Labor Law Tips 2022 Bar Exam

Major Pointers for the 2022
Bar Examination In Labor Laws By: Atty. Aylward M. Consulta
I. GENERAL PRINCIPLES
• Hubilla v. HSY Marketing Ltd., Co., G.R. No. 207354, 10 January 2018
o Where both parties in a labor case have not presented substantial evidence
to prove their allegations, the evidence is considered to be in equipoise.
o When the evidence of the employer and the employee are in equipoise,
doubts are resolved in favor of labor. This is in line with the policy of the
State to afford greater protection to labor
• Centro Project Manpower Services Corp. v. Naluis, G.R. No. 160123, 17 June 2015
o In the interpretation of their provisions, labor contracts require the

resolution of doubts in favor of the laborer because of their being imbued
with social justice considerations. This rule of interpretation is demanded
by the Labor Code1 and the Civil Code.
• Italkarat 18, Inc. v. Gerasmio, G.R. No. 221411, 28 September 2020
o In illegal dismissal cases, the burden of proof is on the employer in

proving the validity of dismissal. However, the fact of dismissal, if
disputed, must be duly proven by the employee
• Bigg's, Inc. v. Boncacas, G.R. Nos. 200487 & 200636, 6 March 2019
o The quantum of proof necessary in labor cases is substantial evidence, or

such amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion.
II. RECRUITMENT AND PLACEMENT OF WORKERS
• People v. Rios y Catagbui, G.R. No. 226140, 26 February 2020
o Illegal Recruitment is defined as any act of recruitment undertaken by

unlicensed or unauthorized persons.
• Republic Act No. 10022, otherwise known as the Migrant Workers Act
o defines illegal recruitment as any act of canvassing, enlisting, contracting,

transporting, utilizing, hiring, or procuring workers and includes referring,
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contract services, promising or advertising for employment abroad,

whether for profit or not, when undertaken by non-licensee or non-holder
of authority.
• Jacob v. First Step Manpower Int'l. Services, Inc., G.R. No. 229984, 8 July 2020
o In Sameer Overseas Placement Agency, Inc. v. Cabiles, the phrase "or for
three (3) months for every year of the unexpired term, whichever is less" in
the above provision of Republic Act No. 10022 was struck down for
violating "constitutional rights to equal protection and due process."
Petitioner is entitled to her salaries for the unexpired portion of her
employment contract.
• Employment of non-resident aliens
o Any alien seeking admission to the Philippines for employment purposes

and any domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the
Department of Labor and Employment.
o The Alien Employment Permit (AEP) is a permit issued to a non-resident

alien or foreign national seeking admission to the Philippines for
employment purposes after a determination of the non-availability of
Filipino citizen who is competent, able and willing at the time of application
to perform the services for which the alien is desired.
o After the issuance of an employment permit, the alien shall not transfer to
another job or change his employer without prior approval of DOLE
III. LABOR STANDARDS
• Del Rosario v. ABS-CBN Broadcasting Corp., G.R. Nos. 202481, 202495, 202497,
210165, 219125, 222057, 224879, 225101 & 225874, 8 September 8, 2020
o This Court has developed the "four-fold test" to determine whether an

employer-employee relationship exists.
o These four factors are: "(1) the selection and engagement of the employee;
(2) the payment of wages; (3) the power of dismissal; and (4) the power to
control the employees' conduct[.]"
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o Of these four factors, the most important is the employer's power of control
over their employee, which means "the right to control not only the end to
be achieved, but also the manner and means to be used in reaching that
end."
o Yet, not every form of control is considered sufficient to pass this test. Not
all rules imposed by the hiring party on the hired party indicate that the
latter is an employee of the former.
o Rules which serve as general guidelines are not indicative of the power of
control.
o The power of control need not be actually exercised by the employer. It is

enough that the employer "has a right to wield the power."
o But when the complexity of the relationship makes the application of the
control test untenable, the economic realities of the employment relations
may also be considered. There are instances when, aside from the
employer's power to control the employee with respect to the means and
methods by which the work is to be accomplished, economic realities of the
employment relations help provide a comprehensive analysis of the true
classification of the individual, whether as employee, independent
contractor, corporate officer or some other capacity.
o The better approach would therefore be to adopt a two-tiered test

involving: (1) the putative employer's power to control the employee with
respect to the means and methods by which the work is to be accomplished;
and (2) the underlying economic realities of the activity or relationship.
o The proper standard of economic dependence is whether the worker is

dependent on the alleged employer for his continued employment in that
line of business.
• Daguinod v. Southgate Foods, Inc., G.R. No. 227795, 20 February 2019
o In determining the existence of an independent contractor relationship,

several factors may be considered, such as, but not necessarily confined to,
whether or not the contractor is carrying on an independent business; the
nature and extent of the work; the skill required; the term and duration of
the relationship; the right to assign the performance of specified pieces of
work; the control and supervision of the work to another; the employer's
power with respect to the hiring, firing and payment of the contractor's
workers; the control of the premises; the duty to supply premises, tools,
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appliances, materials and labor; and the mode, manner and terms of
payment.
o On the other hand, there is labor-only contracting where: (a) the person
supplying workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises,
among others; and (b) the workers recruited and placed by such person are
performing activities which are directly related to the principal business of
the employer.
o One of the factors in determining whether there is labor-only contracting is

