LABOR LAW AND SOCIAL LEGISLATION 1. Maternity Leave ......................................................................................

55
TABLE OF CONTENTS 2. Paternity Leave ....................................................................................... 57
I. Fundamental Principles and Policies 3. Service Incentive Leave .......................................................................... 59
A. Constitutional provisions .................................................................................. 4. Parental Leave (R.A. No. 8972)
1 5. Leave for Victims of Violence against Women and Children (R.A. No. 9262)
1. Article II, Secs. 9, 10, 11, 13, 14, 18, 20. ............................................. 1 6. Special leave benefit for women
2. Article III, Secs. 1, 4, 7, 8, 10, 16, 18(2). .............................................. 2 F. Service Charge ............................................................................................ 60
3. Article XIII, Secs. 1, 2, 3, 13, 14. .......................................................... 3 G. Thirteenth Month Pay ................................................................................... 62
B. Civil Code H. Separation Pay ............................................................................................ 63
1. Article 19 I. Retirement Pay ............................................................................................ 66
2. Article 1700 a. Eligibility ............................................................................................ 68
3. Article 1702 b. Amount .............................................................................................. 69
C. Labor Code c. Retirement benefits of workers paid by results
1. Article 3 d. Retirement benefits of part-time workers
2. Article 4 .................................................................................... 11 e. Taxability
3. Article 166 J. Women Workers .......................................................................................... 69
4. Article 211 a. Provisions against discrimination ....................................................... 69
5. Article 212 b. Stipulation against marriage .............................................................. 69
6. Article 255 .......................................................................................... 12 c. Prohibited acts ................................................................................... 71
7. Article 277 d. Anti-Sexual Harassment Act (R.A. No. 7877) ................................... 71
II. Recruitment and Placement K. Employment of Minors (Labor Code and R.A. No. 7678, R.A. No. 9231) .....
A. Recruitment of local and migrant workers ...................................................... 72
13 L. Househelpers (Labor Code as amended by R.A. No. 7655, An Act Increasing
1. Illegal recruitment (Sec. 5, R.A. No. 10022) ....................................... 13 the Minimum Wage of Househelpers; see also – Household Service under the
a) License v. authority ................................................................ 13 Civil Code) ............................................................................................ 74
b) Essential elements of illegal recruitment M. Employment of Homeworkers ...................................................................... 78
c) Simple illegal recruitment N. Apprentices and Learners ............................................................................ 79
d) Illegal recruitment in large scale O. Persons with disability (R.A. No. 7277, as amended by R.A. No. 9442) ...... 81
e) Illegal recruitment as economic sabotage ................................. 16 a. Definition
f) Illegal recruitment v. estafa b. Rights of persons with disability
g) Liabilities .................................................................................. 17 c. Prohibition on discrimination against persons with disability .............. 83
(i) Local recruitment agency d. Incentives for employers
(ii) Foreign employer IV. Termination of
(a) Theory of imputed knowledge Employment ................................................................................ 84
(iii) Solidary liability A. Employer-employee relationship ....................................................................
h) Pre-termination of contract of migrant worker ........................... 18 84
2. Direct hiring ......................................................................................... 21 1. Four-fold test ....................................................................................... 91
B. Regulation and enforcement .......................................................................... 22 2. Kinds of employment ........................................................................... 98
1. Suspension or cancellation of license or authority (Art. 35, Labor a. Probationary ........................................................................... 100
Code) ........................................................................................................... 22 b. Regular .................................................................................. 104
2. Regulatory and visitorial powers of the DOLE secretary c. Project employment ................................................................ 109
3. Remittance of foreign exchange earnings ........................................... 23 d. Seasonal ................................................................................ 113
4. Prohibited activities ............................................................................. 23 e. Casual .................................................................................... 113
III. Labor f. Fixed-term ............................................................................. 115
Standards .................................................................................................. 23 3. Job contracting .................................................................................. 115
A. Hours of work ............................................................................................... 23 a. Articles 106 to 109 of the Labor Code .................................... 115
1. Coverage/Exclusions (Art. 82, Labor Code) ............................. 23 b. Department Order No. 18-A
2. Normal hours of work ................................................................ 25 c. Department Circular No. 01-12
a) Compressed work week .......................................................... 26 d. Effects of Labor-Only Contracting
3. Meal break e. Trilateral relationship in job contracting ................................... 124
4. Waiting time B. Dismissal from employment .........................................................................
5. Overtime work, overtime pay ............................................................. 26 129
6. Night work (R.A. No. 10151), Night shift differential ........................... 33 1. Just Causes ...................................................................................... 131
7. Part-time work 2. Authorized Causes ............................................................................ 143
8. Contract for piece work (see Civil Code) 3. Due Process ..................................................................................... 153
B. Wages.......................................................................................................... 35 a) Twin-notice requirement
1. Wage v. salary ................................................................................. 36 b) Hearing; meaning of opportunity to be heard
2. Minimum wage defined, Minimum wage setting ................................. 40 C. Reliefs for Illegal Dismissal ..........................................................................
3. Minimum wage of workers paid by results ......................................... 41 161
a) Workers paid by results 1. Reinstatement ................................................................................... 161
b) Apprentices a. Pending appeal (Art. 223, Labor Code)
c) Learners b. Separation pay in lieu of reinstatement
d) Persons with disability 2. Backwages ....................................................................................... 167
4. Commissions ..................................................................................... 42 a. Computation
5. Deductions from wages ..................................................................... 43 b. Limited backwages
6. Wage Distortion/Rectification ............................................................. 45 D. Preventive Suspension ................................................................................ 169
7. Non-diminution of benefits ................................................................. 48 E. Constructive Dismissal ................................................................................ 169
8. Facilities v. supplements .................................................................. 50 V. Management
9. Divisor to determine daily rate Prerogative ..................................................................................... 170
C. Rest Periods ................................................................................................. 51 A. Discipline ..................................................................................................... 174
1. Weekly rest day B. Transfer of employees ................................................................................. 175
2. Emergency rest day work C. Productivity standard ................................................................................... 176
D. Holiday pay/Premium pay ........................................................................... 51 D. Grant of bonus ............................................................................................ 177
1. Coverage, exclusions .......................................................................... 51 E. Rules on Marriage between employees of competitor-employers .................
2. Teachers, piece workers, takay, seasonal workers, seafarers ............. 55 180
E. Leaves ........................................................................................................... 55 F. Post-employment ban .................................................................................. 180
G. Change of working hours ............................................................................. 180 8. Effect of defiance of assumption or certification orders ...................... 270
VI. Social Welfare Legislation (P.D. 626) 9. Illegal strike ....................................................................................... 271
A. SSS Law (R.A. No. 8282) ........................................................................... 181 a) Liability of union officers ........................................................ 271
1. Coverage .............................................................................................. 181 b) Liability of ordinary workers................................................... 271
2. Exclusions from coverage ..................................................................... 184 c) Liability of employer .............................................................. 273
3. Benefits ................................................................................................ 185 d) Waiver of illegality of strike
4. Beneficiaries ......................................................................................... 188 10. Injunctions ....................................................................................... 273
B. GSIS Law (R.A. No. 8291) .......................................................................... 190 a) Requisites for labor injunctions
1. Coverage .............................................................................................. 190 b) “Innocent bystander rule”
2. Exclusions from coverage ..................................................................... 192 VIII. Procedure and Jurisdiction
3. Benefits ................................................................................................ 192 A. Labor Arbiter ................................................................................................
4. Beneficiaries ......................................................................................... 193 274
C. Limited Portability Law (R.A. No. 7699) ...................................................... 1. Jurisdiction
194 a) versus Regional Director
D. Employee’s compensation – coverage and when compensable .................. 194 2. Reinstatement pending appeal
VII. Labor Relations Law 3. Requirements to perfect appeal to NLRC
A. Right to self-organization ............................................................................. B. National Labor Relations Commission (NLRC) ...........................................
197 285
1. Who may unionize for purposes of collective bargaining ................... 200 1. Jurisdiction ....................................................................................... 285
a) Who cannot form, join or assist labor organizations 2. Effect of NLRC reversal of Labor Arbiter’s order of reinstatement
2. Bargaining unit .................................................................................. 210 3. Remedies ............................................................................... 290
a) Test to determine the constituency of an appropriate bargaining unit 4. Certified cases
b) Voluntary recognition C. Bureau of Labor Relations – Med-Arbiters ...................................................
(i) Requirements 290
c) Certification election ............................................................... 213 1. Jurisdiction (original and appellate)
(i) In an unorganized establishment ................................ 220 D. National Conciliation and Mediation Board ..................................................
(ii) In an organized establishment .................................... 221 291
d) Run-off election ...................................................................... 223 1. Nature of proceedings
(i) Requirements 2. Conciliation v. Mediation
e) Re-run election 3. Preventive mediation
f) Consent election ..................................................................... 224 E. DOLE Regional Directors .............................................................................
g) Affiliation and disaffiliation of the local union from the mother union 292
(i) Substitutionary doctrine ............................................... 225 1. Jurisdiction
h) Union dues and special assessments .................................... 225 F. DOLE Secretary ........................................................................................... 295
(i) Requirements for validity 1. Visitorial and enforcement powers
i) Agency fees ............................................................................ 226 2. Power to suspend/effects of termination ............................................ 298
(i) Requisites for assessment 3. Assumption of jurisdiction .................................................................. 298
B. Right to collective bargaining ....................................................................... 4. Appellate jurisdiction
229 5. Voluntary arbitration powers
1. Duty to bargain collectively ..................................................... 230 G. Grievance Machinery and Voluntary Arbitration ...........................................
a) When there is absence of a CBA 302
b) When there is a CBA 1. Subject matter of grievance ............................................................... 302
2. Collective Bargaining Agreement (CBA) ................................ 232 2. Voluntary Arbitrator ........................................................................... 302
a) Mandatory provisions of CBA ................................................ 234 a) Jurisdiction
(i) Grievance procedure b) Procedure
(ii) Voluntary arbitration c) Remedies
(iii) No strike-no lockout clause H. Court of Appeals ......................................................................................... 305
(iv) Labor management council 1. Rule 65, Rules of Court
b) Duration ................................................................................ 236 I. Supreme Court
(i) For economic provisions 1. Rule 45, Rules of Court
(ii) For non-economic provisions J. Prescription of actions .................................................................................. 305
(iii) Freedom period Page 1 of 307
3. Union Security .................................................................................. 238
a) Union security clauses; closed shop, union shop, maintenance of membership
shop, etc.
b) Check-off; union dues, agency fees
4. Unfair Labor Practice in collective bargaining .................................... 245
a) Bargaining in bad faith ........................................................... 245
b) Refusal to bargain .................................................................. 246
c) Individual bargaining
d) Blue sky bargaining
e) Surface bargaining ................................................................. 247
5. Unfair Labor Practice (ULP) ............................................................. 248
a) Nature of ULP ........................................................................ 248
b) ULP of employers ................................................................. 248
c) ULP of labor organizations .................................................... 252
C. Right to peaceful concerted activities ...........................................................
253
1. Forms of concerted activities ............................................................. 254
2. Who may declare a strike or lockout? .............................................. 257
3. Requisites for a valid strike ............................................................... 257
4. Requisites for a valid lockout ............................................................. 263
5. Requisites for lawful picketing ........................................................... 263
6. Assumption of jurisdiction by the DOLE Secretary or Certification of the labor
dispute to the NLRC for compulsory arbitration ........................... 266
7. Nature of assumption order or certification order ............................... 269
JURISTS 6. Cyrus would like to register the union that he and his friends
established to protect their interests against their employer.
1. Distinguish labor-only contracting and job contracting. Where would the register the union?
A There is labor-only contracting if the person supplying workers to an employer Applications for registration of independent labor unions, chartered locals,
does not have substantial capital or investment in the form of tools, workers’ associations shall be filed with the Regional Office where the
equipment, machineries, work premises, among others, and the workers applicant principally operates. It shall be processed by the Labor Relations
recruited and placed by such person are performing activities which are Division at the Regional Office in accordance with Sections 2-A, 2-C, and 2-E
directly related to the principal business of such employer. Labor-only of Rule III.
contracting is prohibited by law and the person acting as contractor shall be Applications for registration of federations, national unions or workers’
considered merely as an agent of the employer who shall be responsible to associations operating in more than one region shall be filed with the Bureau
the workers in the same manner and extent as if the latter were directly or the Regional Offices but shall be processed by the Bureau in accordance
employed by him. with Sections 2-B and 2-D of Rule III. (Department Order No. 40-03, Rule III,
On the other hand, there is job contracting if a principal agrees to put out or Sections 1 and 2)
farm out with a contractor or series of contractors the performance or
completion of a specific job, work or service within a definite or 7. Spicy Bar Club allowed by tolerance ten Guest Relations
predetermined period, regardless of whether such job, work, or service is to be Officers (GROs) to work without compensation in its
performed or completed within or outside the premises of the principal, provided
establishment under the direct supervision of its Manager
that the contractor has substantial capital or investment and the workers
recruited and placed by such contractor are performing activities which are from 8:00 P.M. To 4:00 A.M. everyday, including Sundays and
not directly related to the principal business of the principal. holidays. The GROs, however, were free to ply their trade
elsewhere at anytime, but once they enter the premises of the
2. CDD Corporation is a domestic corporation registered with club, they were required to stay up to closing time. The GROs
the SEC, with 32% of its authorized capital stock owned by earned exclusively from commissions for food and drinks, and
foreigners and 68% of its authorized capital stock owned by tips from generous customers. In time, the GROs formed the
Filipinos. Is CDD Corporation allowed to engage in the Samahang Ugnayan ng mga Kababaihang lnaapi (SUKI), a labor
recruitment and placement of workers, locally and overseas? union duly registered with DOLE. Subsequently, SUKI filed a
Briefly state the basis for your answer. petition for Certification Election in order to be recognized as
No, CDD Corporation is not allowed to engage in the recruitment and placement the exclusive bargaining agent of its members. Spicy Bar Club
of workers. opposed the petition for Certification Election on the ground of
Under Labor Law, only Filipino citizens or corporations, partnerships or entities absence of employer-employee relationship between the GROs
at least 75% of the authorized and voting capital stock of which is owned on one hand and the night club on the other hand. May the
and controlled by Filipino citizens shall be permitted to participate in the
GROs form SUKI as a labor organization for purposes of
recruitment and placement of workers, locally or overseas. [Article 27, Labor
Code] collective bargaining? Explain briefly.
Here CDD Corporation is not qualified because only 68% of its authorized Yes, the GROs may form SUKI for purposes of collective bargaining.
capital stock is owned by Filipinos which falls short of what is required. The Supreme Court has held that under the control test in establishing an
employer-employee, a person is deemed to be an employer if he has control over
the work being done by another person.
3. When is illegal recruitment deemed an economic sabotage? Here, the bar has direct control and supervision of the GROs’ work, it can
Illegal recruitment when committed by a syndicate or in large scale shall be also be said that it has the power to select and engage the GROs, and it has the
considered as offense involving economic sabotage. power to discipline them. The fact that compensation is derived from
Illegal recruitment is deemed committed in large scale if committed against commission is of no moment. In fact, the Bar may be charge for violating labor
three or more persons individually or as a group. standards laws for not compensating the GROs for their services.
Illegal recruitment is deemed committed by a syndicate when it is carried out by
a group of three or more persons conspiring or confederating with one
another. [Section 6, R.A. No. 8042; People v. Gasacao, November 11, 2005] May a “no-union” win in a certification election?
Yes. A “no-union’’ as a choice in a certification election can win if this choice
gets the majority of all the valid votes cast in the said election. (Section 20,
4. A contractor was accused of engaging in labor-only Rule IX, Department Order No. 40-03, February 17, 2003) This is premised on
contracting. The contractor claimed that since it has duly the fact that the right to join unions carries with it the right not to join any labor
registered as a contractor and has been issued a Certificate of union.
Registration by the Department of Labor and Employment, it
cannot be accused of engaging in prohibited labor-only 9. May the substitute union repudiate the existing CBA?
contracting. Is this contention correct? Explain. The substitutionary doctrine provides that the employees cannot revoke the
No, the contention is not correct. validly executed collective bargaining contract with their employer by the
Under the Labor Standards Law, the certification of registration issued by the simple expedient of changing their bargaining agent. And it is in the light of
Department of Labor and Employment is not conclusive evidence that the this that the phrase “said new agent would have to respect said contract” must be
registrant is a legitimate contractor; registration simply prevents the legal understood. It only means that the employees, through their new bargaining
presumption of being a labor-only contractor from arising. agent, cannot renege on their collective bargaining contract, except of course
to negotiate with management for the shortening thereof.
5. Differentiate “surface bargaining” from “blue-sky
bargaining.” 10. Explain the bystander rule.
A Surface bargaining is defined as “going through the motions of negotiating” In a certification election, consent election, run-off election or re run election, the
without any legal intent to reach an agreement. The determination of whether employer should not interfere as he is just a by-stander. This is the sole
a party has engaged in unlawful surface bargaining is a question of the intent of concern of the workers. The only exception is where the employer has to file a
the party in question, which can only be inferred from the totality of the petition for certification election because it was requested to bargain
challenged party’s conduct both at and away from the bargaining table. collectively. Thereafter, the role of the employer in the certification process
On the other hand, blue-sky bargaining is defined as “unrealistic and ceases.
unreasonable demands in negotiations by either or both labor and management,
where neither concedes anything and demands the impossible.” [Standard
Chartered Bank Employees Union (NUBE) v. Confesor, 432 SCRA 308 (2004)].
11. Jim is a Briton who is working as a consultant for a local IT 14. Ang Paraiso ng mga Manlalakbay (APM) is a well-known
company. The company has a union and Jim wants to support travel agency and an authorized sales agent of the Philippine
the union. Is Jim allowed to join the union? Airways. Since majority of its passengers are overseas
Jim as an alien employee may participate in union activities if he has a valid workers, APM applied for an authority to engage in
working permit issued by the Department of Labor and provided that he is a recruitment and placement activities. It stated in its
national of a country which grants the same or similar rights to Filipino application that its purpose is not for profit but to help
workers, as certified by the Department of Foreign Affairs, or which has ratified
either ILO Convention No. 87 and ILO Convention No. 98. (Department Order
Filipinos find employment abroad. Should the application be
No. 40-C-05, March 7, 2005) approved?
No, the application of APM for authority to recruit and place overseas workers
should not be approved.
12. Ador de Tornato was engaged as Athletic Director by St. Under the Labor Law, travel agencies and sales agencies of airline companies
Andrew’s Field School, Inc. at a yearly compensation of are prohibited from engaging in the business of recruitment and placement
₱800,000.00. The contract fixed a specific term for its of workers for overseas employment, whether for profit or not. [Article 26 of
existence, five (5) years from July 13, 2014 to July 13, 2019. the Labor Code]
Some three (3) months before the expiration of the stipulated
period, Ador de Tornato was given a copy of the report filed by 15. The NCR Regional Wage Board issued a Wage Order in
the school with the Department of Labor and Employment February 2018, may it issue another Wage Order in November
(DOLE) advising of the termination of his services effective on 2018 to cushion the effects of inflation on laborers?
July 13, 2019 on the ground of expiration of the definite period As a general rule the regional wage board may it not.
of employment." And a month or so later, Ador de Tornato Under Labor Law, any Wage Order issued by the Board may not be disturbed
accepted the amount of ₱810,000 and signed a receipt stating for a period of twelve months from its effectivity, and no petition for wage
increase shall be entertained within the said period.
"full payment of contract." However, Ador de Tornato In the event, however, that supervening conditions, such as extraordinary
protested the termination of his employment and argued as increase in prices of petroleum products and basic goods/services, demand a
follows: review of the minimum wage rates as determined by the Board and
a) that since his services were necessary and desirable in the confirmed by the Commission, the Board shall proceed to exercise its wage
usual business of his employer, and his employment had lasted fixing function even before the expiration of the said period. [Section 3, Rule IV,
Rules of Procedure on Minimum Wage Fixing]
for five years, he had acquired the status of a regular employee
and could not be removed except for just cause;
16. Giving in to the demands of various labor federations, the
b) the fact that his activities is usually necessary and desirable Regional Tripartite Wages and Productivity Board (RTWPB)
in the business the same cannot be made the subject of a for the National Capital Region issued a Wage Order giving an
definite period of employment. across-the-board wage increase of P25 per day for all
Consequently, Ador de Tornato initiated a complaint for illegal employees in Metro Manila. Is the Wage Order valid?
dismissal before the Arbitration Branch of the National Labor No, the Wage Order is invalid.
Relations Commission (NLRC). If you were the Labor Arbiter Under the Law on Labor Standards, the Regional Wage Boards are authorized to
how will you resolve the contentions of Ador Tornato? State set and adjust the minimum wage only.
your reasons briefly. Here the Metro Manila Wage Board went beyond its authority in granting across-
As labor arbiter, I will rule that Ador did not become a regular employee and his the-board wage increases to all employees alike, regardless of salary rate.
dismissal was valid. Hence the Wage Order is invalid.
The Supreme Court has held that a fixed-term employment contract terminates
by its own terms at the end of a definite period and the fact that the service 17. For humanitarian reasons, a bank hired several
rendered by the employees is usually necessary and desirable in the business handicapped workers to count and sort out currencies. Their
operations of the employer will not impair the validity of such contracts nor employment contract was for five (5) months. The bank
will it make the employee a regular one. terminated their employment on the ground that their contract
Here Tornato’s employment contract was for a fixed five-year period ending on
July 13, 2019. has expired prompting the handicapped workers to file with
Hence his employment terminated upon expiration of the five-year period and the Labor Arbiter a complaint for illegal dismissal.
his dismissal was valid. [See Brent School, Inc. v. Zamora, 5 February 1990] a. Will their action prosper?
a) No, the workers’ action for illegal dismissal will not prosper.
13. Dr. Manang Angal just like most of the professors in The Supreme Court has held that the expiration of the fixed-term contract is a
University of the Orient College of Medicine (a private valid ground for termination of employment and does not amount to an
illegal dismissal.
institution) is teaching a load of about 12 to 15 units per
Here the employment contract of the handicapped workers was for a fixed term
semester. On his tenth year as professor he was not given a of five months.
teaching load. Dr. Angal filed a case for illegal dismissal with Hence upon the expiration of the term, the employment of the handicapped
the Labor Arbiter. Will he win his case? workers was validly terminated and there was no illegal dismissal and the
No, Dr. Angal will not win his case. workers’ action will not prosper.
Under the Law on Labor Relations, part-time private school teachers will not b. Explain the rights of disabled workers under the Magna
attain permanent status no matter how long they have served the school.
Carta for the disabled persons.
[UST v. NLRC, G.R. No. 85519, February 15, 1990]
b) The rights of disabled workers under the Magna Carta for the disabled persons
are the following:
OPPORTUNITY FOR SUITABLE EMPLOYMENT. Opportunity for suitable
employment shall be open to all qualified disabled persons.
NO DISCRIMINATION IN EMPLOYMENT. No individual or entity, whether
public or private, shall discriminate against a qualified disabled person by reason
of disability in regard to job application procedures; the hiring, promotion, or
discharge of employees; employee compensation, job training, and other terms
and conditions of employment.
18. From 2012 to 2018, Acme Corporation had included in the As a result of bargaining deadlock between CTE Corporation
computation of its employees’ 13th month pay the following and CTE Employees Union, its members staged a strike. During
items: maternity leave pay, COLA, premium pay, and cash the strike, several employees committed illegal acts. CTE
equivalent of unused vacation and sick leave. In 2019 the refused to give in to the union’s demands. Eventually, its
company wanted to exclude these items from the computation, members informed the company of their intention to return to
saying that their inclusion was an error since the 13-month pay work.
should be computed on the basis of the basic salary, excluding Can CTE Corporation refuse to admit all the strikers?
non-basic benefits. You are the counsel of Acme Corporation. No, CTE Corporation cannot refuse to admit all the strikers.
What would your advice be? Under the Labor Code, only workers who knowingly participate in the
A My advice to Acme Corporation would be that it cannot exclude the non- commission of illegal acts during a strike may be declared to have lost their
basic benefits in the computation of the 13th month pay. employment status.
Under the Labor Code, it is prohibited to diminish or to eliminate benefits being Hence CTE Corporation cannot refuse to admit those strikers who did not
enjoyed by employees. knowingly participate in the commission of illegal acts.
Here the inclusion of non-basic items in the computation of the 13th month pay Assuming the company admits all the strikers, can it later on
is a benefit being enjoyed by the employees. dismiss those employees who committed illegal acts?
Hence it cannot be diminished or eliminated by the employer Acme
Yes, assuming that the company admits all the strikers, it can later on dismiss
Corporation. [Article 100, Labor Code; Sevilla Trading Company v. Semana, 28
those employees who committed illegal acts provided that it gives them notice
April 2004]
and hearing.
The Supreme Court has held that no law authorizes an immediate dismissal of
Antonio works as a roomboy in Thundercat Hotel. He sued for an employee for participating in an illegal strike and that as in other
underpayment of wages before the NLRC, alleging that he was termination cases, the employees must be given the required notices for
paid below the minimum wage. The employer denied any terminating an employment.
underpayment, arguing that based on long standing, unwritten
policy, the Hotel provided food and lodging to its housekeeping Cesar is a carpenter who was hired by Ang Panday Builders
employees, the costs of which were partly shouldered by it and (APB), and assigned to build a house in Capitol Hills. His
the balance was charged to the employees. The employees’ contract of employment specifically referred to him as a
corresponding share in the costs was thus deducted from their “project employee,” but did not provide any particular date of
wages. The employer concluded that such valid deduction completion of the project. Is the completion of the house a valid
naturally resulted in the payment of wages below the cause for the termination of Cesar’s employment? If so, what
prescribed minimum. are the due process requirements that the APB must satisfy? If
Would Antonio’s case prosper? not, why not?
Yes, Antonio’s case would prosper. Yes, the completion of the house is a valid cause for termination of Cesar’s
The Supreme Court has held that even if food and lodging were provided and employment.
considered as facilities by the employer, the employer could not deduct such In a case involving similar facts, the Supreme Court held that although the
facilities from its workers’ wages without satisfying the following conditions: employment contract may not state a particular date, but if it did specify that the
(a) proof that such facilities are customarily furnished by the trade; termination of the parties’ employment relationship was to be on a “day certain”
(b) the provision of deductible facilities is voluntarily accepted in writing by or the day when the phase of work would be completed, the employee cannot be
the employee; and considered to have been a regular employee (Filipinos Pre-Fabricated Building
(c) the facilities are charged at fair and reasonable value. [Mabeza v. NLRC systems v. Puente, 453 SCRA 820 [2005]).
(271 SCRA 670 (1997)] Under the Law on Labor Relations, the due process requirement that the APB
Here there was no showing that the employer satisfied these conditions. must satisfy is that the employer is required to report to the relevant DOLE
Regional Office the fact of termination of project employees as a result of the
Does the Labor Arbiter have jurisdiction? completion of the project or any phase thereof in which one is employed.
Yes, the Labor Arbiter has jurisdiction.
Under the Law on Labor Relations, the Labor Arbiter has jurisdiction over
claims arising from employer-employee relations. A dismissed employee claims that when he was dismissed, due
Here the claim for underpayment of wages is one which arises from employer- process was not observed in the absence of a hearing in which
employee relations. Hence the Labor Arbiter has jurisdiction. he could have explained his side and refuted the evidence
against him. He was merely required to give a written
20. Who has jurisdiction over money claims of OFWs? explanation. Is his contention correct?
A The Labor Arbiter has jurisdiction over the money claims of OFWs whose No, the employee’s contention is not correct.
contracts are prematurely terminated. The money claim is reimbursement of The Labor Code provides that, in cases of termination for a just cause, an
placement fees plus 12% interest per annum and the salary for the employee must be given “ample opportunity to be heard and to defend himself.”
unexpired portion of the contract. [Sameer Overseas Placement v. Cabiles, As interpreted by the Supreme Court, “ample opportunity to be heard” means
August 5, 2014] any meaningful opportunity – verbal or written – given to the employee to
answer the charges against him and submit evidence in support of his
defense, whether in a hearing, conference, or some other fair, just and reasonable
21. Distinguish economic strike from ULP strike.
way.
Economic strike is declared to demand higher wages, overtime pay, holiday
Here the employee was given an opportunity to submit a written explanation.
pay, vacation pay, and other economic benefits.
Hence, the absence of a hearing will not constitute a violation of the procedural
An economic strike is one which is to force wage or other concessions from the
requirements for termination.
employer which he is not required by law to grant. [Master Iron Labor Union v.
NLRC, G.R. No. 92009, February 17, 1993] While ULP strike is staged to
protest against the employer’s acts of unfair labor practice enumerated in Article
258 of the Labor Code, including gross violation of the Collective Bargaining
Agreement (CBA) and union-busting.
25. Rene has a temper and, in his work as Supervisor he 28. Is an actual or formal hearing an absolute requirement in
frequently loses his temper with his staff. One day, he termination of employment?
physically assaults his staff member by slapping him. The staff No. The Supreme Court laid down the following guiding principles in connection
member sues him for physical injuries. The employer decided with the hearing requirement in dismissal cases:
to terminate Rene’s services, after notice and hearing, on the (a) "ample opportunity to be heard" means any meaningful opportunity
(verbal or written) given to the employee to answer the charges against him
ground of loss of trust and confidence. Rene claims that he is and submit evidence in support of his defense, whether in a hearing,
entitled to the presumption of innocence because he has not conference or some other fair, just and reasonable way.
yet been convicted. Comment on the employer’s action in (b) a formal hearing or conference becomes mandatory only when requested by
relation to Rene’s argument. the employee in writing or substantial evidentiary disputes exist or a
A Rene’s argument is wrong. company rule or practice requires it, or when similar circumstances justify
Under the Law on Labor Relations, commission of a crime by an employee in it.
connection with his work is a just cause for termination; the law only requires (c) the "ample opportunity to be heard" standard in the Labor Code prevails over
commission of a crime and not a prior conviction. the "hearing or conference" requirement in the implementing rules and
Here Rene’s commission of a crime by inflicting slight physical injuries upon his regulations. [Perez v. PT&T, G.R. No. 207838, January 25, 2017 citing Maula v.
staff is work-connected. Ximex, 602 Phil. 522 (2009)]
Hence there is just cause for Rene’s termination.
29. Cite six instances when an illegally dismissed employee
26. Arkady is a medical representative of Wellfit may be awarded separation pay in lieu of reinstatement.
Pharmaceuticals, Inc. The employment contract he signed with The following are the instances when an illegally dismissed employee may be
Wellfit contains the following stipulation: “You agree to awarded separation pay in lieu of reinstatement:
disclose to management any existing or future relationship you 1) Old age. [Espejo v. NLRC, G.R. No. 112678, March 29, 1996]
2) The position no longer exists. [Tanduay Distillery Labor Union, et al. v.
may have, either by consanguinity or affinity, with co-
NLRC and Tanduay Distillery, Inc., G.R. No. 73352, December 6, 1994]
employees or employees of competing drug companies. Should 3) The establishment is taken over by another company. [Callanta v. Carnation
it pose a possible conflict of interest in management discretion, Philippines, Inc. and NLRC, G.R. No. 70615, October 28, 1986]
you agree to resign voluntarily from the Company as a matter 4) Insolvency of the employer. [Electruck Asia, Inc. v. Meris, et al., G.R. No.
of Company policy.” Later Arkady met and fell in love with 147031, July 27, 2004]
Olga, a medical representative of Saxon Drug Corporation, a 5) Closure of business. [Philtread Tire & Rubber Corporation v. Vicente, G.R.
competing drug company. Arkady disclosed the relationship No. 142759, November 10, 2004]
6) Strained relations. [Cabatulan v. Buat, et al., G.R. No. 147142, February 14,
and eventual marriage to Wellfit. Wellfit, invoking the above
2005]
provision, asked Arkady to resign or to have his wife resign.
Arkady refused to do so. After due proceedings, Arkady was
30. Can an employee be entitled to award of both separation
dismissed on the ground of conflict of interest. Was Arkady’s
pay and retirement benefits?
dismissal on such ground proper? Explain. Yes. The Supreme Court held that the award of separation pay is distinct from
Yes, Arkady’s dismissal on the ground of conflict of interest was proper. the grant of retirement benefits. These benefits are not mutually exclusive as
In a case involving similar facts, the Supreme Court upheld the dismissal of an "[r]etirement benefits are a form of reward for an employee’s loyalty and
employee for violation of a conflict-of-interest provision on the ground that an service to an employer and are earned under existing laws, [Collective
employer has the right to guard its proprietary and confidential information. [See Bargaining Agreements], employment contracts and company policies."
Duncan Association of Detailman v. Glaxo Wellcome Phils. Inc., 17 Sep 2004). [Goodyear Philippines, Inc. and Remegio M. Ramos v. Marina L. Angus, G.R.
No. 185449, November 12, 2014]
27. Ador Tole Tino while waiting for a replacement part he Separation pay, on the other hand, is that amount which an employee receives at
requested took a seat and rested. At that time, another the time of his severance from employment, designed to provide the employee
employee, Janil Eki Iza, passed by and saw Tino sitting, then with the wherewithal during the period that he is looking for another
uttered "Ayos ka ha." The matter was brought to the attention employment.(Id.)
of Assembly Action Team Leader, Makro Tex Sun, who
confronted Tino about the said incident. Thereafter, while Sun 31. Manuel, upon reaching the age of 56, availed of the early
and Iza were talking to each other, Tino told the latter in the retirement package of his employer, a mining company. The
vernacular "Ang kitid ng utak mo[.] [B]akit hindi mo muna ako necessary papers were drawn up and Manuel was paid
tinanong kung bakit ako nakaupo[?] [B]akit hindi mo muna retirement benefits equivalent to 20 days’ pay for every year of
tinanong kung ano [ang] nasa likod ng nakita mo?" Iza service. Manuel enjoyed post-retirement life for about three
retorted, saying, "Matapang ka ha! Matapang ka!" Tino as and a half years, until his retirement benefits were exhausted.
replied, "Iza, ikaw pa naman ang nagdadasal araw-araw, tapos After talking to a lawyer, he learned that the retirement pay is
ganyan ang ugali mo!" Can Tino be dismissed on the ground of equivalent to 22.5 days for every year of service. Expecting to
serious misconduct? get more from his employer, Manuel filed a complaint for
No, Tino cannot be dismissed on the ground of serious misconduct. recovery of the deficiency of his retirement pay.
The Supreme Court has held that to constitute a valid cause for the dismissal, the a) Will Manuel’s case prosper?
misconduct: No, Manuel’s case for retirement pay will not prosper.
(a) must be serious; Under the Labor Code, a money claim arising from employer-employee relations
(b) it must relate to the performance of the employee's duties, showing that the shall be filed within three years from the accrual of the cause of action;
employee has become unfit to continue working for the employer; and otherwise, such claim shall be barred by prescription.
(c) it must have been performed with wrongful intent. [See Imasen Philippine Here Manuel’s claim for retirement pay is a money claim arising from employer-
Manufacturing Corporation v. Alcon, 746 Phil. 172, 181 (2014)] employee relations. However, when he filed his case it was more than three years
Here, while Tino indeed committed some sort of misconduct when he engaged in from the time that his cause of action had accrued upon his retirement and thus
a verbal tussle with Iza during work hours and in front of their superior, Sun, the his claim has already prescribed.
same was not serious enough to warrant Tino's dismissal. Neither was it shown Hence, Manuel’s case will not prosper.
that Tino performed such act of misconduct with wrongful intent nor did the
b) Who has jurisdiction over the claim for retirement benefits?
same render him unfit to continue working for the company.
Hence, Tino cannot be dismissed for serious misconduct. It is the labor arbiter which has jurisdiction over the claim for retirement benefits.
Under the Labor Code, the labor arbiter has original and exclusive jurisdiction
over claims arising from employer-employee relations.
32. Atty. Kristyan Brownie was already 65 years of age when he The policy is to extend the applicability of the decree to a greater number of
was allowed extension for another ten years of service. employees who can avail of the benefits under the law, which is in consonance
Thereafter, he was informed by BSWP that his employment will with the avowed policy of the State to give maximum aid and protection to labor.
(Rodriguez v. Park N Ride, March 20, 2017 -Leonen)
no longer be extended. Atty. Brownie initiated a money claim
for his retirement pay. However, BSWP maintains that Atty. Social Legislations
Social legislations are laws, rules, and regulations that promote welfare of all
Brownie 's cause of action for his retirement benefits, which is
sectors of society. Social Legislation includes laws that provide particular kinds
patently a money claim, accrued when he reached the of protection or benefits to the society, in furtherance of social justice. Not all
compulsory retirement age of 65 years old, and had already social legislations are labor laws. Labor laws directly affect employment they
prescribed when he filed his complaint only 10 years later, directly govern effects of employment. All labor laws are social legislations. But
when he was already 75 years old. Decide if Atty. Brownie can not all social legislations are labor laws.
still recover his retirement benefits despite the three (3) year Police Power as Basis of Labor Laws
prescriptive period for money claims under Article 306 of the The relations between capital and labor are not merely contractual as provided in
Article 1700 of the Civil Code. By statutory declaration, labor contracts are
Labor Code. impressed with public interest and, therefore, must yield to the common good.
Atty. Brownie can still recover his retirement benefits. The Supreme Court has
Labor contracts are subject to special laws on wages, working conditions, hours
held that when an employee’s work was extended beyond the compulsory
of labor, and similar subjects. In other words, labor contracts are subject to the
retirement age, the cause of action for his money claim accrued only upon the
police power of the State. (PBOAP v. DOLE, July 17, 2018 – Leonen)
termination of his extended employment. Here Atty. Brownie’s money claim for
retirement pay was filed right after the termination of his extended employment. Social Justice as Basis of Labor Laws
Hence his cause of action had not yet prescribed. [See De La Salle Araneta In our view, with these special circumstances, we can call upon the same “social
University v. Bernardo, G. R. No. 190809, February 13, 2017] and compassionate justice” cited in several cases allowing financial assistance.
These circumstances indubitably merit equitable concessions, via the principle of
“compassionate justice” for the working class. (Paz v. Northern Tobacco Co.,
Aloria was dismissed by his company on 15 November 1999. Feb. 18, 2015 - Leonen)
He filed with the Labor Arbiter a complaint for illegal dismissal
with claim for unpaid salaries, backwages, moral and Right to security of Tenure
This is the right of every employee not to be dismissed without just or
exemplary damages, and attorney’s fees on 16 November 2002. authorized cause and in the absence of due process (Imasen Phils. v. Alcon,
The company contended that Aloria’s claim for unpaid salaries, Oct. 22, 2014)
backwages, damages, and attorney’s fees was barred by The four-fold test in determining the existence of an employer-employee
prescription. Was the company correct? relationship
A The company was correct in saying that the claim for unpaid salaries was (a) the selection and engagement of the employee;
barred by prescription but not so insofar as the claim for backwages, moral and (b) the payment of wages;
exemplary damages, and attorney’s fees was concerned. (c) the power of dismissal; and
In a case involving similar facts, the Supreme Court held that the claim for (d) the employer's power to control the employee on the means and methods by
unpaid salaries was barred since it is a money claim which should have been which the work is accomplished. (Alba v. espinosa, August 9, 2017)
brought within three years from the accrual of the cause of the action;
however the claim for backwages, moral and exemplary damages, and attorney’s Control Test is Crucial
fees was not barred by prescription since there are money claims consequent to The so-called "control test" is commonly regarded as the most crucial and
an illegal dismissal and thus governed by the four-year prescriptive period determinative indicator of the presence or absence of an employer-employee
for filing an illegal dismissal case. relationship. Under the control test, an employer-employee relationship exists
Here Aloria’s complaint was filed three years and one day after his illegal where the person for whom the services are performed reserves the right to
dismissal on 15 November 1999. control not only the end achieved, but also the manner and means to be used
Hence his claim for unpaid salaries has prescribed but not his claim for in reaching that end. (Atok Big Wedge Co., v. Gison, Aug. 18, 2011)
backwages, moral and exemplary damages, and attorney’s fees which were
consequent to his illegal dismissal. [Arriola v. Pilipino Star Ngayon, 13 August Jeepney Drivers are Employees
2014; Article 291, Labor Code; Article 1141, Civil Code] The relationship between jeepney owners/operators and jeepney drivers under
the boundary system is that of employer-employee and not of lessor-lessee
because in the lease of chattels the lessor loses complete control over the chattel
Marcia, a forty-five-year-old employee has served her leased although the lessee cannot be reckless in the use thereof, otherwise he
employer for twenty years. Under the CBA, an employee may would be responsible for the damages to the lessor. In the case of jeepney
retire at the age of fifty-five or after completing twenty years of owners/operators and jeepney drivers, the former exercises supervision and
service, whichever comes first. Her employer told her to retire control over the latter. (Gabriel v. Bilon, February 7, 2007)
based on the CBA provision and already computed her Bus Drivers Are Not Field Personnel
retirement pay. However, Marcia rejected the offer contending At this point, it is necessary to stress that the definition of a “field personnel” is
that she is too young to retire and that she would find difficulty not merely concerned with the location where the employee regularly performs
looking for another job should she retire at that age. Despite his duties but also with the fact that the employee’s performance is
unsupervised by the employer.
Marcia’s objection, the employer issued a check corresponding
Field personnel are those who regularly perform their duties away from the
to her retirement pay and told her to pack her things and do principal place of business of the employer and whose actual hours of work
not report to work anymore. Marcia filed a case for illegal in the field cannot be determined with reasonable certainty. (Auto Bus
dismissal. Would the case for illegal dismissal prosper under Transport Systems, Inc. v. Bautista, May 16, 2005)
the circumstances? Illegal Dismissal
Yes the case for illegal dismissal would prosper. An action for illegal dismissal or when one is arbitrarily and unjustly deprived of
Under the Labor Law, an employer is free to impose a retirement age that is less his job of means of livelihood is essentially a complaint for "injury to rights.” -
than 65 years of age for as long as it has the employee’s consent; otherwise a Gallego v. Wallem Maritime Service, Feb. 19, 2020
termination based on a retirement plan would amount to an illegal dismissal.
Here Marcia did not consent to the retirement plan. Award of Reinstatement and Backwages
Hence Marcia’s dismissal on the basis of the retirement plan was illegal and thus An employee who has been illegally dismissed after the shall be entitled to
the case for illegal dismissal would prosper. reinstatement, full backwages and other benefits for the entire period that he was
out of work and until actual reinstatement. (Equitable Banking Corporation v.
Sadac, June 8, 2006)
Construction in favor of labor
The rudimentary principle that in the implementation and interpretation of the Computation of Full Backwages
provisions of the Labor Code and its implementing regulations, the The base figure to be used in reckoning full backwages is the salary rate of the
workingman's welfare should be the primordial and paramount consideration. employee at the time of his dismissal. The amount does not include the
increases or benefits granted during the period of his dismissal because time
stood still for him at the precise moment of his termination and move Hearing Requirement
forward only upon his reinstatement. (United Coconut Chemicals v. Valmores, Therefore, while the phrase “ample opportunity to be heard” may in fact include
July 12, 2017) an actual hearing, it is not limited to a formal hearing only. In other words, the
Paz v. Northern Tobacco Co., Feb. 18, 2015 (Leonen) existence of an actual, formal “trial-type” hearing, although preferred, is not
An award of full backwages is “inclusive of allowances and other benefits or absolutely necessary to satisfy the employee’s right to be heard.
their monetary equivalent, from the time their actual compensation was This Court has consistently ruled that the due process requirement in cases of
withheld up to the time of their actual reinstatement. Backwages, considered termination of employment does not require an actual or formal hearing.
as actual damages, requires proof of the loss suffered. (Perez v. Philippine Telegraph and Telephone Company, April 7, 2009)
Strained Relations Burden of Proof in Illegal Dismissal
Under the doctrine of strained relations, the payment of separation pay is The rule is well established that in termination cases, the burden of proving just
considered an acceptable alternative to reinstatement when the latter option is no and valid cause for dismissing an employee rests on the employer and his failure
longer desirable or viable. On one hand, such payment liberates the employee to do so shall result in a finding that the dismissal is unjustified. The burden to
from what could be a highly oppressive work environment. On the other prove a just cause for dismissal must be met by the employer. (Protective
hand, it releases the employer from the grossly unpalatable obligation of Maximum Sec. Agency v. Fuentes, Feb. 11, 2015, Leonen)
maintaining in its employ a worker it could no longer trust. Strained relations
must be demonstrated as a fact. The doctrine of strained relations should not
Authorized Cause for Dismissal
be used recklessly or applied loosely nor be based on impression alone.
The employer may also terminate the employment of any employee due to the
(Klaudia’s Kitchen v. Tanguin, June 28, 2017)
installation of labor-saving devices, redundancy, retrenchment to prevent
Double probationary period – illegal losses or the closing or cessation of operation of the establishment or undertaking
The system of double probation a transparent scheme to circumvent the plain unless the closing is for the purpose of circumventing the provisions of this Title,
mandate of the law and make it easier for it to dismiss its employees even after by serving a written notice on the workers and the Department of Labor and
they shall have already passed probation. The petitioners had ample time to Employment at least one (1) month before the intended date thereof.
summarily terminate employee’s services during her period of probation if they In case of termination due to the installation of labor-saving devices or
were deemed unsatisfactory. Not having done so, they may dismiss her now only redundancy, the worker affected thereby shall be entitled to a separation pay
upon proof of any of the legal grounds for the separation of regular employees, to equivalent to at least his one (1) month pay or to at least one (1) month pay
be established according to the prescribed procedure. - Holiday Inn Manila v. for every year of service, whichever is higher.
National Labor Relations Commission, September 14, 1993) In case of retrenchment to prevent losses and in cases of closures or cessation of
University of Sto. Tomas v. NLRC, February 15, 1990 operations of establishment or undertaking not due to serious business losses or
The legal requisites, for acquisition by a teacher of permanent employment, or financial reverses, the separation pay shall be equivalent to one (1) month pay
security of tenure, are as follows: 1) the teacher is a full time teacher; 2) the or at least one-half (1/2) month pay for every year of service, whichever is
teacher must have rendered three (3) consecutive years of service; 3) such higher. A fraction of at least six (6) months shall be considered one (1) whole
service must have been satisfactory. year. (Yulo v. Concentrix Daksh Services, January 21, 2019)
Management Prerogative
It bears stressing that a management prerogative refers to the right of the No Payment of Separation Pay
employer to regulate all aspects of employment, such as the freedom to prescribe In case of retrenchment due to closure or cessation of operations of establishment
work assignments, working methods, processes to be followed, regulation due to serious business losses or financial reverses. To require the company to
regarding transfer of employees, supervision of their work, lay-off and discipline, continue being generous when it is no longer in a position to do so would
and dismissal and recall of work, presupposing the existence of employer- certainly be unduly oppressive, unfair and most revolting to the conscience.
employee relationship. (Goya, Inc. v. Goya Employees Union, January 21, 2013) (Benson Industries Employees Union-ALU-TUCP v. Benson Industries Inc.,
Adamson University Faculty Union v. Adamson University, March 9, 2020 August 6, 2014)
(Leonen)
An employer's management prerogative to dismiss an employee is valid as long Ineffectual Dismissal
as it is done in good faith and without malice. The Court holds that it is the The failure to hear him before he is dismissed renders the termination of his
prerogative of management to regulate, according to its discretion and judgment, employment without legal effect and therefore be struck down as ineffectual.
all aspects of employment. This flows from the established rule that labor law (De Jesus v. Aquino, February 18, 2013)
does not authorize the substitution of the judgment of the employer in the
conduct of its business.
Payment of Nominal Damages
Just Cause for Dismissal Even so, in Agabon, the Court still deplored the employer's violation of the
A dismissal for just cause under Article 282 (297) implies that the employee employee's right to statutory due process by directing the payment of indemnity
concerned has committed, or is guilty of, some violation against the employer, in the form of nominal damages, the amount of which would be addressed to the
i.e. the employee has committed some serious misconduct, is guilty of some sound discretion of the labor tribunal upon taking into account the relevant
fraud against the employer, or, as in Agabon, he has neglected his duties. Thus, it circumstances. such form of damages as a deterrent to employers from
can be said that the employee himself initiated the dismissal process. (Jaka Food committing in the future violations of the statutory due process rights of
Processing Corporation v. Pacot, et. al., March 28, 2005) employees, (De Jesus v. Aquino, February 18, 2013)
Elements of Abandonment
The first element of abandonment is the failure of the employee to report to work Constructive Dismissal
without a valid and justifiable reason. The second element is the existence of There is constructive dismissal when an employer's act of clear discrimination,
overt acts which show that the employee has no intention to return to work. insensibility or disdain becomes so unbearable on the part of the employee
(Protective Maximum Security v. Fuentes, Feb. 11, 2015, Leonen) so as to foreclose any choice on his part except to resign from such employment.
It exists where there is involuntary resignation because of the harsh, hostile
Due Process for Dismissing Employees and unfavorable conditions set by the employer. (Rodriguez v. Park and Ride,
It is a well-settled rule that to constitute a valid dismissal two (2) requisites must March 20, 2017, Leonen)
concur: (a) the dismissal must be or any of the causes expressed in Art. 282 of
the Labor Code and (b) the employee must have been accorded due process, Disease as Ground for Termination
basic of which is the opportunity to be heard and to defend himself. (RDS An employer may terminate the services of an employee who has been found to
Trucking v. NLRC, August 27, 1998) be suffering from any disease and whose continued employment is prohibited by
Twin Notices law or is prejudicial to his health as well as to the health of his co-employees.
1. a notice specifying the grounds for which dismissal is sought a hearing or an He is paid separation pay equivalent to at least one (1) month salary or to one-
opportunity to be heard and 2. after hearing or opportunity to be heard, a notice half (1/2) month salary for every year of service, whichever is greater, a
of the decision to dismiss. (Protective Maximum Sec. Agency v. Fuentes, Feb. fraction of at least six (6) months being considered as one (1) whole year.
11, 2015, Leonen) (1) An employee has been found to be suffering from any disease.
(2) His continued employment is prohibited by law or prejudicial to his
health, as well as to the health of his co-employees.
(3) A competent public health authority certifies that the disease is of such nature appellant’s acts of illegal recruitment, thereby rendering his acts tantamount to
or at such a stage that it cannot be cured within a period of six months even economic sabotage.
with proper medical treatment. (Deoferio v. Intel Tech. June 18, 2014)
Syndicated Illegal Recruitment
Floating Status Illegal recruitment is deemed committed by a syndicate when carried out by a
The practice of placing security guards on "floating status" or "temporary off- group of three (3) or more persons conspiring or confederating with one another.
detail" is a valid exercise of management prerogative. Jurisprudence has (Section 6, Republic Act No. 8042)
settled that the period of temporary off-detail must not exceed six (6) months.
Beyond this, a security guard's floating status shall be tantamount to Large Scale Illegal Recruitment
constructive dismissal. Temporary displacement or temporary off-detail of It is deemed committed in large scale if committed against three (3) or more
security guard is, generally, allowed in a situation where a security agency's persons individually or as a group. (Section 6, Republic Act No. 8042)
client decided not to renew their service contract with the agency and no post is Illegal recruitment in large scale is committed when a person "(a) undertakes any
available for the relieved security guard. Such situation does not normally recruitment activity defined under Article 13 (b) or any prohibited practice
result in a constructive dismissal. (Padilla v. Airborne Security Service, Nov. enumerated under Article 34 of the Labor Code; (b) does not have a license or
22, 2017, Leonen) authority to lawfully engage in the recruitment and placement of workers; and (c)
Migrant Worker commits the same against three or more persons, individually or as a group.
"Migrant worker" refers to a person who is to be engaged, is engaged or has been (People of the Philippines v. Calonzo, G.R. Nos. 115150-55, September 27,
engaged in a renumerated activity in a state of which he or she is not a legal 1996)
resident to be used interchangeably with overseas Filipino worker. (Sec. 3a, RA
8042)
Penalties for Illegal Recruitment
The penalties for illegal recruitment today are the ones provided by Section 6,
POEA Approved Contracts Republic Act No. 10022 which amended Republic Act No. 8042 which provided
The Philippine Overseas Employment Administration or POEA regulations for higher penalties on illegal recruitment than what are provided by Article 39
require certain provisions to be put in the employment contract. Necessarily, it of the Labor Code. Thus:
prescribes a procedure that finds a balance of interest in both the amount and the Simple illegal recruitment - imprisonment of 12 years and 1 day to 20 years
process for recovery of compensation as a result of occupational hazards suffered and a fine of1 million to 2 million pesos.
by the seafarer. The cause of action in such recovery is based on contract Illegal recruitment deemed as economic sabotage- life imprisonment and a fine
inclusive of both statutory and regulatory provisions impliedly included in it. of2 million to 5 million pesos.
(Dayo v. Status Maritime Corporation, Jan. 21, 2015 – Leonen) 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
Money Claims of OFW of authority
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 Consequences of Conviction for Illegal Recruitment
both a violation of due process and the equal protection clauses of the 1. automatic revocation of the license or authority (Art. 39[e]);
Constitution. The money claims of OFW whose contract is prematurely 2. forfeiture of the cash and surety bonds (Art. 39[e]);
terminated is reimbursement of placement fees plus 12% interest per annum 3. conviction for the crime of estafa, if found guilty therefor. (People v.
and the salary for the unexpired portion of the contract. (Sameer Overseas Calonzo, G.R. Nos. 115150-55, September 27, 1996)
Placement v. Cabiles, August 5, 2014 - Leonen)
Illegal Recruitment, Estafa and Double Jeopardy
Rates of OFW Remittance A conviction for illegal recruitment whether simple or committed in large scale
Seamen and mariners – 80% of the basic salary, Construction companies and would not preclude punishment for estafa under Article 315(2)(a) of the
their workers – 70% of the basic salary, Professional workers (e.g. doctors, RPC. This is because no double jeopardy could attach from the prosecution
nurses, engineers, teachers) whose employment contracts provide for free board and conviction of the accused for both crimes considering that they are
and lodging – 70% of the basic salary, Professionals without free board and penalized under different laws and involved elements distinct from one
lodging – 50% of the basic salary, Domestic and other service workers – 50% of another.
the basic salary, all other workers – 50% of the basic salary (Section 2, of Conviction under Article 315(2)(a) requires the concurrence of the following
Executive Order 857) elements:
(1) the accused defrauded another by abuse of confidence or by means of deceit;
License and authority and
A license is a document issued by the Department of Labor and Employment (2) the offended party, or a third party, suffered damage or prejudice capable of
(DOLE) authorizing a person or entity to operate a private employment agency, pecuniary estimation. These are elements completely different from those
while an authority is a document issued by the DOLE authorizing a person or required for illegal recruitment. (People v. Estrada, Feb. 28, 2018)
association to engage in recruitment and placement activities as a private Prescription of action for illegal recruitment
recruitment entity. Illegal recruitment cases under this Act shall prescribe in five (5) years:
Provided, however, that illegal recruitment cases involving economic sabotage as
Illegal Recruitment defined herein shall prescribe in twenty (20) years. (Section 12, Republic Act
Under Section 6 of R.A. No. 8042, illegal recruitment, when undertaken by a 8042)
non-licensee or non-holder of authority as contemplated under Article 13(f) of Doctrine of Imputed Knowledge
the Labor Code, shall mean any act of canvassing, enlisting, contracting, The theory of imputed knowledge ascribes the knowledge of the agent, to the
transporting, utilizing, hiring, procuring workers, and including referring, principal, employer not the other way around. The knowledge of the principal-
contract services, promising or advertising for employment abroad, whether for foreign employer cannot, therefore, be imputed to its agent. (Sunace International
profit or not. (People v. Estrada, Feb. 28, 2018) Management Inc. v. NLRC, G.R. No. 161757, January 25, 2006)
Illegal recruitment is committed when two elements concur, namely; (1) the
offender has no valid license or authority required by law to enable one to Jurisdiction Over Money Claims of OFW’s
lawfully engage in recruitment and placement of workers; and (2) he undertakes The Labor Arbiter has original and exclusive jurisdiction over claims arising
either any activity within the meaning of “recruitment and placement” defined out of an employer-employee relationship or by virtue of any law or contract
under Article 13(b), or any of the prohibited practices enumerated under Article involving Filipino workers for overseas employment including claims for
34 of the Labor Code. (People v. Gutierrez, 422 SCRA 32) actual, moral, exemplary, and other forms of damages.
Economic sabotage
Illegal recruitment when committed by a syndicate or in large scale shall be Job contracting
considered as offense involving economic sabotage. Illegal recruitment is There is "job contracting" where
deemed committed in large scale if committed against three or more persons (a) The contractor carries on a distinct and independent business and undertakes
individually or as a group. In this case, five complainants testified against 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 or person employed in domestic or household service or house helper and the
the results thereof; following must concur: 1. the claim must arise from employer-employee
(b) The contractor has substantial capital or investment; and relationship; 2. the claimant is no longer employed and does not seek
(c) The agreement between the principal and the contractor or subcontractor reinstatement; 3. the aggregate money claim of each employee does not exceed
assures the contractual employees' entitlement to all labor and occupational P5,000.00. In the absence of any of the three (3) requisites, the Labor Arbiters
safety and health standards, free exercise of the right to self-organization, have exclusive original jurisdiction over all claims arising from employer-
security of tenure, and social welfare benefits. (Babas v. Lorenzo Shipping, employee relations, other than claims for employee's compensation, social
December 15, 2010) security, medicare and maternity benefits. (Brokenshire Memorial Hospital,
Department Order No. 174, March 16, 2017 Inc., v. Minister of Labor and Employment, et. al., G.R. No. 74621, February 7,
1990)
Substantial capital Appeals from the decisions of the RDO under Art. 129 must be filed within 5
refers to paid – up capital stocks/shares of at least five million pesos (Php calendar days to the NLRC.
5,000,000.00) in the case of corporations, partnerships and cooperatives; in the
case of single proprietorship, a net worth of at least five million pesos (Php Jurisdiction of DOLE Regional Director if the amount exceeds
5,000,000.00) Section 3(l), D.O. 174, s. 2017 P5000
But even if the amount of the claim exceeds P5,000.00, the claim is not on that
Independent Contractor account necessary removed from the Regional Director's competence. In respect
Independent contractor as one who carries on a distinct and independent business thereof, he may still exercise the visitorial and enforcement powers vested in
and undertakes to perform the job, work, or service on its own account and under him by Article 128 of the Labor Code, as amended, supra; that is to say, he may
its own responsibility according to its own manner and method, free from the still direct his labor regulations officers or industrial safety engineers to
control and direction of the principal in all matters connected with the inspect the employer's premises and examine his records. (Brokenshire
performance, of the work except as to the results thereof. An independent Memorial Hospital, Inc., v. Minister of Labor and Employment, et al., G.R. No.
contractor "enjoys independence and freedom from the control and 74621, February 7, 1990)
supervision of his principal" as opposed to an employee who is "subject to the Jurisdiction of DOLE Regional Director if the employer contests
employer's power to control the means and methods by which the the order
employee's work is to be performed and accomplished." (Paragele v. GMA The adjudicatory power provided by Article 129 to the DOLE Regional Director
Network, July 13, 2020 - Leonen) may not be exercised by him where the employer contests the labor regulation
officers' findings and raises issues which cannot be resolved without considering
Labor – only Contracting is Illegal evidentiary matters not verifiable in the normal course of inspection. In such
Under the Labor Code, two (2) elements must exist for a finding of labor-only an event, the case will have to be referred to the corresponding Labor Arbiter
contracting: (a) the person supplying workers to an employer does not have for adjudication, since it falls within the latter's exclusive original jurisdiction.
substantial capital or investment in the form of tools, equipment, (Brokenshire Memorial Hospital, Inc., v. Minister of Labor and Employment, et.
machineries, work premises, among others, and (b) the workers recruited and al., G.R. No. 74621, February 7, 1990)
placed by such persons are performing activities directly related to the
principal business of such employer. (Filipinas Synthetic Fiber Corporation Contested Cases
(FILSYN) v. National Labor Relations Commission, G.R. No. 113347, June 14, This notwithstanding, the power of the Regional Director to hear and decide the
1996) monetary claims of employees is not absolute. The last sentence of Article 128
(b) of the Labor Code, otherwise known as the "exception clause," provides an
College Professors are not Independent Contractors instance when the Regional Director or his representatives may be divested of
This Court takes judicial notice that a university controls the work of the jurisdiction over a labor standards case.
members of its faculty; that a university prescribes the courses or subjects that Under prevailing jurisprudence, the so-called "exception clause" has the
professors teach, and when and where to teach; that the professors' work is following elements, all of which must concur:
characterized by regularity and continuity for a fixed duration; that professors are (a) that the employer contests the findings of the labor regulations officer and
compensated for their services by wages and salaries, rather than by profits; that raises issues thereon;
the professors and/or instructors cannot substitute others to do their work without (b) that in order to resolve such issues, there is a need to examine evidentiary
the consent of the university; and that the professors can be laid off if their work matters; and
is found not satisfactory. All these indicate that the university has control over (c) that such matters are not verifiable in the normal course of inspection.
their work; and professors are, therefore, employees and not independent (Meteoro v. Creative Creatures, July 13, 2009)
contractors. There are authorities in support of this view. (FEATI University v.
Hon. Jose Bautista, G.R. No. L-21278, December 27, 1966) The Right to Unionize
The right of the people, including those employed in the public and private
Newspaper Columnists are Independent Contractors sectors, to form unions, associations, or societies for purposes not contrary to law
The Inquirer has no control over petitioner as to the means or method used by her shall not be abridged. - Art. III, Sec. 8, 1987 Constitution
in the preparation of her articles. The articles are done by petitioner herself
without any intervention from the Inquirer. Petitioner has not shown that PDI, Government Employees Right to Self-organization
acting through its editors, dictated how she was to write or produce her articles Even government employees have the right to self-organization. It is not,
each week. (Orozco v. CA and PDI, August 13, 2008) however, regarded as existing or available for purposes of collective
Remedies Under Labor Standards bargaining, but simply for the furtherance and protection of their interests.
Article 128 - Visitorial and Enforcement Powers - DOLE Regional Office (Samahan ng mga Manggagawa sa Hanjin v. BLR, October 14, 2015)
Article 129 - Recovery of wages, simple money claims and other benefits - Arizala v. Court of Appeals, Sept. 14, 1990
DOLE regional Office And while EO No. 180 concedes to government employees, like their
counterparts in the private sector, the right to engage in concerted activities,
Appeal from the orders of DOLE Regional Director under Art including the right to strike, the executive order is quick to add that those
activities must be exercised in accordance with law, i.e. are subject both to "Civil
128 Service Law and rules" and "any legislation that may be enacted by Congress.
The order of the Regional Director shall be final and executory unless appealed
to the Secretary of Labor and Employment within ten (10) calendar days from
receipt thereof. (Section 1, Rule IV, Rules on the Disposition of Labor Public School Teachers have no Right to Strike
Standards Cases in the Regional Offices). Appeals under Art. 128 must be filed The mass actions staged by the public school teachers from September 17 to
within 10 calendar days to the SOLE. September 19, 1990, were “to all intents and purposes a strike,” they constituted
a concerted and unauthorized stoppage of, or absence from, work which it
Jurisdiction of the DOLE Regional Director under Art. 129 was the teachers' sworn duty to perform, undertaken for essentially economic
Under Article 129, the Regional Director or any of the duly authorized hearing reasons it denied the petition, since the right to strike did not extend to civil
officers of DOLE has jurisdiction over claims for recovery of wages, simple service employees. (MPSTA v. Laguio, Jr., August 6, 1991)
money claims and other benefits, provided that the claim is filed by an employee
 f) collectives or cooperatives of the above beneficiaries; and
Supervisors May Unionize g) others directly working on the land.
Members of supervisory unions who do not fall within the definition of
managerial employees shall become eligible to join or assist the rank-and-file The children of landowners, who are qualified to be awardees of not more than
organization. The determination of who are managerial employees and who are three (3) hectares, shall be given preference in the distribution of the land of their
not shall be the subject of negotiation between representatives of supervisory parents. Actual tenant-tillers in the landholding shall not be ejected or removed
union and the employer. If no agreement is reached between the parties, either therefrom.
or both of them may bring the issue to the nearest Regional Office for Beneficiaries under Presidential Decree No. 27 who have culpubly sold, disposed
determination. (Holy Child Catholic School v. Sto. Tomas, July 23, 2013) of, or abandoned their land are disqualified to become beneficiaries under the
CARP.
A basic qualification of a beneficiary shall be his willingness, aptitude, and
Unfair Labor Practice ability to cultivate and make the land as productive as possible. The DAR shall
To simplify and clarify matters, unfair labor practice or ULP is any act of adopt a system of monitoring the record or performance of each beneficiary, so
an employer, his representatives and any labor union, its officers and that any beneficiary guilty of negligence or misuse of the land or any support
agents members extended to him shall forfeit his right to continue as such beneficiary. The DAR
which affects the rights of any employee to self-organization. shall submit periodic reports on the performance of the beneficiaries to the
(Philcom Employees Union v. Phil. Global Communication, July 17, 2006) CARP.
If, due to the landowner’s retention rights or to the number of tenants, lessees, or
Dismissal of Union Officers - Not ULP workers on the land, there is not enough land to accommodate any or some of
A dismissal of a union officer is not necessarily discriminatory, especially them, they may be granted ownership of other lands available for distribution
when that officer committed an act of misconduct. In fact, union officers are under the CARL, at the option of the beneficiaries.
held to higher standards. While an act or decision of an employer may be Farmers already in place and those not accommodated in the distribution of
unfair, certainly not every unfair act or decision constitutes unfair labor privately-owned lands will be given preferential rights in the distribution of lands
practice (ULP) as defined and enumerated under Art. 248 (258) of the Labor from the public domain.
Code. (Adamson Univ. Faculty Union v. Adamson Univ., March 9, 2020) 2. Article III, Secs. 1, 4, 7, 8, 10, 16, 18(2)

Distinguish Just compensation under the Comprehensive Agrarian Reform Law

Males can be victims of sexual harassment of 1988 from just compensation under the Bill of Rights? How it is determined
Incidentally, focusing on women was the victims entrenches some level of under the former?
heteronormativity. It is blind to the possibility that, whatever moral positions are
taken by those who are dominant, in reality intimate relationships can also
happen between men. To restate, sexual harassment can happen to anyone In the Bill of Rights, it is provided that private property shall not be taken for
and everyone. Our society has often depicted women as being the weaker sex, public use without just compensation.
and the only victims of sexual harassment. It is high-time that this notion is In the provisions of the 1987 Constitution on agrarian reform, it is provided that
corrected. Toliongco v. Court of Appeals, July 8, 2020 - Leonen) in the just distribution of all agricultural lands, the same shall be subject, among
-oOo- others, to the payment of just compensation.
The concepts of just compensation in the Bill of Rights and in agrarian reform
are similar in the sense that in both situations, the person who is deprived of his
Labor Law property should be given the fair and full equivalent value of the property that is
I. Fundamental Principles and Policies taken from him. In both situations, ultimately, it is the courts which may
A. Constitutional provisions determine ultimately just compensation.
1. Article II, Secs. 9, 10, 11, 13, 14, 18, 20 Under the CARL, however, the Land Bank of the Philippines shall compensate
the landowner in such amount as may agreed upon by the landowner and the
What is the foundation of the agrarian reform program under the 1987 Department of Agrarian Reform and the Land Bank of the Philippines.
Constitution? Who are the direct beneficiaries of the program? Page 3 of 307
Labor Law
Also, under the CARL, compensation could be in cash and in government
The 1987 Constitution enunciates in Article II as one of the state policies that financial instruments like Land Bank of the Philippines bonds. At the option of
“(t)he State shall promote comprehensive rural development and agrarian the landowner, the compensation may be in shares of stock in government owned
reform." and controlled corporations, or in tax credits. The Comprehensive Agrarian
In Article XII of the Constitution, in dealing with the national economy and Reform Law provides that in deter- mining just compensation, the cost of
patrimony, it is also stated that “(t)he State shall promote industrialization and acquisition of the land, the current value of like properties, its nature, actual use
full employment based on sound agricultural development and agrarian reform, x of income, the sworn valuation by the owner, the tax declarations, and the
x x" assessment made by government assessors shall be considered. The social and
Then in Article XIII of the Constitution, in dealing with social justice and human economic benefits contributed by the farmers and the farmworkers and by the
rights, there is this provision, among others: 'The State shall, by law, undertake Government to the property as well as the non-payment of taxes or loans secured
an agrarian reform program founded on the right of farmers and regular farm- from any government financing Institution on the said land shall be considered as
workers, who are landless, to own directly or collectively the lands they till or in additional factors to determine its valuation.
the case of other farmworkers, to receive a just share of the fruits thereof. To this 3. Article XIII, Secs. 1, 2, 3, 13, 14
end. the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the The constitution promotes the principle of shared responsibility between workers
Congress may prescribe, taking into account ecological, developmental, or equity and employers, preferring the settlement of disputes through (2011 BAR) (A)
considerations, and subject to the payment of just compensation. In determining compulsory arbitration. (B) collective bargaining. (C) voluntary modes, such as
the retention limits, the State shall respect the right of small landowners. The conciliation and mediation. (D) labor-management councils.
State shall further provide incentives for voluntary landsharing."
Taken togetner, the above provisions could be considered as the foundation of Is there any distinction between labor legislation and social legislation?
the agrarian reform program.
Under the Comprehensive Agrarian Reform Law, the lands covered by the
Comprehensive Agrarian Refonn Program shall be distributed as much as Labor legislation is sometimes distinguished from social legislation by the
possible to landless residents of the same barangay. or in the absence thereof, former referring to labor statutes, like Labor Relations Law and Labor Standards,
landless residents of the same municipality in the following order of priority: and the latter to Social Security Laws. Labor legislation focuses on the rights of
a) agricultural lessees and share tenants: the worker in the workplace. Social legislation is a broad term and may include
b) regular farm workers; not only laws that give social security protection, but also those that help the
c) seasonal farm workers; worker secure housing and basic necessities. The Comprehensive Agrarian
d) other farm workers; Reform law could also be considered a social legislation.
e) actual tillers or occupants of public lands; ALTERNATIVE ANSWER:
Yes. Labor Legislation is limited in scope, and deals basically with the rights and In her State of the Nation Address, the President stressed the need to provide an
duties of employees and employers. Social Legislation is more encompassing investor-friendly business environment so that the country can compete in the
and includes such subjects as agrarian relations, housing and human settlement, global economy that now suffers from a crisis bordering on recession.
protection of women and children, etc. All labor laws are social legislation, but Responding to the call, Congress passed two innovative legislative measures,
not all social legislation is labor law. namely: (1) a law abolishing the security of tenure clause in the Labor Code; and
Page 4 of 307 (2) a law allowing contractualization in all areas needed in the employer’s
Labor Law business operations. However, to soften the impact of these new measures, the
law requires that all employers shall obtain mandatory unemployment insurance
For labor, the Constitutionally adopted policy of promoting social justice in all coverage for all their employees.
phases of national development means (2011 BAR) (A) the nationalization of the The constitutionality of the two (2) laws is challenged in court. As judge, how
tools of production. (B) the periodic examination of laws for the common good. will you rule? (5%) (2009 Bar Question)
(C) the humanization of laws and equalization of economic forces. (D) the
revision of laws to generate greater employment.
The first innovative measure, on abolition of the security of tenure clause in the
Clarito, an employee of Juan, was dismissed for allegedly stealing Juan’s Labor Code, is unconstitutional as it goes against the entitlement of workers to
wristwatch. In the illegal dismissal case instituted by Clarito, the Labor Arbiter, security of tenure under Section 3, Article XIII of the 1987 Constitution.
citing Article 4 of the Labor Page 6 of 307
Code, ruled in favor of Clarito upon finding Juan’s testimony doubtful. On Labor Law
appeal, the NLRC reversed the Labor Arbiter holding that Article 4 applies only The second innovative measure, on a law allowing contractualization in all areas
when the doubt involves needed in the employer’s business operations, is legal. Article 106 of the Labor
“implementation and interpretation” of the Labor Code provisions. The NLRC Code already allows the Secretary of Labor and Employment not to make
explained that the doubt may not necessarily be resolved in favor of labor since appropriate distinction between labor-only and job contracting. This means that
this case involves the application of the Rules on Evidence, not the Labor Code. the Secretary may decide, through implementing regulation, not to prohibit labor-
Is the NLRC correct? Reasons. (3%) (2009 Bar Question) only contacting, which is an arrangement where 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 the workers recruited
The NLRC is not correct. It is a well settled doctrine that if doubts exist between and place by such person are performing activities which are directly related to
the evidence presented by the employer and the employee, the scale of justice the principal business of the employer.
must be tilted in favor of the latter. It is a time honored rule that in controversies Hence, it would be legal for Congress to do away with the prohibition on labor-
between laborer and master, doubts necessarily arising from the evidence, or in only contracting and allow contractualization in all areas needed in the
the implementation of the agreement and writing should be resolved in favor of employer’s business operations. Assuming, of course, that contractual workers
the laborer. are guaranteed their security of tenure.
ANOTHER
Deeds of release, waivers and quitclaims are always valid and binding. (2%)
(2010 Bar Question)
No, the NLRC is not correct. Art. 221 of the Labor Code read: “In any
proceeding before the Commission....the rules of evidence prevailing in Courts of
law....shall not be controlling and it is the spirit and intention of this Code that FALSE. Deeds of release, waivers and quitclaims are not always valid and
the Commission and its members and the Labor Arbiters shall use every and binding. An agreement is valid and binding only if: (a) the parties understand the
reasonable means to ascertain the facts in each case speedily and objectively terms and conditions of their settlement; (b) it was entered into- freely and
without regard to technicalities of law and procedure, all in the interest of due voluntarily by them; and (c) it is contrary to law, morals, and public policy.
process.” The question of doubt is not important in this case. ALTERNATIVE ANSWER:
FALSE. Not all deeds of release, waivers and quitclaims are valid and binding.
Which takes precedence in conflicts arising between employers’ The Supreme Court, in Periquet v. NLRC (186 SCRA 724 [1990]) and affirmed
MANAGEMENT PREROGATIVE and the employees’ right to security of in Solgus Corporation v. Court of Appeals (514 SCRA 522 [2007]), provided the
tenure? Why? following guideposts in determining the validity of such release, waivers and
quitclaims:
“Not all waivers and quitclaims are invalid as against public policy. If the
Page 5 of 307 agreement was voluntarily entered into and represents a reasonable settlement, it
Labor Law is binding on the parties and may not later be disowned simply because of a
The employee's right to security of tenure takes precedence over the employer's change of mind. But where it is shown that the person making the waiver did so
management prerogative. Thus, an employer's management prerogative includes voluntarily, with full understanding of what he was doing, and the consideration
the right to terminate the services of an employee but this management for the quitclaim is credible and reasonable, the transaction must be recognized
prerogative is limited by the Labor Code which provides that the employer can as a valid and binding undertaking.”
terminate an employee only for a just cause or when authorized by law. This
limitation on management prerogative is because no less than the Constitution Because of continuing financial constraints, XYZ, Inc. gave its employees the
recognizes and guarantees an employee’s right to security of tenure. (Art. 279. option to voluntarily resign from the company. A was one of those who availed
Labor Code: Art. XIII, Sec. 3. of the option. On October 5, 2007, he was paid separation benefits equivalent to
Constitution) seven (7) months pay for his six (6) years and seven (7) months of service with
the company and he executed a waiver and quitclaim. A week later, A filed
Enumerate at least four (4) policies enshrined in Section 3, Article XIII of the against XYZ, Inc. a complaint for illegal dismissal. While he admitted that he
Constitution that are not covered by Article 3 of the Labor Code on declaration was not forced to
of basic policy. (2%) (2009 Bar Question) Page 7 of 307
Labor Law
sign the quitclaim, he contended that he agreed to tender his voluntary
Four (4) policies enshrined in Section 3, Article XIII of the 1987 Constitution resignation on the belief that XYZ, Inc. was closing down its business. XYZ,
which are not covered by Article 3 of the Labor Code on declaration of basic Inc., however continued its business under a different company name, he
policy are: claimed.
1. All workers shall have the right to peaceful concerted activities, including the Rule on whether the quitclaim executed by A (Gabriel) is valid or not. Explain.
right to strike in accordance with law. (3%) (2010 Bar Question)
2. They shall be entitled to a living wage.
3. They shall participate in policy and decision making processes affecting their
rights and benefits as may be provided by law. The quitclaim executed by A is valid and binding.
4. The state shall promote the principle of shared responsibility between workers Generally, deeds of release, waiver or quitclaims cannot bar employees from
and employers. demanding benefits to which they are legally entitled or from contesting the
legality of their dismissal, since quitclaims are looked upon with disfavor and are
frowned upon as contrary to public policy. However, where the person making Page 9 of 307
the waiver has done so voluntarily, with a full understanding thereof, and the Labor Law
consideration for the quitclaim is credible and reasonable, the transaction must be standing of the employees claims?
recognized as being a valid and binding undertaking (Francisco Soriano, Jr. v. b. Would it make any difference if there is no judicial declaration of bankruptcy?
NLRC, et al., 530 SCRA 526 [2007]).
A elected to voluntarily resign, and accepted a credible and reasonable separation
benefits package. In exchange, A executed a waiver and quitclaim. a. In Republic v. Peralta, the claims of the 'Government, like the taxes that
A’s resignation could not have possibly been vitiated by any fraud or should be paid to the BIR, should first be paid before the money claims of the
misrepresentation on the part of XYZ, Inc. The company offered its voluntary workers. But if, the question is now resolved under Rep. Act No. 6715, it is now
resignation package because of continuing financial constraints, and not provided that “unpaid wages and monetary claims (of workers) shall be paid in
preliminary to closure of business. A’s belief is not the kind of proof required full before the claims of the Government and the other creditors may be paid.
that will show he was defrauded, his consent vitiated, and therefore the b. If there is no judicial declaration of bankruptcy, the claim of the Union in
termination of his employment illegal. representation of the employees for unpaid wages, leaves and bonuses will be
ALTERNATIVE ANSWER: given preference after there is a finding by a Labor Arbiter, hearing the case as a
The quitclaim is invalid. The signing of the quitclaim was based on a wrong money claim, that an employer is bankrupt.
premise, and the employer was deceitful by not divulging full information. The
subsequent re-opening of the business under another name is an indication of bad Which is not a constitutional right of the workers? (2012 Bar Question)
faith and fraud. a. The right to engage in peaceful concerted activities;
b. The right to enjoy security of tenure;
What are the requisites of a valid quitclaim? (2016) c. The right to return on investment;
d. The right to receive a living wage.

