sponte unless they have jurisdiction. The
only issue, therefore, is whether they should first
resolve the issue of jurisdiction (over subject matter
and person) before dismissing a case based on forum
non conveniens. Some maintain that there is no need
to resolve jurisdiction; others opine that there is.
It will be recalled that some factors justify
dismissal of a case based on forum non coveniens.
The following can be cited:
(a) Residence of the parties;
(b) Location of witnesses and evidence;
(c) Public policy; and
(d) Burden on the court.
Manila Hotel Corp. v. NLRC
G. R. No. 120077, 13 October 2000
Marcelo Santos, a direct hire, applied for a job with
Manila Hotel International Corp. in China while he was
working in the Sultanate of Oman. He was later retrenched
as an aftermath of the Tiannamen Square massacre. He
sued Manila Hotel Corp., a domestic corporation and
stockholder of Manila Hotel International Corp. which, in
turn, was a foreign corporation doing business in China.
All the elements of the case (from hiring to dismissal
took place in China) were foreign, except that complainant
Santos was a Filipino national. The proper defendant was
not a resident of the Philippines. Neither was it doing busi-
ness in the country. The main witnesses were outside the
country. Hence, the NLRC was a forum non conveniens.
Pakistan lnt'I Airlines Corp. v. Hon. Blas F. Opie, et al.
G.R. No. 61594, 28 September 1990
All the elements of the case were Filipino, except that
the respondent was a foreigner. The complainants were
BAR SYLLABUS-BASED REVIEWER IN 691
LABOR LAW & SOCIAL LEGISLATION
Filipinos, the employment contracts sued upon were en-
tered into in the Philippines, they were partially executed in
the Philippines, and Pakistan International Arlines Corp.
had a local office. Hence, the DOLE was a convenient
forum.
Foreign Element
Even after acquisition of jurisdiction, a local court may
refuse to exercise it because of a foreign element, e.g., the
contract sued upon was executed abroad. Of course, it
may always choose to assume it, provided:
(a) It is a forum that may be conveniently resorted to;
(b) It can make an intelligent decision; and
(c) It can effectively enforce its judgment.
Note:
In 2007 Corazon Sim v. NLRC, the contract sued
upon was executed in Italy. Invoking lex ex contractu, the
bank moved to dismiss the complaint for illegal dismissal
filed with the LA on the ground of lack of jurisdiction. How-
ever, the Supreme Court held that Philippine Labor Re-
lations Law has become extra-territorial by virtue of Sec.
10, R.A. 8042 (now Sec. 7, RA. 10022). Hence, the LA
had jurisdiction.
Would you have argued that the Office of the LA was
a forum non conveniens? No, since the elements of the
case were all Filipino. The bank, although operating in
Italy, was a Filipino national.
2.2. Meritorious Motion to Inhibit
Orders granting motions to inhibit are subject to
approval by the Executive Labor Arbiter (ELA). D.O.
183-17 affecting cases before the Regional Director
prohibits motions to inhibit just as it prohibits motions
to reduce appeal bond.
692 JURISDICTION AND REMEDIES
2.3. Motion for Referral
Referral of cases by the Regional Director to the
Labor Arbiter under Art. 128 of the Labor Code is
discretionary. At this point, a distinction must be made
between "cessation of EER" and "issues not con-
sidered in the course of summary inspection." If the
ground for referral is cessation of EER, the RD must
transmit the case to the LA for lack of jurisdiction.
However, if the ground is the second, he has dis-
cretion "to refer" or "to not refer".
Why?
The allegation that "issues were not considered
in the course of summary inspection" can be dis-
owned by the RD. Besides, he can rule that the sup-
porting documents were actually verifiable in the
course of summary inspection. In other words, he has
the discretion "to agree" or "to not agree".
Note: Subsistence of EER v. Pre-Existence of EER
2.3.1. If the RD's jurisdiction is challenged on the
ground that EER has ceased, i.e., before service of
his inspection notice, he must refer the case to the LA
for lack of jurisdiction.
Question
Absent EER, why refer the case to the LA whose
jurisdiction requires EER too?
Answer
Art. 128 requires the subsistence of EER;
whereas, Art. 224 requires the pre-existence of EER.
If EER has ceased already before the RD took
cognizance of the case, he cannot resolve it because
his visitorial power requires subsistence (read as
continuity) of EER. In contrast, the LA can take over -
subject to the 5K jurisdictional amount rule - because
BAR SYLLABUS-BASED REVIEWER IN 693
LABOR LAW & SOCIAL LEGISLATION
his adjudicatory power requires pre-existence of
EER only. If it existed before, he has jurisdiction.
2.3.2. If the motion to refer rests on the em-
ployer's allegation that issues were not considered
during summary inspection, which issues are suppor-
ted by documentary evidence not verifiable during
said inspection, the RD may refer the case to the LA
so that adjudication may follow in which said evidence
may be adduced thru the employer's position paper.
Notably, proceedings before the Labor Arbiter are not
as summary as proceedings before the RD exercising
visitorial power. If the supporting documents were
verifiable in the course of inspection, however, the RD
may not refer. These are verifiable: payroll sheets,
time sheets, SSS records, Bl R forms, etc. But an SC
ruling on the proper interpretation of the Double
Indemnity Law not yet available during inspection may
be used to support a motion for referraL
Interplay of Jurisdictions
1. National Interest Cases/Certified Cases
Manggagawa ng Komunikasyon of the Phil. v. PLDT
G.R. No. 190389, 19 April 2017
Question
The SOLE assumed jurisdiction over a strike based
on ULP and illegal redundancy, ordering that the strikers
be admitted back to work. The employer complied with the
Return to Work Order (RTWO) but excluded those dis-
missed for redundancy. Meantime, the SOLE certified the
case to the NLRC for conduct of compulsory arbitration on
the issues of ULP and redundancy. Based on the RTWO,
the dismissed workers filed a motion with the SOLE for
issuance of a writ of execution that they may be admitted
694 JURISDICTION AND REMEDIES
back to work. In due time, the NLRC dismissed the com-
plaint for ULP and illegal dismissal.
(a) Is the decision of the NLRC reviewable by the
SOLE who actually acquired jurisdiction over the case and
simply certified it to the NLRC?
(b) Should the SOLE issue the writ prayed for?;
(c) As the union's counsel, would you pray for
reinstatement wages for the period between date of
issuance of the RTWO and the decision of the NLRC
dismissing the complaint for illegal dismissal?
Answer
(a) The effect of a certification order is to re-vest
jurisdiction on the NLRC. Hence, the NLRC does not per-
form a purely administrative function in certififed cases. Its
decisions in said cases are not recommendatory in nature
only, subject to approval by the SOLE. Since they are
decisions in contemplation of law, their mode of review is
Rule 65 of the Rules of Court pursuant to St. Martin's.
(b) No. The decision of the NLRC has mooted the
AJO. Hence, the duty to unconditionally - without quailfica-
tions - admit the strikers back to work under the same
terms and conditions has no basis anymore.
(c) No. Reinstatement wages are proper only under
a reinstatement order (RO) but not under a return to work
order (RTWO). While both orders are immediately exe-
cutory, they do not produce the same legal effect.
Note: RO v. RTWO
As to who issues the order: RO is issued by the LA
or VA; whereas, RTWO is issued by the SOLE.
As to nature: RO is part of a disposition on the
merits; whereas, RTWO is interlocutory only.
BAR SYLLABUS-BASED REVIEWER IN 695
LABOR LAW & SOCIAL LEGISLATION
As to reinstatement wages: If the RO is reversed, the
employer shall pay reinstatement wages from date of refusal
of the RO to date of reversal of the LA's decision; whereas, if
the AJO is mooted, reinstatement wages do not become due.
2. Appointment of LA as VA
1989 Guidelines on the Conduct of Voluntary
Arbitration:
In a case where both employer and EBR refuse to
submit their dispute to voluntary arbitration ( e.g., to the VA
named in their CBA), their dispute can still be heard by a
VA. The third mode by which the VA aquires jurisdiction is
thru appointment. Hence, if the parties are before the LA
already, they can appoint the latter to be their VA.
Note: 2004 Revised Guidelines
Only the NCMB can appoint a VA, i.e., when the
parties have not named a VA in their CBA, or when one
serves a notice to arbitrate and the other does not reply.
10-Day Appeal Period: Reason
Rule 43, Rules of Court, gives 15 days; whereas,
Art. 262-A, Labor Code, gives 10 days. Under Rule 43,
one can file his petition on the 11 th day. By then, however,
the VA's decision would have attained finality already be-
cause, per Art. 262-A (Now Art. 276), it becomes final and
executory unless contested within 10 days. To avoid this
problem, substantive law must be given application over
procedural law. In both Phil. Electric Co. v. CA and
Baronda v. CA, the appeal period was 10 days.
Update:
Guagua National Colleges v. CA
G.R. No. 188492, 28 August 2018
Both 10 days under Art. 262-A (now Art. 276) and 15
days under Rule 43 shall be observed. The first is the
696 JURISDICTION AND REMEDIES
period for filing an MR with the VA; whereas, the second is
the period for filing a petition for review with the CA to be
reckoned from date of receipt of the order denying the MR.
3. RD-LA-RD
The issue of res judicata may be occasioned by the
movement of a case from the RD to LA (via a referral order
for lack of jurisdiction) and back to the RD per order of the
SOLE. When returned to the RD, is the case barred by res
judicata for the reason that the referral order is more than
1O days old? No. A mere referral order is not a judgment
on the merits.
4. RD - SOLE - SLR
4.1. The RD resolved a WACLIU case. His
decision was appealed to the SOLE. Instead of
resolving the appeal, the SOLE transmitted it to the
BLR. This was questioned. Allegedly, the SOLE
abdicated his appellate power in favor of an inferior
body. The SC ruled that there was no such abdication
because Art. 226 (old) of the Labor Code vested
jurisdiction on the BLR over inter-union and intra-
union disputes. The case resolved by the RD was an
intra-union dispute; hence, appeal should be taken to
the BLR (Sarles v. Sitonio).
4.2. From the BLR, the decision rendered on
appeal, shall be elevated to the CA and not the
SOLE. But if the decision is one rendered by the BLR
in an original FlnTCAM case, the appeal goes up to
the SOLE, then to the CA.
4.3. Analogy. The manner of appealing the
RTC's decision is as follows:
4.3.1. By notice of appeal if rendered in
the exercise of original jurisdiction; and
4.3.2. By petition for review if rendered in
the exercise of appellate jurisdiction.
BAR SYLLABUS-BASED REVIEWER IN 697
LABOR LAW & SOCIAL LEGISLATION
Hence, as regards appeals from BLR
decisions, the question to ask is: In what
capacity did the BLR render the decision?
5. RD - SLR - SOLE
In an appealed WACLIU case, the BLR Director
inhibited. As a result, the case was elevated to the SOLE
for resolution. This was questioned for lack of jurisdiction.
Allegedly, it was only the BLR which could resolve the
case. The SC ruled that, in light of the inhibition, the SOLE
could resolve the appeal in the exercise of his power of
control and supervision over the BLR (Heritage Hotel
Manila v. NUWHRAIN-HHMSC, G.R. No. 178296, 12
January 2011 ).
Clue: The Spageti Doctrine
Do not give this to the examiner. In the first place, the
spelling is wrong. In Sarles, the movement was from
SOLE to BLR (pababa) and it was held to be valid. In
Heritage, the movement was from BLR to SOLE (pataas)
and it was also held to be valid.
Evidence in Labor Proceedings
1. Money Claims
1.1. Labor Standards Claims
1.1.1. Even if non-payment is alleged by an
employee (which he is supposed to prove being the
one making the allegation), the employer is still