the nature of the employee's job, i.e., whether the work he performs is
necessary and desirable to the business of the principal.
o It was established that Daguinod was assigned as a counter crew/cashier

in Jollibee Alphaland. The Service Contract of Daguinod with Generation
One does not disclose the specific tasks and functions that he was assigned
to do as counter crew/cashier.
o Daguinod was assigned to perform cash control activities which entails

gathering of orders and assembling food on the tray for dine-in customers
or for take-out. As cashier, Daguinod was also tasked to receive payments
and give change. These tasks are undoubtedly necessary and desirable to
the business of a fast food restaurant such as Jollibee. The service of food to
customers is the main line of business of any restaurant. It is not merely a
non-core or peripheral activity as Generation One and Southgate claim. It
is in the interest of Southgate, franchise owner of Jollibee, that its customers
be served food in a timely manner. Respondents' position that the gathering
of orders and service of food to customers are "non-core" functions or
peripheral activities is simply preposterous and is contrary to the basic
business model of a fast food restaurant. These circumstances lead to no
other conclusion than that Daguinod was a regular employee of Southgate
and that Generation One was a mere agent of Southgate.
o The ownership of substantial capital in the form of tools, equipment,

machineries, work premises, and other properties, by the contractor is
another factor in establishing whether it is legitimate.
o The submission of one ITR for one fiscal year can hardly be considered
substantial evidence to prove that the cooperative has substantial capital.
Furthermore, the Court cannot give credence to the ITR as it does not
appear to have been submitted to the Bureau of Internal Revenue.
Generation One likewise did not submit any Audited Financial Statements
(AFS) to show its assets, liabilities, and equity. It only submitted the Notes
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to the AFS for the year ended 2010 which does not show a complete picture
of its financial standing. In fine, the documents submitted are insufficient
to prove that Generation One possesses substantial capital to be considered
a legitimate labor contractor.
o Certificate of Registration as an independent contractor issued by the

DOLE is not conclusive evidence of legitimate status. The fact of
registration simply prevents the legal presumption of being a mere labor-
only contractor from arising. In distinguishing between permissible job
contracting and prohibited labor-only contracting, the totality of the facts
and the surrounding circumstances of the case are to be considered.
o Registration with DOLE as an independent contractor does not

automatically vest it with the status of a legitimate labor contractor, it is
merely presumptive proof.
• Compressed work week
o The normal workweek is reduced to less than six days but the total number
of work hours remains at 48 hours per week (or 40 hours per week for
companies whose normal workweek is five days).
o Under a compressed workweek scheme, work beyond eight hours will not
be compensable by overtime premium provided the total number of hours
worked per day shall not exceed 12 hours (in a 48-hour workweek) or 10
hours (in a 40-hour workweek).
o Employers may implement a compressed workweek scheme only with the

express and voluntary agreement of a majority of the covered employees
and prior notice to the DOLE of the adoption of the compressed workweek
• Gliding, or flexi-time schedule
o where the employees are required to complete the core work hours, but are
free to determine their arrival and departure time
• Flexi-holidays schedule
o where the employees agree to avail the holidays at some other days,
provided there is no diminution of existing benefits as a result of such
arrangement
• Telecommuting Program
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o Telecommuting is a work arrangement that allows an employee in the

private sector to work in an alternative workplace with the use of
telecommunication and/or computer technologies.
o Is not mandatory
o Telecommuting Program are mutually agreed upon by the employer and

employee.
o Employer to notify the DOLE of the adoption of any telecommuting

program.
• Service Charge Law
o All service charges actually collected shall be distributed completely and

equally, based on actual hours or days of work or service rendered, to all
employees, except those in a managerial position
• Bankard Employees Union-Workers Alliance Trade Unions v. National Labor Relations

Commission, G.R. No. 140689, 17 February 2004
o the four elements of wage distortion, to wit: (1.) An existing hierarchy of

positions with corresponding salary rates; (2) A significant change in the
salary rate of a lower pay class without a concomitant increase in the salary
rate of a higher one; (3) The elimination of the distinction between the two
levels; and (4) The existence of the distortion in the same region of the
country.
o To determine the existence of wage distortion, the "historical" classification

of the employees prior to the wage increase must be established. Likewise,
it must be shown that as between the different classification of employees,
there exists a "historical" gap or difference.
IV. LABOR RELATIONS
• Bigg's, Inc. v. Boncacas, G.R. Nos. 200487 & 200636, 6 March 6, 2019
o a strike means any temporary stoppage of work by the concerted action of

employees as a result of an industrial or labor dispute.
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o Grounds for a valid strike: (1) a bargaining deadlock in the course of

collective bargaining, or (2) the conduct of unfair labor practices by the
employer.
o Only a certified or duly recognized bargaining representative may declare

a strike in case of a bargaining deadlock. However, in cases of unfair labor
practices, the strike may be declared by any legitimate labor organization.
o In both instances, the union must conduct a "strike vote" which requires
that the actual strike is approved by majority of the total union membership
in the bargaining unit concerned. The union is required to notify the
regional branch of the NCMB of the conduct of the strike vote at least 24
hours before the conduct of the voting. Thereafter, the union must furnish
the NCMB with the results of the voting at least seven days before the
intended strike or lockout. This seven-day period has been referred to as
the "seven-day strike ban" or "seven-day waiting period."
o the period is intended to give the NCMB an opportunity to verify whether