The requisites of a valid quitclaim are:

1. A fixed amount as full and final compromise settlement; c) The right to return on investment [Art. XIII, Sec. 3, Constitution]
2. The benefits of the employees if possible with the corresponding
amounts, which the employees are giving up in consideration of the fixed Which of the following is correct with respect to the extent of the application of
compromise amount; security of tenure? (2012 Bar Question)
3. A statement that the employer has clearly explained to the employees a. It applies to managerial and to all rank-and-file employees if not yet regular,
Page 8 of 307 but not to management trainees;
Labor Law b. It applies to managerial and to all rank-and-file employees including those
in English, Filipino, or in the dialect known to the employees and that by signing under probation;
the waiver or quitclaim, they are forfeiting or relinquishing their right to receive c. It applies to seasonal and project employees, if they are hired repeatedly;
the benefits which are due them under the law, and d. It applies to all kinds of employees except those employed on a part-time
4. A statement that the employees signed and executed the document basis.
voluntarily, and had fully understood the contents of the document and that their SUGGESTED ANSWERS:
consent was ifreely given without any threat, violence, intimidation, or undue a. It applies to managerial and to all rank-and-file employees if not yet regular,
influence exerted on their person. but not to management trainees. [Management Trainee are not employees yet].
It is advisable that the stipulations be made in English and Tagalog or in the Page 10 of 307
dialect known to the employees. There should be two (2) witnesses to the Labor Law
execution of the quitclaim who must also sign the quitclaim. The document b. It applies to managerial and to all rank-and-file employees including those
should be subscribed and sworn to under oath preferably before any under probation
administering official of the Department of Labor and Employment or its
regional office, the Bureau of Labor Relations, the NLRC or a labor attache in a Mr. Del Carmen, unsure if his foray into business (messengerial service catering
foreign country. Such official shall assist the parties regarding the execution of purely to law firms) would succeed but intending to go long-term if he hurdles
the quitclaim and waiver (Edi-Staffbuilders International, Inc., v. NLRC, G.R. the first year, opted to open his operations with one-year contracts with two law
No. 145587, 26 October 2007). firms although he also accepts messengerial service requests from other firms as
their orders come. He started with one permanent secretary and six (6)
The Independence Bank of the Philippines (IBP) is the mortgage creditor of San messengers on a one-year, fixed-term, contract.
Juan Trading Company (SJTC). For failure of SJTC to pay its obligations, IBP Is the arrangement legal from the perspective of labor standards? (2013 Bar
foreclosed the former’s mortgaged properties and in the bidding acquired the Questions)
properties as the highest bidder. SJTC’s workers, whose claims for separation (A) No, because the arrangement will circumvent worker's right to security of
pay, unpaid wages and other benefits could not be satisfied, filed an action tenure.
against IBP to enforce their claims, contending that they enjoyed preference in (B) No. If allowed, the arrangement will serve as starting point in weakening the
respect of separation pay, wages and other benefits due them prior to the security of tenure guarantee.
cessation of SJTC's operations. (C) Yes, if the messengers are hired through a contractor.
Will the action of the workers against IBP prosper? Explain. (D) Yes, because the business is temporary and the contracted undertaking is
specific and time-bound.
(E) No, because the fixed term provided is invalid.
The action of the workers against IBP will not prosper. It is true that the Labor
Code provides: In the event of bankruptcy or liquidation of an employer's
business, his workers shall enjoy first preference as regards their wages and other (A)
monetary claims, any provisions of law to the contrary notwithstanding. Such ALTERNATIVE ANSWER:
unpaid wages and monetary claim shall be paid in full before claims of the (E) Reason: The employer and employee must deal with each other on more or
government and other creditors may be paid. But, here, the mortgaged property is less equal terms.
no longer owned by SJTC. The first preference of the workers can only be
enforced against the judgement debtor, meaning SJTC, and not against IBC who What is the quantum of evidence required in labor case? (2012 Bar Question)
now owns the mortgaged property which has been fore-closed. (Development a. The degree of proof which produces the conclusion that the employee is guilty
Dank of the Philippines v. Minister of Labor and Employment, et al. G.R. No. of the offense charged in an unprejudiced mind;
75801, March 20,1991) b. Such amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion;
XYZ Company filed a petition for bankruptcy before a Regional Trial Court. c. That degree of proof which is greater in weight than the opposing party’s
Among the list of creditors are the Philippine National Bank (PNB), various evidence;
suppliers, the Bureau of Internal Revenue (BIR) for payment of back taxes and d. Such evidence which must be highly and substantially more probable to be
the Union in representation of the employees for unpaid wages, leaves and true than not which convinces the trier of facts of its factuality.
bonuses.
a. With regards to the other creditors, particularly the PNB and BIR, what is the
b. Such amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion. [Tancirco v. GSIS, G.R. No. 132916, Nov. 16,
2001] Tripartism in labor relations is the policy of the State enunciated in the Labor
Page 11 of 307 Code (in Art. 275) which is implemented by consulting with representatives of
Labor Law workers and employers in the consideration and adoption of voluntary codes of
C. Labor Code principles designed to promote industrial peace ba.sed on social justice or to
2. Article 4 align labor movement relations with priorities in economic and social
development.
Procopio was dismissed from employment for stealing his co-employee Raul's The codes of principles adopted at tripatite conferences are voluntary. They do
watch. Procopio filed a complaint for illegal dismissal. The Labor Arbiter ruled not have a legal binding effect on workers and employers. But because these
in Procopio's favor on the ground that Raul's testimony was doubtful, and, codes are considered
therefore, the doubt should be resolved in favor of Procopio. On appeal, the Page 13 of 307
NLRC reversed the ruling because Article 4 of the Labor Code - which states that Labor Law
all doubts in the interpretation and implementation of the provisions of the Labor and adopted by representatives of workers and employers, they are likely to be
Code, including the implementing rules and regulations, shall be resolved in complied with voluntarily by workers and employers.
favor of labor - applied only when the doubt involved the "implementation and ALTERNATIVE ANSWER:
interpretation" of the Labor Code; hence, the doubt, which involved the Should not bind unions and employers’ organizations that were not represented
application of the rules on evidence, not the Labor Code, could not necessarily be in the tripartite conference because they were not parties or signatories to any
resolved in favor of Procopio. Was the reversal correct? Explain your answer. agreement arrived at in the conference.
(3%) (2017 Bar Question) II. Recruitment and Placement
A. Recruitment of local and migrant workers
The reversal is not correct. It is a time-honored rule that in controversies
between a laborer and his master, doubts reasonably arising from the evidence, or On December 12, 2008, A signed a contract to be part of the crew of ABC
in the interpretation of agreement and writings, should be resolved in the former's Cruises, Inc. through its Philippine manning agency XYZ. Under the standard
favor (Lepanto Consolidated Mining Company v. Dumapis, G.R. No. 163210, employment contract of the Philippine Overseas Employment Administration
August 13, 2008, 562 SCRA 103). There appears to be serious doubts in the (POEA), his employment was to commence upon his actual departure from the
evidence on record as to the factual basis of the charges against Procopio. These port in the point of hire, Manila, from where he would take a flight to the USA to
doubts should be resolved in his favor in line with the policy under the Labor join the cruise ship “MS Carnegie”. However, more than three months after A
Code to afford protection to labor and construe doubts in favor of labor secured his exit clearance from the POEA for his supposed departure on January
(Asuncion v. NLRC, G.R. No. 129329, July 31, 2001, 362 SCRA 56). 15,2009, XYZ still had not deployed him for no valid reason. Is A entitled to
ALTERNATIVE ANSWER: The reversal is not correct. Article 227 (221) of the relief? Explain. (3%) (2010 Bar Question)
Labor Code clearly provides that "the rules of evidence prevailing in courts of
law shall not be controlling" in any proceeding before the NLRC or the Labor
Arbiters. Moreover, the NLRC/Labor Arbiters are mandated to use every and all YES. Even if no departure took place, the contract of employment has already
reasonable means to ascertain the facts speedily and objectively and without been perfected which creates certain rights and obligations, the breach of which
regard to technicalities of law or procedure, all in the interest of due process. may give rise to a cause of action against the erring party:
(1) A can file a complaint for Recruitment Violation for XYZ’s failure to deploy
In what manner do the labor laws show its solicitous compassionate policy him within the prescribed period without any valid reason, a ground for the
towards the working man? Explain your answer. imposition of administrative sanctions against XYZ under Section 2, Rule I, Part
V of the 2003 POEA Rules on Employment of Seafarers.
(2) At the same time, A can file a case for illegal recruitment under Section 6(L)
Labor laws show solicitous compassionate policy towards the working man by of Rep. Act No. 8042 (cf: Section 11 Rule I, Part V of the 2003 POEA Rules on
providing that all doubts in the implementation and interpretation of labor laws Employment of Seafarers)
including its (3) A may likewise file a complaint for breach of contract, and claim damages
Page 12 of 307 therefore before the NLRC, despite absence of employer-employee relationship.
Labor Law Section 10 of Rep. Act No. 8042 conferred jurisdiction on the Labor Arbiter not
implementing rules and regulations shall be resolved in favor of labor. Thus, only on claims arising out of EER, but also by virtue of any law or contract
among others, the Constitution recognizes that workers are entitled to security of involving Filipino workers for overseas deployment including claims for actual,
tenure, humane conditions of work and a living wage. Labor laws should be moral, exemplary and other forms of damages. (Santiago v. CF Sharp Crew
liberally interpreted to ensure that the above rights are given to workers. Many Management, 527 SCRA 165 [2007]).
times, an employee commits an offense that is a valid ground for disciplinary Page 14 of 307
action but law and jurisprudence do not automatically provide for the termination Labor Law
of the guilty employee because termination may be too harsh a penalty, his
employment may, more often than not be the sole source of his means of The State shall allow the deployment of overseas Filipino Workers only in
livelihood. (Art. 4, Labor Code; Art. XIII. Sec. 3. Constitution) countries where the rights of Filipino migrant workers are protected. Which of
6. Article 255 the following is not a guarantee, on the part of the receiving country, for the
protection of the rights of OFW’s? (2012 Bar Question)
What, if any, is the basis under the Constitution for adopting it? (2007 Bar a. It has existing labor and social laws protecting the rights of migrant workers;
Question) b. It promotes and facilitates re-integration of migrants into the national
mainstream;
c. It is a signatory and/or ratifier of multilateral conventions, declarations or
Art. XIII, Sec. 3 of the Constitution guarantees labor their right to participate in resolutions relating to the protection of migrant workers;
decision and policy-making processes affecting their rights, duties and welfare. d. It has concluded a bilateral agreement or arrangement with the government on
FIRST ALTERNATIVE ANSWER: the protection of the rights of overseas Filipino workers.
The adoption of codetermination is based on the police power of the state and the
constitutional mandate to the State “to promote, the principle of shared
responsibility between the workers and the employers.” The Constitution b. It promotes and facilitates re-integration of migrants into the national
expressly provides that:“It shall guarantee the rights of all workers to xxx mainstream. [Sec. 4 of RA 8042 as amended by Sec. 3 of RA 10022]
collective bargaining and negotiations, xxx. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also participate Which phrase is the most accurate to complete the statement – A private
in policy and decision-making processes affecting their rights and benefits as employment agency is any person or entity engaged in the recruitment and
may be provided by law.” (Art. XIII, placement of workers; (2012 Bar Question)
Sec. 3, 1987 Constitution) a. For a fee, which is charged directly from the workers.
b. For a fee, which is charged directly from employers.
What is tripartism? What is the binding effect of an agreement entered into in a c. For a fee, which is charged directly or indirectly from workers, employers or
tripartite conference? both.
d. For a fee, which is charged from workers or employers, which covers both overseas, because Art 27 of the Labor Code requires at least seventy-five percent
local and overseas employment. (75%).
Q:
A. Rocket Corporation is a domestic corporation registered with the SEC, with
c) For a fee, which is charged directly or indirectly from workers, employers or 30% of its authorized capital stock owned by foreigners and 70% of its
both [Art. 13 (c), Labor Code] authorized capital stock owned by Filipinos. Is Rocket Corporation allowed to
engage in the recruitment and placement of workers, locally and overseas?
Which of the following is an essential element of illegal recruitment? (2011 BAR Briefly state the basis for your answer. (2015 Bar Question)
QUESTION) (A) The recruiter demands and gets money from the recruit but B. When does the recruitment of workers become an act of economic sabotage?
issues no receipt. (B) The recruiter gives the impression that he is able to send (2015 Bar Question)
the recruit abroad. (C) The recruiter has insufficient capital and has no fixed
address. (D) The recruiter has no authority to recruit.
a) License v. authority A. No. Article 27 of the Labor Code mandates that pertinently, for a Corporation
Page 15 of 307 to validly engage in recruitment and placement of workers, locally and overseas,
Labor Law at least seventy-five percent (75%) of its authorized and voting capital stock must
be owned and controlled by Filipino citizens. Since only 70% of its authorized
Marino Palpak, Eddie Angeles and Jose Berdugo advertised in the Manila capital stock is owned by Filipinos, it consequently cannot validly engage in
Bulletin the following information: “20 Teachers wanted for Egypt. Apply at No. recruitment and placement of workers, locally and overseas.
123 Langit. Manila." Page 17 of 307
Salvacion Inocente applied and was made to pay minimal fees to cover Labor Law
administrative expenses and the cost of her passport and visa. For one reason or B. Under Section 6(m) of RA 8042, illegal recruitment is considered economic
another, Salvacion did not get the job and filed a complaint with the POEA. sabotage if it is committed by a syndicate or is large scale in scope. It is
Marino, Eddie and Jose admitted having no license or authority but claimed that syndicated illegal recruitment if the illegal recruitment is carried out by three (3)
they are not covered by the Labor Code since they are not engaged in the or more conspirators; and it is large scale in scope when it is committed against
recruitment and placement for profit and, at any rate, only one prospective three (3) more persons, individually or as a group.
worker was involved. d) Liabilities
May Marino, Eddie and Jose be prosecuted? If so, for what specific offense/s?
A was approached for possible overseas deployment to Dubai by X, an
interviewer of job applicants for Alpha Personnel Services, Inc., an overseas
Marino Eddie and Jose can be prosecuted. Recruitment and placement by persons recruitment agency. X required A to submit certain documents (passport, NBI
without a license or authority constitute illegal activities. Marino, Eddie and Jose clearance, medical certificate) and to pay P25,000 as processing fee. Upon
were engaged in recruitment and placement when they advertised that 20 payment of the said amount to the agency cashier, A was advised to wait for his
teachers were wanted to Egypt. Advertising for employment is one of the acts visa. After five months, A visited the office of Alpha Personnel Services, Inc.
considered as recruitment and placement in the Labor Code. during which X told him that he could no longer be deployed for employment
That they were not engaged in recruitment and placement for profit does not abroad. A was informed by the Philippine Overseas Employment Administration
mean that the conditions for a person to engage in recruitment and placement (POEA) that while Alpha Personnel Sendees, Inc. was a licensed agency, X was
found in the Labor Code are not applicable to them. The Code applies to any not registered as its employee, contrary to POEA Rules and Regulations. Under
recruitment or placement, whether for profit or not. POEA Rules and Regulations, the obligation to register personnel with the POEA
The fact that only one prospective worker was involved does not mean that they belongs to the officers of a recruitment agency. (2010 Bar Question)
were not engaged in recruitment or placement. They were. The reference in the A. May X be held criminally liable for illegal recruitment? Explain. (2%)
Code that any person who offers employment to “two or more persons” as being
engaged in recruitment and placement does not mean that there must be at least
two persons involved. This reference is merely evidentiary. NO. X performed his work with the knowledge that he works for a licensed
They may be prosecuted for these specific offenses: recruitment agency. He is in no position to know that the officers of said
They already charged fees even if they have not yet obtained employment for the recruitment agency failed to register him as its personnel (People v. Chowdury,
applicant. 325 SCRA 572 [20Q0] J. The fault not being attributable to him, he may be
considered to have apparent authority to represent Alpha on recruitment for
Which of the following conditions justifies a licensed employment agency to overseas employment.
charge and collect fees for employment assistance? (2011 BAR QUESTION) (A) B. May the officers having control, management or direction of Alpha Personnel
The recruit has submitted his credentials to the employment agency. (B) The Services, Inc. be held criminally liable for illegal recruitment? Explain. (3%)
POEA has approved the agency's charges and fees. (C) The agency's principal
has interviewed the applicant for the job. (D) The worker has obtained
employment through the agency's efforts. Yes. Alpha, being a licensed recruitment agency, still has obligations to A for
Page 16 of 307 processing his papers for overseas employment. Under Section 6(m) of Rep. Act
Labor Law No. 8042, failure to reimburse expenses incurred by the worker in connection
b) Illegal recruitment in large scale with his documentation and processing for purposes of deployment, in cases
c) Illegal recruitment as economic sabotage where the deployment does not actually take place without the worker’s fault,
Q: amounts to illegal recruitment.
A. When is illegal recruitment considered a crime of economic sabotage?
Explain briefly. (3%) A was recruited to work abroad by Speedy Recruitment Agency as a technician
B. Is a corporation, seventy percent (70%) of the authorized and voting capital of for a Saudi Arabian construction firm, with a monthly salary of $650.00. When
which is owned and controlled by Filipino citizens, allowed to engage in the she got to the construction site, the employer compelled her to sign another
recruitment and placement of workers, locally or overseas? Explain briefly. (2%) contract
Page 18 of 307
Labor Law
A. According to Art. 28 of the Labor Code, illegal recruitment is considered a that referred her to another employer for a salary of $350.00. She worked for the
crime of economic sabotage when committed by a syndicate or in large scale. second employer and was paid $350.00 until her two-year contract expired. Upon
Illegal recruitment is deemed committed by a syndicate if carried out by a group her return to the Philippines, she filed a case against the agency and the two
of three (3) or more persons conspiring and/or confederating with one another in employers. May the agency validly raise the defense that it was not privy to the
carrying out any unlawful or illegal transaction, enterprise or scheme which is an transfer of A to the second employer? Explain. (3%) (2010 Bar Question)
act of illegal recruitment.
Illegal recruitment is deemed committed in large scale if committed against three
(3) or more persons individually or as a group. NO. Speedy’s obligation to A is joint and several with the principal employer
B. No. A corporation, seventy percent (70%) of the authorized arid, voting (Sec. 10, Rep. Act No. 8042).
capital stock of which is owned and controlled by Filipino citizens cannot be The liability of the principal/employer and the recruitment/placement agency for
permitted to participate in the recruitment and placement of workers, locally or any and all claims for money claims shall be joint and several, which undertaking
shall form part of A’s employment contract, and condition precedent for its Department of Labor and Employment (Article 40, Labor Code).
approval. This liability shall continue during the entire period or duration of the ALTERNATIVE ANSWER: The employer is not correct. Under DOLE
employment contract and shall not be affected by any substitution, amendment or Department Order No. 75-06, resident foreign nationals are exempted from
modification made locally or in a foreign country of said contract (Sec. 10, Rep. securing an employment permit.
Act No. 8042).
Peter worked for a Norwegian cargo vessel. He worked as a deckhand, whose
What is the nature of the liabilities of the local recruitment agency and its foreign primary duty was to assist in cleaning the ship. He signed a five-year contract
principal? (2012 Bar Question) starting in 2009. In 2011, Peter’s employers began treating him differently. He
a. The local agency is jointly liable with the foreign principal; severance of was often maltreated and his salary was not released on time. These were
relations between the local agent and the foreign principal dissolves the liability frequently protested to by Peter. Apparently exasperated by his frequent
of the local agent recruiter; protestations, Peter’s employer, a once top official in China, suddenly told him
b. Local agency is solidarily liable with the foreign principal; severance of that his services would be terminated as soon as the vessel arrived at the next
relations between the local agent and the foreign principal dissolves the liability port, in Indonesia. Peter had enough money to go back home, and immediately
of the foreign principal, only; upon arriving, he filed a money claim with the NLRC against his former
c. Local agency is solidarily liable with the foreign principal; severance of employer’s local agent. Will Peter’s case prosper? (2012 Bar Question)
relations between the local agent and foreign principal does not affect the a. Yes, he is entitled to full reimbursement of his placement fee, with interest at
liability of the foreign principal; 12% per annum, plus salary for the unexpired portion of his employment contract
d. Local agency is jointly liable with the foreign principal; severance of the or for three (3) months for every year of the unexpired portion, whichever is
relations between the local agent and the foreign principal does not affect the higher.
liability of the local recruiter. b. Yes, he is entitled to full reimbursement of his placement fee, with interest at
12% per annum, plus his salary for the unexpired portion of his employment
contract for three (3) months for every year of the unexpired portion, whichever
Local agency is solidarily liable with the foreign principal; severance of relations is less;
between the local agent and foreign principal does not affect the liability of the c. Yes, he is entitled to his salaries for the unexpired portion of his employment
foreign principal, [Section 10, second paragraph, RA 8042] contract, plus full reimbursement of his placement fee with interest at 12% per
e) Pre-termination of contract of migrant worker annum;
d. Yes, he is entitled to his salaries for three (3) months for every year of the
(2017 Bar Question) unexpired portion of his unemployment contract, plus full reimbursement of his
Page 19 of 307 placement fee with interest at 12% per annum.
Labor Law
A. Andrew Manning Agency (AMA) recruited Feliciano for employment by
lnvictus Shipping, its foreign principal. Meantime, AMA and lnvictus Shipping Page 21 of 307
terminated their agency agreement. Upon his repatriation following his Labor Law
premature termination, Feliciano claimed from AMA and lnvictus Shipping the a) Yes, he is entitled to his salaries for the unexpired portion of his employment
payment of his salaries and benefits for the unserved portion of the contract. contract, plus full reimbursement of his placement fee with interest at 12% per
AMA denied liability on the ground that it no longer had an agency agreement annum [Serrano v. Gallant Maritime, G.R. No. 167614, March 24, 2009]
with lnvictus Shipping. Is AMA correct? Explain your answer. (3%)
Celia, an OFW that Moonshine Agency recruited and deployed, died in Syria,
AMA is not correct. The liability of the principal/employer and the her place of work. Her death was not work-related, it appearing that she had been
recruitment/placement agency is joint and several. Such liability shall -continue murdered. Insisting that she committed suicide, the employer and the agency
during the entire period or duration of the employment contract and shall not be took no action to ascertain the cause of death and treated the matter as a “closed
affected by any substitution, amendment or modification made locally or in a case.” The worker's family sued both the employer and the agency for moral and
foreign country of the said contract (Section 10, Rep. Act No. 8042, as amended exemplary damages. May such damages be awarded? (2011 BAR QUESTIONS)
by Section 7 of Rep. Act No. 10022). The fact that AMA and its foreign principal (A) Yes, the agency and the employer’s uncaring attitude makes them liable for
have already terminated their agency agreement does not relieve the former of its such damages. (B) Yes, but only the principal is liable for such damages since
liability, because the obligations covenanted in the agency agreement between the agency had nothing to do with Celia’s death. (C) No, since her death is not at
the local agent and its foreign principal are not coterminous with the term of such all work-related. (D) No, since her death is not attributable to any act of the
agreement so that if either or both Of the parties decide to end the agreement, the agency or the employer.
responsibilities of such parties towards the contracted employees under the
agreement do not at all end, but the same extends up to and until the expiration of Philworld, a POEA-licensed agency, recruited and deployed Mike with its
the employment contracts of the employees recruited and employed pursuant to principal, Delta Construction Company in Dubai for a 2-year project job. After
said recruitment agreement; otherwise, this will render nugatory the very purpose he had worked for a year, Delta and Philworld terminated for unknown reason
which the law governing the employment of workers for foreign jobs abroad was their agency agreement. Delta stopped paying Mike's salary. When Mike
enacted (Catan v. NLRC, G.R. No. 77279, April 15, 1988, 160 SCRA 691). B. returned to the Philippines, he sued both Philworld and Delta for unpaid salary
As a rule, direct hiring of migrant workers is not allowed. What are the and damages. May Philworld, the agency, be held liable? (2011 BAR
exceptions? Explain your answer. (2.5%) QUESTIONS) (A) No, since Philworld, the recruitment agency, is not the
employer liable for unpaid wages. (B) Yes, since the agency is equally liable
The exceptions are: direct hiring by members of the diplomatic organizations, with the foreign principal despite the termination of their contract between them.
international organizations, heads of state and government officials with the rank (C) Yes, since the law makes the agency liable for the principal’s malicious
of at least deputy minister, and such other employers as may be allowed by the refusal to pay Mike’s salary. (D) No, since Mike did not get paid only after Delta
Secretary of Labor (Book I, Title I, Chapter I, Article 18, Labor Code). The and Philworld terminated their contract.
reasons for the ban on direct hiring are: a) A worker hired directly by a foreign
employer without government intervention may not be assured of the best When a recruitment agency fails to deploy a recruit without valid reason and
possible terms and conditions of employment. b) A foreign employer must also without the recruit's fault, the agency is obligated to (A) reimburse the recruit's
be protected. Without government intervention, a foreign employer may be documentary and processing expenses. (B) reimburse the recruit’s expenses with
entering into a contract with a Filipino who is not qualified to do the job. 6% interest. (C) pay the recruit damages equivalent to one year’s salary. (D) find
Page 20 of 307 another employer and deploy the recruit within 12 months.
Labor Law 2. Direct Hiring
c) The mandatory requirement for remittance to the Philippines of a portion of Page 22 of 307
the worker's foreign exchange earnings can easily be evaded by the worker. C. Labor Law
Phil, a resident alien, sought employment in the Philippines. The employer,
noticing that Phil was a foreigner, demanded that he first secures an employment TRUE or FALSE. As a general rule, direct hiring of Overseas Filipino Workers
permit from the DOLE. Is the employer correct? Explain your answer. (2.5%) (OFWs) is not allowed. (2%) (2010 Bar Question)

No, the employer is not correct. Only non-resident aliens seeking admission to
the Philippines are required to obtain an employment permit from the
TRUE. Art. I5 of the Labor Code provides that no employer may hire a Filipino trucks of the Company. As for Bong, he is required to keep his cellular phone so
worker for overseas employment except through the Boards and entities that he could be contacted whenever his services as driver as needed. Thus, the
authorized by the Department of Labor and Employment (DOLE) except direct- waiting time of Lito and Bong should be considered are compensable hours.
hiring by members of the diplomatic corps, international organizations and such Note: It could be argued that in the case of Bong who is not required to stay in
other employers as may be allowed by the DOLE. the office but is allowed to go home, if he is not actually asked by cellular phone
Another exemption is ‘‘Name Hire,” which refers to a worker who is able to to report to the office to drive a car, he can use his time effectively and gainfully
secure an overseas employment opportunity with an employer without the to his own purpose, thus, the time that he is at home may mean that there are not
assistance or participation of any agency. compensable hours.
B. Regulation and enforcement
1. Suspension or cancellation of license or authority (Art. 35, Labor Code) The following are excluded from the coverage of Title I, Book II of Labor Code
of the Philippines (Conditions of Employment) except: (2012 Bar Question)
Which of the following acts is NOT part of the regulatory and visitorial power of a) Field personnel;
the Secretary of Labor and Employment over recruitment and placement b) Supervisors;
agencies? The power to (2011 BAR QUESTION) (A) order arrest of an illegal c) Managers;
recruiter (B) inspect premises, books and records (C) cancel license or authority d) Employees of government-owned and controlled corporations.
to recruit (D) garnish recruiter's bond

The power suspend or cancel a license to recruit employees is vested on: (2012 (b) Supervisors [Art. 82, Labor Code]
Bar Question)
a. The Secretary of Labor and Employment; Which of the following is not compensable as hours worked? (2012 Bar
b. The POEA Administrator; Question)
c. A and B concurrently; a. Travel away from home;
d. Neither of them. b. Travel from home to work;
c. Working while on call;
d. Travel that is all in a day’s work.
b. The POEA Administrator [POEA Rules on Overseas land-based employment SUGGESTED ANSWERS:
{2002}]. a) Travel away from home. [Art. 84, Labor Code]
ALTERNATIVE ANSWERS: b) Travel from home to work.
a. The Secretary of Labor and Employment;
b. The POEA Administrator. Pol requested Obet, a union officer and concurrently chairman of the company's
Page 23 of 307 Labor-Management Council, to appeal to the company for a recomputation of
Labor Law Pol’s overtime pay. After 5 p.m., his usual knock-off time, Obet spent two hours
c. A and B concurrently: [Transaction Overseas Corp. v. Sec. of Labor, G.R. NO. at the Personnel Office, reconciling the differing computations of Pol’s overtime.
109583, Sept. 5, 1997] Are those two hours compensable? (2011 BAR QUESTION) (A) Yes, because
2. Remittance of foreign exchange earnings Obet performed work within the company premises.
3. Prohibited activities Page 25 of 307
III. Labor Standards Labor Law
(B) No, since Obet’s action has nothing to do with his regular work assignment.
What is the requirement in order that a compromise agreement involving labor (C) No, because the matter could have been resolved in the labor-management
standards cases be considered duly executed? council of which he is the chairman. (D) Yes, because the time he spent on
grievance meetings is considered hours worked.
2. Normal hours of work Q: Percival was a mechanic of Pacific Airlines. He
For a compromise agreement involving labor standards cases to be considered enjoyed a meal break of one hour. However, during meal breaks, he was required
duly executed, such compromise agreement should be voluntarily agreed upon to be on stand-by for emergency work. During emergencies, he was made to
by the parties with the assistance of the Bureau of Labor Relations or the regional forego his meals or to hurry up eating. He demanded payment of overtime for
office of the Department of Labor and Employment. (Art. 227, Labor Code) work done during his meal periods. Is Percival correct? Explain your answer.
(3%) (2017 Bar Question)
Of the four definitions below, which one does NOT fit the definition of “solo
parent” under the Solo Parents Welfare Act? (2011 BAR QUESTION) (A) Solo Percival is correct. Under Article 85 of the Labor Code and Book Ill, Rule I,
parenthood while the other parent serves sentence for at least one year. (B) A Section 7 of the Rules, it shall be the duty of every employer to give his
woman who gives birth as a result of rape. (C) Solo parenthood due to death of employees not less than sixty (60) minutes time-off for their regular meals. But
spouse. (D) Solo parenthood where the spouse left for abroad and fails to give where during the meal break, the workers are required to stand by "for
support for more than a year. emergency work, such period is considered overtime (Pan American World
A. Hours of work Airways System (Phil.) v. Pan American Employees Association, G.R. No. L-
1. Coverage/Exclusions (Art. 82, Labor Code) 16275, February 23, 1961, 1 SCRA 527). ALTERNATIVE ANSWER: Percival
is correct. All the time during which an employee is required to be on duty or to
Lito Kuiangkuiang and Bong Urongsulong are employed as truck drivers of Line be at the employer's premises or to be at a prescribed work place, and all time
Movers. Inc. Usually. Lito is required by the personnel manager to just stay at during which an employee suffered or permitted to work is considered
the head office after office hours because he could be called to drive the trucks. compensable hours. Given that Percival's meal break was not one of complete
While at the head office, Lito merely waits in the manager’s reception room. On rest, as he did not the freedom to devote such period for his personal needs, the
the other hand, Bong is allowed to go home after office hours but is required to same should be considered as compensable hours of work.
keep his cellular phone on so that he could be contacted whenever his services as
driver becomes necessary. The meal time (lunch break) for the dining crew in Glorious Restaurant is either
Would the hours that Lito and Bong are on call be considered compensable from 10 a.m. to 11 a.m. or from 1:30 p.m. to 2:30 p.m., with pay. But the
working hours? management wants to change the mealtime to 11: a.m. to 12 noon or 12:30 p.m.
to 1:30 p.m., without pay. Will the change be legal? (2011 BAR QUESTION)
(A) Yes, absent an agreement to the contrary, the management determines work
Page 24 of 307 hours and, by law, meal break is without pay. (B) No, because lunchbreak
Labor Law regardless of time should be with pay. (C) Yes, the management has control of its
The hours of Lito and Bong while on call can be considered compensable hours. operations. (D) No, because existing practice cannot be discontinued unilaterally.
The applicable rule is: "An employee who is required to remain on call in the Page 26 of 307
employer's premises or so close thereto that he cannot use the time effectively Labor Law
and gainfully for his own purpose shall be considered as working while on call. a) Compressed work week
An employee who is not required to leave word at his home or with company
officials where be may be reached is not working while on call." Here, Bong is
required to stay at the office after office hours so he could be called to drive the
Under what conditions may a "compressed work week" schedule be legally Labor Law
authorized as an exception to the "eight-hour a day" requirement under the Labor The 5-day-leave with pay every month has no counterpart in Labor Law and is
Code? (4%) very generous.
State your answers and your reasons therefor. (2005 Bar Question) As for the provision in Danilo's contract of employment that he shall receive time
off with pay in lieu of overtime, this violates the provision of the Labor Code
which states that undertime work on any particular day shall not be offset by
A "compressed work week" schedule may be authorized under the following overtime work on any other day. Permission given to the employer to go on leave
conditions: on some other day of the week shall not exempt the employer from paying the
1) The employee voluntarily agrees to it. additional compensation required by the Labor Code.
2) There is no diminution in their weekly or monthly take home pay or fringe
benefits. Pedro Sisid is a seaman who was employed in 1990 by Kuhol Ocean Transport.
3) The benefits are more than or at least commensurate or equal to what is due In May 1993, he was discharged and correspondingly paid vacation pay, terminal
the employees without the compressed work week. pay and overtime pay for the number of hours he actually rendered service in
4) Overtime pay will be due and demandable when they are required to work on excess of his eight (8) working hours a day. Pedro Sisid, however, is dissatisfied
those days which should have ceased to be working days because of the with his overtime pay contending that he is on board the vessel 24 hours a day. or
compressed work week schedule. even beyond his eight (8) working hours which circumstance renders him on call
5) No strenuous physical exertion or that they are given adequate rest periods. whenever his service is needed. Therefore, he insists that he be paid 16 hours a
6) It must be for a temporary duration as determined by the Department of Labor. day by way of overtime. Is the contention of seaman Pedro Sisid tenable? Why?
3. Overtime work, overtime pay

TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the No. The contention of seaman Sisid is not tenable.
statement is false. Explain your answer in not more than two (2) sentences. (5%) The fact that he is on board the vessel 24 hours a day does not mean that beyond
xx his eight working hours, he could be also considered as working because he is on
[d] A waiver of the right to claim overtime pay is contrary to law. (2009 Bar call, and thus, is entitled to overtime pay. Because he is a seaman, this
Question) circumstance means he is on board his vessel while at sea. But he is not thereby
on call as to be entitled to overtime pay because when it is not his working time,
he can, if he chooses to do so, use said non-working time effectively and
True. As a general rule, overtime compensation cannot be waived, whether gainfully for his own purpose.
expressly or impliedly; and stipulation to the contrary is against the law. ALTERNATIVE ANSWER:
(Pampanga Sugar Dev. Co., Inc. v. CIR, 114 SCRA 725 [1982].) An exception No, there being a record of actual overtime services rendered. An estimated
would be the adoption of a compressed work week on voluntary basis, subject to period of overtime is valid as a basis for payment of overtime, only in a case
the guidelines of Department Order No. 02, Series of 2004. where overtime services are actually being rendered regularly but no record of
the hours were kept.
In a scenario like typhoon Ondoy, who may be required by the employer to work
overtime when necessary to prevent loss of life or property? (2011 BAR A manufacturing company operates on a 6-day workweek. It employs 200
QUESTION) workers whose regular workday is 8 hours. On May 1. 1990, the company and
Page 27 of 307 Union “M", the employees; bargaining agent, agreed that the workday be 7 hours
Labor Law from Monday to Wednesday and 9 hours from Thursday to Saturday. The
(A) Health personnel (B) Employees with first aid training (C) Security and agreement was ratified by all the employees. In 1991
safety personnel (D) Any employee Union “M" lost its majority status and Union “P" was certified as bargaining
representative. Union “P" filed a claim against the Company for unpaid overtime
Socorro is a clerk-typist in the Hospicio de San Jose, a charitable institution pay of the 200 employees from May 1. 1990 when they started working 9 hours
dependent for its existence on contributions and donations from well-wishers. per
She renders work eleven (11) hours a day but has not been given overtime pay Page 29 of 307
since her place of work is a charitable institution. Is Socorro entitled to overtime Labor Law
pay? Explain briefly. (5%) day, 3 days a week. Invoking the 1990 agreement, the Company moved to
dismiss the claim of Union “P".
Decide with reasons.
Yes. Socorro is entitled to overtime compensation. She does not fall under any of
the exceptions to the coverage of Art. 82, under the provisions of Hours of Work.
The Labor Code is equally applicable to non-profit institutions. A covered The claim of Union “P" is valid. The Labor Code is very clear: Undertime work
employee who works beyond eight (8) hours is entitled to overtime on any particular day shall not be offset by overtime work on any other day.
compensation. (Article 88, Labor Code)
The right arising from the above provision, meaning, entitlement to overtime pay
Danilo Flores applied for the position of driver in the motorpool of Gold for one hour for working 9 hours per day, 3 days a week. (Article 87, Labor
Company, a multinational corporation. Danilo was informed that he would Code) cannot be considered as waived by a CBA even if the CBA is ratified by
frequently be working overtime as he would have to drive for the company's the employees concerned. The waiver in this instance is against the law, morals,
executives even beyond the ordinary eight-hour work day. He was provided with and public policy. The law must prevail over the CBA.
a contract of employment wherein he would be paid a monthly rate equivalent to
35 times his daily wage, regular sick and vacation leaves. 5 day-leave with pay Ping Gabo is the Chief Engineer of the National Publishing Corp. with a monthly
every month and time off with pay when the company’s executives using the cars salary of P3.000.00. He works over eight (8) hours daily from Monday to
do not need Danilo’s service for more than eight hours a day, in lieu of overtime. Saturday. In May. June and July 1991, he rendered, each month, ten (10) hours
Are the above provisions of the contract of employment in conformity with, or beyond his regular work schedule.
violative of, the law? Is he entitled to overtime pay and holiday pay? Why?

Except for the provision that Danilo shall have time off with pay when the The entitlement of Gabo to overtime pay and holiday pay is dependent on
company's executives using the cars do not need Danilo's service for more than whether he is a managerial employee or not. If he Is a managerial employee, he
eight hours a day, in lieu of overtime, the provisions of the contract of is not entitled to overtime pay and holiday pay. The Labor Code provides that the
employment of Danilo are not violative of any labor law because they instead provisions that grant overtime pay and holiday pay shall not apply, among others,
improve upon the present provisions of pertinent labor laws. to managerial employees.
Thus, the monthly rate equivalent to 35 times the daily wage may be sufficient to A managerial employee is defined by the Code as referring to those whose
include overtime pay. primaiy duty consists of the management of the establishment in which they are
There is no labor law requiring the payment of sick and vacation leaves except employed or of a department or subdivision thereof, and to other officers or
the provision for a five-day service incentive leave in the Labor Code. members of the managerial staff.
Page 28 of 307
Gabo, as Chief Engineer, appears to be a managerial employee. On the other a) Employee is paid for overtime work an additional compensation equivalent to
hand, his monthly pay is rather low for a managerial employee. Despite his title, his regular wage plus at least 30% thereof;
his duty may not consist of a management of department or of a subdivision b) Employee is paid for overtime work an additional compensation equivalent to
thereof. his regular wage plus at least 30% thereof;
c) Employee is paid for overtime work an additional compensation equivalent to
After working from 10 a.m. to 5 p.m. on a Thursday as one of 5,000 employees his regular wage plus at least 20% thereof;
in a beer factory, A hurried home to catch the early evening news and have d) None of the above.
dinner with his family. At around 10 p.m. of the same day, the plant manager
called and ordered A to fill in for C who missed the second shift. (2010 Bar
Question) (a) Employee is paid for overtime work an additional compensation equivalent to
A. May A validly refuse the plant manager’s directive? Explain. (2%) his regular wage plus at least (25% thereof. [Art. 87, Labor Code]
Page 30 of 307
Labor Law The provisions of the Labor Code on the Working Conditions and Rest Periods
of employees are inapplicable to the following employees, except: (2012 Bar
Question)
YES. A may validly refuse to fill in for C. A may not be compelled to perform a. A supervisor in a fast food chain;
overtime work considering that the plant manager’s directive is not for an b. A family driver;
emergency overtime work, as contemplated under Article 89 of the Labor Code. c. A laborer without any fixed salary, but receiving a compensation depending
B. Assuming that A was made to work from 11 p.m. on Thursday until 2 a.m. on upon the result of his work;
Friday, may the company argue that, since he was two hours late in coming to d. A contractual employee.
work on Thursday morning, he should only be paid for work rendered from 1 Page 32 of 307
a.m. to 2 a.m.? Explain. (3%) Labor Law

NO. Undertime is not off-set by overtime (Art. 88, Labor Code). d. A contractual employee.

The Overseas Construction Company, a domestic corporation with a recruitment The following are instances where an employer can require an employee to work
license, hired two thousand Filipino workers and assigned them to its overtime, except: (2012 Bar Question)
construction project in Kuwait. They were given free housing, work clothing and a. In case of actual impending emergencies caused by serious accident, fire,.
food. Flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent
The master employment contract approved for them by the Philippine Overseas loss of live property, or imminent danger to public safety;
Employment Administration (POEA) stipulated that they were to work at the b. When the country is at war or when other national or local emergency has
overseas jobsite for twelve (12) hours per day and that they were accordingly to been declared by the national assembly or the chief executive;
be paid wages higher than the POEA-approved schedule of pay rates. The c. When there is urgent work to be performed on machines, installations, or
individual employment contracts also contained the same stipulations. And equipment, in order to avoid serious loss or damage to employer or some other
during the pre-departure briefings at the company’s Mandaluyong plant site, the cause of similar nature;
workers were told about these stipulations. By actual compu-tation, the wages d. Where the completion or continuation of the work started before the eight hour
paid at the overseas jobsite were at least twenty-five percent (25%) more than the is necessary to prevent serious obstruction or prejudice to the business or
POEA-approved rates. Moreover, the record shows that the workers did not operation of the employer.
always render the full twelve (12) hours of work stipulated in the employment SUGGESTED ANSWERS:
contract. (a) In case of actual impending emergencies caused by serious accident, fire,
Back home after completing their one-year overseas assignment, the workers flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss
engaged your services as their lawyer to prosecute a complaint with the POEA of live property, or imminent danger to public safety;
for recovery of unpaid overtime work. What would your advice be? (b) When the country is at war or when other national or local emergency has
been declared by the national assembly or the chief executive;
(c) When there is urgent work to be performed on machines, installations, or
Before I give an advise, I will first find the answer to this basic question: Were equipment, in order to avoid serious loss or damage to employer or some other
the workers actually paid for their overtime work when they received wages that cause of similar nature;
were at least twenty-five percent (25%) more than the POEA-approved rates? (d) Where the completion or continuation of the work started before the eight
The answer is No if the 25% added to the POEA- approved rate (which we hour is necessary to prevent serious obstruction or prejudice to the business or
assume is a rate for a day of eight (8) hours work) is only 25% of such POEA- operation of the employer.
approved daily wage rate. This is because what should be paid to the workers for
the four (4) hours that they work overtime in their twelve (12) hour day (a 12- May the employer and employee stipulate that the latter’s regular or basic salary
hour work day is 4 hours in excess of already includes the overtime pay, such that when the employee actually works
Page 31 of 307 overtime he cannot claim overtime pay? (2012 Bar Question)
Labor Law a) Yes, provided there is a clear written agreement knowingly and freely entered
an 8-hour work day) should be 50% more of such POEA- approved rate. The into by the employee;
four (4) hours of work is 50% of the normal weight (8) hours of work a day plus b) Yes, provided the mathematical result shows that agreed legal wage rate and
25% of such additional 50% for purposes of paying the overtime rate. the overtime pay. Computed separately, are equal to or higher than the separate
There is also the night differential pay to take into account because a 12-hour amounts legally due;
shift will include working hours from 10:00 p.m. to 6:00 a.m. If the higher-than- c) No, the employer and employee cannot stipulate that the latter’s regular or
the POEA- approved rate is computed as indicated above, I will advise the basic salary already includes the overtime pay;
workers not to sue for they have already been paid for their overtime work. d) A and B
If the higher-than-the-POEA-approved rates is not, however, computed as Page 33 of 307
indicated above, the fact that the POEA-approved the contracts and that the Labor Law
workers agreed to the rates they receive will not be a bar to a complaint for
unpaid overtime pay, the right to which cannot be waived.
ANOTHER c) No, the employer and employee cannot stipulate that the latter’s regular or
basic salary includes the overtime pay. [Art. 87, Labor Code]
SUGGESTED ALTERNATIVE ANSWER:
The rate approved by the POEA has built-in overtime pay. Thus, there is no basis b) Yes, provided the mathematical results shows that the agreed legal wage rate
for the claim for overtime pay. and the overtime pay, computed separately, are equal to or higher that the
separate amounts legally due.
Work may be performed beyond eight (8) hours a day provided that: (2012 Bar
Question) LKG Garments Inc. makes baby clothes for export. As part of its measures to
meet its orders, LKG requires its employees to work beyond eight (8) hours
everyday, from Monday to Saturday. It pays its employees an additional 35% of But it is precisely as regards benefits that are not rights under the law that
their regular hourly wage for work rendered in excess of eight (8) hours per day. collective bargaining is used by Labor to secure these benefits that are over and
Because of additional orders, LKG now requires two (2) shifts of workers with above what the law gives.
both shifts working beyond eight (8) hours but only up to a maximum of four (4) On the other hand, the rejection by the Company of the Union’s demand for
hours. Carding is an employee who used to render up to six (6) hours of overtime overtime pay is not per se illegal. The Labor Code provides that the duty to
work before the change in schedule. He complains that the change adversely bargain collectively does not compel any party to agree to a proposal or to make
affected him because now he can only earn up to a maximum of four (4) hours any concession. (Article 252, Labor Code).
worth of overtime pay. Does Carding have a cause of action against the
company? (2015 Bar Question) Night differential is differentiated from overtime pay in that (2011 BAR
QUESTION) (A) while overtime pay is given for overtime work done during day
or night, night differential is given only for work done between 10:00 p.m. and
NO. A change in work schedule is a management prerogative of LKG. Thus, 6:00 a.m. (B) while overtime pay is paid to an employee whether on day shift or
Carding has no cause of action against LKG if, as a result of its change to two (2) night shift, night shift differential is only for employees regularly assigned to
shifts, he now can only expect a maximum of four (4) hours overtime work. night work. (C) while overtime pay is for work done beyond eight hours, night
Besides, Art. 97 of the Labor Code does not guarantee Carding a certain number differential is added to the overtime pay if the overtime work is done between
of hours of overtime work. In Manila Jockey Employees’ Union v. Manila 6:00 p.m. and 12 midnight. (D) while overtime pay is 25% additional to the
Jockey Club (517 SCRA 707), the Supreme Court held that the basis of overtime employee's hourly regular wage, night differential is 10% of such hourly wage
claim is an employee’s having been “permitted to work”. Otherwise, as in this without overtime pay.
case, such is not demandable. B. Wages
4. Night work (R.A. No. 10151), Night shift differential
A wage order may be reviewed on appeal by the National Wages and
As a tireman in a gasoline station, open twenty four (24) hours a day 'with only Productivity Commission under these grounds, except: (2012 Bar Question)
five (5) employees, Goma worked from 10:00 P.M. until 7:00 A.M. of the a. Grave abuse of discretion;
following day. He claims he is entitled to night shift differential. Is he correct? b. Non-conformity with prescribed procedure;
Explain briefly. (3%) c. Questions of law;
SUGESTED ANSWER: d. Gross under or over-valuation.
Page 34 of 307
Labor Law
Yes. Under Art. 86 of the Labor Code, night shift differential shall be paid to d) Gross under or over-valuation
every employee for work performed between 10:00 o’clock in the evening to six
o’clock in the morning. The following are exempt from the rules on minimum wages, except: (2012 Bar
Therefore, Goma Is entitled to night shift differential for work performed from Question)
10:00 pm until 6:00 am of the day following, but not from 6:00 am to 7:00 am of a. Household or domestic helpers;
the same day. Page 36 of 307
The Omnibus Rules Implementing the Labor Code (In Book ill, Rule lI dealing Labor Law
with night shift differential) provides that its provisions on night shift differential b. Homeworkers engaged in needle work;
shall NOT apply to employees of “retail and service establishments regularly c. Workers’ in duly registered establishment in the cottage industry;
employing not more than five (5) workers”. Because of this provision, Goma is d. Workers in the duly registered cooperative.
not entitled to night shift differential because the gasoline station where he works
has only five employees.
b) Workers in the duly registered cooperative. [Sec. 3 (d), Rule VII, Book III of
Republic Drug Co. has 1,000 employees, including 50 managerial personnel, 90 Omnibus Rules requires recommendations of Bureau of Cooperative
supervisors and 150 sale representatives. The regular workday in the Company is Development and approval of DOLE Secretary – matters that are not in the
from 8:00 a.m. to 5:00 p.m. The sales representatives register their presence with suggested answer]
the timekeeper at 8:00 A.M. every day before they go to their respective sales
territories. They are paid a basic salary plus commission. Sixty of the sales Benito is the owner of an eponymous clothing brand that is a top seller. He
representatives are members of the Republic Salesmen Union which sent to the employs a number of male and female models who wear Benito's clothes in
Company a set of bargaining proposals, including a demand for payment of promotional shoots and videos. His deal with the models is that Benito will pay
overtime pay of the sales representatives for working beyond 5:00 P.M. them with 3 sets of free clothes per week. Is this arrangement allowed? (2015
everyday. The Company refused to consider the bargaining proposals and Bar Question)
rejected the demand for overtime pay for the reason that the sales representatives
are not entitled thereto. The Union filed an unfair labor practice case against the
Company for refusal to bargain, and after complying with the legal requirements No. the arrangement is not allowed. The models are Benito’s employees. As
declared a strike. such, their services require compensation in legal tender (Art. 102, Labor Code).
a) Was the Company legally justified in rejecting the Union’s demand for The three sets of clothes, regardless of value, are in kind; hence, the former’s
overtime pay? Reason. compensation is not in the form prescribed by law.
ANOTHER

The Company was legally justified.

Under the Labor Code, (in Article 82). “field personnel" are among those classes Under Article 102 of the Labor Code, wages of an employee are to be paid only
of workers who are not entitled to overtime pay, and the phrase “field personnel” in legal tender, even when expressly requested bv the employee. Hence, no
includes sales representatives who. like other field personnel, are non- lawful deal in this regard can be entered into by and between Benito and his
agricultural employee who regularly perform their duties away from the principal models.
place of business or branch office of the employer and whose actual hours of SUGGESTED ALTERNATIVE ANSWER:
work in the field cannot be determined with reasonable certainty. The models are not employees. Therefore, Art. 102 of the Labor Code applies.
ALTERNATIVE ANSWER: The payment does not have to be in legal tender.
If the demand for overtime pay is in the nature of a proposal made in the But even if they are employees, the wage arrangement between Benito and the
collective bargaining table and the only reason for rejecting such demand is that models is allowed by Art. 97(f) of the Labor Code which defines wage as the
“the sales remuneration or earning paid to an employee, however designated, capable of
Page 35 of 307 being expressed in terms of money, whether fixed or ascertained on a time, task,
Labor Law piece, or commission basis, or other method of calculating the same, which is
representatives are not entitled thereto,” this is not a legal justification for payable by an employer to an employee under a written or unwritten contract of
rejecting outright the Union's demand for overtime pay. employment for work done or to be done, or for services rendered or to be
It is true that under the Labor Code, field personnel - and this phrase includes rendered. It includes the fair and reasonable value, as determined by the
sales representatives are not entitled to overtime pay. Secretary of Labor, of board, lodging or other facilities customarily furnished by
the employer to the employee.
1. Wage v. salary Labor Law
Page 37 of 307 The attorney's fees should be granted to Robbie. There are two commonly
Labor Law accepted concepts of attorney's fees the so-called ordinary and extraordinary. In
its ordinary concept, an attorney's fee is the reasonable compensation paid to a
Tarcisio was employed as operations manager and received a monthly salary of lawyer by his client for the legal services he has rendered to the latter. The basis
₱25,000.00 through his payroll account with DB Bank. He obtained a loan from of this compensation is the fact of his employment by and his agreement with the
Roberto to purchase a car. Tarcisio failed to pay Roberto when the loan fell due. client. In its extraordinary concept, attorney's fees are deemed indemnity for
Roberto sued to collect, and moved to garnish Tarcisio's payroll account. The damages ordered by the court to be paid by the losing party in a litigation. The
latter vigorously objected and argued that salaries were exempt from instances where these may be awarded are those enumerated in Article 2208 of
garnishment. Is Tarcisio correct? Explain your answer. (3%) (2017 Bar Question) the Civil Code, specifically par. 7 thereof which pertains to actions for recovery
of wages, and is payable not to the lawyer but to the client, unless they have
No, Tarcisio is not correct. Case law exempts rank-and-file employees from agreed that the award shall pertain to the lawyer as additional compensation or as
garnishment.' Tarcisio, however manager, is a managerial employee. Since the part thereof. The extraordinary concept of attorneys fees is the one contemplated
rule covers only file employees, therefore, Tarcisio's salary is not exempt from in Article 111 of the Labor Code, which provides:
(Gaa v. Court ofAppea1s, G.R. No. L-44169, December 3, 1985, 304). "Art. 111. Attorneys fees. (a) In cases of unlawful withholding of wages, the
ALTERNATIVE ANSWER: Yes, Tarcisio is correct. Under Article 1708 of the culpable party may be assessed attorneys fees equivalent to ten percent of the
Civil Code, "(t) he laborer's wages shall not be subject to execution or amount of wages recovered x x x"
attachment, for debts incurred for food, shelter, clothing and medical Article 111 is an exception to the declared policy of strict construction in the
attendance." The indebtedness of Tarcisio was due to a purchase of a car which is awarding of attorneys fees. Although an express finding of facts and law is still
one of the exceptions under the said law. ANOTHER ALTERNATIVE necessary to prove the merit of the award, there need not be any showing that the
ANSWER: Garnishment, which is a species of attachment requires that the employer acted maliciously or in bad faith when it withheld the wages. There
debtor (Tarcisio) is insolvent. need only be a showing that the lawful wages were not paid accordingly, as in
Q: this case.
1) Distinguish “salary" from “wages." In carrying out and interpreting the Labor Code's provisions and its
2) Are these subject to attachment and execution? implementing regulations, the employees' 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 in Article
The term “wages" applies to compensation for manual labor, skilled or unskilled, 4 of the Labor Code which states that all doubts in the implementation and
while salary denotes a compensation for a higher degree of employment. (Goa v. interpretation of the provisions of the Labor Code, including its implementing
Court of Appeals. 140 SCRA 304). rules and regulations, shall be resolved in favor of labor, and Article 1702 of the
ALTERNATIVE ANSWER: Civil Code which provides that in case of doubt, all labor legislation and all labor
1) “Wages" are those paid to any employee as his remuneration or earnings contracts shall be construed in favor of the safety and decent living for the
payable by an employer for work done or to be done, or for services rendered or laborer (PCL Shipping Philippines, Inc. v. NLRC, G.R. No. 153031, [December
to be rendered. 14, 2006]).
On the other hand, “salary" is used in the law that provides for a 13th-month pay. [b] Robbie likewise questions the imposition of interests on the amounts in
In this law, basic salary includes all remuneration or earnings paid by an question because it was not claimed by Apollo, and the Civil Code provision on
employer to his employees for services rendered, but does not include allowances interests does not apply to a labor case. Rule on the issue and explain.
or monetary benefits
Page 38 of 307
Labor Law Page 40 of 307
which are not considered or integrated as part of the regular or basic salary. (Art. Labor Law
97(f). Labor Code; Sec. 2(b), P.D. No. 851) It is now well-settled that generally, legal interest may be imposed upon any
2) Under Article 1708 of the Civil Code, only “wages" are exempt from unpaid wages, salary differential, merit increases, productivity bonuses,
attachment or execution. Salaries are not exempt from attachment or execution. separation pay, backwages on other monetary claims and benefits awarded
(Goa v. Court of Appeals, 140 SCRA 304). illegally dismissed employees. Its grant, however, remains discretionary upon the
courts (Conrado A. Lim v. HMR Philippines G.R. No. 189871, August 13,
How much attorney's fees may a lawyer assess a culpable party in cases of 2013). Legal interest was imposed on all the monetary awards by the SC in the
unlawful withholding of wages? case of Bani Rural Bank v. De Guzman (G.R. No. 170904 November 13, 2013).
The Court therein declared that imposition of legal interest in any final and
executory judgment does not violate the immutability principle. The court ruled
In cases of unlawful withholding of wages, the culpable party may be assessed that once a decision in a labor case becomes final, it becomes a judgment for
attorney's fees equivalent to ten percent (10%) of the amount of wages recovered. money from which another consequence flows - the payment of interest in case
(Art. III, Labor Code) Q: The union’s by-laws provided for burial assistance to of delay.
the family of a member who dies. When Carlos, a member, died, the union 2. Minimum wage defined, Minimum wage setting
denied his wife's claim for burial assistance, compelling her to hire a lawyer to
pursue the claim. Assuming the wife wins the case, may she also claim attorney's The Regional Tripartite Wages and Productivity Board (RTWPB) for Region 3
fees? (2011 BAR QUESTION) (A) No, since the legal services rendered has no issued a wage order on November 2, 2017 fixing the minimum wages for all
connection to CBA negotiation. (B) Yes, since the union should have provided industries throughout Region 3. (a) Is the wage order subject to the approval of
her the assistance of a lawyer. (C) No, since burial assistance is not the the National Wages and Productivity Commission before it takes effect? (2%)
equivalent of wages. (D) Yes, since award of attorney's fee is not limited to cases
of withholding of wages. No, because the NWPC exercises only technical and administrative supervision -
over the RTWPB (Article 121 (g), Labor Code). ALTERNATIVE ANSWER:
In a case for illegal dismissal and non-payment of benefits, with prayer for No, the Wage Order becomes effective fifteen (15) days after its publication in at
Damages, Apollo was awarded the following: 1) P200,000.00 as backwages; 2) least one (l) newspaper of general circulation in the region pursuant to the Rules
P80,000.00 as unpaid wages; 3) P20,000.00 as unpaid holiday pay; 4) P5,000.00 of Procedure in Minimum Wage Fixing. ANOTHER ALTERNATIVE
as unpaid service incentive leave pay; 5) P50,000.00 as moral damages; and 6) ANSWER: Yes. In NWPC v. Alliance of Progressive Labor (G.R. No. 150326,
P10,000.00 as exemplary damages. Attorney's fees of ten percent (10%) of all the March 12, 2014), it was ruled that "(t)he very fact that the validity of the assailed
amounts covered by items 1 to 6 inclusive, plus interests of 6% per annum from sections of Wage Order No. NCR-07 had been already passed upon and upheld
the date the same were unlawfully withheld, were also awarded. by the NWPC meant that the NWPC had already given the wage order its
[a] Robbie, the employer, contests the award of attorney fees amounting to 10% necessary legal imprimatur. Accordingly, the requisite approval or review was
on all the amounts adjudged on the ground that Article 111 of the Labor Code complied with." (b) The law mandates that no petition for wage increase shall be
authorizes only 10% "of the amount of wages recovered". Rule on the issue and entertained within a period of 12 months from the effectivity of the wage order.
explain. (2016) Under
Page 41 of 307
Labor Law
Page 39 of 307
what circumstances may the Kilusang Walang Takot, a federation of labor A, a driver for a bus company, sued his employer for non-payment of
organizations that publicly and openly assails the wage order as blatantly unjust, commutable service incentive leave credits upon his resignation after five years
initiate the review of the wage increases under the wage order without waiting of employment. The bus company argued that A was not entitled to service
for the end of the 12-month period? Explain your answer. (3%) (2017 Bar incentive leave since he was considered a field personnel and was paid on
Question) commission basis and that, in any event, his claim had prescribed. If you were
the Labor Arbiter, how would you rule? Explain. (6%) (2010 Bar Question)
The federation may initiate a review of the • wage order even before the
expiration of the 12-month period when there are supervening conditions, such as
extraordinary increase in prices of petroleum products and basic goods/services Page 43 of 307
which demand a review of minimum wage rates as determined by the Board and Labor Law
confirmed by the Commission. I will grant the prayer of A.
Payment on commission basis alone does not prove that A is a field personnel.
A lady worker was born with a physical deformity, specifically, hard of hearing, There must be proof that A is left to perform his work unsupervised by his
speech impaired and color blind. However, these deficiencies do not impair her employer. Otherwise, he is not a field personnel, thus entitled to commutable
working ability. service incentive leave (SIL) credits [Auto Bus v. Bautista, 458 SCRA 578
Can the employer classify the lady worker as a handicapped worker so that her [2005]).
daily wage will only be seventy-five percent (75%) of the applicable daily His action has not yet prescribed. In Auto Bus v. Bautista (supra.), the Supreme
minimum wage? [5%] Court recognized that SIL is such a unique labor standard benefit, because it is
commutable. An employee may claim his accrued SIL throughout the years of
his service with the company upon his resignation, retirement, or termination.
No, the employer cannot classify the lady worker as a handicapped worker Therefore, when A resigned after five years, his right of action to claim ALL of
because according to the facts in the question, her deficiencies do not impair her his SIL benefits accrued at the time when the employer refused to pay him his
working ability. If her earning capacity is therefore not also impaired, then she rightful SIL benefits. (Art. 291, Labor Code).
cannot be considered a handicapped worker. ALTERNATIVE ANSWER:
Because of the above fact, the employer shall not pay her less than the applicable The money claim as cause of action has prescribed because the claim was filed
daily minimum wage. (See Article 78 of the Labor Code) after five (5) years from date of negotiation. Art. 291 of the Labor Code provides
ANOTHER that all money claims arising from employer- employee relations occurring
during the effectivity of the Code shall be filed within three (3) years from that
time the cause of action has accrued, otherwise, they shall be forever barred.
Yes, the employer can classify the lady worker as a handicapped worker because 5. Deductions from wages
her earning capacity maybe impaired by her physical deficiencies. As such
handicapped worker, the employer may enter into an employment agreement A worked as a roomboy in La Mallorca Hotel. He sued for underpayment of
with her whereby the rate to be paid to her may be les* than the applicable legal wages before the NLRC, alleging that he was paid below the minimum wage.
minimum wage but not less than 75% of such wage. The employer denied any underpayment, arguing that based on long standing,
3. Minimum wage of workers paid by results unwritten policy, the Hotel provided food and lodging to its housekeeping
employees, the costs of which were partly shouldered by it and the balance was
Nemia earns P7.00 for every manicure she does in the barber shop of a friend charged to the employees. The employees’ corresponding share in the costs was
which has nineteen (19) employees. At times she takes home P 175.00 a day and thus deducted from their wages. The employer concluded that such valid
at other times she earns nothing. She now claims holiday pay. Is Nemia entitled deduction naturally resulted in the payment of wages below the prescribed
to this benefit? Explain briefly. (5%) minimum. If you were the Labor Arbiter, how would you rule? Explain. (3%)
Page 42 of 307 (2010 Bar Question)
Labor Law

I will rule in favor of A.

No, Nemia is not entitled to holiday pay. Even if food and lodging were provided and considered as facilities by the
Art. 82 of the Labor Code provides that workers who are paid by results are, employer, the employer could not deduct such facilities from its workers’ wages
among others, not entitled to holiday pay. Nemia is a worker who is paid by without compliance with law (Mayon Hotel & Restaurant v. Adana, 458 SCRA
results. She earns P7.00 for every manicure she does. 609 [2005]).
ANOTHER In Mabeza v. NLRC (271 SCRA 670 [1997]), the Supreme Court held that the
employer simply cannot deduct the value from the employee’s wages without
satisfying the following: (a) proof that such facilities are customarily furnished
Yes. Nemia is entitled to holiday pay. by the trade; (b) the
The Supreme Court has ruled: “As to the other benefits, namely, holiday pay, Page 44 of 307
premium pay, 13m month pay, and service incentive leave which the labor Labor Law
arbiter failed to rule on but which the petitioners prayed for in their complaint, provision of deductible facilities is voluntarily accepted in writing by the
we hold that petitioners are so entitled to these benefits. Three (3) factors lead us employee; and (c) the facilities are charged at fair and reasonable value.
to conclude that petitioners, although piece rate workers, were regular employees
of private respondents. First as to the nature of the petitioner’s tasks, their job of In accordance with the provisions of the collective bargaining agreement, the
repacking snack food was necessary or desirable in the usual business of private Republic Labor Union (RLU) submitted to the Zenith Drug Company a union
respondents, who were engaged in the manufacture and selling of such food board resolution authorizing the deduction from the wage of each of the union’s
products; second, petitioners worked for private respondents throughout the year, two thousand members a special assessment in the sum of twenty pesos to help
their employment not having been dependent on a specific project or season; and pay for the expenses of the RLU president during his observation tour of New
third, the length of time that petitioners worked for private respondents. Thus, Zealand.
while petitioner’s mode of compensation was on a “per piece basis” the status When the company honored the authorization and implemented the deductions,
and nature of their employment was that of regular employees.” [Labor Congress more than a thousand of the employees complained and sought your assistance.
of the Philippines v. NLRC, 290 SCRA 509(1998)] What legal advice would you give and what action would you take on behalf of
the employees?
“Piece rate employees” are those who are paid by results or other non-time basis.
As such they are NOT entitled to overtime pay for work done beyond eight hours
if (2011 BAR) (A) their workplace is away from the company's principal place of I will advise the complaining employees that they should file a complaint against
work. (B) they fail to fill up time sheets. (C) the product pieces they do are not the Company for making the illegal deductions of P20.00 from their wages.
countable. (D) the piece rate formula accords with the labor department’s According to the Labor Code (in Art. 113) of the legal deductions that an
approved rates. employer may make from the wages of his employees are: (a) In cases where the
4. Commissions worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the
insurance; (b) For union dues, in cases where the right of the worker or his union
to check-off has been recognized by the employer or authorized in writing by the 1. Organized establishment - follow the grievance procedure as provided for in
individual worker concerned; and (c) In cases where the employer is authorized the CBA, ending in voluntary arbitration.
by law or regulations issued by the Secretary of Labor. 2. Unorganized establishments - employer and workers, with the aid of the
The deductions made by the employer are not for union dues. NCMB shall endeavor to correct the wage distortion, and if they fail, to submit
ANOTHER the issue to the NLRC for compulsory arbitration.

How should a wage distortion be resolved (1) In case there is a collective

I will advise the complaining employees that they should file a complaint against bargaining agreement and (2) in case there is none? Explain briefly. (3%)
the members of the union board of directors for violating the rights and
conditions of membership in a labor organization by levying a special assessment
without its being authorized by a written resolution of majority of all union According to Art 124 of the Labor Code, in case there Is a collective bargaining
members at a general membership meeting called for the purpose. (Art. 241 (2). agreement, a dispute arising from wage distortions shall be resolved through the
grievance machinery provided in the CBA, and if remains unresolved, through
Corporation X is owned by L’s family. L is the President. M, L’s wife, voluntary arbitration. In case there is no collective bargaining agreement the
occasionally gives loans to employees of Corporation X. It was customary that employers and workers shall endeavor to correct such distortions. Any dispute
loan payments were paid to M by directly deducting from the employees’ arising therefrom shall be settled through the National Conciliation and
monthly salary. Is this practice of directly deducting payments of debts from the foodSation Board and if it remains unresolved after ten calendar days of
employee’s wages allowed? (2012 Bar Question) conciliations, then the dispute is referred to the appropriate branch of the
a) Yes, because where the employee is indebted to the employer, it is sanctioned National Labor Relations Commission.
by the law on compensation under Article 1706 of the Civil Code; Q:
Page 45 of 307 a) Define Wage Distortion.
Labor Law b) May a wage distortion, alleged by the employees but rejected by the employer
b) Yes, because it has already become customary such that no express to be such, be a valid ground for staging a strike?
authorization is required;
c) No, because an employee’s payment of obligation to a third person is
deductible from the employee’s wages if the deduction is authorized in writing; Page 47 of 307
d) No, because Article 116 of the Labor Code absolutely prohibits the Labor Law
withholding of wages and kickbacks. Article 116 provides for no exception. (a) A wage distortion is that brought about where an increase in the prescribed
wage rates results in the elimination or severe contraction of intentional
quantitative differences in wage or salary rates between and among employee
d) No, because Article 116 of the Labor Code absolutely prohibits the groups in an establishment as to effectively obliterate the distinctions embodied
withholding of wages and kickbacks. Article 116 provides for no exception. in such wage rates based on skills, length of service and other logical bases of
SUGGESTED ALTERNATIVE ANSWER: differentiation.
a) Yes, because where the employee is indebted to the employer, it is sanctioned (b) No. the existence of wage distortion is not a valid ground for a strike because
by the law on compensation under Article 1706 of the Civil Code Art. 124 of the Labor Code provides for a specific method of procedure for
correcting wage distortion. In Raw at Buklod ng Manggagawa v. NLRC, 198
Which of the following is not a valid wage deduction? (2012 Bar Question) SCRA 586, the Court said:-
a. Where the worker was insured with his consent by the employer, and the It goes without saying that these joint or coordinated activities may be forbidden
deduction is allowed to recompense the employer for the amount paid by him as or restricted by law or contract. For the particular instance of "distortions of the
the premium of the insurance. wage structure within an establishment" resulting from the application of any
b. When the wage is subject of execution or attachment, but only for debts prescribed wage increase by virtue of a law or wage order, Section 3 of Republic
incurred for food, shelter, clothing and medical attendance; Act No. 6727 prescribes a specific, detailed and comprehensive procedure for the
c. Payment for lost or damaged equipment provided the deduction does not correction thereof, thereby implicitly excluding strikes or lockouts or other
exceed 25% of the employee’s salary for a week; concerted activities as modes of settlement of the issue.
d. Union dues. ALTERNATIVE ANSWER:
(b) A wage distortion, alleged by the employees but rejected by the employer can
be a valid ground for staging a strike if it happens that in rejecting the allegation
c) Payment for lost or damaged equipment provided the deduction does not of wage distortion, the employer refuses to consider the issue under the grievance
exceed 25% of the employee’s salary for a week. [Implementing Rules Book III, procedure provided for in the applicable CBA and later on through Voluntary
Rule VIII, Section 11: 20% of employee’s salary in a week, not 25%] Arbitration. These acts of the employer could be considered as a violation of its
6. Wage Distortion/Rectification duty to bargain collectively which is unfair labor practice (ULP). A ULP strike is
legal.
What is wage distortion? Can a labor union invoke wage distortion as a valid
ground to go on strike? Explain. (2%) (2009 Bar Question) Which is not a procedural requirement for the correction of wage distortion in an
unorganized establishment? (2012 Bar Question)
a. Both employer and employee will attempt to correct the distortion;
Page 46 of 307 b. Settlement of the dispute through National Conciliation and Mediation Board
Labor Law (NCMB);
Wage distortion refers to a situation where an increase in the prescribed wage c. Settlement of the dispute through voluntary arbitration in case of failure to
rates results in the elimination or severe contraction of intentional quantitative resolve dispute through CBA dispute mechanism;
differences in wage or salary rates between and among employee groups in an d. A and B.
establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service and other logical bases of
differentiation. (Art. 124, Labor Code) c. Settlement of the dispute through voluntary arbitration in case of failure to
No. the existence of wage distortion is not a valid ground for staging a strike resolve dispute through CBA dispute mechanism. [Art. 124, Labor Code]
because Art. 124 of the Labor Code provides for a specific method or procedure
for correcting wage distortion. In Ilaw at Buklod ng Manggagawa v. NLRC, (198 In what instances do labor arbiters have jurisdiction over wage distortion cases?
SCRA 586, 594-5 [1991]), the Cour said. (2012 Bar Question)
Page 48 of 307
What procedural remedies are open to workers who seek correction of wage Labor Law
distortion? (2%) (2009 Bar Question) a. When jurisdiction is invoked by the employer and employees in organized
establishments;
b. When the case is unresolved by Grievance Committee;
The Procedural Remedies of Wage Distortion disputes are provided in Art. 242 c. After the panel of voluntarily arbitrators has made a decision and the same is
of the Labor Code, as follows. contested by either party;
d. In unorganized establishments when the same is not voluntarily resolved by Labor Law
the parties before the NCMM. (C) No, because this amounts to a diminution of benefits which is prohibited by
the Labor Code.

d) In unorganized establishments when the same is not voluntarily resolved by Robert, an employee of ABC Company, is married to Wanda. One day, Wanda
the parties before the NCMB. [Art. 124, Labor Code] visited the company office with her three (3) emaciated minor children, and
7. Non-diminution of benefits narrated to the Manager that Robert had been squandering his earnings on his
mistress, leaving only a paltry sum for the support of their children. Wanda
R was employed as an instructor of Cruz College located in Santiago City, tearfully pleaded with the Manager to let her have one half of Robert's pay every
Isabela. Pursuant to a stipulation in R’s employment contract that the college has payday to ensure that her children would at least have food on the table. To
the prerogative to assign R in any of its branches or tie-up schools as the support her plea, Wanda presented a Kasulatan signed by Robert giving her one
necessity demands, the college proposed to transfer hi to Ilagan, a nearby town. half of his salary, on the condition that she would not complain if he stayed with
R filed a complaint alleging constructive dismissal since his re-assignment will his mistress on weekends.
entail an indirect reduction of his salary or diminution of pay considering that If you were the Manager, would you release one half of Robert's salary to
additional allowance will not be given to cover for board and lodging expenses. Wanda? (2013 Bar Questions)
R, however, failed to prove that allowances were given in similar instances in the (A) No, because an employer is prohibited from interfering with the freedom of
past. Is R’s contention that he will suffer constructive dismissal in view of the its employees to dispose of their wages.
alleged diminution of benefit correct? (2012 Bar Question) (B) Yes, because of Robert's signed authorization to give Wanda one half of his
a. Yes, such transfer should require an automatic additional allowance; the non- salary.
granting of said allowance amounts to a diminution of benefit; (C) No, because there is no written authorization for ABC Company to release
b. No, R failed to present evidence that the college committed to provide the Robert's salary to Wanda.
additional allowance or that they were consistently granting such benefit as to (D) Yes, because it is Robert's duty to financially support his minor children.
have ripened into a practice which cannot be peremptorily withdrawn. Hence, (E) No, because Robert's Kasulatan is based on an illegal consideration and is of
there is no violation of the rule against diminution of pay; doubtful legal validity.
c. No, R’s re assignment did not amount to constructive dismissal because the
college has the right to transfer R based on contractual stipulation;
d. B and C. (A)
SUGGESTED ALTERNATIVE ANSWER:
(C)
b) No, R failed to present evidence that the college committed to provide the 7. Facilities v. Supplements
additional allowance or that they were consistently granting such benefit as to
have ripened into a practice which cannot be peremptorily withdrawn. Hence, Gamma Company pays its regular employees P350.00 a day, and houses them in
there is no violation of the rule against diminution of pay. a dormitory inside its factory compound in Manila. Gamma Company also
SUGGESTED ALTERNATIVE ANSWER: provides them with three full meals a day.
Page 49 of 307 In the course of a routine inspection, a Department of Labor and Employment
Labor Law (DOLE) Inspector noted that the workers' pay is below the prescribed minimum
e) No, R’s re assignment did not amount to constructive dismissal because the wage of P426.00 plus P30.00 allowance, and thus required Gamma Company to
college has the right to transfer R based on contractual stipulation [Management pay wage differentials.
prerogative, Morales v. Harbour Centre Port Terminal, Inc., G.R. No. 174208, Gamma Company denies any liability, explaining that after the market value of
January 25, 2012] the company-provided board and lodging are added to the employees' P350 cash
daily
X Company’s CBA grants each employee a 14th month year-end bonus. Because Page 51 of 307
the company is in financial difficulty, its head wants to negotiate the Labor Law
discontinuance of such bonus. Would such proposal violate the “nondiminution wage, the employees' effective daily rate would be way above the minimum pay
rule” in the Labor Code? (2011 BAR) (A) No, but it will certainly amount to required by law. The company counsel further points out that the employees are
negotiating in bad faith. (B) Yes since the rule is that benefits already granted in aware that their food and lodging form part of their salary, and have long
a CBA cannot be withdrawn or reduced. (C) No, since the law does not prohibit a accepted the arrangement.
negotiated discontinuance of a CBA benefit. (D) Yes, since such discontinuance Is the company's position legally correct? (2013 Bar Questions)
will cancel the enjoyment of existing benefits.

In computing for 13th month pay, Balagtas Company used as basis both the No. The following requisites were not complied with:
employee’s regular base pay and the cash value of his unused vacation and sick (a) proof that such facilities are customarily furnished by the trade
leaves. After two and a half years, it announced that it had made a mistake and (b) the provision of deductible facilities is voluntarily accepted by the employee
was discontinuing such practice. Is the management action legally justified? (c) the facilities are charged at the fair and reasonable value. Mere availment is
(2011 BAR) (A) Yes, since 13th month pay should only be one-twelfth of the not sufficient to allow deduction from employee’s wages. (Mayon Hotel &
regular pay. (B) No, since the erroneous computation has ripened into an Restaurant v. Adarna, 485 SCRA 609 [2005])
established, non withdrawable practice. (C) Yes, an error is not a deliberate SUGGESTED ALTERNATIVE ANSWER:
decision, hence may be rectified. (D) No, employment benefits can be withdrawn No. RULE 78, Section 4 provides that there must be a written authorization.
only through a CBA negotiation. C. Rest Periods (Weekly rest day, Emergency rest day work)

Lolong Law Firm (LLF), which employs around 50 lawyers and 100 regular An employer may require an employee to work on the employee's rest day (2011
staff, suffered losses for the first time in its history. The management informed BAR) (A) to avoid irreparable loss to the employer. (B) only when there is a state
its employees that it could no longer afford to provide them free lunch. of calamity. (C) provided he is paid an extra of at least 50% of his regular rate.
Consequently, it announced that a nominal fee would henceforth be charged. (D) subject to 24-hour advance notice to the employee.
Was LLF justified in withdrawing this benefit which it had unilaterally been D. Holiday Pay/ Premium Pay
providing to its employees? (2014 Bar Question) 1. Coverage, exclusion
(A) Yes, because it is suffering losses for the first time.
(B) Yes, because this is a management prerogative which is not due to any legal When an employee works from 8 a.m. to 5 p.m. on a legal holiday falling on his
or contractual obligation. rest day, which of the following formulas do you use to compute for his day's
(C) No, because this amounts to a diminution of benefits which is prohibited by wage on that day? (2011 BAR) (A) His regular daily wage multiplied by 200%
the Labor Code. plus 30% of the 200% (B) His regular daily wage multiplied by 200% (C) His
(D) No, because it is a fringe benefit that has already ripened into a demandable regular daily wage plus 200% (D) His daily regular wage
right. Page 52 of 307
Labor Law

Page 50 of 307
A, a worker of ABC Company, was on leave with pay on March 31, 2010. He Saturday. In May. June and July 1991, he rendered, each month, ten (10) hours
reported for work on April 1 and 2, Maundy Thursday and Good Friday, beyond his regular work schedule.
respectively, both regular holidays. Is A entitled to holiday pay for the two Is he entitled to overtime pay and holiday pay? Why?
successive holidays? Explain. (3%) (2010 Bar Question)

The entitlement of Gabo to overtime pay and holiday pay is dependent on

YES. A is entitled to holiday pay equivalent to two hundred percent (200%) of whether he is a managerial employee or not. If he Is a managerial employee, he
his regular daily wage for the two successive holidays that he worked (Section is not entitled to
6[a], Rule IV, Book III of the Omnibus Rules implementing the Labor Code). Page 54 of 307
Labor Law
Nemia earns P7.00 for every manicure she does in the barber shop of a friend overtime pay and holiday pay. The Labor Code provides that the provisions that
which has nineteen (19) employees. At times she takes home P 175.00 a day and grant overtime pay and holiday pay shall not apply, among others, to managerial
at other times she earns nothing. She now claims holiday pay. Is Nemia entitled employees.
to this benefit? Explain briefly. (5%) A managerial employee is defined by the Code as referring to those whose
primaiy duty consists of the management of the establishment in which they are
employed or of a department or subdivision thereof, and to other officers or
No, Nemia is not entitled to holiday pay. members of the managerial staff.
Art. 82 of the Labor Code provides that workers who are paid by results are, Gabo, as Chief Engineer, appears to be a managerial employee. On the other
among others, not entitled to holiday pay. Nemia is a worker who is paid by hand, his monthly pay is rather low for a managerial employee. Despite his title,
results. She earns P7.00 for every manicure she does. his duty may not consist of a management of department or of a subdivision
ANOTHER thereof.