required to prove payment. The reason for this is that
he has the time sheets and payroll sheets. Thus, being
in a better position to enlighten the forum on the
circumstances of the claim, he is imposed the burden
of evidence.
698 JURISDICTION AND REMEDIES
1.1.2. Regardless, the forum cannot make a just
money award unless the employee shows his entitle-
ment to his claim by proving its basis (e.g., his cove-
rage and his compliance with the prerequisites of the
mandatory benefit claimed) and by particularizing it
(e.g., number of hours overtimed by him) in order to
help the forum make a mathematical determination of
his claim.
1.1.3. Hence, the burden to prove payment
comes after burden to prove the claim as a valid credit,
both due and demandable.
1.2. Labor Relations Claims
1.2.1 Moral Damages
Art. 2217, New Civil Code, provides that
moral damages are awarded when the claimant
suffered physicial suffering, mental anguish,
fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation
and similar injury if they are the proximate cause
of the defendant's wrongful act or omission.
In termination cases, they are awarded
when the dismissal is attended by bad faith,
malice or fraud, or when it constitutes an act op-
pressive to labor, or when it was done in a man-
ner contrary to morals, good customs, or public
policy (San Miguel Properties v. Gubacan, G.R.
No. 153982, 18 July 2011 ).
1.2.2. Exemplary Damages
They are proper when the dismissal was
effected in a wanton, oppressive or malevolent
manner, and public policy requires that these acts
must be suppressed and discouraged (Fernando
P. De Guzman v. NLRC, G.R. No. 167701, 12
December 2007).
BAR SYLLABUS-BASED REVIEWER IN 699
LABOR LAW & SOCIAL LEGISLATION
1.2.3. Attorney's Fees
(a) For Extraordinary Attorney's Fees
(Art. 111, Labor Code), the basis for an award is
unlawful withholding of salaries and benefits. The
10% has application, based on jurisprudence,
beyond the borders of Art. 111. It is also awarded
based on an act of illegal dismissal that compels
the employee to litigate and, as a consequence,
seek legal representation and incur expenses.
(b) For Ordinary Attorney's Fees, e.g,
30%, the agreement between lawyer and client
must be submitted; otherwise, labor tribunals
cannot speculate as to them.
1.3. Social Legislation Claims
1.3.1. The purpose of social legislation is to give
and not withhold benefits. Hence, in the event of
doubt arising from evidence, it shall be resolved
in favour of the member (Utmost Liberality
Rule).
1.3.2. See off-premises rules under Social
Legislation, infra.
2. Other Claims
2.1. Counterclaims
2.1.1. Apply Reasonable Causal Connection
Rule
2.1.2. Apply Sole Reference to Labor Law Rule
2.2. Cross-Claims
2.2.1. Apply Reasonable Causal Connection
Rule
2.2.2. Apply Sole Reference to Labor Law Rule
700 JURISDICTION AND REMEDIES
Judgment
1. Valid Judgment v. Erroneous Judgment. A
labor tribunal's judgment, to be valid, must be based on
substantial evidence. In addition, the issues must be re-
solved based on applicable law or doctrine.
2. In De Roca v. Dabuyan, et al., G.R. 215281, 5
March 2018, it was held that the LA's decision was grossly
erroneous and unjust; hence, it is a "lawless thing which
can be treated as an outlaw and slain at sight, or ignored
wherever it exhibits its head." It could not have attained
finality; it coud not have created rights, nor imposed duties;
and any act performed pursuant to it and any claim
emanating from it have no legal effect.
3. Sec. 14, Art. VIII, Constitution
The stricture that a decision shall state the facts and
law upon which it is based applies to "decisions" only, not
to orders and resolutions that do not dispose of the case
on the merits (FASAP v. PAL, G.R. No. 178083, 13 March
2018).
4. Service on Parties and Counsel
Note: It is "service on", not "service "to". This is all!
5. Principles
5.1. Finality of Judgments
5.1.1. VA Decisions. They attain finality
after 10 (not 15) days if not appealed to the CA.
5.1.2. RD Decisions. They attain finality
after 10 days if not appealed to SOLE; and in 5
days if not appealed to the NLRC.
5.1.3. RD Decisions involving apprentices.
They attain finality in 5 days if not appealed to the
SOLE.
BAR SYLLABUS-BASED REVIEWER IN 701
LABOR LAW & SOCIAL LEGISLATION
5.2. Immutability of Final Judgments, Not
Violated in the following:
5.2.1. The VA can issue an alias writ of
execution directing payent of separation pay in
lieu of reinstatement in view of abolition of posi-
tions (Philex Mining Co. v. Abalos, et al.)
5.2.2. Backwages and separation pay
can be re-computed up to finality of judgment.
5.3. Harmless Error Rule: Do not read!
In FASAP v. PAL, the Special Third Divi-
sion (thru J Ynarez-Santiago) decided the case in
2008 in favor of FASAP. The same division
denied PAL's 1st MR in 2009. When PAL filed a
motion for leave to file a 2nd MR, it was the
Regular Third Division (J Corona) which resolved
the motion by granting it. At that point, J Ynarez-
Santiago had already retired. After J Corona
inhibited (because of his prior mediation efforts
while still in the Palace), the case was re-raffled
to J Velasco of the same Regular Third Division.
When J Velasco inhibited, it was re-raffled to J
Brion of the same division. Meantime, more
justices retired (JJ Chico-Nazario, Nachura and
Carpio-Morales) resulting in the re-organization of
the divisions by J Corona (a CJ by then). It
resulted in the transfer of J Brion to the Second
Division. Per SC Internal Rules, a case follows
the ponente; hence, FASAP v. PAL went to the
Second Division. In due time, J Brion denied the
2nd MR.
Before receiving a copy of the J Brion
resolution, Atty. Estelito Mendoza wrote the SC
Clerk of Court for a case status update. He wrote
4 letters in all thru which he sought information as
regards the ponente, members who voted, and
702 JURISDICTION AND REMEDIES
how they voted - with request to submit his
letters to the SC en bane. Those letters became
an AM. numbered 11-10-1-SC. En Banc resolved
the AM by recalling the J Brion resolution and
resolved the case (separately docketed) on the
merits on 13 March 2018-with PAL winning.
By way of a rule, a case from a division
goes up to the SC en bane only by a vote of 3 out
of 5 of the members. According to J Sereno,
there was no voting that took place. But the
decision penned by J Bersamin says the Second
Division requested the CJ to elevate the case to
the Banc. By way of a rule too, when a member
retires, he/she should be replaced from the
membership of the other divisions. Hence, J
Ynarez-Santiago should have been replaced and
FASAP v. PAL should have remained with the
Special Third Division. As to why it went to the
Regular Third Division, there is no explanation.
What Administrator Marquez confessed was it
was error for the SC to move the case from the
Regular Third Division to the Second Division.
Appeal
Actually, that was not an error. It was based on
the established rule that a case follows the
ponente. The error was the movement of the
1. Court of Appeals (CA)
case from Special Third Division to Regular Third
Division. At any rate, whatever error was
committed was a harmless error, i.e., according
to the en bane.
Advice:
You should pass the Bar this year to avoid
having to read, and bringing to the examination
room, controversial decisions.
NYK-FIL Ship Management, Inc. v. Gener G. Dabu
5.4. Appellate Strategy: Do not read!
BAR SYLLABUS-BASED REVIEWER IN 703
LABOR LAW & SOCIAL LEGISLATION
5.4.1. Atty. Mendoza filed 2 MRs: (a) the
first was a 2nd MR which was accompanied
by his motion for leave to file it; and (b) the
second was his MR on the resolution
denying PAL's 1st MR. Since those MRs ulti-
mately sought reversal of the 2008 decison
of J Ynarez-Santiago, PAL had filed 3 MRs
in all. But Atty. Mendoza was Atty.
Mendoza. If it was Atty. Baringkukurong
filing a 2nd MR, his pleading would not have
seen the light of day. What is the moral
lesson? None! Legal, there is.
5.4.2. J Leonen's Strong Objection
The 2 nd MR was a prohibited pleading;
hence, it did not prevent the 2008 decision
of J Ynarez-Santiago from attaining finality.
"Only Jesus Christ can raise the dead.
Padre Faura, who is just a friar, cannot!!!"
These are not J Leonen's words. Do not
memorize.
1.1. Powers over Labor Cases
1.1.1. Certiorari Power (Rule 65, Rules of Court)
Subject: Decisions of labor appellate
bodies.
1.1.2. Review Power (Rule 43, Rules of Court)
Subject: Decisions of VA or PVA
G.R. No. 225142, 13 September 2017
704 JURISDICTION AND REMEDIES
Sec. 4, Rule 43, Rules of Court, fixes appeal period
at 15 days. On the contrary, Art. 262-A, Labor Code,
provides that the VA's decision shall attain finality if not
challenged in 10 days.
Art. 262-A (now Art.276) should be applied for two
reasons:
(a) An absurd situation will obtain when the VA's
decision is appealed on the 11 th - 15th day from receipt
thereof as allowed by Sec. 4, Rule 43, Rules of Court, but
which decision, by force of Art. 262-A, has already become
final and executory; and
(b) The 10-day appeal period under Art. 262-A is a
substantive right. Therefore, Sec. 5(5), Art. VIII of the Con-
stitution - which does not permit the SC to promulgate
rules that will diminish, increase or modify substantive
rights - will be violated if Sec. 4, Rule 43 of the Rules of
Court were applied.
1.2. Motion for Reconsideration
Reason: Certiorari is an extraordinary remedy
available when there is no appeal nor any plain,
speedy and adequate (PSA) remedy in the ordinary
course of law. While NLRC decisions are not appea-
lable (first condition met), an MR is a PSA remedy
(Jennifer Abraham v. NLRC, G.R. No. 143823, 6
March 2001 ). Hence, one should be filed before
elevating the case to the CA via Rule 65.
1.3. Exceptions
Prior MR is not required in the following: (No MR,
QUINIE)
1.3.1. Pure questions of law are sought to be
resolved;
1.3.2. Under the circumstances, an MR would
be useless;
BAR SYLLABUS-BASED REVIEWER IN 705
LABOR LAW & SOCIAL LEGISLATION
1.3.3. Public interest is involved;
1.3.4. The proceedings in the lower court are a
nullity for lack of due process;
1.3.5. The issues raised under Rule 65 have
been duly raised and passed upon by the
NLRC, or are the same as those raised
and passed upon by it;
1.3.6. Petitioner was deprived of due process
and there is extreme urgency for relief;
Hypothetical Question
Texas Instruments (Tl) prevailed over Larry before the
LA, prompting Larry to appeal the finding of no construc-
tive dismissal to the NLRC. The NLRC reversed the LA,
prompting Tl to file its MR. The NLRC reversed itself,
prompting Larry to file his own MR. The NLRC reversed
itself again, prompting Tl to file a petition for certiorari.
Larry moved to dismiss its petition on the ground that it did
not seek reconsideration of the NLRC's last resolution first.
Decide (2.5% ).
Answer
It would be futile to go back to the NLRC on MR con-
sidering that it had two opportunities to correct or rectify its
error, i.e., upon the same issue of constructive dismissal.
In this case, the filing of an MR is excused; hence, Tl's
petition should be given due course.
Genpact Services, Inc. v. Santos-Falceso, et al.
G.R. No. 227695, 31 July 2017
Question
The LA rendered judgment dismissing Emplo Yee's
complaint for illegal dismissal. His decision was affirmed by
the NLRC, prompting him to file an MR. In its resolution
706 JURISDICTION AND REMEDIES
partially granting the MR by awarding separation pay, the
NLRC said: "No further motion of similar import shall be
entertained." Emplo Yer filed a petition for certiorari which
the CA dismissed on the ground that Emplo Yer did not file
an MR first. Did the CA know what it was doing?
Answer
No. According to J Perlas-Bernabe, the portion in the
NLRC's resolution "No further motion of similar import shall
be entertained" meant that it was useless to file an MR
because it would not be entertained anyway. (See item 2,
Exceptions to MR, supra).
Comment:
Perhaps the CA knew what it was doing. The MR
resolved was Emplo Yee's MR. Hence, the warning was
directed at him, i.e., if minded to ask for backwages upon a