the projected strike really carries the imprimatur of the majority of the
union members.
o In a strike due to bargaining deadlocks, the union must file a notice of strike
or lockout with the regional branch of the NCMB at least 30 days before the
intended date of the strike and serve a copy of the notice on the employer.
This is the so-called "cooling-off period" when the parties may enter into
compromise agreements to prevent the strike. In case of unfair labor
practice, the period of notice is shortened to 15 days; in case of union
busting, the "cooling-off period" does not apply and the union may
immediately conduct the strike after the strike vote and after submitting the
results thereof to the regional arbitration branch of the NCMB at least seven
days before the intended strike.
o In a strike grounded on unfair labor practice, the following are the

requirements: (1) the strike may be declared by the duly certified
bargaining agent or legitimate labor organization; (2) the conduct of the
strike vote in accordance with the notice and reportorial requirements to
the NCMB and subject to the seven-day waiting period; (3) notice of strike
filed with the NCMB and copy furnished to the employer, subject to the 15-
day cooling-off period. In cases of union busting, the 15-day cooling-off
period shall not apply.
o The Court ruled that the union conducted an illegal sit-down strike for
failure of the union to comply with the pre-requisites for a valid strike. The
union did not file the requisite Notice of Strike and failed to observe the
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cooling-off period. In an effort to legitimize the strike, the union filed a

Notice of Strike on the same of the sit down strike. This cannot be
considered as compliance with the requirement, as the cooling-off period is
mandatory. The cooling-off period is not merely a period during which the
union and the employer must simply wait. The purpose of the cooling-off
period is to allow the parties to negotiate and seek a peaceful settlement of
their dispute to prevent the actual conduct of the strike. In other words,
there must be genuine efforts to amicably resolve the dispute.
• FVC Labor Union-PTGWO v. Sama-samang Nagkakaisang Manggagawa sa FVC-

SIGLO, G.R. No. 176249, 27 November 2009
o While the parties may agree to extend the CBA’s original five-year term
together with all other CBA provisions, any such amendment or term in
excess of five years will not carry with it a change in the union’s exclusive
collective bargaining status. By express provision of the above-quoted
Article 253-A, the exclusive bargaining status cannot go beyond five years
and the representation status is a legal matter not for the workplace parties
to agree upon. In other words, despite an agreement for a CBA with a life
of more than five years, either as an original provision or by amendment,
the bargaining union’s exclusive bargaining status is effective only for five
years and can be challenged within sixty (60) days prior to the expiration of
the CBA’s first five years.
o In the event however, that the parties, by mutual agreement, enter into a
renegotiated contract with a term of three (3) years or one which does not
coincide with the said five-year term and said agreement is ratified by
majority of the members in the bargaining unit, the subject contract is valid
and legal and therefore, binds the contracting parties. The same will
however not adversely affect the right of another union to challenge the
majority status of the incumbent bargaining agent within sixty (60) days
before the lapse of the original five (5) year term of the CBA.
o The CBA was originally signed for a period of five years, i.e., from February
1, 1998 to January 30, 2003, with a provision for the renegotiation of the
CBA’s other provisions at the end of the 3rd year of the five-year CBA term.
Thus, prior to January 30, 2001 the workplace parties sat down for
renegotiation but instead of confining themselves to the economic and non-
economic CBA provisions, also extended the life of the CBA for another
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four months, i.e., from the original expiry date on January 30, 2003 to May
30, 2003.
o This negotiated extension of the CBA term has no legal effect on the
FVCLU-PTGWO’s exclusive bargaining representation status which
remained effective only for five years ending on the original expiry date of
January 30, 2003. Thus, sixty days prior to this date, or starting December
2, 2002, SANAMA-SIGLO could properly file a petition for certification
election. Its petition, filed on January 21, 2003 or nine (9) days before the
expiration of the CBA and of FVCLU-PTGWO’s exclusive bargaining
status, was seasonably filed.
• Slord Development Corp. v. Noya, G.R. No. 232687, 4 February 2019
o Union security is a generic term which is applied to and comprehends

'closed shop,' 'union shop,' 'maintenance of membership' or any other form
of agreement which imposes upon employees the obligation to acquire or
retain union membership as a condition affecting employment. There is
union shop when all new regular employees are required to join the union
within a certain period for their continued employment. There is
maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining
unit, or the agreement is terminated. A closed shop, on the other hand, may
be defined as an enterprise in which, by agreement between the employer
and his employees or their representatives, no person may be employed in
any or certain agreed departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains a member in good
standing of a union entirely comprised of or of which the employees in
interest are a part
o To validly terminate the employment of an .employee through the

enforcement of the union ·security clause, the following requisites must
concur: (1) the union security clause is applicable; (2) the union is
requesting for the enforcement of the union security provision in the CBA;
and (3) there is sufficient evidence to support the decision of the union to
expel the employee from the union.
o When certain employees are obliged to join a particular union as a requisite

for continued employment, as in the case of Union Security Clauses, this
condition is a valid restriction of the freedom or right not to join any labor
organization because it is in favor of unionism. This Court, on occasion, has
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even held that a union security clause in a CBA is not a restriction of the
right of freedom of association guaranteed by the Constitution.
o Moreover, a closed shop agreement is an agreement whereby an employer