Z owns and operates a carinderia. His regular employees are his wife, his two (2)
Yes. Nemia is entitled to holiday pay. children, the family maid, a cook, two (2) waiters, a dishwasher and a janitor.
The Supreme Court has ruled: “As to the other benefits, namely, holiday pay, The family driver occasionally works for him during store hours to make
premium pay, 13m month pay, and service incentive leave which the labor deliveries. On April 09, the dishwasher did not report for work. The employer
arbiter failed to rule on but which the petitioners prayed for in their complaint, did not give his pay for that day is the employer correct? (2012 Bar Question)
we hold that petitioners are so entitled to these benefits. Three (3) factors lead us a) No, because employees have a right to receive their regular daily wage during
to conclude that petitioners, although piece rate workers, were regular employees regular holidays;
of private respondents. First as to the nature of the petitioner’s tasks, their job of b) Yes, because April 09 is not a regular holiday;
repacking snack food was necessary or desirable in the usual business of private c) Yes, because of the principle of “a fair day’s wage for a fair day’s work;
respondents, who were engaged in the manufacture and selling of such food d) Yes, because he employs less than ten (10) employees.
products; second, petitioners worked for private respondents throughout the year,
their employment not having been dependent on a specific project or season; and
third, the length of time that petitioners worked for private respondents. Thus, (a) No legal employees have a right to receive their regular daily wage during
while petitioner’s mode of compensation was on a “per piece basis” the status regular holiday [Art. 94, Labor Code, and a carinderia is not in the category of an
and nature of their employment was that of regular employees.” [Labor Congress excluded or service establishment].
of the Philippines v. NLRC, 290 SCRA 509(1998)] SUGGESTED ALTERNATIVE ANSWER:
(d) Yes, because he employs less than ten (10) employees [i.e. if we are to
On orders of his superior, Efren, a high-speed sewing machine technician, consider a carinderia as a retail or service establishment].
worked on May 1, Labor Day. If he worked eight (8) hours on that day, how
much should he receive if his daily rate is P400.00? (2%) Which of the following is not a regular holiday? (2012 Bar Question)
Page 53 of 307 a. New Year’s Eve;
Labor Law b. Eidil Fitr;
c. Father’s Day;
d. Independence Day.
Efren should receive P800.00. Art 92 of the Labor Code provides that the
employer may require an employee to work on any regular holiday but such
employee shall be paid compensation equivalent to twice his regular rate. c) Father’s Day [Art. 94 (c), Labor Code]
Page 55 of 307
This year, National Heroes Day (August 2.5) falls on a Sunday. Sunday is the Labor Law
rest day of Bonifacio whose daily rate is P500.00. 2. Teachers, piece-workers, takay, seasonal workers, seafarers
A. If Bonifacio is required by his employer to work on that day for eight (8) Dennis was a taxi driver who was being paid on the "boundary" system basis. He
hours, how much should he be paid for his work? Explain. (3%) worked tirelessly for Cabrera Transport Inc. for fourteen (14) years until he was
B. If he works for ten (10) hours on that day, how much should he receive for his eligible for retirement. He was entitled to retirement benefits. During the entire
work? Explain. (2%) 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%) (2012 BAR)
A. For working on his scheduled rest day, according to Art. 93(a), Bonifacio
should be paid P500.00 (his daily rate) plus P150.00 (30% of his daily rate) = No. A taxi driver paid under the “boundary system” is not entitled to a 13th
P650.00. This amount of P650.00 should be multiplied by 2 = P1, 300.00. This is month and a SIL pay. Hence, his retirement pay should be computed solely on
the amount that Bonifacio as employee working on his scheduled rest day which the basis of his salary. Specifically, Sec. 3 (e) of the Rules and Regulations
is also a regular holiday, should receive. Art. 94(c) of the Labor Code provides Implementing P.D. 851 excludes from the obligation of 13th Month Pay
that an employee shall be paid a compensation equivalent to twice his regular “Employers of those who are paid on xxx boundary basis”. On the other hand,
rate for work on any regular holiday. The “regular rate” of Bonifacio on May 1, Sec. 1 (d), Rule V, Book III of the Omnibus Rules provides that those
2002 is with an additional thirty percent because the cay is also his scheduled rest “employees whose performance is unsupervised by the employer” are not
day. entitled to Service Incentive Leave. A taxi driver paid under the Boundary
B. P1.300.00 which is the amount that Bonifacio is to receive for working on System is an “unsupervised” employee. b. Since he was not given his 13th month
May 1, 2002 should be divided by 8 to determine his hourly rate of P162.50. This pay and service incentive leave pay, should Dennis be paid upon retirement, in
hourly rate should be multiplied by 2 (the number of hours he worked overtime). addition to the salary equivalent to fifteen (15) days for every year of service, the
Thus, the amount that Bonifacio is entitled to receive for his overtime work on additional 2.5 days representing one-twelfth (1/12) of the 13th month pay as well
May 1, 2002 is P325.00. as the five (5) days representing the service incentive leave for a total of 22.5
days? Explain. (5%) (2012 BAR)
Ping Gabo is the Chief Engineer of the National Publishing Corp. with a monthly
salary of P3.000.00. He works over eight (8) hours daily from Monday to
No. Since he is not entitled to 13th month pay and SIL, his retirement pay should new wife who will be giving birth for the first time, therefore, his entitlement to
be computed solely on the basis of his salary. [R&E Transport v. Latag, G.R. No. paternity leave benefits would begin to run anew.
155214, February 13, 2004]. Whose contention is correct, Weto or the HRD manager?
E. Leaves
1. Maternity Leave
(a) The contention of Weto is correct. The law provides that every married male
Mans Weto had been an employee of Nopolt Assurance Company for the last ten is entitled to a paternity leave of seven (7) days for the first four (4) deliveries of
(10) years. His wife of six (6) years died last year. They had four (4) children. He the legitimate spouse with whom he is cohabiting (Section 2, RA6187). Jovyis
then fell in love with Jovy, his co-employee and they got married. Weto's legitimate spouse with whom he is cohabiting. The fact that Jovy is his
Page 56 of 307 second wife and that Weto had 4 children with his first wife is beside the point.
Labor Law The important fact is that this is the first child of Jovy with Weto. The law did
In October this year, Weto's new wife is expected to give birth to her first child. not distinguish and we should therefore not distinguish.
He has accordingly filed his application for paternity leave, conformably with the Page 58 of 307
provisions of the Paternity Leave Law which took effect in 1996. The HRD Labor Law
manager of the assurance firm denied his application, on the ground that Weto The paternity leave was intended to enable the husband to effectively lend
had already used up his entitlement under that law. Weto argued that he has a support to his wife in her period of recovery and/or in the nursing of the newly
new wife who will be giving birth for the first time, therefore, his entitlement to born child (Sec. 3, RA 8187). To deny Weto this benefit would be to defeat the
paternity leave benefits would begin to run anew. rationaie for the law.
xxx ANOTHER
(b) Is Jovy entitled to maternity leave benefits? (6%)

The HRD manager is correct. Since it is conceded that Weto earlier availed of
(b) Yes, if Jovy, as a female employee, has paid at least three (3) monthly four (4) paternity leaves when his first wife gave birth to their four (4) children,
contributions in the twelve-month period immediately preceding the semester of he clearly "already used up his entitlement under the law". His new wife's giving
her childbirth (Sec, 14-A, R.A. 1161, as amended); otherwise; she is not entitled birth for the first time would not, matter as the benefit given by. Section 2 of
to the benefit. R.A. 8187 is an exhaustible benefit granted to a father "for the first four (4)
deliveries of the legitimate spouse with whom he is cohabiting".
Because of the stress in caring for her four (4) growing children, Tammy suffered
a miscarriage late in her pregnancy and had to undergo an operation. In the How many times may a male employee go on Paternity Leave? Can he avail
course of the operation, her obstetrician further discovered a suspicious-looking himself of this benefit, for example, 50 days after the first delivery by his wife?
mass that required the subsequent removal of her uterus (hysterectomy). After (3%)
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 A male employee may go on Paternity Leave up to four (4) children. (Sec. 2, RA
chemotherapy once a week for four (4) weeks. 8187) On the question of whether or not he can avail himself of this benefit 50
(A) What benefits can Tammy claim under existing social legislation? (2013 Bar days after the delivery of his wife, the answer is: Yes, he can because the Rules
Questions) Implementing Paternity Leave Act says that the availment should not be later
than 60 days after the date of delivery.

Assuming she is employed, Tammy is entitled to a special leave benefit of two Because of the stress in caring for her four (4) growing children, Tammy suffered
months with full pay (Gynecological Leave) pursuant to RA 9710 or the Magna a miscarriage late in her pregnancy and had to undergo an operation. In the
Carta of Women. She can also claim Sickness Leave Benefit in accordance with course of the operation, her obstetrician further discovered a suspicious-looking
the SSS Law. 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.
Melissa, a coffee shop worker of 5 months, requested her employer for 5 days' Meanwhile, the biopsy of the sample tissue taken from the mass in Tammy's
leave with pay to attend to the case that she filed against her husband for physical uterus showed a beginning malignancy that required an immediate series of
assault two weeks earlier. May the employer deny her request for leave with pay? chemotherapy once a week for four (4) weeks.
(2011 BAR) (A) Yes, the reason being purely personal, approval depends on the (A) xxxxxxxxxxx
employer’s discretion and is without pay. (B) No, as victim of physical violence (B) What can Roger-Tammy's 2nd husband and the father of her two (2) younger
of her husband, she is entitled to five days paid leave to attend to her action children -claim as benefits under the circumstances? (2013 Bar Questions)
against him.
Page 57 of 307
Labor Law Under RA 8187 or the Paternity Leave Act of 1996, Roger can claim paternity
(C) No, the employer must grant the request but the leave will be without pay. leave of seven (7) days with full pay if he is lawfully married to Tammy and
(D) Yes, since she is not yet a permanent employee. cohabiting with her at the time of the miscarriage.
1. Paternity Leave
H files for a seven-day paternity leave for the purpose of lending support for his
To avail himself of paternity leave with pay, when must the male employee file wife, W, who suffered a miscarriage through intentional abortion. W also filed
his application for leave? (2011 BAR) (A) Within one week from the expected for
date of delivery by the wife. (B) Not later than one week after his wife’s delivery Page 59 of 307
or miscarriage (C) Within a reasonable time from the expected deliver date of his Labor Law
wife. (D) When a physician has already ascertained the date the wife will give maternity leave for five weeks. H and W are legally married but the latter is with
birth. Q: Which of the following is NOT a requisite for entitlement to paternity her parents, which is a few blocks away from H’s house. Which of the following
leave? (2011 BAR) (A) The employee is cohabiting with his wife when she gave statements is the most accurate? (2012 Bar Question)
birth or had a miscarriage. (B) The employee is a regular or permanent a. Paternity leave shall be denied because it does not cover aborted babies;
employee. (C) The wife has given birth or suffered a miscarriage. (D) The b. Paternity leave shall be denied because W is with her parents;
employee is lawfully married to his wife. c. Maternity leave shall be denied because it does not cover aborted babies;
d. Maternity leave shall be denied because grant of paternity leave bars claim for
Mans Weto had been an employee of Nopolt Assurance Company for the last ten maternity leave.
(10) years. His wife of six (6) years died last year. They had four (4) children. He
then fell in love with Jovy, his co-employee and they got married.
In October this year, Weto's new wife is expected to give birth to her first child. b) Paternity leave shall be denied because W is with her parents [RA 8187,
He has accordingly filed his application for paternity leave, conformably with the Section 2]
provisions of the Paternity Leave Law which took effect in 1996. The HRD 3. Service Incentive Leave Q: Which of the following grounds exempts an
manager of the assurance firm denied his application, on the ground that Weto enterprise from the service incentive leave law? (A) The employees already
had already used up his entitlement under that law. Weto argued that he has a enjoy 15 days vacation leave with pay. (B) The employer's business has been
suffering losses in the past three years. (C) The employer regularly employs
seven employees or less. (D) The company is located in a special economic zone. In order to improve the Cebu service and sales, Ricardo decided to assign some
of its Makati-based employees to Cebu to train Cebu employees and expose them
If not used by the end of the year, the service incentive leave shall be (2011 to the Makati standard of service. A chef and three waiters were assigned to
BAR) (A) carried over to the next year. (B) converted to its money equivalent. Cebu for the task. While in Cebu, the assigned personnel shared in the Cebu
(C) forfeited. (D) converted to cash and paid when the employee resigns or service charge collection and thus received service charge benefits lesser than
retires. what they were receiving in Makati.
If you were the lawyer for the assigned personnel, what would you advice them
Which type of employee is entitled to a service incentive leave? (2012 Bar to do? (2013 Bar Questions)
Question) (A) I would advise them to file a complaint for unlawful diminution of service
a. Managerial employees; charge benefits and for payment of differentials.
b. Field personnel; (B) I would advise them to file a complaint for illegal transfer because work in
c. Government workers; Cebu is highly prejudicial to them in terms of convenience and service charge
d. Part-time workers. benefits.
(C) I would advise them to file a complaint for discrimination in the grant of
service charge benefits.
d) Part-time workers [Art. 82, Labor Code] (D) I would advise them to accept their Cebu training assignment as an exercise
of the company's management prerogative.
The members of the administrative staff of Zeta, a construction company, enjoy (E) I would advise them to demand the continuation of their Makati-based
ten (10) days of vacation leave with pay and ten (10) days of sick leave with pay, benefits and to file a complaint under (B) above if the demand is not heeded.
Page 60 of 307
Labor Law
annually. The workers' union, Bukluran, demands that Zeta grant its workers (A)
service incentive leave of five (5) days in compliance with the Labor Code. Page 62 of 307
Is the union demand meritorious? (2013 Bar Questions) Labor Law
(A) Yes, because non-compliance with the law will result in the diminution of G. Thirteenth Month Pay
employee benefits.
(B) Yes, because service incentive leave is a benefit expressly provided under What would be your advice to your client, a manufacturing company, who asks
and required by the Labor Code. for your legal opinion on whether or not the 13th Month Pay Law (Presidential
(C) No, because Zeta already complies with the law. Decree No. 851) covers a casual employee who is paid a daily wage? [5%]
(D) No, because service incentive leave is a Labor Code benefit that does not
apply in the construction industry.
(E) Yes, because Labor Code benefits are separate from those voluntarily granted I will advise the manufacturing company to pay the casual employee 13th Month
by the company. Pay if such casual employee has worked for at least one (1) month during a
calendar year.
The law on the 13th Month Pay provides that employees are entitled to the
(C) Basis: Article 95 of the Labor Code. The employee is already given vacation benefit of said law regardless of their designation or employment status.
leave of 10 days. This is deemed compliance with the requirement of service The Supreme Court ruled in Jackson Building Condominium Corporation v.
incentive leave under the law. NLRC, 246 SCRA 329, (1995) interpreting P.D. No. 851, as follows:
F. Service Charge xxx employees are entitled to the thirteenth-month pay benefits regardless of
their designation and irrespective of the method by which their wages are paid.
Ricardo operated a successful Makati seafood restaurant patronized by a large
clientele base for its superb cuisine and impeccable service. Ricardo charged its Concepcion Textile Co. included the overtime pay, night-shift differential pay,
clients a 10% service charge and distributed 85% of the collection equally among and the like in the computation of its employees' 13th-month pay. Subsequently,
its rank-and-file employees, 10% among managerial employees, and 5% as with the promulgation of the decision of the Supreme Court in the case of San
reserve for losses and break ages. Because of the huge volume of sales, the Miguel Corporation v. Inciong (103 SCRA 139) holding that these other
employees received sizeable shares in the collected service charges. monetary claims should not be included in the computation of the 13th-month
As part of his business development efforts, Ricardo opened a branch in Cebu pay. Concepcion Textile Co. sought to recover under the principle of solutio
where he maintained the same practice in the collection and distribution of indebitii overpayment of its employees' 13th-month pay, by debiting against
service charges. The Cebu branch, however, did not attract the forecasted future 13th-month payments whatever excess amounts it had previously made.
clientele; hence, the Cebu employees received lesser service charge benefits than 1) Is the Company’s action tenable?
those enjoyed by the Makati-based employees. As a result, the Cebu branch 2) With respect to the payment of the 13th-month pay after the San Miguel
employees demanded equalization of benefits and filed a case with the NLRC for Corporation ruling, what arrangement, if any, must the Company make in order
discrimination when Ricardo refused their demand. to exclude from the 13th-month pay all earnings and remunerations other than
Will the case prosper? (2013 Bar Questions) the basic pay.
(A) Yes, because the employees are not receiving equal treatment in the
distribution of service charge benefits.
(B) Yes, because the law provides that the 85% employees' share in the service 1) The Company’s action is not tenable. The principle of solutio indebiti which is
charge collection should be equally divided among all the employees, in this a civil law concept Is not applicable in labor law. Thus, solutio indebiti is not
case, among the Cebu and Makati employees alike. applicable to the instant case. (Davao Fruits Corporations v. National Labor
Page 61 of 307 Relations Commission, et at. 225 SCRA, 562)
Labor Law ALTERNATIVE ANSWERS:
(C) No, because the employees in Makati are not similarly situated as the Cebu a) The Company’s action would be tenable if payment was done by mistake, in
employees with respect to cost of living and conditions of work. which case recovery can be done under the principle of solutio indebiti But if
(D) No, because the service charge benefit attaches to the outlet where service there was no
charges are earned and should be distributed exclusively among the employees Page 63 of 307
providing service in the outlet. Labor Law
(E) No, because the market and the clientele the two branches are serving, are mistake, the Company's action would be untenable because it would violate
different. Article 100 of the Labor Code which prohibits elimination or diminution of
benefits.
b) No. The Company’s action is not tenable. The grant by Concepcion Textile
D) Co. of a better formula, more favorable to the employee, constituted a valid offer
by the company as the offeror and the employees as the offeree. There having
How often should the collected service charges be distributed to employees in been a meeting of the minds of the parties, the rights and obligations arising
hotels and restaurants? (2011 BAR) (A) Every end of the month (B) Every two therefrom were valid. Thus, any amount received by virtue thereof could not be
weeks (C) Every week (D) At the end of each work day
recovered, much less taken away unilaterally. The principle does not apply to the must be taken not only of the basis salary of the employee but also his
case at bar. allowances.
2) Alter the 1981 San Miguel ruling, the High Court decided the case of Page 65 of 307
Philippine Duplicators Inc. v. NLRC, on 11 November 1993. Accordingly, Labor Law
management may undertake to exclude sick leave, vacation leave, maternity In decisions applying the law before Rep. Act No. 6715, the Supreme Court ruled
leave, premium pay for regular holiday, night differential pay and cost of living that the maximum limit for back wages shall be three years.
allowance. Sales commissions, however, should be included based on the settled The law has been changed by Rep. Act No. 6715. Back wages are now to be
rule as earlier enunciated in Songco v. NLRC, 183 SCRA 610. computed from the time the compensation of the employee was withheld from
him up to the time of his actual reinstatement. Thus, in applying the amendment
Who among the following is not entitled to 13th month pay? (2012 Bar Introduced by Rep. Act No. 6715, this means that back wages will now be paid
Question) for the entire period up to the actual reinstatement of the employees, even if the
a. Stephanle, a probationary employee of a cooperative bank who rendered six period is over three years.
(6) months of service during the calendar year before filing her resignation;
b. Rafael, the Secretary of a Senator; Lizzy Lu is a sales associate for Luna Properties. The latter is looking to retrench
c. Selina, a cook employed by and who lives with an old maid and who also Lizzy and five other sales associates due to financial losses. Aside from a basic
tends the sari-sari store of the latter; monthly salary, Lizzy and her colleagues receive commissions on the sales they
d. Roger, a house gardener who is required to report to work only thrice a week. make as well as cost of living and representation allowances. In computing
Lizzy’s separation pay, Luna Properties should consider her: (2014 Bar
Question)
b. Rafael, the secretary of a Senator [Section 3 (b), Dec. 22, 1975, Rules and (A) monthly salary only
Regulations Implementing PD 851] (B) monthly salary plus sales commissions
H. Separation Pay (C) monthly salary plus sales commissions, plus cost of living allowance
(D) monthly salary plus sales commissions, plus cost of living allowance and
Pedro Tiongco was a salesman for ten years of Lakas Appliance Company representation allowance
(LAC). Due to business reverses, the Company laid off Tiongco and three other
salesmen and offered them separation pay based on their monthly basic salary of
P5,700.00. The three salesmen accepted their separation pay and signed (D) monthly salary plus sales commissions, plus cost of living allowance and
individual quitclaims stating, among others, that they have no more claims or representation allowance (Songco v. NLRC, G.R. No. L-50999, March 23,
causes of action whatsoever against LAC. The quitclaims were duly notarized. 1990).
Tiongco refused to accept his separation pay and instead, demanded that the said
pay should be computed on the basis of his monthly basic salary and his sales Hector, a topnotch Human Resource Specialist who had worked in multinational
commis-sions. Upon LAC’s rejection of Tiongco’s demand. Tiongco filed the firms both in the Philippines and overseas, was recruited by ABC Corp., because
appropriate complaint with the Labor Arbiter. of his impressive credentials. In the course of Hector's employment, the company
Page 64 of 307 management frequently did not follow his recommendations and he felt offended
Labor Law by this constant rebuff.
a) As Labor Arbiter, how will you resolve Tiongco’s complaint? Reasons. Thus, he toyed with the idea of resigning and of asking for the same separation
pay that ABC earlier granted to two (2) department heads when they left the
company.
As Labor Arbiter, I will grant the demand that Tiongco be paid his separation To obtain a legal opinion regarding his options, Hector sent an email to ABC's
pay computed on the basis of his monthly basic salary and his sales retained counsel, requesting for advice on whether the grant by the company of
commissions. The sales commissions under the Labor separation pay to his resigned colleagues has already ripened into a company
Code is part of the ‘‘wage’’ that the salesmen are entitled to receive for services practice, and whether he can similarly avail of this benefit if he resigns from his
rendered. Wages may be fixed or ascertained on a time, task, piece or job.
commission basis. (Article 97. Labor Code. Songeo. el al.. v. NLRC. G.R. No. As the company's retained legal counsel, how will you respond to Hector? (2013
50999, March 23, 1990) Bar Questions)
b) If Tiongco obtains a favorable decision will the three other salesmen be Page 66 of 307
entitled to separation pay differential? Reasons. Labor Law
(A) I would advise him to write management directly and inquire about the
benefits he can expect if he resigns.
No. If the acceptance of their separation pay by the t hree other salesmen and (B) I would advise him that the previous grant of separation pay to his colleagues
their signing individual quitclaims that stated that they have no more claims or cannot be considered a company practice because several other employees had
causes of actions whatsoever against LAC (where the quitclaims were even duly resigned and were not given separation pay.
notarized) is voluntarily, they can no longer'ask for a recomputation of their (C) I would advise him to ask for separation pay, not on account of company
separation pay according to the favorable decision secured by Tiongco. practice, but on the basis of discrimination as he is similarly situated as the two
The salesmen signed quitclaim that are not contrary to law morals or public resigned department heads who were paid their separation pay.
policy. Not all quitclaims are invalid as against public policy if they are (D) I would not give him any legal advice because he is not my client.
voluntarily entered into and represents a reasonable settlement. (Periquel v. (E) I would maintain that his question involves a policy matter beyond the
NLRC, 186 SCRA 724) competence of a legal counsel to give.

Linder what circumstances or instances may an employee who is found to have

been illegally dismissed and, therefore, entitled to reinstatement, be nevertheless. (D)
NOT ordered reinstated but merely awarded (a) separation pay in lieu of ALTERNATIVE ANSWER:
reinstatement and (b) back wages? At what rate would the separation pay be? (A)
What would be the maximum limit for the back wages? I. Retirement Pay

A Collective Bargaining Agreement (CRA) between Company A and its

In a number of Supreme Court decision, it has been ruled that an employee who employees provides for optimal retirement benefits for employees who have
is found to have been illegally dismissed shall be awarded separation pay in lieu served the company for over 25 years regardless of age, equivalent to one-and-
of reinstatement If reinstatement is no longer viable in view of the strained one-half months pay per year of service based on the employee’s last pay. The
relations between the employee and his employer. In a case, the Supreme Court CBA further provides that “employees whose services are terminated, except for
also ruled that since reinstatement was no longer feasible in view of the advanced cause, shall receive said retirement benefits regardless of age or service record
age of the employees who were illegally dismissed, they should instead received with the company or to the applicable separation pay provided by law, whichever
separation pay. is higher." The Company, due to poor business conditions, decided to cease
The rate of separation pay is one month salary for every year of service. The operations and gave its employees the required one month’s advance notice as
Supreme Court has also ruled that in the computation of separation pay account well as notice to DOLE, with the further advice that each employee may claim
his corresponding separation or retirement benefits whichever is higher after (D) No, because retirement pay is deemed included in her contracted per piece
executing the required waiver and quitclaim. pay.
Dino Ramos and his co-employees who have all rendered more than 25 years of (E) No, because homeworkers are not entitled to retirement pay.
service, received their retirement benefits. Soon after, Ramos and others
similarly situated demanded for their separation pay. The Company refused,
claiming that under the CBA they cannot receive both benefits. (C)
Who is correct, the employees or the Company?
The Labor Code on retirement pay expands the term “one-half (½) month salary”
because it means (2011 BAR) (A) 15 days' pay plus 1/12th of the 13th month pay
The employees are correct. In the absence of a categorical provision in the and 1/12th of the cash value of service incentive leave. (B) 15 days' pay plus
Retirement Plan and the CBA that an employee who receives separation pay is 1/12th of the 13th month pay and the cash equivalent of five days service
no longer, entitled to retirement benefits, the employee is entitled to the payment incentive leave. (C) 15 days pay plus a full 13th month pay. (D) 15 calendar
of both benefits pursuant to days' pay per year of service plus allowances received during the retirement year.
Page 67 of 307 a. Eligibility
Labor Law Page 69 of 307
the social justice policy. [Conrado M. Aquino, et aL v. National Labor Relations Labor Law
Commission, et al., G.R No. 87653, 11 February 1992)
ALTERNATIVE ANSWER: How many years of service is the underground mine employees required to have
a) The Company is correct. The CBA clearly provides that employees who are rendered in order to be entitled to retirement benefits? (2012 Bar Question)
terminated are entitled to retirement benefits or separation pay, whichever is a. 5;
higher. The CBA, therefore, does not give the employees a right to both b. 10;
retirement pay and separation pay. Hence, they cannot be entitled to both. The c. 15;
exclusion of one by the other is deductible not only from the term “or” but also d. 20.
by the qualifying phrase “whichever is higher”. This phrase would be immaterial
if the employees were entitled to both.
b) Dino and his co-employees were correct. a) 5 [Section 2.1, 0005-04-1998, Rules Prescribing the Retirement Age for
In the case of University of the East v. NLRC, it was clarified that the retirement Underground Mine Employees, May 9, 1998]
benefits arising from the CBA is an Obligation Ex Contractu while separation b. Amount
pay under Art. 284 is an Obligation Ex-Lege. The components of retirement pay are:
Thus, the Company should grant both benefits to those who were separated due 1. 15 days pay
to CLOSURE and at the same time were qualified to retire. (Cipriano v. San 2. 1/12 of 13th month pay, and
Miguel, 24 SCRA 703) 3. Cash equivalent of not more than five {5) days of service incentive leave.
J. Women Workers
After thirty (30) years of service, Beta Company compulsorily retired Albert at a. Provisions against discrimination
age 65 pursuant to the company's Retirement Plan. Albert was duly paid his full
retirement benefits of one (1) month pay for every year of service under the Plan. In a work-related environment, sexual harassment is committed when (2011
Thereafter, out of compassion, the company allowed Albert to continue working BAR) (A) the offender has authority, influence, or moral ascendancy over his
and paid him his old monthly salary rate, but without the allowances that he used subordinate victim. (B) the victim’s continued employment is conditioned on
to enjoy. sexual favor from her. (C) the female victim grants the demand for sexual favor
After five (5) years under this arrangement, the company finally severed all against her will. (D) the victim is not hired because she turned down the demand
employment relations with Albert; he was declared fully retired in a fitting for sexual favor.
ceremony but the company did not give him any further retirement benefits. b. Stipulation against marriage
Albert thought this treatment unfair as he had rendered full service at his usual
hours in the past five (5) years. Thus, he filed a complaint for the allowances that One of Pacific Airline's policies was to hire only single applicants as flight
were not paid to him, and for retirement benefits for his additional five (5) attendants, and considered as automatically resigned the flight attendants at the
working years, based either on the company's Retirement Plan or the Retirement moment they got married. Is the policy valid? Explain your answer. (2.5%) (2017
Pay Law, whichever is applicable. Bar Question)
(A) After Albert's retirement at age 65, should he be considered a regular
employee entitled to all his previous salaries and benefits when the company
allowed him to continue working? (2013 Bar Questions) Page 70 of 307
Labor Law
The policy is not valid. It violates the provisions of Article 136 (now Article 134)
He would be considered a contractual employee, not a regular employee. His of the Labor Code on stipulations against marriage, to wit: "It shall be unlawful
salaries and benefits will be in accordance with the stipulations of the contract he for an employer to require as a condition of employment or continuation of
signed with the employment that a employee shall not get married, or to stipulate expressly or
Page 68 of 307 tacitly that upon getting married, a woman employee shall be deemed resigned or
Labor Law separated, or to actually dismiss, discharge, discriminate, or otherwise prejudice
company. a woman employee merely by reason of her marriage."
The present case is similar to a case decided by the Supreme Court (Januaria
Rivera v. United Laboratories, G.R. No. 155639 [2009]) where the Court held Dinna Ignacio was hired by Stag Karaoke Club as a guest relations officer. Dinna
that the company, in employing a retired employee whose knowledge, experience was also required to sing and dance with guests of the club.
and expertise the company recognized, as an employee or as a consultant, is not In Dinna Ignacio’s employment contract, which she signed, the following
an illegality; on the contrary, it is a recognized practice in this country. stipulations appeared:
(B) Is he entitled to additional retirement benefits for the additional service he Compensation: Tips and commissions coming from guests shall be subjected to
rendered after age 65? (2013 Bar Questions) 15% deduction.
Hours of work: 5 P.M. up to 2 AM. Daily Including Sundays and Holidays
Other conditions: Must maintain a body weight of 95 lbs., remain single.
No. He cannot be compulsorily retired twice in the same company. Marriage or pregnancy will be considered as a valid ground for a termination of
employment.
At age 65 and after 20 years of sewing work at home on a piece rate basis for A year later. Dinna Ignacio requested to go on leave because she would be
PQR Garments, a manufacturer-exporter to Hongkong, Aling Nena decided it getting married to one of the club's regular guests. The management of the club
was time to retire and to just take it easy. dismissed her.
Is she entitled to retirement pay from PQR? (2013 Bar Questions) Dinna filed a complaint for illegal dismissal, night shift differential pay,
(A) Yes, but only to one month pay. backwages, overtime pay and holiday pay. Discuss the merits of Dinna’s
(B) No, because she was not a regular employee. complaint.
(C) Yes, at the same rate as regular employees.
 3. The acts of Atty. Renan towards Miss Maganda resound with deafening clarity
The first issue to be resolved is: Is Dinna Ignacio an employee of the Star the unspoken request for a sexual favor, regardless of whether it is accepted or
Karaoke Club? Yes, she is an employee per the provision of the Labor Code that not by Miss Maganda.
states: "Any woman who is permitted or suffered to work, with or without 4. In sexual harassment, it is not essential that the demand, request or
compensation, in any night club, cocktail lounge, massage clinic, bar or similar requirement be made as a condition for continued employment or promotion to a
establishment, under the effective control or supervision of the employer for a higher position. It is enough that Atty.
substantial period shall be considered an employee of such establishment for Renan’s act result in creating an intimidating, hostile or offensive environment
purposes of labor and social legislation"(Art. 138). In Dinna’s conditions of for Miss Maganda.
employment have all the aforesaid characteristics. K. Employment of Minors (Labor Code and R.A. No. 7678, R.A. No. 9231)
She has been illegally dismissed. The Labor Code expressly provides, that "It A spinster school teacher took pity on one of her pupils, a robust and precocious
shall be unlawful for an employer to require as a condition of employment or 12-year old boy whose poor family could barely afford the cost of his schooling.
continuation of employment that a woman employee shall not get married, or to She lives alone at her house near the School after her housemaid had left. In the
stipulate expressly or tacitly that upon getting married a woman employee shall afternoon, she lets the boy do various chores as cleaning, fetching water and all
be deemed resigned or separated, or to actually dismiss, discharge, discriminate kinds of errands after school hours. She gives him rice and P100.00 before the
or otherwise prejudice a woman employee merely by reason of her marriage." boy goes home at 7:00 every night. The school principal learned about it and
(Art. 136) charged her with violating the law which prohibits the employment of children
Page 71 of 307 below 15 years of age. In her defense, the teacher stated that the work performed
Labor Law by her pupil is not hazardous. Is her defense tenable? Why? (5%) (2012 BAR)
Because of her illegal dismissal, she is entitled to backwages from the time her
compensation was withheld from her to the time of her actual reinstatement. The defense is not tenable. Children below fifteen (15) years of age shall not be
Dinna is not entitled to night differential pay, overtime pay and holiday pay employed except:
because she belongs to one of those classes of employees who are not covered by Page 73 of 307
the provision of the Labor Code providing for these benefits. She is a worker Labor Law
paid by results, since her compensation is determined by the tips and commission 1. When a child works directly under the sole responsibility of his/her parents or
that she receives from her guests. legal guardian and where only members of his/her family are employed…; or 2.
Mam-manu Aviation Company (Mam-manu) is a new airline company recruiting Where a child’s employment or participation in public entertainment or
flight attendants for its domestic flights. It requires that the applicant be single, information through cinema, theater, radio, television or other forms of media is
not more than 24 years old, attractive, and familiar with three (3) dialects, viz: essential … [ Section 12, RA 7610, as amended by RA 9231].
llonggo, Cebuano and Kapampangan. lngga, 23 years old, was accepted as she
possesses all the qualifications. After passing the probationary period, lngga TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the
disclosed that she got married when she was 18 years old but the marriage was statement is false. Explain your answer in not more than two (2) sentences. (5%)
already in the process of being annulled on the ground that her husband was xxx
afflicted with a sexually transmissible disease at the time of the celebration of [b] Employment of children below fifteen (15) years of age in any public or
their marriage. As a result of this revelation, lngga was not hired as a regular private establishment is absolutely prohibited.
flight attendant. Consequently, she filed a complaint against Mam-manu alleging
that the pre-employment qualifications violate relevant provisions of the Labor
Code and are against public policy. Is the contention of lngga tenable? Why? False. Children below fifteen (15) years of age (can be employed) “when he/she
(5%) (2012 BAR) works directly under the sole responsibility of his/her parents or guardian, and
his employment does not in any way interfere with his schooling.”
Yes. Man-manu’s pre-employment requirement cannot be justified as a “bona
fide occupational qualification,” where the particular requirements of the job Iya, 15 years old, signed up to model a clothing brand. She worked from 9am to
would justify it. The said requirement is not valid because it does not reflect an 4 pm on weekdays and 1pm to 6pm on Saturdays for two (2) weeks. She was
inherent quality that is reasonably necessary for a satisfactory job performance. issued a child working permit under RA 9231. Which of the following statements
[PT&T v. NRLC, G.R. No. 118978, May 23, 1997 citing 45A Am. Jur. 2d, Job is the most accurate? (2012 Bar Question)
Discrimination, Sec. 506, p.468) Another a. Working permit for Iya’s employment is not required because the job is nit
hazardous;
b. Her work period exceeds the required working hours for children aged 15
Yes, Ingga’s contention is tenable considering Art. 136 of the Labor Code which years old;
prohibits discrimination against married women. c. TO require a 15-year old to work without obtaining the requisites working
c. Prohibited acts permit is a form of child labor;
d. Anti-Sexual Harassment Act (R.A. No. 7877) d. Iya, who was engaged in a work that is not child labor, is a working child.

Atty. Renan, a CPA-lawyer and Managing Partner of an accounting firm,

conducted the orientation seminar for newly-hired employees of the firm, among d. Iya, who was engaged in a work that is not child labor, is a working child [Sec.
them, Miss Maganda. After the seminar, Renan requested Maganda to stay, 12-A, 8 hours but not beyond 40 hours].
purportedly to discuss some work assignment. Left alone in the training room,
Page 72 of 307 In what situation is an employer permitted to employ a minor? (2012 Bar
Labor Law Question)
Renan asked Maganda to go out with him for dinner and ballroom dancing. a. 16-year old child actor as a cast member in soap opera working 8
Thereafter, he persuaded her to accompany him to the mountain highway in hours a day, 6 days a week;
Antipolo for sight-seeing. During all these, Renan told Maganda that most, if not b. A 17-year old in deep sea-fishing;
all, of the lady supervisors in the firm are where they are now, in very productive c. A 17-year old construction worker;
and lucrative posts, because of his favorable endorsement. d. A 17-year old assistant cook in a family restaurant.
[a] Did Renan commit acts of sexual harassment in a work-related or Page 74 of 307
employment environment? Reasons. (3%) Labor Law

Atty. Renan is guilty of sexual harassment. This conclusion is predicated upon d. A 17-year old assistant cook in a family restaurant [Sec. 12, RA 7610, as
the following consideration: amended by Sec. 2, RA 9231, Dec. 19, 2003]
1. Atty. Renan has authority, influence or moral ascendancy over Miss Maganda; L. Househelpers (Labor Code as amended by R.A. No. 7655, An Act Increasing
2. While the law calls for a demand, request or requirement of a sexual favor, it the Minimum Wage of Househelpers; see also – Household Service under the
is not necessary that the demand, request or requirement of a sexual favor be Civil Code)
articulated in a categorical oral or written statement. It may be discerned, with
equal certitude from the acts of the offender. (Domingo v. Rayala, 546 SCRA 90 Are there differences between a househelper and a homeworker? Explain your
[2008]); answer. (4%) (2017 Bar Question)
 Househelper refers to any person, whether male or female, who renders services (A) No, since a househelper can be dismissed only for just cause or when his
in and about the employer's home and which services are usually necessary or agreed period of employment ends. (B) Yes, since it is the employer who
desirable for the maintenance and enjoyment thereof, and ministers exclusively determines the period of his service. (C) Yes, since a househelper can be
to the personal comfort and enjoyment of the employer's family (Rule XIII, dismissed with or without just cause. (D) No, since a househelper can be
Section I(b), Book 3, Labor Code; Apex Mining Company, Inc. v. NLRC, G.R. dismissed only for just cause, except when he has been employed for a definite
No. 94951, April 22, 1991, 196 SCRA 251), homeworker, on the other hand, is period not exceeding one year.
one who works in a system of production under an employer or contractor whose
job is carried out at his/her home, the materials of which may or may not be Linda was employed by Sectarian University (SU) to cook for the members of a
furnished by the employer or contractor (Department Order No. 005-92). The religious order who teach and live inside the campus. While performing her
househelper is covered by the Kasambahay Law; whereas, the homeworker is assigned task, Linda accidentally burned herself. Because of the extent of her
subject to the provisions of Book Ill of the Labor Code. The househelper works injuries, she went on medical leave. Meanwhile, SU engaged a replacement
in another person's home; whereas, the homeworker does his job in the confines cook. Linda filed a complaint for illegal dismissal, but her employer SU
of his own home. The househelper has a definite employffrrrrrer while the contended that Linda was not a regular employee but a domestic househelp.
homeworker has none. The househelper has security of tenure, which the Decide. (2014 Bar Question)
homeworker does not have.

In the case of a househelper, reinstatement is not a statutory relief for unjust The employer's argument that Linda was not a regular employee has no merit.
dismissal because of the confidentiality of his or her job. Instead, the househelper The definition of domestic servant or househelper contemplates one who is
shall be paid (2011 BAR) (A) an indemnity equivalent to 15 days' pay plus employed in the employer’s home to minister exclusively to the personal comfort
compensation already earned. (B) a separation pay equivalent to one month's pay and enjoyment of the employer’s family. The Supreme Court already held that
per year of service. (C) a separation pay equivalent to one-half month's pay per the mere fact that the househelper is working in relation to or in connection with
year of service. (D) 15 days' pay as indemnity plus wages lost from dismissal to its business warrants the conclusion that such househelper or domestic servant is
finality of decision. and should be considered as a regular employee. (Apex Mining Co., Inc. v.
NLRC, G.R. No. 94951, April 22, 1991). Here, Linda was hired not to minister
Soledad, a widowed school teacher, takes under her wing one of her students, to the personal comfort and enjoyment of her employer's family but to attend to
Kiko, 13 years old, who was abandoned by his parents and has to do odd jobs in other employees who teach and live inside the campus.
order to study. She allows Kiko to live in her house, provides him with clean SUGGESTED ALTERNATIVE ANSWER:
clothes, food, and a daily allowance of 200 pesos. In exchange, Kiko does The complaint for illegal dismissal should be dismissed. There was no showing
routine that in hiring the replacement cook, SU severed its employer-employee
Page 75 of 307 relationship with Linda. In illegal dismissal cases, an employee must first
Labor Law establish, by substantial evidence, the fact of dismissal before shifting to the
housework, consisting of cleaning the house and doing errands for Soledad. One employer the burden of proving the validity of such dismissal. (Grand Asian
day, a representative of the DOLE and the DSWD came to Soledad's house and Shipping Lines, Inc., Eduardo P. Francisco and William How v. Wilfred Galvez,
charged her with violating the law that prohibits work by minors. Soledad objects et al., G.R. No. 178184, January 29, 2014). Here, Linda's dismissal was not
and offers as a defense that she was not requiring Kiko to work as the chores clearly established.
were not hazardous. Further, she did not give him chores regularly but only
intermittently as the need may arise. Is Soledad's defense meritorious? (2015 Bar Albert, a 40-year old employer, asked his domestic helper, Inday, to give him a
Question) private massage. When Inday 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 convenience.
Soledad’s defense is meritorious. Sec. 4(d) of the Kasambahay Law (RA 10361) [a] Is Inday’s refusal tenable? Explain. (3%) (2009 Bar Question)
provides that the term “Domestic Worker” shall not include children who are xxx
under foster family arrangement, and are provided access to education and given Page 77 of 307
an allowance incidental to education, i.e. “baon”, transportation, school projects Labor Law
and school activities.

Which of the following statements is the most accurate? (2012 Bar Question) Yes. Inday’s refusal to give her employer a “private massage” is in accordance
a. Domestic helpers with monthly income of at least P3,000.00 are compulsory with law because the nature of the work of a domestic worker must be in
members of the SSS Law; connection with household chores. Massaging is not a domestic work.
b. House helpers with monthly income of at least P2,000.00 are compulsory
members of the SSS Law; Nova Banking Corporation has a rest house and recreational facility in the
c. Domestic helpers, 55 years of age and who worked for at least five (5) years, highlands of 'Tagaytay City for the use of its top executives and corporate
are covered by the Retirement Pay Law under optional retirement, in the absence clients. The rest house staff includes a caretaker, two cooks and laundrywoman.
of a CBA; All of them are reported to the Social Security System as domestic or household
d. Domestic helpers in the personnel service of another are not entitled to 13th employees of the rest house and recreational facility and not of the bank. Can the
month pay. bank legally consider the caretaker, cooks and laundrywoman as domestic
employees of the rest house and not of the bank? (3%)

d) Domestic helpers in the personnel service of another are not entitled to 13th
month pay. No, they are not domestic employees. They are bank employees because the rest
house and recreational facility are business facilities as they are for use of the top
What is the nature of employment of househelpers? (2012 Bar Question) executives and clients of the bank. [Art. 141, Labor Code; Apex Mining Co., Inc.
a. Seasonal; v. NLRC, 196 SCRA 251 (1991)-, Traders Royal Bank v. NLRC, G.R. No.
b. Fixed-term; 127864, December 22, 19991.
c. Regular; The weekly work schedule of a driver is as follows: Monday, Wednesday, Friday
d. Probationary. - drive the family car to bring and fetch the children to and from school.
Tuesday, Thursday, 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
a) Fixed-Term [Not to exceed 2 years but “renewable for such periods as may be the driver a house helper? (5%) (2012 BAR)
agreed upon by the parties” [Art. 242, Labor Code]
Yes, insofar as concerns his work on “Monday, Wednesday and Friday”, as he
Is it correct to say that under Philippine law a househelper has no right to ministers to the personal comfort and enjoyment of his employer’s family during
security of tenure? (2011 BAR) those days. [Apex Mining Company, Inc. v. NLRC (G.R. No. 94951, April 22,
Page 76 of 307 1991, 196 SCRA 251, 254-255)]. b. The same driver claims that for work
Labor Law performed on Tuesday, Thursday and Saturday, he should be paid the minimum
daily wage of a driver of a commercial establishment. Is the claim of the driver Labor Law
valid? (5%) (2012 BAR) They differ in the focus and terms of training. An apprentice trains in a highly
skilled job or in any job found only in highly technical industries. Because it is a
highly skilled job, the training period exceeds three months. For a learner, the
Page 78 of 307 training period is shorter because the job is more easily learned than that of
Labor Law apprenticeship. The job, in other words, is "non- apprenticeable" because it is
Yes, as during said days, he already works not as a domestic servant but as a practical skills which can be learned in three (not six) months. A learner is not an
regular employee in his employer’s boutique in a mall [Apex Mining Company, apprentice but an apprentice is, conceptually, also a learner.
Inc. v. NLRC (supra)]. Accordingly, because the job is more easily learnable in learnership than in
apprenticeship, the employer is committed to hire the learner- trainee as an
Under the Labor Code, its provisions on working conditions, including the eight- employee after the training period. No such commitment exists in apprenticeship.
hour work day rule, do not apply to domestic helpers. Does it follow from this Finally, employment of apprentices, as stated in Article 60, is legally allowed
that a domestic helper's workday is not limited by law? (2011 BAR) (A) No, only in highly technical industries and only in apprenticeable occupations
since a domestic helper cannot be required to work more than ten hours a day. approved by the DOLE. Learnership is allowed even for non- technical jobs.
(B) Yes, since a domestic helper's hours of work depend on the need of the
household he or she works for. (C) No, because a domestic helper is legally A handicapped worker may be hired as apprentice or learner, provided (2011
entitled to overtime pay after ten hours of work. (D) Yes, a domestic helper may BAR) (A) he waives any claim to legal minimum wage. (B) his work is limited
be required to work twelve hours a day or beyond. to apprenticeable job suitable to a handicapped worker. (C) he does not impede
M. Employment of Homeworkers job performance in the operation for which he is hired. (D) he does not demand
regular status as an employee.
In industrial homework, the homeworker does at his home the work that his
employer requires of him, using employer-supplied materials. It differs from The apprenticeship program should be supplemented by theoretical instruction to
regular factory work in the sense that (2011 BAR) (A) the workers are not be given by (A) the apprentice's school only where the apprentice is formally
allowed to form labor organizations. (B) the workers' pay is fixed by informal enrolled as a student. (B) the employer if the apprenticeship is done in the plant.
agreement between the workers and their employer. (C) the workers are under (C) the civic organizations that sponsor the program. (D) the Department of
very little supervision in the performance or method of work. (D) the workers are Labor and Employment.
simply called “homeworkers,” not “employees,” hence not covered by the social
security law. What is not a prerequisite for a valid apprenticeship agreement? (2012 Bar
Question)
Albert, a 40- year old employer, asked his domestic helper, Inday, to give him a a. Qualifications of an apprentice are met;
private massage. When Inday refused, Albert showed her Article 141 of the b. A duly executed and signed apprenticeship agreement;
Labor Code, which says that one of the duties of a domestic helper is to minister c. The apprenticeship program is approved by the Secretary of Labor;
to the employer’s personal comfort and convenience. d. Included in the list of apprenticeable occupation of TESDA.
xxx
[b] Distinguish briefly, but clearly, a “househelper” from a “homeworker.” (2%)
(2009 Bar Question) Page 81 of 307
Labor Law
c. The apprenticeship program is approved by the Secretary of Labor. [Sec 18,
Art. 141. - Domestic Helper - one who performs services in the employers house RA 7796 – The apprenticeship Program of DOLE shall be transferred to TESDA
which is usually necessary or desirable for the maintenance and enjoyment which shall implement and administer said program].
thereof and includes
Page 79 of 307 Which is a characteristic of the learner? (2012 Bar Question)
Labor Law a. A person is hired as a trainee in an industrial occupation;
ministering to the personal comfort and convenience of the members of the b. Hired in a highly technical industry;
employer’s household, including the services of a family driver. c. Three (3) months practical on-the-job training with theoretical instruction;
Art. 153.- Homeworker -is an industrial worker who works in his/her home d. At least 14 years old.
processing raw materials into finished products for an employer. It is a
decentralized form of production with very limited supervision or regulation of
methods of work. a) A person is hired as a trainee in an industrial occupation. [Art. 73, Labor
N. Apprentices and Learners Code]

Distinguish a learner from an apprentice. (4%) (2017 Bar Question) Both apprenticeship and learnership are government programs to provide
practical on-the-job training to new workers. How do they differ with respect to
1. As to nature: a learner trains in a semi-skilled job; whereas, apprentice trains period of training? (2011 BAR) (A) In highly technical industries, apprenticeship
in a highly technical job. 2. As to period: a learner is for three months; whereas, can exceed 6 months; learnership can exceed one year. (B) Apprenticeship
an apprentice is not less than three months but not more than six months, as rule. cannot exceed 6 months; learnership can. (C) Apprenticeship shall not exceed six
3. As to commitment to employ: Fora learner, there is a commitment to employ months; while learnership shall not exceed three months. (D) The law lets the
the learner, as regular employees if he so desire, upon completion of the employer and the apprentice agree on the apprenticeship period; but the law fixes
learnership; whereas, for an apprentice, is no such commitment. 4. As to learnership period at six months in non-technical industries. Q: Although both
necessity of TESDA approval: For a learner, TESDA approval is not necessary, are training programs, apprenticeship is different from learnership in that (2011
only TESDA inspection is required; whereas, for an apprentice, prior approval by BAR) (A) a learner may be paid 25% less than the legal minimum wage while an
TESDA is required. 5. As to deductibility of expenses: Fora learner, there is no apprentice is entitled to the minimum wage. (B) apprenticeship has to be covered
for deductibility of expenses; whereas, for an apprentice, of training are by a written agreement; no such formality is needed in learnership. (C) in
deductible from income tax. 6. As to compensation: a learner has compensation; learnership, the employer undertakes to make the learner a regular employee; in
an apprentice has none if DOLE authorizes, as when required by the school. apprenticeship, no such undertaking. (D) a learner is deemed a regular employee
if terminated without his fault within one month of training; an apprentice attains
Differentiate learnership from apprenticeship with respect to the period of employment status after six months of apprenticeship. O. Persons with disability
training, type of work, salary and qualifications. (2016) (R.A. No. 7277, as amended by R.A. No. 9442) a. Definition
Page 82 of 307
Labor Law
Learnership and apprenticeship are similar because they both mean training
periods for jobs requiring skills that can be acquired through actual work According to Article 78 of the Labor Code, a handicapped worker is one whose
experience. And because both a learner and an apprentice are not as fully earning capacity is impaired by the following, except: (2012 Bar Question)
productive as regular workers, the learner and the apprentice may be paid wages a. Age;
twenty-five percent lower than the applicable legal minimum wage. b. Physical Deficiency;
Page 80 of 307 c. Mental Deficiency;
d. Psychological Deficiency. Labor Law
Arbiter a complaint for illegal dismissal. Will their action prosper? Why or why
not? (5%) (2012 BAR)
d) Psychological Deficiency [Art. 78, Labor Code]
b. Rights of persons with disability No. An employment contract with a fixed term terminates by its own terms at
the end of such period. The same is valid if the contract was entered into by the
A lady worker was born with a physical deformity, specifically, hard of hearing, parties on equal footing and the period specified was not designed to circumvent
speech impaired and color blind. However, these deficiencies do not impair her the security of tenure of the employees. (Brent School v. Zamora, 181 SCRA
working ability. 702).
Can the employer classify the lady worker as a handicapped worker so that her IV. Termination of Employment
daily wage will only be seventy-five percent (75%) of the applicable daily
minimum wage? [5%] When the employer or his representative hurls serious insult on the honor or
person of the employee, the law says that the employee (2011 BAR) (A) may
leave work after at least a five-day notice to the employer. (B) may leave work at
No, the employer cannot classify the lady worker as a handicapped worker any time and file for constructive dismissal. (C) may leave work without giving a
because according to the facts in the question, her deficiencies do not impair her 30-day notice to the employer. (D) may abandon his job at once.
working ability. If her earning capacity is therefore not also impaired, then she A. Employer-employee relationship
cannot be considered a handicapped worker.
Because of the above fact, the employer shall not pay her less than the applicable Dr. Crisostomo entered into a retainer agreement with AB Hotel and Resort
daily minimum wage. (See Article 78 of the Labor Code) whereby he would provide medical services to the guests and employees of AB
Hoteland Resort, which, in turn, would provide the clinic premises and medical
Which of the following is not a privilege of a person with disability under the supplies. He received a monthly retainer fee of ₱60,000.00, plus a 70% share in
Magna Carta for disabled persons? (2012 Bar Question) the service charges from AB Hotel and Resort's guests availing themselves of the
a. At least 20% discount on purchase of medicines in all drugstores; clinic's services. The clinic employed nurses and allied staff, whose salaries, SSS
b. Free transportation in public railways; contributions and other benefits he undertook to pay. AB Hotel and Resort issued
c. Educational assistance in public and private schools through scholarship directives giving instructions to him on the replenishment of emergency kits and
grants; forbidding the clinic staff from receiving cash payments from the guests. In time,
d. A and C. the nurses and the clinic staff claimed entitlement to rights as regular employees
SUGGESTED ANSWERS: of AB Hoteland Resort, but the latter refused on the ground that Dr. Crisostomo,
a) At least 20% discount on purchase of medicines in all drugstores [Magna who was their employer, was an independent contractor. Rule, with reasons.
Carta of PWDs] (4%) (2017 Bar Question)
b) Free transportation in public railways.
Page 83 of 307 I will rule in favor of AB Hoteland Resort. Applying the Four-Fold Test will
Labor Law readily show that the real employer of.the nurses and the clinic staff is Dr.
c) Prohibition on discrimination against persons with disability Crisostomo and not AB Hoteland Resort, viz: (1) the selection and engagement
d) Incentives for employers of the nurses and clinic staff were made by Dr. Crisostomo; (2) their wages were
paid by Dr. Crisostomo. As a mgtter of
The minimum wage prescribed by law for persons with disability is __________. Page 85 of 307
(2013 Bar Questions) Labor Law
(A) 50% of the applicable minimum wage fact, SSS contributions were paid by him which, by itself, is already an indication
(B) 75% of the applicable minimum wage that he is the employer. Although he did not exercise the power of dismissal, it
(C) 100% of the applicable minimum wage can be said that as the doctor, he has the control of his employees' conduct in the
(D) the wage that the parties agree upon, depending on the capability of the dispensing of medical services to the guests and personnel of the resort. The fact
disabled. that AB Hoteland Resort gave instructions to him regarding replenishment of
(E) the wage that the parties agree upon, depending on the capability of the emergency kits and forbidding his staff from receiving cash payments from
disabled, but not less than 50% of the applicable minimum wage guests is of no consequence. They are nothing more but guidelines which will not
create an employer-employee relationship (Insular Life Co., Ltd. v. NLRC, G.R.
No. 84484, November 15, 1989, 179 SCRA 459). ALTERNATIVE ANSWER: I
(B) will rule in favor of the employees. In the case of Samonte v. La Salle Greenhills,
Note: This is the general rule. As an exception, if the employee is qualified to Inc. (G.R. No. 199683, February 10, 2016), the Court held that "Time and again,
work and the disability has nothing to do with the work, the employee is entitled we have held that the power of control refers to the existence of the power and
to 100%. not necessarily to the actual exercise thereof, nor is it essential for the employer
to actually supervise the performance of duties of the employee. It is enough that
What is the financial incentive, if any, granted by law to SPQ Garments whose the employer has the right to wield that power." Such power is present in the
cutters and sewers in its garments-for-export operations are 80% staffed by deaf hands of AB Hoteland Resort. Q: (2017 Bar Question) A. What are the accepted
and deaf-mute workers? (2013 Bar Questions) tests to determine the existence of an employer-employee relationship? (5%)
(A) Additional deduction from its gross income equivalent to 25% of amount
paid as salaries to persons with disability. The accepted tests to determine the existence of an employer-employee
(B) Additional deduction from its gross income equivalent to 50% of the direct relationship are: A) • Four-fold Test: 1. The selection and engagement of the
costs of the construction of facilities for the use of persons with disability. employees; 2. The payment of wages 3. The power of dismissal; and 4. The
(C) Additional deduction from its net taxable income equivalent to 5% of its total power to control the employees' conduct (The Manila Hotel corp. v. NLRC, G.R.
payroll No. 154591, March S, 2007, 343 SCRA 1). The most important test is the
(D) Exemption from real property tax for one (1) year of the property where element of control, which has been defined as the '"right to control not only the
facilities for persons with disability have been constructed. end to be achieved but also the means to be used in reaching such end" (LVN
(E) The annual deduction under (A), plus a one-time deduction under (B). Pictures v. Philippine Musicians Guild, GSR. No. L-12582, January 28, 1961, 1
SCRA 132). B) Economic reality Test:
Page 86 of 307
(A) Labor Law
Basis: Magna Carta for Disabled Persons. The Supreme Court has also used the economic reality test, where the economic
c. Prohibition on discrimination against persons with disability realities prevailing within the activity or between the parties are exam ined,
For humanitarian reasons, a bank hired several handicapped workers to count and taking into consideration the totality of circumstances surrounding the true nature
sort out currencies. The handicapped workers knew that the contract was only for of the relationship between the parties (Orozco v. Court of Appeals, G.R. No.
a period of six-months and the same period was provided in their employment 155207, August 13, 2008, 562 SCRA 36). B. Applying the tests to determine the
contracts. After six months, the bank terminated their employment on the ground existence of an employer-employee relationship, is a jeepney driver operating
that their contract has expired. This prompted the workers to file with the Labor under the boundary system an employee of his jeepney operator or a mere lessee
Page 84 of 307 of the jeepney? Explain your answer. (3%)
 set of officers, with himself as President and Chief Executive. Mr. Epol would be
The jeepney driver operating under the boundary system is an employee of the re-elected only to the ceremonial post of Board Chairman, Mr. Epol got a Notice
jeepney operator, not a mere lessee. The jeepney operator exercises supervision of Special Meeting of the Board to elect a new set of corporate officers. He
and control over the jeepney driver. The jeepney operator, as holder of the consults you as lawyer.
certificate -of public convenience, must see to it that the jeepney driver follows He asks if he is covered by the Labor Code and Constitutional guarantees of
the route prescribed by the franchising authority and the rules promulgated as security of tenure of workers. He theorizes that since he was elected for a fixed
regards its operation. Moreover, jeepney drivers perform activities which are one-year term, he enjoys tenure for the term.
usually necessary or desirable in the usual business or trade of the jeepney (a) What is you view? Reasons.
operator (Jardin, etal. v. NLRC, G.R. No. 119268, February 23, 2000, 326 SCRA Mr. Epol, despite your opinion, observes that the Constitutional issue was not
299). raised in those cases. He is adamant that you seek recourse to prevent his
Juicy Bar and Night Club allowed by tolerance fifty (50) Guest Relations removal as President and Chief Executive Officer before his term expires.
Officers (GROs) to work without compensation in its establishment under the (b) Where will you file the case?
direct supervision 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 (a) Mr. Epol is not covered by the Labor Code and Constitutional guarantees of
Were required to stay up to closing time. The GROs earned their keep security of tenure or workers. He is not an employee. He is a corporate officer
exclusively from commissions for food and drinks, and tips from generous and his tenure is subject to the Constitution and by-laws of the corporation and of
customers. In time, the GROs formed the Solar Ugnayan ng mga Kababaihang the Corporation Code.
lnaapi (SUKI), a labor union duly registered with DOLE. Subsequently, SUKI (b) I will file the case before the Securities and Exchange Commission which has
filed a petition for Certification Election in order to be recognized as the jurisdiction over the case. Whether or not Mr. Ramos and the other stockholders
exclusive bargaining agent of its members. Juicy Bar and Night Club opposed legally re-organized out Mr. Epol is an intra-corporate dispute. Since it is an
the petition for Certification Election on the singular ground of absence of intra-corporate dispute which is involved, it is the SEC which has jurisdiction.
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 Employees-employer relationship exist under the following, except: (2012 Bar
purposes of collective bargaining? Explain briefly. (5%) (2012 BAR) Question)
a. Jean, a guest relations officer in a nightclub and Joe the nightclub owner;
Yes. The GROs worked under the direct supervision of the Nite Club Manager b. Atty. Sin Cruz, who works part-time as the resident in-house lawyer of X
for a substantial period of time. Hence, under Art. 138, with or without Corporation;
compensation, the GROs are to be deemed employees. As such, they are entitled c. Paul, who works as registered agent on commission basis in an insurance
to all the rights and benefits granted to employees/workers under the Constitution company.
and other pieces of labor d. Jack and Jill, who work in X Company, an unregistered Association.
Page 87 of 307
Labor Law
legislation including the right to form labor organizations for purposes of Page 89 of 307
collective bargaining. [Const., Art. XIII, Sec. 3; Labor Code, Art. 243). Another Labor Law
Alternative Answer: c) Paul, who works as registered agent on commission basis in an insurance
No. While the GROs are considered employees of Juicy Bar and Night Club by company. [Great Pacific Life Assurance Corp. v. Judico, G.R. No. 73887, Dec.
fiction of law for purposes of labor and social legislation (ART. 138, Labor 21, 1989].
Code), Art. 243 of the Labor Code however excludes “ambulant, intermittent and
itinerant workers xxx ad those without any definite employers” such as the GROs Lina has been working as a steward with a Miami, U.S.A.-based Loyal Cruise
here, from exercising “the right to self-organization xxx for purposes of Lines for the past 15 years. She was recruited by a local manning agency,
collective bargaining”. They can only “form labor organization for their mutual Macapagal Shipping, and was made to sign a 10-month employment contract
aid and protection”. 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
TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the which happened during her last cruise assignment, Lina was not re-hired. Lina
statement is false. Explain your answer in not more than two (2) sentences. (5%) claims she has been illegally terminated and seeks separation pay. If you were
[a] The relations between employer and employee are purely contractual in the Labor Arbiter handling the case, how would you decide? (2014 Bar
nature. (2%) (2010 Bar Question) Question)

FALSE. Some aspects of the relations between employer and employee are I will dismiss Lina's complaint. Lina is a contractual employee and the length of
determined by certain labor standards. her employment is determined by the contracts she entered into. Here, her
ALTERNATIVE ANSWER: employment was terminated at the the expiration of the contract (Millares, et al.
FALSE. The Constitution, Labor Code, Civil Code and other social legislations v. NLRC, 385 SCRA 306, 318 [2002]).
are replete with provisions that define employment relationship even without
contract, with the intention of insuring that all the rights of labor are protected. Ador is a student working on his master's degree in horticulture. To make ends
Article 1700 of the Civil Code provides that “[T]he relations between capital and meet, he takes on jobs to come up with flower arrangements for friends. His
labor are not merely contractual. They are so impressed with public interest that neighbor, Nico, is about to get married to Lucia and needs a floral arranger. Ador
labor contracts must yield to the common good.” offers his services and Nico agrees. They shake hands on it, agreeing that Nico
In Article 106 of the Labor Code, the principal is deemed as a direct employer in will pay Ador :P20,000.00 for his services but that Ador will take care of
labor-only contracting, despite absence of contractual relationship between the everything. As Ador sets about to decorate the venue, Nico changes all of Ador's
worker and the principal reduced in writing. plans and ends up designing the arrangements himself with Ador simply
Equity likewise affords the aggrieved party relief in a case where an agent was executing Nico's instructions.
given apparent authority by the employer to represent it to third persons, such as (a) Is there an employer-employee relationship between Nico and Ador? (2015
in a relationship between hospitals and doctors practicing medicine in its Bar Question)
establishment (Nogtales v. Capitol Medical Center, 511 SCRA 204 [2006]). (b) Will Nico need to register Ador with the Social Security System (SSS)?
(2015 Bar Question)
Mr. Aristedes Epol was elected as President, Chief Executive Officer, and Board
Chairman of Transnational Insurance Corp. on May 31, 1988. At that time, he
owned (a) Yes. With Ador’s simply executing Nico’s instruction, Nico, who now has
Page 88 of 307 control over Ador’s work, has become the employer of Ador. In Royale Homes
Labor Law Marketing Corp. v. Fidel Alcantara (G.R. No. 195190, July 28, 2014) the
51% of the company’s voting stock. Under the By-Laws of the company he had a Supreme Court held that control is the most important determinant of employer-
one-year term of office from June 1, 1988 to June 1, 1989. On July 15, 1988, Mr. employee relationship.
Ramos agreed with the other stockholders to re-organize the composition of
officers by having the Board declare all positions of officers vacant, elect a new
(b) Yes, as under Section 9 of the Social Security Law (Art. 1161 as amended), fee depending on the number of workers serving the company. After two years,
coverage in the SSS shall be compulsory upon all employees not over sixty (60) all the workers assigned by Jack Perez to the company Joined the United
years of age and their employers. Restaurant Workers Union. Soon thereafter, the labor union sought recognition
ANOTHER from the Smarty Food Company and requested for collective bargaining negotia-
tions. Thereupon, the company terminated its service contract with the San
Jacinto Manpower Agency and prevented the latter's workers from entering the
Page 90 of 307 company premises. To keep its business going, the Smarly Food Company
Labor Law secured its manpower needs from
(b) If Ador is a purely casual employee: Page 92 of 307
No. Casual employees are not subject to the compulsory coverage of the SSS by Labor Law
express provision of law. (Section 8(5) (3), RA 1161, as amended) another service agency. The labor union then filed a complaint for unfair labor
SUGGESTED ALTERNATIVE ANSWER: practice under Article 248(a) of the Labor Code against the Smarty Food
(a) There is no employer-employee relationship. The case at hand pertains to a Company.
civil law arrangement. There is no business undertaken by Lucia; what the Has the Smarty Food Company succeeded in avoiding its labor relations
parties have is a contract for a specific service. obligations to the workers of San Jacinto Manpower Agency? Is the company
guilty of unfair labor practice? Give your reasons.
Baldo, a farm worker on pakyaw basis, had been working 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 Smarty Food Company has not succeeded in avoiding its labor relations
the sense that it was done for more than one harvesting season. obligation to the workers of San Jacinto Manpower Agency. Under the facts of
[a] Was Dencio required to report Baldo for compulsory social security coverage the case in the question, the cooks, waiters, waitresses, dishwashers and other
under the SSS law? Explain. (2016) workers supplied by San Jacinto Manpower Agency are employees of Smarty
SUGGESTED ANSWERS: Food Company and not of the Agency because said workers are performing
Dencio is required to report Baldo for compulsory social security coverage under activities which are directly related to the principal business of Smarty Food
the SSS Law. From the facts mentioned, Baldo is clearly an employee of Dencio. Company which is engaged in the restaurant and catering business. It is also
Considering the length of time that Baldo has worked with Dencio, it may be noted that the Agency does not have substantial capital or investment in the form
justifiably concluded that he is engaged to perform activities necessary or of tools, equipment machineries and work premises. It does not have a separate
desirable in the usual trade or business of Dencio and is therefore a regular regular business office and merely operates its business from the house of the
employee. Length of service was used by the Supreme Court in the case of owner/operator of the Agency. Thus, under the above circumstances, under the
Brotherhood Labor Unity Movement of the Philippines v. Zamora, (G.R. No. Labor Code (Art. 106) the Agency is engaged in "labor only" contracting arid
485451 January 7, 1987), to pronounce that the individual involved is a regular should therefore be considered merely as an agent of the employer, meaning
employee. Baldo, is thus, not a casual or temporary employee, exempted from Smarty Food Company.
the coverage of the SSS Law. Because of the fact that Smarty Food Company is the employer of the cooks,
[b] What are the liabilities of the employer who fails to report his employee for waiters, waitresses, dishwashers and other workers, the Company was guilty of
social security coverage? Explain. unfair labor practice when it terminated their services by terminating its service
contract with the Agency. The Company thereby discriminated against its
workers to discourage membership in any labor organization which is an unfair
The employer is subject to the following liabilities: It shall pay to the SSS labor practice. The Company also committed an unfair labor practice when it
damages equivalent to the benefit which the employee would have been entitled violated its duty to bargain collectively by refusing to meet with the United
had his name been reported on time to the SSS, except that in case of pension Workers Restaurant Workers Union which was organized by the workers of the
benefits, the employer shall be liable to pay the SSS damages equivalent to five Company.
years monthly pension; however, if the contingency occurs within thirty (30)
days from date of employment, the employer Don Jose, a widower, owns a big house with a large garden. One day, his
Page 91 of 307 househelper and gardener left after they were scolded. For days, Don Jose, who
Labor Law lives alone in compound to look for someone who could water the plants in the
shall be relieved of his liability for damages (Sec. 24 (a), R.A. 1161, as garden and clean the house. He chanced upon Mang Kiko on the street and asked
amended). It shall pay the corresponding unremitted contributions and penalties him to water the plants and clean the house.
thereon (Sec.24 (b), R.A. 1161, as amended). Without asking any question. Mang Kiko attended to the plants in the garden and
1. Four-fold test cleaned the house. He finished the work in two days.
a) Is there an employer-employee relationship between Don Jose and Mang
Reach-All, a marketing firm with operating capital of P100,000, supplied sales Kiko?
persons to pharmaceutical companies to promote their products in hospitals and xxx
doctors' offices. Reach-All trained these sales persons in the art of selling but it is Page 93 of 307
the client companies that taught them the pharmacological qualities of their Labor Law
products. Reach-All’s roving supervisors monitored, assessed, and supervised
their work performance. Reach-All directly paid their salaries out of contractor's
fees it received. Under the circumstances, can the sales persons demand that they There is an employer-employee relationship between Don Jose and Mang Kiko
be absorbed as employees of the pharmaceutical firms? (2011 BAR) (A) No, because Mang Kiko, assuming payment of compensation, was rendering services
they are Reach-All’s employees since it has control over their work performance. for Don Jose and was under the orders of Don Jose as regards employment.
(B) Yes, since they receive training from the pharmaceutical companies xxx
regarding the products they will promote. (C) No, since they are bound by the
agency agreement between Reach-All and the pharmaceutical companies. (D) Pandoy, an electronics technician, worked within the premises of Perfect
Yes, since Reach-All does does not qualify as independent contractoremployer, Triangle, an auto accessory shop. He filed a complaint for illegal dismissal,
its clients being the source of the employees’ salaries. overtime pay and other benefits against Perfect Triangle, which refused to pay
his claims on the ground that Pandoy was not its employee but was an
The Smarly Food Company is engaged in the restaurant and catering business. independent contractor. It was common practice for shops like Perfect Triangle
Having invested a substantial amount of money to establish its business, the to collect the service fees from customers and pay the same to the independent
company decided to avoid its legal responsibilities in connection with the contractors at the end of each week. The auto shop explained that Pandoy was
selection of employees, their social security and other labor relations problems. like a partner who worked within its premises, using parts provided by the shop,
To this end, the company engaged the services of Jack Perez, doing business but otherwise Pandoy was free to render service in the other auto shops. On the
under the name of San Jacinto Manpower Agency, to supply it with cooks, other hand, Pandoy insisted that he still was entitled to the benefits because he
waiters, waitresses, dishwashers, and other workers. Jack Perez does not have a was loyal to Perfect Triangle-, it being a fact that he did not perform work for
separate regular business office. He operates his business from his own house. anyone else. Is Pandoy correct? Explain briefly. (5%)
Under this economic arrangement, Jack Perez pays the wages of the workers
assigned to the company directly and reports said workers to the Social Security
System as his own employees. He charges the Smarty Food Company a monthly Pandoy Is not correct.
He is not an employee because he does not meet the fourfold test for him to be an Shoe. In issuing ID's to the shoe shine boys, the same signifies that they can
employee of Perfect Triangle. Ail that he could claim is: he worked within the represent themselves as part of the work force of Matibay Shoe.
premises of Perfect Triangle. Pandoy was NOT engaged as an employee by The second element is also present. Requiring the customers to pay through the
Perfect Triangle. He was NOT paid wages by Perfect Triangle. Perfect Triangle Matibay Shoe's cashier signifies that their services were not engaged by the
does NOT have the power to dismiss him although Perfect Triangle may not customers. Equally important, it was Matibay Shoe which gave the shoe shine
continue to allow him to work within its premises. And most important of all, boys their daily wage.
Pandoy was NOT under the control of Perfect Triangle as regards the work he The third element is satisfied. Requiring the shoe shine boys to be present from
performs for customers. store opening until store closing and to follow company rules on cleanliness and
The Supreme Court has ruled: “In stark contrast to the Company’s regular decorum shows that they cannot conduct their activity anywhere else but inside
employees, there are independent, free-lance operators who are permitted by the the store of Matibay Shoe, hence, their means and methods of accomplishing the
Company to position themselves proximate to the Company premises. These desired services for the customers of Matibay Shoe was controlled by it.
independent operators are allowed by the Company to wait on Company Lastly, the fourth element is made apparent when Matibay Shoe barred the shoe
customers who would be requiring their services. In exchange for the privileges shine boys from continuing with their work-related activity inside its
of favorable recommendation by the Company and immediate access to the establishment.
customers in need of their services, these independent operators allow the ALTERNATIVE ANSWER:
Company to collect their service fee from the customer and this fee is given back No. The elements to determine the existence of an employment relationship are:
to the independent operator at the end of the week. In effect, they do not earn (a) the selection and engagement of the employee; (b) the payment of wages; (c)
fixed wages from the Company as their variable fees are earned by them from the the employer's power to control the employee's conduct; and (d) the power of
customers of the Company. The Company has no control over and does not dismissal.
restrict the methodology or the means and manner by which these operators The first element is absent. The mere issuance of an ID to the boys is not
perform their work. These operators are not supervised by any employee of the conclusive of the power of selection of Matibay Shoe. They may be given IDs
Company since the results merely as a security measure for the establishment.
Page 94 of 307 Furthermore, using the control test, the boys have exclusive power over the
Labor Law means and method by which the shoe shining activity is to be conducted.
of their work is controlled by the customers who hire them. Likewise, the
Company has no control as an employer over these operators. They are not The most important factor in determining the existence of an employer-employee
subject to the regular hours and days of work and may come and go as they wish. relationship is the: (2012 Bar Question)
They are not subject to any disciplinary measures from the Company, save a. Power to control the method by which employees are hired and selected;
merely for the inherent rules of general behavior and good conduct.” [Ushio Page 96 of 307
Marketing v. NLRC, 294 SCRA 673(1998)] Inggu, an electronics technician, Labor Law
worked within the premises of Pit Stop, an auto accessory shop. He filed a b. Power to control the manner by which employees are transferred from one job
Complaint for illegal dismissal, overtime pay and other benefits against Pit Stop. site to another;
Pit Stop refused to pay his claims on the ground that lnggu was not its employee c. Power to control the results achieved by giving guidelines to the employees;
but was an independent contractor . . It was common practice for shops like Pit d. Power to control the results to be achieved and the employee’s method of
Stop to collect the service fees from customers and pay the same to the achieving the task.
independent contractors at the end of each week. The auto shop explained that
lnggu was like a partner who worked within its premises, using parts provided by
the shop, but otherwise lnggu was free to render service in the other auto shops. d. Power to control the results to be achieved and the employee’s method of
On the other hand, lnggu insisted that he still was entitled to the benefits because achieving the task [Abante v. La Madrid Bearing Part Corp., 430 SCRA 368
he was loyal to Pit Stop, it being a fact that he did not perform work for anyone (2004]
else. Is lnggu correct? Explain briefly. (5%) (2012 BAR)
Don Luis, a widower, lived alone in a house with a large garden. One day, he
Yes. Inggu is an employee of the Pit Stop. Articles 1767 of the Civil Code states noticed that the plants in his garden needed trimming. He remembered that
that in a contract of partnership two or more persons bind themselves to Lando, a 17-year old out-of-school youth, had contacted him in church the other
contribute money, property or industry to a common fund, with the intention of day looking for work. He contacted Lando who immediately attended to Don
dividing the profits among themselves. Not one of these circumstances is present Luis’s garden and finished the job in three days. (2014 Bar Question)
in this case. No written agreement exists to prove the partnership between the (A) Is there an employer-employee relationship between Don Luis and Lando?
parties. Inggu did not contribute money, property and industry for the purpose of
engaging in the supposed business. There is no proof that he was receiving a
share in the profits as a matter of course. Neither is there any proof that he had Yes. All the elements of employer-employee relationship are present, viz:
actively participated in the management, administration and adoption of policies 1. the selection and engagement of the employee;
of the business. [Sy, et. al. v. Court of Appeals G.R. No 142293, February 27, 2. the power of dismissal;
2003]. 3. the payment of wages; and
4. the power to control the employee's conduct.
Matibay Shoe and Repair Store, as added service to its customers, devoted a There was also no showing that Lando has his own tools, or equipment so as to
portion of its store to a shoe shine stand. The shoe shine boys were tested for qualify him as an independent contractor.
their skill before being allowed to work and given ID cards. They were told to be SUGGESTED ALTERNATIVE ANSWER:
present from the opening of the store up to closing time and were required to None. Lando is an independent contractor for Don Luis does not exercise control
follow the company rules on cleanliness and decorum. They bought their own over Lando's means and method in tending to the former's garden.
shoe shine boxes, polish, and rags. The boys were paid by their customers for (B) Does Don Luis need to register Lando with the Social Security System
their services but the payment is coursed through the store's cashier, who pays (SSS)?
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 Yes. Coverage in the SSS shall be compulsory upon all employees not over sixty
the boys employees of the store? Explain. (2016) (60) years of age .
SUGGESTED ALTERNATIVE ANSWER:
Page 97 of 307
Page 95 of 307 Labor Law
Labor Law No. Lando is not an employee of Don Luis. What the parties have is a contract
Yes. The elements to determine the existence of an employment relationship are: for a piece of work which, while allowed by Article 1713 of the Civil Code, does
(a) the selection and engagement of the employee; (b) the payment of wages; (c) not make Lando an employee under the Labor Code and Social Security Act.
the employer's power to control the employee's conduct; and (d) the power of
dismissal. Gregorio was hired as an insurance underwriter by the Guaranteed Insurance
The first element is present, as Matibay Shoe allowed shoe shine boys in its shoe Corporation (Guaranteed). He does not receive any salary but solely relies on
shine stand to render services that are desirable in the line of business of Matibay 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) 29, 2002, 385 SCRA 306), which constitute stare decisis with respect to the
insurance policies, otherwise, he may be terminated. He was made to agree to a employment status of seafarers as contractual employees, not regular employees,
Code of Conduct for underwriters and is supervised by a Unit Manager. notwithstanding performance of-usually necessary and desirable functions which
[a] Is Gregorio an employee of Guaranteed? (2.5%) exceed one year or continuous rehiring.