new finding of illegal dismissal, he should ask for that from
the CA. The NLRC would not give him that on re-reconsi-
deration. As to Emplo Yer, he should have filed an MR
because the warning was not directed at him. By accident,
the CA knew what it was doing - as if it predicted FASAP
v. PAL, 13 March 2018. The MR resolved was Emplo
Yee's MR. Hence, the warning was directed at him, i.e., if
minded to ask for backwages upon a new finding of illegal
dismissal, he should ask for that from the CA. The NLRC
would not give him that on re-reconsideration. As to Emplo
Yer, he could file an MR on the resolution of Emplo Yee's
MR. Atty. Estelito Mendoza, in FASAP v. PAL, filed 2 MRs
with the SC. The first was a second MR (with leave of
court) for the reversal of the 2008 decision of J Ynarez-
Santiago. The second was a first MR on the 2009
resolution denying PAL's first MR. Based on this, Emplo
Yer could MR the resolution of Emplo Yee's MR. If the
examiner will give Genpact, he will have a problem with
FASAP v. PAL. The case may be outside the 2018 Bar cut-
off date but, by the time the UP Law Center will suggest
BAR SYLLABUS-BASED REVIEWER IN 707
LABOR LAW & SOCIAL LEGISLATION
answers, it will have been digested and fully analyzed it
already. Therefore, he should avoid giving Genpact for his
own good; otherwise, he would be booed by you during
your oathtaking ceremony.
1.4. Requisites of Certiorari
PALEA v. Hon. Cacdac
G.R. No. 155097, 27 September 2010
Clue: TiBO: No Appeal, No PSA Remedy
1.4.1. Respondent is a tribunal, board, or officer
(TBO) exercising judicial or quasi- judicial
powers;
1.4.2. There is no appeal nor any plain, speedy
or adequate (PSA) remedy in the ordinary course
of law.
Note:
1. The Labor Code provides for no system of
appeals after the SOLE, NLRC and BLR render decisions
in the exercise of their review powers (No appeal). A
motion for reconsideration, however, is a PSA remedy
(Jennifer Abraham v. NLRC, G.R. No. 143823, 6 March
2001 ).
2. Not Quasi-Judicial Bodies
(a) DOLE-RD when implementing a final BLR
decision to conduct a general election (PALEA,
supra.). Incidental orders of RD are not in the
exercise of quasi-judicial power.
(b) A mere task force (Rivera v. Espiritu, G.R.
No. 135547, 23 January 2002). However, the SC
allowed the petition because air transportation was of
public interest.
(c) The NCMB is not a quasi-judicial body.
708 JURISDICTION AND REMEDIES
3. Certified photo copies are the same as certified
true copies. They are presumed, based on the certification
of the certifying officer, as faithful reproductions of the ori-
ginal copies on file (Doble v. ABB, Inc., G.R. No. 215627,
5 June 2017).
1.5. Grave Abuse of Discretion
Grave abuse of discretion is the whimsical and
capricious exercise of judgment so patent and gross as
to amount to an evasion of a positive duty or a virtual
refusal to perform a duty enjoined by law, as where the
power is exercised in an arbitrary and despotic manner
because of passion or hostility (Cuison v. CA, G.R No.
128540, 15 April 1998).
1.6. Error of Jurisdiction
The CA, sitting as a Rule 65 court, can only cor-
rect error of jurisdiction, i.e., grave abuse of appellate
power. Thus, save in the exercise of its Equity Juris-
diction (EJ), it cannot review the evidence.
1.7. Equity Jurisdiction
CA, as a Rule 65 court, cannot review the evi-
dence and correct errors of judgment. As an exception
to this rule, if the factual findings of the appellate body
are opposed to those of the first level administrative
bodies, it is allowed to determine which the correct
finding is in the exercise of equity jurisdiction (Rf: Luna
v. Allado Construction Co. et al., G.R. No. 175251,
30 May 2011 ).
1.8. CA Functions
1.8.1. As a Rule 65 Court, it corrects error of
jurisdiction (of NLRC, SOLE, BLR).
1.8.2. As Rule a 43 Court, it corrects error of
judgment (of VA).
BAR SYLLABUS-BASED REVIEWER IN 709
LABOR LAW & SOCIAL LEGISLATION
Distinctions:
(a) Under Rule 65, MR is mandatory (unless
excused, supra); whereas, under Rule 43, it is optional.
(b) Under Rule 65, prescriptive period is 60
days; whereas, under Rule 43 it is 1O (for labor cases
decided by the VA).
Note: Appeal of VA decision is to the CA via
Rule 43 and not Rule 65 even if grave abuse of
discretion is ascribed to the VA (Baronda v. CA,
supra)
1.9. Dual Function of Appellate Courts
1.9.1. Review for Correctness Function
. In simple terms, a case must be correctly
decided as to prevent a re-litigation of the same
issues between the same parties. Hence, the
objective of the first function is res judicata.
1.9.2. Institutional Function
. . Decisions must have predictability. Cases,
involving the same or substantially the same facts
and issues, must be similarly resolved. Hence,
the objective of the second function is stare
decisis.
Note:
As a case goes higher up the review ladder,
institutional function increases (Fabiana v. CA J
Reyes, et al., A.M. No. CA-13-51-J, 2 July 2013).
2. Supreme Court
2.1. From CA to SC, the mode of review is thru a
petition for review on certiorari (Rule 45), not Rule 65
because there is an appeal (Rule 45 is a mode of appeal).
710 JURISDICTION AND REMEDIES
2.2. If grave abuse of certiorari power is raised, Rule
65 is available (Tomas Claudio Memorial College, Inc. v.
CA, G.R. No. 152568, 16 February 2007).
Update: Even if grave abuse of discretion is alleged,
the remedy must be petition for review on certiorari under
Rule 45 (Wenceslao, et al. v. Makati Dev't Corp., G.R.
No. 230696, 30 August 2017).
2.3. FASAP v. PAL, G.R. No. 178083, 13 March 2018
(Residual Power, Harmless Error Rule)
The 2018 FASAP v. PAL Case
PADRE FAURA RAISES LAZARUS FROM THE DEAD
(Fake News?)
PAL retrenched FASAP members in 1998 on the
ground of serious business losses. The dismissal was
contested. The LA found for FASAP. On appeal, the NLRC
reversed the LA. FASAP went up to the CA which favored
PAL. It declared the retrenchment as valid based on fin-
dings of serious business losses (sans financial state-
ments). In 2008, the SPECIAL THIRD DIVISION (com-
posed of JJ Ynarez-Santiago, Bersamin, Peralta, Nachura
and Chico-Nazario) reversed the CA and declared that the
complaining FASAP members had been illegally dismissed
based on lack of audited financial statements. The ponente
was J Ynarez-Santiago.
PAL filed an MR which J Ynarez-Santiago denied
WITH FINALITY thru her 2009 Resolution (FIRST RESO-
LUTION). PAL filed a motion for leave to file a second MR.
Since J Ynarez-Santiago had already retired, J Corona
(member of the regular THIRD DIVISION) granted the
motion for leave and then inhibited due to his prior media-
tion efforts while still with the Palace. Thereafter, the case
was re-raffled to J Velasco of the regular THIRD DIVI-
SION. However, J Velasco inhibited for a valid reason.
Hence, the case was re-raffled to co-member J Brion.
Later, J Brion became a member of the SECOND DIVI-
BAR SYLLABUS-BASED REVIEWER IN 711
LABOR LAW & SOCIAL LEGISLATION
SION by reason of the re-organization of the SC divisions
by J Corona (now CJ) occasioned by the retirement of JJ
Ynarez-Santiago, Nachura, Morales and Chico-Nazario.
Per internal rules, the case followed the ponente, J Brion.
Eventually, J Brion denied PAL's second MR thru his 2011
resolution (SECOND RESOLUTION).
In the interim, Atty. Estelito Mendoza wrote 4 letters
to the SC Clerk of Court, Atty. Vidal. He wanted an update
on the case, asking for details, viz., who the ponente and
members were, and how they voted.
During an en bane session, CJ Corona explained that
the Mendoza letters (J Sereno claims that the entire mem-
bership of the SC was not shown copies of the letters)
were creating a big problem for the SC; hence, he sugges-
ted that the SECOND RESOLUTION be recalled and that
the en bane resolve the issues raised by Atty. Estelito
Mendoza in his letters. Hence, J Brion's SECOND RESO-
LUTION was recalled thru the 4 October 2011 RECALL
RESOLUTION, (which was without facts and law) in A.M.
11-10-1-SC (the Mendoza letters were treated as A.M. and
assigned this docket number). Eventually, FASAP v. PAL
was decided by the SC en bane which ruled by a vote of 7-
2 that the retrenchment was valid as found by both NLRC
and CA. It also held that FASAP could not participate in
the determination of the selection criteria employed by
PAL.
J Leonen's Objection
PAL'S second MR, being a prohibited pleading, did
not stop the 2008 decision from attaining finality. J Corona
granted the motion for leave to file a second MR but did
not state that the decision of J Ynarez-Santiago has not
attained finality. So it attained finality. In re-opening the
case, the dead was resurrected. Meantime, J Sereno (on
leave) claims that the SECOND DIVISION did not elevate
FASAP v. PAL to the en bane by 3/5 vote. Nor were the
712 JURISDICTION AND REMEDIES
Mendoza letters disclosed to all members of the Court as
to intelligently act on the matter.
The Majority's Justification
1. Sec. 14, Art. VIII of the Constitution - which
requires that decisions state the acts and law upon which
they are based - applies only to decisions and not to mere
resolutions. Even Sec. 1, Rule 36 of the Rules of Court,
which implements the constitutional provision, applies to
judgments only. These provisions do not apply to mere
recall resolutions which do not dispose of a case on the
merits. It was within the power of the SC to see to it that
the SECOND DIVISION was clothed with the property
authority to issue the SECOND RESOLUTION.
2. The members of the SECOND DIVISION (Ruling
Division) went to the CJ to recommend the recall in clear
and unequivocal terms. This was omitted in the RECALL
RESOLUTION in observance of the prohibition against
public disclosure of internal deliberations of the SC.
3. The raffle of the case to the SECOND DIVISION
was in accordance with Sec. 4(3), Art VIII of the
Constitution and that any error committed was a harmless
error that did not invalidate prior rulings made.
4. The participation of CJ Corona did not void the
RECALL RESOLUTION (note that he inhibited earlier). He
could not have resolved the case by himself because the
SC, whether acting en bane or thru a division, acts as a
collegial body.
5. Thru its 13 March Resolution, the SC upheld the
validity of its RECALL RESOLUTION and ruled that the
case be raffled to either J Peralta or J Bersamin, being the
remaining members of the SPECIAL THIRD DIVISION, to
become Member-in-Charge. Hence FASAP's MR to void
the RECALL RESOLUTION must be denied.
BAR SYLLABUS-BASED REVIEWER IN 713
LABOR LAW & SOCIAL LEGISLATION
6. PAL's second MR was not a prohibited pleading.
As an exception to Sec 2, Rule 52, Rules of Court, the
IRSC allows second MRs under these conditions: (a) to
serve the higher interest of justice, i.e., the decision is not
only legally erroneous, but patently unjust and potentially
capable of causing unwarranted and irremediable injury or
damage; (b) the second MR is filed before finality of
judgment; and (c) if the decision was rendered by a
division, at least 3 members must vote to elevate the case
to the en bane; or, if by the en bane, 2/3 of the en bane
must vote to allow the second MR.
7. The 2008 decision penned by J Ynarez-Santiago
contravened jurisprudence recognizing the precarious
financial condition of PAL, the findings of the LA (?), NLRC
and CA, as well as SEC, regarding the business losses of
PAL. It was merely based on the lack of audited financial
statements.
8. With the granting of PAL's motion for leave to file
second MR, the 2008 decision has not attained finality yet.
Matters Not Raised on Appeal
1. Rule: Issues not brought on appeal are beyond
review.
2. Exceptions:
Javines v. Xlibris aka Author Solutions, Inc.
G.R. No. 214301, 7 June 2017
2.1. Questions affecting jurisdiction over the
subject matter;
2.2. Matters evidently plain or clerical errors
within contemplation of law;
2.3. Matters necessary in arriving at a just
decision and complete resolution of the case, or
necessary in avoiding piecemeal justice;
714 JURISDICTION AND REMEDIES BAR SYLLABUS-BASED REVIEWER IN 715
LABOR LAW & SOCIAL LEGISLATION