binds himself to hire only members of the contracting union who must
continue to remain members in good standing to keep their jobs.
• Albay Electric Cooperative, Inc. v. ALECO Labor Employees Organization, G.R. No.
241437, 14 September 2020
o When, in his opinion, there exists a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to the national interest, the
Secretary of Labor and Employment may assume jurisdiction over the
dispute and decide it or certify the same to the Commission for compulsory
arbitration.
o The effects of an assumption order issued by the Secretary of Labor are two-
fold: (a) it enjoins an impending strike on the part of the employees, and (b)
it orders the employer to maintain the status quo.
o In cases where a strike has already taken place, the assumption order shall
have the effect of: (a) directing all striking workers to immediately return
to work (return-to-work order), and (b) mandating the employer to
immediately resume operations and readmit all workers under the same
terms and conditions prevailing before the strike.|
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• Escario v. National Labor Relations Commission, G.R. No. 160302, 27 September 2010
o The status quo to be maintained under Article 278 [263] of the Labor
Code refers to that which was prevailing the day before the strike. |||
o On the consequences of an illegal strike, the provision distinguishes

between a union officer and a union member participating in an illegal
strike. A union officer who knowingly participates in an illegal strike is
deemed to have lost his employment status, but a union member who is
merely instigated or induced to participate in the illegal strike is more
benignly treated. Part of the explanation for the benign consideration for
the union member is the policy of reinstating rank-and-file workers who
are misled into supporting illegal strikes, absent any finding that such
workers committed illegal acts during the period of the illegal strikes.
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• San Fernando Coca-Cola Rank-and-File Union v. Coca-Cola Bottlers Philippines, Inc.,

G.R. No. 200499, 4 October 2017
o Unfair labor practice refers to acts that violate the workers' right to
organize. There should be no dispute that all the prohibited acts constituting
unfair labor practice in essence relate to the workers' right to self-
organization. Thus, an employer may only be held liable for unfair labor
practice if it can be shown that his acts affect in whatever manner the right
of his employees to self-organize.
V. TERMINATION OF EMPLOYMENT
Philippine National Oil Co.-Energy Development Corp. v. Buenviaje, G.R. Nos. 183200-01,
183253 & 183257, 29 June 2016
o A probationary employee is defined as one who is on trial by an employer

during which the employer determines whether or not he is qualified for
permanent employment. In general, probationary employment cannot
exceed six (6) months, otherwise the employee concerned shall be
considered a regular employee. It is also indispensable in probationary
employment that the employer informs the employee of the reasonable
standards that will be used as a basis for his or her regularization at the time
of his or her engagement. If the employer fails to comply with this, then the
employee is considered a regular employee.
• De La Salle Araneta University, Inc. v. Magdurulang, G.R. No. 224319, 20 November

2017
o The probationary period of employment of academic personnel such as

professors, instructors, and teachers — including the determination as to
whether they have attained regular or permanent status — shall not be
governed by the Labor Code but by the standards established by the
Department of Education and the Commission on Higher Education. The
Revised Manual for Regulations of Private Schools explicitly provides
that: (a) for those in elementary and secondary levels, the probationary
period shall not be more than three (3) consecutive years of satisfactory
service; and (b) for those in the tertiary level, such period shall be six (6)
consecutive semesters or nine (9) consecutive trimesters, as the case may be.
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o For an academic personnel to acquire a regular and permanent employment

status, it is required that: (a) he is considered a full-time employee; (b) he
has completed the required probationary period; and (c) his service must
have been satisfactory.
o However, it must be emphasized that mere completion of the probationary

period does not, ipso facto, make the employee a permanent employee of the
educational institution, as he could only qualify as such upon fulfilling the
reasonable standards for permanent employment as faculty member. This
is especially true in the case of institutions of higher education which,
consistent with academic freedom and constitutional autonomy, has the
prerogative to provide standards for its academic personnel and determine
whether the same have been met. Thus, at the end of the probation period,
the decision to re-hire a probationary employee, and thus, vest upon him a
regular and permanent status, belongs to the educational institution as the
employer alone. Otherwise stated, upon the expiration of their contract of
employment, academic personnel on probation cannot automatically claim
security of tenure and compel their employers to renew their employment
contracts which would then transform them into regular and permanent
employees.
• Del Rosario v. ABS-CBN Broadcasting Corp., G.R. Nos. 202481, 202495, 202497,
210165, 219125, 222057, 224879, 225101 & 225874, 8 September 2020
o The Labor Code classifies four (4) kinds of employees, as follows: (i) regular
employees, or those who have been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer; (ii) project employees, or those whose employment has been
fixed for a specific project or undertaking, the completion or termination of
which has been determined at the time of the employees' engagement; (iii)
seasonal employees, or those who perform services which are seasonal in
nature, and whose employment lasts during the duration of the season; and
(iv) casual employees, or those who are not regular, project, or seasonal
employees. Jurisprudence added a fifth kind — fixed-term employees, or
those hired only for a definite period of time.
o As a background, block-timing is a scheme where an external producer,

who is known as the block-timer, purchases a fixed number of airtime on
certain dates from ABS-CBN. During this time, the block-timer's own shows
are aired, and the advertising revenues earned shall belong to the block-
timer.
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o Similarly, in airing foreign canned shows and licensed programs, ABS-CBN

