R001 Thommy Licuanan Oide

Labor Law Refresher

Performance Enhancement Assessment
Date submitted: October 8, 2021

1. What are the two types of contractors under the labor law? Explain thoroughly the
main difference between the two?

Answer: The two types of contractors in labor are job contractor and labor-only contractor.

A job contractor is a person who is engaged in a legitimate job contracting or subcontracting and
the following conditions must be present:

a. the contractor carries on a distinct and independent business and partakes the contract
work on his 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 his work except as to its result;
b. the contractor has substantial capital or investment; and
c. the agreement between the principal and the contractor or subcontractor assures the
contractual employees’ entitlement to all labor and occupational safety and health
standards, free exercise of the right to self-organization, security of tenure, and social
welfare benefits.

A labor contractor refers to a person 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.

Job contracting is valid and recognized by law while Labor-only contracting is a prohibited act.
A finding that a contractor is a labor-only contractor is equivalent to a declaration that there is an
employer-employee relationship between the principal and the employees of the labor-only
contractor. In such a case the labor-only contractor shall be responsible to the workers in the
manner and extent as if said workers were directly employed by him.

2. What are the consequences of labor-only contracting?

Answer: The following are the consequences:

a. The subcontractor will be treated as the agent of the principal. Since the act of an agent is the
act of the principal, representations made by the subcontractor to the employees will bind the
principal.

b. The principal will become the employer as if it directly employed the workers engaged to
undertake the subcontracted job or service. It will be responsible to them for all their
entitlements and benefits under the labor laws.

c. The principal and the subcontractor will be solidarily treated as the employer.
d. The employees will become employees of the principal, subject to the classifications of
employees under Article 28 of the Labor Code.

If the labor-only contracting activity is undertaken by a legitimate labor organization, a petition

for cancellation of union registration may be filed against it, pursuant to Article 239(e).

3. What is job-contracting? State the elements of job contracting?

Answer: Job contracting refers to an arrangement whereby a principal agrees to put out or
farm out with the 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.

A person is considered engaged in legitimate job contracting or subcontracting if the following

conditions concur:

a. the contractor carries on a distinct and independent business and partakes the contract
work on his 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 his work except as to its result;
b. the contractor has substantial capital or investment; and
c. the agreement between the principal and the contractor or subcontractor assures the
contractual employees’ entitlement to all labor and occupational safety and health
standards, free exercise of the right to self-organization, security of tenure, and social
welfare benefits.

4. Who is an independent contractor?

Answer: An independent contractor is a person who undertakes to perform work on its own
account, under its own responsibility and according to its own manner and method, free from the
control and direction of the principal. No employment relationship arises between its employees
and the principal.

5. Which of the following best describes the test which determines the existence of an
employment relationship?

a. An employer-employee relationship exist where the person for whom the

services are performed exercises the right to control not only the end to
be achieved, but also the manner and means to be used in reaching the
end.
b. An employer-employee relationship exists where the person for whom
the services are performed exercises the right to control the manner and
means to be used in reaching the end.
c. An employer-employee relationship exist where the person for whom the
services are performed reserves the right to control not only the end to be
achieved, but also the manner and means to be used in reaching the end.
 d. An employer-employee relationship exists where the person for whom
the services are performed reserves the right to control the end to be
achieved.
e. None of the above

Answer: I choose e because the case of Pacific Consultants vs. Schonfeld provides that the
employer controls or has reserved the right to control the employee not only as to the result of
the work to be done but also as to the means and methods by which the same is to be
accomplished. Stated otherwise, an employer-employee relationship exists where the person for
whom the services are performed reserves the right to control not only the end to be achieved
but also the means to be used in reaching such end. In the choices provided the word manner
was added. Hence, I chose e.

6. Why is it important to determine if there exists an employer-employee relationship?

a. It determines the jurisdiction of the labor courts.

b. It determines the liabilities for labor standards benefits.
c. It determines labor relations obligations.
d. A, B, and C.
e. B and C

Answer: I choose letter d as my answer because this has an effect on the applicability of the
Labor Code. Likewise, if there is no employment relationship, the Labor Code does not apply
and labor courts have no jurisdiction.

7. Legitimate job contracting exits when a 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:

a. or 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.
b. 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.
c. and the contractor has substantial capital and investment in the form of
tools, equipment, machineries, work premises, and other materials which
are necessary in the conduct of the business.
d. or 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.
e. None of the above.