2.4. Matters on record not entertained by the lution assailed, together with clear copies of
court, or which the parties failed to raise; documents relevant or related to the said
2.5. Matters closely related to the assigned order or resolution;
error; (b) Must bear the arbitral docket
2.6. Matters upon which the determination of a number and appeal docket number, if any;
question properly assigned is dependent. (c) Must state material dates to
show timeliness of the petition;
Post-Judgment Remedies
(d) Must be verified by the
1. In St. Martin Funeral Home v. NLRC, G.R. No. petitioner himself/herself;
130866, 16 September 1998, the Supreme Court stated
that the mode of review of NLRC decisions is a petition (e) In the form of a memoran-
for certiorari under Rule 65, Rules of Court. Since the dum, stating the grounds relied upon and
remedy is not a mode of appeal really, as it is actually a relief/s prayed for;
special civil action with the NLRC as respondent, it (f) Three (3) legibly written or
follows that the NLRC's decisions are final and non- printed copies; and
appealable in the strict sense of the term. Thus, the
(g) Accompanied by:
following remedies taken after finality thereof may be
regarded as post-judgment remedies: (i) certificate of non-froum
shopping;
1.1. Petition for Certiorari (Rule 65, Rules of
Court); (ii) proof of service upon
the other party/ies and
1.2. Motion to Lift Entry of Judgment (Sec. 5,
Labor Arbiter who
Rule XI, 2011 NLRC Rules);
issued the order or
1.3. Motion to Quash Writ of Execution (Sec. 13, resolution; and
Rule XI, id.); and
(iii) proof of payment of the
1.4. Petition for Extraordinary Remedies (Rule XII, required fees.
id.) 2.1.2. Grounds (Sec. 2)
2. Guidelines (a) Pure questions of law;
2.1. Petition for Extraordinary Remedies (Rule (b) Serious errors in findings of
XII) fact;
2.1.1. Requisites (c) FAME resulting in failure to
appeal;
(a) Accompanied by clear original
or certified true copy of the order or reso-
716 JURISDICTION AND REMEDIES
(d) The order or resolution will
cause injustice if not rectified.
2.2. Rule 65 v. Rule XII
As to Grounds: Rule 65 is limited to grave
abuse of discretion, or error of jurisdiction; whereas,
Rule XII is not. It includes these additional grounds:
pure questions of law; serious errors in findings of
fact; FAME resulting in failure to appeal; the order or
resolution will cause injustice if not rectified (Sec. 2).
Note: As to serious errors in the findings of
fact, Rule XII does not substitute for an appeal under
Art. 229. This is why there is a need to emphasize
that a Rule XII petition is a post-judgment remedy and
not a mode of appeal.
As to Prescription: A Rule 65 petition must be
filed within 60 days; whereas, a Rule XII petition must
be filed within 10 days.
As to Respondent/s: Under Rule 65, the
respondent is the NLRC; whereas, under Rule XII, the
LA is a nominal respondent. The LA is not allowed to
file comment or appear.
2.3. Effects of Post-Judgment Remedies on
Execution
2.3.1. Sec. 4, Rule XI, 2011 NLRC Rules of
Procedure, as amended.
Mere filing of a petition for certiorari will not stay exe-
cution, unless a TRO is issued enjoining execution.
Note: Sec. 7, Rule 65, Rules of Court, grants the
lower courts 10 days to enforce final judgments under
pain of administrative sanction.
2.3.2. Sec. 13, Rule XI, 2011 NLRC Rules of
Procedure, as amended.
BAR SYLLABUS-BASED REVIEWER IN 717
LABOR LAW & SOCIAL LEGISLATION
Mere filing of a motion to quash writ of execution will
not stay execution.
2.3.3. Sec. 9, Rule XII, 2011 NLRC Rules of
Procedure, as amended.
Mere filing of a Rule XII petition will not stay
execution, unless a TRO is issued.
Execution of Judgment
1. Pre-Execution Conference
1.1. Compromise
The parties can always enter into a compromise
settlement agreement at this stage. The requisites of a
valid settlement are: (a) reasonable and fair; and (b)
adequate consideration. In Catholic Vicariate of
Baguio v. Sec. Sto. Tomas, supra, 50% consideration
was considered as unconscionable.
1.2. Recomputation of Backwages and Separation
Pay
The Principle of Finality of Judgments is not
violated when backwages and separation pay are
recomputed until finality of judgment. In Session
Delights, from which Gallery Frames took its bearing,
it was held that finality of a judgment puts to rest all the
issues of a case - except as to amount of backwages.
In other words, where no reinstatement takes effect,
backwages continue to accrue until finality of judgment
(Gaco v. NLRC); hence, the computation of the LA,
NLRC or CA, as the case may be, must be adjusted
until the date of finality stated in the entry of judgment.
Even separation pay, computed as of date of the
LA's decision, NLRC's decision, or CA's decision - as
the case may be - shall be recomputed up to finality of
judgment.
718 JURISDICTION AND REMEDIES BAR SYLLABUS-BASED REVIEWER IN 719
LABOR LAW & SOCIAL LEGISLATION