merely obtains broadcasting rights from the previous owners of the said
programs. Basically, what ABS-CBN does in these cases is to simply avail
of distributorship or airing rights in order to play the contents of a program
that has been previously produced.
o Hence, in this respect, there can be no employer-employee relationship

between the production staff of the "block-timers," and owners of the
foreign shows and licensed programs, on the one hand, and ABS-CBN, on
the other. This is based on the obvious reason that ABS-CBN had no hand
in the production of the said shows. However, this same ratiocination does
not apply to the workers hired in the self-produced, line-produced, co-
produced shows, and live coverages of ABS-CBN.
o a project-based employment, the employee is assigned to a

particular project or phase, which begins and ends at a determined or
determinable time. Consequently, the services of the project employee may
be lawfully terminated upon the completion of such project or
phase. For employment to be regarded as project-based, it is incumbent
upon the employer to prove that (i) the employee was hired to carry out a
specific project or undertaking, and (ii) the employee was notified of the
duration and scope of the project.
o Here, ABS-CBN failed to adduce any evidence to establish that the

requirements for project employment were complied with. There is
nothing in the records that would prove that the employees were notified
beforehand of the duration and scope of their projects. Neither was there
confirmation of compliance with the contract-registration requirement, or
evidence of the submission of a notice of termination or completion
of project. It is basic that project or contractual employees shall be apprised
of their project under a written contract, specifying inter alia the nature of
work to be performed and the rates of pay and the program in which they
will work. W
o The creation of a work pool is a valid exercise of management prerogative.

It is a privilege inherent in the employer's right to control and manage its
enterprise effectively, and freely conduct its business operations to achieve
its purpose. However, in order to ensure that the work pool arrangement is
not used as a scheme to circumvent the employees' security of tenure, the
employer must prove that (i) a work pool in fact exists, and (ii) the members
therein are free to leave anytime and offer their services to other employers.
These requirements are critical in defining the precise nature of the
workers' employment.
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o Members of a work pool could either be project employees or regular

employees. Specifically, members of a work pool acquire
regular employment status if: (i) they were continuously, as opposed to
intermittently, re-hired by the same employer for the same tasks or nature
of tasks; and (ii) the tasks they perform are vital, necessary and
indispensable to the usual business or trade of the employer.
• Allied Banking Corporation v. Calumpang, G.R. No. 219435, 17 January 2018
o Permissible job contracting or subcontracting has been distinguished from

labor-only contracting such that permissible job contracting or
subcontracting refers to an arrangement whereby a principal agrees to put
out or farm out to a contractor or subcontractor the performance or
completion of a specific job, work or service within a definite or
predetermined period, regardless of whether such job, work or service is to
be performed or completed within or outside the premises of the principal,
while labor-only contracting, on the other hand, pertains to an arrangement
where the contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal.
o There is job contracting permissible under the Code if the following

conditions are met:
§ The contractor carries on an independent business and undertakes

the contract work on his own account under his own responsibility
according to his own manner and method, free from the control and
direction of his employer or principal in all matters connected with
the performance of the work except as to the results thereof; and
§ The contractor has substantial capital or investment in the form of

tools, equipment, machineries, work premises, and other materials
which are necessary in the conduct of his business.
§ Labor-only contracting. - (a) Any person who undertakes to supply

workers to an employer shall be deemed to be engaged in labor-only
contracting where such person:
§ Does not have substantial capital or investment in the form of tools,

equipment, machineries, work premises and other materials; and §
The workers recruited and placed by such person are performing
activities which are directly related to the principal business or
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operations of the employer in which workers are habitually

employed.
o As a general rule, a contractor is presumed to be a labor-only contractor,

unless such contractor overcomes the burden of proving that it has the
substantial capital, investment, tools and the like.
o Here, petitioner failed to establish that RCI is a legitimate labor contractor

as contemplated under the Labor Code. Except for the bare allegation of
petitioner that RCI had substantial capitalization, it presented no
supporting evidence to show the same. Petitioner never submitted financial
statements from RCI.
• RNB Garments Philippines, Inc. v. Ramrol Multi-Purpose Cooperative, G.R. No.

236331, 14 September 2020
o Labor-only contracting, a prohibited act, is an arrangement where the

contractor, who does not have substantial capital or investment in the form
of tools, equipment, machineries, work premises, among others, supplies
workers to an employer and the workers recruited are performing activities
which are directly related to the principal business of such employer.
o The test of independent contractorship is whether one claiming to be an

independent contractor has contracted to do the work according to his own
methods and without being subject to the control of the employer, except
only as to the results of the work.
o The burden to hurdle this test is cast upon the contractor. In cases where
the principal also claims that the contractor is a legitimate contractor, as in
this case, said principal similarly bears the burden of proving that supposed
status.
o Although the AFS was submitted, the same shows that the company does
not have sufficient working capital. Even though its assets reached
P10,316,724.00 in 2007, it drastically decreased in 2008 to P1,446,397.00.
Worse, the company incurred a balance of P9,288,038.92 for the advances as
of 2009 and even had to sell the sewing machines, the tools of its trade, as
partial payment of its debt. While the DOLE may have found that the
capital and/or investments in tools and equipment of RMPC are sufficient
for an independent contractor, this does not mean that such capital and/or
investments are likewise sufficient to maintain an independent contracting
business.
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o The drastic and substantial deterioration of the company's assets over a

very short period of time, taken together with its overwhelming
debts/liabilities, militates against its purported substantial capitalization to
further or maintain its contracting business. o Here, the workers were
engaged as sewers, trimmers, reviser, quality control staff, and sewing
mechanic, which, by their nature, are inherently related to and necessary in
its business as a manufacturer of garments. They were made to work inside
the premises of the principal using its fabrics and sewing accessories, and
had to accomplish their tasks within a specific period of completion, in
accordance with the specifications, correct patterns, and quantity dictated
by said principal. These circumstances undoubtedly show that the principal
has the power of control over the workers in the performance of their work.
• King of Kings Transport v. Mamac, G.R. No. 166208, 29 June 2007
o The first written notice to be served on the employees should contain
§ the specific causes or grounds for termination against them;