Answer: I choose letter b as my answer because the law provides that a Legitimate job
contracting exits when a 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.

8. If a person is engaged to perform activities which are usually necessary or desirable

in the usual business or trade of the employer, he is:

a. A regular employee
b. A project employee
c. A seasonal employee
d. All of the above
e. None of the above

Answer: I choose letter a as my answer because the labor laws define regular employees as those
who have been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer

9. Under Article 84 of the Labor Code, hours worked shall include:

a. Time during which an employee is required to be on duty or to be at a

prescribed workplace.
b. Time during which an employee is suffered or permitted to work.
c. Rest periods of short duration.
d. A and B
e. A, B, and C

Answer: I choose letter e as my answer because the labor code provide that hours worked shall
include (a) all time during which an employee is required to be on duty or to be at a prescribed
workplace; and (b) all time during which an employee is suffered or permitted to work. Rest
periods of short duration during working hours shall be counted as hours worked.

10. The Labor Code is applicable to:

a. Agricultural workers
b. Employees of labor organizations
c. Employees of non-stock, non-profit organizations
d. All of the above
e. None of the above.

Answer: I choose letter d as my answer because Art. 82. of the labor code provides that the
provisions of this the labor code shall apply to employees in all establishments and undertakings
whether for profit or not.

11. Statement No. 1 – “A company that exercises its prerogative to dismiss is not
allowed to turn around and deny employer-employee relationship.”
Statement No. 2 – “Alleging abandonment indicates employer-employee
relationships.”

a. Both statements are true

b. Both statements are false
 c. Only statement No. 1 is true
d. Only statement No. 2 is true
e. It depends

Answer: I choose letter a as my answer because the power to dismiss is included in an employer-
employee relationship and the exercise of which is a clear evidence of such relationship.
Likewise, the allegation of abandonment would logically result to the fact that there is no
abandonment if there is no employer-employee relationship in the first place. Hence, both
statements are true and that is the reason why I choose letter a.

12. Statement No. 1 – It is employers’ duty to inform the probationary employee

reasonable work standards.
Statement No. 2 – The employer may terminate the services of a probationary
employee without valid cause as long as such termination be done within the six
months trial period.

a. Both statements are true

b. Both statements are false
c. Only statement No. 1 is true
d. Only statement No. 2 is true
e. It depends

Answer: I choose letter b as my answer because under the labor laws it is the employer’s duty to
inform the probationary employee about the regularizations standards and also to inform him or
her about the grounds for the termination of his employment which should be just. Here, what is
provided in statement no. 1 is reasonable work standards and in statement no. 2. is that the
employer may terminate the services even without just cause. Hence, I chose letter b.

13. Statement No. 1 – It does not necessarily follow that where the duties of the
employee consist of activities usually necessary or desirable in the usual business of
the employer, the parties are forbidden from agreeing on a period of time for the
performance of such activities.
Statement No. 2 – Temporarily hired contractual employees are not regular even
they perform necessary and desirable function in the usual business of employer.

a. Both statements are true

b. Both statements are false
c. Only statement No. 1 is true
d. Only statement No. 2 is true
e. It depends

Answer: I choose letter c because jurisprudence provided that It does not necessarily follow that
where the duties of the employee consist of activities usually necessary or desirable in the usual
business of the employer, the parties are forbidden from agreeing on a period of time for the
performance of such activities.

14. Statement No. 1 – Job contracting is permissible only if the contractor carried an
independent business and his substantial capital but without investment in the form
of tools equipment machineries of other materials in the conduct of business.
 Statement No. 2 – It is a badge of labor–only contracting when there is a correlation
between the nature of work of employees to the usual business or trade of the
employer or principal.

a. Both statements are true

b. Both statements are false
c. Only statement No. 1 is true
d. Only statement No. 2 is true
e. It depends

Answer: I choose letter b as my answer because the law provides that a job contractor shall also
have invenstment in form of tools, equipment in the conduct of his business. While in statement
no. 2, the word should be relation not correlation. Hence, I choose letter b.

15. This is a situation where an increase in prescribed wage rates results in elimination
or severe contraction of intentional qualitative difference in wage as salary rates
between or among employee groups in an establishment as to effectively obliterate
distinction embodied in such wage structure based on skills, length of service or
other logical basis of differentiation.
a. Wage increases
b. Wage crediting
c. Wage differential
d. Wage distortion
e. None of the above.