1.3. Legal Interest the latter; hence, it was void. Being void, the peti-
Backwages will continue to accrue until finality of tion for certiorari was mooted.
judgment only. After finality, legal interest will accrue if 4.2. Transmarine Carriers v. Legaspi, 71 o
the employer does not satisfy the judgment. Starting 1 Phil. 838, 2013
July 2013, legal interest shall be 6% per annum. Before
The conditional satisfaction of judgment was
then, it was 12%.
highly prejudicial to the claimant because while the
2. Writ of Execution employer could file a petition for certiorari and other
2.1. Motion to Quash cases, the claimant could not. Hence, it was void.

A motion to quash, to be filed within 10 days

from receipt of the writ of execution, shall be
resolved in 10 days from filing.
2.2. No Appeal
If the motion to quash is denied, the em-
ployer cannot appeal anymore unlike before. His
remedy is to challenge the order denying his
motion under Rule XI I.
3. Order of Execution
3.1. Cash bond
3.2. Bank deposits
3.3. Surety bond
3.4. Personal property
3.5. Real property
4. Conditional Settlement of Judgment: Effect on
Certiorari Petition
4.1. Magsaysay Maritime Corp. v. De Jesus,
G.R. No. 203943, 30 August 2017
The conditional satisfaction of judgment pro-
vided that should the respondent be able to get a
reversal, the complainant could not avail of any
legal remedies. This was held to be prejudicial to
4.3. Leonis Navigation v. Villamater, 628 Phil.
81,2010
The decision was enforced pending respon-
dents' petition for certiorari. An order was issued
by the LA closing and terminating the case. The
respondents did not question that order. Regard-
less, the complainant was not allowed to rely on
that order to frustrate restitution because the
Acknowledgment Receipt she signed when she
received the amount was without prejudice to the
final outcome of the petition for certiorari.
4.4. Career Philippines Ship Management v.
Madjus, 650 Phil. 157, 2010
The conditional satisfaction of judgment
mooted the petition for certiorari. It was held to be
valid. The complainant waived all past, present
and future rights, with undertaking not to file suit
anywhere.
Conclusion:
If the conditional satisfaction of judgment is
void, it will moot the petition for certiorari.
Restitution (Rule XI, 2011 NLRC Rules of Procedure, as
amended).
1. Sec. 18
720 JURISDICTION AND REMEDIES
"Where the executed judgment is totally or
partially reversed or nullified by the Cout of Appeals
or the Supreme Court with finality and restitution is
so ordered, the Labor Arbiter shall, on motion, issue
such order of restitution of the executed award,
except reinstatement wages paid pending appeal."
Even if not ordered, restitution must be allowed as
common sense dictates; otherwise, the employee
would be enriched at the expense of his employer
(2015 Wallem Ruling).
Revival of Judgment
Within 5 years from date of finality, judgments shall be
enforced by motion for issuance of writs of execution.
Thereafter, it shall be by revival.
Zamboanga Barter Traders Kilusang Bayan, Inc.
(ZBTKBI) v. Hon. Julius Rhett J. Plagata, et al.,
G.R. No. 148433, 30 September 2008
ZBTKBI donated a parcel of land to the Republic
(represented by the Commanding Officer of the Philippine
Constabulary) on condition, among others, that the latter
would build a 1,000-stall barter trade market building on it,
and that should barter trading be phased out, prohibited, or
suspended for more than 1 year then the property shall be
reverted. Hence, TCT NO. 66696 was issued to the donee.
Prior to the donation and the construction of the building,
ZBTKBI hired Mendoza as clerk. Dismissed for abandon-
ning his work, he sued for illegal dismissal and won a mo-
netary award. The NLRC dismissed ZBTKBl's appeal.
Having failed to elevate the case to the certiorari court, a
writ of execution was issued but it was returned unsa-
tisfied. In his report, the sheriff stated that the corporate
president told him to tell the LA to send him (sheriff) to the
barter trade "clad in an iron shirt". Thereafter, an alias writ
of execution was issued against the Commanding Officer
BAR SYLLABUS-BASED REVIEWER IN 721
LABOR LAW & SOCIAL LEGISLATION
of the Philppine Constabulary, as representative of the
Republic. Subsequently, barter trading in Zamboanga was
totally phased out by the President.
A second alias writ was issued authorizing the levy of
any interest ZBTKBI had over the land and its improve-
ments. Eventually, the land was auctioned off with
Mendoza as the highest bidder. As it turned out, ZBTKBI
failed to redeem it. Hence, Mendoza who was issued a
certificate of sale was eventually issued a writ of posses-
sion. ZBTKBI filed a motion for reconsideration but it was
denied. Resultantly, it filed a petition for certiorari.
Allegedly, the owner of the land was the Republic which
had no notice of the suit. Besides, the over-levy took pace
after 5 years from finality of judgment. The CA dismissed
the petition, ruling that the property had already reverted to
ZBTKBI. It ruled that, based on the documents, it was the
owner; hence, the Republic did not have to be notified.
And as to the allegedly shocking bid, it ruled that it was
even advantageous to ZBTKBI because it allowed it to
redeem the property at a low price. After the CA denied its
MR, it went up to the SC which dismissed its petition for
review on certiorari for lack of merit.
Before the SC, Y Trading Center Stallholders filed a
motion for intervention with MR, praying that the levy and
sale be voided and that Mendoza's title be cancelled. It
prayed that it be allowed to pay the judgment award, plus
legal interest.
During a congressional investigation, the LA admitted
having violated the Rules of Court and the Labor Code
when he ordered execution of judgment by mere motion
after 5 years. His testimony was submitted by the
intervenor to the SC as supporting evidence. Meantime, a
separate cancellation case was filed with the RTC. That
was manifested to the SC.
Required to file comment since government propertry
was involved, the OSG submitted that the CA erred in not
722 JURISDICTION AND REMEDIES
passing upon the issue of nullity of the levy which was
made without notice to the Republic. Thus, it erred in ruling
that the property had reverted; in upholding the auction
sale, certificate of sale, and writ of possession; in not
voiding the levy on the ground that it was an over-levy; and
in not ruling that the judgment could not be executed by
mere motion after 5 years.
The SC ruled that the property automatically reverted
without need for rescission because the President had
totally phased out barter trade in Zamboanga; however,
what reverted was the land and not the 5M worth of
government improvements. As to the 5-year period,
Mendoza was able to move for execution within 5 years. If
there was delay in the levy, it was because the corporate
President warned that the sheriff should be clad in iron
shirt if dispatched to enforce the judgment. Hence,
Mendoza was not required to file an independent action.
What is the moral lesson?
None, except to remark - and it bears doing so - that
the corporate president was a lawyer who was very
inclined to apply the Iron Shirt Doctrine (do not use this in
the Bar).
Piercing the Veil of Corporate Fiction
1. Piercing the veil of corporate fiction is a means to
determine liability, not to acquire jurisdiction.
Kukan International Corp. v. Hon. Amore Reyes,
et al.
G.R. No. 182729, 29 September 2010
A corporation must be co-impleaded from the start
before it can be subjected to the piercing processes of the
trial court. Piercing the veil of corporate fiction is a
means to determine liability, not to acquire jurisdic-
tion. The grounds for piercing are to be proven during a
BAR SYLLABUS-BASED REVIEWER IN 723
LABOR LAW & SOCIAL LEGISLATION
full-blown trial. A third party claim questioning the propriety
of the piercing, thru a special and involuntary appearance,
is subsumed to a challenge to jurisdiction; hence, the third
party-movant does not submit to the jurisdiction of the
court thereby.
1 .1 . Hypothetical Problems
1.1.1. Ricardo sued Jolibee for illegal
dismissal. The LA rendered a decision ordering
his immediate reinstatement and payment of his
full backwages. The NLRC affirmed the decision,
which also earned approval from the CA and the
SC. In the LA's eventual writ of execution, Jolicee
and Jolidee were included based on his determi-
nation that both were adjuncts or instrumentalities
being used by Jolibee as in-house manpower
suppliers to circumvent the law on tenure. He
denied their separate motions to quash writ which
were based on alleged lack of jurisdiction since
both movants were not impleaded in the case.
Decide (2.5%).
1.1.2. The LA issued an alias writ of
execution, this time including ABC Corp. which is
not a party to the case, based on public know-
ledge that the taxi cabs sporting the name Aircon
- one of which was being driven by the com-
plainant - are actually owned by ABC Corp. In
said writ, he pierced the corporate veil separating
the legal personality of said company from that of
respondent company XYZ Corp. Resolve. (2.5%)
1.2. Proposed Answers
1.2.1. The piercing of the corporate veils se-
parating the three corporations is void. As a re-
quirement of due process, Jolicee and Jolidee
should have been impleaded in the same case
against Jolibee. Piercing is a process that takes
 --,
'I
!

724 JURISDICTION AND REMEDIES BAR SYLLABUS-BASED REVIEWER IN 725

LABOR LAW & SOCIAL LEGISLATION

place during trial at which the grounds are es-
tablished, i.e., after the court has acquired juris-
diction over all corporations concerned. (Kukan).
1.2.2. Public knowledge cannot substitute
for evidence. Appearance evidence, or surface
evidence, is not substantial evidence at all.
Moreover, corporate veil cannot be pierced in a
writ of execution but in the decision that resolves
the issues of the case. Since ABC Corp. was not
impleaded, jurisdiction has not been acquired
over its person. Hence, no issue could have been
validly resolved as against it.
2. Theories on Piercing or Grounds for Piercing
2.1. Fraud Theory
2.2. Alter Ego Theory
4.2. Types
International Academy of Management and
Economics v. Litton and Co., Inc.
G.R. No. 191525, 13 December2017
(MCLE Notes of Dean Nilo T. Divina)
4.2.1. Outsider Reverse Piercing. It contem-
plates a situation wherein a party with a claim
against an individual or corporation attempts to
be repaid with assets of a corporation owned or
substantially controlled by the defendant.
4.2.2. Insider Reverse Piercing. The controlling
members attempt to ignore corporate fiction in or-
der to take advantage of a benefit available to the
corporation, such as an interest in a lawsuit or
protection of personal assets.

3. lmpleading of Parties During Execution

Dutch Movers, Inc., et al. v. Edilberto Lequin, et al.

G.R. No. 210032, 25 April 2017
J Castillo
(MCLE Notes of Dean Nilo T. Divina)
Piercing the veil of corporate fiction is allowed, and
responsible persons may be impleaded and be held
solidarily liable even after final judgment and on execution,
provided that such persons deliberately used the
corporate vehicle to unjustly evade the judgment
obligation, or resorted to fraud, bad faith, or malice in
evading their obligation.

4. Reverse Piercing Action

4.1. Concept. In a reverse piercing action, the assets
of a corporation are made to satisfy claims
against a corporate insider.
 BAR SYLLABUS-BASED REVIEWER IN 727
LABOR LAW & SOCIAL LEGISLATION

APPENDIX "A"

....an
.
00
0
a:
APPENDICES

...
an
'l'
M
00

~
-C
 --.a
N
0G

S~li~ary
)>
"'C
"'C
m
z ►
"C
C "C
m
X z
C
Solidary ~:: 0
Violations m
en

•JS,L

-J
Labor Procedure I .,$C,,cc. J
• Pure Questions of Low
l.Concept • EquifyJurisdidion

2. Jurisdictional Rules

o. Reosonoble Causal
I. . ·... ~~:;-,.(. I ,m
Connection Rule • Certiorari ►►
m ;:c
b. Sore Reference to • Equity Jurisdicti.on Oen
;:c -<
c. labor low Rule • Dual-Function I"" I""
)> ►' 6i
3.Aspecfs
a. Confemment
BUl S()Lf; I. N~J~ .1 "'ti
"'ti
m
z
:E
~c
en Cf'
b. Acquisition • Original • Review • Review
om
C o ►
-en
c. Exercise
d. Interplay
• Appellate • Assumption
• Control & S<.,pe,vl.sion
• lr~undion
• Rule-making
x ►m
'C
• Suspens:ion • CompulsoryArbitrotion
ri:: I"" ;:c
mm
~<
en-
, m
lM~sl-:~., I L. .RQ.,,;,;:,~'.J L ''~'"' ' I I . . ,.Y~ .;J ~~
0 ;:c
• CEPetition • M_ 128&129 • Art224,PD442 • Traditional z-z
• EBRCertificoiion • Sec_37,RA 10361 • Sec.7,RA 10022 • Stipulated
• Apprentices • Seafarers
• CR Concellofion • others
• CBA Deregistmf10n
--.a
• DOLEAdv.4.s_2016 N
co
730 APPENDICES BAR SYLLABUS-BASED REVIEWER IN 731
LABOR LAW & SOCIAL LEGISLATION