§ and a directive that the employees are given the opportunity to
submit their written explanation within a reasonable
period."Reasonable opportunity" means every kind of assistance
that management must accord to the employees to enable them to
prepare adequately for their defense. This should be construed as a
period of at least five (5) calendar days from receipt of the notice to
give the employees an opportunity to study the accusation against
them, consult a union official or lawyer, gather data and evidence,
and decide on the defenses they will raise against the complaint.
§ Moreover, in order to enable the employees to intelligently prepare

their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for
the charge against the employees. A general description of the
charge will not suffice. Lastly, the notice should specifically mention
which company rules, if any, are violated and/or which among the
grounds under Art. 282 is being charged against the employees. o
o After determining that termination of employment is justified, the

employers shall serve the employees a written notice of termination
indicating that: (1) all circumstances involving the charge against the
employees have been considered; and (2) grounds have been established to
justify the severance of their employment.
16
• Perez, et al. v. Phil. Telegraph and Telephone Co., G.R. No. 152048, 7 April 2009
o A formal hearing or conference becomes mandatory only when requested

by the employee in writing or substantial evidentiary disputes exist or a
company rule or practice requires it, or when circumstances justify it.
• Villanueva v. Ganco Resort and Recreation, Inc., G.R. No. 227175, 8 January 2020
o The records of the case show that petitioner was charged with two
infractions, i.e., (1) insubordination for her failure to sign the Notice to
Transfer and (2) habitual neglect for her absences without leave from March
22 to March 26, 2014, as shown by the two memoranda served on her.
o Insubordination or willful disobedience requires the concurrence of the

following requisites: (1) the employee's assailed conduct must have been
willful or intentional, the willfulness being characterized by a "wrongful
and perverse attitude"; and (2) the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the
duties which he had been engaged to discharge.
o As stated by petitioner in her handwritten explanation, she withheld her

signature on the Notice to Transfer because she was awaiting answers to
the questions she raised to the management via e-mail. She cannot be forced
to affix her signature thereon if she does not really fully understand the
reasons behind and the consequences of her transfer. While her action is
willful and intentional, it is nonetheless far from being "wrongful and
perverse." In addition, respondents failed to prove that there is indeed an
order or company procedure requiring a transferee's written conformity
prior to the implementation of the transfer, and that such order or
procedure was made known to petitioner.
o Anent the charge of habitual neglect for petitioner's absences without leave,
jurisprudence provides that in order to constitute a valid cause for
dismissal, the neglect of duties must be both gross and habitual. Gross
negligence has been defined as "the want or absence of or failure to exercise
slight care or diligence, or the entire absence of care. It evinces a thoughtless
disregard of consequences without exerting any effort to avoid them." On
the other hand, habitual neglect "imparts repeated failure to perform one's
duties for a period of time, depending on the circumstances." A single or
isolated act of negligence does not constitute a just cause for the dismissal
of the employee.
o The totality of infractions or the number of violations committed during the

period of employment shall be considered in determining the penalty to be
17
imposed upon an erring employee. The offenses committed by petitioner

should not be taken singly and separately. Fitness for continued
employment cannot be compartmentalized into tight little cubicles of
aspects of character, conduct and ability separate and independent of each
other. While it may be true that petitioner was penalized for his previous
infractions, 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 penalty that should be meted
out since an employee's past misconduct and present behavior must be
taken together in determining the proper imposable penalty. Despite the
sanctions imposed upon petitioner, he continued to
commit misconduct and exhibit undesirable behavior on board. Indeed, the
employer cannot be compelled 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.
• Rodriguez v. Sintron Systems, Inc., G.R. No. 240254, 24 July 2019
o Abandonment of employment is a deliberate and unjustified refusal of an

employee to resume his employment, without any intention of
returning. While it is not expressly enumerated under Article 297 of the
Labor Code as a just cause for dismissal of an employee, it has been
recognized by jurisprudence as a form of, or akin to, neglect of duty. It
requires the concurrence of two elements: 1) failure to report for work or
absence without valid or justifiable reason; and 2) a clear intention to sever
the employer-employee relationship as manifested by some overt acts.
• Pardillo v. Bandojo, G.R. No. 224854, 27 March 2019
o Article 297 (c) allows an employer to terminate the services of an employee

on the ground of loss of trust and confidence. There are two requisites for
this ground: first, the employee must be holding a position of trust and
confidence; and second, there must be a willful act that would justify the
loss of trust and confidence which is based on clearly established facts.
o Pardillo's status as a managerial employee holding the position of Business