16. He is a contractor who carries on an independent business and undertakes contract

work on his own account, under his own responsibility according to his own
manner and method free from control and discretion of the principal except as to
result and having a substantial capital to carry on his business:

a. Labor contractor
b. Job contractor
c. Project employees
d. Employer
e. None of the above

17. Compose of those whose primary duty consists of management of establishment in

which they are employed or of a department or subdivision thereof:
a. Supervisory employees
b. Department heads
c. Board of directors
d. Managerial employees
e. None of the above

18. They perform services in employer’s home which are usually necessary or desirable
for maintenance and employment thereof or minister to the personal comfort,
convenience, or safety of employer as well as members of his household are:

a. Domestics/servants/house helpers
b. Regular employees
 c. Confidential employees
d. Managerial staff
e. None of the above

19. Gian is a field personnel. On January 1, 2006, his boss required him to work. He
started working from 8am until 5pm in the afternoon. A month later, Gian
requested his holiday pay. Is Gian entitled to holiday pay?

Answer: No, Gian is not entitled to holiday pay because he is a field personnel and under the
omnibus rules to implement the labor code a field personnel is not entitled to holiday pay.

20. Arian and Orion worked at a restaurant. Arian worked as a cashier while orion
served as a waiter. Such restaurant collected service charges. When the manager
was about to distribute collection for the service charges, Orion contended that he
should get all the payment for the service charges since it was only he who tended
personally to the customers. Is Orion correct?

Answer: No, Orion is not correct because the service charge law essentially mandates all
establishments that collect service charge to distribute it “completely and equally” among
covered employees—meaning all workers directly employed by the covered establishment
“regardless of position, designation or employment status. Here, Arian and Orion are both
employees of the restaurant. Hence, they are both entitled to a share in the service charge.
Therefore, Orion is not correct.

21. When can an employer require an employee to work on a rest day?

The employer may require his employee to work on rest day in the following instances:

1. In case of actual or impending emergencies caused by serious accident, fire, flood,

typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and
property, or imminent danger to public safety;
2. In cases of urgent work to be performed on the machinery, equipment, or installation, to
avoid serious loss which the employer would otherwise suffer;
3. In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures;
4. To prevent loss or damage to perishable goods;
5. Where the nature of the work requires continuous operations and the stoppage of work
may result in irreparable injury or loss to the employer; and
6. Under other circumstances analogous or similar to the foregoing as determined by the
Secretary of Labor and Employment.

22. Enumerate the 12 regular holidays in a year under the Administrative code of 1987.

They are the following:

1. New Year’s Day January 1
2. Maundy Thursday Movable Date
3. Good Friday Movable Date
4. Araw ng Kagitingan Monday nearest April 9
5. Labor Day Monday nearest May 1
6. Independence Day Monday nearest June 12
7. National Heroes’ Day Last Monday of August
8. Eidl Fitr Movable Date
9. Eidl Adha Movable Date
10. Bonifacio Day Monday nearest November 30
11. Christmas Day December 25
12. Rizal Day Monday nearest December 30

23. When can an employer require an employee to perform emergency over time
work?

Under Art. 89 of the Labor Code any employee may be required by the employer to perform
overtime work in any of the following cases:

a. When the country is at war or when any other national or local emergency has been
declared by the National Assembly or the Chief Executive;

b. When it is necessary to prevent loss of life or property or in case of imminent danger to

public safety due to an actual or impending emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;

c. When there is urgent work to be performed on machines, installations, or equipment, in

order to avoid serious loss or damage to the employer or some other cause of similar
nature;

d. When the work is necessary to prevent loss or damage to perishable goods; and

e. Where the completion or continuation of the work started before the eighth hour is
necessary to prevent serious obstruction or prejudice to the business or operations of the
employer.

True or False. State your basis.

24. Under time work on any particular day shall not be offset by overtime work on any
other day. However, permission given to the employee to go on leave some other
day of the week shall offset over time work?
False because Art. 88 of the labor code provides that undertime is not offset by
overtime. Undertime work on any particular day shall not be offset by overtime work on any
other day. Permission given to the employee to go on leave on some other day of the week shall
not exempt the employer from paying the additional compensation required in this Chapter.

25. Under the “Theory of Imputed Knowledge” notice to agent is deemed notice to the
principal and the other way around.
False because the law provides that the theory of imputed knowledge ascribes the knowledge of
the agent to the principal- employer, not the other way around. The knowledge of the principal-
foreign employer cannot, therefore, be imputed to its agent.