For ten (10) separate but consecutive yearly contracts, Cesar has been deployed
No, Gregorio is not an employee of Guaranteed. Control is the most important as an able-bodied seaman by Meritt Shipping, through its local agent, Ace
element of employer-employee relationship, which refers to the means and Maritime Services (agency), in accordance with the 2000Philippine Overseas
methods by which the result is to be accomplished (Avelino Lambo and Vicente Employment Administration Standard Employment Contract (2000 POEA-SEC).
Belocura v. NLRC and J.C. Tailor Shop and/or Johnny Co., 375 Phil. 855 Cesar's employment was also covered by a CBA between the union, AMOSl.JP,
[1999]), .citing Makati Haberdashery, Inc. v. NLRC, 259 Phil. 52 [1989]. The and Meritt Shipping. Both the 2000 POEA-SEC and the CBA commonly provide
requirement of complying with quota, company code of conduct and supervision the same mode and procedures for claiming disability benefits. Cesar's last
by unit managers do not go into the means and methods by which Gregorio must contract (for nine months) expired on July 15, 2013.
achieve his work. He has full discretion on how to meet his quota requirement, Cesar disembarked from the vessel M/V Seven Seas on July 16, 2013as a seaman
hence, there is no employer- employee relationship between Gregorio and on "finished contract". He immediately reported to the agency and complained
Guaranteed. that he had been experiencing spells of dizziness, nausea, general weakness, and
ALTERNATIVE ANSWER: difficulty in breathing. The agency referred him to Dr. Sales, a cardio-pulmonary
Yes, Gregorio is Guaranteed's employee. The fact that Gregorio was made to specialist, who examined and treated him; advised him to take a complete rest for
agree to a Code of Conduct and was supervised by a Unit Manager are indicators a while; gave him medications; and declared him fit to resume work as a seaman.
that he is an employee of Guaranteed by using the control test mentioned in the After a month, Cesar went back to the agency to ask for re-deployment. The
Makati Haberdashery case. Furthermore, the fact that he was given a quota and agency rejected his application. Cesar responded by demanding total disability
can be terminated if he does not meet it all the more indicates that he is indeed an benefits based on the ailments that he developed and suffered while on board
employee of Guaranteed. In Angelina Francisco v. NLRC Kasei Corporation Meritt Shipping vessels. The claim was based on the certification of his
G.R. No. 170087, August 31, 2006, the court added another element to ascertain physician (internist Dr. Reyes) that he could no longer undertake sea duties
employer-employee relationship. This is whether or not the worker is dependent because of the hypertension and diabetes that afflicted him while serving on
on the alleged employer for his continued employment. This was dubbed as the Meritt Shipping vessels in the last 10 years. Rejected once again, Cesar filed a
economic dependence test. The fact that Guaranteed can terminate Gregorio if he complaint for illegal dismissal and the payment of total permanent disability
does not meet the quota of 20 benefits against the agency and its principal.
Page 98 of 307 Page 100 of 307
Labor Law Labor Law
insurance policies a month, negates his status as an independent contractor and Assume that you are the Labor Arbiter deciding the case. Identify the facts and
proves that he is an employee. issues you would consider material in resolving the illegal dismissal and
[b] Suppose Gregorio is appointed as Unit Manager and assigned to supervise disability complaint. Explain your choices and their materiality, and resolve the
several underwriters. He holds office in the company premises, receives an case. (2013 Bar Questions)
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 1. Does the Labor Arbiter have jurisdiction to decide the case?
Guaranteed? Explain. (2016) 2. Did Cesar submit to a post-employment examination within 3 days upon his
return? This is a mandatory requirement; otherwise, Cesar will forfeit his right to
claim benefits.
Yes, Gregorio is an employee. In fact, he is deemed as a regular employee. As a 3. Is Dr. Sales the company-designated physician? The company-designated
unit manager who was tasked to supervise underwriters, he can be said to be physician is the one who initially determines compensability.
doing a task which is necessary and desirable to the usual business of 4. Was Cesar assessed by Dr. Sales (if he is the company physician) within 120
Guaranteed. Article 295 of the Labor code provides that "(T)he provisions of days?
written agreement to the contrary notwithstanding and regardless of the oral 5. If the 120 days was exceeded and no declaration was made as to Cesar’s
agreement of the parties, an employment shall be deemed to be regular where the disability, was this extended to 240 days because Cesar required further medical
employee has been engaged to perform activities which are usually necessary or treatment?
desirable in the usual business or trade of the employer, x x x." 6. Was the 240 days exceeded and still no final decision was reached as to
ALTERNATIVE ANSWER: Ceasar’s disability? If so, Ceasar is deemed entitled to permanent total disability
Yes. Article 219 (m) of the Labor Code defines a Managerial employee as one benefits.
who is vested with the powers or prerogatives to lay down and execute 7. If the company’s physician and Ceasar’s physician cannot agree, was a third
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, physician designated to determine the true nature and extent of the disability. The
assign or discipline employees. As Gregorio was appointed Unit Manager, the third physician’s finding under the law is final and conclusive.
means and methods of accomplishing his goal come under the guidelines laid 8. In the matter of the complaint for illegal dismissal: There is none because
down by Guaranteed. Ceasar disembarked on a “finished contract”.
ANOTHER ALTERNATIVE ANSWER: 9. Seafarers are contractual employees, for a fixed term, governed by the contract
No. Guaranteed did not define the duties and responsibilities of Gregorio; they sign; exception to Article 280 (now Article 286) of the Labor Code. Hence,
Guaranteed left, it to Gregorio's discretion as to how he will achieve his goal. the complaint for illegal dismissal will not prosper.
Therefore, the only interest Guaranteed has is in the result of Gregorio's work. a. Probationary
2. Kinds of employment
Page 99 of 307 Amaya was employed as a staff nurse by St. Francis Hospital (SFH) on July 8,
Labor Law 2014 on a probationary status for six (6) months. Her probationary contract
required, among others, strict compliance with SFH's Code of Discipline.
Marciano was hired as Chief Engineer on board the vessel MN Australia. His On October 16, 2014, Dr. Ligaya,, filed a Complaint with the SFH Board of
contract of employment was for nine months. After nine months, he was re-hired. Trustees against Amaya for uttering slanderous remarks against the former.
He was hired a third time after another nine months. He now claims entitlement Attached to the complaint was a letter of Minda, mother of a patient, who
to the benefits of a regular employee based on his having performed tasks usually confirmed the following remarks against Dr. Ligaya:
necessary and desirable to the employer's business for a continuous period of "Bakit si Dr. Ligaya pa ang napili mong pedia ' eh ang tanda- tanda na n'un? E
more than one year. Is Marciano's claim tenable? Explain your answer. (3%) makakalimutin na yun x x x Alam mo ba, kahit wala namang diperensya yung
(2017 Bar Question) baby, ipinapa-isolate nya?"
Page 101 of 307
No, Marciano's claim is not tenable. Seafarers are contractual employees for a Labor Law
fixed term, governed by the contracts they sign. We should not depart from the The SFH President asks you, being the hospital's counsel, which of these two (2)
rulings of the Supreme Court in Brent School, hic. v. Zamora (GSR. No. L- options is the legal and proper way of terminating Amaya: a) terminate her for a
48494, February 5, 1990, 181 SCRA 702); Coyoca v. NLRC (G.R. No. 113658, just cause under Article 288 of the Labor Code (Termination by Employer); or b)
March 31, 1995, 243 SCRA 190); and Millares v. NLRC (G.R. No. 110524, July terminate her for violating her probationary contract. Explain. (2016)
ALTERNATIVE ANSWER:
I will advise the President of SFH to terminate Amaya for violating her Mr. X was hired by Y Company on probation for six months as general utility
probationary contract. Part and parcel of the standards of her employment is to worker. On the expiration of the probationary period, Mr. X was informed by Y
strictly follow the Code of Conduct of SFH. The act of defaming Dr. Ligaya is Co. that his work was unsatisfactory and failed to meet the required standard. To
certainly a misdemeanor that is usually not acceptable in any work environment. give him a chance to improve his performance, Y Co. instead of terminating Mr.
With such attitude Amaya displayed, she cannot pass the company standard of X’s services, extended, with X’s written consent, the probation period for another
SFH. three months. This extension notwithstanding, his performance did not improve,
I will not suggest the dismissal of Amaya under Article 297. Though she on account of which, Y Co. terminated Mr. X's services at the end of the
displayed misconduct, the same is not work-related, as spreading a rumor against extended period. Mr. X filed a case for illegal dismissal contending that he was
a Doctor does not go into the duties and responsibilities of a staff nurse. already regular at the time of his dismissal pursuant to Art. 281 of the Labor
ALTERNATIVE ANSWER: Code, the particular portion of which provides:
I will advise the President of SFH to terminate Amaya for a just cause under Art. “xxx. An employee who is allowed to work after a probationary period shall be
297 of the Labor Code in relation to Art. 296. The Labor Code assigns a separate considered a regular employee."
provision, Article 296, and provides a different set of grounds for the dismissal Therefore, he could not have been lawfully dismissed for failure to meet
of probationary employees, to wit: company standards as a probationary worker. Decide with reason.
ART. 296. PROBATIONARY EMPLOYMENT
Probationary employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an apprenticeship agreement Mr. X could not argue that because his probationary period was extended beyond
stipulating a longer period. The services of an employee who has been engaged six months he was now a regular employee and thus could no longer be
on a probationary basis may be terminated for a just cause or when he fails to terminated except for Just cause or when authorized by law.
qualify as a regular employee in accordance with reasonable standards made The fact is that the probationary period of Mr. X was extended beyond six
known by the employer to the employee at the time of his engagement. An months with his consent. It was to give him an opportunity to improve his
employee who is allowed to work after a probationary period shall be considered performance.
a regular employee. Thus, it was legal for Y Company to terminate Mr. X for his failure to meet
The law does not preclude the employer from terminating the probationary company standard as a probationary worker.
employment, if the employer finds that the probationary employee is not The Labor Code provides that probationary employment shall not exceed six (6)
qualified for regular employment. As long as the termination was made for months. But the Supreme Court has ruled that said probationary period could be
reasons provided under Article 296 of the Labor Code before the expiration of extended with the consent of the probationary employee lo give him an
the six-month probationary period, the employer is well within its rights to sever opportunity to improve his performance. (Art. 281. Labor Code)
the employer-employee relationship (Pasamba v. NLRC, G.R. No. 168421, 8
June 2007). Aleta Quiros was a faculty member at BM Institute, a private educational
Page 102 of 307 institution. She was hired on a year-to-year basis under the probationary
Labor Law employment period provision of the Manual of Regulations for Private Schools.
The terms and conditions of her engagement were defined under her renewable
On January 3, 1988, Sea Breeze Restaurant, Inc. (SBRI) hired Juan Reyes as a yearly contract.
probationary kitchen helper. He received and cleaned food ingredients delivered For reasons of its own, BM Institute no longer wanted to continue with Aleta's
by suppliers and stored them in freezers, cleaned kitchenware and utensils, and teaching services. Thus, after the contract for her second year expired, BM
kept the kitchen tidy. On July 1, Institute advised Aleta that her contract would no longer be renewed. This advice
1988, he was sent to the company’s doctor for a complete medical examination. prompted Aleta to file a complaint for illegal dismissal against BM Institute.
Thereafter, he continued working. On July 8, 1988, the doctor submitted his Page 104 of 307
report finding Juan to have minimal pulmonary tuberculosis (TB). Labor Law
The manager consults you as the labor adviser of the company, and asks if Juan’s Will the complaint prosper? (2013 Bar Questions)
employment can be terminated as his presence was a hazard to the health of other (A) Yes, because no just or authorized cause existed for the termination of her
workers and customers of the restaurant. probationary employment.
(a) Within the time frame of the problem, was there any change in Juan’s (B) Yes, because under the Labor Code, Aleta became a regular employee after 6
employment status? months and she may now only be dismissed for cause.
(b) When did the change occur? (C) No, because there was no dismissal to speak of. Her employment was
(c) Why did it occur? automatically terminated upon the expiration of her year-to-year fixed term
(d) Can the company still terminate Juan as a probationer? employment.
(e) Under what conditions may Juan be terminated considering his health? (D) No, because BM Institute may dismiss its faculty members at will in the
Explain. exercise of its academic freedom.
(f) Based on your analysis of the factual and legal situation, what course of (E) No, because Aleta was still on probationary employment.
action would you advise the company to take?

(A) (Yolanda Mercado v. AMA Computer College, G.R. No. 183572 [2010])
(a) There was a change in the employment status of Juan, from probationary to b. Regular
regular employment.
(b) July 4,1988, after his six-month probationary period. A was hired in a sugar plantation performing such tasks as weeding, cutting and
(c) The Labor Code (Art. 281) provides that “an employee who is allowed to loading canes, planting cane points, fertilizing and cleaning the drainage.
work after a probationary period shall be considered a regular employee.” Because his daily presence in the field was not required, A also worked as a
(d) The company can terminate Juan, but no longer as a probationary employee, houseboy at the house of the plantation owner. For the next planting season, the
but as a regular employee since his six (6) month probationary period has owner decided not to hire A as a plantation worker but as a houseboy instead.
expired. Furious, A filed a case for illegal dismissal against the plantation owner. Decide
(e) Juan may be terminated considering the fact that he has minimal pulmonary with reason. (3%) (2010 Bar Question)
tuberculosis. The Labor Code (Art. 284) provides that an employer may
terminate the services of an employee who has been found to be suffering from
any disease and whose continued employment is prohibited by law or is A is a regular seasonal employee. Therefore, he cannot be dismissed without just
prejudicial to his health as well his co-employees.” or valid cause.
(f) Based on my analysis outlined above, I will advise the Company to dismiss The primary standard for determining regular employment is the reasonable
the employee but pursuant to the Rules and Regulations implementing the Labor connection between the particular activity performed by the employee in relation
Code, the Company should not terminate the employment of its employee on the to the usual trade or business of the employer (Pier 8 Arrastre & Stevedoring
ground of his disease unless there is a certification by a competent public health Services, Inc., et al. v. Jeff B. Boclot, 534 SCRA 431 [2007]). Considering that
authority that the disease is of such nature or at such a stage that it cannot be A, as plantation worker, performs work that is necessary and desirable to the
cured within a period of six (6) months even with proper medical treatment. usual business of the plantation owner, he is therefore a regular seasonal
Page 103 of 307 employee and is entitled to reinstatement upon onset of the next season unless he
Labor Law
was hired for the duration of only one season (Hacienda Bino v. Cuenca, 456 Damian Damaso was one of 75 machinists of City Re- builders Machine Shop
SCRA 300 [2005]). (CRMS). He had worked as a lathe operator there since February 15, 1975. Lathe
Converting A to a mere houseboy at the house of the plantation owner amounts men process metal to fine tolerances of thousandths of an inch. If tolerances are
to an act of severing his employment relations as its plantation worker (Angeles not met, work is re-done at great cost. Defective work released to customers
v. Fernandez, 513 SCRA 378 [2007]). cause breakdown on equipment in which they are used. Juan worked an average
Page 105 of 307 of 300 days per year at a daily wage of 1*100.00 plus the COLA mandated by
Labor Law law. If there are no rejects on what he processes, he got a¥15 bonus for each item
ALTERNATIVE ANSWER: done right. In the last 2.months, 10% of his output either needed re-work or were
It is management prerogative to determine what kind of worker is needed by the rejected. He claimed his lathe was defective. However, the second shift man
plantation. Of course, if the prerogative is exercised and results in redundancy, using the same machine produced work meeting standards. Damian did not earn
there must be payment of separation pay under Article 283 of the Labor Code. any bonuses, and received a written warning. Feeling oppressed, he went to the
Kamao ng Manggagawa, a registered labor federation to ask for advice on the
Julius Lagat, a truck driver, was hired by Merdeka Trucking Company which is mechanics of organizing a union, and worker rights and duties when they
engaged in the business of hauling farm produce, fertilizer and other cargo for an organize.
agribusiness company on a non-seasonal and continuing basis. Lagat’s contract You are a labor organization adviser of Kamao. x x x
stipulated that it was effective for six months from date of execution, renewable Page 107 of 307
for the same period. Upon expiration of the renewed contract. Lagat was advised Labor Law
by Merdeka that his services were terminated. Lagat filed a complaint for illegal A supervisor of the CRMS saw Damian leave Kamao’s headquarters. Sensing
dismissal against Merdeka which contended that Lagat had no cause of action as that Damian would organize a union, he reported what he saw to management.
his employment was for a definite and specific period. Damian did not know he was seen. Management acted on the report. The next
You are the Labor Arbiter. Decide with reasons. day, his foreman found Damian’s work of unacceptable quality and below output
standards. He was given a second warning. The following day, work exceeding
allowed tolerances were again found. He was suspended for a week and thus,
As Labor Arbiter, I will decide in favor of Lagat. From the circumstances of the was unable to start organizing a union. When he came back, his work was again
case, it is apparent, that the six month period was imposed to preclude the found deficient and 50% was rejected and condemned as waste. He was given a
employee from acquiring security of tenure. The contract that Merdeka had with 15-day notice of termination on August 1, 1988, to take effect on August 16,
Lagat can be considered as circumventing the law that gives to a worker the right 1988 and paid for 15 days of accumulated leave; banned from entering company
to security of tenure, considering that Lagat was a truck driver in a business that premises effective immediately; and given termination pay equal to 12 days’
was not seasonal and was on a continuing basis. If the work was seasonal, then wages per year of service, computed on his daily wage for 13 years. He reported
he would have been legally employed for a specific period, namely, per season. what had happened to Kamao. The matter was referred to you again for
(Cielo v. NLRC. 193 SCRA 410) assistance. (1988 Bar Question)
This should also be noted. Lagat’s contract was a renewed contract. This means (a) Damian wants to know if he was unlawfully terminated. Explain.
that at the veiy least, he was already employed for six months after which the (b) Damian asks you if he had been given all his terminal entitlements.
contract was renewed. So, if the first six months period was considered a
probationary period, Lagat has now worked after the probationary period. Thus,
he is now a regular employee and clearly with the right to security of tenure. a) Damian was unlawfully terminated. There could be just cause for his
(Article 281. Labor Code) termination if his work is of unacceptable quality and below’ output standards
which could be considered as gross and habitual neglect of duties which is a just
Borloloy & Co. is engaged in the construction business which hired the services cause for termination. But the facts show that CRMS was intent on terminating
of Ispongklong as mason and Agaton as carpenter in 1977. Every time their Damian not because of his poor performance but because he was organizing a
services are needed, Ispongklong and Agaton are issued notices of employment union. Thus, the act of CRMS is an unfair labor practice. The dismissal is illegal.
by Borloloy & Co. in the following tenor: b) If there is just cause for the termination of Damian, CRMS has no obligation
“This is to inform you that you have been hired at Lahar Bldg., as mason and to pay him any terminal entitlement, like termination pay. But, he should be paid
carpenter respectively at a monthly salary/daily or hourly of PI2.40. Your whatever rights may have accrued, like, in this case, the pay to 15 days of
employment shall be deemed automatically terminated either at the completion accumulated leave.
of If there is no just cause for the termination of Damian, he has the right to
Page 106 of 307 reinstatement without loss of seniority rights and to his backwages computed
Labor Law from the time his compensation was withheld from him up to the time of his
the project or upon the completion of the work requiring your respective services reinstatement (Art. 279).
to start May 12, 1977.
ACCEPTED: The workers worked as cargadors at the warehouse and ricemills of farm A for
Such an arrangement continued wherein both Agaton and Ispongklong became several years. As cargadors, they loaded, unloaded and piled sacks of rice from
members of a work pool from where Borloloy & Co. draws manpower to work the warehouse to the cargo trucks for delivery to different places. They were paid
on various projects. After each project they have been assigned to is completed, by Farm A on a piece-rate basis. Are the workers considered regular employee?
Borloloy & Co. reported the names of Ispongklong and Agaton to the Social (2012 Bar Question)
Security System for registration. a) Yes, because Farm A paid wages directly to these workers without the
In 1987 (or after ten years of service) they received a notice from Borloloy & Co. intervention of any third party independent contractor;
informing them that their services are no longer needed. Ispongklong and Agaton b) Yes, their work is directly related, necessary and vital to the operations of the
immediately filed a case for illegal dismissal alleging that they are regular and farm;
permanent workers of Borloloy & Co. having worked for it for ten (10) years Page 108 of 307
hence prayed for reinstatement and back wages. Borloloy & Co. on the other Labor Law
hand, claims that Agaton and Ispongklong are project employees whereby their c) No, because Farm A did not have the power to control the workers with
employment is automatically terminated either at the completion of the phase of respect to the means and methods by which the work is to be accomplished;
work requiring their respective service as stated in their respective Notice of d) A and B
Employment the sample test of which is quoted above. If you are the Labor SUGGESTED ANSWERS:
Arbiter assigned to the case, how will you decide the controversy? d) A and B

Mr. Ortanez has been in the building construction business for several years. He
As Labor Arbiter, I will promulgate a decision finding the dismissal of Agaton asks you, as his new labor counsel, for the rules he must observe in considering
and Ispongklong illegal. Ispongklong and Agaton ceased to be project employees regular employment in the construction industry.
when they became members of a work pool from where their employer draws You clarify that an employee, project or non-project, will acquire regular status if
manpower to work on various projects. Thus, as regular employees, they can be __________. (2013 Bar Questions)
terminated only if there is just cause or otherwise authorized by law. (Art. 280, (A) he has been continuously employed for more than one year
Labor Code) (B) his contract of employment has been repeatedly renewed, from project to
project, for several years
(C) he performs work necessary and desirable to the business, without a fixed prescribed, and failure to do so militates against the employer's claim of project
period and without reference to any specific project or undertaking employment. This is true even outside the construction industry.
(D) he has lived up to the company's regularization standards Mario Brothers failed to comply with both requirements; hence, Tristan, Arthur
(E) All of the above. and Jojo are its regular employees. The cancellation of its contract with Axis did
not result to the termination of employment of Tristan, Arthur and Jojo.
[b] Can Axis be made solidarily liable with Mario Brothers to pay the unpaid
(C) wages and 13th month pay o f Tristan, Arthur, and Jojo? Explain.
Note: With all due respect to the examiner, the questions is ambiguous since it
mentions, project or non-project. This is confusing since the criteria in the
determination of regular status for project and non-project employees are Yes, Axis can be made solidarily liable with Mario Brothers. Principals are
different. solidarily liable with their contractors for the wages and other money benefits of
their contractors' workers.
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 Distinguish the project employees from regular employees. (1996 Bar Question)
contracts of 4 months each but at 2-week intervals between contracts. 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 "regularization" A regular employee is one engaged to perform activities which are usually
and for illegal dismissal, claiming that he is a regular employee of CALLHELP necessary or desirable in the usual business or trade of the employer. On the
and that he was dismissed without cause. You are the Labor Arbiter. How would other hand, a project employee is one whose employment is fixed for a specific
you decide the case? (2015 Bar Question) project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee. (See Art. 280 of the
Labor Code)
As Labor Arbiter, I will decide the case in favor of Don Don. Given the nature of Page 111 of 307
Don Don’s work, which consist of activities usually or desirable in the usual Labor Law
business of CALLHELP, Don Don should be considered a regular employee.
Page 109 of 307 How is a project worker different from a casual or contractual worker? Briefly
Labor Law explain your answers, (6% )
CALLHELP’s termination of Don Don’s service in the guise of “poor
performance” is not valid. Whether for a probationary or regular employee, the
requisites of dismissal on that ground do not appear to have been complied with A project worker is employed for a specific project or undertaking the
by the employer here. completion or termination of which is determined at the time of his engagement.
His work need not be incidental to the business of the employer. His employment
Under the Labor Code on Working Conditions and Rest Periods, a person hired may exceed 1 year without necessarily making him a regular employee.
by a high company official but paid for by the company to clean and maintain his A casual employee is engaged to perform a job, work, or service which is
staff house is regarded as (2011 BAR) (A) a person rendering personal service to incidental to the business of the employer; moreover, the definite period of his
another. (B) a regular company employee. (C) a family member. (D) domestic employment is made known to him at the time of his engagement, His continued
helper. Q: Albert and four others signed employment contracts with Reign employment after the lapse of one year makes him a regular employee. Under the
Publishers from January 1 to March 31, 2011 to help clear up encoding backlogs. Social Security Law, employment that is purely casual and not for the purpose of
By first week of April 2011, however, they remained at work. On June 30 occupation or business of the employer is not under the coverage of the aforesaid
Reign’s manager notified them that their work would end that day. Do they have law.
valid reason to complain? (2011 BAR) (A) No, since fixed term employment, to A "project worker", on the other hand, is a specific term used to designate
which they agreed, is allowed. (B) Yes, their job was necessary and desirable to workers in the construction industry hired to perform a specific undertaking for a
the employer’s business and, therefore, they are regular employees. (C) Yes, fixed period which is co-terminus with a project or phase thereof determined at
when they worked beyond March without an extended fixed term employment the time of the engagement of the employee (Policy Instruction No, 19. DOLE),
contract, they became regular employees. (D) No, since the 3-month extension is and it is mandatorily required that a termination report be submitted to the
allowed in such employment. nearest public employment office upon the completion of the construction project
c. Project employment [Aurora Land Projects Corp. v. NLRC. 266 SCRA 48 (Jan, 2. 1997)]; There is no
such requirement (or an ordinary contractual worker.
Mario Brothers, plumbing works contractor, entered into an agreement with Axis
Business Corporation (Axis) for the plumbing works of its building under Design Consultants, Inc. was engaged by the PNCC to supervise the construction
construction. Mario Brothers engaged the services of Tristan, Arthur, and Jojo as of the South Expressway Extension. Design Consultants, Inc. hired Omar as a
plumber, pipe fitter, and threader, respectively. These workers have worked for driver for two (2) years. After his two-year contract expired, he was extended
Mario Brothers in numerous construction projects in the past but because of their another contract for nine (9) months. These contracts were entered into during
long relationship, they were never asked to sign contracts for each project. No the various stages and before the completion of the extension project. Omar
reports to government agencies were made regarding their work in the company. claims that because of these repeated contracts, he is now a regular employee of
During the implementation of the works contract, Axis suffered financial Design Consultants, Inc. Is he correct? Explain briefly. (5%)
difficulties and was not able to pay Mario Brothers its past billings . As a result,
the three (3) employees were not paid their salaries for two (2) months and their
13th month pay. Because Axis can not pay, Mario Brothers cancelled the Yes. The principal test for determining whether a particular employee is a
contract and laid off Tristan, Arthur, and Jojo. The 3 employees sued Mario “project employee” as distinguished from a “regular employee” is whether or not
Brothers and Axis for illegal dismissal, unpaid wages, and benefits. the “project employee” was assigned to carry out a “specific projector
Page 110 of 307 undertaking,” the duration and scope of which were specified at the time the
Labor Law employee was engaged for the projects.
[a] Mario Brothers claims the 3 workers are project employees. It explains that In the problem given, there is no showing that Omar was informed that he was to
the agreement is, if the works contract is cancelled due to the fault of the client, be assigned to a “specific project or undertaking.” Neither has it been established
the period of employment is automatically terminated. Is the contractor correct? that he was informed of the duration and scope of such project or undertaking at
Explain. (2016) the time of his engagement. [Philex Mining Corp. v. NLRC, 312 SCRA 119
(1999)]
Page 112 of 307
No. In GMA Network, Inc v. Pabriga, (G.R. No. 176419, November 27, 2013, Labor Law
the requirements to qualify an employment as project-based was set as follows: Moreover, the re-hiring of Omar is sufficient evidence of the necessity or the
1) employers claiming that their workers are project employees should not only indispensability of his services to the company’s business. [Aurora Land Projects
prove that the duration and scope of the employment was specified at the time Corp v. NLRC, 266 SCRA 48(1997)]
they were engaged, but also that there was indeed a project; and Hence, Omar is correct in claiming that he is a regular employee of Design
2) the termination of the project must be reported by the employer to the DOLE Consultants, Inc.
Regional Office having jurisdiction over the workplace within the period ANOTHER
 Labor Law
one of the gates of SDS. Soon thereafter, other employees whose 5-month term
Omar is not correct. Omar is a project employee as defined by Art. 280 of Labor had also elapsed joined Lina’s hunger strike. (2008 Bar Question)
Code. He was hired for a specific project with fixed periods of employment, Lina and 20 other salesladies filed a complaint for illegal dismissal, contending
specifically: two (2) years for the first contract, and nine (9) months for the that they are SDS’ regular employees as they performed activities usually
second contract. A project employee who is hired for a specific project only is necessary or desirable in the usual business or trade of SDS and thus, their
not a regular employee notwithstanding an extension of the project provided that constitutional right to security of tenure was violated when they were dismissed
the contract of project employment clearly specifies the project and the duration without a valid, just or authorized cause. SDS, in defense, argued that Lina, et al.
thereof. [Palomares v. NLRC, 277 SCRA 439 (1997)) agreed- prior to engagement – to a fixed period employment and thus waived
their right to a full-term tenure. Decide the dispute (4%)
Aldrich Zamora, a welder, was hired on February 1972 by Asian Contractors
Corporation (ACC) for a project. He was made to sign a contract stipulating that
his services were being hired for the completion of the project, but not later than I would rule in favor of Lina, et al. In Pure Foods Corporation v. NLRC (283
December 30, 1972, whichever comes first. SCRA 135(1997]), the scheme of the employer in hiring workers on a uniformly
After December 1972, Zamora, being a man of many talents, was hired for fixed contract basis of 5 months and replacing them upon the expiration of their
different projects of ACC in various capacities, such as carpenter, electrician and contracts with other workers with the same employment status was found to have
plumber. In all of these engagements. Zamora signed a contract similar to his been designed to prevent “casual” employees from attaining the status of a
first contract except for the estimated completion dates of the project for which regular employee.
he was hired. ANOTHER
What is Zamora's status with ACC? is he a contract worker, a project employee,
a temporary or a regular employee? State your reason.
The Complaint of Lina and 20 other employees should be dismissed. Under
existing jurisprudence, there is no dismissal to speak of when the term of fixed-
Zamora could be a project employee if his work is coterminous with the project period employments expires. As such, there is no violation of the right to security
for which he was hired. of tenure of these fixed-period employees even if they performed activities
But in the case, Zamora was rehired after the completion of every project usually necessary or desirable in the usual trade of business, because they knew
throughout the period of his employment with the company which ranged for beforehand that their contract is to expire after five (5) months.
quite a long time. Thus, he should be considered a regular employee. (Philippine ANOTHER
National Construction Corporation v. National Labor Relations Commission, et
aL, G.R No. 95816, 27 October 1972. J. Grlno-Aquino)
ALTERNATIVE ANSWER: I will resolve the illegal dismissal case in favor of SDS. In Brent, the Supreme
a) Zamora is a regular employee because he was engaged to work in various Court En Banc held that while fixed term employment has already been repealed
projects of ACC for a considerable length of time, on an activity that is usually by the various amendments to the Labor Code, the Civil Code still allows fixed
necessary desirable in the usual business or trade of ACC. (Mehitabel Furniture term employment. Such kind of employment is valid as long as it is established
v. NLRC, 220 SpRA 602) that: (1) the fixed period of employment was knowingly and voluntarily agreed
Page 113 of 307 upon by the parties, without any force, duress or improper pressure being brought
Labor Law to bear upon the employee and absent any other circumstance vitiating his
b) Zamora is a regular employee. Article 280 of the Labor Code declares with consent; and (2) the employer and employee dealt with each other on more or
unmistakable clarity: “THE PROVISIONS OF WRITTEN AGREEMENT TO less equal terms with no moral dominance on the latter.
THE CONTRARY NOTWITHSTANDING, xxx an employment shall be Since admittedly, Lina, et al. agreed, prior to their engagement, to the fixed term
deemed to be regular where the employee has been engaged to perform activities employment, and It appearing that their consent was not vitiated, and considering
which are usually necessary or desirable in the usual business or trade of the further that it has not been argued that the parties dealt with each other on less
employer.” equal terms, it then follows that Lina, et al’s fixed term employment is valid. No
He is not a CONTRACT or TEMPORARY WORKER because even the illegal dismissal can take place upon expiration of such fixed term employment.
provisions of the simulated contracts were not followed when his Job was used Page 115 of 307
continuously. He is not a project employee, as the term is understood in Art. 280 Labor Law
or under Policy Instruction No. 20. f. Fixed-term

Martillo and other similarly-situated project workers demanded that the increases TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the
be extended to them, inasmuch as they should now be considered regular statement is false. Explain your answer in not more than two (2) sentences. (5%)
employees and members of the bargaining unit. (2006 Bar Question) Seafarers who have worked for twenty (20) years on board the same vessel are
If you were ABC's legal counsel, how would you respond to this demand? regular employees. (2009 Bar Question)

As legal counsel for ABC, I would argue that the employment of Martillo was FALSE. Seafarers as overseas Filipino workers are fixed-term employees whose
fixed for a specific project or undertaking, the completion or termination of continued rehiring should not be interpreted as a basis for regularization but
which has been determined at the time of his engagement. Rendering 14 months rather as a series of contract renewals sanctioned under the doctrine set by
of work does not make him a regular employee, when to begin with, he was Millares v. NLRC (Gu-Miro v. Adorable, 437 SCRA 162 [2004]).
employed for a specific project, i.e., which is the construction of a particular 40-
storey building. The rule on more than 1 year of service making the employment Lucy was one of approximately 500 call center agents at Hambergis, Inc. She
regular applies only to casual employees, hence, Mariano does not belong to the was hired as a contractual employee four years ago. Her contracts would be for a
bargaining unit of regular employees. duration of five (5) months at a time, usually after a one-month interval. Her re-
d. Seasonal hiring was contingent on her performance for the immediately preceding
e. Casual contract. Six (6) months after the expiration of her last contract, Lucy went to
Hambergis personnel department to inquire why she was not yet being recalled to
Savoy Department Store (SDS) adopted a policy of hiring salesladies on five- work. She was told that her performance during her last contract was “below
month cycles. average.” Lucy seeks your legal advice about her chances of getting her job back.
At the end of a saleslady’s five-month term, „ another person is hired as What will your advice be? (2014 Bar Question)
replacement.
Salesladies attend to store customers, wear SDS uniforms, report at specified
hours, and are subject to SDS workplace rules and regulations. Those who refuse Lucy cannot get her job back. She is a fixed-term employee and as such, her
the 5-month employment contract are not hired. employment terminates upon the expiration of her contract. (Rowell Industrial
The day after the expiration of her 5-month engagement, Lina wore her SDS Corporation v. Court of Appeals, 517 SCRA 691 [2007]).
white and blue uniform and reported for work but was denied entry into the store ALTERNATIVE ANSWER:
premises. Agitated, she went on a hunger strike and stationed herself in front of I will advise Lucy that she can get her job back if she files a case for illegal
Page 114 of 307 dismissal where, as a general rule, the twin reliefs of backwages and
reinstatement are available. In the instant case, Lucy is a regular employee capital or investment which relates to the job, work or service to be performed
because the employment contracts of five (5) months at a time, for four (4) years and the employees recruited, supplied or placed by such contractor or
are obviously intended to circumvent an employee's security of tenure, and are subcontractor are performing activities which are directly related to the main
therefore void. As a regular employee, Lucy may only be dismissed from service business of the principal; or
based on just and authorized causes enumerated under the Labor Code, and after (2) The contractor, does not exercise the right to control over the
observance of procedural due process prescribed under said law. (Magsalin, et al. performance of the work of the contractual employee.
v. NOWM, G.R. No. 148492, May 9, 2003). The first element is present herein, as Style has no substantial capital or
3. Job contracting investment in engaging in the supply of services contracted out by Empire which
a. Articles 106 to 109 of the Labor Code is directly related to the marketing and promotion of its clothing line. The second
Page 116 of 307 element is present as it is inevitable for Empire to direct the activities of the
Labor Law TMRs to properly market and promote its product line. The subsequent contract
of Empire with Wave did not affect the regular employment of the TMRs with
The labor sector has been loudly agitating for the end of labor-only contracting, Empire as, through the Marketing Director of Empire, the
as distinguished from job contracting. Explain these two kinds of labor Page 118 of 307
contracting, and give the effect of a finding that one is a labor-only contractor. Labor Law
Explain your answers. (4%) (2017 Bar Question) TMRs were under the control of Empire. Thus, the five-month employment
contract entered into by the TMRs with Wave did not divest them of their regular
There is labor-only contracting where: (1) the person supplying workers to an employment status with Empire. In addition, such scheme undermined the
employer does not have substantial capital or investment in the form of tools, security of tenure of the TMRs which is constitutionally guaranteed, hence, the
equipment, machineries, work premises, among others; and (2) the workers contract of the TMRs with Wave is void ad initio.
recruited and placed by such person are performing activities which are directly [b] Were the TMRs illegally dismissed by Wave?
related to the principal business of such employer (Baguio v. NLRC, G.R. Nos.
79004-08, October 4, 1991, 202 SCRA 465; Art. 106, Labor Code). There is job
contracting where: (I) the contractor carries on an independent business and No. As the TMRs are employees of Empire, Wave did not have the power of
undertakes the contract work on his own account under his own responsibility dismissal; thus, even if Wave dismissed the TMRs the same has no consequence.
according to his own manner and method, free from the control and direction of Distinguish Labor-Only contracting and Job-Only contracting. (5%) (2012 BAR)
his principal in all matters connected with the performance of the work except as
to the results thereof; and (2) the contractor has substantial capital or investment Labor-only contracting. The contractor does not have substantial capital or
in the form of tools, equipment, machineries, work premises, and other materials investment in the form of tools, equipment, machineries, work premises, among
which are necessary in the conduct of his business (Baguio v. NLRC, G.R. Nos. others, and the employees of the contractor are performing activities which are
79004-108, October 4, 1991, 202 SCRA 465). A finding that a contractor is a directly related to the main business of the principal. [Sy, et al. v. Fairland
labor-only contractor is equivalent to a declaration that there is an employer- Knitcraft Co., Inc., G.R. Nos. 182915 & 189658, December 12, 2011].
employee relationship between the principal and the employees of the labor-only Legitimate Job Contracting. The contractor has substantial capital and investment
contractor (Industrial Timber Corp. v. NLRC, G.R. No. 83616, January 20, 1989, in the form of tools, equipment, etc. and carries a distinct and independent
169 SCRA 341). In such a case, the person or intermediary shall be considered business and undertakes to perform the job, work or service on its own
merely as an agent of the employer, who shall be responsible to the workers in responsibility, according to its own manner and method, and free from control
the manner and extent as if the latter were directly employed by him (Sandoval and direction of the principal in all matters connected with the performance of
Shipyards, Inc. v. Prisco Pepito, G.R. No. 143428, June 25, 2001, 359 SCRA the work except as to the results thereof [Escasinas v. Shangri-la’s Mactan Island
555). The liability of the principal vis-å-vis the employees of the labor-only Resort, 580 SCRA 344 (2009]. Labor-Only Contracting. Contracting is
contractor is comprehensive, i.e., not only for unpaid wages but for all claims prohibited while Job Contracting is allowed by law. Another
under the Labor Code and ancillary laws (San Miguel Corporation v. MAERC
Integrated Services; Inc., G.R. No. 144672, July 10, 2003, 405 SCRA 579). 1. Job-Only contracting is legal; whereas, Labor-Only contracting is prohibited
by law 2. In Job-Only contracting, the principal is only an indirect employer;
Empire Brands (Empire) contracted the services of Style Corporation (Style) for whereas, in Labor-Only contracting, the principal becomes the direct employer of
the marketing and promotion of its clothing line. Under the contract, Style the employees of the labor-only contractor.
provided Empire with Trade Merchandising Representatives (TMRs) whose Page 119 of 307
services began on September 15, 2004 and ended on June 6, 2007, when Empire Labor Law
terminated the promotions contract with Style. 3. The liability of the principal in Job-Only contracting vis-à-vis employees of
Empire then entered into an agreement for manpower supply with Wave Human job-contractor is for a limited purpose only, e.g. wages and violation of labor
Resources (Wave). Wave owns its condo office, owns equipment for the use by standards laws; whereas, the liability of the principal in Labor-Only contracting
the TMRs, and has assets amounting to P1,000,000.00. Wave provided the is for a comprehensive purpose and, therefore, the principal becomes solidarily
supervisors liable with the labor-only contractor for all the rightful claims of the employees.
Page 117 of 307 In Job-Only contracting, no employer-employee relationship exists between the
Labor Law principal and the employees of the job contractor; whereas, in Labor-Only
who supervised the TMRs, who, in turn, received orders from the Marketing contracting, the law creates an employer-employee relationship between the
Director of Empire. In their agreement, the parties stipulated that Wave shall be principal and the employees of the labor-only contractor.
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 the four tests below, which is the most determinative of the status of a
of all withholding taxes, Social Security Service, and Philhealth premiums, in legitimate contractor-employer? (2011 BAR) (A) The contractor performs
accordance with relevant laws. activities not directly related to the principal's main business. (B) The contractor
As the TMRs wanted to continue working at Empire, they submitted job has substantial investments in tools, equipment, and other devices. (C) The
applications as TMRs with Wave. Consequently, Wave hired them for a term of contractor does not merely recruit, supply, or place workers. (D) The contractor
five (5) months, or from June 7, 2007 to November 6, 2007, specifically to has direct control over the employees’ manner and method of work performance.
promote Empire's products.
When the TMRs' 5-month contracts with Wave were about to expire, they sought Mario, an expert aircon technician, owns and manages a small aircon repair shop
renewal thereof, but were refused. Their contracts with Wave were no longer with little capital. He employs one full-time and two part-time technicians. When
renewed as Empire hired another agency. This prompted them to file complaints they do repair work in homes or offices, their clients do not tell them how to do
for illegal dismissal, regularization, non-payment of service incentive leave and their jobs since they are experts in what they do. The shop is shabby, merely
13th month pay against Empire and Wave. rented, and lies in a small side street. Mario and the other technicians regard
[a] Are the TMRs employees of Empire? (2016) themselves as informal partners. They receive no regular salary and only earn
SUGGESTED ANSWER commissions from service fees that clients pay. To what categories of workers do
Yes. From the time Empire contracted the services of Style, both engaged in they fall? (2011 BAR) (A) Labor-only contractors (B) Job contractors (C)
labor-only contracting. In BPI Employees Union-Davao City- FUBU v. BPI, Pakyaw workers (D) Manpower agency contractors
(G.R. No. 174912, July 24, 2013), it was ruled that where any of the following
elements is present, there is labor-only contracting: K is a legitimate contractor hired by G for six (6) months. On the third month, G
(1) The contractor or subcontractor does not have substantial remitted to K the salaries and wages of the employees. However, K absconded
with the money leaving the employees unpaid. The disgruntled employees c) An indirect employer, by operation of law, of his contractor’s employees; he
demanded from G the payment of their salaries. Is G liable? (2012 Bar Question) becomes solidarily liable with the contractor only in the even the latter fails to
a. No, because G has already remitted the employees’ salaries to K, validly pay the employees’ wages and for violation of labor standard laws. [Arts. 107
excusing G from liability. and 109, Labor Code]
b. Yes, because he is jointly and solidarily liable for whatever monetary claims
the employees may have against K; Linis Manpower, Inc. (LMI) had provided janitorial services to the Philippine
c. Yes, because of the principle of “a fair day’s wage for a fair day’s work”; Overseas Employment Administration (POEA) since March 2009. Its service
Page 120 of 307 contract was renewed every three months. However, in the bidding held in June
Labor Law 2012, LMI was disqualified and excluded. In 2013, six janitors of LMI formerly
d. B and C. assigned at POEA filed a complaint for underpayment of wages. Both LMI and
POEA were impleaded as respondents. Should POEA, a government agency
subject to budgetary appropriations from Congress, be held liable solidarily with
b. Yes, because he is jointly and severally liable for whatever monetary claims LMI for the payment of salary differentials due to the complainant? Cite the legal
the employees may have against K; [Art. 106, Labor Code] basis of your answer. (2014 Bar Question)
ALTERNATIVE ANSWER: Page 122 of 307
c. Yes, because of the principle of “a fair day’s wage for a fair day’s work”. Labor Law

Is the contractor a necessary party in a case where labor contracting is the main
issue and labor-only contracting is found to exist? (2012 Bar Question) Yes, but only to the extent of work performed under the contract. The second
a. Yes, the contractor is necessary in the full determination of the case as he is paragraph of Article 106 of the Labor Code provide
the purported employer of the worker; Art. 106. Contractor or subcontractor. – xxx
b. Yes, no full remedy can be granted and executed without impleading the In the event that the contractor or subcontractor fails to pay the wages of his
purported contractor; employees in accordance with this Code, the employer shall be jointly and
c. No, the contractor becomes a mere agent of the employer-principal in labor severally liable with his contractor or subcontractor to such employees to the
contracting; extent of the work performed under the contract, in the same manner and extent
d. No, the contractor has no standing in a labor contracting case. that he is liable to employees directly employed by him. Xxx
SUGGESTED ANSWERS: The fact that POEA is a government agency is of no moment. In U.S.A v. Ruiz
a. Yes, the contractor is necessary in the full determination of the case as he is (G.R. No. L-35645, May 22, 1985), the Supreme Court ruled that the State may
the purported employer of the worker. be sued if the contract it entered into is pursuant to its proprietary functions.
b. Yes, no full remedy can be granted and executed without impleading the
purported contractor. Luningning Foods engaged the services of Lamitan Manpower, Inc., a bona fide
independent contractor, to provide “tasters” that will check on food quality.
Which is a characteristic of a labor-only contractor? (2012 Bar Question) Subsequently, these “tasters” joined the union of rank-and-file employees of
a. Carries an independent business different from the employer’s; Luningning and demanded that they be made regular employees of the latter as
b. The principal’s liability extends to all rights, duties and liabilities under labor they are performing functions necessary and desirable to operate the company’s
standards laws including the right to self-organization; business. Luningning rejected the demand for regularization. On behalf of the
c. No employer-employee relationship; “tasters”, the union then filed a notice of strike with the Department of Labor and
d. Has sufficient substantial capital or investment in machinery, tools or Employment (DOLE). In response, Luningning sought a restraining order from
equipment directly or intended to be related to the job contracted. the Regional Trial Court (RTC) arguing that the DOLE does not have jurisdiction
over the case since it does not have an employer-employee relationship with the
employees of an independent contractor. If you were the RTC judge, would you
c. No employer-employee relationship [Art. 106, Labor Code] issue a restraining order against the union? (2014 Bar Question)

What is not an element of legitimate contracting? (2012 Bar Question)

a. The contract calls for the performance of a specific job, work or service; Yes. There is no labor dispute in the instant case. Since Lamitan Manpower is a
Page 121 of 307 bona fide independent contractor, there is no employee-employer relationship
Labor Law between the Luningning and the tasters.
b. It is stipulated that the performance of a specific job, work or service must be ALTERNATIVE ANSWER:
within a definite predetermined period; No. Article 254 of the Labor Code is clear that no temporary or permanent
c. The performance of a specific job, work or service has to completed either injunction or restraining order in any case involving or growing out of labor
within or outside the premises of the principal; disputes shall be issued by any court or other entity, except as provided in Article
d. The principal has control over the performance of a specific job, work or 218 and 264 of the same Code.
service.
Constant Builders, an independent contractor, was charged with illegal dismissal
and non-payment of wages and benefits of ten dismissed employees. The
d. The principal has control over the performance of a specific job, work or complainants impleaded as co-respondent Able Company, Constant Builder's
service. [Art. 106, Labor Code] principal in the construction of Able's office building. The complaint demanded
that
With respect to legitimate independent contracting, an employer or one who Page 123 of 307
engages the services of a bona fide independent contractor is – (2012 Bar Labor Law
Question) Constant and Able be held solidarily liable for the payment of their backwages,
a. An indirect employer, by operation of law, of his contractor’s employees; he separation pay, and all their unpaid wages and benefits.
becomes solidarily liable with the contractor not only for unpaid wages but also If the Labor Arbiter rules in favor of the complainants, choose the statement that
for all the rightful claims of the employees under the Labor Code; best describes the extent of the liabilities of Constant and Able. (2013 Bar
b. Treated as direct employer of his contractor’s employees in all instances; he Questions)
becomes subsidiarily liable with the contractor in the event the latter fails to pat (A) Constant and Able should be held solidarily liable for the unpaid wages and
the employee’s wages and for violation of labor standards laws; benefits, as well as backwages and separation pay, based on Article 109 of the
c. An indirect employer, by operation of law, of his contractor’s employees; he Labor Code which provides that "every employer or indirect employer shall be
becomes solidarily liable with the contractor only in the even the latter fails to held responsible with his contractor or subcontractor for any violation of any
pay the employees’ wages and for violation of labor standard laws; provision of this Code."
d. Treated as direct employer of his contractor’s employees in all instances; the (B) Constant and Able should be held solidarily liable for the unpaid wages and
principal becomes solidarily with the contractor not only for unpaid wages but benefits, and should order Constant, as the workers' direct employer, to be solely
also for all the rightful claims of the employees under th Labor Code. liable for the backwages and separation pay.
(C) Constant and Able should be held solidarily liable for the unpaid wages and
benefits and the backwages since these pertain to labor standard benefits for
which the employer and contractor are liable under the law, while Constant alone No. The element of an employee’s “performing activities which are directly
– as the actual employer - should be ordered to pay the separation pay. related to the principal business of such employer” does not actually matter for
(D) Constant and Able should be held solidarily liable for the unpaid wages and such is allowed by Art. 107 of the Labor Code. An “independent contractor for
benefits, and Constant should be held liable for their backwages and separation the performance of any work, task, job or project” such as Security and Janitorial
pay unless Able is shown to have participated with malice or bad faith in the Agencies, naturally hire employees whose tasks are not directly related to the
workers' dismissal, in which case both should be held solidarily liable. principal business of” the company hiring them. Yet, they can be labor-only
(E) The above statements are all inaccurate. contractors if they suffer from either of the twin handicaps of “substantial
capital”. “OR” “substantial investment in the form of tools”, and the like.
Conversely, therefore, the performance by a job-contractor’s employee of
(A) activities that are directly related to the main business of the principal does not
make said employee a regular employee of the principal.
Star Crafts is a lantern maker based in Pampanga. It supplies Christmas lanterns Q:
to stores in Luzon, Metro Manila, and parts of Visayas, with the months of 1) What is a “labor-only" contract?
August to November being the busiest months. Its factory employs a workforce 2) Distinguish the liabilities of an employer who engages the services of a bona
of 2,000 workers who make different lanterns daily for the whole year. Because fide “independent contractor" from one who engages a “labor-only" contractor?
of increased demand, Star Crafts entered into a contractual arrangement with
People Plus, a service contractor, to supply the former with I 00 workers for only
4 months, August to November, at a rate different from what they pay their 1) “Labor-only" contract is a contract between an employer and a person who
regular employees. The contract with People Plus stipulates that all equipment supplies workers to such employer where the person supplying workers does not
and raw materials will be supplied by Star Crafts with the express condition that have substantial capital or investment in the form of tools, equipment,
the workers cannot take any of the designs home and must complete their tasks machineries, work premises, among others, and the workers recruited and placed
within the premises of Star Crafts. by such person are performing activities which are directly related to the
Is there an employer-employee relationship between Star Crafts and the 100 principal business of such employer. (Art. 106, Labor Code)
workers from People Plus? Explain. (2015 Bar Question) 2) A person who engages the services of a bona fide “Independent contractor" for
Page 124 of 307 the performance of any work, task, job or project is the indirect employer of the
Labor Law employees who have been hired by the Independent contractor to perform said
work, task, Job or project.
Page 126 of 307
Yes. People Plus is a labor-only-contractor because it is not substantially Labor Law
capitalized. Neither does it carry on an independent business in which it uses its In the event that the independent contractor fails to pay the wages of his
own investment in the form of tools, equipment, machineries or work premises. employees, an indirect employer, in the same manner and extent that he is liable
Hence, it is just an agent or recruiter of workers who perform work directly to employees directly employed by him, is jointly and severally liable with the
related to the trade of Star Crafts. Since both the essential element and the independent contractor to the employees of the latter to the extent of the work
conforming element of labor-only contracting are present, Star Crafts becomes performed under the contract.
the employer of the supplied worker. As for the person who engages the services of a "labor only" contractor, the latter
As principal, Star Crafts will always be an employer in relation to the workers is considered merely as.an agent of the former who shall be responsible to the
supplied by its contractor. Its status as employer is either direct or indirect workers hired by the “labor only" contractor in the same manner and extent as if
depending on whether the contractor is legitimate or not. Thus even if People he directly employed such workers.
Plus were a legitimate job contractor, still Star Crafts will be treated as a ALTERNATIVE ANSWERS:
statutory employer for purposes of paying the workers’ unpaid wages and a) An employer who engages the services of a bona fide “independent
benefits. contractor" is solidarity liable with his contractor or sub-contractor only for non-
b. Effects of Labor-Only Contracting payment or underpayment of wages and other labor standards provisions of the
c. Trilateral relationship in job contracting Labor Code, whereas an employer who engages a “labor-only" contractor is
a. XYZ Manpower Services (XYZ) was sued by its employees together with its liable for all benefits, terms and conditions of employment that it normally grants
client, ABC Polyester Manufacturing Company (ABC). ABC is one of the many to its regular or direct employees.
clients of XYZ. During the proceedings before the Labor Arbiter, XYZ was able b) An employer who deals with a bona-fide independent contractor shall be liable
to prove that it had substantial capital of Three Million Pesos. The Labor Arbiter only subsidiarity, if the contractor or sub-contractor fails to pay the wages to the
ruled in favor of the employees because it deemed XYZ as a labor only workers in accordance with the Labor Code.
contractor. XYZ was not able to prove that it had invested in tools, equipment, Upon the other hand, an employer who deals with a “labor-only" contractor shall
etc. Is the Labor Arbiter's ruling valid? Explain. (5%) (2012 BAR) be primarily responsible to the workers in the same manner and extent as if the
latter were directly employed by him. (Arts 106-107, Labor Code)
Yes. The presumption is that a contractor is a labor-only contractor unless it is
shown that it has substantial capital and substantial investment in the form of Jolli-Mac Restaurant Company (Jolli-Mac) owns and operates the largest food
tools, equipment, machineries, work premises and the like [Sy, et al. v. Fairland chain in the country. It engaged Matiyaga Manpower Services, Inc. (MMSI), a
Knitcraft Co., Inc., G.R. Nos. 182915 & 189658, December 12, 2011]. Besides, job contractor registered with the Department of Labor and Employment, to
what Art. 106 of the Code defines is Labor-Only Contracting and not Job- provide its restaurants the necessary personnel, consisting of cashiers,
Contracting. In mandating that “(t)here is ‘labor-only’ contracting where the motorcycle deliver}' boys and food servers, in its operations. The Service
person supplying workers to an employer does not have substantial capital OR Agreement warrants, among others, that MMSI has a paid-up capital of
investment in the form of tools, equipment, machineries, work premises, among P2,000,000.00; that it would train and determine the qualification and fitness of
others”, the law is therefore clear that the presence of either handicap – all personnel to be assigned to Jolli-Mac; that it would provide these personnel
“substantial capital OR (substantial) investment in the form of tools, equipment, with proper Jolli-Mac uniforms; and that it is exclusively responsible to these
(etc.)” – is enough basis to classify one as a labor-only contractor. Another 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
Page 125 of 307 member of the Board of Directors of Jolli-Mac. (2009 Bar Question)
Labor Law [a] Is the Service Agreement between Jolli-Mac and MMSI legal and valid? Why
a) No, the Labor Arbiter’s ruling is not valid. Art. 106 of the Labor Code or why not? (3%)
provides that the contractor has “substantial capital or investment.” The law did
not say substantial capital and investment. Hence, it is in the alternative; it is
sufficient if the contractor has one of the other, i.e., either the substantial capital Page 127 of 307
or the investment. And under Department Order No. 18-A, Series of 2011, the Labor Law
amount of P3 million paid-up capital for the company is substantial capital. b. No. It is not legal and valid because MMSI is engaged in labor-only contracting.
Does the performance by a contractual employee, supplied by a legitimate For one, the workers supplied by MMSI to Jolli-Mac are performing services
contractor, of activities directly related to the main business of the principal which are directly related to the principal business of Jolli-Mac. This is so
make him a regular employee of the principal? Explain. (5%) (2012 BAR) because the duties performed by the workers are integral steps in or aspects of
the essential operations of the principal. (Baguio, et al. v. NLRC, et al., 202
SCRA 465 [1991]; Kimberly Independent Labor Union, etc. v. Drillon, 185 provided the equipment and tools because Arnold had neither tools and
SCRA 190 [1990]. For another, MMSI was organized by Jolli-Mac itself to equipment nor capital for the job. Arnold, on the other hand, hired his friends,
supply its personnel requirements. (San Miguel Corporation v. MAERC relatives and neighbors for the job. Their wages were paid by Sta. Monica
Integrated Services, Inc., et al., 405 SCRA 579 [2003]). Plywood Corp. to Arnold, based on their production or the number of workers
ANOTHER and the time used in certain areas of work. All work activities and schedules
were fixed by the company.
A. Is Arnold a job contractor? Explain briefly. (2%)
The Service Agreement is valid. The law, Art. 106, does not invalidate an B. Who is liable for the claims of the workers hired by Arnold? Explain briefly.
Independent Contractors Agreement because the Independent Contractor has (3%)
only one (1) client, or that the employer of the independent contractor is one of
the major owners of the employing establishment. MMSI, is an independent
business, adequately capitalized and assumed all the responsibilities of a Page 129 of 307
legitimate Independent Contractor. Labor Law
[b] If the cashiers, delivery boys and food servers are not paid their lawful A. No. In two cases decided by the Supreme Court, it was held that there is “job
salaries, including overtime pay, holiday pay, 13,h month pay, and sendee contracting” where (1) the contractor carries on an independent business and
incentive leave pay, against whom may these workers file their claims? Explain. undertakes the contract work in his own account, under his own responsibility
(2%) 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 (2) the contractor has substantial capital
They may file their claims against Jolli-Mac. A finding that MMSI is a “labor- or investment in the form of tools, equipment, machineries, work premises and
only” contractor is equivalent to declaring there is an employer-employee other materials which are necessary in the, conduct of his business. [Lim v.
relationship between Jolli-Mac and the workers of MMSI. (Associated Anglo- NLRC, 303 SCRA 432 (1999); Baguio v. NLRC, 202 SCRA 465(1991)]
American Tobacco Corp. v. Clave, 189 SCRA 127 [1990], Industrial Timber In the problem given, Arnold did not have sufficient capital or investment for
Corp. v. NLRC, 169 SCRA 341 [1989]). The liability of Jolli-Mac vis-a-vis the one. For another Arnold was not free from the control and direction of Sta.
workers of MMSI is for a comprehensive purpose, i.e., not only for the unpaid Monica Plywood Corp. because all work activities and schedules were fixed by
wages but for all claims under the Labor Code and ancillary laws. (San Miguel the company.
Corp. v. Maerc Integrated Services, Inc., et al., 405 SCRA 579 [2003]) Therefore, Arnold is not a job contractor. He is engaged in labor-only
ANOTHER contracting.
B. Sta. Monica Plywood Corp. is liable for the claims of the workers hired by
Arnold. A finding that Arnold is a labor only contractor is equivalent to declaring
The employers can file their claims against Jolli- Mac pursuant to Art. 106 of the that there exist an Employer - employee relationship between Sta. Monica
Labor Code which reads: “Contractor or .subcontractor—x x x In the event that Plywood Corp. and workers hired by Arnold. This is so because Arnold is
the contractor or subcontractor fails to pay the wages of his employees in considered a mere agent of Sta. Monica Plywood Corp. [Lim v. NLRC, 303
accordance with this Code, the employer shall be jointly and severally liable with SCRA 432, (1999); Baguio et. al. v. NLRC, 202 SCRA 465 (1991)]
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 Tower Placement Agency supplies manpower to Lucas Candy Factory to do
employee directly employed by him.” work usually necessary for work done at its factory. After working there for more
Even if the RSC has a paid up capitalization of P1,000,000.00 it is not engaged in than two years under the factory manager’s supervision, the workers demanded
labor-only contracting, or permissible job contracting. It is engaged simply in that Lucas extend to them the same employment benefits that their directly hired
recruiting. RSC merely provides PizCorp the former’s motorcycle-owning workers enjoyed. Is their demand valid? (2011 BAR) (A) Yes, since it was Lucas
members to deliver the product of PizCorp in accordance with PizCorp’s that actually hired and supervised them to work at its factory. (B) No, since the
directives and orders. agency workers are not employees of the client factory. (C) Yes, since they have
Page 128 of 307 been working at the factory in excess of two years. (D) No, since it was the
Labor Law placement agency that got them their jobs.
B. Dismissal from employment
The Pizza Corporation (PizCorp) and Ready Supply Cooperative (RSC) entered
into a “service agreement” where RSC, in consideration of service fees to be paid Rico has a temper and, in his work as Division Manager of Mata tag Insurance,
by PizCorp, will exclusively supply PizCorp with a group of RSC motorcycle- frequently loses his temper with his staff. One day, he physically assaults his
owning cooperative members who will henceforth perform PizCorp’s pizza staff member by slapping him. The staff member sues him for physical injuries.
delivery service. RSC assumes - under the agreement - full obligation for the Matatag Insurance decides to terminate Rico, after notice and hearing, on the
payment of the salaries and other statutory benefits of its members deployed to ground of loss of trust and confidence. Rico claims that he is entitled to the
PizCorp. The parties also stipulated that there shall be no employer-employee presumption of innocence because he has not yet been convicted. Comment on
relationship between PizCorp and the RSC members. However, if PizCorp is Matatag's action in relation to Rico's argument. (2015 Bar Question)
materially prejudiced by any act of the delivery crew that violates PizCorp’s Page 130 of 307
directives and orders, PizCorp can directly impose disciplinary sanctions on, Labor Law
including the power to dismiss, the erring RSC member/s.
xx
c) RSC is engaged in “labor-only” contracting. Matatag Insurance does not have to await the result of the criminal case before
exercising its prerogative to dismiss. Dismissal is not affected by a criminal case.
Under the Three-fold Liability Rule, a single act may result in three liabilities,
It is not enough to show substantial capitalization or investment in the form of two of which are criminal and administrative. To establish them, the evidence of
tools, equipment, machinery and work premises. In addition, the following the crime must amount to proof beyond reasonable doubt; whereas, the evidence
factors have to be considered: (a) whether the contractor is carrying on an of the ground for dismissal is substantial evidence only. In this regard, the
independent business; (b) the nature and extent of the work; (c) the skill required; company has some basis already for withholding the trust it has reposed on its
(d) the term and duration of the relationship; (e) the right to assign the manager. Hence, Rico’s conviction need not precede the employee’s dismissal.
performance of specified pieces of work; (f) the control and supervision of the
workers; (g) the power of employer with respect to the hiring, firing and payment Under current jurisprudence, when the dismissal is for a just or authorized cause
of workers of the contractor; (h) the control and supervision of the workers; (g) but due process is not observed, the dismissal is said to be: (2012 Bar Question)
the power of employer with respect to the hiring, firing and payment of workers a. Void for denial of due process; hence, the employee should be reinstated;
of the contractor; (h) the control of the premises; (j) the mode, manner and terms b. Void for lack of due process, the employee should be paid full backwages;
of payment (Alexander Vinoya v. NLRC, Regent Food Corporation and/or Ricky c. Valid, for the dismissal is with just/authorized cause, but the employer shall be
See, 324 SCRA 469[2000]; Osiasl. Corporal, Sr., et al. v. NLRC, Lao Enteng liable for nominal damages;
Company, Inc. and/or Trinidad IMO Ong, 341 SCRA 658[2000]). d. Valid, even if due process is not observed, hence reinstatement should not be
ordered.
Sta. Monica Plywood Corporation entered into a contract with Arnold for the
milling of lumber as well as the hauling of waste wood products. The company
c. Valid, for the dismissal is with just/authorized cause, but the employer shall be company did not find satisfactory. A month later, he was repatriated to the
liable for nominal damages. [Agabon v. NLRC, G.R. No. 158693, November 17, Philippines.
2004] Upon arrival in the Philippines, A filed with the National Labor Relations
Commission (NLRC) a complaint against the agency and the principal for illegal
Lionel, an American citizen whose parents migrated to the U.S. from the dismissal with a claim for salaries for the unexpired portion of his contract. (2010
Philippines, was hired by JP Morgan in New York as a call center specialist. Bar Question)
Hearing about the phenomenal growth of the call center industry in his parents’ a) Was A’s dismissal valid? Explain. (3%)
native land, Lionel sought and was granted a transfer as a call center manager for
JP Morgan’s operations in Taguig City. Lionel’s employment contract did not
specify a period for his stay in the Philippines. After three years of working in NO, A’s dismissal was not valid. A was not found to be “in possession of the
the Philippines, Lionel was advised that he was being recalled to New York and prohibited substance” nor was he “impaired by the use” thereof. Being “tested
being promoted to the position of director of international call center operations. positive for marijuana” is not a ground for “disciplinary action” under the
However, because of certain “family reasons,” Lionel advised the company of “undertaking” he signed.
his preference to stay in the Philippines. He was dismissed by the company. ALTERNATIVE ANSWER:
Lionel now seeks your legal advice on: (2014 Bar Question) YES, A’s dismissal was valid. He was tested positive for marijuana. This is in
violation of the drug and alcohol policy, which bans possession, or use of all
alcoholic beverages, prohibited substances and un-prescribed drugs on board the
(A) whether he has a cause of action ship.
Page 131 of 307 Page 133 of 307
Labor Law Labor Law
Lionel has a cause of action; he was illegally dismissed. Dismissal due to an b) Is his claim for salaries for the unexpired portion of his contract tenable?
employee’s refusal of a promotion is not within the sphere of management Explain. (3%)
prerogative. There is no law that compels an employee to accept promotion
(Dosch v. NLRC, et al., G.R. No. L-51182, July 5, 1983).
(B) whether he can file a case in the Philippines YES. Section 10 of Rep. Act No. 8042 (as amended by Rep. Act No. 10022)
Yes. Since this is a case of illegal dismissal, the Labor Arbiters have jurisdiction provides that in case of termination of overseas employment without just, valid
over the same (Art. 217 (a) (2), Labor Code). Under the 2011 NLRC Rules of or authorized cause as defined by law or contract, or any unauthorized
Procedure, all cases which Labor Arbiters have authority to hear and decide, may deductions from the migrant worker’s salary, the worker shall be entitled to the
be filed in the Regional Arbitration Branch having jurisdiction over the full reimbursement of his placement fee with interest at twelve percent (12%) per
workplace of the complainant or petitioner (Rule IV, Section 1). annum, plus his salaries for the unexpired portion of his employment contract or
(C) what are his chances of winning for three (3) years for every year of the unexpired term, whichever is less (cf.
He has a big chance of winning. An employee cannot be promoted without his Serrano v. Gallant Maritime, 582 SCRA 254 [2009]).
consent, even if the same is merely a result of a transfer, and an employee’s ALTERNATIVE ANSWER:
refusal to accept promotion cannot be considered as insubordination or willful NO. Under Rep. Act No. 8042, money claim can be made only if there is
disobedience of a lawful order of the employer. In this case, JP Morgan cannot dismissal without just or authorized cause.
dismiss Lionel due to the latter's refusal to accept the promotion (Norkis Trading
Co., Inc. v. Gnilo, 544 SCRA 279 [2008]). Atty. Renan, a CPA-lawyer and Managing Partner of an accounting firm,
SUGGESTED ALTERNATIVE ANSWER: conducted the orientation seminar for newly-hired employees of the firm, among
His chances of winning is NIL because the objection to the transfer was them, Miss Maganda. After the seminar, Renan requested Maganda to stay,
grounded solely on personal “family reasons” that will be caused to him because purportedly to discuss some work assignment. Left alone in the training room,
of the transfer. (OSS Security v. NLRC, 325 SCRA 157 [2000]); Phil. Industrial Renan asked Maganda to go out with him for dinner and ballroom dancing.
Security Agency Corp. v. Dapiton, 320 SCRA 124 [1999]). Thereafter, he persuaded her to accompany him to the mountain highway in
1. Just Causes Antipolo for sight-seeing. During all these, Renan told Maganda that most, if not
all, of the lady supervisors in the firm are where they are now, in very productive
What are the grounds for validly terminating the services of an employee based and lucrative posts, because of his favorable endorsement.
on a just cause? (5%) (2017 Bar Question) xxx
[b] The lady supervisors in the firm, slighted by Renan’s revelations about them,
Article 296 of the Labor Code (formerly Article 282) provides for the succeeded in having him expelled from the firm. Renan then filed with the
termination of the services of an employee for just causes. An employer may Arbitration Branch of the NLRC an illegal dismissal case with claims for
terminate an employment for any of the following causes: (a) Serious misconduct damages against the firm. Will the case prosper? Reasons. (2%) (2009 Bar
or willful disobedience by the employee of the lawful orders of his employer- or Question)
representative in connection with his work; (b) Gross and habitual neglect by the
employee of his duties;
Page 132 of 307 Yes, serious misconduct is a ground for termination of employment. The term
Labor Law “misconduct” denotes intentional wrongdoing or deliberate violation of a rule of
(c) Fraud or willful breach by the employee of the trust reposed in him by his law or standard of behavior.
employer or duly authorized representative; (d) Commission of a crime or ANOTHER
offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representatives; and (e) Other causes
analogous to the foregoing. No. The case for illegal dismissal with damages filed in the Office of Labor
Arbiter will not prosper. Renan was terminated for serious misconduct which is a
A was an able seaman contracted by ABC Recruitment Agency for its foreign just cause under Art.
principal, Seaworthy Shipping Company (SSC). His employment contract Page 134 of 307
provided that he would serve on board the Almieda II for eight (8) months with a Labor Law
monthly salary of US $450. In connection with his employment, he signed an 282 of the Labor Code. The act of Renan is grave and aggravated in character,
undertaking to observe the drug and alcohol policy which bans possession or use and committed in connection with his work (Echaverria v. Venutek Media, 516
of all alcoholic beverages, prohibited substances and unprescribed drugs on SCRA 72 [2007], and indicates that he has become unfit to continue working for
board the ship. The undertaking provided that: (1) disciplinary action including his employer. (Torreda v. Toshiba Info. Equipment, Inc. Phils., 515 SCRA 133
dismissal would be taken against anyone in possession of the prohibited [20007]).
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 Dion is an Accounting Supervisor in a trading company. He has rendered
ship. exemplary service to the company for 20 years. His co-employee and kumpadre,
On his third month of service while the Almieda Uwas docked at a foreign port, a Mac, called him over the phone and requested him to punch his (Mac's) daily
random drug test was conducted on all members of the crew and A tested time card as he (Mac) was caught in a monstrous traffic jam. Dion acceded to
positive for marijuana. He was given a copy of the drug test result. In compliance Mac's request but was later caught by the Personnel Manager while punching
with the company’s directive, he submitted his written explanation which the
Mac's time card. The company terminated the employment of Dion on the of whether the bank management allows her personal leave without pay for 45
ground of misconduct. Is the dismissal valid and just? Explain. (2016) days. Without waiting for the decision of the Vice President for branch banking
division, which denied her Motion for Reconsideration. Julie proceeded to take
her leave commencing on Dec. 1, 1992.
Yes. The ground sustaining the dismissal of Dion is serious misconduct. The act Having exhausted her 60 days leave of absence, she reported back for work but
of Dion in giving in to Mac's request to punch the latter's daily time card is loth a was presented a letter dated Dec. 16, 1992, from the Vice President for Branch
wrongful conduct, grave in character and not merely trivial or unimportant. The Banking Division, informing her of her termination effective December 16.
subject act involves dishonesty, and the same portrays Dion's moral obliquity to 1992. She filed a case for illegal dismissal and prayed for reinstatement and
make it appear that Mac was working when actually he is not. The fact that he damages against Bangko Bangkarute National.
has rendered 20 years of service aggravates his situation because, by the length 1) Is the severance of Julie’s employment for a just cause? Explain.
of his service, he should be well-aware that Mac must personally punch his daily 2) Is she entitled to reinstatement? Why?
time card. 3) Are damages recoverable from Bangko Bangkarute National?
ALTERNATIVE ANSWER:
No. Applying both the Proportionality Rule and the 1st offense rule, dismissal
was too harsh a consequence for the actions of Dion. Absent a showing that the 1) The severance of Julie’s employment is for a Just cause. She is guilty of
action amounted to serious misconduct, his length of service may be taken as a willful disobedience of the lawful order of her employer, or her representative in
mitigating factor in the penalty to be imposed against him. connection with her work. As a branch manager of the Bank, Julie is a high
official, who should be a good example to the employees on how lawful orders
Which is NOT a guideline for the dismissal of an employee on the ground of of the employer are to be observed and obeyed.
“loss of confidence”? (2011 BAR) (A) Loss of confidence may not be arbitrarily The refusal of the Bank to grant her request for personal leave without pay for 45
invoked in the face of overwhelming evidence to the contrary. (B) Loss of days was not whimsical or arbitrary. There was reason for the refusal, that is, the
confidence as cause of dismissal should be expressly embodied in written anticipated heavy workload brought about by the onset of the Christmas season.
company rules. There was willful disobedience on the part of Julie. Her filing a motion for
Page 135 of 307 reconsideration was only by way of formality, since she was bent on taking a
Labor Law leave for 60 days irrespective of whether the Bank management allows her
(C) The employee holds a position of trust and confidence. (D) Loss of personal leave without pay for 45 days.
confidence should not be simulated nor a mere afterthought to justify earlier ALTERNATIVE ANSWERS:
action taken in bad faith. a) There is basis for the Bank to terminate the services of Julie on the ground of
its loss of confidence in her. As a branch manager of the Bank, Julie should show
A foreign guest in a luxury hotel complained that he lost certain valuable items in concern that the anticipated workload brought about by the onset of the
his hotel room. An investigation by the hotel pointed to two roomboys as the Page 137 of 307
most probable thieves. May the management invoke “loss of confidence” as a Labor Law
just cause for dismissing the roomboys? (2011 BAR) (A) No, “loss of Christmas season is satisfactorily dealt with by the Bank. Yet, inspite of Julie
confidence” as reason for dismissal does not apply to rank and file employees. being told about this problem, she was still bent on taking a leave for 60 days
(B) No, “loss of confidence” applies only to confidential positions. (C) Yes, “loss irrespective of whether the Bank allows her personal leave without pay for 45
of confidence” is broad enough to cover all dishonest acts of employee. (D) days.
RIGHT ANSWER Yes, “loss of confidence” applies to employees who are b) Basically, the problem is entitlement to personal leave of 45 days on the part
charged with the care and custody of the employer's property. Q: An employee is of the employee. If she is entitled by reason of company regulations or company
NOT entitled to “financial assistance” in cases of legal dismissal when the practice, the employer being a bank, the denial may have been arbitrary and is
dismissal (2011 BAR) (A) is based on an offense reflecting the depraved invalid. If so, her dismissal is without a just cause, for availment of a right cannot
character of the employee. (B) is based on serious misconduct or breach of the be a ground for discipline. She would therefore be entitled to reinstatement.
employer's trust. (C) is grounded on any of the just causes provided by the Labor However, no damages should be due from the bank, unless it is clear that it had
Code. (D) when the employee has less than 10 years of service. ratified the action taken by the bank, vice-president. He should shoulder the
damages instead.
Domingo, a bus conductor of San Juan Transportation Company, intentionally On the other hand, if the claim of personal leave is entirely without legal basis,
did not issue a ticket to a female passenger, Kim, his long-time crush. As a result, then the employee was AWOL for 45 days which is serious misconduct, hence, a
Domingo was dismissed from employment for fraud or willful breach of trust. just cause for dismissal. Even then, in the light of her long service plus a valid
Domingo contests his dismissal, claiming that he is not a confidential employee justification for personal leave (such as urgent medical treatment abroad), the
and, therefore, cannot be dismissed from the service for breach of trust. Is dismissal would be for insufficient cause and would be too harsh, hence, she
Domingo correct? Reasons. (2%) (2009 Bar Question) would be entitled to reinstatement without back wages.

Domingo as bus conductor holds a position wherein he was reposed with the 2) She is not entitled to reinstatement because her dismissal was legal, it being
employer’s trust and confidence. In Bristol Mgers Squibb (Phils.) v. Baban (574 for Just cause.
SCRA 198 [2008]), the Court established a second class of positions of trust that ALTERNATIVE ANSWERS:
involve rank-and-file employees who, in the normal and routine exercise of their a) She would be entitled to reinstatement since her dismissal is considered too
functions, regularly handle significant amounts of money. A bus conductor falls harsh a penalty for the offense she committed.
under such second class of persons. This does not mean, however, that Domingo b) Julie is not entitled to reinstatement. The “strained relations" rule applies in
should be dismissed. In Etcuban v. Sulpicio Lines (448 SCRA 516 [2005]), the this case. Julie, a branch manager of the bank, occupies a highly responsible and
Court held that where the amount involved is miniscule, an employee may not be confidential position, which requires a consistent level of confidence.
dismissed for loss of trust and confidence. 3) She cannot claim damages from the Bank. There is no basis for a claim for
damages. It may be noted that she was not given the required due process by the
Julie is a branch manager of Bangko Bangkarute National, rising from the ranks Bank before her dismissal. She Is therefore entitled to an indemnity of PI.000.
through her 21 years of employment. On November 25. 1992, she filed an
Page 136 of 307 “A” is an audit clerk in the Seafront Financing Company. One day he had an
Labor Law argument with his immediate superior after the latter accused him of having
application for a total 60 days leave of absence; 15 days with pay (regular annual failed to record and check a certain transaction a week earlier which resulted in
vacation leave), starting December 1 to 15. and 45 days without pay (personal the loss of P100, 000. The argument led to a fist- fight with both protagonists
leave), starting December 16 to January 30. which she submitted to the Vice sustaining serious injuries that required hospitalization. One and a half months
President for Branch Banking Department, for approval. Unfortunately, the Vice later, “A” returned to work but was immediately given by the same superior a
President for the Branch Banking Department, disapproved her request for dismissal letter on the ground of loss of confidence, grave misconduct and
personal leave without pay of 45 days, citing as reason the anticipated heavy fighting with his
work load brought about by the onset of the Christmas season. Nonetheless, he Page 138 of 307
approved her regular annual leave with pay of 15 days. Realizing that the leave Labor Law
granted her (15 days) is not sufficient she filed a motion for reconsideration only superior. “A” later sued the company for illegal dismissal. He also claimed for
by way of formality since she is bent on taking a leave for 60 days, irrespective reinstatement and backwages. Decide.
 his right to reinstatement; By law an employee who is unjustly dismissed is
entitled to reinstatement, among others.
There may be just cause for the termination of the employment of “A”. After all, The mere fact that the complaint did not pray for reinstatement will not prejudice
he is guilty of a serious misconduct if he fought his superior after the latter the employee, because technicalities of law and procedure are frowned upon in
accused him of having failed to record and check a transaction which resulted in labor proceedings. (General Baptist Bible College v. NLRC, 219 SCRA 549).
a loss of P100,000 for the company. This is also a factual basis for loss of Page 140 of 307
confidence since it is a willful breach of trust by the employee of the trust Labor Law
reposed in him by his employer. The foregoing is a just cause for the termination
of employment. Diosdado, a carpenter, was hired by Building Industries Corporation (BIC), and
However, the Company should first give “A” the ample opportunity to be heard assigned to build a small house in Alabang. His contract of employment
and defend himself with the assistance of his representatives if he so desires in specifically referred to him as a “project employee,” although it did not provide
accordance with company rules and regulations promulgated pursuant to the any particular date of completion of the project.
guidelines set by the DOLE. Is the completion of the house a valid cause for the termination of Diosdado’s
Unless the Company gives to “A” the ample opportunity to be heard and to employment?
defend himself, its termination of “A” will be illegal, and “A” will be entitled to If so, what are the due process requirements that the BIC must satisfy? If not,
reinstatement and backwages. why not? (3%) (2009 Bar Question)

Jose and Pedro were utility workers employed by Yellow Farms. Inc. On 13
January 1984, they were picked up by the company's guards in connection with The completion of the house should be valid cause for termination of Diosdado’s
the theft of polyethylene bags belonging to the company. They were detained at employment.
the Baybay Municipal Jail. Initial investigation of the police yielded no prima Although the employment contract may not state a particular date, but if it did
facie case against them, resulting in their release. However, after further specify that the termination of the parties* employment relationship was to be on
investigation. an amended complaint was formally filed against them and two a “day certain” - the day when the phase of work would be completed - the
others, charging them with theft before the Municipal Court. The Company employee cannot be considered to have been a regular employee (Filipinos Pre-
terminated Jose and Pedro due to loss of confidence. Consequently, the two filed Fabricated Building systems v. Puente, 453 SCRA 820 [2005]).
a complaint of illegal dismissal on the ground that their dismissal based on the To satisfy due process requirement, under DOLE Department Order No. 19,
criminal complaint did not justify their termination. Is the filing of the criminal series of 1993, the employer is required to report to the relevant DOLE Regional
complaint against Jose and Pedro sufficient ground for their termination? What is Office the fact of termination of project employees as a result of the completion
the quantum of proof necessary to terminate an employee for loss of confidence? of the project or any phase thereof in which one is employed.
What if the criminal complaint was dismissed on the ground of reasonable ANOTHER
doubt?