Office Manager was never disputed in this case. there must be some basis
or reasonable ground to believe that the employee is responsible for
the misconduct and the breach or act complained of must be related to the
work performed by the employee. Although the employer is given more
18
leeway in the dismissal of managerial employees on the ground of loss of

trust and confidence, the dismissal must not be based on the mere whims
or caprices of the employer.
• Suspension of Employment Relationship (D.O. 215-2020)
o ER-EE Relationship shall be deemed suspended

§ Bona fide suspension of operation of the business for the period not
exceeding 6 months
o Extension for a period not exceeding 6 months
§ declaration of war, pandemic, and national emergencies
§ EE-ER shall meet to discuss extension
o EE shall not lose employment if they find alternative employment during

the extension except in cases of written, unequivocal, and voluntary
resignation.
• Que v. Asia Brewery, Inc., G.R. No. 202388, 10 April 2019
o Redundancy exists when the service of an employee is in excess of what is

reasonably demanded by the actual requirements of the business. A
redundant position is one rendered superfluous by any number of factors,
such as overhiring of workers, decreased volume of business, dropping of
a particular product line previously manufactured by the company or
phasing out of a service activity formerly undertaken by the enterprise.
o For a valid implementation of a redundancy program, the employer must

comply with the following requisites: (1) written notice served on both the
employee and the DOLE at least one month prior to the intended date of
termination; (2) payment of separation pay equivalent to at least one month
pay or at least one month pay for every year of service, whichever is higher;
(3) good faith in abolishing the redundant position; and (4) fair and
reasonable criteria in ascertaining what positions are to be declared
redundant.
o Among the accepted criteria in implementing a redundancy program are:

(1) preferred status; (2) efficiency; and (3) seniority. The company employed
fair and reasonable criteria in declaring the employee’s position redundant.
The emplouyee was hired only on 23 June 2000, did not deny that she was
19
the most junior of all the executives. The employee also did not present
contrary evidence to disprove that she was the least efficient and least
competent among all the Creative Directors.
o The determination of the continuing necessity of a particular officer or

position in a business corporation is a management prerogative, and the
courts will not interfere unless arbitrary or malicious action on the part of
management is shown.
o It is also within the exclusive prerogative of management to determine the

qualification and fitness of an employee for hiring and firing, promotion or
reassignment. Indeed, an employer has no legal obligation to keep more
employees than are necessary for the operation of its business." In
determining who among the employees should be retained or separated,
the Court explained that preferred status, efficiency, and seniority are
among the accepted criteria in implementing a redundancy program.
• San Fernando Coca-Cola Rank-and-File Union v. Coca-Cola Bottlers Philippines, Inc.,

G.R. No. 200499, 4 October 2017
o For there to be a valid implementation of a redundancy program, the

following should be present:
§ written notice served on both the employees and the Department of

Labor and Employment at least one month prior to the intended date
of retrenchment;
§ payment of separation pay equivalent to at least one month pay or
at least one month pay for every year of service, whichever is higher;
§ good faith in abolishing the redundant positions; and
§ fair and reasonable criteria in ascertaining what positions are to be

declared redundant and accordingly abolished.
o CCBPI was able to prove its case that from the study it conducted, the
previous CRS and MB selling and distribution schemes generated the
lowest volume contribution which thus called for the redesigning and
enhancement of the existing selling and distribution strategy; that such
study called for maximizing the use of the MEPs if the company is to retain
its market competitiveness and viability; that furthermore, based on the
study, the company determined that the MEPs will enable the CCBPI
to "reach more" with fewer manpower and assets to manage; that it is but a
20
consequence of the new scheme that CCBPI had to implement

a redundancy program structured to downsize its manpower complement
• ENLI v. Dela Cruz, G.R. No. 225100, 19 February 19, 2020
o Preventive suspension is not a penalty but a disciplinary measure to protect

life or property of the employer or the co-workers pending investigation of
any alleged infraction committed by the employee. Thus, it is justified only
when the employee's continued employment poses a serious and imminent
threat to the employer's or co-workers' life or property. When justified, the
preventively suspended employee is not entitled
• Dumapis v. Lepanto Consolidated Mining Company, G.R. No. 204060, 15

September 2020
o The award of backwages and/or separation pay due to illegally dismissed

employees shall include all salary increases and benefits granted under the
law and other government issuances, Collective Bargaining Agreements,
employment contracts, established company policies and practices, and
analogous sources which the employees would have been entitled to had
they not been illegally dismissed. This ruling is consistent with the
Constitutional command that the State shall afford full protection to labor
o However, salary increases and other benefits which are contingent or
dependent on variables such as an employee's merit increase based on
performance or longevity or the company's financial status shall not be
included in the award.
VI. MANAGEMENT PREROGATIVE
• Labor Advisory No. 06-20

o employers are required to release an employee's final pay within thirty (30)
days from the date of his/her termination or separation from employment.
• Ebus v. The Results Co., Inc., G.R. No. 244388, 3 March 2021
o TRCI cannot hide behind the argument that its conduct was an exercise
of management prerogative as its actions prejudiced Ebus and it failed to
provide a legitimate ground to put him on temporary lay-off. Although the
exercise of management prerogative will ordinarily not be interfered
with, 51 it is not absolute and it is limited by law, collective bargaining
21
agreement, and general principles of fair play and justice. "Indeed, having
the right should not be confused with the manner in which that right is
exercised."
VII. JURISDICTION AND RELIEFS
• Gallego v. Wallem Maritime Services, Inc, G.R. No. 216440, February 19, 2020
o The prescriptive period to file a complaint for illegal dismissal is four years
from the time the cause of action accrued.32 An action for illegal dismissal
or when one is arbitrarily and unjustly deprived of his job or means of
livelihood is essentially a complaint for "injury to rights," which falls under
Article 1146 of the Civil Code of the Philippines
• Tumaudos v. San Miguel Yamamura Packaging Corporation, G.R. No. 241865,