Appendix "D" bargaining which, in turn, is a prenumbra (shadow right) of

the right to self-organization. In effect, therefore, what is
Additional Notes on Self-Organization violated is the workers' right to self-organization. However,
to be ULP, the violation must pertain to economic
SELF-ORGANIZATION provisions and it must be gross and flagrant (Art. 274,
Labor Code).
Overview
In the face of a direct violation of the right to self-
Self-organization leads to collective bargaining. As a
organization (e.g., coercion, interference or restraint), the
rule workers cannot compel their employer to come to the
workers can use their "survival weapon", viz., ULP strike.
bargaining table to negotiate a CBA unless they are acting
In contrast, in the event of an indirect violation (e.g., refusal
thru a union possessed with majority representative status.
or evasion) resulting in a CBA deadlock, they can use their
This implies the following processes: (a) formation of a
"economic weapon", viz., economic strike. Since survival
union during an organizational meeting at which its name
is the issue in ULP strikes (especially one grounded on
is decided upon, a CBL is adopted, and union officers are
union busting), the cooling off period is shorter (15/0 days).
elected; (b) registration of the union in order to become a
In contrast, since the employer can still improve his offer or
legitimate labor organization (LLO) f~r purpos~s of
the union can still reduce its demand, the cooling off period
exercising the rights of an LLO, one of which Is the right to
in economic strikes is longer (30 days) to allow saving of
be voted for as the exclusive bargaining representative
faces.
(EBR); (c) selection and certification of the LLO as SEBA
or EBR; (d) compliance with the jurisdictional preconditions
Formation of Labor Organizations (LOs)
of collective bargaining; (d) observance of the applicable
collective bargaining procedure; and (e) negotiation and 1. Mechanics
perfection of a CBA.
1.1. Organizational Meeting
A CBA undergoes three phases: (a) political phase
1.1.1. Name of LO, official address;
(negotiation); (b) legislative phase (perfection); and (c)
judicial phase (consummation/administr~t~on). ~t has two 1.1.2. Adoption of CBL;
lives: (a) economic life; and (b) political life. (Prof.
1.1.3. Election of Union Officers.
Azucena)
Only occupants of union offices
A CBA, being a contract, is governed by rules
created by the CBL are union officers.
governing contracts in general, e.g.: (a) Principle of
Hence, only their dismissal will amount to
Freedom of Contracts; and (b) Principle of Mandatory
union busting as long as said dismissal
Force of Contracts.
will threaten the union's existence. How-
Violation of the applicable CBA is a ULP under both ever, even the dismissal of a shop ste-
Articles 259 and 260 of the Labor Code. As to why said ward who assists union members during
violatiqn should be a ULP (defined as violation of workers' litigation amounts to union busting under
right to self-organization), a CBA is the fruit of collective like circumstance.
732 APPENDICES
1.1.4. Minutes
A secretary is pre-selected to pre-
pare the minutes of the adoption of the CBL
and minutes of the election of union officers,
reflecting the number of participants and the
number of those who adopted and voted.
Said minutes will form part of the registra-
tion requirements later on.
1.2. In independent registration, minutes and
other documentary requirements must be attested to
by the Union President. In chartering, there is no need
to.
2. Rights of Union Members (Art. 250)
2.1. Political Right
2.2. Economic Right
2.3. Right to Participate
2.4. Right to Information
Note: Violations of these rights by union officers
will generate intra-union disputes.
3. Duties of Union Members
Rights of Legitimate Labor Organizations (Art. 251)
3.1. Union Dues
3.2. Special Assessments
Legitimate Labor Organization (LLO)
1. Independent Registration: Types of LOs and
Registration Requirements
1.1. Independent Union (NaMin NamAn FiCon)
1.2. Workers Association (NaMin FiCon)
1.3. Federation and National Unions (NaMin
NamAn Res Con)
BAR SYLLABUS-BASED REVIEWER IN 733
LABOR LAW & SOCIAL LEGISLATION
2. Chartering: Registration Requirements
3. Independent Registration (IR) v. Chartering (C)
3.1. Legal Personality. In IR, the LO becomes
an LLO upon issuance of its CR; whereas, in C, LLO
status attaches upon submission of registration
requirements.
3.2. Right to file CE Petition. In IR, a CE
petition can be filed only after attainment of LLO
status; whereas, in C, the mother organization can file
a CE petition in behalf of its local after issuing its
charter certificate.
Note: On behalf means 'in representation of';
whereas, in behalf means "in the interest of'.
3.3. 20% Rule. In IR, the applicant LO must
submit names of members comprising at least 20% of
the CBU membership; whereas, in C, this is not
required.
3.4. Attestation. In IR, the Union president need
not attest to the registration documents; whereas, in
C, his attestation is required.
1. Right to become EBR or SEBA thru:
1.1. SEBA Request
On 7 September 2015, D.O. 40-1-15 was issued
to do away with Voluntary Recognition. At any rate, it
requires that there be one union only. In Me-Shurn
Corp. v. Me-Shurn Workers Union, G.R. No.
156292, 11 Jan. 2005, there was a rival union but the
company voluntarily recognized the favored union.
That had no legal effect.
If there was one union only but the employer
refused to recognize it as EBR, the employees were
 .
734 APPENDICES
7 !

BAR SYLLABUS-BASED REVIEWER IN 735

LABOR LAW & SOCIAL LEGISLATION

disadvantaged. Thru SEBA request, they can now (a) Formal Validity (in writing, signed,
compel their employer to collectively bargain. verified)
1.2. Procedure: OE v. UE (b) Substantial Validity
1.2.1. UE (i) Description of CBU sought to be
(a) If there is only one union, the represented;
RD shall call a conference for the submis- (ii) Statement that the CE is not
sion of (i) names of employees comprising barred;
majority of the CBU membership involved
who support certification; (ii) certification (iii) Statement that the petitioner is an
under oath by the president that the docu- LLO;
ments submitted are true and correct based (iv) Statement that majority of the CBU
on his personal knowledge. If documents members support it.
are . not submittted, the request shall be
1.3.2. Valid CE
referred to an election officer for the conduct
of CE pursuant to Rule IX (D.O. 40-1-15). Questions to Ask:
(b) If there are more than 1 LLOs, (a) Is the CE barred (by contract bar; certification
certification election shall be conducted year bar; deadlock bar)?
instead. Note: If barred, it is not valid.
1.2.2. OE (b) Did majority (Major) of the eligible voters (ELVOT)
SEBA request shall be referred to cast their votes (CASVOT)?
the Med-Arbiter to determine propriety of a Memory Tool: If the CE is not barred and Major
CE. ELVOT CASVOT voted then it is valid.
Note: SEnA Request v. SEBA Space for Computations
Request
Illustration:
SEnA Request initiates SEnA
proceedings, a pre-litigation requirement of X Co. has 1,000 rank and filers. Of said number, 100
Art. 228, Labor Code, based on Sec. 1, have been CBU members for two months. During the CE
R.A. 10396; whereas, a SEBA Request is initiated by petition during the freedom period, 451 cast
the substitute for voluntary recognition. their ballots. Is the CE valid?
1.3. Certification Election Application: Questions and Answers