No. The completion of the house is not a valid cause for termination of
The mere filing of the criminal complaint against Jose and Pedro would not be employment of Diosdado, because of the failure of the BIC to state “the specific
sufficient ground for their termination. because while it is true that the criminal project or undertaking the completion or termination of which has been
complaint could be properly filed only if there was a prima facie case against determined at the time of the engagement of the employee.” (Labor Code, Art.
said employees, this fact does not in turn automatically mean that there is already 280). There being no valid termination of employment, there is no need to
substantial evidence to prove that there is Just cause for their termination. comply with the requirements of procedural due process.
The quantum of evidence necessary to terminate an employee for loss of
confidence is that of substantial evidence. For misconduct or improper behavior to be a just cause for dismissal, the
Page 139 of 307 following guidelines must be met, except: (2012 Bar Question)
Labor Law a) It must be serious;
Even if the criminal complaint was dismissed on the ground of reasonable doubt. b) It must relate to the performance of the employee’s duties;
Jose and Pedro could still be dismissed as long as there is substantial evidence to c) It should not be used as a subterfuge for causes which are improper, illegal or
prove that they have committed acts that could be an objective basis for loss of unjustified;
confidence. d) It must show that the employee has become unfit to continue working for the
ALTERNATIVE ANSWER: employer.
Yes, the filing of a criminal complaint is sufficient ground, since such complaint Page 141 of 307
is founded upon prima facie evidence of their guilt of theft. In dismissal for loss Labor Law
of confidence, it is sufficient if there is substantial evidence to believe that the
employee is guilty of theft. This standard is equivalent to a prima facie finding of
guilt in criminal procedure. c. It should not be used as a subterfuge for causes which are improper, illegal or
Mere dismissal on the ground that proof beyond reasonable doubt was adduced, unjustified [Solid Development Corp. Workers Association v. Solid
will not entitle the employees to reinstatement. In criminal law the higher Development Corp., 530 SCRA 132 (2007)].
standard will not necessarily negative the existence of the lower standard of
proof of substantial evidence of guilt. The Supreme Court categorically declared that separation pay shall be allowed as
Q: a measure of social justice only in those instances where the employee is validly
1) Distinguish between the substantive and the procedural requirements for the dismissed for cause other than: (2012 Bar Question)
dismissal of an employee. a. Serious Misconduct;
2) May a court order the reinstatement of a dismissed employee even if the b. Gross and habitual neglect of duties;
prayer of the complaint did not include such relief? c. Willfull disobedience to lawful orders;
d. Fraud or willful breach of trust.

1) This is the substantive requirement for the valid dismissal of an employee:

There should be a just cause for the termination of an employee or that the A) Serious Misconduct [Tirazona v. PET, Inc., 576 SCRA 625]
termination is authorized by law. But Apacible (G.R. No. 178903, May 30, 2011) disallows separation pay for
This is the procedural requirement: The employer should furnish the employee employees who are dismissed under any of 4 grounds in Art. 282, thus NO
whose employment is sought to be terminated a written notice containing a CORRECT ANSWER.
statement of the causes for termination and the employer should afford the
employee to be terminated ample opportunity to be heard and to defend himself Luisa was hired as a secretary by the Asian Development Bank (ADB) in Manila.
with the assistance of his representative if he so desires. (Arts. 279 and 277 (b). Luisa’s first boss was a Japanese national whom she got along with. But after
Labor Code) two years, the latter was replaced by an arrogant Indian national who did not
2) So long as there is a finding that the employee was illegally dismissed, the believe her work output was in accordance with international standards. One day,
court can order the reinstatement of an employee even if the complaint does not Luisa submitted a draft report filled with typographical errors to her boss. The
include a prayer for reinstatement, unless, of course, the employee has waived latter scolded her, but Luisa verbally fought back. The Indian boss decided to
terminate her services right then and there. Luisa filed a case for illegal dismissal
with the Labor Arbiter claiming arbitrariness and denial of due process. If you
were the Labor Arbiter, how would you decide the case? (2014 Bar Question) The offense committed by Jose did not relate to the performance of his duties.
For misconduct or improper behavior to be a just cause for dismissal, it (a) must
be serious; (b) must relate to the performance of the employee’s duties; and (c)
I will dismiss the case. ADB enjoys immunity from suit (DFA v. NLRC, G.R. must show that the employee has become unfit to continue working for the
No. 113191, September 18, 1996). employer.
SUGGESTED ALTERNATIVE ANSWER: On the basis of the forgoing guidelines, it can be concluded that Paolo was not
I will decide in favor of Luisa, by granting nominal damages. To clarify, guilty of serious misconduct: Paolo was not performing official work at the time
however, Luisa's dismissal is not illegal, for it has been held that failure to of the incident. (Lagrosas v. Bristol Myers Squibb, G.R. No. 168637/170684
observe prescribed standards of work, or to fulfill reasonable work assignments [2008])
due to inefficiency, as in this case, may constitute just cause for dismissal. Additionally, there was no compliance with the rudimentary requirements of due
(Iluminada, Buiser, et. al. v. Leogardo, Jr., 131 SCRA process.
Page 142 of 307 2. Authorized Causes Blank Garments, Inc. (BLANK), a clothing manufacturer,
Labor Law employs more than 200 employees in its manufacturing business. Because of its
151 (1969)] Nonetheless, the employer's failure to comply with the procedure high overhead, BLANK decided to sell its manufacturing business to Bleach
prescribed by law in terminating the services of the employee warrants the Garments, Inc. (BLEACH) lock, stock and barrel which included goodwill,
payment of nominal damages of Php30,000.00, in accordance with the Supreme equipment, and personnel. After taking on BLANK's business, BLEACH reduces
Court's ruling in the case of Agabon v. NLRC (G.R. No. 158693, November 17, the workforce by not hiring half the workers specifically the ones with seniority.
2004). BLANK and BLEACH are still discerned to be sister companies with identical
incorporators. The laid-off employees sue both BLANK and BLEACH for
Lanz was a strict and unpopular Vice-President for Sales of Lobinsons Land. unlawful termination. (a) How would you decide this case? (4%) (b) What is the
One day, Lanz shouted invectives against Lee, a poor performing sales associate, "successor employer" doctrine? (2%) (2015 BAR)
calling him, among others, a “brown monkey.” Hurt, Lee decided to file a Page 144 of 307
criminal complaint for grave defamation against Lanz. The prosecutor found Labor Law
probable cause and filed an information in court. Lobinsons decided to terminate
Lanz for committing a potential crime and other illegal acts prejudicial to (a)In transfer of ownership, the buyer corporation, as a general rule, is not duty-
business. Can Lanz be legally terminated by the company on these grounds? bound to absorb the employees of the selling corporation. The buyer corporation
(2014 Bar Question) becomes liable to the displaced employees only if the change in ownership is
done in bad faith or is used to defeat the rights of labor. In such a case, the
successor-employer is duty-bound to absorb the displaced employees
No. The grounds relied upon by Lobinsons are not just causes for dismissal under (Penafrancia Tours and Travel Transport, Inc., v. Sarmiento, 634 SCRA 279).
the Labor Code. Defamation is not a crime against person which is a ground to Since the facts of the case do no show any bad faith in BLEACH’s sale to
dismiss under Article 282, now Article 295, (d) of the Labor Code. BLANK, BLEACH, consequently, is not obliged to absorb the displaced
employees of BLANK. The case at hand involves sales of assets as differentiated
Jose and Erica, former sweethearts, both worked as sales representatives for from sales of stock. The ruling in SME Bank v. De Guzman (G.R. No. 184517,
Magna, a multinational firm engaged in the manufacture and sale of Oct. 8, 2013), which reversed Manlimos v. NLRC (312 Phil. 178), pointed out
pharmaceutical products. Although the couple had already broken off their that in asset sales, the rule is that the seller in good faith is authorized to dismiss
relationship, Jose continued to have special feelings for Erica. the affected employees, but is liable for the payment of separation pay under the
One afternoon, Jose chanced upon Erica riding in the car of Paolo, a co- law. The buyer in good faith, on the other hand, is not obliged to absorb the
employee and Erica's ardent suitor; the two were on their way back to the office employees affected by the sales, nor is it liable for the payment of their claims. In
from a sales call on Silver Drug, a major drug retailer. In a fit of extreme contrast with asset sales, in which the assets of the selling corporation are
jealousy, Jose rammed Paolo's car, causing severe injuries to Paolo and Erica. transferred to another entity, the transaction in stock sales takes place at the
Jose's flare up also caused heavy damage to the two company-owned cars they shareholder level. Because the corporation possesses a personality separate and
were driving. distinct from that of its shareholders, a shift in the composition of its
A) As lawyer for Magna, advise the company on whether just and valid grounds shareholders will not affect its existence and continuity. Hence the corporation
exist to dismiss Jose. (2013 Bar Questions) continues to be the employer and continues to be liable for the payment of their
just claims. Absent a just or authorized cause, the corporation or its new majority
shareholders are not entitled to lawfully dismiss corporate employees. (b)The
Jose can be dismissed for serious misconduct, violation of company rules and “successor employer” doctrine refers to a sales or transfer in ownership of an
regulations, and commission of a crime against the employer’s representatives. entity that has been done in bad faith or to defeat the rights of labor. In such a
Article 282 of the Labor Code provides that an employer may terminate an case, it is as if there have been no changes in employer-employee relationship
employment for any serious misconduct or willful disobedience by the employee between the seller and its employees. The buyer becomes a “successor employer”
of the lawful orders of his employer or his representatives in connection with his and is obliged to absorb the displaced employees. X was one of more than one
work. hundred (100) employees who were terminated from employment due to the
Misconduct involves “the transgression of some established and definite rule of closure of Construction Corporation A. The Cruz family owned Construction
action, forbidden act, a dereliction of duty, willful in character, and implies Company A. Upon the closure of Construction Company A, the Cruzes
wrongful intent and not mere error in judgment.” For misconduct to be serious established Construction Company B. Both corporations had the same president,
and therefore a valid ground for dismissal, it must be: the same board of directors, the same corporate officers, and all the same
Page 143 of 307 subscribers. From the General Information Sheet filed by both companies, it also
Labor Law showed that they shared the same address and/or premises. . Both companies also
1. of grave and aggravated character and not merely trivial or unimportant and hired the same accountant who prepared the books for both companies. X and his
2. connected with the work of the employee. co-employees amended their Complaint with the Labor Arbiter to hold
SUGGESTED ALTERNATIVE ANSWER: Construction Corporation 8 joint and severally liable with Construction
Article 282(e) of the Labor Code talks of other analogous causes or those which Company A for illegal dismissal, backwages and separation pay. Construction
are susceptible of comparison to another in general or in specific detail as a cause Company 8
for termination of employment. Page 145 of 307
In one case, the Court considered theft committed against a co-employee as a Labor Law
case analogous to serious misconduct, for which penalty of dismissal from interposed a Motion to Dismiss contending that they are juridical entities with
service may be meted out to the erring employee. (Cosmos Bottling Corp. v. distinct and separate personalities from Construction Corporation A and
Fermin, G.R. No. 193676/194303 [2012]). Similarly, Jose’s offense perpetrated therefore, they cannot be held jointly and severally liable for the money claims of
against his co-employees, Erica and Paolo, can be considered as a case analogous workers who are not their employees. Rule on the Motion to Dismiss. Should it
to serious misconduct. be granted or denied? Why? (5%) (2012 BAR)
B) Assuming this time that Magna dismissed Jose from employment for cause
and you are the lawyer of Jose, how would you argue the position that Jose's Denied. The factual circumstances – that the businesses of Construction
dismissal was illegal? (2013 Bar Questions) Company A and Construction Company B are related, that all of the employees
of Company A are the same persons manning and providing for auxiliary
services to units of Company B, and that the physical plants, offices and facilities
are situated in the same compound – justify the piercing of the corporate veil of According to Art. 283 of the Labor Code, the lawful or authorized causes for the
Company B. [Indophil Textile Mill Workers Union v. Calica, 205 SCRA 697 termination of an employee are:
(1992)]. The fiction of the corporate entity can be disregarded when it is used to 1. installation of labor saving devices
justify wrong or protect fraud. [Complex Electronics Association v. NLRC, G.R. 2. redundancy
No. 121315 & 122136, July 19, 1999)]. 3. retrenchment to prevent losses or;
4. closing or cessation of operation of the establishment or undertaking, unless
Juan and Pedro were regular employees of Rose Manufacturing Company for 20 the closing Is for the purpose of circumventing the provisions of the Labor Code.
years. On May 31, 1984, both were dismissed by the company for dishonesty and Art 284 also provides that an employer may terminate the services of an
fraud. They sued for reinstatement and backwages. The labor arbiter ordered the employee who has been found to be suffering from any disease and whose
reinstatement of Juan and Pedro and the payment of their backwages. During the continued employment is prohibited by law or is prejudicial to his health as well
pendency of its appeal to the National Labor Relations Commission (NLRC). as to the health of his co-employees.
The company undertook a reorganization of its various departments where,
among others, the positions of Juan and Pedro were eliminated as redundant. On Coronet Records Phil. (CRP) manufactures audio/video record players, compact
April 30, 1989, the NLRC affirmed the labor arbiter’s award and ordered the discs, video discs, cassettes and the like. CRP’s shareholdings is 40% foreign and
reinstatement of Juan and Pedro and payment of backwages covering five years. 60% domestic.
You are asked by the company to question the ruling of the NLRC before the CRP signed a Collective Bargaining Agreement (CBA) with its rank-and-file
Supreme Court. What would be your main arguments? workers for three years starting from January 1, 1990 and ending on December
31. 1993.
Before the expiration of the CBA. CRP decided to sell all its assets to Lyra
I will question the ruling of the NLRC before the Supreme Court with the Music Corporation effective September 30. 1993. In this regard, notice was sent
following as my main arguments: on August 30. 1993 to each employee advising them of the sale of the Company's
1. The order to reinstate Juan and Pedro is no longer correct because of the assets to Lyra Music Corporation and the closure of the company’s operations
supervening event, namely, the reorganization at the company that included, effective September 30. 1993. CRP, likewise, requested that each employee
among others, the elimination of the positions of Juan and Pedro which were receive his separation pay equivalent to one-and-one-half (1 & 1/2) month’s pay
considered redundant. Redundancy is an authorized cause for the termination of per year of service, exclusive of all unused leaves which were also converted to
employment. (Art. 283, Labor Code). cash, and his 13th-month pay for 1993.
2. The award of backwages covering five years is not correct. The Supreme The employees received their respective separation pay under protest and
Court has been consistently applying the so-clled Mercury Drug ruling that limits thereafter filed an action against CRP and Lyra Music Corporation for unfair
the backwages to a three year period. labor practice (ULP). The Arbiter ruled in favor of the workers and ordered Lyra
Page 146 of 307 Music
Labor Law Page 148 of 307
ALTERNATIVE ANSWER: Labor Law
I will charge the NLRC and the Labor Arbiter with abuse of discretion Corporation to absorb the former workers of CRP. Was the Labor Arbiter correct
amounting to lack of jurisdiction for ordering the reinstatement and the payment in his decision?
of back wages to them. Assuming that the dishonesty and fraud of Juan and
Pedro have been established as facts, their dismissal is for just cause.
ABC Tomato Corporation, owned and managed by three (3) elderly brothers and No. The Labor Arbiter is not correct. As held in the case of San Felipe Neri
two (2) sisters, has been in business for 40 years. Due to serious business losses School of Mandaluyong v. NLRC, when there is a legitimate sale of a company’s
and financial reverses during the last five (5) years, they decided to close the assets, the buyer in good faith cannot be legally compelled to absorb the
business. a. As counsel for the corporation, what steps will you take prior to its employees of the seller in good faith. In the case at bar, the employees of the
closure? (3%) (2012 BAR) CRP were validly terminated based on Article 284. e.g. closure of operations and
separation pay was paid at a rate much higher than the law.
I will serve a written notice on both the workers and the Regional Office of the Furthermore, the case filed by the employees was UNFAIR LABOR
Department of Labor and Employment, at least one (1) month before the PRACTICE. It is highly irregular to order absorption of employees in a ULP
intended date of closure. (Art. 283, Labor Code); and (2) provide proof of ABC’s case.
serious business losses or financial reverses [Balasbas v. NLRC, G.R. No. 85286, Q:
August 24, 1992] b. Are the employees entitled to separation pay? (2%) (2012 (1) Y Corporation suffered business reverses and it was forced to cease
BAR) operations and dismiss all its employees. Said employees filed a complaint with
the National Labor Relations Commission fob illegal dismissal and payment of
No. Where closure is due to serious business losses, no separation pay is separation pay. Decide with reasons.
required. [North Davao Mining Corp. v. NLRC, 254 SCRA 721; JAT General (2) Suppose it was found by the labor arbiter that the corporation did not suffer
Services v. NLRC, 421 SCRA 78 (2004)] If the reason for the closure is due to business losses. It was also found that the corporation went on with its
old age of the brothers and sisters: c. Is the closure allowed by law? (2%) (2012 operations. May an illegally dismissed employee be ordered reinstated despite
BAR) his strained relationship with the corporation? What may be awarded to the
employee? Explain your answers.
Yes. The determination to cease or suspend operations is a prerogative of
management that the State usually does not interfere with, as no business can be
required to continue operating to simply maintain the workers in employment. (1) When Y Corporation dismissed all its employees because it ceased
[San Pedro Hospital of Digos v. Secretary of Labor, G.R. No. 104624, October operations, the dismissal was legal. Cessation of operations of. an establishment
11, 1996; Espina v. CA, 519 SCRA 327 (2007)] d. Are the employees entitled to or undertaking is one of the authorized causes for the termination of employees.
separation benefits? (3%) (2012 BAR) (Art. 283. Labor Code). But considering the facts of the case in question, the
Page 147 of 307 employer is not under legal obligation to pay separation pay since the cessation
Labor Law of operations was due to business reverses. Nevertheless, the employer should
serve a written notice on the workers at least one (1) month before the intended
date of the cessation of operation.
Yes. In case of cessation of operations of establishment or undertaking not due to A POINT TO CONSIDER: The bar examinee may state that there shall be
serious business losses or financial reverses, the separation pay shall be payment of separation pay only if the cessation of operation is due to serious
equivalent to one (1) month pay or at least one-half (1/2) month ay for every year business losses or financial reverses. The question did not describe the business
of service, whichever is higher. A fraction of at least six (6) months shall be reverses as serious. So. the bar examinee may state that there should be payment
considered as one (1) whole year [Art. 283, Labor Code]. of separation pay.
(2) There are some Supreme Court decisions ruling that even if there is no legal
Aside from the just causes enumerated in Article 282 of the Labor Code for the basis for the termination of an employee, he may not be reinstated because of
termination of employment, state three (3) lawful or authorized causes for the strained relationship between the employer and the employee. Instead. he should
dismissal of an employee. (2%) be given separation pay. (an example of these cases is Hernandez v. National
Labor Relations Commission, G.R. No. 84302, Aug. 10. 1989. where the decided to abolish the position of chambermaids and outsource the cleaning of
Supreme Court said: “Inasmuch the rooms to Malinis Janitorial Services, a bona fide independent contractor
Page 149 of 307 which has invested in substantial equipment and sufficient manpower. The
Labor Law chambermaids filed a case of illegal dismissal against Luisa Court. In response,
as the charge against petitioner has not been substantiated, the inevitable result is the company argued that the decision to outsource resulted from the new
that this Court must declare the dismissal as unwarranted and. therefore, illegal. management’s directive to streamline operations and save on costs. If you were
Considering, however, that the relationship between petitioner and private the Labor Arbiter assigned to the case, how would you decide? (2014 Bar
respondent has been severely strained by reason of their respective imputation of Question)
bad faith against each other, this Court believes that to order reinstatement at this
juncture will no longer serve any prudent purpose.")
Under the facts of the case given in the question, however, it is respectfully Page 151 of 307
submitted that the above ruling of the Supreme Court should not apply. In the Labor Law
case, the employer acted in bad faith. He claimed business losses. It was found I will decide in favor of Luisa Court, provided that all the requisites for a valid
that there were no such business losses. He said he will cease operations. Instead, retrenchment under the Labor Code are satisfied. It is management prerogative to
he actually went on with the operations. On the basis of these proofs of bad faith, farm out any of its activities (BPI Employees Union-Davao City-FUBU (BPIEU-
the employer should reinstate the illegally dismissed employee pursuant to the Davao City-FUBU) v. Bank of the Philippine Islands, et al., G.R. No. 174912,
Labor Code which specifically provides for the reinstatement of an unjustly July 23, 2013).
dismissed employee. SUGGESTED ALTERNATIVE ANSWER:
A POINT TO CONSIDER: A bar examinee may state that there is need to prove I will decide in favor of the chambermaids. Article 248 (c) of the Labor Code
serious business losses or financial reverses so that thereby, there may be considers as unfair labor practice on the part of Luisa Court its “contradicting out
authorized cause for termination. (Camara Shoes v. Kapisanan ng Manggagawa the services or functions being performed by union members”. Luisa Court's
sa Camara Shoes. G.R. No. 63208-09, May 5. 1989) abolition and act of outsourcing the chambermaids' position are clearly acts of
illegal dismissal.
Zienna Corporation (Zienna) informed the Department of Labor and
Employment Regional Director of the end of its operations. To carry out the Hagibis Motors Corporation (Hagibis) has 500 regular employees in its car
cessation, Zienna sent a Letter Request for Intervention to the NLRC for assembly plant. Due to the Asian financial crisis, Hagibis experienced very low
permission and guidance in effecting payment of separation benefits for its fifty car sales resulting to huge financial losses. It implemented several cost-
(50) terminated employees. cutting measures such as cost reduction on use of office supplies, employment
Each of the terminated employees executed a Quitclaim and Release before hiring freeze, prohibition on representation and travel expenses, separation o f
Labor Arbiter Nocomora, to whom the case was assigned. After the erstwhile casuals and reduced work week. As counsel of Hagibis, what are the measures
employees received their separation pay, the Labor Arbiter declared the labor the company should undertake to implement a valid retrenchment? Explain.
dispute dismissed with prejudice on the ground of settlement. Thereafter, Zienna (2016)
sold all of its assets to Zandra Company (Zandra), which in turn hired its own
employees.
Nelle, one of the fifty (50) terminated employees, filed a case for illegal For a valid retrenchment, the following requisites must be complied with: (a) the
dismissal against Zienna. She argued that Zienna did not cease from operating retrenchment is necessary to prevent losses and such losses are proven; (b)
since the corporation subsists as Zandra. Nelle pointed out that aside from the written notice to the employees and to the DOLE at least one month prior to the
two companies having essentially the same equipment, the managers and owners intended date of retrenchment; and (c) payment of separation pay equivalent to
of Zandra and Zienna are likewise one and the same. one-month pay or at least one- half month pay for every year of service,
For its part, Zienna countered that Nelle is barred from filing a complaint for whichever is higher.
illegal dismissal against the corporation in view of her prior acceptance of Jurisprudential standards for the losses which may justify retrenchment are:
separation pay. Firstly, the losses expected should be substantial and not merely de minimis
Is Nelle correct in claiming that she was illegally dismissed? (5%) inextent. If the loss purportedly sought to be forestalled by retrenchment is
clearly shown to be insubstantial and inconsequential in characfer, the bonafide
nature of the retrenchment would appear to be seriously in question; secondly,
Page 150 of 307 the substantial loss must be reasonably imminent, as such imminence can be
Labor Law perceived objectively and in good faith by the employer; x x x thirdly, because of
No. In SME Bank, Inc. v. De Guzman (G.R. No. 184517 and 186641, October 8, the consequential nature of retrenchment, it must be reasonably necessary and is
2013), there are two (2) types of corporate acquisitions: asset sales and stock likely to be effective in preventing the expected losses x x x lastly; x x x alleged
sales. In asset sales, the corporate entity sells all or substantially all of its assets losses if already realized, and the expected imminent losses sought to be
to another entity. In stock sales, the individual or corporate shareholders sell a forestalled, must be proved by sufficient and convincing evidence (Manatad v.
controlling block of stock to new or existing shareholders. Asset sales happened Philippine Telegraph and Telephone Corporation, G.R. No. 172363, March 7,
in this case; hence, Zienna is authorized to dismiss its employees, but must pay 2008).
separation pay. The buyer Zandra, is not obliged to absorb the employees Page 152 of 307
affected by the sale, nor is it liable for the payment of their claims. The most that Labor Law
Zandra may do, for reasons of public policy and social justice, is to give Hagibis should exercise its prerogative to retrench employees in good faith. It
preference is hiring to qualified separated personnel of Zienna. must be for the advancement of its interest and not to defeat or circumvent the
employees' right to security of tenure. Hagibis should use fair and reasonable
Bugoy, an employee with only six (6) months of service, was dismissed due to criteria, such as status, efficiency, seniority, physical fitness, age, and financial
redundancy. He is, under Art. 283 of the Labor Code, entitled to a separation pay hardship for certain workers in ascertaining who would be dismissed and who
of: (2012 Bar Question) would be retained among the employees.
a. One (1) month pay;
b. One (1) year pay. Art. 283 of the Labor Code being explicit that “a fraction of After vainly struggling to stay financially afloat for a year, LMN Corp. finally
at least six (6) months shall be considered one (1) whole year; gave up and closed down its operations after its major creditors filed a petition
c. Six (6) months pay; for LMN's insolvency and liquidation.
d. One (1) year and six (6) months pay, as Art. 4 of the Labor Code mandated In this situation, LMN's employees are entitled to _________ as separation pay.
that “(a)ll doubts in the implementation and interpretation of this Code xxx shall (2013 Bar Questions)
be resolved in favor of labor”. (A) one-half month pay for every year of service
(B) one month pay for every year of service
(C) one-half month pay
a) One (1) month pay [Art. 283, Labor Code] (D) one month pay
(E) no separation pay at all
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 See: Article 283 (now Article 289) of the Labor Code. (North Davao Mining
agreement (CBA) with the company. While the CBA was in force, Luisa Court Corp v. NLRC, G.R. No. 112546 [1996])
 (Magro Placement and General Services v. Hernandez, G.R. No. 156964, July 4,
Venus Department Store decided to contract out the security services that its 10 2007, 526 SCRA 408; see also Mercury Drug Corporation v. Serrano, G.R. No.
direct-hired full-time security guards provided. The company paid the men 160509, March 10, 2006, 484 SCRA 434; citing Maquiling v. Philippine
separation pay. With this move, the Store was able to cut costs and secure Tuberculosis Society, Inc, G.R. No. 143384, February 4, 2005, 450 SCRA 465).
efficient outside professional security services. But the terminated security 3. "Reasonable opportunity" under the Omnibus Rules means every kind of
guards complained of illegal dismissal, claiming that regular jobs such as theirs assistance that management must accord to the employee to enable him to
could not be contracted out. Will their complaint prosper? (2011 BAR) (A) No. prepare adequately for his defense. This should be construed as a period of at
the management has the right to contract out jobs to secure efficient and least five (5) calendar days from receipt of the notice to give the employee an
economical operations. (B) Yes. They should be reinstated or absorbed by the opportunity to study the accusation against him, consult a union official or
security agency as its employees. (C) No. They are estopped from demanding lawyer, gather data and evidence, and decide on the defenses he will raise against
reinstatement after receiving their separation pay. (D) Yes. The company cannot the complaint (King of Kings Transport, Inc. v. Mantac, G.R. No. 166208, June
contract out regular jobs such as they had. Q: A golf and country club outsourced 29, 2007, 526 SCRA 116). 4. After receiving the first notice apprising him of the
the jobs in its food and beverage department and offered the affected employees charges against him, the employee may submit a written explanation (which may
an early retirement package of 1 ½ month’s pay for each year of service. The be in the form of a letter, memorandum, affidavit or position paper) and offer
employees who accepted the package executed quitclaims. Thereafter, employees evidence in support thereof, like relevant company records (such as his 201 file
of a service contractor performed their jobs. Subsequently, the management and daily time records) and the sworn statements of his witnesses. a. For this
contracted with other job contractors to provide other services like the purpose, he may prepare his explanation personally or with the assistance of a
maintenance of physical facilities, golf operations, and administrative and representative or counsel. He may also ask the employer to provide
support services. Some of the separated employees who signed Page 155 of 307
Page 153 of 307 Labor Law
Labor Law him copy of records material to his defense. His written explanation may also
quitclaims later filed complaints for illegal dismissal. Were they validly include a request that a formal hearing or conference be held. b. In such a case,
dismissed? (2011 BAR) (A) Yes. The jobs were given to job contractors, not to the conduct of a formal hearing or conference becomes mandatory, as where
labor-only contractors, and the dismissed employees received higher separation there exist substantial evidentiary disputes or where company rules or practice
pay than the law required. (B) No. The outsourcing and the employment requires an actual hearing as part of employment pre-termination procedure
termination were invalid since the management failed to show that it suffered (Perez v. Philippine Telegraph and Telephone Company, G.R. No. 152048, April
severe financial losses. (C) No. Since the outsourcing of jobs in several 7, 2009, 584 SCRA 110).
departments entailed the separation of many employees, the club needed the
Secretary of Labor’s approval of its actions. (D) No. Since the outsourced jobs Pedro, a bus driver of Biyahe sa Langit Transport, was involved in a collision
were held by old-time regular employees, it was illegal for the club to terminate with a car, damaging the bus. The manager accused him of being responsible for
them and give the jobs to others. Q: Sampaguita Company wants to embark on a the damage and was told to submit his written explanation within
retrenchment program in view of declining sales. It identified five employees that 48 hours. Pedro submitted his explanation within the period. The day after, Pedro
it needed to separate. The human resource manager seems to recall that she has received a notice of termination stating that he is dismissed for reckless driving
to give the five employees and the DOLE a 30-day notice but she feels that she resulting to damage to company property, effective immediately. Pedro asks you,
can give a shorter notice. What will you advise her? (2011 BAR) (A) Instead of as his counsel, if the company complied with the procedural due process with
giving a 30-day notice, she can just give a 30-day advanced salary and make the respect to dismissal Of employees.
separation effective immediately. (B) So long as she gave DOLE a 30-day prior [a] Explain the twin notice and hearing rule. (2016)
notice, she can give the employees a shorter notice. (C) The 30-day advance
notice to the employee and the DOLE cannot be shortened even with a 30-day
advance salary. (D) She can give a shorter notice if the retrenchment is due to The twin notice and hearing rule requires a directive that the employee be given
severe and substantial losses. Q: A sugar mill in Laguna, capitalized at P300 the opportunity to submit a written explanation on why he should not be
million, suffered a P10,000.00 loss last year. This year it dismissed three young dismissed within a reasonable period of time (King of Kings Transport, Inc. v.
female employees who gave birth in the last three years. In its termination report Santiago 0. Mamac, G.R. No. 166208, June 29, 2007). The grounds for
to DOLE, the sugar mill gave as reason for the dismissal “retrenchment because terminating an employee, again as explained in the Kings case, must be a
of losses.” Did it violate any law? (2011 BAR) (A) Yes, the law on retrenchment, detailed narration of the facts and circumstances that will serve as basis for the
the sugar mill’s loses not being substantial. (B) Yes, the law against violence charge against him. Further, it should mention specifically which company rule
committed on women and children. (C) No, except the natural law that calls for or provision of the Labor Code was violated. The Supreme Court defines
the protection and support of women. (D) No, but the management action 'reasonable period of time" to be five calendar days from the day the employee
confirms suspicion that some companies avoid hiring women because of higher received the NTE. As to the hearing, in Perez v. Philipjine Telegraph Company,
costs. 584 SCRA 110 120091, the Supreme Court enunciated the rule that a hearing is
3. Due Process (Twin-notice requirement, Hearing; meaning of opportunity to be only necessary if it was asked or requested by an employee. In case it was
heard) requested, a summary hearing must be done by the employer where the employee
must be afforded the opportunity to adduce evidence and present witnesses in his
Give the procedure to be observed for validly terminating the services of an behalf. Then the employer must inform the employee in writing of its decision
employee based on a just cause? (4%) (2017 Bar Question) stating the facts, the analysis of the evidence and statement of witnesses and the
Page 154 of 307 law or policy which led to the decision.
Labor Law [b] Did the Biyahe sa Langit Transport comply with the prior procedural
requirements for dismissal?
Procedural due process mandates that the twin requirements of Notice and Page 156 of 307
Hearing should be present. The two notices are as follows: 1st notice: Notice of Labor Law
appraisal, which is a written notice served on the employee specifying the ground
or grounds of termination, and giving the employee reasonable opportunity
within which to explain his side. 2nd notice: Notice of termination, which is a No. The notice given by Biyahe sa Langit Transport did not give Pedro a
written notice of termination served upon the employee, indicating that upon due minimum period lof five (5) days to submit a written explanation. He was given
consideration of all the circumstances, grounds have been established to justify only 48 hours to submit the same. The fact that he met the deadline did not cure
his termination. 1. The first notice should contain a detailed narration of facts and the lapse committed by Biyahe sa Langit Transport. There being a violation, of
circumstances that will serve as basis for the charge or specific causes or ground procedural due process, Biyahesa Langit Transport becomes liable for nominal
for termination against the employee, and a directive that the employee is given damages even, assuming that there was a valid ground for dismissal.
the opportunity to submit his written explanation within a reasonable period
(Unilever Phil. v. Maria Ruby Rivera, G.R. No. 201701, June 3, 2013, 697 The employer must observe both substantive and procedural due process when
SCRA 136). This is to enable the employee to intelligently prepare his dismissing an employee. If procedural due process is not observed, the dismissal
explanation and defenses. 2. A general description of the charge will not suffice. will be regarded as (A) defective; the dismissal process has to be repeated. (B) an
The notice should specifically mention which company rules, if any, are violated abuse of employer's discretion, rendering the dismissal void. (C) ineffectual; the
(King of Kings Transport, Inc. v. Mamac, G.R. No. 166208, June 29, 2007, 526 dismissal will be held in abeyance. (D) legal and valid but the employer will be
SCRA 116), and that the employer seeks his dismissal for the act or omission liable for indemnity.
charged against him; otherwise, the notice does not comply with the rules
Juan Santos is a regular employee of Far East Development Company. During
office hours, he quarelled with a co-employee. Santos was holding a knife and
when his supervisor Olivia Garcia tried to pacify him, he chased her instead with The twin requirements of due process are notice and hearing to be given to the
the knife but he was held back by cooler heads. On the ground of gross worker. There is likewise a two- notice requirement rule, with the first notice
misconduct and insubordination, he was dismissed from the service. He filed a pertaining to specific causes or grounds for termination and a directive to submit
complaint for illegal dismissal with the labor arbiter. The labor arbiter required a written explanation within a reasonable period.
Santos and his employer to file their position papers. On the basis of the position “The second notice pertains to notice of termination. Pursuant to Perez v.
papers submitted, the labor arbiter found that the dismissal was for lawful cause Philippine Telegraph and Telephon Company (G.R. No. 152048, 7 April 2009),
and thus, the complaint was dismissed. On appeal to the National Labor the Court held that a hearing or conference is not mandatory, as long as the
Relations Commission, the said decision was reversed on the ground that Santos employee is given “ample opportunity to be heard”, i.e. any meaningful
was not afforded due process by his employer before he was dismissed. Hence, opportunity (verbal or written) to answer the charges against him or her and
he was ordered reinstated with backwages from the date of his separation to the submit evidence in support of the defense, whether in a hearing, conference, or
date of his reinstatement without qualification or deduction. some other fair, just and equitable way.
The employer elevated the case lo the Supreme Court. He argued that even if
there was no due process in the dismissal of Santos, at the hearing before the Mariano, Dondon and Pongpong were members of the United Labor
labor arbiter, it was found that the dismissal was for a just cause and therefore Organization, a duly registered local union. During a meeting, the union expelled
Santos was not entitled to reinstatement. Santos, on the other hand, challenged them for disloyalty. They were not notified of the specific accusations against
the proceedings before the labor arbiter on the ground that no hearing was them or given any opportunity to refute the charges in any hearing or
conducted and that the decision was reached only on the basis of position papers investigation. The union immediately informed their employer, the XYZ
submitted and hence, in violation of due process. CORPORATION, of their expulsion from the union and recommended their
(1) Is the employer's contention valid? Explain. dismissal in accordance with the closed-shop agreement in the CBA.
(2) Is the contention of Santos correct? Explain. a) May the XYZ CORPORATION look into the facts of the expulsion before
Page 157 of 307 affecting termination of their employment?
Labor Law

Yes, XYZ Corporation may look, in fact, it should look into the facts of the
(1) The employer's contention is valid. It is true that under the facts of the case in expulsion before effecting termination of their employment.
the question, the employer failed to give due process to Santos before the latter The Labor Code expressly provides that the employer should not only furnish the
was dismissed since the employer did not give Santos the required written notice worker whose employment is sought to be terminated a written notice containing
of his termination and the reason or reasons for his termination. The employer a statement of the causes for termination. The employee should also be afforded
did not give Santos the required opportunity to defend himself. the opportunity to be heard and to defend himself.
But on the basis of the position papers submitted, the labor arbiter found that the Page 159 of 307
dismissal was lawful cause since Santos was indeed guilty of serious misconduct Labor Law
and willful disobedience which are just causes for termination. b) If the corporation decided to investigate the circumstances of the expulsion
The fact that Santos was not afford due process by the employer does not mean and found out that the union acted arbitrarily in expelling them from its ranks,
that thereby the employer cannot dismiss Santos, if there is just cause for his may it refuse to terminate their employment?
termination.
(2) In Wenph.il Corporation v. National Labor Relations Commission et al, G.A.
No. 80587, Feb. 8, 1989, the Supreme Court said: "By the same token, the The employer may refuse to terminate the employment of Mariano, Dondon and
conclusion of the public respondent NLRC on appeal that private respondent was Pongpong. The closed-shop agreement in the CBA can be the basis for
not afforded due process before he was dismissed is binding on this Court. terminating an employee only if the employees have been validly expelled from
Indeed, it is well taken and supported by the records. However, it can not justify union membership.
a ruling that private respondent should be reinstated with back wages as the 3. Suppose Juan Dukha proved during the hearing that he was robbed of his
public respondent NLRC so decreed. Although belatedly, private respondent was collections and, consequently, the Labor Arbiter decided in his favor. In the
afforded due process before the labor arbiter wherein the just cause of his meantime, the Ladies Garments Company appealed to the National Labor
dismissal had been established. With such finding, it would be arbitrary and Relations Commission (NLRC).
unfair to order his reinstatement with back wages." Pending appeal, what rights are available to Juan relative to the favorable
The contention of Santos is not correct. The Labor Codes provides (in Art. 221) decision of the Labor Arbiter? Explain.
that in any proceeding before the National Labor Relations Commission or any
labor arbiter, the rules of evidence prevailing in courts oflaw or equity shall not
be controlling and that it is in the spirit and intention of the Code that the Juan can ask for immediate reinstatement pending resolution of the appeal filed
Commission and the labor arbiters shall use every and all reasonable means to by the company with the NLRC. At the option of his employer, he may be
ascertain the fact in each case speedily, and objectively, without regard to admitted back to work or merely reinstated in the payroll.
technicalities of law on procedure, all in the interest of due process.
Considering the above provision in the Labor Code, in many decisions, the Atty. Oliza heads the legal department of Company X with the rank and title of
Supreme Court has held that it is proper for a labor arbiter to decide a case on the Vice-President. During his leave of absence, his assistant took over as acting
basis of the position papers submitted by the parties. (Example: Robusta Agro head of the legal department. Upon his return, Atty. Oliza was informed in
Marine Products Inc. u. Corobalem. G.R. No.80500, July 5. 1989). writing that his services were no longer needed, it appearing that the Company
ALTERNATIVE ANSWERS: had lost so many cases by default due to his incompetence. Atty. Oliza filed a
(1) The employer's contention is valid if a just cause was found by the labor case for illegal dismissal.
arbiter on the merits on the basis of admission in the pleadings, meaning the 1) Will his case prosper?
position papers. 2) Pending hearing, may Atty. Oliza ask the Secretary of Labor to suspend the
(2) The contention of Santos is not correct if the pleadings meaning the position effects of the termination of the services of an employee and to order his
papers did not tender any issue of fact. Such issue could be the subject of a temporary reinstatement?
hearing and
Page 158 of 307
Labor Law 1) His case will prosper. He was not given procedural due process. He was not
presentation of evidence. If the pleadings tendered an issue of fact, then a hearing given the required notice, namely, a written notice containing a statement of the
would be required by due process. causes for termination, and he was not afforded ample opportunity to be heard
and to defend himself.
Alfredo was dismissed by management for serious misconduct. He filed suit for Page 160 of 307
illegal dismissal, alleging that although there may be just cause, he was not Labor Law
afforded due process by management prior to his termination. He demands But if, before the Labor Arbiter, in a hearing of the case of illegal dismissal that
reinstatement with full backwages. Atty. Oliza may have filed, he is found to be grossly Incompetent, this is Just
[a] What are the twin-requirements of due process which the employer must cause for his dismissal. (Art. 277(b), Labor Code)
observe in terminating or dismissing an employee? Explain. (3%) ALTERNATIVE ANSWER:
Yes. The examinee submits that Atty. Ollza's case will prosper. Well-settled is
the rule that even managerial employees are entitled to the constitutional
guarantee of security of tenure. In the case at bar, there was a clear deprivation of
Atty. Oliza’s right to due process. The blanket accusation of “incompetence"
hardly qualifies as compliance with the substantive requirements for an
employee’s dismissal. The written notice that his services were no longer needed
also fall short of the procedural requirements of notice and opportunity to be
heard, the twin ingredients of due process.

2) The Labor Code gives the Secretary of Labor and Employment the power to
suspend the effects of a termination made by an employer pending resolution of a
labor dispute in the event of a prima facie finding by the Department of Labor
and Employment before whom such dispute is pending that the termination may
cause serious labor dispute or is in implementation of a mass lay-off.
The termination of Atty. Oliza does not cause a serious labor dispute considering
that he is a managerial employee. It is not in implementation of a mass lay-off.
Thus, pending hearing, the Secretary of Labor and Employment may not suspend
the effects of the termination and order his temporary reinstatement. (Art.
277(b))

The Company lawyer sent a memo to the employee informing him of the specific
charges against him and giving him an opportunity to explain his side. In a
subsequent letter, the employees was informed that, on the basis of the results of
the investigation conducted, his written explanation, the written explanation of
other employees as well as the audit report, the management has decided to
terminate his employment. The employee contended that his termination was
illegal for lack of procedural due process. Is the employee’s contention correct?
(2012 Bar Question)
a) No, the employee’s written explanation and written explanation of the other
employees were sufficient basis for the employer to terminate his employment;
b) Yes, because the employer did not abide by the two-notice rule;
c) Yes, because he was not properly afforded the chance to explain his side in a
conference;
d) No, because he was not properly notice of the cause of dismissal afforded him
ample opportunity to be heard and defend himself, and the written notice of the
decision to terminate him which states the reasons therefore, complies with the
two-notice rule.
Page 161 of 307
Labor Law

d) No, because he was not properly notice of the cause of dismissal afforded him
ample opportunity to be heard and defend himself, and the written notice of the
decision to terminate him which states the reasons therefore, complies with the
two-notice rule.

Which of the following is not a procedural due process requirement in the

termination of an employee for just cause? (2012 Bar Question)
a. A written notice to the employee specifying the grounds for his termination;
b. A written notice to the DOLE at least thirty (30) days before the effectivity of
termination;
c. A written notice to the employee stating that upon consideration of the
circumstances, grounds have been established to justify his termination;
d. An opportunity for the employee to present his evidence.

a. A written notice to the DOLE at least thirty (30) days before the effectivity of
termination.
 especially seamen. In these instances, separation pay in lieu of reinstatement
Reliefs for Illegal Dismissal may be ordered at the rate of one month or one month for ever year of
1. Reinstatement (Pending appeal (Art. 223, Labor Code), Separation pay in lieu service, a fraction of at least 6 months equivalent to one year, whichever is
of reinstatement) higher.

Juanito initiated a case for illegal dismissal against Mandarin What is meant by "payroll reinstatement" and when does it
Company. The Labor Arbiter decided in his favor, and ordered apply? (4%) (2005 Bar Question)
his immediate reinstatement with full backwages and without Payroll reinstatement is a form of reinstatement which an employer may opt to
exercise in lieu of an actual reinstatement. Here, the illegally dismissed
loss of seniority and other benefits. Mandarin Company did not
employee is to receive his basic pay without the obligation of rendering any
like to allow him back in its premises to prevent him from service to the employer. This occurs when a Labor Arbiter decides that an
influencing his co-workers to move against the interest of the employee was illegally dismissed and as a consequence awards reinstatement,
company; hence, it directed his payroll reinstatement and paid pursuant to Article 279 of the Labor Code. Such award of reinstatement,
his full backwages and other benefits even as it appealed to the according to Art. 223 of the Code, is immediately executory even pending
NLRC. A few months later, the NLRC reversed the ruling of the appeal.
Labor Arbiter and declared that Juanito's dismissal was valid.
The reversal ultimately became final. May Mandarin Company Juan Dukha, a bill collector of Ladies Garments Company, was
recover the backwages and other benefits paid to Juanito dismissed because he did not remit his collections. He filed a
pursuant to the decision of the Labor Arbiter in view of the case against his company for illegal dismissal. During the
reversal by the NLRC? Rule, with reasons. (2.5%) (2017 Bar hearing, the President of the Company admitted that Juan was
Question) never formally investigated for his dishonesty; neither was he
Mandarin cannot recover the backwages and Other benefits paid to Juanito. The informed of the nature of the charge against him. He was
decision of the Labor Arbiter insofar as the reinstatement aspect is concerned, is simply barred from entering company premises by the security
immediately executory pending appeal (Fellr v. Enertech Systems Industries guards upon instruction of management. Juan Dukha asks for
Inc., G.R. No. 192007, March 28, 2001, 355 SCRA 680). In fact, in the case of immediate reinstatement with full back wages and without
Pioneer Texturizing Corp. v. NLRC (G.R. No. 118651, October 16, 1997, 280
SCRA 806), it was held that the order of the Labor Arbiter is self-executory;
loss of seniority rights. (1995 Bar Question) Suppose Juan
hence, it is the obligation of Mandarin to immediately admit Juanito back to Dukha proved during the hearing that he was robbed of his
work or reinstate him in the payroll. When Mandarin appealed the Labor collections and, consequently, the Labor Arbiter decided in his
Arbiter's decision to the NLRC, the employer-employee relationship between favor. In the meantime, the Ladies Garments Company
the former and Juanito never ceased; and his employment status remained appealed to the National Labor Relations Commission (NLRC).
uncertain until the NLRC reversed the decision, which became final. Thus, the Pending appeal, what rights are available to Juan relative to
reinstatement salaries due to Juanito were, by their nature, payment of the favorable decision of the Labor Arbiter? Explain.
unworked backwages. These were salaries due to him because he was
Juan can ask for immediate reinstatement pending resolution of the appeal
prevented from working despite the finding of the Labor Arbiter that he
filed by the company with the NLRC. At the option of his employer, he may be
had been illegally dismissed. (Wenphil Corp. v. Abing and Tuason, G.R. No.
admitted back to work or merely reinstated in the payroll.
207983, April 7, 2014, 721 SCRA 126).
Under what circumstances or instances may an employee who is found to have
Cite four (4) instances when an illegally dismissed employee may be awarded
been illegally dismissed and, therefore, entitled to reinstatement, be nevertheless,
separation pay in lieu of reinstatement. (3%) (2009 Bar Question)
NOT ordered reinstated but merely awarded (a) separation pay in lieu of
reinstatement and (b) back wages? At what rate would the separation pay be?
What would be the maximum limit for the back wages?
These four instances are:
In a number of Supreme Court decision, it has been ruled that an employee who
(i) in case the establishment where the employee is to be reinstated has closed or
is found to have been illegally dismissed shall be awarded separation pay in lieu
ceased operations;
of reinstatement if reinstatement is no longer viable in view of the strained
(ii) where the company has been declared insolvent;
relations between the employee and his employer.
(iii) former position no longer exists at the time of reinstatement for reason
In a case, the Supreme Court also ruled that since reinstatement was no longer
not attributable to the fault of the employer; and
feasible in view of the advanced age of the employees who were illegally
(iv) where the employee decides not to be reinstated as when he does not pray
dismissed, they should instead receive separation pay.
for reinstatement in his complaint or position paper.
The rate of separation pay is one month salary for every year of service. The
Supreme Court has also ruled that in the computation of separation pay account
Discuss briefly the instances when non-compliance by the must be taken not only of the basic salary of the employee but also his
employer with a reinstatement order of an illegally dismissed allowances.
employee is allowed. (2007 Bar Question) The law has been changed by Rep. Act No. 6715. Back wages are now to be
Despite a reinstatement order, an employer may not reinstate an employee in the computed from the time the compensation of the employee was withheld
following instances: from him up to the time of his actual reinstatement. Thus, in applying the
(a) when the position or any substantial equivalent thereof no longer exists; amendment Introduced by Rep. Act No. 6715, this means that back wages will
(b) when reinstatement has been rendered moot and academic by supervening now be paid for the entire period up to the actual reinstatement of the
events, such as insolvency of the employer as declared by the court or closure of employees, even if the period is over three years.
the business; or
(c) the existence of strained relations between the employer and the illegally
dismissed employee, provided the matter is raised before the Labor Arbiter.
ALTERNATIVE ANSWER:
When reinstatement is not feasible due to the strained employer-employee
relationship; or that the reinstatement is rendered moot by the bona fide closure
of business; or when the position previously held by the employee no longer
exists and there is no equivalent position available; or that the employee is sick
with an illness (down with a sickness) that cannot be cured within 6 months, or
that the employee has reached the age of retirement; or that the employee
himself refuses to be reinstated for one reason or another; in view of the
expiration of the 4-year prescriptive period; RA 8042 (Migrant Workers and
Overseas Act) does not allow reinstatement to overseas Filipinos workers
Johnny Torres is an employee of M.C.U, hospital having worked justified? (2011 BAR) (A) No, every employee found to have been illegally
therein as janitor for 12 years. Sometime in March 1993, he dismissed is entitled to immediate reinstatement even pending appeal. (B) Yes.
was suspected of conniving with some medical students in the The employer’s refusal is legal and justified as a penalty for defying the
secretary’s lawful order. (C) Yes, the rule on immediate reinstatement does not
theft of laboratory equipment for which reason, the apply to employees who have defied a return-to-work order. (D) No. The
management of M.C.U Hospital ordered his employment dismissal of the employees was valid; reinstatement is unwarranted.
terminated for loss of confidence. Johnny Torres filed before Page 167 of 307
the Arbitration Branch of the NLRC a case of illegal dismissal Labor Law
against the hospital. After hearing, the Labor Arbiter cleared
Johnny Torres of any involvement in the theft and rendered a Despite a reinstatement order, an employer may choose not to reinstate an
employee if: (2014 Bar Question)
decision declaring the order of dismissal illegal thereby
(A) there is a strained employer-employee relationship
ordering the hospital to reinstate Johnny Torres to his former (B) the position of the employee no longer exists
position and to pay him full backwages, which he would have (C) the employer’s business has been closed
received were it not for the illegal dismissal. MCU Hospital filed (D) the employee does not wish to be reinstated.
a Motion for Reconsideration alleging that the Labor Arbiter
gravely abused his discretion in ordering a reinstatement
which is no longer possible under the “strained relations" (D) the employee does not wish to be reinstated (DUP Sound Phils. v. CA, G.R.
No. 168317, Nov. 21, 2011).
principle, a hostility that developed between the parties as a
result of the litigation. Is the legal argument poised by MCU The decision of the Labor Arbiter in a labor dispute case is: (2012 Bar Question)
Hospital tenable? a. Immediately executory;
The legal argument poised by MCU Hospital is not tenable. An employer cannot b. Requires a writ of execution;
use “strained relations" as a valid reason for not reinstating an employee who has c. Is immediately executor insofar as the reinstatement of the employee is
been illegally dismissed, if such strained relations arose from a worker filing a concerned;
case of illegal dismissal against his employer. When he filed the case, the d. Is stayed by the appeal of the employer and posting of appeal bond.
employee was only asserting his constitutional right to security of tenure.

The Septuagint Company, Inc., through its general manager, c. Is immediately executory insofar as the reinstatement of the employee is
dismissed Juan Suntok, a rank-and-file employee, on the concerned. [Art. 223, Labor Code]
ground of loss of confidence. The company served on his the
An employee proved to have been illegally dismissed is entitled to reinstatement
notice of termination effective on the date of receipt, which and full backwages computed on the basis of his (2011 BAR) (A) basic salary
was 8 September 1986. Taken aback by his sudden dismissal, plus the regular allowances and the thirteenth month pay. (B) basic salary plus
Juan confronted the general manager and hit him on the face the salary CBA increases during the pendency of his case. (C) basic salary plus
with a cast of iron pipe. The company filed a complaint against the increases mandated by wage orders issued during the pendency of his case.
him for less serious physical injuries. On 1 September 1990, a (D) basic salary at the time of dismissal.
week after he was acquitted by the court which tried the 2. Backwages (Computation, Limited backwages)
criminal case, Juan filed a complaint for illegal dismissal,
An employee was ordered reinstated with backwages. Is he entitled to the
seeking reinstatement and payment of back wages. benefits and increases granted during the period of his lay-off? Explain briefly.
a) On the basis of the facts given, was the dismissal of Juan valid? (3%)
The dismissal of Juan was not valid. The ground for his dismissal is mere
allegation of “loss of confidence." Such allegation is not sufficient unless there
are facts that provide the objective basis of loss of confidence. It should also be Yes. An employee who is ordered reinstated with backwages is entitled to the
noted that Juan was not given any opportunity to be heard and to defend himself. benefits and increases granted during the period of his lay-off. The Supreme
b) If the Labor Arbiter finds that the dismissal was illegal for being Court has ruled:
Page 168 of 307
without just cause, what relief/s may be granted to Juan?
Labor Law
Juan is entitled to these reliefs, namely reinstatement without loss of seniority
“Backwages are granted for earnings a worker lost due to his illegal dismissal
and other privileges and full backwages, inclusive of allowances, and to other
and an employer is obliged to pay an illegally dismissed employee the whole
benefits or their monetary equivalent computed from the time his
amount of salaries plus all other benefits and bonuses and general increases to
compensation was withheld from him up to the time of his actual
which the latter should have been normally entitled had he not been dismissed.”
reinstatement.
[Sigma Personnel Services v. NLRC, 224 SCRA 181 (1993)]
c) If the Labor Arbiter finds that there was just cause for the
termination of Juan's employment, but that the requirement of Distinguish between an award for back wages and an award for unpaid wages.
notice and hearing was not complied with, what relief/s may be
granted to Juan?
The relief to be granted to Juan is indemnity in the amount of PI.000.00. An award for backwages is to compensate an employee who has been illegally
d) Was the complaint for illegal dismissal filed within the reglementary period? dismissed, for the wages, allowances and other benefits or their monetary
equivalent, which said employee did not receive from the time he was illegally
dismissed up to the time of his actual reinstatement.
It was filed within the reglementaiy period. Juan filed his complaint for illegal On the other hand, an award for unpaid wages is for an employee who has
dismissal within four (4) years from the date of his dismissal which is the actually worked but has not been paid the wages he is entitled to receive for such
prescriptive period for filing cases of illegal dismissal. An action for illegal work done. (Arts. 279 and 97(f). Labor Code)
dismissal prescribes in four years under the Civil Code, It being an action ALTERNATIVE ANSWER:
predicated “upon an injury to the rights of the plaintiff." An award of backwages is given to an employee who is unjustly dismissed. The
cause of action here is the unjust dismissal. On the other hand, an award of
The employees’ union in San Joaquin Enterprise continued their strike despite a unpaid wages is given to an employee who has not been paid his salaries or
return to work order from the Secretary of Labor. Because of this defiance, the wages for services actually rendered. The cause of action here is non-payment of
employer dismissed the strikers. But the Labor Arbiter declared as illegal the wages or salaries. (General Baptist Bible College v. NLRC 219 SCRA 549).
dismissal of those whose commission of unlawful acts had not been proved.
They were ordered immediately reinstated. The employer refused, however, to Baldo was dismissed from employment for having been absent without leave
reinstate them on the ground that the rule on immediate reinstatement applies (AWOL) for eight (8) months. It turned out that the reason for his absence was
only to terminations due to just or authorized causes. Is the employer’s refusal his incarceration after he was mistaken as his neighbor’s killer. Eventually
acquitted and released from jail, Baldo returned to his employer and demanded
reinstatement and full backwages. Is Baldo entitled to reinstatement and
backwages? Explain your answer. (3%) (2009 Bar Question) Which takes precedence in conflicts arising between employers’s
MANAGEMENT PREROGATIVE and the employees right to security of
tenure? Why?
Yes. Baldo is entitled to reinstatement. Although he shall not be entitled to
backwages during the period of his detention, but only from the time the
company refused to reinstate him. (Magtoto v. NLRC, 140 SCRA 58 [1985]). The employee's right to security of tenure takes precedence over the employer's
ANOTHER management prerogative. Thus, an employer's management prerogative includes
the right to terminate the services of an employee but this management
prerogative is limited by the Labor Code which provides that the employer can
No. Baldo is not entitled to reinstatement and backwages. The dismissal was for terminate an employee only for a just cause or when authorized by law. This
cause, i.e., AWOL. Baldo failed to timely inform the employer of the cause of limitation on management prerogative is because no less than the Constitution
his failure to report for work; hence, prolonged absence is a valid ground to recognizes and guarantees an employee’s right to security of tenure. (Art. 279.
terminate employment. Labor Code: Art. XIII, Sec. 3.
Page 169 of 307 Constitution)
Labor Law
Harbor View Hotel has an existing Collective Bargaining Agreement (CBA) with
May the general manager of a company be held jointly and severally liable for the union of rank-and-file employees consisting, among others, of bartenders,
backwages of an illegally dismissed employee? (2%) waiters, roomboys, housemen and stewards. During the lifetime of the CBA,
Harbor View Hotel, for reasons of economy and efficiency, decided to abolish
the position of housemen and stewards who do the cleaning of the hotel’s public
Yes. If it is shown that he acted in bad faith, or without or In excess of authority, areas. Over the protest of the Union, the Hotel contracted out the aforementioned
or was motivated by personal ill-will in dismissing the employee, the general job to the City Service Janitorial Company, a bonafide independent contractor
manager may be held jointly and severally liable for the backwages of an which has a substantial capital in the form of janitorial tools, equipment,
illegally dismissed employee. [ARB Construction C. v. Court of Appeals, 332 machineries and competent manpower. Is the action of the Harbor View Hotel
SCRA 427, (2000), Lim v. NLRC, 303 SCRA 432, (1999)] legal and valid?
ANOTHER

The action of Harbor View Hotel is legal and valid.

Yes. The General Manager may be held jointly and severally liable for back Page 171 of 307
wages of an illegally dismissed employee if he or she actually authorized or Labor Law
ratified the wrongful dismissal of the employee under the rule of respondent The valid exercise of management prerogative, discretion and judgment
superior. In case of illegal dismissal, corporate directors and officers are encompasses all aspects of employment, including the hiring, work assignments,
solidarily liable with the corporation where termination of employment are done working methods, time, place and manner of work, tools to be used, processes to
with malice or bad faith. {Bogo- Medellin Sugar Planters Assoc., Inc. v. NLRC, be followed, supervision of workers, working regulations, transfer of employees,
296 SCRA 108, (1998)] work supervision, lay-off of workers, and the discipline, dismissal and recall of
D. Preventive Suspension workers, except as provided for, or limited by special laws.
Company policies and regulations are. unless shown to be gross oppressive or
Karina Santos is a famous news anchor appearing nightly in the country's most contrary to law, generally binding and valid on the parties and must be complied
watched newscast. She is surprised, after one newscast, to receive a notice of with until finally revised or amended unilaterally or preferably through
hearing before the station's Vice-President for Human Resources and calls the negotiation or by competent authority. (San Miguel Corporation us. Reynaldo R.
VP immediately to ask what was wrong. Karina is told over the phone that one of Ubaldo and Emmanuel Noel A. Cruz, Chairman and Member respectively ojthe
her crew filed a complaint against her for verbal abuse and that management is Voluntary Arbitration Panel, et aL G.R. No. 92859, 1 February 1993. J. Campos.
duty bound to investigate and give her a chance to air her side. Karina objects Jr.. 218 SCRA.293)
and denies that she had ever verbally assaulted her crew. The VP then informed ALTERNATIVE ANSWER:
her that pending the investigation she will be placed on a 30-day preventive a) The action of the Harbor View Hotel is legal and valid. Contracting out
suspension without pay and that she will not be allowed to appear in the newscast services or functions being performed by union members is not illegal per se. In
during this time. fact, it is the prerogative of management to adopt cost-saving measures to ensure
Is the preventive suspension of Karina valid? Discuss the reasons for your economy and efficiency. Contracting out services or functions being performed
answer. (2015 Bar Question) by union members becomes illegal only when it interferes with, restrains or
coerces employees in the exercise of their right to self-organization.
b) The action of Harbor View Hotel would, at first glance, appear to be an unfair
No. The preventive suspension of Karina is not valid. labor practice under Article 248(c), e.g., “to contract out services or functions
The employer may place an employee under preventive suspension if his/her being performed by union members if such will interfere with, restrain or coerce
continued employment would pose a serious and immientn threat to the life or employees in the exercise of their right to self-organization.”
property of the employer or of his/her co-employees. These requirements are not Considering, however, that in the case at bar. there is no showing that the
present here. contracting out of services would violate the employees right to self-
E. Constructive Dismissal organization, it is submitted that the hotel’s action is a valid exorcise of its
Page 170 of 307 management prerogatives and the right to make business judgments in
Labor Law accordance with law.

An accidental fire gutted the JKL factory in Caloocan. JKL decided to suspend Flight attendant A, five feet and six inches tall, weighing 170 pounds ended up
operations and requested its employees to stop reporting for work. After six (6) weighing 220 pounds in two years. Pursuant to the long standing Cabin and Crew
months, JKL resumed operations but hired a new set of employees. The old set of Administration Manual of the employer airline that set a 147-pound limit for A’s
employees filed a case for illegal dismissal. If you were the Labor Arbiter, how height, management sent A a notice to “shape up or ship out” within 60 days. At
would you decide the case? (2014 Bar Question) the end of the 60-day period, A reduced her weight to 205 pounds. The company
finally served her a Notice of Administration Charge for violation of company
standards on weight requirements. Should A be dismissed? Explain. (3%) (2010
I will rule in favor of the employees. JKL factory merely suspended its Bar Question)
operations as a result of the fire that gutted its factory. Article 286 of the Labor
Code states that an employer may bona fide suspend the operation of its business
for a period not exceeding six (6) months. In such a case, there would be no Page 172 of 307
termination of the employment of the employees, but only a temporary Labor Law
displacement. Since, the suspension of work lasted more than six months, there is NO. While the weight standards for cabin crew may be a valid company policy
now constructive dismissal (Sebuguero v. NLRC, 245 SCRA 532 [1995]). in light of its nature as a common carrier, the airline company is now estopped
V. Management Prerogative from enforcing the Manual as ground for dismissal against A.
It hired A despite her weight of 170 pounds, in contravention of the same Manual No. it is not really correct. The transfer of an employee ordinarily lies within the
it now invoked. ambit of management prerogatives but like other rights, there are limits thereto.
The Labor Code gives to an airline the power to determine appropriate minimum This managerial prerogative to transfer personnel must be exercised without
age and other standards for requirement or termination in special occupations grave abuse of discretion, bearing in mind the basic elements of justice and fair
such as those of flight attendants and the like. Weight standards for cabin crew is play. Thus, the transfer of Bobby from Tarlac to Makati must be done in good
a reasonable imposition by reason of flight safety [Yrasuegui v. PAL, 569 SCRA faith, and it must not be unreasonable, inconvenient or prejudicial to the
467 [2008]). However, A had already been employed for two (2) years before the employee. For another, the reinstatement of Bobby ought to be to his former
airline company imposed on her this weight regulation, and an incident did the position, much akin to return to work order, i.e. to restore the
airline company raise which rendered her amiss of her duties. Page 174 of 307
Labor Law
Bulacan Medical Hospital (BMH) entered into a Collective Bargaining status quo in the work place. (Composite Enterprises v. Capamaroso, 529 SCRA
Agreement (CBA) with its Union, wherein it is expressly stipulated in the 470 [2007]).
Management Prerogative Clause that BMH shall, in the exercise of its SUGGESTED ALTERNATIVE ANSWER:
management prerogatives, have the sole and exclusive right to promulgate, No. Under Article 223 of the Labor Code, the reinstatement order of the Labor
amend and modify rules and regulations for the employees within the bargaining Arbiter which is immediately executory even pending appeal, should pertain to
unit. A year after the contract was signed, BMH issued its Revised Rules and restoration to status quo ante.
Regulations and furnished a copy thereof to the Union for dissemination to all (B) Advise Bobby on the best course of action to take under the circumstances.
employees covered by the CBA. The Union wrote BMH demanding that the (2013 Bar Questions)
Revised Rules and Regulations be first discussed with them before its
implementation. BMH refused. So. the Union filed an action for unfair labor
practice (ULP) against BMH. The best course of action for Bobby to take under the circumstances is to allege
1) Is the Union correct? constructive dismissal in the same case, and pray for separation pay in lieu of
2) Assuming that the CBA was signed or executed before the 1987 Constitution reinstatement.
was ratified, would your answer to the preceding question be different? A. Discipline

Bulacan Medical Hospital (BMH) entered into a Collective Bargaining

1) The Union is correct. A provision in the collective bargaining agreement Agreement (CBA) with its Union, wherein it is expressly stipulated in the
concerning management prerogatives, may not be interpreted as cession of the Management Prerogative Clause that BMH shall, in the exercise of its
employees’ right to participate in the deliberation of matters which may affect management prerogatives, have the sole and exclusive right to promulgate,
their right and the formulation of policies relative thereto, such as the amend and modify rules and regulations for the employees within the bargaining
formulation of a code of discipline. unit. A year after the contract was signed, BMH issued its Revised Rules and
A line must be drawn between management prerogatives regarding business Regulations and furnished a copy thereof to the Union for dissemination to all
operations per se and those which affect the rights of the employees, and in employees covered by the CBA. The Union wrote BMH demanding that the
treating the latter, management should see to it that its employees are at least Revised Rules and Regulations be first discussed with them before its
properly informed of its decisions or modes of action. implementation. BMH refused. So. the Union filed an action for unfair labor
The attainment of a harmonious labor-management relationship and the existing practice (ULP) against BMH.
state policy of enlightening workers concerning their rights as employees 1. Is the Union correct?
demand no less than the observance of transparency in managerial moves 2. Assuming that the CBA was signed or executed before the 1987 Constitution
affecting employees' rights. was ratified, would your answer to the preceding question be different?
Page 173 of 307
Labor Law
(Philippine Airlines. Inc. v. National Labor Relations Commission, et al, G.R. 1. The Union is correct. A provision in the collective bargaining agreement
No. 85985, 13 August 1993. J. Melo. 225 SCRA 258. 301.) concerning management prerogatives, may not be interpreted as cession of the
ALTERNATIVE ANSWER: employees’ right to participate in the deliberation of matters which may affect
a) The Union is correct. Workers have the right to participate in policy and their right and the formulation of policies relative thereto, such as the
decision-making processes affecting their rights, benefits and welfare. (Art. 255). formulation of a code of discipline.
b) Yes. The Union is correct in asking for discussion of the revised rules prior to A line must be drawn between management prerogatives regarding business
their effectivity. The reason is Art. XIII. Sec. 3 of the 1987 Constitution, operations per se and those which affect the rights of the employees, and in
allowing workers the right to participate 'in policy and decision-making on treating the latter,
matters related to their welfare and benefits. Page 175 of 307
The Union's remedy however should not be to file a ULP case but to initiate a Labor Law
GRIEVANCE proceeding, and if unresolved, submit the matter to voluntary management should see to it that its employees are at least properly informed of
arbitration. its decisions or modes of action.
The attainment of a harmonious labor-management relationship and the existing
state policy of enlightening workers concerning their rights as employees
2) The answer would be the same even if the CBA was signed or executed before demand no less than the observance of transparency in managerial moves
the ratification of the 1987 Constitution because it has always been the policy of affecting employees' rights. (Philippine Airlines. Inc. v. National Labor Relations
the State to promote the enlightenment of workers concerning their rights and Commission, et al, G.R. No. 85985, 13 August 1993. J. Melo. 225 SCRA 258.
obligations as employees. (Art. 211; PAL v. NLRC, GR 85985. August 13. 1993) 301.)
ALTERNATIVE ANSWER:
Bobby, who was assigned as company branch accountant in Tarlac where his a. The Union is correct. Workers have the right to participate in policy and
family also lives, was dismissed by Theta Company after anomalies in the decision-making processes affecting their rights, benefits and welfare. (Art. 255).
company's accounts were discovered in the branch Bobby filed a complaint and b. Yes. The Union is correct in asking for discussion of the revised rules prior to
was ordered reinstated with full backwages after the Labor Arbiter found that he their effectivity. The reason is Art. XIII. Sec. 3 of the 1987 Constitution,
had been denied due process because no investigation actually took place. allowing workers the right to participate 'in policy and decision-making on
Theta Company appealed to the National Labor Relations Commission (NLRC) matters related to their welfare and benefits.
and at the same time wrote Bobby, advising him to report to the main company The Union's remedy however should not be to file a ULP case but to initiate a
office in Makati where he would be reinstated pending appeal Bobby refused to GRIEVANCE proceeding, and if unresolved, submit the matter to voluntary
comply with his new assignment because Makati is very far from Tarlac and he arbitration.
cannot bring his family to live with him due to the higher cost of living in 2) The answer would be the same even if the CBA was signed or executed before
Makati. the ratification of the 1987 Constitution because it has always been the policy of
(A) Is Bobby's reinstatement pending appeal legally correct? (2013 Bar the State to promote the enlightenment of workers concerning their rights and
Questions) obligations as employees. (Art. 211; PAL v. NLRC, GR 85985. August 13. 1993)
B. Transfer of employees
George Clinton, an American, was hired as marketing assistant by Perot Drug
Company in its main office in Cleveland. Ohio. Because of his good What is a bonus? When is it demandable as a matter of right? Explain.
performance, Clinton was appointed manager of the Company’s branch in
Manila. After two years in Manila, Clinton was advised of his promotion and
transfer to Cleveland as director for international marketing. Because of his A bonus is money given in addition to an employee’s usual compensation.
refusal to be promoted and transferred “for family reasons", Clinton was It may be given as a gratuity, as an act of liberality. But a bonus is demandable as
dismissed by the Company. Clinton sought your advice. As his counsel, answer a matter of right if it is made a legal obligation by law or in a collective
the following: bargaining agreement or in a contract of employment or by its having been given
a) What Clinton's cause of action, if any, against Perot Drug Company? for such a long time such that the receipt of a bonus has ripened into a right.
ALTERNATIVE ANSWER:
A bonus is an amount granted and paid to an employee for his industry and
The course of action of Clinton against Perot Drug Company is that of illegal loyalty which contributed to the employer's success and realization of profit.
dismissal. When the Company dismissed him for his refusal to be promoted and (1) Grant of bonus is a prerogative, not an obligation of the employer; and
transferred “for family reason", he could claim he was being dismissed without (2) It is entirely dependent on the employer's capacity to pay.
just cause. Normally discretionary, it becomes part of the regular compensation by reason of
Page 176 of 307 long and regular concession or when the bonus is included as among the benefits
Labor Law granted in a CBA.
b) If he has a cause of action, where will you file the appropriate petition — in
the U.S. or in the Philippines? The projected bonus for the employees of Suerte Co. was 50% of their monthly
compensation. Unfortunately, due to the slump in the business, the president
Page 178 of 307
I will file the case of illegal dismissal in the Philippines where Clinton was Labor Law
working when he was dismissed. The Company can be sued in the Philippines reduced the bonus to 5 % of their compensation. Can the company unilaterally
because it is doing business in the country by having a branch in Manila. reduce the amount of bonus? Explain briefly. (2%)
c) Will your petition, if you decide to file one, proper? Answer with reasons.

Yes. The granting of a bonus is a management prerogative, something given in

The petition will prosper. The refusal of Clinton to be promoted and transferred addition to what is ordinarily received by or strictly due the recipient.
to Cleveland is not just cause. His refusing a promotion - his refusing to receive An employer, like Suerte Co., cannot be forced to distribute bonuses when it can
the gift that the Company was offering, namely, his promotion - cannot be no longer afford to pay. To hold otherwise would be to penalize the employer for
considered as willful disobedience of a lawful order of his employer. Thus, there his past generosity. [Producers Bank of the Phil. V. NLRC, 355 SCRA 489,
is not just cause for the dismissal of Clinton (2001)]
ANOTHER
Din Din is a single mother with one child. She is employed as a sales executive
at a prominent supermarket. She and her child live in Quezon City and her
residence and workplace are a 15-minute drive apart. One day, Din Din is It depends. If there is a legal obligation on the part of Suerte Co. to pay a bonus
informed by her boss that she is being promoted to a managerial position but she of its employees equivalent to 50% of their monthly compensation, because said
is now being transferred to the Visayas. Din Din does not want to uproot her obligation is included in a collective bargaining agreement, then Suerte Co.
family and refuses the offer. Her boss is so humiliated by Din Din's refusal of the cannot reduce the bonus to 5% of their monthly compensation. But if the
offer that she gives Din Din successive unsatisfactory evaluations that result in payment of the bonus is not a legal obligation but only a voluntary act on the part
Din Din being removed from the supermarket. of the employer, said employer, unilaterally, can only reduce the bonus from
Din Din approaches you, as counsel, for legal advice. What would you advise 50% to 5% of the monthly compensation of its employees; the employer can, in
her? (2015 Bar Question) fact, not give any bonus at all.

Lito was anticipating the bonus he would receive for 2013. Aside from the 13th
I will advise Din Din to sue her boss and the supermarket for illegal dismissal. month pay, the company has been awarding him and his other co-employees a
Din Din cannot be compelled to accept the promotion. Her unsatisfactory two to three months bonus for the last 10 years. However, because of poor over-
evaluations as well as her boss’ insistence that she should agree to the intended all sales performance for the year, the company unilaterally decided to pay only a
transfer to Visayas are badges of an abuse of management prerogative. In Pfizer one month bonus in 2013. Is Lito’s employer legally allowed to reduce the
Inc. v. Velasco (645 SCRA 135), the Supreme Court held that the managerial bonus? (2014 Bar Question)
prerogative to transfer personnel must be exercised without abuse of discretion,
bearing in mind the basic elements of justice and fair play. Hence, Din Din’s
dismissal is illegal. Yes. A bonus is an act of generosity granted by an enlightened employer to spur
C. Productivity standard the employee to greater efforts for the success of the business and realization of
bigger profits. The granting of a bonus is a management prerogative, something
Union “X” is the majority union of the rank and file employees at Slipper Mart given in addition to what is ordinarily received by or strictly due the recipient.
Company. It amended its by-laws to include among the obligations of its Thus, a bonus is not a demandable and enforceable obligation, except when it is
members “to refuse to work with non-union members.” Slipper Mart wants the made part of the wage, salary or compensation of the employee. It may,
amendment therefore, be withdrawn, unless they have been made a part of the wage or salary
Page 177 of 307 or compensation of the employees, a matter which is not in the facts of the case
Labor Law (American Wire and Cable Daily Rated Employees Union v. American Wire and
to be declared null and void considering that not all its rank and file employees Cable Co., Inc. and the Court of Appeals, G.R. No. 155059, April 29, 2005).
belong to Union “X” and its enforcement will cause work stoppage in the SUGGESTED ALTERNATIVE ANSWER:
company. Give your opinion on the validity of the amendment. Page 179 of 307
Labor Law
No. Having been enjoyed for the last 10 years, the granting of the bonus has
The provision of the by-laws of the union that made it among the obligations of ripened into a company practice or policy which can no longer be peremptorily
its members ‘‘to refuse to work with non-union members” cannot be withdrawn. Art. 100 of the Labor Code prohibits the diminution or elimination
implemented at the Slipper Mart Company. It is management’s prerogative to by the employer of the employees' existing benefits.
determine who shall work together in a company.
ALTERNATIVE ANSWER: Far East Bank (FEB) is one of the leading banks in the country. Its compensation
The act is an unfair labor practice on the part of the union because it could have and bonus packages are top of the industry. For the last 6 years, FEB had been
the effect of compelling the employer to compel its employees to join Union providing the following bonuses across-the-board to all its employees:
“X”, thus, in effect restraining or coercing employees in the exercise of their (a) 13th month pay;
right to self-organization. (b) 14th to 18th month pay;
D. Grant of bonus (c) Christmas basket worth P6,000;
(d) Gift check worth P4,000; and who worked overtime were only paid an additional 25%instead of the previous
(e) Productivity-based incentive ranging from a 20o/o to 40% increase in gross 35%. To replace the workers' overtime rate loss, the company granted a one-time
monthly salary for all employees who would receive an evaluation of "Excellent" 5% across-the-board wage increase.
for 3 straight quarters in the same year. Vigilant Union, the rank-and-file bargaining agent, charged the company with
Because of its poor performance over-all, FEB decided to cut back on the Unfair Labor Practice on the ground that (1) no consultations had been made on
bonuses this year and limited itself to the following: who would render overtime work; and (2) the unilateral overtime pay rate
(a) 13th month pay; reduction is a violation of Article 100 (entitled Prohibition Against Elimination
(b) 14th month pay; or Diminution of Benefits) of the Labor Code.
(c) Christmas basket worth P4,000; and Is the union position meritorious? (2013 Bar Questions)
(d) Gift check worth P2,000
Katrina, an employee of FEB, who had gotten a rating of "Excellent" for the last
3 quarters was looking forward to the bonuses plus the productivity incentive The allegation of ULP by the Union is not meritorious. The selection as to who
bonus. After learning that FEB had modified the bonus scheme, she objected. Is would render overtime work is a management prerogative.
Katrina's objection justified? Explain. (2015 Bar Question) However, the charge of the Union on the diminution of benefits (violation of
Article 100 of the Labor Code) appears to be meritorious. Since three (3) years
have already lapsed, the overtime rate of 35% has ripened into practice and
Katrina’s objection is justified. policy, and cannot anymore be removed. (Sevilla Trading v. Semana, 428 SCRA
Having enjoyed the across-the-board bonuses, Katrina has earned a vested right. 239 [2004]) This is deliberate, consistent and practiced over a long period of
Hence, none of them can be withheld or reduced. In the problem, the company time.
has not proven its alleged losses to be substantial. Permitting reduction of pay at VI. Social Welfare Legislation (P.D. 626)
the slightest indication of losses is contrary to the policy of the State to afford A. SSS Law (R.A. No. 8282)
full protection to labor and promote full employment. (Linton Commercial Co. v. 1. Coverage
Hellera, 535 SCRA 434)
As to the withheld productivity-based bonuses, Katrina is deemed to have earned Seventy (70) private security guards of TAPANG SECURITY AGENCY
them because of her excellent performance ratings for three quarters. On this CORPORATION, assigned to guard the mining area of DAVAO GOLD
basis, they cannot be withheld without violating the Principle of Non-Diminution CORPORATION, filed a complaint against both their direct employer.
of Benefits. TAPANG SECURITY, and their indirect employer. DAVAO GOLD, when they
Moreover, it is evident from the facts of the case that what was withdrawn by discovered they could not avail of the benefits of the Social Security System law
FEB was a productivity bonus. Protected by RA 6791 which mandates that the for the failure of respondents TAPANG or DAVAO GOLD to remit its
monetary value contributions to the System.
Page 180 of 307 By way of answer to the complaint. TAPANG claims that there is no employer-
Labor Law employee relationship, since it has only two (2) office employees whose duties
of the productivity improvement be shared with the employees, the are to monitor their assignment and hours of work and to pay the salaries under
“productivity-based incentive” scheme of FEB cannot just be withdrawn without the agency contract of the security guards from the funds remitted by DAVAO
the consent of its affected employees. GOLD, keeping a certain percentage of the amount for office expenses and
E. Rules on Marriage between employees of competitor-employers supervisory fees, the true and real employer being DAVAO GOLD. On the other
hand, DAVAO GOLD maintains that it has no employer-employee relationship
A was working as a medical representative of RX pharmaceutical company when with TAPANG’s security guards assigned to secure its mining area since it has
he met and fell in love with B, a marketing strategist for Delta Drug Company, a no control over
competitor of RC. On several occasions, the management of RX called A’s Page 182 of 307
attention to the stipulation in his employment contract that requires him to Labor Law
disclose any relationship by consanguinity or affinity with co-employees or hiring/dismissal of its guards. TAPANG is a duly licensed security agency and a
employees of competing companies in light of a possible conflict of interest. A bona fide independent contractor.
seeks your advice on the validity of the company policy. What would be your 1) Who is deemed an “employee" for purposes of coverage under the SSS law?
advice? (3%) (2010 Bar Question) 2) Under the above facts whose duty is it to bring the security guards for
compulsory coverage pursuant to the SSS law? Discuss.