February 19, 2020
o Not all controversies or money claims by an employee against the employer

or vice versa fall within the exclusive jurisdiction of the LA. With regard to
money claims and damages, the Labor Code bestows upon the LA original
and exclusive jurisdiction over
§ cases filed by workers involving wages, among others, if
accompanied by a claim for reinstatement; § all claims, except those
for Employees Compensation, Social Security, Medicare and
maternity benefits, arising from employer employee relations
involving an amount exceeding P5,000.00 regardless of whether
accompanied with a claim for reinstatement; and
§ claims for actual, moral, exemplary and other forms of damages

arising from employer-employee relations o Not every controversy
or money claim by an employee against the employer or vice-versa
is within the exclusive jurisdiction of the labor arbiter. Actions
between employees and employer where the employer employee
relationship is merely incidental and the cause of action precedes
from a different source of obligation is within the exclusive
jurisdiction of the regular court.
o Where the principal relief sought is to be resolved not by reference to the

Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the labor arbiter and the
NLRC.
22

Labor Law Tips 2022 Bar Exam

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Labor Law Tips 2022 Bar Exam

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Major Pointers for the 2022

Bar Examination In Labor Laws By: Atty. Aylward M. Consulta

o In the interpretation of their provisions, labor contracts require the

• Italkarat 18, Inc. v. Gerasmio, G.R. No. 221411, 28 September 2020

o In illegal dismissal cases, the burden of proof is on the employer in

o The quantum of proof necessary in labor cases is substantial evidence, or

II. RECRUITMENT AND PLACEMENT OF WORKERS

• People v. Rios y Catagbui, G.R. No. 226140, 26 February 2020

o Illegal Recruitment is defined as any act of recruitment undertaken by

o defines illegal recruitment as any act of canvassing, enlisting, contracting,

contract services, promising or advertising for employment abroad,

• Employment of non-resident aliens

o Any alien seeking admission to the Philippines for employment purposes

o The Alien Employment Permit (AEP) is a permit issued to a non-resident

III. LABOR STANDARDS

o This Court has developed the "four-fold test" to determine whether an

o The power of control need not be actually exercised by the employer. It is

o The better approach would therefore be to adopt a two-tiered test

o The proper standard of economic dependence is whether the worker is

• Daguinod v. Southgate Foods, Inc., G.R. No. 227795, 20 February 2019

o In determining the existence of an independent contractor relationship,

o One of the factors in determining whether there is labor-only contracting is

o It was established that Daguinod was assigned as a counter crew/cashier

o Daguinod was assigned to perform cash control activities which entails

o The ownership of substantial capital in the form of tools, equipment,

o Certificate of Registration as an independent contractor issued by the

o Registration with DOLE as an independent contractor does not

• Compressed work week

o Employers may implement a compressed workweek scheme only with the

• Gliding, or flexi-time schedule

o Telecommuting is a work arrangement that allows an employee in the

o Telecommuting Program are mutually agreed upon by the employer and

o Employer to notify the DOLE of the adoption of any telecommuting

• Service Charge Law

o All service charges actually collected shall be distributed completely and

• Bankard Employees Union-Workers Alliance Trade Unions v. National Labor Relations

o the four elements of wage distortion, to wit: (1.) An existing hierarchy of

o To determine the existence of wage distortion, the "historical" classification

IV. LABOR RELATIONS

o a strike means any temporary stoppage of work by the concerted action of

o Grounds for a valid strike: (1) a bargaining deadlock in the course of

o Only a certified or duly recognized bargaining representative may declare

o the period is intended to give the NCMB an opportunity to verify whether

o In a strike grounded on unfair labor practice, the following are the

cooling-off period. In an effort to legitimize the strike, the union filed a

• FVC Labor Union-PTGWO v. Sama-samang Nagkakaisang Manggagawa sa FVC-

• Slord Development Corp. v. Noya, G.R. No. 232687, 4 February 2019

o Union security is a generic term which is applied to and comprehends

o To validly terminate the employment of an .employee through the

o When certain employees are obliged to join a particular union as a requisite

o Moreover, a closed shop agreement is an agreement whereby an employer

o On the consequences of an illegal strike, the provision distinguishes

• San Fernando Coca-Cola Rank-and-File Union v. Coca-Cola Bottlers Philippines, Inc.,

o A probationary employee is defined as one who is on trial by an employer

• De La Salle Araneta University, Inc. v. Magdurulang, G.R. No. 224319, 20 November

o The probationary period of employment of academic personnel such as

o For an academic personnel to acquire a regular and permanent employment

o However, it must be emphasized that mere completion of the probationary

o As a background, block-timing is a scheme where an external producer,

o Similarly, in airing foreign canned shows and licensed programs, ABS-CBN

o Hence, in this respect, there can be no employer-employee relationship

o a project-based employment, the employee is assigned to a