1.3.1. Valid CE Petition Q: Is the CE barred?

 ,
A

736 APPENDICES BAR SYLLABUS-BASED REVIEWER IN 737

LABOR LAW & SOCIAL LEGISLATION

A: No because the CE petition was filed during the 2.2. The Certification Year Bar applies if
freedom period. collective bargaining was commenced and sustained
Q: Did majority of the eligible voters cast their votes? during the 12-month period immediately following the
selection of the EBR. If commenced but not sus-
A: Yes. tained, it means that the EBR is inutile; hence, it
ELVOT = 1,000 less 100 (to be eligible new needs to be replaced thru another CE. To this end, a
employees must have been CBU members for at least 3 losing union can file its CE petition even during the
months). Therefore, ELVOT is 900 only. 12-month period - except if management has been
evading its duty to collectively bargain (Prof.
Majority = 50% of 900 + 1 Azucena).
= 450 + 1 2.3. The Negotiation Bar. If CBA negotiations
= 451 between the EBR and the company have com-
menced, CE is barred.
Guide Notes:
2.4. The Deadlock Bar applies if the dead-
1. The following are not ELVOTs:
locked issue: (a) is undergoing conciliation/mediation;
Non-employees (b) has been submitted to voluntary arbitration; or (c)
Non-CBU members has become the subject of a valid notice of strike. In
these situations, a CE should not resolve the issue.
CBU members for less than 3 months
Confidential employees Note: (a) A valid notice of strike is one served by
the proper union and based on strikable grounds; (b) the
Legal secretaries following can serve a strike notice:
Corporate secretaries
In Economic Strikes
2. CE Bars: Prerequisites
Rule: Only the EBR
2.1. The Contract Bar applies if the CBA is
Reason: It is the one locking horns with management
registered. But even if registered, filing of CE petition
over CBA provisions.
outside the freedom period is permissible in the
following instances: In ULP Strikes
(a) Defective CBA (entered into with the wrong General Rule: EBR
union); Exception: The victim union if the EBR neglects or
(b) CBA was signed before or within the refuses to serve notice.
freedom period; Grounds:
(c) Renegotiated CBA was concluded in bad Strikeable: bargaining deadlock, ULP and union
faith to bar a CE (Prof. Azucena). busting.
738 APPENDICES
Non-strikeable: wage distortion dispute; labor
standards dispute; intra-union dispute; and inter-union
dispute
3. CE Winner
3.1. The winner is the union that gets majority
vote (Major VOT) based on valid votes (VALVOT).
Memory Tool: The winner is Major VOT VALVOT
Illustration: (same example, supra)
Of the 900 ballots cast, 15 were blank and 5 were
spoiled. The participants obtained the following votes:
Union A- 400
Union B - 241
Union C - 239
No Union - 0
Who is the winner?
Application: Questions and Answers
Q: What is the VALVOT?
A: 900- 20 (15 blanks & 5 spoiled)= 880
Q: What is the majority of 880?
A: 441
Q: Which of the participants got at least 441?
A: None, because the highest vote is 400 only.
3.2. Run-Off Election
Take note that, in the example, the combined votes
(880) of the unions (excluding No Union) is more than 50%
of the CASVOT (900). This is evidence that the workers
want to be represented by a union. In fact, 50% of 900 is
450 which is the minimum evidence required. Based on
BAR SYLLABUS-BASED REVIEWER IN 739
LABOR LAW & SOCIAL LEGISLATION
said evidence, a run-off election may be conducted in
order to produce an EBR for the workers - subject to the
attendance of other requisites.
Requisites of a Run-off Election:
(i) The CE is valid;
(ii) Three or more participants (including No Union);
(iii) None of the participants got Major VOT VALVOT;
(iv) The combined votes of the participants (excluding
No Union) is at least 50% of CASVOT; and
(v) No election contest that would materially alter the
CE result.
Note: Even if there is a protest but the number of
ballots contested is not sufficient to alter the voting result,
run-off election can proceed; otherwise, the 5th requisite
shall be deemed not complied with. Hence, where Union A
got 440 votes because 1 vote was excluded by the election
officer and that vote is sought to be included via an
election protest, the protest must be heard first due to the
possibility that it will be counted. If the deficiency is 1O
votes and the number of ballots excluded is 5 only, the
contest will not alter the CE result.
Participants: The top two (2) unions. The term "the
two unions with the highest number of votes" implies that
Union A and Union B got equal votes; hence, the better
term is "top two unions".
Run-off Election Winner:
One View: The union that gets the higher vote.
Another View: The union that gets Major VOT
VAL VOT. This is the correct view because if less than
majority cast their votes in the run-off election, a failure of
election results.
740 APPENDICES
If there is no failure of election but none gets majority
vote, there will be no more elections during the ensuing 12
months to avoid union politics.
Run-Off Election (ROE) vs. Re-Run Election (RRE)
ROE is an election that comes after a CE does not
produce an EBR (subject to requisites, supra). RRE is not
an election that comes after a failed ROE. It is one
conducted when there is failure of election (less than
majority voters' turnout) in a CE, or when the CE is
attended by irregularities (threats, intimidation to election
officers).
1. Consent Election
In the course of CE proceedings, the affected unions
may manifest to the Med-Arbiter that they are opting for a
ConEI, in which case the CE proceedings will be
terminated. Or where no CE proceedings are initiated, they
may agree to hold a ConEI. In a ConEI, the unions adopt
their ground rules. They may or they may not seek
supervision from the DOLE. The winner will be certified as
EBR by the Med-Arbiter.
2. Representational Right
2.1. Right to represent union members
A union can be a co-complainant in labor cases
involving members (e.g., illegal dismissal). It can be the
complainant for the enforcement of the duty of an employer
to pay replacement wages under Art. 128 of the Labor
Code (NAMAWU v. Marcopper, supra). However, it
cannot waive personal rights, e.g., right to reinstatement.
Hence, it cannot enter into a compromise settlement
whereby separation pay will substitute for reinstatement,
i.e., where its members desire reinstatement.
BAR SYLLABUS-BASED REVIEWER IN 741
LABOR LAW & SOCIAL LEGISLATION
The Principle of Agency
Unions are their members' agents; hence, they
cannot rise higher than the source of their representational
powers. Likewise, mother organizations (federations,
national unions) are their members' agents; hence, they
cannot sequester their members' properties.
2.2. Right to represent all CBU members
Art. 255 (old) of the Labor Code provides that, for
purposes of collective bargaining, workers shall be
represented by the EBR. For other purposes, like dealing
with the employer for grievance redressing, they may be
represented by any group of workers.
3. Other Rights
3.1. Right to own property;
3.2. Right to sue and be sued;
3.3. Right to audit financial statements; and
3.4. Right to undertake all helpful activities.
Collective Bargaining
1. Concept
1.1. Definition (Art. 263, Labor Code)
1.1.1. Duty to meet promptly, expedi-
tiously in good faith to negotiate a CBA embo-
dying employment terms and conditions, inclu-
ding a grievance machinery;
1.1.2. Without compelling any party to
agree to a proposal or to make any concession.
1.2. Collective Bargaining (CB) v. Collective
Negotiations (CN)
CB is both a right and a duty, infra;
whereas, CN is a right only.
742 APPENDICES BAR SYLLABUS-BASED REVIEWER IN 743
LABOR LAW & SOCIAL LEGISLATION

2. Nature mixed-CSU membership. However, it can

2.1. It is a right (Sec. 3, Art. XIII, Constitution; participate in the pre-election conference to
Art. 3, Labor Code). challenge the petitioner's list. Exclusion of voters
can be demanded based on non-membership in
2.2. It is a duty (Art. 263, Labor Code) as the CSU.
follows:
4. Jurisdictional Preconditions
2.2.1. In Organized Establishments, to
meet, negotiate a CSA and respect the pre- 4.1. Possession of majority representative
existing CSA while in effect. status;
2.2.2. In Unorganized Establishment, to 4.2. Proof of SEBA/EBR status; and
meet and negotiate a CSA. There is no pre- 4.2. Demand to bargain.
existing CSA to observe.
5. Procedure
3. Subject of Representation
5.1. Single Enterprise Bargaining (Art.261,
Only an appropriate collective bargaining unit (CSU) Labor Code)
can be represented in collective bargaining. In the public
sector, its counterpart is an appropriate collective 5.1.1. Demand with list of proposals;
negotiation unit (CNU). To be valid, a CE petition must 5.1.2. Reply in 1O days;
describe the CBU/CNU sought to be represented.
5.1.3. NCMB intervention, if no reply or
3.1. Tests to Determine Appropriateness of demand and offer require adjustment; and
CBU
5.1.4. No disruptive acts during mediation
3.1.1. Globe Doctrine proceedings.
3.1.2. Mutuality of Interest Doctrine 5.2. Multi-Employer Bargaining (D.O. 40-03)
3.1.3. CSA History Rule 5.2.1. 1 EBR per 1 Employer Rule
3.1 .4. Employment Status (counterparting rule); and
Doctrine
(Lepanto Case, infra) 5.2.2. Art. 261 procedure.

Lepanto Consolidated Mining Co. v. The Lepanto
Capataz Union
G.R. No. 157086, 18 February 2013
3.2. Inclusion-Exclusion Proceedings
The employer establishment cannot file a
· motion to dismiss a CE petition on the ground of
6. Violation of Duty to Collectively Bargain
6.1. Forms of Violation
6.1.1. Refusal to reply to the demand to
bargain; and
6.1.2. Evasion of mandatory subjects.
 ----,

744 APPENDICES
BAR SYLLABUS-BASED REVIEWER IN 745
LABOR LAW & SOCIAL LEGISLATION

6.2. Subjects of Collective Bargaining or

Collective Bargaining Issues
6.2.1. Mandatory Subjects
(a) Hours of work, wages and
other employment terms;
(b) Vested rights, e.g., benefits
under a non-contributory retirement plan
and other non-contributory benefits being
enjoyed already, e.g., 14th month pay, sa-
lary increases, rice allowances, midyear
bonuses, seniority pay, medical and hos-
pitalization plans, health plans, vacation,
sick and other leaves. They cannot be
evaded without violating Art. 100, Labor
Code (Tiangco v. Hon. Leogardo, 122
SCRA 267);
(c) Subjects covered by the
previous CBA. It is to be expected that the
union will seek renewal thereof (Republic
Cement Corp. v. Hon. Panel of Arbitra-
tors, G.R. No. 89766, 19 February 1990).
6.2.2. Discretionary Subjects
(a) Not pertaining to hours of
work, wages, and mandatory terms and
conditions of employment;
6.4.1. Find out if there is a pre-existing
CBA (Organized Establishment) or the CBA being
negotiated is the first ever (Unorganized
Establishment);
6.4.2. If there is a pre-existing CBA, is the
subject alleged to be evaded by the employer
vested by that CBA?
(a) If Yes then there is evasion.
(b) If No then there is no evasion.
However:
Expired economic provIsIons may not be
insisted on under the rule that the right to
collective bargaining includes the right to suspend
it (Insular Hotel Employees Union-NFL v.
Waterfront Insular Hotel Davao, G.R. No.174040,
22 September 2010).
6.4.3. lfthere is no pre-existing CBA, is the
subject alleged to be evaded by the employer on
hours of work, wages, other mandatory terms and
conditions of employment?
(a) If Yes then there is evasion.
(b) If No then there is no evasion.
Note:

(b) Not covered by the pre- Are these subjects mandatory or discretio-
existing CBA; nary: Union Security Clause; No Strike No Lock-
out Clause; Compulsory Arbitration Clause; Ma-
(c) Not vested rights. nagement Prerogatives; Pre-termination Proce-
6.3. A proposal to exclude retirement pay from dure?
the subjects of collective bargaining, being a (a) Mandatory if they are part of CBA
mere proposal, is not refusal to bargain. history.
6.4. Tool for Analysis
(b) Discretionary if they are not; or if there is
no pre-existing CBA.
 4
746 APPENDICES
If the CBA is the first ever to be negotiated,
the employer cannot be compelled to agree to a
no lockout clause, nor can it be compelled to
stipulate on a pre-termination procedure (contrac-
tual due process) more elaborate than statutory
due process pursuant to the principle that no
party can be compelled to agree to a proposal.
Hence, it cannot be accused of refusal, evasion
or bad faith.
Collective Bargaining Agreements
1. Principles
1.1. Principle of Freedom of Contracts
Insular Hotel Employees Union-NFL v. Waterfront
Insular Hotel Davao
G.R. No.174040, 22 September2010
The right to collective bargaining includes the right to
suspend it.
1.2. Principle of Obligatory Force of
Contracts
Goya, Inc. v. Goya Inc. Employees Union - FFW
G.R. No. 170054, 21 January 2013
If CBA provisions leave no room for interpretation, a
literal reading and application thereof must be observed.
They must be read together to give effect to the intent of
the parties. Hence, where all types of employees (including
casuals) are made subject to the union security clause, the
employer cannot invoke management prerogative as
excuse to hire casuals from a manpower provider.
Application:
The CBA has a Closed Shop provision. Elsewhere, it
has a provision that casuals shall be subject to the union
BAR SYLLABUS-BASED REVIEWER IN 747
LABOR LAW & SOCIAL LEGISLATION
security clause. The company cannot invoke management
prerogative to justify its engagement of a manpower
supplier if the actual work to be performed is casual in
nature. It should utilize casual union members to perform
the work. The intent of the parties to the CBA is clear: only
union members can be hired to perform even casual work.
Comment:
Since the CBA provision violated was a political
provision, the violation would not be a ULP. Only an
economic provision, grossly and flagrantly violated,
constitutes ULP. Hence, the violation should just have
been treated as a grievable act; hence, subject to the
grievance machinery then to voluntary arbitration.
2. When CBA Violation is a ULP
Bar 2015, Question No. XVII
The Collective Bargaining Agreement (CBA) between
Libra Films and its union, Libra Films Employees' Union
(LFEU), contains the following standard clauses:
1. Maintenance of membership;
2. Check off or union dues and agency fees; and
3. No strike, No lock-out.
While Libra Films and LFEU are in re-negotiations for
an extension of the CBA, LFEU discovers that some of its
members have resigned from the union, citing their consti-
tutional right to organize (which includes the right NOT to
organize). LFEU demands that Libra Films institute admi-
nistrative proceedings to terminate those union members
who resigned in violation of the CBA's maintenance of
membership clause. Libra Films refuses, citing its obliga-
tion to remain a neutral party. As a result, LFEU declares a
strike and after filing a notice of strike and taking a strike
vote, goes on strike. The union claims that Libra Films
 4
748 APPENDICES
grossly violated the terms of the CSA and is engaged in
unfair labor practice.
(a) Are LFEU's claims correct? Explain. (4%)
XXX
(a) LFEU's claim that Libra Films committed ULP
based on its violation of the CSA is not correct. For
violation of a CSA to constitute ULP, the violation must be
a violation of its economic provisions. Moreover, said viola-
tion must be gross and flagrant. Based on the allegation of
the union, what was violated was the maintenance of
membership clause which was a political provision; hence,
no ULP was committed (BPI Employees Union - Davao
City v. BPI, G.R. No. 174912, 24 July 2013).
XXX
Guide Notes: Questions to Ask
1. Is the violation complained of a violation of an
economic provision of the CSA?
2. Is the violation gross and flagrant?
3. Duration (Life)
3.1. Representation aspect (5 years)
3.2. All other CSA provisions (3 years)
4. Hold-Over Doctrine v. Automatic Renewal
Clause
Economic provisions are good for 3 years only;
hence, they have to be renegotiated not later than 3 years.
Political provisions expire in 5 years; hence, the entire CSA
expires in 5 years.
4.1. Hold-Over Doctrine
Economic provisions take effect as follows:
Voluntary CBAs
BAR SYLLABUS-BASED REVIEWER IN 749
LABOR LAW & SOCIAL LEGISLATION
OE - (a) If concluded w/in 6 months from expiry of old
economic provisions, the new economic provisions shall
retroact to the day immediately following date of expiry of
the old economic provisions; (b) if concluded after 6
months, they shall take effect on the date agreed upon.
They can be retroacted or not. If not, the period in between
date of expiry and later date agreed upon shall be
governed by the old economic provisions pursuant to the
Hold Over Doctrine.
UE - The economic provisions shall take effect on the
date agreed upon, not date of CSA signing. Take note that
in UE there is no pre-existing CBA; hence, no economic
provisions will expire for this reason, the 6-month rule has
no application.
Involuntary CBAs
OE - SOLE shall give the parties the opportunity to
agree on the date of effectivity; if they cannot agree, the
SOLE shall fix it.
UE - SOLE shall give the parties the opportunity to
agree on the date; if they cannot agree, the economic
provisions shall take effect like judicial decisions. (Meralco
Case)
Note: The economic provisions of a CSA crafted by
the SOLE are known as arbitral award. Said award may be
challenged via a Rule 65 petition. In turn, the CA's decision
may be challenged via a Rule 45 petition. If the SC allows
it, the arbitral award will become effective following entry of
judgment; otherwise, the disallowed economic provisions
will never take effect.
4.2. Automatic Renewal Clause
Upon expiration of its political life, the old CSA will still
continue to apply pursuant to its Automatic Renewal
Clause until a new one is concluded. To prevent the
unwanted effects of this situation, CE petitions are allowed
 4
750 APPENDICES
during the last 60 days of the current CBA. Theoretically, a
new EBR will be able to timely conclude a new CBA with
the employer.
5. Union Security Clauses
5.1. Closed Shop. The employer cannot hire
from outside the membership of the EBR.
5.2. Union Shop. The employer can hire from
outside, subject to the duty of the new hire to join the
EBR.
5.3. Maintenance of Membership Shop.
Continuing employment is conditioned on continuing
membership in the EBR.
5.4. Agency Shop. A new employee, if he
refuses to join the EBR, must pay union dues.
5.5. Hiring Hall Provision. The employer shall
hire workers referred by the EBR.
Note:
1. Between a Closed Shop Agreement and
a Union Shop Agreement, the first is more onerous to the
employer. Under the first, the employer cannot hire outside
the membership of the EBR. Hence, a position requiring
qualifications not possessed by any of its members will
have to be filled up with an unqualified or under-qualified
employee. Under the second, the company can hire from
outside. Hence, it can match the requirements of the job
with the skills of its chosen employee - subject, of course,
to the obligation of the the new hire to join the EBR;
otherwise, his dismissal can be requested by the EBR.
2. In deadlocked CBA negotiations where the SOLE
assumes jurisdiction, stipulations already reached by the
parties, e.g., maintenance of membership clause, cannot
be changed by the SOLE to more onerous provisions.
Hence, he cannot change Union Shop to Closed Shop, or
BAR SYLLABUS-BASED REVIEWER IN 751
LABOR LAW & SOCIAL LEGISLATION
Maintenance of Membership to Closed Shop as it would
make the CBA more burdensome for the employer. This
constitutes grave abuse of discretion correctible by
certiorari (Meralco v. Secretary of Labor, G.R. No.
127598, 27 January 1999).
Right to Peaceful Concerted Activities
1. Forms of Concerted Activities
1.1 . Picketing
Marching to-and-fro with placards that make known
the issues between the establishment and the workers. If
interviewed "Ano pinag/afaban nyo?", the answer is
"Basta!" (Sandoval Doctrine). Note: There is no Sandoval
Doctrine. "Basta" is just the expression of Prof. Edwin
Sandoval. Another thing, picketing is not marching "thru
and thru". What is the lesson? Take care of simple things
because they can be the most difficult in the Bar.
1.2. Strike
1.2.1. Determining the Fact of a Strike
(Elements)
(a) Temporary stoppage of work; hence, if
the stoppage is permanent then it is a
mass resignation or mass abandon-
ment;
(b) Concerted activity; hence, if it is the
activity of 2 only then it is insubordina-
tion or serious misconduct;
(c) Labor dispute; hence, if there is no
labor dispute then the mass action
cannot be a violation of the no strike
clause.
1.2.2. Determining the Validity of a Strike
(MISPAP Tests)
 4

752 APPENDICES
BAR SYLLABUS-BASED REVIEWER IN 753
LABOR LAW & SOCIAL LEGISLATION

(a) Means Test

(i) A strike may be valid in all
respects, except that illegalities have been
committed in its course, e.g., blocking
ingress or egress as to compel the
employer to fly out its managers with the
use of a chopper. Said illegalities will make
the strike illegal.
(ii) The Principle of Vicarious
Liability is not observed anymore; hence, in
an illegal strike, the union officers will lose
their employment while mere members will
not, unless they have committed illegalities.
Reason: the officers ought to know better
than stage an illegal strike.
(b) Injunction Test
(i) An AJO has an injunctive effect;
hence, if not complied with, the strike
becomes illegal.
(ii) A TRO or injunctive writ issued
under Arts. 225 & 279, Labor Code, if
violated, will render the strike illegal.
(c) Statutory Prohibition Test (E.O. 180)
These employees cannot strike:
(i) SSS employees;
(ii) Manila public school teachers.
(d) Procedure Test
(i) Conversion Rule. When the
NCMB converts a notice of strike to
preventive mediation, a new notice has to
be served. If not, the strike that ensues will
be illegal.
(ii) 7-day strike ban is added to the
cooling-off period (NCMB Primer).
Comment:
Should the 7-day strike ban be added
to the cooling-off period or should it run with
it? The debate is an unfinished business.
The practical solution is to simply
apply these rules: (1) both perods are
mandatory; hence, they must be allowed to
lapse; and (2) the union may take a vote
during the cooling-off period.
Situations:
1. The applicable cooling-off period
is 30 days to end on August 30. The strike
vote result is filed on August 25. Can the
intended strike be staged on August 31?
Answer: No. The earliest it can be
staged is on September 2 because by then
both periods would have lapsed. The 30-
day cooling off period ends on August 30
while the 7-day strike ban ends on
September 1.
2. The applicable cooling period is
30 days to end on August 30. The strike
vote result is reported on August 20. Can
the intended strike be staged on August 28?
Answer: No. The earliest date it can
be staged is August 31. As of August 28,
the strike ban ends but the colling-off period
has yet to end on August 30.
 _____,,,,.,
754 APPENDICES
(e) Agreement Test
(i) Applicable to economic strike;
(ii) Has no application to Compulsory
Arbitration Clause.
(f) Purpose Test
These are non-strikable:
(i) Wage distortion;
(ii) Inter-union matters;
(iii) Intra-union matters; and
(iv) Labor Standards matters.
Guide Notes:
1. The exact nature of a concerted
activity must be determined in order to know
if strike rules apply. This is important be-
cause there are other constitutionally gua-
ranteed activities that border on a strike. In
the Toyota Case, infra., the union despe-
rately claimed that it was in the exercise of
other constitutionally guaranteed rights;
hence, it could not be bound to rules go-
verning strikes. However, it was held that its
activity was a strike. Hence, absent prior
notice, the strike was declared as illegal. In
the Philippine Blooming Mills Case, infra.,
the union was freed from liability under the
No Strike Clause No Lockout Clause of the
CSA because its activity was not a strike.
2. An activity is a strike if it has these
elements:
2.1. Temporary stoppage of work;
2.2. Concerted activity; and
BAR SYLLABUS-BASED REVIEWER IN 755
LABOR LAW & SOCIAL LEGISLATION
2.3. Labor dispute.
3. In a mass resignation, the emplo-
yees cannot reclaim their positions on the
pretext of abandoning their strike. Once a
resignation is accepted, there is permanent
stoppage of work. Hence, the strikers must
apply as new employees.
4. There can be no strike in the
hands of just two rebellious and recalcitrant
union members blocking ingress. Hence,
the union cannot be held liable under the No
Strike Clause of the CBA.
5. Where all the union members
leave their posts and go to Malacanang in
order to air their grievances against the po-
lice despite the request of the company that
some of them stay behind to man important
facilities, the No Strike Clause has no appli-
cation because the dispute is between
union members and the police. Hence, the
third element is absent.
2. Lockout
2.1. Requisites
Do not set aside other reading materials. By
way of a reminder, this is not complete.
2.2. Another Conversion Rule
As a result of mediation, and by reason of
the no strike clause in the parties' CBA, the
strikers abandon their economic strike and return
to their work. However, the company does not
admit back the union officers. Hence, the mem-
bers resume the strike in protest. The illegal lock-
out (no voting) converts the economic strike to a
ULP strike. In this case, the no strike clause will
756 APPENDICES

not apply anymore. But if the clause is a compul-

sory arbitration clause (e.g., "All disputes shall be
submitted to voluntary arbitration."), a distinction
shall not be made anymore between economic
strike and ULP strike.