The company policy is valid. However, it does not apply to A. As A and B are
not yet married, no relationship by consanguinity or affinity exists between them. 1) A person is deemed an employee" for purposes of coverage under the Social
The case of Duncan v. Glaxo Wellcome (438 SCRA 343 [2004]) does not apply Security Law if such person performs services for an employer in which either or
in the present case. both mental and physical efforts are used and who received compensation for
F. Post-employment ban such services, where there is an employer-employee relationship. Also, a self-
employed person is both an employee and employer at the same time. (Sec. 8(d).
TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the Social Security Law). It is the duty of Tapang Security Agency Coip. to bring the
statement is false. Explain your answer in not more than two (2) sentences. (5%) security guards for compulsory coverage pursuant to the SSS law. Said law
An employment contract prohibiting employment in a competing company expressly provides that employees of bona fide independent contractors shall not
within one year from separation is valid. (2009 Bar Question) be deemed employees of the employer engaging the services of said contractors.
(Sec. 8(j), Social Security Law)
ALTERNATIVE ANSWERS:
True. An employment contract prohibiting employment in a competing company a) The Social Security Law defines an employer as one who uses the services of
within a reasonable period of one year from separation is valid. The employer another person who is under his orders as regards the employment. Under the
has the right to guard its trade secrets, manufacturing formulas, marketing facts of the case, it is very clear that it is Davao Gold that has control of the
strategies and other confidential programs and information. security guards. The security guards are under the orders of Davao Gold as
G. Change of working hours regards their employment, meaning how they perform their work. It could be said
that Tapang Security Agency Corp. was acting only like a labor-only contractor
Inter-Garments Co. manufactures garments for export and requires its employees and thus, was just an agent of Davao Gold who is the real employer. (Sec. 8(e),
to render overtime work ranging from two to three hours a day to meet its clients' Social Security Law and Art. 106, Labor Code)
deadlines. Since 2009, it has been paying its employees on overtime an b) If a company enters into a contract of services with a security agency whereby
additional 35% of their hourly rate for work rendered in excess of their regular the latter htred security guards to work with the said company, then that company
eight working hours. becomes the indirect employer of the guards hired by said security agency. The
Due to the slowdown of its export business in 2012, Inter-Garments had to company and the security agency become jointly and severally liable to the
reduce its overtime work; at the same time, it adjusted the overtime rates so that security guards. Hence, it is the duty, of both the direct and indirect employer to
those bring the security guards for compulsory coverage pursuant to the SSS law.
Page 181 of 307
Labor Law Sapatilya Company, a manufacturer of wooden shoes started its operations on
January 1, 1989. As of June 15, 1989, the company had in its payroll a general
manager, an assistant general manager, three supervisors and forty rank and file a. A self employed person;
employees, all of whom started with the company on January 1, 1989. On July 1, b. The government and any of its political subdivisions, branches or
1989, the company also had ten casual employees who had been with the instrumentalities, including corporations owned or controlled by the government;
company since February 16, 1989 and twelve contractual employees whose c. A natural persons, domestic or foreign, who carries on in undertaking or
contracts of employment with the company is for the period from August 1, 1989 activity of any kind and uses the services of another person who is under his
to September 30, 1989,. Who among the aforementioned employees are under orders as regards the employment;
coverage of the Social Security Law? When did their coverage under the said law d. A foreign corporation.
take effect?
Page 183 of 307
Labor Law b) The government and any of its political subdivisions, branches or
instrumentalities, including corporations owned or controlled by the government.
[Sec. 8 (c), RA 8282]
All of the foregoing employees are covered by the Social Security Law, except 2. Exclusions from coverage
the ten (10) casual employees. The coverage of the Social Security System is
very comprehensive; it covers “all” employees not over sixty years of age except, The owners of FALCON Factory, a company engaged in the assembling of
among others those whose “employment is purely casual and not for the purpose automotive components, decided to have their building renovated. Fifty (50)
of occupation or business of the employer.” But the casual employees in the persons, composed of engineers, architects and other construction workers, were
question may not even be casual under the Social Security Law because they hired by the company for this purpose. The work was estimated to be completed
have been with the company since February 16, 1989. How could they be with in three (3) years. The employees contended that since the work would be
the Company that long if their em-ployment is not for the purpose of occupation completed after more than one (1) year, they should be subject to compulsory
or business of the employer? coverage under
The coverage of the Social Security Law takes effect on the day of the Page 185 of 307
employment of the employee. Labor Law
the Social Security Law. Do you agree with their contention? Explain your
Can a member of a cooperative be deemed an employee for purposes of answer fully. (5%)
compulsory' coverage under the Social Security Act? Explain. (2%) (2009 Bar
Question)
No. Under Section 8 (j) of RA 1161, as amended, employment of purely casual
and not for the purpose of the occupation or business of the employer are
Yes, an employee of a cooperative, not over sixty (60) years of age is, under the excepted from compulsory coverage.
SSS Law, subject to compulsory coverage. The Section 8(d) SSS Law defines an An employment is purely casual if it is not for the purpose of occupation or
employee as - “Sec. 8(d)— any person who performs services for an employer in business of the employer.
which either or both mental and physical efforts are used and who receives In the problem given, Falcon Factory is a company engaged in the assembling of
compensation for such service, where there is an employer- employee automotive components.
relationship.” The fifty (50) persons (engineers, architects and construction workers) were
hired by Falcon Factory to renovate its building. The work to be performed by
Don Jose, a widower, owns a big house with a large garden. One day, his these fifty (50) people is not in connection with the purpose of the business of the
househelper and gardener left after they were scolded. For days, Don Jose, who factory. Hence, the employ of these fifty (50) persons is purely casual. They are,
lives alone in compound to look for someone who could water the plants in the therefore, excepted from the compulsory coverage of the SSS law.
garden and clean the house. He chanced upon Mang Kiko on the street and asked I agree with the contention that the employees hired by the owners of FALCON
him to water the plants and clean the house. Without asking any question. Mang factory as construction workers in the renovation of its building should be under
Kiko attended to the plants in the garden and cleaned the house. He finished the the compulsory coverage of the Social Security Law.
work in two days. It is true that in connection with FALCON Factory, which is engaged in the
xxx assembling of automotive components, the construction workers may be
b) Are they compulsorily covered by the Social Security System? considered casual employees because their employment is not for the purpose of
occupation of business of FALCON Factory. As such, In accordance with
Section 8(j) of the Social Security Law, they are excepted form the compulsory
No. In their employer-employee relationship, Don Jose and Mang Kiko are not coverage of the Social Security System.
compulsory covered by the Social Security System because Mang Kiko is But they could also be considered project employees of FALCON Factory and as
rendering domestic sendees in a private home which is one of the kinds of such could be under the compulsory coverage of the SSS, applying Art 4 of the
employment excluded from the compulsory coverage of the Social Security Labor Code that provides that all doubts in the implementation and interpretation
System. of the provisions of Labor Law shall be resolved in favor of labor. The
Page 184 of 307 employees here therefore, should be considered as under the compulsory
Labor Law coverage of the SSS.
3. Benefits
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 Gene is a married regular employee of Matibay Corporation. The employees and
day, he asked his employer to stop deducting from his salary his SSS monthly Matibay Corporation had an existing CBA that provided for funeral or
contribution, reasoning out that he is waiving his social security coverage. bereavement aid of ₱15,000.00 in case of the death of a legal dependent of a
If you were Tito’s employer, would you grant his request? Why? (6%) 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
No. As Tito’s employer, I am bound by law to remit to SSS Tito’s monthly Page 186 of 307
contribution. The SSS law covers any person natural, juridical, domestic or Labor Law
foreign, carrying in the Philippines trade, business, industry, undertaking or the basis that she had not been his legal dependent as the term legal dependent
activity and uses the services of another under his order as regards employment was defined by the Social Security Law. (2017 Bar Question) (a) Who may be
(Sec. 89[c]). the legal dependents of Gene under the Social Security Law? (2.5%) (b) Is Gene
The compulsory coverage of employers and employees under the SSS law is entitled to the funeral aid for the death of his widowed mother? Explain your
actually a legal imposition on the employers and employees, designed to provide answer. (2%)
social security to workingmen. Membership in SSS is in compliance with a
lawful exercise of the police power of the State, and may not be Waived by (a) Pursuant to Section 8(e) of Rep. Act No. 1161, the legal dependents Of Gene
agreement of any party (Phil. Blooming Mills, Co., Inc. v. SSS, 17 SCRA under the Social Security Law are the legitimate, legitimated or legally adopted
1077(1966]). child who is unmarried, not gainfully employed and not over twenty-one years of
age, or over twenty-one years of age provided that he is congenitally
Which of the following is not considered an employer by the terms of the Social incapacitated and incapable of self-support, physically or mentally; the legitimate
Security Act? (2012 Bar Question) spouse dependent for support upon the employee; and the legitimate parents
wholly dependent upon the covered employee for regular support. (b) Gene
would be entitled to the funeral aid under the CBA for the death of his widowed Luisa is an unwed mother with 3 children from different fathers. In 2004, she
mother because the latter is a legitimate parent wholly dependent upon him for became a member of the Social Security System (SSS). That same year, she
regular support for many years. As held in a case, the coverage of the term "legal suffered a miscarriage of a baby out of wedlock from the father of her third child.
dependent" in a stipulation in a CBA granting funeral or bereavement benefits to She wants to claim maternity benefits under the SSS Act. Is she entitled to
a regular employee for the death of a legal dependent, if the CBA is silent about claim? (2015 Bar Question)
it, is to be construed as similar to the meaning that contemporaneous social
legislation have set. This is because the terms of such social legislation are
deemed incorporated in or adopted by the CBA (Philippines Journalists, Inc. v. Yes. Provided Luisa has reported to her employer her pregnancy and date of
Journal Employees Union, et al, G.R. No. 192601, June 3, 2013, 697 SCRA expected delivery and paid at least three monthly contributions during the 12-
103). month period immediately preceding her miscarriage then she is entitled to
maternity benefits up to four deliveries. As to the fact that she got pregnant
A, single, has been an active member of the Social Security System for the past outside wedlock, as in her past three pregnancies, this will not bar her claim
20 months. because the SSS is non-discriminatory.
She became pregnant out of wedlock and on her 7th month of pregnancy, she 4. Beneficiaries
was informed that she would have to deliver the baby through caesarean section
because of some complications. Can A claim maternity benefits? If yes, how Pedro Tortilla and his employer were covered by the Social Security System.
many days can she go on maternity leave? If not, why is she not entitled? (3%) Tortilla was legally married to Orpha de la Cruz, a plain housewife with whom
(2010 Bar Question) he had two minor, unmarried and unemployed children. But for two years, he had
been living with his common-law wife, Dora Tea, with whom he had two minor,
unmarried and unemployed chil-dren. His jobless father stayed with him. In his
YES. The SSS Law does not discriminate based on the civil status of a female SSS record, he designated as beneficiary his best friend, a 20- year-old student
member-employee. As long as said female employee has paid at least three (3) who was totally dependent on him for support. In a car accident. Tortilla, Orpha
monthly contributions in the twelve-month period immediately preceding the de la Cruz and their two children died.
semester of her childbirth, she can avail of the maternity benefits under the law. Who are entitled to the death benefits?
Page 187 of 307
Labor Law
Since A gave birth through C-section, she is entitled to one hundred percent The Social Security Law defines beneficiaries as “the dependent spouse until he
(100%) of her average salary credit for seventy-eight (78) days, provided she remarries and dependent children, who shall be primary beneficiaries. In their
notifies her employer of her pregnancy and the probable date of her childbirth, absence, the dependent parents and, subject to the restrictions imposed on
among others (See Section 14-A, Rep. Act No. 8282). dependant children, the legitimate descendants and illegitimate children who
The same maternity benefits are ensured by Sec. 22 (b)(2) of the Magna Carta of shall be the secondary
Women (Rep. Act No. 9710). Page 189 of 307
Labor Law
Samson Security Agency (SAMSON) undertook to provide 24 hours security beneficiaries. In the absence of any of the foregoing, any other person designated
service to Jarillo Realty (JARILLO) in the latter’s construction operations. The by the covered employee as secondary beneficiary."
contract between SAMSON and JARILLO expressly stipulated that Samson’s Applying the above provision, when Tortilla died, he died with the persons who
security guards are its employees and not that of JARILLO. SAMSON undertook are his primary beneficiaries.
to hold JARILLO free from any liability whatsoever resulting from injuries Thus, Tortilla's secondary beneficiaris namely, his dependent jobless father and
which its (SAMSON’s) guards may suffer or be exposed to suffer as guards of illegitimate children, who were minor, unmarried and unemployed are entitled to
JARILLO’s construction operations. death benefits under the Social Security Law.
To facilitate payment, JARILLO undertook to pay directly to the guards the Under the law, the common law wife is not among those who could be a
agreed wages, which are subsequently deducted from the monthly payments to beneficiary, either as primary or secondary beneficiary;
SAMSON under its contract with JARILLO. JARILLO, in turn, charges As for the 20-year old student who was Tortilla's best friend, because he was
SAMSON for the equipment supplied to the guards' such as uniforms, pistols and designated by Tortilla as beneficiary, he could have been entitled to death
ammunition and cost of training of guards JARILLO wants replaced. benefits, in the absence of either primary and secondary beneficiaries, which is
During a storm, several scaffoldings of JARILLO fell and killed two (2) guards not the case, however, in the question given.
whose families later sued JARILLO. JARILLO, in turn, impleaded SAMSON as
third-party defendant before the Arbiter. Eduardo Serangco. an SSS member for 20 years, died on May 1, 1992. The
Decide who should be held liable. records of the SSS show that Serangco designated as his beneficiaries Marietta
Uy. wife; Gloria Serangco. daughter, bom June 30. 1979; and Jose Serangco,
son, bom July 16, 1981. On May 10. 1992, the SSS granted Marietta Uy funeral
Liability lies against the State Insurance Fund administered by the SSS. This is a benefits. On May 16, 1992. Josefa Costa filed a claim for death benefits alleging
case of death in connection with the employees’ work. that she was married to the late Eduardo Serangco on October 15, 1982 and
Jarillo is deemed to be the employer of the guards in view of the direct payment depended upon him for support. She attached to her claim, copy of a marriage
of wages to the guards. Thus, if there are benefits arising from employer- contract duly certified and sealed by the civil registrar of Pasig, Rizal. Marietta
employee relationship, Jarillo should be held answerable. Uy opposed
NOTE: The law involved, namely the law on employees compensation and State Josefa Costa’s claim, contending that she and her children, Gloria and Jose
Insurance Fund was expressly excluded from this year’s bar examination in Serangco, are entitled to death benefits because they were the primary
Labor and Social Legislation. beneficiaries designated by the deceased Serangco.
To whom shall the SSS award death benefits? Why?
Jennifer, a receptionist at Company X, is covered by the SSS. She was pregnant
with her fourth child when she slipped in the bathroom of her home and had a
miscarriage. Meanwhile, Company X neglected to remit the required The primary beneficiaries of a deceased employee are the dependent spouse until
contributions to the SSS. Jennifer claims maternity leave benefits and sickness he/she remarries and dependent children.
benefits. Which of these two may she claim? (2012 Bar Question) On the other hand, a dependent spouse is the legitimate spouse dependent for
Page 188 of 307 support upon the employee and dependent children are legitimate, legitimated or
Labor Law legally adopted children, who are unmarried, not gainfully employed and not
a. None of them; over twenty one years of age, or over twenty one years of age, provided that they
b. Either one of them; are congenitally incapacitated and incapable of self-support. (Article 8(e), (k).
c. Only maternity leave benefits; Social Security Law)
d. Only sickness benefits. Page 190 of 307
Labor Law
Considering the above provisions of the Social Security Law, Gloria and Jose
c. Only maternity leave benefits [Sec. 14-A (c), RA 1161 (SSS Law) as amended Serangco are dependent children because they are still not over twenty one years
by RA 8282] of age assuming that they are also unmarried and are not gainfully employed.
The legitimate wife of the deceased employee is Marietta Uy and not Josefa ALTERNATIVE ANSWERS:
Costa. The marriage of the deceased employee to Costa is bigamous. Thus, Page 192 of 307
Marietta is primary beneficiary together with her children Gloria and Jose. As Labor Law
such primary beneficiaries, the SSS should award to them the death benefits a) No. When an employee is constrained to retire at an early age due to his illness
arising from the death of Eduardo Serangco. and the illness persists even after retirement, resulting in his continued
unemployment, such condition amounts to total disability which should entitle
A is an employee of B who in turn registered A with the Social Security System him to the maximum benefits allowed by law. Her disability which should entitle
as required by law. Unfortunately, B did not remit A’s contributions to the her to the maximum falls within the definition of permanent total disability.
System. In the course of his employment, A met a serious accident requiring his b) No, the GSIS erred in denying the claim. Note,.that the original claim and
hospitalization. grant of benefits was based on Presidential Decree No. 626, or Book IV, Title II
(1) Suppose he decides to retire from the firm because of the accident, is he of the Labor Code: Employees Compensation and State Insurance Fund. The
entitled to recover retirement benefits under the System? Explain your answer. same law does not provide for separation fee from employment as a basis for
(2) Suppose that he died because of the accident, are his heirs entitled to death denial of benefits.
benefits under the System? Explain your answer. The worsening of the school teacher’s condition is a direct result, or a continuing
result of the first injury which was deemed work-connected by the GSIS and
hence compensable.
(1) A is entitled to receive benefits from the Social Security System even if his “Diopenes v. GSIS. 205 SCRA 331 (1992), the Supreme Court cautioned against
employer did not remit A’s contribution to the System because the Social a too strict interpretation of the law which may be detrimental to claimants and
Security Law provides (in Sec. 22(b) that the failure or refusal of the employer to advised the GSIS of the constitutional mandate on protection to labor and the
pay or remit contributions shall not prejudice the right of the covered employee promotion of social justice. Said the Court:
to the benefits of the coverage. The GSIS and the ECC should be commended for their vigilance against
But A is not entitled to retirement benefits in the form of a monthly pension unjustified claims that will only deplete the funds intended to be disbursed for
unless at the time of the accident, he has reached the age of sixty years and has the benefit only of deserving disabled employees. Nevertheless, we should
paid at least 120 monthly contributions prior to the semester of the accident. caution against a too strict interpretation of the rules that will result in the
(Sec. 12-B, Social Security Law). withholding of full assistance from those whose capabilities have been
(2) The heirs are not entitled, but his primary beneficiaries or in the absence of diminished if not completely impaired as a compensation of their service in the
primary beneficiaries, his secondary beneficiaries are entitled. government. A humanitarian impulse dictated by no less than the Constitution
B. GSIS Law (R.A. No. 8291) itself under the social justice policy, calls for a liberal and sympathetic approach
1. Coverage to the legitimate appeals of disabled public servants. Compassion for them is not
a dole but a right.
State briefly the compulsory coverage of the Government Service Insurance Act. 2. Exclusions from coverage
(2%) (2009 Bar Question) 3. Benefits

Juan Sipay was elected councilor of the municipality of San Felipe. On the
The following are compulsorily covered by the GSIS pursuant to Sec. 3 of R.A. second year of his term, he left his legitimate wife. Josefa Asuwa, and their three
No. 8291. minor, unmarried and unemployed children and lived with a common-law wife,
Page 191 of 307 Maria Makupad, with whom he had two minor, unmarried and unemployed
Labor Law children. Immediately after he completed his term. Juan was appointed cashier in
1. All employees receiving compensation who have not reached the compulsory the office of the municipal treasurer of San Felipe. He was dishonorably
retirement age, irrespective of employment status. discharged from the service upon being convicted of malversation of public
2. Members of the judiciary and constitutional commissions for life insurance funds. A year later, he died.
policy Who are entitled to the GSIS survivorship benefits?

Efrenia Reyes was a classroom teacher assigned by the Department of Education.

Culture and Sports (DECS) in Panitan, Capiz. She has been in the government Page 193 of 307
service since 1951 up to November. 1985 when she retired at 55 due to poor Labor Law
health. None. When Sipay was dishonorably discharged from the service, having been
In March, 1982, while she was teaching her Grade 1 pupils the proper way of convicted of malversation of public funds, he automatically forfeited his right to
scrubbing and sweeping the floor, she accidentally slipped. Herback hit the edge the benefits that he or his beneficiaries could have been entitled to received from
of a desk. She later complained of weak lower extremities and difficulty in the GSIS. Thus, Sipay’s death did not give rise to any right to survivorship
walking. After an X-ray examination, she was found to be suffering from Pott's benefits.
disease and was advised to undergo an operation. In 1985, she filed with the 4. Beneficiaries
GSIS a claim for disability benefits under Presidential Decree No. 626, as
amended. The GSIS granted the claim and awarded Efrenia permanent partial FACTS: Pitoy Mondero was employed as a public school teacher at the
disability benefits. Marinduque High School from July 1, 1983 until his untimely demise on May
After she underwent a surgical operation on her spine in November. 1985, her 27, 1997.
condition worsened. On April 27, 1997, a memorandum was issued by the school principal, which
In 1990, Efrenia filed with the GSIS a petition for conversion of her disability reads: “You are hereby designated to prepare the MODEL DAM project, which
status to permanent total disabilities with corresponding adjustment of benefits. will be the official entry of or school the forthcoming Division Search for
GSIS denied the claim stating that after Efrenia's retirement, any progression of Outstanding Improvised Secondary'Science Equipment forTeach- ers to be held
her ailment is no longer compensable. in Manila on June 4, 1997. You are hereby instructed to complete this MODEL
Is the GSIS correct in denying the claim. Explain. DAM on or before the scheduled date of the contest."
Mordero complied with his superior’s instruction and constructed an improvised
electric microdam, which he took home to enable him to finish it before the
Considering that the disability of Reyes is work connected the provisions of the deadline. On May 27, 1997, while working on the MODEL DAM Project in his
Labor Code dealing with employees compensation should determine her right to house, he came to contact with a live wire and was electrocuted. He was
benefits. immediately brought to a clinic for emergency treatment but was pronounced
According to said provisions, if any employee under permanent partial disability dead on arrival. The death certificate showed that he died of cardiac arrest due to
suffers another injury which results in a compensable disability greater than the accidental electrocution. Pepay Palaypay (Pitoy Mordero's common-law wife for
previous injury, the State Insurance Fund shall be liable for the income benefit of more than twenty years) and a Pitoy Mordero Jr. (his only son) filed a claim for
the new disability even after her retirement. death benefits with the Government Service Insurance System (GSIS), which
Was Reyes still an “employee” for the purpose of applying the above provision was denied on the ground that Pitoy Mordeno’s death did not arise out of and in
of the Labor Code? the course of employment and therefore not compensable because the accident
Liberally construing said provision, Reyes may be considered still as an occurred in his house and not in the school premises.
employee so that she could receive additional benefits for the progression of her 1. Is Pepay Palaypay entitled to file a claim for death benefits with the GSIS?
ailment. Why? (2%)
 Under employee’s compensation, the so-called “Theory of Increased Risks” is
irrelevant when: (2012 Bar Question)
The beneficiaries of a member of the GSIS are entitled to the benefits arising a. There is a need to categorize a disability as permanent and total;
from the death of said member. Death benefits are called survivorship benefits b. It is not clear as to how an injury was sustained;
under the GSIS Law. c. The ailment or sickness is not classified as an occupational disease;
Not being a beneficiary, Pepay Palaypay is not entitled to receive survivorship d. There is a prima facie finding that the employee had willful intention to hurt
benefits. She is not a beneficiary because she is a common-law wife and not a himself.
legal dependent spouse.
Page 194 of 307
Labor Law c) The ailment or sickness is not classified as an occupational disease [Jebsens
2. Is the cause of death of Pitoy Mordeno (cardiac arrest due to accidental Maritime, Inc., Dec. 14, 2011; Juala v. ECC, G.R. No. 57623, March 29, 1984]
electrocution in his house) compensable? Why? (3%). Page 196 of 307
Labor Law

Yes. To be compensable under the GSIS Law, the death need not be work Which of the following injuries/death is not compensable? (2012 Bar Question)
connected. a. Injuries sustained by a technician while at a field trip initiated by the Union
C. Limited Portability Law (R.A. No. 7699) and sponsored by the Company;
b. Injuries received by a janitor at a Union election meeting;
Luisito has been working with Lima Land for 20 years. Wanting to work in the c. Death of a bank teller because of a bank robbery;
public sector, Luisito applied with and was offered a job at Livecor. Before d. Death of a professor who was hit by a van on his way home from work.
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 b. Injuries received by a janitor at a Union election meeting.
advice? (2014 Bar Question)
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
Yes. Under RA 7699, otherwise known as the Portability Law, one may combine pacify them. One of the neighbors shot Luis by mistake, which resulted in Luis's
his years of service in the private sector represented by his contributions to the death. Marian, Luis's widow, filed a claim with the GSIS seeking death benefits.
Social Security System (SSS) with his government service and contributions to The GSIS denied the claim on the ground that the death of Luis was not service
the GSIS. The contributions shall be totalized for purposes of old-age, disability, related as he was off duty when the incident happened. Is the GSIS correct?
survivorship and other benefits in case the covered member does not qualify for (2015 Bar Question)
such benefits in either or both Systems without totalization.
Under the Limited Portability law, funds from the GSIS and the SSS maybe
transferred for the benefit of a worker who transfers from one system to the No. The GSIS is not correct. Luis, a policeman, just like a soldier, is covered by
other. For this purpose, overlapping periods of membership shall be (2011 BAR) the 24-Hour Duty Rule. He is deemed on round-the-clock duty unless on official
(A) credited only once. (B) credited in full. (C) proportionately reduced. (D) leave, in which case his death outside performance of official peace-keeping
equally divided for the purpose of totalization. mission will bar death claim. In this case, Luis was not on official leave and he
D. Employee’s compensation – coverage and when compensable died in the performance of a peace-keeping mission. Therefore, his death is
C. Rosa was granted vacation leave by her employer to spend three weeks in compensable.
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 Victor was hired by a local manning agency as a seafarer cook on board a luxury
in order to derive best manufacturing practices useful to the company. She vessel for an eight-month cruise. While on board, Victor complained of chronic
accepted the request because the errand would be important to the company and coughing, intermittent fever, and joint pains. He was advised by the ship's doctor
Zimbabwe was anyway in her itinerary. It appears that she contracted a serious to take complete bed rest but was not given any other medication. His condition
disease during the trip. Upon her return, she filed a claim for compensation, persisted but the degree varied from day to day. At the end of the cruise, Victor
insisting that she had contracted the disease while serving the interest of her went home to Iloilo and there had himself examined. The examination revealed
employer. that he had tuberculosis.
Page 195 of 307 (a) Victor sued for medical reimbursement, damages and attorney's fees,
Labor Law claiming that tuberculosis was a compensable illness. Do you agree with Victor?
Under the Labor Code, the sickness or death of an employee, to be compensable, Why or why not? (2015 Bar Question)
must have resulted from an illness either definitely accepted as an occupational (b) Due to his prolonged illness, Victor was unable to work for more than 120
disease by the Employees' Compensation Commission, or caused by employment days. Will this entitle him to claim total permanent disability benefits? (2015 Bar
subject to proof that the risk of contracting the same is increased by working Question)
conditions. Is the serious disease Rosa contracted during her trip to Africa
compensable? Explain your answer. (2.5%) (2017 Bar Question)
Page 197 of 307
For sickness and the resulting disability to be compensable, the sickness must be Labor Law
the result of an occupational disease listed under Annex A of the Amended Rules (a) TB is listed under Sec. 32-A of the POEA-SEC as a work-related disease. It
on Employees' Compensation with the condition set therein satisfied; otherwise, was also either contracted or aggravated during the effectivity of Victor’s
proof must be shown that the risk of contracting the disease is increased by the contract. Having shown its manifestations on board, Victor should have been
working condition. The burden of proof is upon Rosa. No proof was presented by medically repatriated for further examination and treatment in the Philippines.
Rosa to substantiate the foregoing. Moreover, it is required that the sickness and This obligation was entirely omitted in bad faith by the company when it waited
the resulting injury must have arisen out of or in the course of employment. In for his contract to expire on him before signing him off. On this basis, Victor is
the present case/ Rosa contracted the disease While on vacation leave. entitled to medical reimbursement, damages and attorney’s fees.
Consequently, the disease contracted by herin Africa during her vacation leave is (b) No. Victor’s TB is work-related and it developed on board, thereby satisfying
not compensable (Iloilo Dock & Engineering Co. v. Workmen's Compensation the twin requisites of compensability. However, despite his knowledge of his
Commission et al., G.R. NO, L-26341, November 27, 1968, 26 SCRA 102). medical condition, he failed to report to his manning agent within three days
ALTERNATIVE ANSWER: from his arrival as required by Sec. 20-B(3) of the POEA-SEC. Since he already
Yes, although Rosa's leave of absence was approved, she was merely on a partial felt the manifestations of TB before his sign-off, he should have submitted to
vacation due to the business assignment that her employer gave her to visit the post-employment medical examination (Jebsens Maritime Inc. v. Enrique Undag,
plant of a client in Zimbabwe to derive best manufacturing practices useful to the 662 SCRA 670). The effect of his omission is forfeiture by him of disability
company; thus, she had to go and observe said activity beneficial to her employer benefits (Coastal Safeway Marine Services, Inc. v. Elmer T. Esguerra, 655
in the performance of her assigned task. As she contracted the disease during her SCRA 300). In effect, the 120-day rule has no application at all.
trip, the same must be construed as work-related. VII. Labor Relations Law
A. Right to self-organization
Of the four grounds mentioned below, which one has been judicially affirmed as Labor Organization
justification for an employee’s refusal to follow an employer’s transfer order? Which of the following is a right and/or condition of membership in a labor
(2011 BAR) (A) A transfer to another location is not in the employee's organization? (2012 Bar Question)
appointment paper. (B) The transfer deters the employee from exercising his a. No arbitrary or excessive initiation fees shall be required of the members of a
right to self-organization. (C) The transfer will greatly inconvenience the legitimate labor organization nor shall arbitrary, excessive or oppressive fine and
employee and his family. (D) The transfer will result in additional housing and forfeiture be imposed;
travel expenses for the employee. b. The members shall be entitled to full and detailed reports from their officers
and representatives of all financial transactions as provided for in the constitution
The Securities and Exchange Commission approved a merger that allowed Broad and by-laws of the organization;
Bank to absorb the assets and liabilities of EBank. Broad Bank also absorbed c. No labor organization shall knowingly admit as members or continue in
EBank’s rank-and-file employees without change in tenure, salary, and benefits. membership any individual who belongs to a subversive organization or who is
Broad Bank was unionized but EBank was not. The Broad Bank bargaining engaged directly or indirectly in any subversive activity;
union requested the management to implement the union security clause in their d. All of the above.
CBA by requiring the ex-EBank employees to join the union. Does the union d. All of the above. [Art. 241, Labor Code]:
security clause in the Broad Bank CBA bind the ex-EBank employees? (2011 (a) No arbitrary or excessive initiation fees shall be required of the members of a
BAR) (A) No, since the ex-EBank employees were not yet Broad Bank legitimate labor organization nor shall arbitrary, excessive or oppressive fine and
employees when that CBA was entered into. (B) No, Broad Bank’s absorption of forfeiture be imposed; [Art. 241 (a), Labor Code];
ex-EBank employees was not a requirement of law or contract; hence, the CBA (b) The members shall be entitled to full and detailed reports from their officers
does not apply. (C) Yes, Broad Bank’s absorption of ex-EBank employees and representatives of all financial transactions as provided for in the constitution
automatically makes the latter union members of Broad Bank’s bargaining union. and by-laws of the organization; [Art. 241 (b), Labor Code]
Page 198 of 307 (c) No labor organization shall knowingly admit as members or continue in
Labor Law membership any individual who belongs to a subversive organization or who is
(D) Yes, since the right not to join a labor union is subordinate to the policy of engaged directly or indirectly in any in any subversive activity. [Art. 241 (c)
unionism that encourages collective representation and bargaining. Labor Code]
A. Malou is the Executive Secretary of the Senior Vice- President of a bank At what particular point does a labor organization acquire a legal personally?
while Ana is the Legal Secretary of the bank's lawyer. They and other executive (2012 Bar Question)
secretaries would like to join the union of rank and file employees of the bank. Page 200 of 307
Are they eligible to join the union? Why? Explain briefly. (3%) Labor Law
B. Mang Bally, owner of a shoe repair shop with nine (9) workers in his a. On the date the agreement to organize the union is signed by the majority of all
establishment, received proposals for collective bargaining from the Bally Shoe its members;
Union. Mang Bally refused to bargain with the workers for several reasons. First, b. On the date the application for registration is duly filed with the Department of
his shoe business is just a service establishment. Second, his workers are paid on Labor;
a piecework basis (i.e.. per shoe repaired) and not on a time basis. Third, he has c. On the date appearing on the Certificate of Registration;
less than ten (10) employees in the establishment. Which reason or reasons is/are d. On the date the Certificate of Registration is actually issued.
tenable? Explain briefly. (2%)

b) On the date the Certificate of Registration is actually issued [Art. 234, Labor
A. The following rules will govern the right of self- organization of Malou, Ana, Code]
and the other Executive Secretaries;
1. No Right to Self-Organization — Confidential employees who act in a Which of the following groups does not enjoy the right to self-organization?
confidential capacity to persons who formulate, determine, and effectuate (2014 Bar Question)
management policies in the field of labor-management relation. The two criteria (A) those who work in a non-profit charitable institution
are cumulative and both must be met. [San Miguel Corporation Union v. (B) those who are paid on a piece-rate basis
Laguesma, 277 SCRA 370 (1997)] (C) those who work in a corporation with less than 10 employees
2. With Right to Self-Organization — When the employee does not have access (D) those who work as legal secretaries
to confidential labor relations information, there is no legal prohibition against
confidential employees from forming, assisting, or joining a labor organization.
[Sugbuanon Rural Bank, Inc. v. Laguesma, 324 SCRA 425 (2000)] D. those who work as legal secretaries (Tunay na Pagkakaisa v. Asia Brewery,
No right of self-organization for Legal Secretaries — Legal Secretaries fall under G.R. No. 162025, August 3, 2010]
the category of confidential employees with no right to self-organization. [Pier &
Arrastre Stevedoring Services, Inc. v. Confesser, 241 SCRA 29* (1995)] Our Lady of Peace Catholic School Teachers and Employees Labor Union
B. None. First, Mang Bally’s shoe business is a commercial enterprise, albeit a (OLPCS-TELU) is a legitimate labor organization composed of vice-principals,
service establishment. Second, the mere fact that the workers are paid on a piece- department heads, coordinators, teachers, and non-teaching personnel of Our
rate basis does not negate their status as regular employees. Payment by piece is Lady of Peace Catholic School (OLPCS).
just a method of compensation and does not define the essence of the relation. OLPCS-TELU subsequently filed a petition for certification election among the
[Lambo v. NLRC, 317 SCRA 420 (1899)]. Third, the employees’ right to self- teaching and non-teaching personnel of OLPCS before the Bureau of Labor
organization is not delimited by their number. Relations (BLR) of the Department of Labor and Employment (DOLE). The
The right to self-organization covers all persons employed in commercial, Med-Arbiter subsequently granted the petition and ordered the conduct of a joint
industrial and agricultural enterprises and in religious, charitable, medical, or certification election for the teaching and non-teaching personnel of OLPCS.
educational institutions whether operating for profit or not [Art. 243, Labor May OLPCS-TELU be considered a legitimate labor organization? (2014 Bar
Code] Question)
Page 199 of 307
Labor Law
Yes. The facts of the case concede that OLPCS-TELY “is a legitimate labor
It is defined as any union or association of employees which exists in whole or in organization”.
part for the purpose of collective bargaining with employers concerning terms 1. Who may unionize for purposes of collective bargaining (Who cannot form,
and conditions of employment. (2012 Bar Question) join or assist labor organizations )
a. Bargaining representative; Page 201 of 307
b. Labor organization; Labor Law
c. Legitimate labor organization;
d. Federation. Section 255 (245) of the Labor Code recognizes three categories of employees,
namely: managerial, supervisory, and rank-and-file. (a) Give the characteristics
of each category of employees, and state whether the employees in each category
may organize and form unions. Explain your answer. (5%)
 promotion, transfer, suspension and termination of employees is still subject to
Managerial employees — those vested with powers or prerogatives to lay down confirmation and approval by their respective superior. [See Atlas Lithographic
and execute management policies and/or to hire, transfer, suspend, lay-off, recall Services, Inc. v. Laguesma, 205 SCRA 12, 17 (1992)] Thus, where such power,
employees (Article 219 12121, par. m, Labor Code) Managerial employees which is in effect recommendatory In character, is subject to evaluation, review
cannot join, assist or form unions (Article 255 12451, Labor Code). Supervisory and final action by the department heads and higher executives of the company,
employees — those who, in the interest of management, effectively recommend the same, although present, is not effective and not an exercise of independent
such managerial actions if the exercise of such authority is not merely routine or judgment as required by law. [Philippine Appliance Corp. v. Laguesma, 226
clerical in nature, but requires use of independent judgment (Article 219 12121, SCRA 730, 737 (1993) citing Franklin Baker Company of the Philippines v.
par. m, Labor Code). Supervisory employees are not eligible for membership in a Trajano, 157 SCRA 416, 422-433 (1988)]." (Paper Industries Corp. of the
labor organization of rank-and-file employees but may join, assist, or form Philippines v. Bienvenido E. Laguesma, 330 SCRA 295, (2000)]
separate labor organizations of their own (Art. 255 12451, Labor Code). Rank- B. Employees who are members of a cooperative cannot form a union because,
and-file employees — all other employees not falling within the definition of as members, they are owners and owners cannot bargain with themselves.
"managerial" or "supervisory" employees are considered rank-and-file employees However, employees who are not members of the cooperative can form a union.
(Article 219 [2121, par. m, Labor Code). Rankand-file employees have the right [San Jose Electric Service Cooperative v. Ministry of Labor, 173 SCRA 697
to form, join or assist unions of their own choosing (Art. 253 12431, Labor (1989)]
Code). (b) May confidential employees who assist managerial employees, and
who act in a confidential capacity or have access to confidential matters being Executive Order No. 180, which protects government employees, does NOT
handled by persons exercising managerial functions in the field of labor relations apply to “high-level employees,” namely, (2011 BAR) (A) presidential
form, or assist, or join labor unions? Explain your answer. (2.5%) (2017 Bar appointees. (B) those performing policy-determining functions, excluding
Question) confidential employees and supervisors. (C) confidential employees and those
performing policy-determining functions. (D) elective officials.
No, these confidential employees cannot form, assist, or join labor unions. The
exclusion from bargaining units of employees who, in the general course of their Government employees may elect a union as their exclusive representative but
duties, become aware of management policies relating to labor relations is this right is not available to (2011 BAR) (A) regular employees in government
founded upon the "confidential employee rule". The rationale behind this rule is instrumentalities and agencies. (B) employees of government-owned and -
that employees should not be placed in a position involving a potential conflict of controlled corporations without original charters. (C) employees of government-
interests. Management should not be required to handle labor relation matters owned-or-conrolled corporations with original charters. (D) employees of
through employees who are represented by the union with which the company is provincial and local government units.
required to deal and who in the normal performance of their duties may obtain
advance information of the company's position with regard to contract Distinguish the rights of managerial employees from members of a managerial
negotiations, the disposition of grievances or other labor relations matters (San staff.
Miguel
Page 202 of 307
Labor Law Managerial employees have no collective bargaining rights because, they cannot
Corporation Supervisor and Exempt Employees Union v. Laguesma, G.R. No. join or form any other labor organization while officers of a managerial staff are
110399, August 15, 1997, 277 SCRA 370). ALTERNATIVE ANSWER: No. not prohibited from joining, assisting or forming or arresting a supervisor’s
Under the doctrine of necessary implication, the same reason for the union; hence, they can
disqualification of managerial employees applies to confidential employees Page 204 of 307
(Pepsi-Cola Products Phil., Inc. v. Sec. of Labor, G.R. Nos. 96693 and 103300, Labor Law
August 10, 1999, 312 SCRA 104). Q: A group of 15 regular rank-and-file bargain collectively. (Art. 245, Labor Code; National Sugar Refineries Corp. v.
employees of Bay Resort formed and registered an independent union. On NLRC. 220 SCRA 452).
hearing of this, the management called the officers to check who the union ALTERNATIVE ANSWER:
members were. It turned out that the members included the probationary staff, Managerial employees, under Article 212(m) of the Labor Code are vested with
casuals, and the employees of the landscape contractor. The management the prerogatives to lay down and execute management policies and/or to hire,
contends that inclusion of non-regulars and employees of a contractor makes the fire, transfer, promote, lay-off and discipline employees. They are not eligible for
union’s composition inappropriate and its registration invalid. Is this correct? the right to self-organization for purposes of collective bargaining.
(2011 BAR) (A) Yes, union membership should be confined to direct-hired Upon the other hand, members of managerial staff, under Article 82 of the Labor
employees of the company. (B) Yes, the “community of interest” criterion should Code, are not vested ’with the above-cited prerogatives. They are not entitled to
be observed not only in the composition of a bargaining unit but also in the overtime pay and other benefits under Book III, Title I of the Code.
membership of a union. (C) Yes, a union must have community of interest; the Q:
non-regulars do not have such interest. (D) No, union membership may include 1) Can an employer legally oppose the inclusion of confidential employees in the
non-regulars since it differs from membership in a bargaining unit. bargaining unit of rank-and-file employees?
Q: 2) Would your answer be different if the confidential employees are sought to be
A. Distinguish managerial employees from supervisory employees. (3%) Included in the supervisory union?
B. Do employees of a cooperative have a right to form a union? Explain briefly.
(2%)
1) Yes. an employed can legally oppose the inclusion of confidential employees
in the bargaining unit of the rank -and-file. This issue has been settled in the case
A. A managerial employee is one who is vested with powers or prerogatives to of Golden Farms v. Calleja, and reiterated in the case of Philips Industrial Dev.
lay down and execute management policies and/or to hire, transfer, suspend, lay- Inc. v. NLRC.
off, recall, discharge, assign or disciple employees. Supervisory employees, on ALTERNATIVE ANSWERS:
the other hand, are those who in the interest of the employer, effectively Yes, an employer can legally oppose the inclusion of the confidential employees
recommend such managerial actions if the exercise of such authority is not in the bargaining unit of rank-and-file employees because confidential employees
merely routinary or clerical in nature but requires the use of independent are Ineligible to form, assist or join a labor union.
judgment [Art. 212 (m), Labor Code] By the nature of their functions, they assist and act in a confidential capacity to,
In a case, the Supreme Court said: “In the petition before us, a thorough or have access to confidential matters of, persons who exercise managerial
dissection of the job description of the concerned supervisory employees and functions in the field of labor relations, and the union might not be assured of
section heads indisputably show that they are not actually managerial but only their loyalty in view of evident conflict of interest.
supervisory employees since they do not lay down company policies. PICOP’s An employer can legally oppose the inclusion of confidential employees in the
contention that the subject section heads and bargaining unit of rank -and- file employees because confidential employees are
Page 203 of 307 considered part of management. (Philtranco v. BLR, 174 SCRA 388).
Labor Law
unit managers exercise the authority to hire and fire is ambiguous and quite
misleading for the reason that any authority they exercise Is not supreme but 2) The answer would be the same if confidential employees are sought to be
merely advisory In character. Theirs is not a final determination of the company included in the supervisory union because confidential employees, being a part of
policies inasmuch as any action taken by them on matters relative to hiring,
management would not qualify to Join, much less form a labor union. (Philtranco TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the
v. BLR. 174 SCRA 388). statement is false. Explain your answer in not more than two (2) sentences. (5%)
ALTERNATIVE ANSWER: (2009 Bar Question)
My answer would remain the same, even If the confidential employees were xxx
sought to be included in the supervisory union. Confidential employees would [b] All confidential employees are disqualified to unionize for the purpose of
have the same adverse impact on the bargaining unit of supervisors: Confidential collective bargaining.
employees' access to highly sensitive information may become the source of Page 207 of 307
undue advantage by the union over the employer. [Philips Industrial Labor Law
Development Inc., v. National Labor Relations Commission, et.al, G.R. No.
88957, 25 June 1992)
False. Not all confidential employees are disqualified to unionize for the purpose
The existing collective bargaining unit in Company X includes some fifty of collective bargaining. Only confidential employees, who, because of the
“secretaries” and “clerks” who routinely record and monitor reports required by nature of their positions, have access to confidential information affecting labor-
their department heads. Believing that these secretaries and clerks should not be management relations as an integral part of their position are denied the right of
union members because of the confidential nature of their work, the management self-organization for purpose of collective bargaining (San Miguel Corporation
discontinued deducting union dues from their salaries. Is the management’s Supervisors v. Laguesma, 277 SCRA 370 [1997]).
action legal? (2011 BAR) (A) No, only managers are prohibited from joining
unions; the law does not bar “confidential employees” from joining unions. (B) TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the
No, “confidential employees” are those who assist persons who formulate, statement is false. Explain your answer in not more than two (2) sentences. (5%)
determine, or enforce management policies in the field of labor relations. (C) (2009 Bar Question)
Yes, secretaries and clerks of company executives are extensions of the xxxxxx
management and, therefore, should not join the union. (D) No, “confidential” [c] Government employees have the right to organize and join concerted mass
employees are those who handle executive records and payroll or serve as actions without incurring administrative liability.
executive secretaries of top-level managers.

Company XYZ has two recognized labor unions, one for its False. Government employees have the right to organize, but they may be held
liable for engaging in concerted mass actions, it being a prohibited activity under
rank-and-file employees (RFLU), and one for supervisory
CSC Law (E.O. 181). The right of government employees to organize is limited
employees (SELU). Of late, the company instituted a to the formation of unions or associations without including the right to strike.
restructuring program by virtue of which A, a rank-and-file (Gesite v. CA, 444 SCRA 51 [2004]).
employee and officer of RFLU, was promoted to a supervisory
position along with four (4) other colleagues, also active union The Confederation of Free Workers (CFW), a national labor federation, has an
members and/or officers. Labor Union KMJ, a rival labor union existing collective bargaining agreement with Tanawan Leather Company
seeking recognition as the rank-and-file bargaining agent, filed covering the Company’s rank-and-file employees who are direct members of
CFW. The supervisors of the Company organized themselves into a union which
a petition for cancellation of the registration of RFLU on the they affiliated to CFW. CFW filed a petition in behalf of the supervisors for
ground that A and her colleagues have remained to be certification election. The Company opposed the petition asserting that CFW
members of RFLU. Is the petition meritorious? Explain. (3%) cannot represent the supervisors for collective bargaining purposes because it
(2010 Bar Question) also represents the rank-and-file employees.
No. Having been promoted to supervisory positions, A and her colleagues are no You are the Med-Arbiter. Will you order the holding of a certification election?
longer part of the rank-and- file bargaining unit. They are deemed removed Reasons.
from membership of RFLU (Art. 245-A, Labor Code as amended by Rep. Act
No. 9481).
I will not order the holding of a certification election if the supervisors of the
A, an employee of XYZ Cooperative, owns 500 shares in the Company have been included by the existing CBA in the bargaining unit of the
Company’s rank- and-file employees before the effectivity of Republic Act No.
cooperative. He has been asked to join the XYZ Cooperative
6715 where the supervisors
Employees Association. He seeks your advice on whether he Page 208 of 307
can join the association. Labor Law
What advice will you give him? (3%) (2010 Bar Question) may remain, in accordance with the pertinent Rules and Regulations
A cannot join XYZ Cooperative Employees Association, because owning shares implementing the Labor Code.
in XYZ Cooperative makes him a co-owner thereof. But if the supervisors are not included by the existing CBA in the bargaining unit
An employee-member of a cooperative cannot join a union and bargain of the Company's rank and file employees. I will order a certification election.
collectively with his cooperative for an “owner cannot bargain with himself and But the Union that I will allow in the ballot of the certification election will not
his co-owners” (Cooperative Rural Bank, of Davao City, Inc. v. Calleja, 165 be CFW. the national federation which has a direct members the Company s rank
SCRA 725, 732 [1988]; San Jose City - Electric Service Cooperative, Inc. v. and file employees. On the ballot of the certification election will instead be the
Ministry of Labor, 173 SCRA697,701- 703 [1989]). local Union organized by the supervisors. The Labor Code provides that
supervisory employees shall not be eligible for membership in a labor
organization of the rank and file employees but may form 01 join a separate labor
Should A be a member of the supervisory union? Explain.
organization of their own. Thus. CFW of which the Company's rank and file
YES, as long as A is not a confidential employee who has access to confidential
employees are members, cannot be the Union to represent the supervisors in
matters on labor relations (San Miguel Corporation Supervisors and Exempt
collective bargaining. [Atlas Lithographic Services, Inc. us. Laguesma. et al., 205
Employees Union v. Laguesma, 277 SCRA 370,374-375 [1997]).
SCRA 12)
If A performs supervisory functions, such as overseeing employees’ performance
and with power of recommendation, then A is a rightful member of the
Lazaro, an engineer, organized a union in Garantisado Construction Corporation
supervisory union. Otherwise, he may not, because Samahang Manggagawa ng
(Garantisado) which has 200 employees. He immediately filed a Petition for
Terracota cannot represent A, A being not part of SMT’s bargaining unit.
Certification Election, attaching thereto the signatures of 70 employees.
B. Assuming that A is ineligible to join the union, should the registration of
Garantisado vehemently opposed the petition, alleging that 25 signatories are
Samahang Manggagawa ng Terracota be cancelled? Explain. (3%)
probationary employees, while 5 are supervisors. It submitted the contracts of the
25 probati9nary 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
NO. Rep. Act No. 9481 introduced a new provision, Art. 245-A, which provides
way below the minimum number of 50 signatories needed to meet the alleged
that mixed membership is not a ground for cancellation of a union's registration,
25% requirement. If you are the Director of Labor Relations, will you approve
but said employees wrongfully joined are deemed removed from said union.
the holding of a Certification Election. Explain your answer. (2016)
Yes, I will allow the certification election. What is required for a certification 2. Bargaining unit
election is that at least 25 per cent of the bargaining unit must sign the petition.
Since 25 percent of 200 is 50 then the fact that there were 70 signatories who The modes of determining the exclusive bargaining agent of the employees in a
signed means that it should be allowed. Note that out of the 70 signatories only business are: (a) voluntary recognition; (b) certification election; and (c) consent
the supervisors should be excluded. Article 254 of the Labor Code allows election. Explain how they differ from one another. (4%) (2017 Bar Question)
supervisory employees to form, join, or assist separate labor organizations but
they are not eligible for membership in a Labor organization of the rank-and-file. Voluntary Recognition: An employer may voluntarily recognize the
Thus, they are the only ones, that should be disqualified. As to the probationary representation status of a labor union if the establishment is unorganized and has
employees, they should be included. The fact that an employee is given a only one legitimate labor organization. Such voluntary recognition, accompanied
classification such as beginner, trainee, or probationary employee, and the fact by supporting documents, should be submitted to the Regional Office, which
that contemplation of permanent tenure is subject to satisfactory completion of issued the labor union's certificate of registration. Certification Election: This is
an initial trial period, are insufficient to warrant such employees' exclusion from the process by which a legitimate labor organization or the employer may file a
a bargaining unit. Moreover the eligibility of probationary employees does not petition for certification election to determine the choice of an exclusive
turn on the proportion of such employee who, willingly or not, fails to continue collective bargaining agent of the employees. A med-arbiter shall automatically
to work for the employer throughout the trial period. order a certification election by secret ballot when a petition is filed (I) in an
Page 209 of 307 unorganized establishment or (2) in an organized establishment where the
Labor Law petition is supported by at least 25% of all employees in the
ALTERNATIVE ANSWER: Page 211 of 307
Yes, I will allow the certification election. Following the Bystander Rule, the Labor Law
role of the employer in certification elections is that of a mere bystander; it has bargaining unit. To have a valid certification election, at least a majority of all
no right or material interest to assail the certification election. Thus, its eligible votes in the bargaining unit must have cast their votes. The labor union
opposition to the certification election must not be given credence. receiving the majority of the valid votes cast Shall be certified as the exclusive
The only exception to this rule is where the employer has to file the petition for bargaining agent of all employees in the unit. Consent Election: Similar to a
certification election pursuant to Article 270 of the Labor Code because it was certification election proceeding, consent election is the process of determining
requested to bargain collectively; such exception does not apply in this case. through secret ballot the sole and exclusive bargaining agent of employees in an
appropriate collective bargaining unit for purposes of collective bargaining or
Philhealth is a government-owned and controlled corporation employing negotiations. This process, however, differs from a certification election as this is
thousands of Filipinos. Because of the desire of the employees of Philhealth to voluntarily agreed upon by the parties, with or without the DOLE's intervention.
obtain better terms and conditions of employment from the government, they In such a case, the med-arbiter need not issue a formal order calling for such an
formed the Philhealth Employees Association (PEA) and demanded Philhealth to election. The minutes of the agreement and records of the case are forwarded to
enter into negotiations with PEA regarding terms and conditions of employment the Regional Director for implementation of the consent election.
which are not fixed by law. (2014 Bar Question)
(A) Are the employees of Philhealth allowed to self-organize and form PEA and On what ground or grounds may a union member be expelled from the
thereafter demand Philhealth to enter into negotiations with PEA for better terms organization? (3%)
and conditions of employment?

Union members may be expelled from the labor organization only on valid
Yes. Employees of Philhealth are allowed to self-organize under Section 8, grounds provided for in the Union Constitution, By-Laws, or conditions for
Article III and Section 3, Article XIII of the Constitution which recognize the union membership.
rights of all workers to self-organization. They cannot demand, however, for Whenever appropriate for any violation of the rights as:
better terms and conditions of employment for the same are fixed by law (Art. 1. Refusal to pay union dues and special assessments;
244, Labor Code), besides, their salaries are standardized by Congress (Art. 276, 2. Disloyalty to the union; and
Labor Code). 3. Violation of the constitution and by-laws of the union.
(B) In case of unresolved grievances, can PEA resort to strikes, walkouts, and
other temporary work stoppages to pressure the government to accede to their The modes of determining an exclusive bargaining agreement are: 1. voluntary
demands? recognition 2. certification election 3. consent election Explain briefly how they
differ from one another. (5%) (2012 BAR)

No. Since the terms and conditions of government employment are fixed by law, “Voluntary Recognition” refers to the process by which a legitimate labor union
government workers cannot use the same weapons employed by workers in the is recognized by the employer as the exclusive bargaining representative or agent
private sector to secure concessions from their employers. (Blaquera v. Alcala, in a bargaining unit. Sec. 1, (bbb), Rule 1, Book V (Omnibus Rules Implmenting
G.R. Nos. 109406, 110642, 111494, 112056, 119597, September 11, 1998). the Labor Code). Another

What is the rule on the "equity of the incumbent"? (2015 Bar

Page 212 of 307
Question)
Labor Law
The Equity of the Incumbent rule has it that all existing federations or national
1. Voluntary Recognition is possible only in unorganized establishments where
unions, possessing all qualifications of an LLO and none of the grounds for CR
there is only one legitimate labor organization and the employer voluntarily
cancellation, shall continue to maintain their existing affiliates regardless of their
recognize the representation status of such a union; whereas, 2. Certification
location or industry to which they belong. In case of dissociation, affiliates are
election is a process of determining the sole and exclusive bargaining agent of
not required to observe the one union-one industry rule.
the employees in an appropriate bargaining unit for purposes of collective
bargaining, which process may involve one, two or more legitimate labor
George is an American who is working as a consultant for a local IT company.
organizations. On the other hand, 3. Consent election is an agreed one, the
The company has a union and George wants to support the union. How far can
purpose being merely to determine the issue of majority representation of all the
George go in terms of his support for the union? (2015 Bar Question)
workers in the appropriate bargaining unit. “Certification Election” refers to the
process of determining through secret ballot the sole and exclusive representative
of the employees in an appropriate bargaining unit for purposes of collective
George, as a general rule, is prohibited by Art. 270(a) of the Labor Code from
bargaining or negotiation. A certification election is ordered by the Department.
giving any donation, grant or other form of assistance, in cash or in kind, directly
[Sec. 1, (h), Rule 1, Book V, Omnibus Rules Implementing the Labor Code].
or indirectly to the Union. He can give a support only upon prior permission
“Consent Election” refers to the process of determining through secret ballot the
from the Secretary of Labor relative to “Trade Union activities” as defined in
sole and exclusive representative of the employees in an appropriate bargaining
said law.
unit for purposes of collective bargaining or negotiation. A consent election is
George, in addition to his alien employment permit, must first prove that the
voluntary agreed upon by the parties, with or without the intervention by the
country whereof he is a national recognizes the right of Filipinos working therein
Department. [Sec. 1 (h), Rule I, Book V, Omnibus Rules].
to organize. Under these conditions, he is allowed to support the existing union
by joining it as to increase its membership.
Samahang Tunay, a union of rank-and-file employees lost in a certification stating that they are members of and are supporting the Union petitioning for
election at Solam Company and has become a minority union. The majority direct certification to be their exclusive collective bargaining representation.
union now has a signed CBA with the company and the agreement contains a 2. A certification election is an election ordered by Med-Arbiter for the purpose
maintenance of membership clause. of determining the sole and exclusive bargaining agent of the employees in an
What can Samahang Tunay still do within the company as a union considering appropriate bargaining unit.
that it still has members who continue to profess continued loyalty to it? (2013 3. A consent election is an election agreed upon by the parties to determine the
Bar Questions) issue of majority representation of all the workers of an appropriate collective
(A) It can still represent these members in grievance committee meetings. bargaining unit.
(B) It can collect agency fees from its members within the bargaining unit.
(C) It can still demand meetings with the company on company time. Where there is only one union claiming to be the bargaining representative, is it
(D) As a legitimate labor organization, it can continue to represent its members proper to grant direct certification to said union?
on non-CBA-related matters.
(E) None of the above.
(F) All of the above. (b) It is proper to grant direct certification to said Union, but in addition to its
being the only union claiming to be the bargaining representative, it should
submit evidence that it is the choice of a majority of the employees in an
(D) Basis: Article 248 (formerly Art. 242) of the Labor Code. appropriate bargaining unit, as the bargaining representative. The Labor Code (in
Page 213 of 307 Art. 255) provides that the labor organization designated or selected by the
Labor Law majority of the employees in an appropriate collective bargaining unit shall be
the exclusive representative of the employees in such unit for the purpose of
Differentiate a “labor organization” from a “legitimate labor organization.” (2011 collective bargaining.”
BAR) (A) While the employees themselves form a “labor organization,” a ALTERNATIVE ANSWER:
“legitimate labor organization” is formed at the initiative of a national union or Page 215 of 307
federation. (B) While the members of a “labor organization” consists only of Labor Law
rank and file employees, a “legitimate labor organization” consists of both It may not be proper to grant direct certification in view of the decision in the
supervisory and rank and file employees. (C) While a “labor organization” exists case of Colgate-Palmolive where the Supreme Court said:
for a lawful purpose, a “legitimate labor organization” must, in addition, be The constitutional mandate that the State shall “assure the rights of the workers
registered with the labor department. (D) While the officers in a “labor to self-organiza-tion, collective bargaining, security of tenure and just and
organization” are elected in an informal way, the officers in “legitimate labor humane conditions of work,” should be achieved under a system of law such as
organization” are formally elected according to the union's constitution and by- the aforementioned provisions of the pertinent statutes. When an overzealous
laws. Q: During the CBA negotiation the management panel proposed a official by-passes the law on the pretext of retaining a laudable objective, the
redefinition of the “rank-and-file” bargaining unit to exclude “HR Specialist” in intendment or purpose of the law will lose its meaning as the law itself is
the human resource department and “Analyst” in the research and development disregarded. When the Minister of Labor directly certifies the union, he in fact
department. The union panel objected since those affected have already been disregards this procedure and its legal recruitment. There is failure to determine
included in the bargaining unit covered by the existing CBA and so could no with legal certainty whether the Union enjoyed majority representation.
longer be excluded. Is the union correct in insisting that their exclusion would The holding of a certification election at the proper time is not necessarily a mere
amount to bad faith on the part of the management panel? (2011 BAR) (A) No, formality where there is a compelling legal reason not to directly and unilaterally
efforts to modify an existing CBA do not constitute bad faith if such certify a union whose legitimacy is precisely the object of litigation in a pending
modification does not diminish employment benefits. (B) Yes, the proposed cancellation case filed by a group of employees who also claim majority status.
exclusion amounts to management’s violation of its duty to bargain because it Even in a case where a union has filed a petition for certification elections, the
disregards the bargaining history between the parties. (C) Yes, once the coverage mere fact that no opposition is made does not warrant a direct certification. More
of the bargaining unit has been contractually defined, it can no longer be so in a case when the required proof is not presented in an appropriate
redefined. (D) No, bargaining history is not the only factor that determines the proceeding and the basis of the direct certification is the union’s mere allegation
coverage of the bargaining unit; seeking its redefinition is not negotiating in bad in its position paper that it has 87 out of 117 regular employees. In other words,
faith. the Minister may not merely rely on the self-serving assertion of a union that it
a) Test to determine the constituency of an appropriate bargaining unit enjoys the support of the majority of the employees, without subjecting such
b) Voluntary recognition (Requirements) assertion to the test of competing claims. Colgate Palmolive Philippines, Inc. v.
c) Certification election Bias Ople, G.R. 73681, 30 June 88, Second Division, Paras, J.

What is the purpose of a certification election? The Construction and Development Corporation has a total of one thousand and
one hundred (1,100) employees. In a certification election ordered by the Bureau
of Labor Relations to elect the bargaining representative of the employees, it was
The purpose of a certification election is to determine the labor organization determined that only one thousand (1,000) employees are eligible voters. In the
which shall be the exclusive bargaining agent of the employees of an appropriate election a total of nine hundred (900) ballots was cast. There were fifteen (15)
collective spoiled ballots and five (5) blank ballots. A total of four hundred (400) votes was
Page 214 of 307 cast for ABC Labor Union, a total of two hundred forty (240) votes was cast in
Labor Law favor of JVP Labor Union, and a total of two hundred and forty (240) votes was
bargaining unit. A certification election may also determine whether or not the in favor of RLG Labor Organization.
employees wish to have a collective bargaining representative because in a (a) Is there a valid certification election? Why?
certification election, employees can vole for “no union." Preliminarily. through (b) You are called upon to decide the case. Which labor union will you certify as
a certification election, the members of an appropriate collective bargaining unit the collective bargaining representative of the employees of the company? Why?
may also be authoritatively determined. (Arts. 255. 256, 257. Labor Code)
Q:
(a) Distinguish and/or explain the following terms: (a) There is a valid certification election. In the facts of the case in question,
1. direct certification; there is no bar to the holding of the certification election.
2. certification election; Page 216 of 307
3. consent election. Labor Law
The Labor Code provides (in Art. 256) that to have a valid certification election,
at least a majority of all eligible voters in the bargaining unit must have cast their
1. There is direct certification if a Med-Arbiter certifies that a certain Union is votes in the election. In the facts of the case in the question, 1,000 employees are
the exclusive collective bargaining representative of the employees of an eligible voters and 900 voters, which is very much more than the majority (501)
appropriate bargaining unit without the holding of a certification election, but of the eligible voters cast their votes.
merely on the basis of evidence presented in support of the (b) As med-arbiter called upon to decide the case, I will not certify any labor
Union’s claim that it is the choice of the majority of the employees. Such union as the collective bargaining representative of the company, because none
evidence may consist of affidavits made by a clear majority of the employees of the labor unions who participated in the certification election garnered a
majority of the valid votes cast. According to the Labor Code (in Art. 256), the
labor union receiving the majority of the valid votes cast shall be certified as the Labor Law
exclusive bargaining agency of all the workers in the unit. The valid votes cast in a. The employer;
the certification election total 880 votes (900 votes cast minus 20 invalid votes. b. The legitimate labor organization;
15 of which were spoiled ballots and 5 blank ballots). No labor union garnered at c. The Federation on behalf of the chapter;
least 441 votes which is the majority of 880 votes. d. The Worker’s Association.

Llanas Corporation and Union X, the certified bargaining agent of its employees,
concluded a CBA for the period January 1, 2000 to December 31, 2004. But, D) Workers’ Association [Arts. 258 {employer}, 242, 256 (legitimate labor
long before the CBA expired, members of Union Y, the minority union, showed organization} and 257 (Federation which has issued a Charter Certificate) Labor
dissatisfaction with the CBA under the belief that Union X was a company Code]
union. Agitated by its members, Union Y filed a petition for a Certification
Election on December 1, 2002. Will the petition prosper? (2011 BAR) (A) No, The following are grounds to deny the Petition for Certification Election, except:
such a petition can only be filed within the freedom period of the CBA. (B) No, (2012 Bar Question)
since a petition for certification can be filed only upon the expiration of the CBA. a. The petitioning union is illegitimate or improperly registered;
(C) Yes, a certification is the right remedy for ousting a company union. (D) Yes, b. Non-appearance for two consecutive schedules before the Med-Arbiter by
employees should be allowed to cancel at the earliest opportunity a CBA that petitioning union;
they believed was obtained by a company union. c. The inclusion of members outside the bargaining unit;
d. Filed within an existing election bar.
The Amalgamated Workers of the Philippines (AWP) was certified on July 1,
1992 as bargaining representative of the rank-and-file employees of Company
“X". The employees are members of a local Company affiliated with AWP. On c. The Inclusion of members outside the bargaining unit [Art. 245-A, Labor
September 1. 1992, “X” received a letter from the local union stating that it had Code, as amended]
disaffiliated from AWP. The employees had disauthorized AWP as their
bargaining representative and it (local union) will negotiate a bargaining contract Liwayway Glass had 600 rank-and-file employees. Three rival unions A, B, and
with “X" • When AWP sent its bargaining proposals to “X" on September 5, C ‒ participated in the certification elections ordered by the Med-Arbiter. 500
1992, “X" informed AWP that it could not consider the proposals because the employees voted. The unions obtained the following votes: A-200; B-150; C-50;
local union had disaffiliated from AWP and the employees had disauthorized it 90 employees voted “no union”; and 10 were segregated votes. Out of the
to act as their representative. AWP filed an unfair labor practice case against “X” segregated votes, four (4) were cast by probationary employees and six (6) were
for refusaldo bargain. “X" invoked good faith as a defense. cast by dismissed employees whose respective cases are still on appeal. (2014
Will AWP's complaint prosper? Why? Bar Question)
(A) Should the votes of the probationary and dismissed employees be counted in
the total votes cast for the purpose of determining the winning labor union?
Page 217 of 307
Labor Law
AWP’s complaint will prosper. AWP was certified on July 1, 1992 as bargaining Yes. Rule IX, Section 5 of DOLE Department Order 40-03 provides that “[a]ll
representative of the rank and file employees of Company "X". Under the one- employees who are members of the appropriate bargaining unit sought to be
year rule, meaning that provided in the Rules and Regulations implementing the represented by the petitioner at the time of the issuance of the order granting the
Labor Code (Book V. Rule V, Sec. 3) which states that no certification election conduct of a certification election shall be eligible to vote. An employee who has
may be filed within one year from the date of issuance of a final certification been dismissed from work but has contested the legality of the dismissal in a
election result, there could be no change of the collective bargaining forum of appropriate jurisdiction at the time of the issuance of the order for the
representative within one year from the date of its certification as such conduct of a certification election shall be considered a qualified voter, unless
representative. Thus, the local union which disaffiliated with AWP cannot take his/her dismissal was declared valid in a final judgment at the time of the conduct
over from AWP the latter's status as collective bargaining representative. of the certification election.”
(Balmar Farms, Inc. v. NLRC. et al.. G.R. No. 73504. October 15. 1991) Page 219 of 307
It would be a different matter if the local union, as an affiliate of AWP. was Labor Law
certified as the collective bargaining representative. Then. AWP cannot insist (B) Was there a valid election?
that it be the collective bargaining representative after the local union
disaffiliated from AWP. From the beginning, it is the local union that was the
collective bargaining representative and not AWP. (Tropical Hut Employees Yes. To have a valid election, at least a majority of all eligible voters in the unit
Union-CGW, et al.. v. Tropical Hut Food Market, Inc.. et al. G.R. L-43495-99, must have cast their votes (Article 256, now Article 266, of the Labor Code). In
January' 30. 1990) the instant case, 500 out of 600 rank-and-file employees voted.
(C) Should Union A be declared the winner?
The Pinagbuklod union filed a Petition for Certification Election, alleging that it
was a legitimate labor organization of the rank-and-file employees of Delta
Company. On Delta's motion, the Med Arbiter dismissed the Petition, based on No. The Labor Code provides that the Labor Union receiving the majority of the
the finding that Pinagbuklod was not a legitimate labor union and had no legal valid votes cast shall be certified as the exclusive bargaining agent of all the
personality to file a Petition for Certification Election because its membership workers in the unit (Article 256, now Article 266, of the Labor Code). Here, the
was a mixture of rank-and-file and supervisory employees. number of valid votes cast is 490; thus, the winning union should receive at least
Is the dismissal of the Petition for Certification Election by the Med-Arbiter 246 votes. Union A only received 200 votes.
proper? (2013 Bar Questions) (D) Suppose the election is declared invalid, which of the contending unions
(A) Yes, because Article 245 of the Labor Code prohibits supervisory employees should represent the rank-and-file employees?
from joining the union of he rank and file employees and provides that a union
representing both rank and file and supervisory employees as members is not a
legitimate labor organization. None of them should represent the rank-and-file employees (Article 255, now
(B) No, because the grounds for the dismissal of a petition for certification Article 265, of the Labor Code).
election do not include mixed membership in one umon. (E) Suppose that in the election, the unions obtained the following votes: A-250;
(C) No, because a final order of cancellation of union registration is required B-150; C-50; 40 voted “no union”; and 10 were segregated votes. Should Union
before a petition for certification election may be dismissed on the ground of lack A be certified as the bargaining representative?
of legal personality of the umon.
(D) No, because Delta Company did not have the legal personality to participate
in the certification election proceedings and to file a motion to dismiss based on Yes. The Labor Code provides that the Labor Union receiving the majority of the
the legitimacy status of the petitioning union. valid votes cast shall be certified as the exclusive bargaining agent of all the
workers in the unit (Article 256, now Article 266, of the Labor Code). Here, the
The following may file a Petition for Certification Election, except: (2012 Bar number of valid votes cast is 490. Thus, the winning union should receive at least
Question) 246 votes; Union A received 250 votes.
Page 218 of 307
Samahang East Gate Enterprises (SEGE) is a labor organization composed of the belong to one union. Thus, as a result, a bargaining unit could no longer be
rank-and-file employees of East Gate Enterprises (EGE), the leading composed of rank and file employees and supervisor employees.
manufacturer of all types of gloves and aprons. A POINT TO CONSIDER: A bar examinee may. however, assume that the
EGE was later requested by SEGE to bargain collectively for better terms and reference to the bargaining unit being a companywide unit means either a
conditions of employment of all the rank-and-file employees of EGE. companywide unit of all rank and file employees or a companywide unit of all
Consequently, supervisory employees.
Page 220 of 307 ALTERNATIVE ANSWER:
Labor Law As Secretary, I would affirm the order of the med- arbiter. There is no bar to the
EGE filed a petition for certification election before the Bureau of Labor election, and the employees are entitled to a speedy determination of their
Relations (BLR). bargaining representative so that they could exercise their right to bargain
During the proceedings, EGE insisted that it should participate in the certification collectively.
process. EGE reasoned that since it was the one who filed the petition and (ii) In an organized establishment
considering that the employees concerned were its own rank-and-file employees, Page 222 of 307
it should be allowed to take an active part in the certification process. Labor Law
Is the contention of EGE proper? Explain. (2014 Bar Question)
The constituency of the bargaining unit in Complex Electronics Corporation
consisted of 800 employees. Four unions - A, B, C. and D - vied to represent the
No. Under Article 258-A of the Labor Code, an employer is a mere bystander in employees for collective bargaining purposes. In a certification election ordered
certification elections, whether the petition for certification election is filed by by the Med-Arbiter, 700 employees voted. Union A obtained 200 votes; Union
said employer or a legitimate labor organization. The employer shall not be B, 150 votes, Union C, 70 votes; and Union D, 30 votes. 250 employees voted
considered a party thereto with a concomitant right to oppose a petition for "no union.”
certification election. a) Was there a valid election? Why?
(i) In an unorganized establishment

Where the petition for a certification election in an unorganized establishment is Yes, There was a valid election. The Labor Code requires that for a certification
filed by a federation, it shall NOT be required to disclose the (A) names of the election to be valid, at least a majority of all eligible voters in the unit must have
local chapter's officers and members. (B) names and addresses of the federation cast their votes. (Article 256, Labor Code) Here, the number of eligible voters
officers. (C) names and number of employees that initiated the union formation was 800. Seven hundred (700) or more than a majority voted. Thus, the election
in the enterprise. (D) names of the employees that sought assistance from the was valid.
federation in creating the chapter. b) Which union should be certified as bargaining representative of tire
employees? Why?
The PMG Stevedoring Company is a relatively new firm engaged in the
stevedoring business in the port of Cebu City. The company has 278 regular and
permanent employees, engaged in the loading and unloading of foreign and No union could be certified as bargaining representative of employees. To be
domestic vessels docking at the said port. The Company also employs 55 certified, a labor union should receive a majority of valid votes cast of at least a
supervisory personnel. majority of the 800 votes cast which should be 401 votes. (Article 256, Labor
The AH Labor Organization filed a verified petition with the company stating, Code) The union obtaining the highest number of votes is Union A. It obtained
inter alia, that it is a legitimate labor organization representing majority of the only 200 votes, short of the majority by 201 votes.
employees, and that there is no bargaining agent in the unit. The union asked for a) Should a new election be conducted with all the four unions participating?
recognition as the bargaining agent of all the employees of the company. Reasons.
The company replied that while it is not anti-union, it cannot, under the
circumstances, accede to the union demand on the ground that the petition is not
supported by the written consent of at least twenty-five percent (25%) of ail the A new election should be conducted, but the Labor Code provides that it should
employees and also because the company-wide unit sought to be represented by be an election not at all the four unions who participated in the election but a run-
the union is not an appropriate collective bargaining unit. off election where only the labor unions receiving the two highest numbers of
Page 221 of 307 votes will participate. This run-off election can be held because in the earlier
Labor Law election, the total number of votes for all the contending unions was at least fifty
After hearing, the med-arbiter ordered a certification election in the company- percent (50%) of the number of votes cast. Here. 450 votes or more than a
wide unit. Not satisfied therewith, the company elevated the order to the majority of the 800 votes cast, were votes for all contending unions. (Article 256,
Secretary of Labor and Employment. Labor Code)
If you were the Secretary of Labor and Employment, how will you decide this b) Suppose in the election. Union A obtained 300 votes. Union B, 30 votes.
case? Give your reasons. Union C. 10 votes and Union D, no votes and 360 voted no union. Should Union
A be certified as bargaining representative? Reasons.

As Secretary of Labor and Employment, I will affirm the order for a certification
election made by the Med Arbiter. Page 223 of 307
But I will amend the order. Instead of a certification election in a company wide Labor Law
unit, I will order a certification election only for a bargaining unit composed of Here, the total number of votes cast was 700 votes. Union A can not be certified
rank and file employees, or only for a bargaining unit composed of supervisory as bargaining representative. It did not get the majority of the valid votes cast,
employees, in whichever bargaining unit are found the members of the namely 351 votes. Union A got only 300 votes.
petitioning labor organization.
The order for a certification election is proper even if the petition for certification Rank-and-file workers from Peacock Feathers, a company with 120 employees,
election filed by AH Labor Organization is not supported by at least 25% of the registered their independent labor organization with the Department of Labor and
employees of the appropriate collective bargaining unit. The petition for Employment (DOLE) Regional Office. Management countered with a petition to
certification election is filed in an unorganized establish-ment there being, as yet. cancel the union’s registration on the ground that the minutes of ratification' of
no bargaining agent in PMG Stevedoring Company. A petition for certification the union constitution and-by-laws submitted to the DOLE were fraudulent.
election in an unorganized establishment does not require the consent of at least Specifically, management presented affidavits of ten (10) out of forty (40)
25% of all the employees in the bargaining unit (Art. 257. Labor Code). This is a individuals named in the list of union members who participated in the
requirement only for petitions filed in an organized establishment. (Art. 256, ratification, alleging that they were not present at the supposed January 1, 2010
Labor Code) meeting held for the purpose. The union argued that the stated date of the
But the bargaining unit cannot be company wide. Rep. Act No. 6715, in meeting should have read “January 11, 2010,” instead of “January 1, 2010”, and
reaffirming the right of supervisory employees to form a union, provides that that, at any rate, the other thirty (30) union members were enough to register a
they can only be members of unions whose members are all supervisory union. Decide with reason. (3%) (2010 Bar Question)
employees. This restriction means that, unlike the situation before Rep. Act No.
6715. supervisory employees and rank and file employees could no longer
Petition for cancellation is dismissed for want of merit.
The date specified therein is purely a typographical error as admitted by the [d] In the law on labor relations, the substitutionary doctrine prohibits a new
union itself. There was no willful or deliberate intention to defraud the union collective bargaining agent from repudiating an existing collective bargaining
members that will vitiate their consent to the ratification. To be a ground for the agreement. (2009 Bar Question)
cancellation of union registration under the Labor Code, the nature of the fraud
must be grave and compelling enough to vitiate the consent of the majority of
union members (Mariwasa Siam Ceramics v. Secretary, 60S SCRA 706 [2009]). True. The existing collective bargaining agreement (in full force and effect) must
Moreover, 20% of 120 is 24. So, even if the 10 union members disown their be honored by a new exclusive bargaining representative because of the policy of
participation to the ratification of the union constitution and by-laws, the union is stability in labor relations between an employer and the workers.
correct in arguing that the 30 union members suffice to uphold the legitimacy of h) Union dues and special assessments
its union (Art. 234, Labor Code). (i) Requirements for validity
d) Run-off election (Requirements)
The union deducted P20.00 from Rogelio’s wages for January. Upon inquiry he
In a certification election, three (3) unions participated. The election results were learned that it was for death aid benefits and that the deduction was made
as follows: Union “A” got 100 votes; Union “B” got 80 votes; Union “C” got pursuant to a board resolution of the directors of the union. Can Rogelio object to
120 votes. The “NO-UNION” got 150 votes. The aggregate number of votes cast the deduction? Explain briefly. (5%)
was 450; the total number of eligible voters was likewise 450.
(a) Which union, if any, should be certified?
(b) If a run-off election is necessary, which union(s) or choices should appear in Yes. In order that the special assessment (death aid benefit) may be upheld as
the ballot? Explain your answer. valid, the following requisites must be complied with: (1) Authorization by a
written resolution of the majority of all the members at the general membership
meeting duly called for the purpose; (2) Secretary’s record of the meeting; and
Page 224 of 307 (3) Individual written authorization for the check-off duly signed by the
Labor Law employee concerned. [ABS-CBN Supervisors Employees
(a) No union should be certified. No union got a majority of the valid votes cast, Page 226 of 307
which is 224 votes [Vi of 450 plus 1). The Labor Code (in Art. 256) provides that Labor Law
a union, to be certified as the exclusive bargaining agent of the workers in a Union Members v. ABS-CBN Broadcasting Corp. and Union Officers, 304
bargaining unit, should receive a majority of the valid votes cast. ' SCRA 489(1999)]
(b) Since no union was certified, a run-off election should be held between Union In the problem given, none of the above requisites were complied with by the
“A” which got 100 votes and Union “C” which got 120 votes. They are unions union. Hence, Rogelio can object to the deduction made by the union for being
who got the two highest number of votes. The Labor Code (in Art. 256) provides invalid.
that when an election which provides three or more choices results in no choice i) Agency fees (Requisites for assessment)
receiving a majority of valid vote cast, a run-off election shall be conducted
between the labor union having the two highest number of votes. TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the
ALTERNATIVE ANSWER: statement is false. Explain your answer in not more than two (2) sentences. (5%)
NO-UNION which got 150 votes and Union “C” which got 120 votes were the xxxxxxxx
choices which got the two highest number of votes. Thus, the run-off election [e] Agency fees cannot be collected from a non-union member in the absence of
should be between the NO-UNION and Union “C”. The provision in Republic. a written authorization signed by the worker concerned. (2009 Bar Question)
Act No. 6715 the limits a run-off election to labor unions excluding thereby the
NO-UNION choice is unconstitutional. It violates the workers’ right to self-
organization which also includes the right not to join a labor union. False. Agency fee can be collected from a union member even without his prior
e) Re-run election written authorization as long as he receives the benefits of a CBA, and is a
f) Consent election member of the appropriate bargaining unit. (Arts. 248(e)& 241(o), Labor Code).

Distinguish clearly but briefly between: Atty. Facundo Veloso was retained by Welga Labor Union to represent it in the
xx collective bargaining negotiations. It was agreed that Atty. Veloso would be paid
xxxxxx in the sum of P20.000.00 as attorney's fees for his assistance in the CBA
Consent election and certification election. negotiations.
Social security and union security. After the conclusion of the negotiations. Welga Labor Union collected from its
SUGGESTED ANSWERS: individual members the sum of P100.00 each to pay for Atty. Veloso'sfees and
"A certification election and a consent election are" both elections held to another sum of PI00.00 each for services rendered by the union officers. Several
determine through secret ballot the sole and exclusive representative of the" members of the Welga Labor Union approached you to seek advice on the
employees in an appropriate bargaining unit for the purpose of collective following matters.
bargaining or negotiations. There is this difference, however. A certification (a) Whether or not the collection of the amount assessed on the individual
election is ordered by the Department of Labor and Employment while a consent members to answer for the Attorney’s fees was valid.
election is voluntarily agreed upon by the parties, with or without the (b) Whether or not the assessment of PI00.00 from the individual members of the
intervention of the Social Security is the protection given by social insurance Welga
programs such as the programs of the SSS, GSIS and PHIC undertaken pursuant Labor Union for services rendered by the union officers In the CBA negotiations
to their respective charters, including the employees compensation program was valid.
provided for in the Labor Code. The aforesaid programs provide income benefits
and/or medical care when
Page 225 of 307 Page 227 of 307
Labor Law Labor Law
contingencies like sickness, (also maternity in the case of SSS) disability, death, (a) The assessment of P 100.00 from each union member as attorney's fees - for
or retirement, including in the case of the GSIS, separation and unemployment union negotiation, is not valid. Art. 222(b) of the Labor Code, reads:
benefits. "No attorneys fees, negotiation fees or similar charges of any kind arising from
On the other hand, union security refers to a clause in a collective bargaining any collective bargaining negotiations or conclusion of the collective agreement
agreement whereby the employer agrees to employ or continue in employment shall be imposed on any individual member of the contracting union; Provided,
only workers who are members of the exclusive collective bargaining however, that attorneys fees may be charged against union funds in an amount to
representative of the employees of said employer in a bargaining unit. be agreed upon by the parties. Any contract, agreement or arrangement of any
g) Affiliation and disaffiliation of the local union from the mother union sort to be contrary shall be null and void."
(i) Substitutionary doctrine (b) The assessment of PI00.00 as negotiation fees charged to each individual
union member and payable to union officers is also not valid, for the same reason
TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the as stated above. The assessment is an act violative of Art. 222(b).
statement is false. Explain your answer in not more than two (2) sentences. (5%) ALTERNATIVE ANSWER:
xxxxxxxx (a) The collection of the amount assessed on the individual members to answer
for the attorney's fees would be valid if it was authorized by a written resolution
of a majority of all the members in a general membership meeting called for the a. Can invoke the right to collective bargaining because it is a fundamental right
purpose. under the Constitution;
(b) The assessment of PI00.00 from the individual members of the Welga Labor b. Can invoke the right to collective bargaining because they are permitted by
Union for services rendered by the union officers in the CBA negotiations would law;
be valid if it was authorized by a written resolution of a majority of all the c. Cannot invoke the right to collective bargaining because each member is
members in a general membership meeting duly called for the purpose. (Art. considered an owner;
241(N)]. d. Cannot invoke the right to collective bargaining because they are expressly
prohibited by law.
In the general assembly meeting held on September 5, 1992, a BANK UNION
with a majority of its 1,500 rank- and-file members attending, ratified and
confirmed the decision of its UNION OFFICERS to engage the sendees of one c) Cannot invoke the right to collective bargaining because each member is
ATTY. DAYOS to assist them in the negotiation of a new 3-year Collective considered an owner. [Benguet Electric Cooperative v. Pura Ferrer-Calleja, G.R.
Bargaining Agreement (CBA). to replace the expiring CBA. A contractual No. 79025, Dec. 29, 1989]
undertaking was signed by the UNION OFFICERS providing for the pay-ment
of attorney’s fees to ATTY. DAYOS in the amount equivalent to ten (10%) The CBA for the period January 2007 to December 2009 granted the employees
percent of the total package benefits that may be secured from the BANK. The a P40 per day increase with the understanding that it is creditable as compliance
BANK was authorized to deduct or check-off said attorney's fees and to turn over to any future wage order. Subsequently, the regional wage board increased by
the proceeds directly to ATTY. DAYOS. P20 the minimum wage in the employer’s area beginning January 2008. The
After the conclusion and signing of the new CBA between the BANK UNION management claims that the CBA increase may be considered compliance even if
and the BANK MANAGEMENT, many of the members of the BANK UNION the Wage Order itself said that “CBA increase is not creditable as compliance to
who attended the general assembly meeting on September 5. 1992. objected to the Wage Order.” Is the management's claim valid? (2011 BAR) (A) Yes, since
the payment of ATTY. DAYOS' attorney's fees for various reasons: (1) Some creditability of the CBA increase is the free and deliberate agreement and
claimed that the UNION'S contract to pay attorney's fees, negotiation fees or intention of the parties. (B) Yes, since the Wage Order cannot prejudice the
similar charges of any kind arising from any CBA negotiations or conclusion of management’s vested interest in the provisions of the CBA. (C) No, disallowing
the CBA, imposed on the individual members of the contracting UNION, was creditability of CBA pay increase is within the wage board's authority. (D) No,
null and void; (2) Some also claimed that they never attended the UNION'S gen- the CBA increase and the Wage Order are essentially different and are to be
eral assembly meeting of September 5. 1992, and even if they were present, then complied with separately.
they would have opposed
Page 228 of 307 The employees’ rights to organize and to bargain collectively are means of
Labor Law exercising the broader right to participate in policy or decision-making processes.
to the payment of attorney's fees to ATTY. DAYOS; (3) others claimed that The employees' right to participate in policy and decision making processes is
although they signed the resolution authorizing the payment of the attorney's available (2011 BAR) (A) if a labor-management council exists. (B) if a labor-
fees, they were withdrawing such authorizations. On the other hand, the UNION management council does not exist.
OFFICERS insisted on paying UNION'S counsel 10% attorney's fees alleging Page 230 of 307
that its rank and file members in their general assembly meeting held on Labor Law
September 5. 1992, authorized and ratified their contractual undertaking to pay (C) if a union exists and it agrees to the creation of a labor-management council.
10% to ATTY'. DAYOS for services rendered. (D) whether or not a labor-management council exists.
1) Discuss and justify the stand or position of the recalcitrant or opposition 1. Duty to bargain collectively a) When there is absence of a CBA
UNION members.
2) Discuss and justify the stand or position of the UNION OFFICERS and Upon the expiration of the first three (3) years of their CBA, the union and the
ATTY. DAYOS. company commenced negotiations. The union demanded that the company
continue to honor their 30-day union leave benefit under the CBA. The company
refused on the ground that the CBA had already expired, and the union had
1) The opposition Union members could contend that the Labor Code (in Art. already consumed their union leave under the CBA.
222(b) categorically provides that no attorney’s fees, negotiation fees or similar Who is correct? (2013 Bar Questions)
charges of any kind arising from collective bargaining negotiations or conclusion (A) The company is correct because the CBA has expired; hence it is no longer
of the Collective Agreement shall be imposed on any individual member of the bound to provide union leave.
contracting union and that any contract, agreement or arrangement of any sort to (B) The company is correct because the union has already consumed the allotted
the contrary shall be null and void. union leave under the expired CBA.
ALTERNATIVE ANSWER: (C) The union is correct because it is still the bargaining representative for the
The opposition Union members could contend that the payment of attorney’s next two (2) years.
fees to Atty. Dayos equivalent to ten (10%) percent of the total package of (D) The union is correct because union leaves are part of the economic terms that
benefits imposed on the individual members of the contracting union is in the continue to govern until new terms are agreed upon.
nature of a special assessment that may not be levied upon members of a labor (E) They are both wrong.
organization unless authorized by a written resolution of a majority of all the
members at a general membership meeting called for the purpose. (Art. 241(n),
Labor Code). Members can withdraw their earlier authorization. (B)
Re: the check-off for the attorney’s fees, because the same is not for mandatory SUGGESTED ALTERNATIVE ANSWER:
activities, there could be no check-off without individual written authorization (D) Basis: Article 259 (formerly Article 253) of the Labor Code.
duly signed by the employee. (Art. 241(0), Labor Code) b) When there is a CBA
2) The Union officers and Atty. Dayos could contend that after a majority of the
members of the Union ratified and confirmed at a general assembly meeting the ABC company and U labor union have been negotiating for a new Collective
decision of the Union officers to engage the services of Atty. Dayos to assist Bargaining Agreement (CBA) but failed to agree on certain economic provisions
them in the negotiation of a new CBA, and in implementation of such ratification of the existing agreement. In the meantime, the existing CBA expired. The
and confirmation, the Union officers entered into a contract for the purpose with company thereafter refused to pay the employees their midyear bonus, saying
Atty. Dayos, the contract was legal and after his rendition of services, the union that the CBA which provided for the grant of midyear bonus to all company
can pay Atty. Dayos his fees to be paid from the funds of the Union which was employees had already expired. Are the employees entitled to be paid their
raised by special assessment of Union members. midyear bonus? Explain your answer. (3%) (2010 Bar Question)
The Labor Code provides that attorney's fees may be charged against union funds
in an amount to be agreed upon by the parties. (Art. 222 (b))
Page 229 of 307 Page 231 of 307
Labor Law Labor Law
B. Right to collective bargaining YES, under Article 253 of the Labor Code, the parties are duty-bound to
maintain the status quo and to continue in full force and effect the terms and
Which phrase most accurately completes the statement – Members of conditions of the existing CBA until a new agreement is reached by the parties.
cooperatives: (2012 Bar Question)
Likewise, Art. 253-A provides for an automatic renewal clause of a CBA. renegotiated not later than three (3) years after its execution except the
Although a CBA has expired, it continues to have legal effects as between the representation aspect of the CBA.
parties until a new CBA has been entered into. 3. The refusal of the company to renegotiate not later than three (3) years after
The same is also supported by the principle of holdover, which states that despite the execution of the CBA is a refusal to bargain collectively and is, therefore, an
the lapse of the formal effectivity of the CBA, the law stills considers the same as unfair labor practice. Thus, a case of unfair labor practice may be filed against
continuing in force and effect until a new CBA shall have been validly executed the employer with a Labor Arbiter.
(MERALCO v. Hon. Sec. of Labor, 337 SCRA 90 [2000] citing National The Union may go on an unfair labor practice strike considering that the
Congress of Unions in the Sugar Industry of the Philippines v. Ferrer-Calleja, employer is guilty of an unfair labor practice if it refuses to renegotiate the CBA
205 SCRA 478 [1992]). within three (3) years after its execution.
The terms and conditions of the existing CBA remain under the principle of CBA
continuity. Republic Drug Co. has 1,000 employees, including 50 managerial personnel, 90
supervisors and 150 sale representatives. The regular workday in the Company is
The Company and Triple-X Union, the certified bargaining agent of rank-and- from 8:00 a.m. to 5:00 p.m. The sales representatives register their presence with
file employees, entered into a Collective Bargaining Agreement (CBA) effective the timekeeper at 8:00 A.M. every day before they go to their respective sales
for the period January 1, 2002 to December 31, 2007. territories. They are paid a basic salary plus commission. Sixty of the sales
For the 4th and 5th years of the CBA, the significant improvements in wages and representatives are members of the Republic Salesmen Union which sent to the
other benefits obtained by the Union were: Company a set of bargaining proposals, including a demand for payment of
1. Salary increases of PI,000 and PI,200 monthly, effective January 1, 2006 and overtime pay of the sales representatives for working beyond 5:00 P.M.
January 1, 2007, respectively; everyday. The Company refused to consider the bargaining proposals and
2. Vacation Leave and Sick Leave were adjusted from 12 days to 15 days rejected the demand for overtime pay for the reason that the sales representatives
annually for each employee; are not entitled thereto. The Union filed an unfair labor practice case against the
3. Medical subsidy of P3,000 per year for the purchase of medicines and Company for refusal to bargain, and after complying with the legal requirements
hospitalization assistance of P10,000 per year for actual hospital confinement; declared a strike.
4. Rice Subsidy of P600 per month, provided the employee has worked for at xxx
least 20 days within the particular month; and b) Was the Company guilty of unfair labor practice? Was the Union’s strike
5. Birthday Leave with Pay and Birthday Gift of PI,500. legal? Reasons.
As early as October 2007, the Company and the Union started negotiations to
renew the CBA. Despite mutual good faith and earnest efforts, they could not
agree. However, no union filed a petition for certification election during the The Company is not guilty of unfair labor practice. The Republic Salesmen
freedom period. On March 30, 2008, no CBA had been concluded. Management Union has a members only 60 of the 150 sales representatives. This fact could
learned that the Union would declare a bargaining deadlock on the next mean that the Union is not the majority union that is the collective bargaining
scheduled bargaining meeting. representative of the sales representatives. (Article 255. Labor Code)
As expected, on April 3, 2008, the Union declared a deadlock. In the afternoon of Because the Union is not the collective bargaining representative, the Company
the same day, management issued a formal announcement in writing, posted on did not commit an unfair labor practice when it refused to bargain with said
the bulletin board, that due to the CBA expiration on December 31,2007, all union. The duty of the employer to bargain collectively arises only as regards the
fringe bargaining representative of the employees. (Article 252, Labor Code) Because
Page 232 of 307 the refusal to bargain under the above described circumstances is not an unfair
Labor Law labor practice, the Union's strike was not legal.
benefits contained therein are considered withdrawn and can no longer be Page 234 of 307
implemented, effective immediately. Labor Law
xxxxxx ALTERNATIVE ANSWER:
[c] Is management’s withdrawal of the fringe benefits valid? Reasons. (2%) If the sales representatives constitute an appropriate collective bargaining unit in
(2009 Bar Question) the Company, and the Republic Salesman Union (SBU) was recognized or
certified as the collective bargaining representative in said bargaining unit,
inspite of the fact that only 60 of the 150 sales representative are members of
No. Pending renewal of the CBA, the parties are bound to keep the status quo SBU. (because SBU is nevertheless designated or selected by a majority of the
and to treat the terms and conditions embodied therein still in full force and sales representatives) then, the Company is guilty of unfair labor practice when it
effect, until a new agreement is reached by the union and management. This is refused, at the very least, j ust to consider the bargaining proposals of the Union.
part and parcel of the duty to bargain collectively in good faith under Article 253, The refusal to at least just consider the bargaining proposals of the Union
the Labor Code. constitutes a refusal to bargain collectively; thus, it is an unfair labor practice.
2. Collective Bargaining Agreement (CBA) The strike, then, of the Union is legal because an unfair labor practice strike is
Q: legal.
What, if any, is the maximum term of a collective bargaining agreement under a) Mandatory provisions of CBA (Grievance procedure, Voluntary arbitration,
R.A. 6715? No strike-no lockout clause, Labor management council)
Company America and the union entered into a five (5) year collective
bargaining agreement (CBA). Three (3) years thereafter, the Company received a A. XYZ Company and Mr. AB, a terminated employee who also happens to be
demand letter from the union for renegotiation of the terms and conditions of the the President of XYZ Employees Union, agree in writing to submit Mr. AB's
CBA on the ground that the cost of living and prices of the essential commodities illegal dismissal case to voluntary arbitration. Is this agreement a valid one?
have gone up by 30% since the CBA was concluded. (2015 Bar Question)
1. Was the five-year term of the CBA legal? B. XYZ Company and XYZ Employees Union (XYZEU) reach a deadlock in
2. Is the Company obligated to renegotiate the CBA as demanded by the union? their negotiation for a new collective bargaining agreement (CBA). XYZEU files
If your reply is in the affirmative, state the extent of the Company’s obligations. a notice of strike; XYZ Company proposes to XYZEU that the deadlock be
3. What are the remedies available to the Union in the event the Company submitted instead to voluntary arbitration. If you are counsel for XYZEU, what
refuses to renegotiate the CBA? Does it include the right to strike? advice would you give the union as to the: (1) propriety of the request of XYZ
Company, and (2) the relative advantages/disadvantages between voluntary
arbitration and compulsory arbitration? (2015 Bar Question)
According to Republic Act No. 6715 (Article 253-A, of the Labor Code, as
amended), the maximum term of a collective bargaining agreement is 5 years,
but except as to the representation aspect, all other provisions of the agreement The agreement is valid because the preferred mode of settling labor disputes is
shall be renegotiated not later than three (3) years after its execution. through voluntary modes, like voluntary arbitration. The agreement is consistent
1. The five year term of CBA is legal. This is provided for in Rep. Act No. 6715. with Sec. 3, Art. XIII of the Constitution. Moreover, Art. 262 of the Labor Code
Page 233 of 307 authorizes a voluntary arbitrator to hear and decide by agreement of the parties,
Labor Law all other labor disputes.
2. The company is obligated to renegotiate the CBA as demanded by the union. (1) As counsel, I will advise the union to accede to the request of the company.
Rep. Act. No. 6715 provides that all the provisions of a CBA shall be Besides being the constitutionally preferred mode of dispute settlement,
voluntary arbitration is less adversarial and more expeditious.
(2) The advantages of voluntary arbitration are: learned that the Union would declare a bargaining deadlock on the next
(a) the parties’ dispute is heard and resolved by a person whom both parties have scheduled bargaining meeting.
chosen as their judge; hence, likely to be impartial. As expected, on April 3, 2008, the Union declared a deadlock. In the afternoon of
(b) if both parties are willing to submit their dispute, the decision is final and the same day, management issued a formal announcement in writing, posted on
binding on them in general by reason of their submission agreement; and the bulletin board, that due to the CBA expiration on December 31,2007, all
Page 235 of 307 fringe benefits contained therein are considered withdrawn and can no longer be
Labor Law implemented, effective immediately.
(c) in the event of a challenge, the decision is elevated to the CA and then to the xxxxxxxx
SC, i.e., less one layer of appeal because the NLRC is out of the way. Page 237 of 307
The disadvantages of voluntary arbitration are: Labor Law
(a) in case of appeal by the employer to the CA, the monetary award will not be [d] If you were the lawyer for the union, what legal recourse or action would you
secured with an appeal bond which Rule 43 of the Rules of Court does not advise? Reasons. (3%)
require; and
(b) in case of enforcement of judgment, the Voluntary Arbitrator has no sheriff to
enforce it. I would recommend the filing of an unfair labor practice case against the
The advantages of compulsory arbitration are: employer for violating the duty to bargain collectively under Article 248(g) of
(a) subject to pre-litigation mediation, a case can be initiated through the filing of the Labor Code. This arbitration case also institutes the “deadlock bar” that shall
a verified complaint by a union member, unlike in voluntary arbitration where prevent any other union from filing a petition for certification election.
the Voluntary Arbitrator acquires jurisdiction primarily through a submission ANOTHER
agreement. In a case where the company is unwilling, the EBR (and only the
EBR) may serve a notice to arbitrate; hence, a union member may be left out in
the process if the EBR does not serve that notice; I will advice the Union to continue negotiations with the aid of the NCMB (Art.
(b) a monetary award is secured with the employer’s appeal bond; and; 250, Labor Code), and to file a complaint for unfair labor practice, i.e., violation
(c) there is a system of restitution in compulsory arbitration. of an economic provision, gross and serious in character under Articles 248(i)
The disadvantages of compulsory arbitration are: and Art. 261 of the Labor Code.
(a) State interference with the affairs of labor and management is maximized, (ii) For non-economic provisions (iii) Freedom period
disregarding the inter-party nature of the relationship; and
(b) The system of appeals entails a longer process. The Company and Triple-X Union, the certified bargaining agent of rank-and-
file employees, entered into a Collective Bargaining Agreement (CBA) effective
This process refers to the submission of the dispute to an impartial person for for the period January 1, 2002 to December 31, 2007.
determination of the basis of the evidence and arguments of the parties. The For the 4th and 5th years of the CBA, the significant improvements in wages and
awards id enforceable to the disputants. (2012 Bar Question) other benefits obtained by the Union were:
a. Arbitration; - Salary increases of PI,000 and PI,200 monthly, effective January 1, 2006 and
b. Mediation; January 1, 2007, respectively;
c. Conciliation; - Vacation Leave and Sick Leave were adjusted from 12 days to 15 days annually
d. Reconcilitation. for each employee;
- Medical subsidy of P3,000 per year for the purchase of medicines and
The parties to a labor dispute can validly submit to voluntary arbitration hospitalization assistance of P10,000 per year for actual hospital confinement;
_________. (2013 Bar Questions) - Rice Subsidy of P600 per month, provided the employee has worked for at least
(A) any disputed issue they may agree to voluntarily arbitrate 20 days within the particular month; and
(B) only matters that do not fall within the exclusive jurisdiction of the Labor - Birthday Leave with Pay and Birthday Gift of PI,500.
Arbiter As early as October 2007, the Company and the Union started negotiations to
(C) any disputed issue but only after conciliation at the National Conciliation and renew the CBA. Despite mutual good faith and earnest efforts, they could not
Mediation Board fails agree. However, no union filed a petition for certification election during the
(D) any disputed issue provided that the Labor Arbiter has not assumed freedom period. On March 30, 2008, no CBA had been concluded. Management
jurisdiction over the case on compulsory arbitration learned that the Union would declare a bargaining deadlock on the next
(E) only matters relating to the interpretation or implementation of a collective scheduled bargaining meeting.
bargaining agreement As expected, on April 3, 2008, the Union declared a deadlock. In the afternoon of
Page 236 of 307 the same day, management issued a formal announcement in writing, posted on
Labor Law Page 238 of 307
Labor Law
the bulletin board, that due to the CBA expiration on December 31,2007, all
Basis: Article 262 (now Article 268) of the Labor Code. The Voluntary fringe benefits contained therein are considered withdrawn and can no longer be
Arbitrator, upon agreement of the parties, can assume jurisdiction over the implemented, effective immediately.
dispute. When was the “freedom period” referred to in the foregoing narration of facts?
b) Duration Explain. (2%) (2009 Bar Question)
(i) For economic provisions

The Company and Triple-X Union, the certified bargaining agent of rank-and- The freedom period or the time within which a petition for certification election
file employees, entered into a Collective Bargaining Agreement (CBA) effective to challenge the incumbent collective bargaining agent may be filed is from 60
for the period January 1, 2002 to December 31, 2007. days before the expiry date of the CBA.
For the 4th and 5th years of the CBA, the significant improvements in wages and 3. Union Security
other benefits obtained by the Union were: In the Collective Bargaining Agreement (CBA) between Dana Films and its
1) Salary increases of PI,000 and PI,200 monthly, effective January 1, 2006 and rank-and-file Union (which is directly affiliated with MMFF, a national
January 1, 2007, respectively; federation), a provision on the maintenance of membership expressly provides
2) Vacation Leave and Sick Leave were adjusted from 12 days to 15 days that the Union can demand the dismissal of any member employee who commits
annually for each employee; acts of disloyalty to the Union as provided for in its Constitution and By-Laws.
3) Medical subsidy of P3,000 per year for the purchase of medicines and The same provision contains an undertaking by the Union (MMFF) to hold Dana
hospitalization assistance of P10,000 per year for actual hospital confinement; Films free from any and all claims of any employee dismissed. During the term
4) Rice Subsidy of P600 per month, provided the employee has worked for at of the CBA, MMFF discovered that certain employee-members were initiating a
least 20 days within the particular month; and move to disaffiliate from MMFF and join a rival federation, FAMAS. Forthwith,
5) Birthday Leave with Pay and Birthday Gift of PI,500. MMFF sought the dismissal of its employee-members initiating the disaffiliation
As early as October 200*7, the Company and the Union started negotiations to movement from MMFF to FAMAS. Dana Films, relying on the provision of the
renew the CBA. Despite mutual good faith and earnest efforts, they could not aforementioned CBA, complied with MMFF's request and dismissed the
agree. However, no union filed a petition for certification election during the employees identified by MMFF as disloyal to it. a. Will an action for illegal
freedom period. On March 30, 2008, no CBA had been concluded. Management
dismissal against Dana Films and MMFF prosper or not? Why? (5%) (2012 strike down their unfair treatment by their own unworthy leaders. The
BAR) Constitution enjoins the state to afford protection to labor. Fair dealing is equally
demanded of unions as well as of employers, in their dealings with employees
Yes. While Dana Films, under the CBA, is bound to dismiss any employee who (Heirs of Cruz v. CIR, G.R. Nos. L-23331-32, December 27, 1969).
is expelled by MMFF for disloyalty (upon its written request), this undertaking
should not be done hastily and summarily. Due process is required before a Explain the impact of the union security clause to the employees’ right to
member can be dropped from the list of union members of good standing. The security of tenure. (2%) (2009 Bar Question)
company’s dismissal of its workers without giving them the benefit of a hearing,
and without inquiring from the workers on the cause of their expulsion as union
members, constitute bad faith. [Liberty Cotton Mills Workers Union, et. al v. A valid union security clause when enforced or implemented for cause, after
Liberty Cotton Mills, Inc. et. al., G.R. No. L-33987, May 31, 1979]. according the worker his substantive and procedural due process rights (Alabang
Page 239 of 307 Country Club, Inc. v. NLRC, 545 SCRA 357 [2008]; does not violate the
Labor Law employee's right to security of
b. What are the liabilities of Dana Films and MMFF to the dismissed employees, Page 241 of 307
if any? (5%) (2012 BAR) Labor Law
tenure. Art. 248(e) of the Labor Code allows union security clauses and a failure
to comply with the same is a valid ground to terminate employment. Union
Dana Films is obliged (1) to reinstate the illegally dismissed employees to their security clause are designed to strengthen unions and valid law policy.
former positions without reduction in rank, seniority and salary; and (2) to jointly
and severally pay the dismissed employees backwages, without any reduction in Yellow Bus Company has an existing collective bargaining agreement (CBA)
pay or qualification. [Amada Rice v. NLRC, G.R. No. 68147, June 30, 1988]. with Union “X”. During the 60-day “freedom period,” Union “A” filed a petition
a) Union security clauses; closed shop, union shop, maintenance of membership for certification election claiming a majority of the rank and file employees of
shop, etc. the company had joined it. Pending the hearing of the petition, the company and
Union “X” renegotiated and signed a new CBA which is admittedly better than
Forbes Country Club (Club) owns a golf course and has 250 rank-and-file the previous one. In view of this supervening event, the med-arbiter dismissed
employees who are members of the Forbes Country Club Union (Union). The the petition of Union "A” for being moot and academic. Is the dismissal of the
Club has a CBA with the Union and one of the stipulations is a Union Security petition correct? Can the company and Union “X” claim the benefit of the
Clause, which reads: "All regular rank-and-file employees who are members of “contract bar rule?”
the union shall keep their membership in good standing as a condition for their
continued employment during the lifetime of this agreement."
Peter, Paul and Mary were the Treasurer, Assistant Treasurer, and Budget Officer The dismissal of the petition is not correct. The Company and Union “X” cannot
of the Union, respectively. They were expelled by the Board of Directors of the claim the benefit of the “contract bar rule.”
Union for malversation. The Union then demanded that the Club dismiss said The Labor Code (in Art. 256) provides: “In organized establishments, when a
officials pursuant to the Union Security Clause that required maintenance of verified petition questioning the majority status of the incumbent bargaining
union membership. The Club required the three officials to show cause in writing agent is filed before the Department of Labor and Employment within the sixty-
why they should not be dismissed. Later, the Club called the three Union day period before the expiration of the collective bargaining agreement, the Med-
officials for a conference regarding the charges against them. After considering Arbiter shall automatically order an election by secret ballot when the verified
the evidence submitted by the parties and their written explanations, the Club petition is supported by the written consent of at least twenty-five (25%) percent
dismissed the erring officials. The dismissed officials sued the Club and the of all the employees in the bargaining unit to ascertain the will of the employees
Union for illegal dismissal because there was really no malversation based on the in the appropriate bar-gaining unit.”
documents presented and their dismissal from the Union was due to the fact that Assuming that the petition of Union “A” was supported by at least 25% of the
they were organizing another union. employees in the bargaining unit, the Med-Arbiter should have automatically
[a] Is the dismissal of Peter, Paul and Mary by the Club valid? (2016) ordered a certification election since the petition was duly filed during the
freedom period.
But how about the supervening event, i.e. a new CBA has been signed? The
The dismissal of Peter, Paul and Mary is valid as it was made pursuant to a union Rules implementing the Labor Code provides (in Book V, Rule V, Sec. 4) that
security clause contained in the Collective Bargaining Agreement between the the representation case shall not x x x be adversely affected by a collective
management and agreement submitted before or during the last 60 days of a subsisting agreement
Page 240 of 307 or during the pendency of a representation case.
Labor Law
the union. A union security clause is intended to strengthen, a contracting union FACTS: In a certification election conducted by the Department of Labor,
and protect it from the fickleness or perfidy of its own members (Caltex Refinery Associated Workers Organization in Laguna (AWOL) headed by Cesar
Employees Association v. Brillarts, G.R. No. 123782, September 16, 1997). In Montanyo, won over Pangkat ng mga Manggagawa sa Laguna (PML), headed by
terminating employees by reason of union security clause, what the employer Eddie Graciaa. Hence, AWOL was certified as the exclusive bargaining agent of
needs to determine and prove are: a). that the union security clause is applicable, the rank-and-file employees of the Laguna Transportation Company (LTC).
b). that the union is requesting for the enforcement of the union security clause Shortly, thereafter, a Collective Bargaining Agreement was concluded by LTC
and, c). that there are sufficient evidence to support the decision of the union to and AWOL which provided for a closed shop. Consequently, AWOL, demanded
expel the employee from the union (Picop Resources v. Tantla, G.R No. 160828, that Eddie Graciaa and all the PML members be required to become members of
August 9, 2010). In the case at bar, the union demanded - the dismissal of Peter, AWOL
Paul and Mary after they were expelled from the union. The Club then afforded Page 242 of 307
them due process by ordering them to show cause in writing why they should not Labor Law
be dismissed. Thereafter, a conference was held in their behalf. Having complied as a condition for their continued employment; other- wise, they shall be
with all the requirements mentioned, itj can be said that the dismissal of Peter, dismissed pursuant to the closed shop provision of the CBA.
Paul and Mary was made validly. The union security clause of the CBA also provided for the dismissal of
[b] If the expulsion by the Union was found by the Labor Arbiter to be baseless, employees who have not maintained their membership in the union. For one
is the Club liable to Peter, Paul and Mary? Explain. reason or another, Francis Magallona, a member of AWOL, was expelled from
the union membership for acts inimical to the interest of the union. Upon receipt
of the notice that Francis Magallona failed to maintain his membership in good
Yes, the Club can be held, liable to Peter, Paul and Mary. Even if the elements standing with AWOL, LTC summarily dismissed him from employment.
under (a) and (b), as mentioned above, are present, it behooves upon the Club to 1. Can Eddie Graciaa and all the PML members be required to become members
ascertain in good faith the sufficiency of evidence that supports the decision of of the AWOL pursuant to the closed shop provision of the CBA? Why? (3%)
expelling them from the union. The Club should have been circumspect in the 1
sense that it should have determined the veracity of the union's claim that Peter,
Paul and Mary were indeed guilty of malversation. Should it have been guilty of Eddie Gracia and all the PML members can not be required to become members
making a mistake then it should be accountable for it. Just as the Court has of AWOL pursuant to the closed shop provision of the CBA.
stricken down unjust exploitation of laborers by oppressive employers, so will it
According to the Labor Code (Article 248(e), a closed shop provision cannot be May a rank-and-file employee, who is not a member of the union representing
applied to those employees who are already members of another union at the his bargaining unit, avail of the wage increases which the union negotiated for its
time of the signing of the CBA, members? (4%).
2. Is the termination from employment of Francis Magallona by LTC lawful?
Why? (2%)
Yes. The beneficiaries of a Collective Bargaining Agreement include Non-Union
Members; other Wise, there will be discrimination which is prohibited by law.
Pursuant to the closed shop provision of the CBA entered into by AWOL with [New Pacific Timber and Supply Co., Inc. v. NLRC, 328 SCRA 424 (2000)).
LTC, membership in AWOL has become a condition of employment in LTC.
As long as the expulsion of Francis Magallona from AWOL was done in Pablo works as a driver at the National Tire Company (NTC). He is a member of
accordance with applicable provisions of law and with the Constitution and By- the Malayang Samahan ng Manggagawa sa NTC, the exclusive rank-and-file
laws of the AWOL, then it was lawful for LTC to terminate Magallona. collective bargaining representative in the company. The union has a CBA with
Panel: The termination is unlawful (Ferrer v. NLRC). NTC which contains a union security and a check-off clause. The union security
clause contains a maintenance of membership provision that requires all
The Collective Bargaining Agreement (CBA) between Libra Films and its union, members of the bargaining unit to maintain their membership in good standing
Libra Films Employees' Union (LFEU), contains the following standard clauses: with the union during the term of the CBA under pain of dismissal. The check-
1. Maintenance of membership; off clause on the other hand authorizes the company to deduct from union
2. Check off for union dues and agency fees; and members' salaries defined amounts of union dues and other fees. Pablo refused to
3. No strike, no lock-out. issue an authorization to the company for the check-off of his dues, maintaining
While Libra Films and LFEU are in re-negotiations for an extension of the CBA, that he will personally remit his dues to the union.
LFEU discovers that some of its members have resigned from the union, citing Would the NTC management commit unfair labor practice if it desists from
Page 243 of 307 checking off Pablo's union dues for lack of individual authorization from Pablo?
Labor Law (2013 Bar Questions)
their constitutional right to organize (which includes the right NOT to organize).
LFEU demands that Libra Films institute administrative proceedings to terminate
those union members who resigned in violation of the CBA's maintenance of No. Under Article 9481, violation of the Collective Bargaining Agreement, to be
membership clause. Libra Films refuses, citing its obligation to remain a neutral an unfair labor practice, must be gross in character. It must be a flagrant and
party. As a result, LFEU declares a strike and after filing a notice of strike and malicious refusal to comply with the economic provisions of the CBA.
taking a strike vote, goes on strike. The union claims that Libra Films grossly SUGGESTED ALTERNATIVE ANSWER:
violated the terms of the CBA and engaged in unfair labor practice. No. Check-offs in the truth impose an extra burden on the employer in the form
(a) xxxxxxx of
(b) Distinguish between a "closed shop" clause and a "maintenance of Page 245 of 307
membership" clause. (2015 Bar Question) Labor Law
(c) Distinguish between "union dues" and "agency fees." (2015 Bar Question) additional administrative and bookkeeping costs. It is a burden assumed by
SUGGESTED ANSWERS: management at the instance of the union and for its benefit, in order to facilitate
(b) In a “closed shop” clause, all employees are required to be members of the the collection of dues necessary for the latter’s life and sustenance. But the
union at the time of hiring. They too must remain members of good standing obligation to pay union dues and agency fees obviously devolves not upon the
during the period of employment as a condition of continued employment. employer, but the individual employee. It is a personal obligation not
Maintenance of membership clause, on the other hand, requires all employees demandable from the employer upon default or refusal of the employee to
who are union members at the time of the execution of the CBA to maintain their consent to a check-off. The only obligation of the employer under a check-off is
membership of good standing, as a condition of continued employment. to effect the deductions and remit the collections to the union. (Holy Cross of
(c) Union dues are union funds paid by union members, normally through check- Davao College v. Joaquin, G.R. No. 110007 [1996])
off by the employer on the basis of an individual written authorization duly Can the union charge Pablo with disloyalty for refusing to allow the check off of
signed by the employees pursuant to Art. 241 (o) of the Labor Code. Agency fee, his union dues and, on this basis, ask the company to dismiss him from
on the other hand, is a reasonable fee equivalent to the dues and other fees paid employment? (2013 Bar Questions)
by members of the recognized collective bargaining agent. Art. 248(e) of the
Labor Code mandates that only non-union members who accept the benefits
under the CBA may be assessed agency fees. Their check-off authorization is not No. The “check-off clause” in the CBA will not suffice. The law prohibits
required. interference with the disposition of one’s salary. The law requires “individual
b) Check-off; union dues, agency fees written authorization” to deduct union dues from Pablo’s salaries. For as long as
he pays union dues, Pablo cannot be terminated from employment under the
A is employed by XYZ Company where XYZ Employees Union (XYZ-EU) is union security clause. As a matter of fact, filing a complaint against the union
the recognized exclusive bargaining agent. Although A is a member of rival before the Department of Labor for forcible deduction from salaries does not
union XYR-MU, he receives the benefits under the CBA that XYZ-EU had constitute acts of disloyalty against the union. (Tolentino v. Angeles, 52 O.G.
negotiated with the company. 4262)
XYZ-EU assessed A a fee equivalent to the dues and other fees paid by its 2. Unfair Labor Practice in collective bargaining
members but A insists that he has no obligation to pay said dues and fees because The negotiating panels for the CBA of X Company established a rule that only
he is not a member of XYZ-EU and he has not issued an authorization to allow employees of the company will seat in each panel. In the next session, the
the collection. Explain whether his claim is meritorious. (3%) (2010 Bar management panel objected to the presence of the union counsel. Still the
Question) negotiation proceeded. At the next session, the management panel again objected
to the presence of the union counsel as a non-observance of the “no outsider”
rule. The negotiation nonetheless proceeded. Does the management panel's
NO. The fee exacted from A takes the form of an AGENCY FEE. This is objection to the presence of the union counsel constitute unfair labor practice
sanctioned by Article 248 (e) of the Labor Code. through bad-faith bargaining? (2011 BAR) (A) Yes, the management is harping
Page 244 of 307 on a non-mandatory matter instead of proceeding with the mandatory subjects of
Labor Law bargaining. (B) No, there is no bargaining in bad faith since the bargaining
The collection of agency fees in an amount equivalent to union dues and fees proceeded anyway. (C) Yes, the management panel has no legal basis for
from employees who are not union members is recognized under Article 248(e) limiting the composition of the union negotiating panel. (D) No, since it is the
of the Labor Code. The union may collect such fees even without any written union that violates the ground rules fashioned by the parties, it is the one
authorization from the non-union member employees, if said employees accept negotiating in bad faith.
the benefits resulting from the CBA. The legal basis of agency fees is quasi- a) Bargaining in bad faith
contractual (Del Pilar Academy v. Del Pilar Academy Employees Union, 553
SCRA 590 [2008]). Corporation “X” is engaged in a collective bargaining negotiation with the Union
of its employees. With respect to the demand for profit-sharing the corporation
During the open forum following your lecture before members of various unions patiently but consistently alleged that it cannot accept the said demand. The
affiliated with a labor federation, you were asked the following questions: Page 246 of 307
Labor Law
corporation and the union several times to arrive at the proper resolution of the
issue but the corporation would not yield. Finally, the union filed an unfair labor Page 248 of 307
practice case accusing the corporation of bargaining in bad faith and refusing to Labor Law
accede to its demand of profit-sharing. Decide. False. A runaway shop is not automatically an unfair labor practice. It is an
unfair labor practice if the relocation that brought about the runaway shop is
motivated by anti-union animus rather than for business reasons.
Corporation “X” is not guilty of unfair labor practice. ANOTHER
The question gives as facts that the corporation and the union met several times
to arrive at the proper resolution of the issue as to whether or not there shall be
profit sharing at the corporation. In these meetings, the corporation patiently but True. The transfer 6f location of a strike bound establishment to another location
consistently stated that it cannot accept the demand for profit sharing. By these (run-away shop) can constitute an act of interference or restraint of the
acts, the corporation bargained in good faith; it was showing that it sincerely employees’ right to self-organization. There is an inferred anti-union bias of the
desired to reach an agreement with the union. Its not yielding to the demand for employer (Labor Code, Art. 248[a]). The provisions of Art. 248[a] should be
profit sharing is not an unfair labor practice because the Labor Code (in Art. 252) broadly and liberally interpreted to achieve the policy objective of the law, i.e., to
expressly provide that the duty to bargain collectively does not compel any party enhance the workers right to self-organization and collectively bargain
to agree to a proposal or to make any concession. (Constitution, Art. XIII, Sec. 3 & Art. Ill, Sec. 8; Labor Code, Arts. 243, 244 8e
b) Refusal to bargain 245; Caltex Filipino Managers, etc. v. C1R, 44 SCRA 350 [1972]).
5. Unfair Labor Practice (ULP) a) Nature of ULP
The Malipol Labor Union submitted to the management of the Malilito Co.. Inc.
a set of proposals for a collective bargaining agreement. A few days later, the Which of the following acts is NOT considered unfair labor practice (ULP)?
Kapuspalad Labor Union forwarded its own proposals, claiming to represent the (2011 BAR) (A) Restraining employees in the exercise of the right to self-
majority of the rank-and-file employees in the company. The company refused to organization. (B) Union's interference with the employee's right to self-
bargain with either Malipol Labor Union or Kapuspalad Labor Union. organization. (C) Refusal to bargain collectively with the employer. (D) Gross
Malipol Labor Union then filed a complaint for unfair labor practice, charging violation of the collective bargaining agreement by the union.
that the Kapuspalad Labor Union is a company union. The company then filed b) ULP of employers
with the Med- Arbiter a petition for certification election.
a) Was the company’s refusal to bargain with either Malipol Labor Union or the The Company has a renewed collective bargaining agreement (CBA) with the
Kapuspalad Labor Union an unfair labor practice? Union, which covers the bargaining unit of rank-and-file employees, including
twenty (20) security guards and has a term of five years effective January 1,
1992. In 1991. the Company had consultation meetings with the Union on the
The refusal of the Company to bargain with either Malipol Labor Union or the abolition of the security guard section and the engagement of the sendees of an
Kapuspalad Labor Union is not an unfair labor practice. The refusal is justified. independent security agency. On July 16. 1992, the Company abolished the
The Company is not certain as to which of the two labor unions is the union security guard section, contracted the services of Edsa Security Agency, and
representing the majority of the employees of the employer belonging to the advised the Union that the guards will be transfered to other positions in the
appropriate collective bargaining unit. It is the duty of the employer to bargain Company with increase in pay and transfer bonus. The Union objected to the
collectively only with the labor union which is the representative of the abolition as it was in violation of the CBA. The Company asserted that its action
employees, which in turn the labor union designated or selected by the majority was an exercise of its management prerogatives after consultations with the
of the employees in an appropriate collective bargaining unit. Union in 1991 and intended to promote efficiency and economy. After satisfying
b) Was the company’s petition for certification election proper? Will it prosper? all requirements, the Union declared a strike. There is a provision in the CBA
Page 247 of 307 recognizing in general terms management prerogatives.
Labor Law a) Did the Company violate the CBA? Explain.

The company's petition for certification election is proper. Under the Labor Page 249 of 307
Code, an employer may file a petition for certification election when there is a Labor Law
demand for collective bargaining. The Company violated the CBA. It is noted that in the CBA, the bargaining unit
But the petition may not immediately prosper. covered not only the rank and file employees. It also covered 20 security guards.
Malipol Labor Union has charged that Kapuspalad Labor Union is a company Yet, the Company was abolishing the security guard sector where these security
union. This charge brings about a prejudicial question which should first be guards belonged. It may be noted that an employer commits an unfair labor
resolved, before the certification election may be held. A company union cannot practice if it contracts and services or functions being performed by union
be certified as a bargaining representative. members when such will interfere with, restrain or coerce employees in the
c) Blue sky bargaining d) Surface bargaining exercise of their rights to self-organization. (Article 248(c), Labor Code)
It is true that in 1991, there were consultation meetings with the Union on the
Differentiate “surface bargaining” from “blue-sky bargaining”. (2%) (2010 Bar abolition of the security guard section and the engagement of the services of an
Question) independent security agency.
But yet, after these consultation meetings, the CBA that was entered into
included the 20 security guards in the bargaining unit of the CBA. There was
(1) SURFACE BARGAINING is defined as “going through the motions of thereby, an agreement to retain said security guards.
negotiating” without any legal intent to reach an agreement. The determination of ALTERNATIVE ANSWER:
whether a party has engaged in unlawful surface bargaining is a question of the The Company did not violate the CBA. When it abolished the security guard
intent of the party in question, which can only be inferred from the totality of the section and engaged the sendees of an independent security agency, the
challenged party’s conduct both at and away from the bargaining table. It Company was merely exercising its management prerogatives. It is an unfair
involves the question of whether an employer’s conduct demonstrates an labor practice for an employer to contract services or functions being performed
unwillingness to bargain in good faith or is merely hard bargaining (Standard by union members, but only when such interferes with, restrains or coerces
Chartered Bank Employees Union (NUBE)v. Confesor, 432 SCRA 308 [2004]). employees in the exercise of their rights to self-organization. Here, the Company
(2) BLUE-SKY BARGAINING is defined as “unrealistic and unreasonable exercised its prerogative Management ever in consultation with the Union and its
demands in negotiations by either or both labor and management, where neither objective was to promote efficiency and economy.
concedes anything and demands the impossible” (Standard Chartered Bank b) Was the Union's strike legal? Explain.
Employees Union (NUBE) v. Confesor, supra.).

TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the If the Company is guilty of unfair labor practice, then the strike of the Union has
statement is false. Explain your answer in not more than two (2) sentences. (5%) legal basis and thus is legal.
xxxxxx ALTERNATIVE ANSWER:
[a] A runaway shop is an act constituting unfair labor practice. (2009 Bar If the Company is not guilty of unfair labor practice, then, the strike of the Union
Question) is illegal, because there will be no legal ground for the strike.
 a. Unfair labor practices cannot be committed unless the union has been
Article 248(d) of the Labor Code states that it shall be unlawful for an employer performed and registered;
to initiate, dominate, assist in or otherwise interfere with the formation or b. The commission of unfair labor practice requires an employer-employee
administration of any labor organization, including the giving of financial or relationship;
other support to it or to its organizers or officers. c. The offense of unfair labor practice prescribes in one (1) year;
X Company, Inc. has been regularly contributing money to the recreation fund of d. The list of unfair labor practices is exclusive.
the labor union representing its employees. This fund, including the financial
Page 250 of 307
Labor Law a. Unfair labor practices cannot be committed unless the union has been
assistance given by the employer, is used for refreshment and other expenses of performed and registered. [Art. 247 Labor Code]
the labor union whenever the employees go on a picnic, on an excursion, or hold
a Christmas party. Is the employer liable for unfair labor practice under Article The following are unfair labor practice of employers, except: (2012 Bar
248(d) of the Labor Code? Explain your answer. Question)
a. Interrogating its employees in connection with their membership in the union
or their union activities which hampers their exercise of free choice;
No. If the contributions of the employer benefit all the employees and there is no b. The grant of profit-sharing benefits to managers, supervisors and all rank-and-
employee discriminated against, there is no unfair labor practice. The file employees not covered by the CBA;
contributions may be considered a fringe benefit given by the employer. Page 252 of 307
ALTERNATIVE ANSWER: Labor Law
If the regular contributions are pursuant to a CBA provision, there is no unfair c. The cessation of a company’s operations shortly after the organization of a
labor practice. If not pursuant to a CBA violation, the assistance may constitute labor union and the resumption of business barely a month after;
an unfair labor practice. d. Withdrawal by the employer of holiday pay benefits stipulated under a
ANOTHER ALTERNATIVE ANSWER: supplementary agreement with the union.
If Art. 248(d) is strictly applied, the giving of money by the employer to the
recreation fund of the labor union is an unfair labor practice because said Article
considers as an unfair labor practice “the giving of financial or other support to it b) The grant of profit-sharing benefits to managers, supervisors and all rank-and-
(meaning a union) or to its organizers or officers.” The file employees not covered by the CBA [Art. 248, Labor Code]
Article does not provide for a situation where such giving is not an unfair labor
practice. The Collective Bargaining Agreement (CBA) between Libra Films and its union,
Libra Films Employees' Union (LFEU), contains the following standard clauses:
The management and Union X in Atisan Mining entered into a CBA for 1997 to 1. Maintenance of membership;
2001. After 6 months, a majority of the members of Union X formed Union Y 2. Check off for union dues and agency fees; and
and sought management recognition. The latter responded by not dealing with 3. No strike, no lock-out.
either union. But, when the CBA’s economic provisions had to be renegotiated While Libra Films and LFEU are in re-negotiations for an extension of the CBA,
towards the end of the term of the CBA, the management chose to negotiate with LFEU discovers that some of its members have resigned from the union, citing
Union Y, the newer union. Thus, Union X which negotiated the existing CBA their constitutional right to organize (which includes the right NOT to organize).
charged the company with unfair labor practice (ULP). The company argued that LFEU demands that Libra Films institute administrative proceedings to terminate
it committed no unfair labor practice since the supposed violation had nothing to those union members who resigned in violation of the CBA's maintenance of
do with economic provisions of the CBA. Is the management right? (2011 BAR) membership clause. Libra Films refuses, citing its obligation to remain a neutral
(A) No. Refusal to comply with the CBA’s economic provisions is not the only party. As a result, LFEU declares a strike and after filing a notice of strike and
ground for ULP; a disregard of the entire CBA by refusing to renegotiate with taking a strike vote, goes on strike. The union claims that Libra Films grossly
the incumbent bargaining agent is also ULP, (B) Yes. No unfair labor practice violated the terms of the CBA and engaged in unfair labor practice.
was committed because the supposed violation has nothing to do with economic (a) Are LFEU's claims correct? Explain. (2015 Bar Question)
provisions of the CBA. (C) Yes. The management commits no ULP when it (b) xxxxxxx
decided to renegotiate with the numerically majority union. (D) Yes. A CBA (c) xxxxxxx
violation amounts to ULP only if the violation is “gross,” meaning flagrant or SUGGESTED ANSWERS:
malicious refusal to comply with the CBA’s economic provisions which is not (a) LFEU’s claim that Libra Films committed ULP based on its violation of the
the case here. CBA is not correct. For violation of a CBA to constitute ULP, the violation must
Page 251 of 307 be violation of its economic provisions. Moreover, said violation must be gross
Labor Law and flagrant. Based on the allegation of the union, what was violated was the
maintenance of membership clause which was a political or representational
Unions “A” and “B” are competing with one another to organize the employees provision; hence, no ULP was committed. (BPI Employees Union-Davao City v.
of Ocean BPI, 702 SCRA 42).
Supermart. Inc. It was an uncertain contest until the President of Ocean c) ULP of labor organizations
Supermart issued a written statement expressing the hope that the employees
refrain from joining a union but in the event they should decide to do so, stating Union “X” is the majority union of the rank and file employees at Slipper Mart
his preference for Union “A”. In the certification election Union “B” lost. Is Company. It amended its by-laws to include among the obligations of its
there an unfair labor practice? Reasons. members “to refuse to work with non-union members.” Slipper Mart wants the
amendment to be declared null and void considering that not all its rank and file
employees
Ocean Supermart was guilty of unfair labor practice. The Labor Code (in Art. Page 253 of 307
248) provides that it is unfair labor practice for an employer “To interfere with, Labor Law
restrain or coerce employees in the exercise of their right to self-organization” belong to Union “X” and its enforcement will cause work stoppage in the
and “for an employer to initiate, dominate, assist or otherwise interfere in the company. Give your opinion on the validity of the amendment.
formation or administration of any labor organization, including the giving of
financial or other support to it or its organizations or supporters.”
In the question given, Ocean Supermart issued a written statement expressing the The provision of the by-laws of the union that made it among the obligations of
hope that the employees refrain from joining a union. It also express a preference its members ‘‘to refuse to work with non-union members” cannot be
for Union “A”. These statements could be considered interference with the implemented at the Slipper Mart Company. It is management’s prerogative to
exercise by employees by the right to self-organize. Giving support to a determine who shall work together in a company.
particular union is an act of company unionism therefore, was an unfair labor ALTERNATIVE ANSWER:
practice. The act is an unfair labor practice on the part of the union because it could have
the effect of compelling the employer to compel its employees to join Union
Which of the following is not true in unfair labor practices committed by an “X”, thus, in effect restraining or coercing employees in the exercise of their
employer? (2012 Bar Question) right to self-organization.
When there is no recognized collective bargaining agent, can a legitimate labor president’s part in slowdown. (C) No. When a strike is illegal, the management
organization validly declare a strike against the employer? (2013 Bar Questions) has the right to dismiss the union president. (D) No. As the union president, it
(A) Yes, because the right to strike is guaranteed by the Constitution and cannot may be assumed that he led the slowdown.
be denied to any group of employees.
(B) No, because only an exclusive bargaining agent may declare a strike against What do you understand by the “improved offer balloting?”
the employer.
(C) Yes, because the right to strike is a basic human right that the country's
international agreements and the International Labor Organization recognize. A strike may be an economic strike, namely, it is a strike caused by a deadlock at
(D) Yes, but only in case of unfair labor practice. the bargaining table. A deadlock may arise because the offer of the employer,
(E) No, in the absence of a recognized bargaining agent, the workers' recourse is e.g., its offer of a 20% across-the-board increase in wages and salaries, was not
to file a case before the Department of Labor and Employment. accepted by the Union who wanted a 50% increase.
After considering the matter, the employer may improve its offer, e.g. it offers a
35% increase.
Basis: Article 263(c) (now Article 269 (c)) of the Labor Code. This improved offer of the employer may be submitted to the union members on
C. Right to peaceful concerted activities or before the 30th day of the strike. The secret balloting that will determine
whether a majority of the union members accept the improved offer of the
Freibourg Electronics Corporation which employs 400 rank-and-file employees, employer is the so-called “'improved offer balloting."
80 supervisors and 20 managerial personnel, negotiated a collective bargaining In case it is a lockout, and not a strike, what may be the subject matter of a secret
agreement with the Modemo Labor Union (MLU), the bargaining representative balloting, this lime among the members of the Board of Directors of the
of the rank-and-file employees. Because of deadlocked negotiations. MLU after employer, may be the reduced offer of the union, i.e., instead of asking for 50%
complying with the legal re-quirements declared a strike and picketed the across the board increase in wages and salaries, it may reduce its demand to 25 %
Company's gates. The picketers obstructed the free ingress into the engrees from .
the premises. Fearing that it might not meet its commitments to European and
American buyers, the Company appealed to the MLU to allow entry of personnel On May 24, 1989, the UKM urged its member-unions to join a “Welga ng
who were willing to work. MLU rejected the appeal. On the tenth day of the Bayan” in support of its efforts to pressure Congress to increase the daily
strike, a squad of policemen escorted the managerial and supervisory personnel minimum wage. Union “X” is a member of the UKM and represents all the rank
and 100 and file employees of the Puritan Mining Company. Following the call for a
Page 254 of 307 nationwide strike, Union “X” staged a strike and put up a picket the following
Labor Law day. As a result, the company’s operations were paralyzed although company
rank-and-file employees entering the Company's premises to work. During the officials and supervisory employees were allowed ingress and egress to and from
entry, 20 supervisors and 50 rank-and-file employees were beaten by the the company premises. The picket was likewise peaceful. On May 28, 1989, the
picketers. UKM leadership announced the end of the “Welga ng Bayan.” Union “X”
The MLU charged the Company and the policemen with violation of the anti- immediately lifted its picket and its members went back to work. The company
scab law under the Labor Code. The Company, for its part, filed a petition to sought our legal advice on the legality of the strike and the liability, if any, of the
declare the strike and picketing illegal. union officers and the participating members. What is your opinion? Explain.
As the Labor Arbiter, resolve MLU's charge and the Company's petition with
reasons.
Page 256 of 307
Labor Law
The charge made by MLU that the Company and the policemen violated the anti- The strike was illegal. For a strike to be legal, it should either be an economic
scab law under the Labor Code has no basis. The Code provides that no public strike, i.e., caused by a bargaining deadlock or an unfair labor practice strike, i.e.,
official or employee, including officers and personnel of the New Armed Forces caused by the commission of an unfair labor practice by an employer.
of the Philippines and the Integrated National Police, or armed personnel, shall The strike of Union “X” was neither an economic strike or an unfair labor strike.
bring in, introduce or escort in any manner any individual who seeks to replace Thus, it was an illegal strike.
strikers in entering or leaving the premises of a strike area, or work in place of Because it was an illegal strike, any union officer who knowingly participated in
strikers. (Article 264(d), Labor Code) it may be declared to have lost his employment status, meaning such union
The Company of the policemen did not violate the above provision of the Labor officer could be legally terminated.
Code when a squad of policemen escorted the managerial and supervisory As for the union members who participated in the strike, the facts show that no
personnel and 100 rank-and-file employees in entering the Company’s premises illegal acts were committed. They allowed ingress and egress to and from the
to work because the above personnel and employees are old employees, not new company premises. The picket was peaceful. The mere participation of the union
employees who will “replace” the strikers. members, without their committing illegal acts, does not constitute sufficient
The Company’s petition to declare the strike and picketing illegal has basis. The ground for the termination of their employment.
picketers committed an unlawful act when they obstructed the free ingress into ALTERNATIVE ANSWER:
and egress from the Company premises. The beating up by the picketers of 20 The strike is legal and the union officers and participating union members incur
supervisors and 50 rank and file employees is also the basis for making the strike no liability for calling and participating in the strike respectively. Applying the
illegal. rule in Philippine Blooming Mills to the effect that the workers only personally
ALTERNATIVE ANSWER: assembled to influence the decision making process of the government which is a
The Labor Code, (in Article 264(d). provides that "the police force shall keep out constitutionally guaranteed right.
of the picket lines unless actual violence or other criminal acts occur therein. In Note: Credit should be given to answer that focus on the procedural requirement
the case in the question, when a squad of policemen escorted the personnel and for a strike to be legal, i.e. strike vote, notice, cooling off period.
employs in entering the Company's premises to work, the policemen violated the
above provision of the Labor Code by crossing the picket lines, when as yet there On the first day of collective bargaining negotiations between rank-and-file
was no actual violence, other criminal acts were not occurring. Union A and B Bus Company, the former proposed a P45/day increase. The
1. Forms of concerted activities company insisted that ground rules for negotiations should first be established, to
which the union agreed. After agreeing on ground rules on the second day, the
The union filed a notice of strike due to a bargaining deadlock. But, because the union representatives reiterated their proposal for a wage increase. When
Secretary of Labor assumed jurisdiction over the dispute, the strike was averted. company representatives suggested a discussion of political provisions in the
Meanwhile, the employer observed that the union engaged in a work slowdown. Collective Bargaining Agreement as stipulated in the ground rules, union
Contending that the slowdown was in fact an illegal strike, the employer members went on mass leave the next day to participate in a whole-day prayer
dismissed all the union officers. The union president complained of illegal rally in front of the company building.
dismissal because A. The company filed a petition for assumption of jurisdiction with the Secretary
Page 255 of 307 of Labor and Employment. The Union opposed the petition, arguing that it did
Labor Law not intend to stage a strike. Should the petition be granted? Explain. (2%)
the employer should first prove his part in the slowdown. Is the union president
correct? (2011 BAR) (A) Yes, since the employer gave him no notice of its
finding that there was a slowdown. (B) Yes. The employer must prove the union
YES. There was a strike. What the union engaged in was actually a “work The duty to bargain does not compel either party to agree to a proposal or require
stoppage” in the guise of a protest rally. the making of a concession. The parties failure to agree which to discuss first on
Page 257 of 307 the bargaining table did not amount to ULP for violation of the duty to bargain.
Labor Law Page 259 of 307
Article 212(o) of the Labor Code defines strike as a temporary stoppage of work Labor Law
by the concerted action of employees as a result of an industrial or labor dispute. Besides, the mass leave conducted by the union members failed to comply with
The fact that the conventional term the procedural requirements for a valid strike under the Rules, without which, the
"strike” was not used by the striking employees to describe their common course strike conducted taints of illegality.
of action is inconsequential. What is controlling is the substance of the situation, C. Union member AA, a pastor who headed the prayer rally, was served a notice
and not its appearance. The term "strike” encompasses not only concerted work of termination by management after it filed the petition for assumption of
stoppages, but also slowdowns, mass leaves, sit-downs, attempts to damage, jurisdiction. May the company validly terminate AA? Explain. (2%)
destroy or sabotage plant equipment and facilities, and similar activities (Santa
Rosa Coca- Cola Plant Employees Union, Donrico v. Sebastian, et al. v. Coca-
Cola Bottlers Phils., Inc., 512 SCRA 437 [2007]). NO. The company cannot terminate AA because the Labor Code provides mere
2. Who may declare a strike or lockout? participation of a worker in a strike shall not constitute sufficient ground for
3. Requisites for a valid strike termination of his employment.

A sympathetic strike is stoppage of work to make common cause with other Which of the following is not a valid reason for a strike? (2012 Bar Question)
strikers in another establishment or business. Is the sympathetic strike valid? a. There is a bargaining deadlock;
Explain your answer. (1%) (2017 Bar Question) b. There is a prevailing intra-union dispute;
c. The company engaged in unfair labor practice;
A sympathetic strike is not valid. It is illegal because the strikers have no direct d. Theirs is a flagrant violation of CBA’s economic provisions.
grievance against their own employer; that is, no labor dispute exists between the
strikers and the employer. Q: Where there is a bargaining deadlock, who may file
a notice of strike? (2011 BAR) (A) The majority members of the bargaining unit. b) There is a prevailing intra-union dispute [Art. 263(b), Labor Code].
(B) The recognized bargaining agent. (C) Any legitimate labor organization in
the employer’s business. (D) The majority members of the bargaining union. Union X staged a strike in front of Company B because of a CBA deadlock.
During the strike, Company hired replacement workers. Upon resuming their
A is a member of the labor union duly recognized as the sole bargaining employment, the strikers found that Company B obliged obliged to reinstate the
representative of his company. Due to a bargaining deadlock, 245 members of returning workers? (2012 Bar Question)
the 500-strong union voted on March 13, 2010 to stage a strike. A notice of strike a. No, because the strike caused work stoppage;
was submitted to the National Conciliation and Mediation Board on March 16, b. No, because it is a valid exercise of management prerogative;
2010. Seven days later or on March 23, 2010, the workers staged a strike in the c. Yes, because workers who go on strike do not lose their employment status;
course of which A had to leave and go to the hospital where his wife had just d. Yes, because workers are entitled to such retention every time during a valid
delivered a baby. The union members later intimidated and barred other strike.
employees from entering the work premises, thus paralyzing the business
operations of the company.
Page 258 of 307 d) Yes, because workers are entitled to such retention every time during a valid
Labor Law strike.
A was dismissed from employment as a consequence of the strike. (2010 Bar SUGGESTED ALTERNATIVE ANSWER:
Question) d. Yes, because workers who go on strike do not lose their employment status
[Art. 264(a), last par., Labor Code].
Page 260 of 307
NO. The strike was not legal due to the union’s failure to satisfy the required Labor Law
majority vote of union membership (251 votes), approving the conduct of a strike
(See Art. 263(f), Labor Code; Section 11, Rule XXII, Dept. Order No. 40-03). In response to Company X’s unfair labor practices, a union officer instructed its
Also, the strike was illegal due to the non-observance of the 30-day cooling off members to stop working and walk out of the company premises. After three (3)
period by the union (Art. 263(c), Labor Code). rights of employees to self- hours, they voluntarily returned to work. Was there a strike and was it a valid
organization (Club Filipino, Inc. v. Bautista, 592 SCRA 471 [2009]). activity? (2012 Bar Question)
a. Yes, it was a strike; it was a valid activity;
On the first day of collective bargaining negotiations between rank-and-file b. Yes, it was a strike; No, it was not a valid activity;
Union A and B Bus Company, the former proposed a P45/day increase. The c. No, Iit was not a strike; yes, it was a valid activity;
company insisted that ground rules for negotiations should first be established, to d. No, it was not a strike; no, it was not a valid activity.
which the union agreed. After agreeing on ground rules on the second day, the
union representatives reiterated their proposal for a wage increase. When
company representatives suggested a discussion of political provisions in the b. Yes, it was a strike; no, it was not a valid activity [Airline Pilots Association
Collective Bargaining Agreement as stipulated in the ground rules, union of the Phils. v. CIR, 76 SCRA 274; and First City Interlinks Transportation v.
members went on mass leave the next day to participate in a whole-day prayer Roldan Confessor, 272 SCRA 124]
rally in front of the company building.
xxx As a result of a bargaining deadlock between Lazo Corporation and Lazo
B. The Union contended that assuming that the mass leave will be considered as Employees Union, the latter staged a strike. During the strike, several employees
a strike, the same was valid because of the refusal of the company to discuss the committed illegal acts. Eventually, its members informed the company of their
economic provisions of the CBA. Rule on the contention. (2%) intention to return to work. (2014 Bar Question)
(A) Can Lazo Corporation refuse to admit the strikers?

The Union’s contention is wrong. A strike may be declared only in cases of

deadlock in collective bargaining negotiations and unfair labor practice (Article No. The Commission of illegal acts during a strike does not automatically bring
263(c, Labor Code); Section 1, Rule V, NCMB Manual of Procedures). about loss of employment status. Due process must be observed by the employer
The proposal of the company to discuss political provisions pursuant to the before any dismissal can be made. {Stanford Marketing Corp. v. Julian, 423
ground rules agreed upon does not automatically mean that the company refuses SCRA 633 (2004]).
to discuss the economic provisions of the CBA, or that the company was engaged (B) Assuming the company admits the strikers, can it later on dismiss those
in “surface bargaining” in violation of its duty to bargain, absent any showing employees who committed illegal acts?
that such tend to show that the company did not want to reach an agreement with
the Union. In fact, there is no deadlock to speak of in this case.
No. The employer may be considered as having waived its right to dismiss a) No. Firstly, a Notice of Strike is always required by Art. 263(c) of the Labor
employees who committed illegal acts during the strike (Reformist Union of R.B. Code before a strike may be staged – be it grounded on bargaining deadlock or
Liner v. NLRC, 266 SCRA 713 (1997]). unfair Labor Practice. Secondly, the Supreme Court already held in Sukothai that
(C) If due to prolonged strike, Lazo Corporation hired replacements, can it refuse while AILU may not exhaust the 15-day cooling-off period in case of dismissal
to admit the replaced strikers? from employment of its officers who were duly elected in accordance with the
Union constitution and by-laws and the dismissal constitutes union busting and a
threat to AILU’s existence, still, Art. 263 (f) requires that a strike vote be
No. Sec. 3, Art. XIII of the Constitution guarantees workers the right to strike in undertaken through a secret ballot and approved by a majority of the total union
accordance with law, and prolonged strike is not prohibited by law. With Art. membership in the bargaining unit. Devoid of a notice of strike and a strike vote,
212 (o) AILU’s strike is therefore illegal.
Page 261 of 307 b) The refusal of the Secretary to assume jurisdiction is valid. Par. (g) of Art. 263
Labor Law (old) of the Labor Code leaves it to his sound discretion to determine if national
defining strike as “any temporary stoppage of work as a result of an industrial or interest is involved. Assumption power is full and complete. It is also plenary
labor dispute, it is the prerogative of strikers to cut short or prolong a strike. By and discretionary (Philtranco Service Enterprises, Inc. v. Philtranco Workers
striking, the employees have not abandoned their employment. Rather, they have Union-AGLO, G.R. No. 180962, February 26, 2014). Thus, if in his opinion
only ceased temporarily from rendering work. The striking employees have not national interest is not involved, then the company cannot insist that he assume
lost their right to go back to their positions, because the declaration of a strike is jurisdiction.
not a renunciation of their employment, much less their employee-employer c) If dismissal is based on illegal strike: The company has to file a complaint for
relationship. illegal strike first. Once the strike is declared by final judgment to be illegal, it
SUGGESTED ALTERNATIVE ANSWER: can dismiss the union officers. As to members, their dismissal must be based on
No. As a general rule, replacements take their employment as conditional, i.e., their having committed illegalities on the occasion of their illegal strike. Since
subject to the rights of strikers to return to work. the company prematurely and indiscriminately dismissed the AILU members
However, since this is an economic strike, the strikers are entitled to then their dismissal is illegal.
reinstatement only in case Lazo Corporation has not yet hired permanent If dismissal is based on the unlawful acts of barricading to lock the AILU
replacements (Consolidated Labor Association v. Marsman & Co., 11 SCRA 589 members: Yes. Article 264 (a) of the Labor Code authorizes the employer to
[1964]). declare the loss of
Page 263 of 307
The procedural requirements of a valid strike include: (2014 Bar Question) Labor Law
(A) a claim of either unfair labor practice or deadlock in collective bargaining employment status of “ANY WORKER” or union officer who knowingly
(B) notice of strike filed at least 15 days before a ULP-grounded strike or at least participates in the commission of illegal acts during a strike.
30 days prior to the deadlock in a bargaining-grounded strike 4. Requisites for a valid lockout
(C) majority of the union membership must have voted to stage the strike with 5. Requisites for lawful picketing
notice thereon furnished to the National Conciliation and Mediation Board
(NCMB) at least 24 hours before the strike vote is taken Asia Union (Union) is the certified bargaining agent of the rank-and-file
(D) strike vote results must be furnished to the NCMB at least seven (7) days employees of Asia Pacific Hotel (Hotel).
before the intended strike The Union submitted its Collective Bargaining Agreement (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
(B) notice of strike filed at least 15 days before a ULP-grounded strike or at least Board (NCMB). Consequently, the Union conducted a Strike Vote on January
30 days prior to the deadlock in a bargaining-grounded strike (Art. 263 (c), Labor 14, 2015, when it was approved.
Code). The next day, waiters who are members of the Union came out of the Union
SUGGESTED ALTERNATIVE ANSWER: office sporting closely cropped hair or cleanly shaven heads. The next day, all
(C) majority of the union membership must have voted to stage the strike with the male Union members came to work sporting the same hair style. The Hotel
notice thereon furnished to the National Conciliation and Mediation Board prevented these workers from entering the premises, claiming that they violated
(NCMB) at least 24 hours before the strike vote is taken (Art. 263 (f), Labor the company rule on Grooming Standards.
Code). On January 16, 2015, the Union subsequently staged a picket outside the Hotel
(D) strike vote results must be furnished to the NCMB at least seven (7) days premises and prevented other workers from entering the Hotel. The Union
before the intended strike (Art. 263 (f), Labor Code). members blocked the ingress and egress of customers and employees to the Hotel
premises, which caused the Hotel severe lack of manpower and forced the Hotel
The Alliance of Independent Labor Unions (AILU) is a legitimate labor to temporarily cease operations resulting to substantial losses.
federation which represents a majority of the appropriate bargaining unit at the On January 20, 2015, the Hotel issued notices to Union members, preventively
Lumens Brewery (LB). While negotiations were ongoing for a renewal of the suspending them and charging them with the following offenses:
collective bargaining agreement (CBA), LB handed down a decision in a (1) illegal picket; (2) violation of the company rule on Grooming Standards; (3)
disciplinary case that was pending which resulted in the termination of the illegal strike; and (4) commission of illegal acts during the illegal strike. The
AILU's treasurer and two Hotel later terminated the Union officials and members who participated in the
Page 262 of 307 strike. The Union denied it engaged in an illegal strike and countered that the
Labor Law Hotel committed an unfair labor practice (ULP) and a breach of the freedom of
other members for cause. AILU protested the decision, claiming that LB acted in speech.
bad faith and asked that LB reconsider. LB refused to reconsider. AILU then [a] Was the picketi legal? Was the mass action of the Union officials and
walked out of the negotiation and declared a strike without a notice of strike or a members an illegal strike? Explain. (2016)
vote. AILU members locked in the LB management panel by barricading the
doors and possible exits (including windows and fire escapes). LB requested the
DOLE to assume jurisdiction over the dispute and to certify it for compulsory Page 264 of 307
arbitration. Labor Law
The Secretary of Labor declined to assume jurisdiction, finding that the dispute The picket was illegal. The right to picket as a means of communicating the facts
was not one that involved national interest. LB then proceeds to terminate all of of a labor dispute is a phase of freedom of speech guaranteed by the constitution
the members of the bargaining agent on the ground that it was unlawful to: (1) (De Leon v. National Labor Union 100 Phil 789 [19571). But this right is not
barricade the management panel in the building, and (2) participate in an illegal absolute. Article 278 of the Labor Code provides that no person engaged in
strike. picketing shall ... obstruct the free ingress to or egress from the employer's
(a) Was AILU justified in declaring a strike without a strike vote and a notice of premises for lawful purposes or obstruct public thorough fares. The acts of the
strike? Why or why not? (2015 Bar Question) union members in blocking the entrance and exit of th hotel which caused it to
(b) Was the Secretary of Labor correct in declining to assume jurisdiction over shut down temporarily makes the picket illegal.
the dispute? (2015 Bar Question) The actions of all the union members in cropping or shaving their head is deemed
(c) Was LB justified in terminating all those who were members of AILU on the an illegal strike. In National Union of Workers in the Hotel Restaurant and Allied
two grounds cited? (2015 Bar Question) Industries (NUWHRAINAPL-IUF) Dusit Hotel Nikko Chapter v. Court of
SUGGESTED ANSWERS: Appeals, G.R. No. 163942 November 11 2008, the Supreme Court ruled that the
act of the Union was not merely an expression of their grievance or displeasure Peaceful picketing conducted by employees in a strike area during any labor
but was, indeed, a calibrated and calculated act designed to inflict serious controversy is given protection by the Labor Code.
damage to the hotel's grooming standards which resulted in the temporary Thus, if the place being picketed is a strike area which is defined by the Labor
cessation and disruption of the hotel's operations. This should be considered as Code as “the establishment, warehouses. depots, plants or offices, including the
an illegal strike. sites or premises used as runaway shops, of the employer struck against, as well
ALTERNATIVE ANSWER: as the immediate vicinity actually used by picketing strikers in moving to and fro
As regards the shaving of heads by the union members, their mass action was not before all points of entrance to and exit from said establishment,” then the -
an illegal strike. It was the Hotel administration which prevented them from picketing is protected, if it is peaceful.
entering the hotel premises. In the question given, however, since the striking union is picketing the
[b] Rule on the allegations of ULP and violation of freedom of speech. Explain. company's outside outlets who are not company owned but independent dealers,
the picketing is not in a strike area, thus the picketing is not protected by the
Code.
The Hotel is not guilty of ULP. The act of the hotel in suspending and eventually 6. Assumption of jurisdiction by the DOLE Secretary or Certification of the labor
dismissing the union officers who concertedly antagonized and embarrassed the dispute to the NLRC for compulsory arbitration
hotel management and, in doing so, effectively disrupted the operations of the
hotel, is an act of self-preservation. The law in protecting the rights of the laborer Calabarzon Transportation Company (CTC) and the Calabarzon Workers Union
authorizes neither oppression nor self- destruction of the employer. The right of (CWU) are parties to a collective bargaining agreement (CBA), which is
the employer to dismiss its erring employees is a measure of self protection effective until December 31. 1992. The CBA provides for among others, a
(Filipro v. NLRC, G.R. No. 70546, October 16, 1966). The power to dismiss an bipartite committee composed of CTC and CWU representatives to evaluate all
employee is a recognized prerogative that is inherent in the employee's right to positions in the CTC and detennine adjustment of wages and allowances. The
freely manage and regulate its business (Philippine Singapore Transport Service Committee members having failed to agree on the adjustments, the CWU filed a
v. NLRC, G.R. No. 95449 [1997). notice of strike. Conciliation efforts by the National Conciliation and Mediation
It cannot be said that the hotel is guilty of violating the union member's right to Board failed. The CWU then declared a strike. The Secretary of Labor and
freedom of speech. The right to freedom of expression is not absolute; it is Employment assumed jurisdiction over the dispute and after proceedings issued
subject to regulation so that it may not be injurious to the right of another or to an order (a) awarding certain monetary benefits to the strikers, (b) declaring the
society. As discussed, the union member's act of cropping or shaving their heads strike legal on the ground that CWU complied with all the requirements for a
caused substantial losses to the hotel valid strike, and (c) restraining CTC from taking retaliatory actions against the
Page 265 of 307 officers and members of CWU who were responsible for the strike.
Labor Law a) As lawyer for CTC what action should you take?
caused by the cessation of its operations. The Supreme Court in one case held
that the union's violation of the hotel grooming standards was clearly a deliberate
and concerted action to undermine the authority of and to embarrass the hotel As lawyer of CTC, I will first file with the Secretary of Labor and Employment a
and was, therefore, not a protected action. The physical appearance of the hotel Motion for Reconsideration. If this Motion is denied, then I will file with the
employees directly reflect the character and well-being of the hotel, being a five- Supreme Court a petition
star hotel that provides service to topnotch clients. Page 267 of 307
ALTERNATIVE ANSWER: Labor Law
Yes. The Hotel is guilty of Unfair Labor Practice under Art. 259 of the Labor for certiorari under Rule 65 of the Rules of Court. I will assail the issuance by the
Code, specifically Art. 259 (1) To interfere with, restrain or coerce employees in Secretary of Labor of his Order, and his refusal to reconsider said Order as a
the exercise of their right to self-organization. The act of the Hotel in preventing grave abuse of discretion amounting to lack or excess of jurisdiction.
the employees from entering the work premises constitutes this unfair laboi b) Was the assumption of the labor dispute by the Secretary of Labor and
practice. Employment valid?

Following a deadlock in collective bargaining, the AC- AC Labor Union filed a

notice of strike with the Department of Labor and Employment and, thirty (30) It is valid. Under the Labor Code, (in Article 263 (g)) the Secretary of Labor has
days later, went on strike and picketed the gates of the UP-UP Company, the power to assume jurisdiction over a labor dispute causing or likely to cause a
paralyzing its operations. The company is engaged in telecommunications, strike or lockout in an industry indispensable to the national interest. CTC, as a
including the supply of cellular phone equipment, with a nationwide network of transportation Company, is in an industiy indispensible to the national interest.
facilities. In a petition with the DOLE, the company questioned the legality of c) Was the Secretary’s order granting monetary bene fits. declaring the strike of
the strike and asked for compulsory arbitration. The Secretary of the DOLE CWU legal and restraining the CTC from penalizing CWU members valid?
certified the dispute to the NLRC for compulsory arbitration and ordered the Reasons.
company to readmit the workers pending the arbitration. The workers returned
and were readmitted by the company but five (5) technicians were temporarily
reassigned to the warehouse while five (5) others were reinstated on payroll only. The Secretary's order declaring the strike of CWU legal and restraining the CTC
The company justified its acts as an exercise of management prerogative. from penalizing CWU members on the basis of the finding of the Secretary that
xxxxxx the strike is legal, is illegal. He is acting in excess of his jurisdiction. It is a Labor
During the strike, may the striking union picket the company's outside outlets Arbiter, not the Secretary of Labor, that has the jurisdiction to determine the
although they are not company- owned but independent dealers? Was there a legality of a strike. (Article 217. Labor Code. Philippine Airlines, Inc. v.
valid strike? Secretanj of Labor and Employment et al., 193 SCRA 223) but in International
Pharmaceuticals v. Secretary of oj Labor, 205 SCRA 65, (Jan. 9, 1992), the
Supreme Court that the Secretary of Labor, when he assumes jurisdiction under
The strike is not valid. Article 263(g) of the Labor Code could.deal with all the incident of the labor
It is true that the Labor Code provides that if an employer violates a collective dispute including the issue as to whether or not a strike is legal.
bargaining agreement, the said employer commits an unfair labor practice act, The Secretary's Order granting monetary benefits is valid. When the Secretary
which in turn is a legal ground for a strike. assumed jurisdiction over the labor disputes, he assumed such jurisdiction for
Page 266 of 307 compulsory arbitration, meaning, he could thereby determine the monetary
Labor Law benefits that CTC and CWU cannot agree about.
But Rep. Act No. 6715 amended the Labor Code by providing that violations of a
collective bargaining agreement. except those which are gross in character shall Following a deadlock in collective bargaining, the AC- AC Labor Union filed a
no longer be treated as unfair labor practice and shall be resolved as grievances notice of strike with the Department of Labor and Employment and, thirty (30)
under the collective bargaining agreement. The violation involved in the question days later, went on strike and picketed the gates of the UP-UP Company,
is not a gross violation because there is no “flagrant and/or malicious refusal to paralyzing its operations. The company is engaged in telecommunications,
comply with the economic provisions of such agreement which is how the Code including the supply of cellular phone equipment, with a nationwide network of
defines a gross violation of a collective bargaining agreement. facilities. In a petition with the DOLE, the company questioned the legality of
the strike and asked for compulsory arbitration. The Secretary of the DOLE
certified the dispute to the NLRC for compulsory arbitration and ordered the
company to readmit the workers pending the arbitration. The workers returned
and were readmitted by the company but five (5) technicians were temporarily Those who violate the foregoing shall be subject to disciplinary action or even
reassigned to the warehouse while five (5) others were reinstated on payroll only. criminal prosecution.
The company justified its acts as an exercise of management prerogative. Under Art. 264 of the Labor Code, no strike or lockout shall be declared after the
Page 268 of 307 assumption of jurisdiction by the Secretary.
Labor Law
b) Was the certification of the dispute for compulsory arbitration proper? Several employees and members of Union A were terminated by Western Phone
Co. on the ground of redundancy. After complying with the necessary
requirements, the Union staged a strike and picketed the premises of the
The certification of the dispute for compulsory arbitration was proper. company. The management then filed a petition for the Secretary of Labor and
The dispute was causing a strike in an industry indispensable to the national Employment to assume jurisdiction over the dispute. Without the benefit of a
interest. The company was engaged in telecommunication including the supply hearing, the Secretary issued an Order to assume jurisdiction and for the parties
of cellular equipment, with a nationwide network of facilities. All these activities to revert to the status quo ante litem. (2010 Bar Question)
are at present indispensable to the national interest. A. x x x
c) Were the temporary reassignment and payroll reinstatement valid? Page 270 of 307
Labor Law
B. Under the same set of facts the Secretary instead issued an Order directing all
No. The temporary re-assignment and payroll rein- statement are not valid. striking workers to return to work within 24 hours, except those who were
According to the Labor Code, when the Secretary of Labor assumes Jurisdiction, terminated due to redundancy. Was the Order legal? Explain. (3%)
such assumption has the effect of automatically enjoining the strike that is taking
place and all striking employees shall immediately return to work as the
employer shall immediately resume operations and readmit all workers under the NO. The Secretary of Labor’s order will be inconsistent with the established
same terms and conditions prevailing before the strikes. policy of the State of enjoining the parties from performing acts that undermine
ALTERNATIVE ANSWER: the underlying principles embodied in Article 263(g) of the Labor Code.
The temporary re-assignment and payroll reinstatement are valid, if they are In this case, excepting the employees terminated due to redundancy from those
made in good faith, and are not for the purpose of discouraging membership in who are required to return- to-work, which was the very labor dispute that
the union. It is the prerogative of the management to assign its employees to sparked the union to strike, the Secretary of Labor comes short of his duty under
where the management believes their services could be best utilized. As for the Article 263(g) to maintain status quo or the terms and conditions prevailing
payroll reinstatement, it is valid if there is a valid reason to prevent the workers before the strike. In fact, the Secretary could be accused of disposing of the
placed or payroll reinstatement from actually returning to work, like a valid fear parties’ labor dispute without the benefit of a hearing, in clear derogation of due
that they will sabotage equipment in the company, process of law.
8. Effect of defiance of assumption or certification orders
Several employees and members of Union A were terminated by Western Phone
Co. on the ground of redundancy. After complying with the necessary The Secretary of Labor assumed jurisdiction over a strike under Art. 263(g) of
requirements, the Union staged a strike and picketed the premises of the the Labor Code and issued a return-to-work order. The Union defied the return-
company. The management then filed a petition for the Secretary of Labor and to-work order and continued the strike. The Company proceeded to declare all
Employment to assume jurisdiction over the dispute. Without the benefit of a those who participated in the strike as having lost their employment status.
hearing, the Secretary issued an Order to assume jurisdiction and for the parties 1) Was the Company’s action valid?
to revert to the status quo ante litem. (2010 Bar Question) 2) Was the Company still duty bound to observe the requirements of due process
A. Was the order to assume jurisdiction legal? Explain. (2%) before declaring those who participated in the strike as having lost their
employment status?

YES. The Secretary of Labor and Employment has plenary power to assume
jurisdiction under Article 263(g) of the Labor Code. When in his opinion, there 1) The Company’s action is valid. Any declaration of a strike after the Secretary
exists a labor dispute of Labor has assumed jurisdiction over a labor dispute is considered an illegal
Page 269 of 307 act. and any worker or union officer who knowingly participates in a strike
Labor Law defying a retum-to-work order may consequently be declared to have lost his
causing or likely to cause a strike or lockout in an industry indispensable to the employment status and forfeited his right to be readmitted, having abandoned his
national interest, the Secretary of Labor may assume jurisdiction over the dispute position, and so could be validly replaced.
and decide it or certify it to the NLRC for compulsory arbitration (Art. 263[g], For the moment a worker defies a return-to-work order, he is deemed to have
Labor Code). This extraordinary authority giyen to the Secretary of Labor is abandoned his job, as it is already in itself knowingly participating in an illegal
aimed at arriving at a peaceful and speedy solution to labor disputes, without act, otherwise the worker will simply refuse to return to his work and cause a
jeopardizing national interests (Steel Corporation v. SCP Employees Union, 551 standstill in company operations while returning the posi-tion he refuses to
SCRA 594 [2008]). Such assumption shall have the effect of automatically discharge or allow management to fill. (SL Scholastica’s College v. Hon. Ruben
enjoining an impending strike or lockout, or an order directing immediate return Torres, Secretary of Labor, etal., G.R. No. 100158, 29 June 1992.)
to work and resume operations, if a strike already took place, and for the Page 271 of 307
employer to re-admit all employees under the same terms and conditions Labor Law
prevailing before the strike or lockout (Art. 263(g), Labor Code; Sec. 15, Rule 2) Considering that the workers who defied the return-to-work order are deemed
XXII, Dept. Order No. 40-G-03). to have abandoned their employment, the only obligation required of an
7. Nature of assumption order or certification order employer is to serve notices declaring them to have lost their employment status
at the worker's last known address. ( Sec. 2 Rule XIV, Book V, Rules
In a labor dispute, the Secretary of Labor issued an "Assumption Order". Give Implementing the Labor Code)
the legal implications of such an order. 9. Illegal strike
a) Liability of union officers
b) Liability of ordinary workers
Under Art. 263(g) of the Labor Code, such assumption shall have the effect of
automatically enjoining the intended or impending strike or lockout as specified Due to business recession, Ballistic Company retrenched a part of its workforce.
in the assumption order. If one had already taken place at the time of assumption, Opposing the retrenchment, some of the affected employees staged a strike.
all striking or lockout employees shall immediately return to work and the Eventually, the retrenchment was found to be justified, and the strike was
employer shall immediately resume operations and re-admit all workers under declared illegal; hence, the leaders of the strike, including the retrenched
the same terms and conditions prevailing before the strike or lockout. The employees, were declared to have lost their employment status. Are the striking
Secretary of Labor and Employment may seek the assistance of law enforcement retrenched employees still entitled to separation pay under Sec. 298 (283) of the
agencies to ensure compliance with this provision as well as with such orders as Labor Code despite the illegality of their strike? Explain your answer. (2%)
he may issue to enforce the same. The mere issuance of an assumption order by (2017 Bar Question)
the Secretary of Labor automatically carries with it a return-to-work order, even
if the directive to return to work is not expressly stated in the assumption order. No. The Supreme Court has ruled if the strike staged by the union is declared
illegal, the union officers and members are considered validly dismissed from
employment for committing illegal acts during the illegal strike. The striking ii) It may file a case before the Labor Arbiter, under Art. 217. to have the strike
retrenched union officials and members who were found guilty of having staged declared illegal and after that proceed to terminate the strikers.
an illegal strike, which constituted serious misconduct, will not be entitled to 3) They could file a case of illegal dismissal. The strikers who are union officers
separation pay (C. Alcantara & sons, Inc. v. Court of Appeals, G.R. No. 155109, may contend that the strike is not illegal. The strikers who are mere union
March 14, 2012, 631 SCRA 486; citing Toyota Motors Phils. Corp. Workers members may contend that they did not commit any illegal acts during the strike.
Association v. NLRC, G.R. No. 158786 & 158789, October 19, 2007, 537 SCRA (Art. 264, Labor Code)
171). ALTERNATIVE ANSWER: Yes. Article 298 (283) of the Labor Code c) Liability of employer
requires an employer to give, without qualification, separation pay in cases of 10. Injunctions (Requisites for labor injunctions, “Innocent bystander rule”)
retrenchment. The law does not make a distinction as to which among the
retrenched employees are entitled to receive separation pay; thus, the striking A food processing company (the Company) engaged the services of duly
retrenched employees are still entitled to separation pay despite the illegality of licensed independent contractors in connection with the operation of its business.
their strike. Q: Given that the liability for an illegal strike is individual, not The contractors deployed workers in the Company. The contractors’ workers
collective, state when the participating union officers and members may be joined ABC the union of rank-and-file employees of the Company, and later
terminated from employment because of the illegal strike. Explain your answer. demanded that they be made regular employees because they are performing
(4%) (2017 Bar Question) functions necessary and desirable in the usual business of the Company. The
Page 272 of 307 Company questioned the contractors' workers joining ABC and rejected their
Labor Law demand for regularization. ABC filed a notice of strike with the Department of
Labor and Employment. In a petition filed with the Regional Trial Court, the
When a strike is declared illegal because of non-compliance with statutory or Company asked the court to enjoin ABC and the contractors’ workers from
contractual requirements or because of the use of unlawful means, the declaring a strike, asserting that the workers are not employees of the Company
consequence is loss of employment status of the officers of the union who and that there is no
knowingly participated in the illegal strike. Ordinary union members will lose Page 274 of 307
their employment status only if they participated in the commission of illegal acts Labor Law
during the strike, thus, mere union membership does not result in automatic loss labor dispute between the workers and the Company as its agreement is only
of employment as a result of an illegal strike (Article 263-264 [now Articles 278- with the contractors.
2791 of the Labor code; Pepsi-Cola Labor Union v. NLRC, G.R. No. L-58341, As trial judge, will you issue an injunction against ABC and the workers?
June 29, 1982, 114 SCRA 930; Solidbank corp. v. Solidbank Union, G.R. No. Explain.
159461, November 15, 2010, 634 SCRA 554).

Union A filed a Notice of Strike with the National Conciliation and Mediation As trial judge, I will not issue an injunction against ABC and the workers.
Board (NCMB) of the Department of Labor and Employment. Upon a motion to The acts of ABC and the workers, namely, the workers joining ABC said
dismiss by the Company on the ground that the acts complained of in the notice workers demanding that they be made regular employees, ABC filing a notice of
of strike are non -strikeable the NCMB dismissed the Notice of Strike but strike with the Department of Labor and Employment, all these acts brought
continued to mediate the issues contained therein to prevent the escalation of the about a labor dispute which is not within the jurisdiction of the Regional Trial
dispute between the parties. While the NCMB was conducting mediation Court.
proceedings, the Union proceeded to conduct a strike vote as provided for under The fact that the Company is asserting that the workers are not employees of the
the Labor Code. After observance of the procedural processes required under the Company does not make the case between the Company, on one hand, and ABC
Code, the Union declared a strike. and the workers, on the other hand, not a labor dispute. The truth cr falsity of the
1) Is the strike legal? assertion of the Company is a matter that is within a Labor Arbiter, not a
2) Can the employer unilaterally declare those who participated in the strike as Regional Trial Court. to decide. (San Miguel Corp. Employees Union-PTGWO-
having lost their employment status? vs. Bersamina, 186 SCRA 496)
3) What recourse do these employees (declared by the employer to have lost their If an injunction is proper, it is the National. Labor Relations Commission that
employment status) have, if any? can enjoin ABC and the workers from doing any unlawful act.
The Labor Code (in Article 254) is very clear: No temporary or permanent
injunction or restraining order involving or growing out of a labor dispute shall
1) No. The strike is not legal. The Labor Code provides that no labor be enjoined by any court or other entity except by the NLRC under Articles 218
organization shall declare a strike without first having bargained collectively in and under 264.
accordance with its Title VII of Book V, which in turn provides that during VIII. Procedure and Jurisdiction
conciliation proceedings at the NCMB. the parties are prohibited from doing any A. Labor Arbiter (Jurisdiction, Reinstatement pending appeal, Requirements to
act that may disrupt or impede the early settlement of the dispute. (Arts. 264(a), perfect appeal to NLRC)
also 250(d); Labor Code)
ALTERNATIVE ANSWER: Marcel was the Vice President for Finance and Administration and a member of
a) The strike is not legal, considering that it was declared after the NCMB the Board of Directors of Mercedes Corporation. He brought a complaint for
dismissed the Notice of Strike. illegal suspension and illegal dismissal against Mercedes Corporation, which
Page 273 of 307 moved to dismiss the complaint on the ground that the complaint pertained to the
Labor Law jurisdiction of the RTC due to the controversy being intracorporate based on his
Hence, it is as if, no notice of strike was filed. A strike declared without a notice positions in the corporation. Marcel countered that he had only been removed as
of strike is illegal; (GOP-CCP v. CIR, 93 SCRA 118). Vice President for Finance and Administration, not as a member of the Board of
b) No. The strike is illegal. It is already settled in the case of PAL us. Secretary Directors. He also argued that his position was not listed as among the corporate
of Labor (Drilon) that the pendency of a mediation proceedings is a bar to the offices in Mercedes Corporation's by-laws. Is the argument of Marcel correct?
staging of a strike even if all the procedural requirements were complied with, Explain your answer. (2.5%) (2017 Bar Question)
2) The employer may unilaterally declare those who participated in the strike as
having lost their employment status but such unilateral declaration does not
necessarily mean that thereby the strikers are legally dismissed. The strikers Page 275 of 307
could still file a case of illegal dismissal and prove, if they can, that there was no Labor Law
just cause for their dismissal. Yes, Marcel's argument is correct. The question is whether the complaint for
ALTERNATIVE ANSWER: illegal dismissal filed by Marcel is intra-corporate and thus beyond the
a) The employer cannot unilaterally declare those who participated in the illegal jurisdiction of the Labor Arbiter. Marcel as the Vice-President for Finance and
strike as having lost their employment status. Only the union officers who Administration is not a corporate official. Although he is a member of the Board
knowingly participated in the strike and workers who knowingly participated in of Directors, he was not removed as such; he was removed only from his position
the commission of illegal acts, if any, may be declared to have lost their as Vice-President. Inasmuch as the core issue is his termination as a non-
employment status. (Art. 264). corporate official, then Marcel's complaint for illegal dismissal is not an intra-
b) The employer has two options: corporate controversy (Real v. sangu Philippines, Inc. et al., G.R. No. 168757,
i) It may declare the strikers as having lost their employment status pursuant to January 19, 2011, 640 SCRA 67). ALTERNATIVE ANSWER: Yes, Marcel's
Art. 264 of the Labor Code, or argument is correct. Only corporate officers such as the president, secretary,
treasurer, and such other officers as may be provided in the by-laws of the
corporation are subject to the jurisdiction of the RTC. Corporate officers are (A) He should file his claim with the DSWD, which will eventually endorse it to
those whose position is a creation of the corporate charter or by laws and whose the right agency. (B) Since he has no interest in reinstatement, he can file his
election is by virtue of the acts of the Board of Directors (Cosare v. claim with the office of the regional director of the Department of Labor. (C) He
BroadcomAsia, Inc., G.R. No. 201298, February 5, 2014, 715 SCRA 534). Q: should file his claim exceeding P5,000.00 with the office of the labor arbiters, the
State the jurisdiction of the Voluntary Arbitrator, or Panel of Voluntary regional arbitrators representing the NLRC. (D) He should go to the Employee’s
Arbitrators in labor disputes? (4%) (2017 Bar Question) Compensation Commission.

The jurisdiction of the Voluntary Arbitrator, or Panel of Voluntary Arbitrators in As the lawyer of Mr. Excelente, state the nature of your action or complaint to be
labor disputes is provided in Article 274 (formerly Article 261) of the Labor filed against the university, the proper body or court before which it may be filed,
Code, viz: the Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the laws to be invoked, and the facts or evidence to be adduced.
original and exclusive jurisdiction to hear and decide all unresolved grievances
arising from the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company As lawyer of Mr. Excelente, I will file a complaint questioning the legality of his
personnel policies referred to in the immediately preceding article. Accordingly, dismissal.
violations of a Collective Bargaining Agreement, except those which are gross in I will file the complaint with the Labor Arbiter in the Regional Arbitration
character, shall no longer be treated as unfair labor practice and shall be resolved Branch of the NLRC having jurisdiction over the place where Mr. Excelente
as grievances under the Collective Bargaining Agreement. For purposes of this works.
article, gross violations of Collective Bargaining Agreement shall mean flagrant- I will invoke the provisions of the Labor Code which are found in its Book VI
and/or malicious refusal to comply with the economic provisions of such that guarantee the right of workers to security of tenure.
agreement. ALTERNATIVE ANSWER: Under Articles 274 and 275 of the I will adduce facts or evidence that will disprove the allegations of the University
Labor Code, as re-numbered, the jurisdiction of Voluntary Arbitrators or Panel of President that have been given as reasons for dismissing Mr. Excelente. The fact
Voluntary Arbitrators are: (a) original and exclusive jurisdiction to hear and that he had served the University for twenty five years, was well known in his
decide all unresolved grievances arising from the interpretation or field and has received many awards should disprove the allegation of gross
implementation of the Collective Bargaining Agreement (Article 274); incompetence. I will content that the alteration over teaching loads of professors
Page 276 of 307 is not tantamount to insubordination and dereliction of duty.
Labor Law a) May the University President be impleaded as co-respondent? If so, what will
(b) those arising from the interpretation or enforcement of company personnel be the nature of his liability?
policies (Id.); (c) upon agreement of the parties, jurisdiction to hear and decide
all other labor disputes including unfair labor practices and bargaining deadlocks
(Article 275). Page 278 of 307
On August 01, 2008, Y, a corporation engaged in the manufacture of textile Labor Law
garments, entered into a collective bargaining agreement with Union X in The University President may not be impleaded if his acts in connection with the
representation of the rank and-file employees of the corporation. The CBA was termination of Mr. Excelente were official.
effective up to June 20, 2011. The contract had an automatic renewal clause But he may be pleaded if he acted without or in excess of his authority or was
which would allow the agreement after its expiry date to still apply until both motivated by personal ill will towards Mr. Excelente. If he is thus impleaded, the
parties would have been able to execute a new agreement. On May 10, 2011, University President shall be personally liable for the payment of back wages and
Union X submitted to Y's management their proposals for the negotiation of a damages, if any that Mr. Excelente will be entitled to receive if it is found that he
new CBA. The next day, Y suspended negotiations with Union X since Y had has been unjustly dismissed.
entered into a merger with z,· a corporation also engaged in the manufacture of
textile garments. Z assumed all the assets and liabilities of Y. Union X filed a A was dismissed from the service by his employer for theft of goods owned by
complaint with the Regional Trial Court for specific performance and damages the company. He was also prosecuted for theft before the Regional Trial Court of
with a prayer for preliminary injunction against Y and Z and Z filed a Motion to Pasay City. Meanwhile, A filed a complaint for illegal dismissal against the
Dismiss based on lack of jurisdiction. Rule on the Motion to Dismiss. (5%) employer before the labor arbiter. The trial court subsequently acquitted A and
(2012 BAR) ordered his reinstatement with backwages from the time of his separation to the
date of his actual reinstatement.
The Motion to Dismiss must be granted. The claim against Y and Z consists (1) Is the decision of the court correct? State your reasons.
mainly of the civil aspect of the unfair labor practice charge referred to in Article (2) Even with such acquittal, may the labor arbiter still proceed to resolve the
247 of the Labor Code. Under Article 247 of the Code, “the civil aspects of all complaint for illegal dismissal filed by A? State your reasons.
cases involving unfair labor practices, which may include claims for damages
and other affirmative relief, shall be under the jurisdiction of the labor arbiters.”
[National Union of Bank Employees v. Lazaro G.R. No. 56431, January 19, (1) The decision of the court is not entirely correct.
1988]. Besides, what the parties have is a labor dispute as defined in Art. 212 (1) It is within the jurisdiction of the Regional Trial Court to acquit A. As a regular
of the Labor Code “regardless of whether the disputants stand in the proximate court, the RTC has jurisdiction over criminal cases. But it is outside of the
relation of employer and employee”. Being so, the RTC is prohibited by Art. 254 jurisdiction of the RTC to order the reinstatement of A with backwages. A
of the Code from exercising jurisdiction over the cases. termination dispute, which could give rise to a decision for the reinstatement of
an illegally dismissed employee and the payment of his backwages is outside the
Pedring, Daniel, and Paul were employees of Delibakery who resigned from their jurisdiction of the RTC. It is within the original and exclusive jurisdiction of
jobs but wanted to file money claims for unpaid wages and 13th month pay. labor arbiters. (Art. 217, Labor Code).
Pedring’s claim totals P20,000.00, Daniel’s P3,000.00, and Paul’s P22,000.00. (2) Even with A’s acquittal, the labor arbiier should still proceed to resolve the
Daniel changed his mind and now also wants reinstatement because he resigned complaint for illegal dismissal filed by A. An action for illegal dismissal is
only upon the instigation of Pedring and Paul. Where should they file their entirely separate and distinct from a criminal action. (Pepsi Cola Bottling
claims? (2011 BAR) (A) With the DOLE regional director for Pedring and Paul’s Company of the Philippines v. Guanzon, G.R. No. 81162, April 19. 1989).
claims with no reinstatement; with the labor arbiter for Daniel’s claim with In many decisions, the Supreme Court has ruled that the acquittal of an employee
reinstatement. in a criminal case does not mean that there could be no basis for legally
Page 277 of 307 dismissing the employee for. say. willful breach of trust, which is a just cause for
Labor Law termination. Conviction in a criminal case requires proof beyond reasonable
(B) With the Office of the Regional Director of the Department of Labor for all doubt. In a termination dispute, it is enough that there is substantial evidence to
claims to avoid multiplicity of suits. (C) With a labor arbiter for all three prove that there has been willful breach of trust.
complainants. (D) With the DOLE Regional Director provided they are
consolidated for expediency. Richie, a driver-mechanic, was recruited by Supreme Recruiters (SR) and its
principal, Mideast Recruitment Agency (MRA), to work in Qatar for a period of
Quiel, a househelper in the Wilson household since 2006, resigned from his job two (2) years.
for several reasons. One reason was the daily 12-hour workday without any rest Page 279 of 307
day. When he left his job he had unpaid wages totaling P13,500.00 which his Labor Law
employer refused to pay. He wants to claim this amount though he is not However, soon after the contract was approved by POEA, MRA advised SR to
interested in getting back his job. Where should he file his claim? (2011 BAR) forego Richie’s deployment because it had already hired another Filipino driver-
mechanic, who had just completed his contract in Qatar. Aggrieved, Richie filed Labor Law
with the NLRC a complaint against SR and MRA for damages corresponding to I will deny the motion to dismiss. "Corporate officers" in the context of
his two years’ salary under the POEA- approved contract. Presidential Decree No. 902-A are those officers of the corporation who are
SR and MRA traversed Richie’s complaint, raising the following arguments: given that character by the Corporation Code or by the corporation's by-laws.
[a] The Labor Arbiter has no jurisdiction over the case; (2%) (2009 Bar Section 25 of the Corporation Code enumerates three specific officers that in law
Question) are considered as corporate officers – the president, secretary and the treasurer.
xxxxxx Lincoln is not one of them. There is likewise no showing that his position as
Rule on the validity of the foregoing arguments with reasons. Assistant Vice-President is a corporate officer in the company's by-laws. The
Labor Arbiter therefore, has jurisdiction over the case (Art. 217 (a) (2), Labor
Code).
The Labor Arbiter has jurisdiction. Sec. 10, R.A. No. 8042, reads:
“Money Claims.- Notwithstanding any provision of law to the contrary, the Mario comes from a family of coffee bean growers. Deciding to incorporate his
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have fledgling coffee venture, he invites his best friend, Carlo, to join him. Carlo is
the original and exclusive jurisdiction to hear and decide, within ninety (90) hesitant because he does not have money to invest but Mario suggests a scheme
calendar days after the filing of the complaint, the claims arising out of an where Carlo can be the Chief Marketing Agent of the company, earning a salary
employer-employee relationship or by virtue of any law or contract involving and commissions. Carlo agrees and the venture is formed. After one year, the
Filipino workers for overseas deployment including claims for actual, moral, business is so successful that they were able to declare dividends. Mario is so
exemplary and other forms of damages.” happy with Carlo's work that he assigns 100 shares of stock to Carlo as part of
ANOTHER the latter's bonus.
Much later on, it is discovered that Carlo had engaged in unethical conduct
which caused embarrassment to the company. Mario is forced to terminate Carlo
The Labor Arbiter has no jurisdiction over the case. The failure to deploy a but he does so without giving Carlo the opportunity to explain.
worker within the prescribed period without valid reason is a recruitment Carlo filed a case against Mario and the company for illegal dismissal. Mario
violation under the jurisdiction of the POEA. objected on the ground that the Labor Arbiter had no jurisdiction over the case as
it would properly be considered as an intra-corporate controversy cognizable by
Is a termination dispute a grievable issue? (2012 Bar Question) the RTC. Further, Mario claimed that because Carlo's dismissal was a corporate
a. Yes, if the dismissal arose out of the interpretation or implementation of the act, he cannot be held personally liable.
CBA; (a) As the Labor Arbiter assigned to this case, how would you resolve the
b. No, once there’s actual termination, the issue is cognizable by a Labor Arbiter; jurisdiction question. (2015 Bar Question)
c. Yes, it is in the interest of the parties that the dispute be resolved on the (b) What is the rule on personal liability of corporate officers for a corporate act
establishment level; declared to be unlawful? (2015 Bar Question)
d. No, a voluntary arbitrator must take cognizance once termination is made
effective.
Page 280 of 307 (a) The Labor Arbiter has jurisdiction over Carlo’s illegal dismissal complaint as
Labor Law he was hired by Mario on a “salary and commission” basis. In Grepalife v.
Judico (180 SCRA 445) it was held that a worker who is paid on a salary plus
commission basis is an employee. While regular courts have jurisdiction over
c) No, once there’s actual termination, the issue is cognizable by a Labor Arbiter Mario’s corporate act of severing ties with Carlo, the Labor Arbiter, pursuant to
[Art. 217 (a), Labor Code; San Miguel Corporation v. NLRC, G.R. No. 108001, Art. 217 A-(2) of the Labor Code, has jurisdiction over Carlo’s illegal dismissal
March 15, 1996] complaint.
(b) Corporate officers are not, as a general rule, personally liable for the
The jurisdiction of the National Labor Relations Commission does not include: corporate acts they performed in behalf of the corporation they represent. They
(2014 Bar Question) are,
(A) exclusive appellate jurisdiction over all cases decided by the Labor Arbiter Page 282 of 307
(B) exclusive appellate jurisdiction over all cases decided by Regional Directors Labor Law
or hearing officers involving the recovery of wages and other monetary claims however, personally liable for their corporate acts if they acted with malice or
and benefits arising from employer-employee relations where the aggregate bad faith (Girly Ico v. Systems Technology Institute, Inc., G.R. No. 185100, July
money claim of each does not exceed five thousand pesos (Php5,000) 9, 2014).
(C) original jurisdiction to act as a compulsory arbitration body over labor SUGGESTED ALTERNATIVE ANSWER:
disputes certified to it by the Regional Directors (a) Carlo is party to a joint-venture. Hence, he is not related to Mario as an
(D) power to issue a labor injunction employee. As a business organization, the affairs of that joint-venture are not
governed by Labor Law, except in relation to its employees. Any issue arising
from that affair, therefore, must be brought to the RTC. Thus, the NLRC has no
(C) original jurisdiction to act as a compulsory arbitration body over labor jurisdiction because the matter did not arise from employer-employee
disputes certified to it by the Regional Directors (Art. 129, Labor Code). relationship and the issue between the disputants is not resolvable solely through
the application of Labor Law.
Lincoln was in the business of trading broadcast equipment used by television
and radio networks. He employed Lionel as his agent. Subsequently, Lincoln set A neighbor’s gardener comes to you and asks for help because his employer
up Liberty Communications to formally engage in the same business. He withheld his salary for two (2) months amounting to P4,000.00. Where will you
requested Lionel to be one of the incorporators and assigned to him 100 Liberty advise him to file his complaint? (2012 Bar Question)
shares. Lionel was also given the title Assistant Vice-President for Sales and a. Labor arbiter;
Head of Technical Coordination. After several months, there were allegations b. DOLE Regional Director;
that Lionel was engaged in “under the table dealings” and received “confidential c. Conciliator/Mediator;
commissions” from Liberty’s clients and suppliers. He was, therefore, charged d. MTC Judge.
with serious misconduct and willful breach of trust, and was given 48 hours to
present his explanation on the charges. Lionel was unable to comply with the 48-
hour deadline and was subsequently barred from entering company premises. b. DOLE Regional Director [Art. 129, Labor Code]
Lionel then filed a complaint with the Labor Arbiter claiming constructive
dismissal. Among others, the company sought the dismissal of the complaint Who has jurisdiction over a money claim instituted by an overseas Filipino
alleging that the case involved an intra-corporate controversy which was within workers? (2012 Bar Question)
the jurisdiction of the Regional Trial Court (RTC). a. Labor Arbiter;
If you were the Labor Arbiter assigned to the case, how would you rule on the b. National Labor Relations Commissions;
company’s motion to dismiss? (2014 Bar Question) c. Labor Arbiter concurrently with the regular courts;
d. National Labor Relations Commission concurrently with the regular courts.

Page 281 of 307

a) Labor Arbiter [Sec. 10, Art. 8042] Through a petition for certiorari under Rule 65 of the Rules of Court, Baker
Requirements to perfect appeal to NLRC Company challenged the validity of the NLRC ruling. It argued that the NLRC
acted with grave abuse of discretion when it ruled on the illegal dismissal issue,
Filmore Corporation was ordered to pay P49 million to its employees by the when the only issue brought on appeal was the legal propriety of the financial
Labor Arbiter. It interposed an appeal by filing a Notice of Appeal and paid the assistance award.
corresponding appeal fee. However, instead of filing the required appeal bond Cris countered that under Article 218(c) of the Labor Code, the NLRC has the
equivalent to the total amount of the monetary award, Filmore filed a Motion to authority to "correct, amend, or waive any error, defect or irregularity whether in
Reduce the Appeal Bond to P4,000,000.00 but submitted a surety bond in the substance or in form" in the exercise of its appellate jurisdiction.
amount of P4.9 million. Filmore cited financial difficulties as justification for its Decide the case. (2013 Bar Questions)
Page 283 of 307
Labor Law
inability to post the appeal bond in full owing to the shutdown of its operations. The review power of the NLRC in perfected appeals is limited only to those
It submitted its audited financial statements showing a loss of P40 million in the issues raised on appeal. Hence, it is grave abuse of discretion for the NLRC to
previous year. To show its good faith, Filmore also filed its Memorandum of resolve issues not raised on appeal. (United Placement International v. NLRC,
Appeal. 221 SCRA 445 [1993])
The NLRC dismissed the appeal for non-perfection on the ground that posting of SUGGESTED ALTERNATIVE ANSWER:
an appeal bond equivalent to the monetary award is indispensable for the Page 285 of 307
perfection of the appeal and the reduction of the appeal bond, absent any Labor Law
showing of meritorious ground to justify the same, is not warranted. Is the In the exercise of its jurisdiction, the NLRC is empowered to determine even
dismissal of the appeal correct? Explain. (2016) issues not raised on appeal in order to fully settle the issues surrounding the case.
[See: Art. 218(c), now Art. 224 (c)].
a) versus Regional Director
No. In McBurnie v. Ganzon (G.R. Nos. 178034, 186984-85, October 2013),
NLRC made a serious error in denying outright the motion to reduce the bond. The Secretary of Labor and Employment or his duly authorized representative,
Once the motion to reduce the appeal bond is accompanied by at least 10% of the including labor regulations officers, shall have access to employer's records and
monetary awards, excluding damages and attorney's fees, the same shall premises during work hours. Why is this statement an inaccurate statement of the
provisionally be deemed the reasonable amount of the bond in the meantime that law? (2011 BAR) (A) Because the power to inspect applies only to employer
an appellant's motion is pending resolution by the Commission. Only after the records, not to the premises. (B) Because only the Secretary of Labor and
posting of a bond in the required percentage shall an appellant's period to perfect Employment has the power to inspect, and such power cannot be delegated. (C)
an appeal under the NLRC Rules be deemed suspended. Because the law allows inspection anytime of the day or night, not only during
The NLRC must resolve the motion and determine the final amount of bond that work hours. (D) Because the power to inspect is already delegated to the DOLE
shall be posted by the appellant, still in accordance with the standards of regional directors, not to labor regulations officers.
meritorious grounds and reasonable amount. Should the NLRC later determine B. National Labor Relations Commission (NLRC)
that a greater amount or the full amount of the bond needs to be posted by the
appellant, then the party shall comply accordingly. The appellant has ten (10) Non-lawyers can appear before the Labor Arbiter if: (2014 Bar Question)
days from notice of the NLRC order to perfect the appeal by posting the required (A) they represent themselves
appeal bond. (B) they are properly authorized to represent their legitimate labor organization
or member thereof
In cases involving monetary award, why does the law require an employer to (C) they are duly-accredited members of the legal aid office recognized by the
post a cash or surety bond as an indispensable condition for the perfection of an DOJ or IBP
appeal? (D) they appear in cases involving an amount of less than Php5,000

An appeal stays the execution of a decision or award. Such decision or award A. They represent themselves (Art. 222, Labor Code; Rule III, Section 6, 2011
could be in the form of a monetary award made in favor of an employee. Thus, NLRC Rules of Procedure).
an appeal will mean that a monetary award will not be executed. To ensure that 1. Jurisdiction
an appealed monetary award will be paid to the employee once such monetary
award is affirmed and has become final and executory, the Labor Code requires Jim is the holder of a certificate of public convenience for a jeepney. He entered
that the appeal by an employer may be perfected only upon the posting of a cash into a contract of lease with Nick, whereby they agreed that the lease period is
or surety bond issued by a reputable bonding company for one (1) year unless sooner terminated by Jim for any of the causes laid down
Page 284 of 307 in the contract. The rental is thirty thousand pesos (P30,000.00) monthly. All the
Labor Law expenses for the repair of the jeepney, together with expenses for diesel, oil and
duly accredited by the NLRC in the amount equivalent to the monetary award in service, shall be for the account of Nick. Nick is required to make a deposit of
the judgment appealed from. (Art. 223, Labor Code) three (3) months to answer for the restoration of the vehicle to its good operating
Page 286 of 307
The appeal to the NLRC may be entertained only on any of the following Labor Law
grounds, except: (2012 Bar Question) condition when the contract ends. It is stipulated that Nick is not an employee of
a. If there is a prima facie evidence of abuse of discretion on the part of the Labor Jim and he holds the latter free and harmless from all suits or claims which may
Arbiter arise from the implementation of the contract. Nick has the right to use the
b. If the decision, order or award was secured through fraud or coercion, jeepney at any hour of the day provided it is operated on the approved line of
including graft and corruption; operation.
c. If made purely on questions of fact and law; After five (5) months of the lease and payment of the rentals, Nick became
d. If serious errors in the findings of facts are raised which would cause grave or delinquent in the payment of the rentals for two (2) months. Jim, as authorized by
irreparable damage or injury to the appellant. the contract, sent a letter of demand rescinding the contract and asked for the
arrearages. Nick responded by filing a complaint with the NLRC for illegal
dismissal, claiming that the contract is illegal and he was just forced by Jim to
c. If made purely on question of fact and law. [Art. 223, Labor Code] sign it so he can drive. He claims he is really a driver of Jim on a boundary
system and the reason he was removed is because he failed to pay the complete
Cris filed a complaint for illegal dismissal against Baker Company. The Labor daily boundary of one thousand (P1,000.00) for 2 months due to the increase in
Arbiter dismissed the complaint but awarded Cris financial assistance. Only the the number of tricycles.
company appealed from the Labor Arbiter's ruling. It confined its appeal solely [a] Jim files a motion to dismiss the NLRC case on the ground that the regular
to the question of whether financial assistance could be awarded. The NLRC, court has jurisdiction since the agreement is a lease contract. Rule on the motion
instead of ruling solely on the appealed issue, fully reversed the Labor Arbiter's and explain. (2016)
decision; it found Baker Company liable for illegal dismissal and ordered the
payment of separation pay and full backwages.
Jim's Motion to Dismiss must be denied. Although Jim and Nick called their No. Any compromise agreement, including those involving labor standards laws,
contract as a lease, it is actually a contract of employment, and the rentals that voluntary agreed upon by the parties with the assistance of the Bureau or the
Nick must pay to Jim is actually a boundary. Martinez v. National Labor regional office of the Department of Labor, shall be final and binding upon the
Relations Commission (G.R. No. 117495, May 29,1997) teaches that jeepney parties. The National Labor Relations Commission or any court shall not assume
owners/operators exercise control over jeepney drivers. The fact that the drivers jurisdiction over issues involved therein except in case of non- compliance
do not receive fixed wages but get only that in excess of the so-called boundary thereof or if there is prima facie evidence that the settlement was obtained
they pay to the owner/operator does not affect the existence of employer- through fraud, misrepresentation, or coercion. (Art. 227, Labor Code)
employee relationship. Nick was engaged by Jim to perform activities which
were usually necessary or desirable to the business or trade of Jim which makes Jose Lovina had been member of the board of directors and Executive Vice
him the employer of Nick. President of San Jose Corporation for 12 years. In 2008, the San Jose
[b] Assuming that Nick is an employee of Jim, was Nick validly dismissed? stockholders did not elect him to the board of directors nor did the board
reappoint him as Executive Vice President. He filed an illegal dismissal
complaint with a Labor Arbiter. Contending that the Labor Arbiter had no
Page 287 of 307 jurisdiction over the case since Lovina was not an employee, the company filed a
Labor Law motion to dismiss. Should the motion be granted? (2011 BAR) (A) No, the Labor
Yes. For failing to remit five (5) months worth of boundary, Nick apparently Arbiter has jurisdiction over all termination disputes. (B) Yes, it is the NLRC
committed fraud against Jim. In Cosmos Bottling Corporation v. Fermin, G.R. that has jurisdiction over disputes involving corporate officers. (C) No, a motion
No. 193676 and Fermin v. Cosmos Bottling Corporation, (G.R. No. 194303, 20 to dismiss is a prohibited pleading under the NLRC Rules of Procedure. (D) Yes,
June 2012), it was ruled that theft committed against a co- employee is jurisdiction lies with the regular courts since the complainant was a corporate
considered as a case analogous to serious misconduct, for which the penalty of officer.
dismissal from service may be meted out to the erring employee. Page 289 of 307
Labor Law
What matters may be taken up by the National Labor Relations Commission
(NLRC) En Banc? Philippine News Network (PNN) engages the services of Anya, a prominent
news anchor from a rival station, National News Network (NNN). NNN objects
to the transfer of Anya claiming that she is barred from working in a competing
The NLRC shall sit en banc only for purposes of promulgating rules and company for a period of three years from the expiration of her contract. Anya
regulations governing the hearing and disposition of cases before any of its proceeds to sign with PNN which then asks her to anchor their nightly newscast.
divisions and regional branches and formulating policies affecting its NNN sues Anya and PNN before the National Labor Relations Commission
administration and operations. (Art. 213, Labor Code) (NLRC), asking for a labor injunction. Anya and PNN object claiming that it is a
matter cognizable by a regular court and not the NLRC.
Mr. Esto Pido is employed as a medical representative of Taypa Laboratories. By (a) Is NNN's remedy correct? Why or why not? (2015 Bar Question)
nature of his work, he was allowed to avail of the company’s car loan policy (b) What are the grounds for a labor injunction to issue? (2015 Bar Question)
whereby the company advanced the purchase price of the car to be paid back by (c) Distinguish the jurisdiction of a Labor Arbiter from that of the NLRC. (2015
the employee through monthly deductions from his salary with the company Bar Question)
retaining the ownership of the motor vehicle until it shall have been fully paid.
Six months after the availment by Mr. Esto Pido of Taypa Laboratories’ car loan
policy, he was dismissed from the service for having participated in an illegal (a) The NLRC has no jurisdiction.
strike. In the Notice of Dismissal sent to him by his employer, he had been As to PNN, there is no employer-employee relationship between itself and NNN;
directed to either return the car to the company or settle the remaining balance of hence, the NLRC cannot hear and resolve their dispute (Reasonable Causal
the cost of the car. Esto Pido filed an action against Taypa Laboratories for Connection Rule). As to Anya, the injunctive power of the NLRC is ancillary in
illegal dismisssal before the Arbitration branch of the National Labor Relations nature; hence, it requires a principal case, which is absent. Besides, the dispute
Commission (NLRC). The Labor Arbiter, however, upheld the legality of his between her and PNN is not resolvable solely through the application of the
dismissal hence he appealed his case before the NLRC. Labor Code, other labor statutes, CBA or employment contract. (Reference to
In the meantime. Taypa Laboratories filed before the Regional Trial Court a civil Labor Law Rule)
suit to recover possession of the car which Esto Pido refused to return and/or (b) The NLRC may issue an injunctive writ to enjoin an illegal activity under
settle the remaining balance. The RTC thereafter directed the Deputy Sheriff to Art. 264 (old) of the Labor Code; as an ancillary remedy to avoid irreparable
take into his custody the motor vehicle from Esto Pido. injury to the rights of a party in an ordinary labor dispute pursuant to Rule X,
To counter the order of the RTC, Esto Pido sought a temporary restraining order 2011 NLRC Rules of Procedure, as amended; and to correct the Labor Arbiter’s
in the NLRC to stop the Taypa Laboratories from collecting their monthly grave abuse of discretion pursuant to Rule XII of the 2011 NLRC Rules of
amortization pending final resolution of his appeal in the illegal dismissal case. Procedure, as amended.
According to him, had he not been dis-missed he would not have defaulted in his Moreover, for labor injunction to issue, it must be proven under Art. 218 (e).
amortization. NLRC granted the relief prayed for by Esto Pido by restraining Labor Code:
Taypa Laboratories from collecting the monthly amortization pending resolution i. That the prohibited or unlawful acts have been threatened and will be
by the NLRC of the illegal dismissal case. Taypa Laboratories filed a Petition for committed and will be continued unless restrained;
Certiorari alleging that ii. That substantial and irreparable injury to the complainant’s property will
Page 288 of 307 follow;
Labor Law iii. That greater injury will be inflicted upon complainant by the denial of relief
NLRC gravely abused its discretion in issuing the temporary restraining order. than will be inflicted upon defendants by the granting of relief;
NLRC argues that it has the power to issue an injunction based on Art. 218 of the iv. That complainant has no adequate remedy at law; and
Labor Code. Decide the controversy with reason. v. That public officers charged with the duty to protect complainant’s property
are unable or unwilling to furnish adequate protection
(c) As to jurisdiction, the LA can hear and resolve cases under Art. 217 (old) of
NLRC has no power to issue the injunction. the Labor Code, money claims under Sec. 7 of R.A. 10022; and referred wage
The powers of NLRC enumerated in Art. 218 of the Labor Code are powers that distortion disputes in unorganized establishments, as well as the enforcement of
it could exercise only in connection with labor disputes. compromise agreements pursuant to the 2011 NLRC Rules of Procedure, as
The case involving the contract on the car loan entered into by Taypa amended. On the other hand, the NLRC reviews decisions rendered by the LA;
Laboratories and Esto Pido is not a labor dispute. It is properly under the decisions or orders rendered by the RD under Art. 129 of the Labor Code; and
exclusive jurisdiction of the RTC. Thus, the NLRC has no power to issue the conducts compulsory arbitration in certified cases.
temporary restraining order that it issued. Page 290 of 307
Labor Law
May the NLRC or the courts take jurisdictional cognizance over compromise As to the power to issue a labor injunction, the NLRC can issue an injunctive
agreements/ settlements involving labor matters? writ. On the other hand, the Labor Arbiter cannot issue an injunctive writ.
2. Remedies
An employee filed a complaint against his employer before the National Labor Page 292 of 307
Relations Commission (NLRC). The labor arbiter decided the case in favor of the Labor Law
employee. The employer received a copy of the decision on April 10. 1984. April (3) ARBITRATION is a system of dispute settlement that may be compulsory or
20 being a Good Friday and the following Saturday having been declared a non- voluntary, whereby the parties are compelled by. the government, or agree to
working public holiday by the President, the employer filed his appeal with the submit their dispute before an arbiter, with the intention to accept the resolution
NLRC from the said decision on April 23. 1984. of said arbiter over the dispute as final and binding on them (Luzon Development
(1) Was the appeal filed on time? Explain your reason. Bank v. Association of Luzon Development Employees, 249 SCRA 162 [1995]).
(2) Assuming the decision of the labor arbiter is affirmed by the NLRC. what is In this jurisdiction, compulsory arbitration in labor disputes are submitted to a
the recourse of the employer? State the nature of the action, the court which has labor arbiter, whose powers and functions are clearly defined under Article
jurisdiction over the action, and the period within which the same must be filed. 217(a) of the Labor Code; whereas in voluntary arbitration, the powers and
functions of the voluntary arbitrator or panel of voluntary arbitrators elected to
resolve the parties’ dispute involve the interpretation and implementation of the
(1) The appeal was filed on time. The Supreme Court has ruled that in the parties’ collective bargaining agreement, pursuant to Articles 260-262 of the
counting of the ten day period within which to file an appeal, if the tenth day is a Labor Code.
holiday, then the appeal may be filed on the day after said holiday. But if the day E. DOLE Regional Directors 1. Jurisdiction
after said holiday is also a non-working public holiday as in the case in the
question, then the appeal cannot be filed because government offices are closed. TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the
The appeal could then be filed on the day after such non-working public holiday. statement is false. Explain your answer in not more than two (2) sentences. (5%)
But again, in the case, this day is a Sunday when government offices are also xxxxxxxxxxxx
closed. Thus, the filing on the following Monday. April 23. is still within the ten- [e] The visitorial and enforcement powers of the DOLE Regional Director to
day period. (Pacana v. National Labor Relations Commission, et al.. G.R. No. order and enforce compliance with labor standard laws can be exercised even
83513. April 18. 1989) when the individual claim exceeds P5,000.00. (2009 Bar Question)
(2) According to the Labor Code (in Art. 223). in the exercise of its appellate
jurisdiction over decisions of labor arbiters, a decision of the National Labor
Relations Commission is final and executory after ten (10) calendar days from True. The visitorial and enforcement powers of the DOLE Regional Director to
receipt thereof by the parties. order and enforce compliance with labor standards laws can be exercised even
In view of the above provision, the employer in the case in the question who is when the individual claims exceed P5,000.00 The authority under Article 128
aggrieved by the decision of the NLRC should file a petition for certiorari with may be exercised regardless of the monetary value involved. Under Article 129,
the Supreme Court under Rule 65 of the Rules of Court within a reasonable however the authority is only for claims not exceeding P5,000.00 per claimant.
period from receipt of the decision which is the subject of the petition for
certiorari usually within 30 days. (Pacana, op.cit) Inggo is a drama talent hired on a per drama "participation basis" by DJN Radio
C. Bureau of Labor Relations – Med-Arbiters (Jurisdiction (original and Company. He worked from 8:00 a.m. until 5:00 p.m., six days a week, on a gross
appellate)) rate of P80.00 per script, earning an average of P20,000.00 per month. Inggo
filed a complaint before the Department of Labor and Employment (DOLE)
Which of the following is cognizable by the Bureau of Labor Relations Med- against DJN Radio for illegal deduction, non-payment of service incentive leave,
Arbiters? (2012 Bar Question) and 13th month
Page 291 of 307 Page 293 of 307
Labor Law Labor Law
a. Unfair labor practice for violation of the CBA filed by the Workers Union of pay, among others. On the basis of the complaint, the DOLE conducted a plant
Company X against Company X; level inspection.
b. Claim for back wages filed by overseas contract worker Xena against her The DOLE Regional Director issued an order ruling that Inggo is an employee of
Saudi Arabian employer; DJN Radio, and that Inggo is entitled to his monetary claims in the total amount
c. Contest for the position of MG Union President brought by Ka Joe, the losing of P30,000.00. DJN Radio elevated the case to the Secretary of Labor who
candidate in the recent union elections; affirmed the order. The case was brought to the Court of Appeals. The radio
d. G contesting his removal as Chief Executive Officer of Company Z. station contended that there is no employer-employee relationship because it was
the drama directors and producers who paid, supervised, and disciplined him.
Moreover, it argued that the case falls under the jurisdiction of the NLRC and not
c. Contest for the position of MG Union President brought by Ka Joe, the losing the DOLE because Inggo's claim exceeded PS,000.00.
candidate in the recent union elections. [Art. 226, Labor Code] [a] May DOLE make a prima facie determination of the existence of an
D. National Conciliation and Mediation Board employer-employee relationship in the exercise of its visitorial and enforcement
1. Nature of proceedings 2. Conciliation v. Mediation powers? (2016)

Distinguish the terms “conciliation,” “mediation” and “arbitration”. (3%) (2010

Bar Question) Yes. Pursuant to Article 128 (b) of the Labor Code, the DOLE may do so where
the prima facie determination of employer-employee relationship is for the
exclusive purpose of securing compliance with labor standards provisions of said
There is a DOLE official called a “Conciliator Mediator”. He is an officer of the Code and other labor legislation.
NCMB whose principal function is to assist in the settlement and disposition of The DOLE, in the exercise of its visitorial and enforcement powers, somehow
labor - management disputes through conciliation and preventive mediation. has to make a determination of the existence of an employer-
However, he does not promulgate decisions that settle controversies about rights, employee relationship. Such determination, however, cannot be coextensive with
which are demandable and enforceable. The latter is called arbitration and is the the visitorial and enforcement power itself. Indeed, such determination is merely
function of a labor arbiter or a voluntary arbitrator. preliminary, incidental and collateral to the DOLE's primary function of
ALTERNATIVE ANSWER: enforcing labor standards provisions (People's Broadcasting Bombo Radyo
(1) CONCILIATION is the process of dispute management whereby parties in Phils., Inc. v. Secretary of Labor, G.R. No. 179652, May 8, 2009).
dispute are brought together for the purpose of: (1) amicably settling the case [b] If the DOLE finds that there is an employee-employer relationship, does the
upon a fair compromise; (2) determining the real parties in interest; (3) defining case fall under the jurisdiction of the Labor Arbiter considering that the claim of
and simplifying the issues in the case; (4) entering into admissions or stipulations Inggo is more than P5,000.00. Explain.
of facts; and (5) threshing out all other preliminary matters (Section 3, Rule V,
2005 NLRC Rules of Procedure). In resolving labor disputes, this comes before
arbitration, as a mandatory process, pursuant to the State policy of promoting and No. As held in the case of Meteoro v. Creative Creatures, Inc., G.R. No. 171275,
emphasizing conciliation as modes of settling labor disputes (Art. 211 (A)(a), July 13, 2009, the visitorial and enforcement powers of the Secretary, exercised
Labor Code). through his representatives, encompass compliance with all labor standards taws
(2) MEDIATION is a voluntary process of settling dispute whereby the parties and other labor legislation, regardless of the amount of the claims filed by
elect a mediator to facilitate the communication and negotiation between the workers; thus, even claims exceeding P5,000.00.
parties in dispute for the purpose of assisting them in reaching a compromise
(Sec. 3(q), Rep. Act No. 9285 or the Alternative Dispute Resolution Law).
Tina Aquino, a domestic helper in the household of Fidel Aldeguer, filed an was endorsed to the Secretary of Labor who, in turn, referred the matter to the
action in the Regional Office of the Department of Labor and Employment. Regional Director of Makunat City in Region XII where the ten (10) security
(DOLE) for recovery of unpaid wages amounting to P3.500.00 and PI.499.00 as guards reside and where their employer conducts business. The Office of the
moral damages. Aquino claimed that the amount of P3, 500.00 is equivalent to Regional Director conducted
the P500.00 a month she failed to receive for the last seven months of her Page 296 of 307
employment with Aldeguer. based on their agreed P2.500.00 monthly salary. Labor Law
Aldeguer moved to have Aquino’s complaint dismissed, alleging that as a an investigation and called for a hearing with all the parties present. Therefrom,
domestic helper Ms. Aquino should have first brought the matter to the Lupong the Regional Director found that there were indeed violations commit-ted by
Barangay. BSSA against the ten (10) security guards, such as underpayment of wages, non-
If you were the Regional Director, how would you resolve the matter? integration of cost of living allowance, underpayment of 13th-month pay and
underpayment of five (5) days incentive pay BSSA and Surot Theater were
directed to comply with the labor standards and ordered BSSA and Surot Theater
As Regional Director. I will assume jurisdiction. The provisions of P.D. No. to pay jointly and severally to the ten (10) security guards their respective claim
1508 requiring the submission of disputes before the Barangay Lupong of P 10,000.00 each or an aggregate amount of PI00,000.00. BSSA and Surot
Tagapayapa prior to their filing with the court or other government offices are Theater filed a Petition for Certiorari before the Supreme Court seeking to annul
not applicable to labor cases. the decision of the Regional Director on the ground of grave abuse of discretion
Article 129 of the Labor Code empowers the Regional Director to hear and in assuming jurisdiction over the case. Will the Petition for Certiorari prosper?
decide any matter involving the recovery of wages and other monetary claims Decide with reason.
and benefits owing to an employee or person employed in* domestic or
household service, provided that the money claim does not exceed P5.000.CX).
(Montoya v. Escayo, G.R Nos. 82211-12, March 21. 1989) It is to be noted that the Regional Director assumed jurisdiction before the
effectivity of Rep. Act No. 6715 (which is March 21, 1989). Thus, applying Art.
In a letter to the Regional Director of Region VII of the Department of Labor and 128 of the Labor Code, the petition for certiorari will not prosper.
Employment, employee Ricardo Malalang claims that his employer, the Visayan Under said article of the Labor Code, the Secretary of Labor or his duly
Sea Products Corp., has not compensated him for various legal benefits, authorized representatives - and Regional Directors are duly authorized
including overtime pay, holiday pay, 13th month pay and other monetary representatives - have visitorial and enforcement powers. Thus, a Regional
benefits totaling P6.000.00. Director not only has visitorial powers, i.e., to visit the premises of an employer
Despite the fact that the amount claimed exceeds P5.000 how may the Regional and examine his records, he also has enforcement powers, i.e. based on the
Director exercise jurisdiction over the case? Why? findings of labor regulation officers or industrial safety engineers made in the
course of inspection. A Regional Director has the power to order and administer,
after due notice and hearing compliance with the labor standards, provisions of
The power of the Regional Director over money claims may arise under either the Labor Code. Thus, he could issue writs of execution to the appropriate
Article 128 or Article 129 of the Labor Code. authority for the enforcement of his orders, except in cases where the employer
Under Article 129, for the Regional Director to exercise Jurisdiction, the contests the findings of the labor regulation officer and raises issues which
aggregate money claims of an employee should not exceed P5.000.00. cannot be resolved without considering evidentiary matters that are not verifiable
Page 295 of 307 in the normal course of inspection.
Labor Law Therefore, pursuant to Art. 128 of the Labor Code, the Regional Director was
Under Article 128, as the duly authorized representative of the Secretary of only exercising his visitorial and enforcement powers in the case of BSSA and
Labor, the Regional Director has the power to order and administer, after due Surot Theater. Thus, he has jurisdiction to do what he did.
notice and hearing, compliance with the labor standards provisions of the Labor In a dissenting opinion. Chief Justice Narvasa said that even after the effectivity
Code and other labor legislation based on the findings of labor regulation officers of Rep. Act No. 6715, the Regional Director has jurisdiction to act on claims
made in the course of inspection and issue writs of execution to the appropriate exceeding P5.000.00.
authority for the enforcement of their orders, except in cases where the employer The petition for certiorari will prosper under Rep. Act No. 6715. its provision
contests the findings of the labor regulation officer and raises issues which limiting the power of Regional Directors to money claims not exceeding
cannot be resolved without considering evidentiary matters that are not verifiable P5,000.00 per employee, the Regional Director no longer has the power to act on
in the normal course of inspection. money claims exceeding P5.000.00 per employee, even if the same power i£
Article 128 applies where the relationship of employer- employee relationship exercised pursuant to his visitorial and enforcement power under the Labor Code
still exists. (Art. 128) where the P5.000 limitation is not found.
Page 297 of 307
Kevin, an employee of House of Sports, filed a complaint with the DOLE Labor Law
requesting the investigation and inspection of the said establishment for labor Note:
law violations such as underpayment of wages, non payment of 13th month pay, Chief Justice Narvasa dissents from the above majority view of the Supreme
non payment of rest day pay, overtime day, holiday pay, and service incentive Court.
leave pay. House of Sports alleges that DOLES has no jurisdiction over the
employees’ claims where the aggregate amount of the claims of each employee The Manila Industrial Corp. has fifty (50) contract workers supplied by the
exceeds P5,000.00, whether or not accompanied with a claim for reinstatement. National Employment Agency. They joined the Novato Labor Union, the sole
Is the argument of House of Sports tenable? (2012 Bar Question) and exclusive bargaining representative of the rank-and-file workers in the
a. Yes, Article 129 of the Labor Code shall apply, and thus, the Labor Arbiter has company. In turn, the union demanded that the company consider the fifty new
jurisdiction; union members as regular employees accordance with the Labor Code. When the
b. No, Article 128(b) of the Labor Code shall apply, and thus, the DOLE company refused to make their employment regular, the union, after complying
Regional Director has jurisdiction; with the requirements, staged a strike. The Secretary of Labor and Employment
c. Yes, if the claim exceeds P5,000.00, the DOLE Secretary loses jurisdiction; assumed Jurisdiction of the case.
d. No, a voluntarily arbitrator has jurisdiction because the matter involved is a Assuming that there is no employer-employee relationship between the company
grievable issue. and the fifty contract workers, is there a labor dispute between them that properly
falls under the jurisdiction of the Secretary of Labor and Employment?

b) No, Article 128(b) of the Labor Code shall apply, and thus, the DOLE
Regional Director has jurisdiction. [Art. 128 (b), Labor Code] Yes. There is a labor dispute that could properly fall under the jurisdiction of the
F. DOLE Secretary 1. Visitorial and enforcement powers Secretary of Labor and Employment assuming that Manila Industrial Corp. is an
industry indispensable to the national interest, since the dispute between the
The Bantay-Salakay Security Agency (BSSA) employed ten security guards and corporation and the contract workers is a labor dispute, even if there is no
assigned them to Surot Theater which contracted BSSA for its security needs. employer-employee relationship between the corporation and the contract
On November 3. 1988, the ten (10) security guards of BSSA addressed to the workers.
Office of the President, a letter- complaint against their employer for non- Under the Labor Code, a labor dispute includes any controversy or matter
compliance with R.A. 6640 providing for an increase in the statutory minimum concerning terms and conditions of employment or the association or
wage and salary rates of employees and workers in the private sector. The letter representation of persons in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment, regardless of whether the arbiters (International Pharmaceuticals, Inc v. Secretary of Labor, G.R. Nos.
disputants stand in the proximate relation of employer and employee." 92981-83, January 9, 1992, 205 SCRA 59).
From the above definition, it is noted that there is a labor dispute regardless of A disobedience or defiance of the return-to-work order of the Secretary of Labor
whether the disputants stand in proximate relation of employer and employee. results in a loss of employment status (Allied Banking Corporation v. NLRC,
The demand of the union that the company regularize the employment of the G.R. No. 116128, July 12, 1996, 258 SCRA 724).
contract worker is a controversy concerning terms and conditions of
employment. A deadlock in the negotiations for the collective bargaining agreement between
College X and the Union prompted the latter, after duly notifying the DOLE, to
Kevin, an employee of House of Sports, filed a complaint with the DOLE declare a strike on November 5. The strike totally paralyzed the operations of the
requesting the investigation and inspection of the said establishment for labor school. The Labor Secretary immediately assumed jurisdiction over the dispute
law violations such as underpayment of wages, non payment of 13th month pay, and issued on the same day (November 5) a return to work order. Upon receipt of
non payment of rest day pay, overtime day, holiday pay, and service incentive the order, the striking union officers and members, on November 1, filed a
leave pay. House of Sports alleges that DOLES has no jurisdiction over the Motion for Reconsideration thereof questioning the Labor Secretary's assumption
employees’ claims where the aggregate amount of the claims of each employee of jurisdiction, and continued with the strike during the pendency of their motion.
exceeds P5,000.00, whether or not accompanied with a claim for reinstatement. On November 30, the Labor Secretary denied the reconsideration of his return to
Is the argument of House of Sports tenable? (2012 Bar Question) work order and further noting the strikers' failure to immediately return to work,
Page 298 of 307 terminated their employment. In assailing the Labor Secretary's decision, the
Labor Law Union contends that:
a. Yes, Article 129 of the Labor Code shall apply, and thus, the Labor Arbiter has Page 300 of 307
jurisdiction; Labor Law
b. No, Article 128(b) of the Labor Code shall apply, and thus, the DOLE 1. The Labor Secretary erroneously assumed jurisdiction over the dispute since
Regional Director has jurisdiction; College X could not be considered an industry indispensable to national interest;
c. Yes, if the claim exceeds P5,000.00, the DOLE Secretary loses jurisdiction; 2. The strikers were under no obligation to immediately comply with the
d. No, a voluntarily arbitrator has jurisdiction because the matter involved is a November 5 return to work order because of their then pending Motion for
grievable issue. Reconsideration of such order; and 3. The strike being legal, the employment of
the striking Union officers and members cannot be terminated. Rule on these
contentions. Explain. (5%) (2012 BAR)
b. No, Article 128(b) of the Labor Code shall apply, and thus, the DOLE
Regional Director has jurisdiction. [Art. 128 (b), Labor Code] The contention has no merit. There is no doubt that the on-going labor dispute at
the school adversely affects the national interest. The on-going work stoppage at
The Regional Director or his representative may be divested of his enforcement the school unduly prejudices the students and will entail great loss in terms of
and visitorial powers under the exception clause of Article 128 of the Labor time, effort and money to all concerned. More importantly, the school is engaged
Code and, resultantly, jurisdiction may be vested on the labor arbiter when three in the promotion of the physical, intellectual and emotional well-being of the
(3) elements are present. Which of the following is not one of the three (3) country’s youth, matters that are therefore of national interest. [St. Scholastica’s
elements? (2012 Bar Question) College v. Ruben Toress, G.R. No. 100158, 29 June 1992 citing Philippine
a. Employer contests the findings of the labor regulations officers and raises School of Business Administration v. Noriel, G.R. No. 80648, 15 August 1988,
issues thereon; 164 SCRA 402]. Another
b. In order to resolve any issues raised, there is a need to examine evidentiary
matters; 1. The Secretary of Labor correctly assumed jurisdiction over the labor dispute
c. The issues raised should have been verifiable during the inspection; because the school (College X) is an industry indispensable to the national
d. The evidentiary matters are not verifiable in the normal course of inspection. interest. This is so because the administration of a school is engaged in the
promotion of the physical, intellectual and emotional well-being of the country’s
youth (PSBA v. Noriel, 164 SCRA 402 [1988]). 2. An assumption order is
c. The issues raised should have been verifiable during the inspection. [SSK Parts executory in character and must be strictly complied with by the parties even
Corporation v. Camas, 181 SCRA 675 (1990); Art. 128 (b), Labor Code] during the pendency of any petition (or Motion for Reconsideration) questioning
2. Power to suspend/effects of termination its validity (Baguio Colleges Foundation v. NLRC, 222 SCRA 604 [1993];
3. Assumption of jurisdiction Union of Filipro Employees v. Nestle Philippines, Inc., 193 SCRA 396 [1990]. 3.
Article 264 of the Labor Code, as amended. (Solid Bank Corporation, etc. v.
Pursuant to his power under Sec. 278(g) (263(g)) of the Labor Code, the Solid Bank Union, G.R. No. 159641, 15 November 2010.) Thus, the union
Secretary of Labor assumed jurisdiction over the 3-day old strike in Armor Steel officers and members who defied the assumption order of the Secretary of Labor
Plates, Inc., one of the country's bigger manufacturers of steel plates, and ordered are deemed to have lost their employment status for having knowingly
all the striking employees to return to work. The striking employees ignored the participated in an illegal act. (Union of Filipro Employees v. Nestle Philippines,
order to return to work. (a) What conditions may justify the Secretary of Labor to supra).
assume jurisdiction? (2.5%)
Page 299 of 307 2. This position of the union is flawed. Article 263 (g) Labor Code provides that
Labor Law “(s)uch assumption xxx shall have the effect of automatically enjoining the
intended or impending strike xxx. If one has already taken place at the time of
The conditions that may justify the Secretary of Labor to assume jurisdiction are assumption, xxx ‘all striking… employees shall immediately return to work.’
found in Article 278(g) (formerly Article 263 (g)), viz: "When, in his opinion, xxx" This means that by its very terms, a
there exists a labor dispute causing or likely to cause a strike or lockout in an Page 301 of 307
industry indispensable to the national interest, the Secretary of Labor and Labor Law
Employment may assume jurisdiction over the dispute and decide it or certify the return-to-work order is immediately effective and executory notwithstanding the
same to the Commission for compulsory arbitration. xxx" (b) What are the filing of a motion for reconsideration. [Ibid., citing University of Santo Tomas v.
consequences of the assumption of jurisdiction by the Secretary of Labor, and of NLRC, G.R. No. 89920, 18 October 1990; 190 SCRA 759].
the disobedience to the return to work? Explain your answer. (2.5%) (2017 Bar
Question)
Responsibility of the striking members and officers must be on an individual and
not collective basis. Art. 264 (a) of the Labor Code mandates that “No strike or
The assumption of jurisdiction by the Secretary of Labor automatically results in lockout shall be declared after assumption of jurisdiction by the President of the
a return-to-work of all striking workers (if one has already taken place) or Secretary of Labor. In Manila Hotel Employees Association v. Manila Hotel
enjoins the taking place of a strike, whether or not a corresponding order had Corporation [517 SCRA 349 (2007)], it was held that defiance of the Assumption
been issued by the Secretary of Labor (Union of Filipro Employees v. Nestle Order or a return-to-work order by a striking employee, whether a Union Officer
Philippines, Inc., G.R. Nos. 88710-13; December 19, 1990, 192 SCRA 396). or a plain member, is an illegal act which constitutes a valid ground for loss of
When jurisdiction over a labor dispute is assumed by the Secretary of Labor, employment status. It thus follows that the defiant strikers were validly
such comprehensive jurisdiction includes all incidental issues and cases which dismissed.
otherwise would be under the original and exclusive jurisdiction of the labor
Philippine Electric Company is engaged in electric power generation and resulted in a deadlock, both parties agreed to submit their dispute to voluntary
distribution. It is a unionized company with Kilusang Makatao as the union arbitration stipulating, among other things, that the decision of the Voluntary
representing its rank-and-file employees. During the negotiations for their Arbitrator shall be “final unappealable and executory" conformable with the
expired collective bargaining agreement (CBA), the parties duly served their provisions of Art. 262 of the Labor Code.
proposals and counter-proposals on one another. The parties, however, failed to The Voluntary Arbitrator rendered his decision or award worded as follows:
discuss the merits of their proposals and counter-proposals in any formal “COMPUTER TECH CORP. to award a sum total package benefits to
negotiation meeting because their talks already bogged down on the negotiation COMPUTER WORKERS UNION in the amount of TWENTY MILLION
ground rules, i.e., on the question of how they would conduct their negotiations, (P20.000.000.00) PESOS for the three-year period of the CBA, the distribution
particularly on whether to consider retirement as a negotiable issue. and availment per year to be suggested by the UNION subject to the approval of
Because of the continued impasse, the union went on strike. The Secretary of the CORPORATION, seeing to it that the decretal benefits shall first be satisfied
Labor and Employment immediately assumed jurisdiction over the dispute to above all others.
avert widespread electric power interruption in the country. After extensive The UNION filed a “Motion for Clarification" claiming that the package benefit
discussions and the filing of position papers (before the National Conciliation award of P20-million does not cover the decretal benefits granted by Wage Order
and Mediation Board and before the Secretary himself) on the validity of the No. 2 which was issued on the same day when the arbitration award was made.
union's strike and on the wage and other economic issues (including the The Arbitrator issued an order which modified the original award of P20-million
retirement issue), the DOLE Secretary ruled on the validity of the strike and on and sought to impose upon the CORPORATION an additional burden of decretal
the disputed CBA issues, and ordered the parties to execute a CBA based on his benefits given by Wage Order No. 2. The CORPORATION assailed the
rulings. Arbitrator’s modification of the original award claiming that the modification of
Did the Secretary of Labor exceed his jurisdiction when he proceeded to rule on the original award was null and void and without or in excess of the
the parties' CBA positions even though the parties did not fully negotiate on their Arbitrator’s authority and brought the issue to the Supreme Court by petition for
own? (2013 Bar Questions) certiorari
1) Are decisions or awards of the Voluntary Arbitrators appealable? Discuss.
2) Has the Voluntary Arbitrator the authority to modify his original award under
No. The power of the Secretary of Labor under Article 263(g) is plenary. He can the above-narrated facts. Discuss.
rule on all issues, questions or controversies arising from the labor dispute,
including the legality of the strike, even those over which the Labor Arbiter has
exclusive jurisdiction. (Bagong Pagkakaisa ng mga Manggagawa sa Triumph 1) No. The decisions or awards of Voluntary Arbitrators are not appealable
International v. Secretary, G.R. Nos. 167401 and 167407, July 5, 2010) because, according to Art.262-A of the Labor Code, they are final and executory'
Page 302 of 307 after ten (10) calendar days from receipt of the copy of the award or decision by
Labor Law the parties.
But said award or decision could be brought to the Supreme Court on certiorari
Liwanag Corporation is engaged in the power generation business. A stalemate on the ground that the Voluntary Arbitrator committed grave abuse of discretion
was reached during the collective bargaining negotiations between its amounting to lack or excess of jurisdiction. The Supreme Court has taken
management and the union. After following all the requisites provided by law, cognizance of petitions questioning decision of Voluntary Arbitrator where want
the union decided to stage a strike. The management sought the assistance of the of jurisdiction, grave abuse of discretion, violation of due process, denial of
Secretary of Labor and Employment, who assumed jurisdiction over the strike substantial justice and erroneous interpretation of the law were brought to its
and issued a return-to-work order. The union defied the latter and continued the attention.
strike. Without providing any notice, Liwanag Corporation declared everyone Page 304 of 307
who participated in the strike as having lost their employment. (2014 Bar Labor Law
Question) 2) No. The Voluntary Arbitrator has no authority to modify his original award.
(A) Was Liwanag Corporation’s action valid? Acting on a Motion for Clarification, he could only clarify his award. It is in
excess of his jurisdiction to go beyond clarifying his award by radically
modifying and in fact increasing the original award.
Yes. A strike that is undertaken despite the issuance by the Secretary of Labor of ALTERNATIVE ANSWERS:
an assumption or certification order becomes an illegal act committed in the a) If his award has not yet become final and executory because it is still within
course of a strike. It rendered the strike illegal. The Union officers and members, the ten (10) day period from receipt of the copy of award by the parties, the
as a result, are deemed to have lost their employment status for having Voluntary Arbitrator could still modify his original award in the way he did it
knowingly participated in an illegal act (Union of Filipro Employees v. Nestle because in the facts of the case, a Wage Order was issued on the same day when
Philippines, Inc., 192 SCRA 369 [1993] ) . Such kind of dismissal under Article the arbitration award was made. In his award, the Voluntary Arbitrator made
264 can immediately be resorted to as an exercise of management prerogative reference to decretal benefits. He said: “seeing to it that the decretal benefits shall
(Biflex v. Filflex Industrial, 511 SCRA 247 [2006]). first be satisfied above all others.” Thus, the Voluntary Arbitrator was just
SUGGESTED ALTERNATIVE ANSWER: clarifying that the employer should pay the decretal benefits granted by Wage
No. Liwanag Corporation cannot outrightly declare the defiant strikers to have Order No. 2 which was not dealt with in the award of the Voluntary Arbitrator
lost their employment status. “(A)s in other termination cases”, the strikers are because the Wage Order was issued on the same day the arbitration award was
entitled to due process protection under Article 277 (b) of the Labor Code. made.
Nothing in Article 264 of the Code authorizes immediate dismissal of those who b) No. such authority has disappeared, upon rendition of an award which is final,
commit illegal acts during a strike (Stanford Marketing Corp. v. Julian, 423 in appealable and executory by stipulation of the parties. Enforcement of the
SCRA 633 (2004); Suico v. NLRC, 513 SCRA 325 [2007]). Wage Order must be by legal process, through claims filed before the Labor
(B) If, before the DOLE Secretary assumed jurisdiction, the striking union Arbiter.
members communicated in writing their desire to return to work, which offer
Liwanag Corporation refused to accept, what remedy, if any, does the union Company C, a toy manufacturer, decided to ban the use of cell phones in the
have? factory premises. In the pertinent Memorandum, management explained that too
much texting and phone-calling by employees disrupted company operations.
Two employees-members of Union X were terminated from employment due to
File a case for illegal dismissal [Art. 217 (a) (2), Labor Code]. violation of the memorandum-policy. The union countered with a prohibitory
injunction case (with prayer for the issuance of a temporary- restraining order)
Filed with the Regional Trial Court, challenging the validity and constitutionality
Grievance Machinery and Voluntary Arbitration
of the cell phone ban. The company filed a motion to dismiss, arguing that the
1. Subject matter of grievance case should be referred to the grievance machinery pursuant to an existing
2. Voluntary Arbitrator Collective Bargaining Agreement with Union X, and eventually to Voluntary
Page 303 of 307 Arbitration. Is the company correct? Explain. (3%) (2010 Bar Question)
Labor Law
a) Jurisdiction
YES. Termination cases arising in or resulting from the interpretation and
When the Collective Bargaining Agreement (CBA) negotiations between implementation of collective bargaining agreements, and interpretation and
COMPUTER WORKERS UNION and COMPUTER TECH CORPORATION enforcement of company personnel policies which were initially processed at the
various steps of the plant-level Grievance Procedures under the parties collective Relations Commission, et al. G.R No. 102958. 25 June 1993, J. Davide. Jr. 223
bargaining agreements, fall within the original and exclusive jurisdiction of the SCRA 656.
voluntary arbitrator pursuant to Article 217 (c) and Article 261 of the Labor
Code.
ALTERNATIVE ANSWER: What is the prescriptive period of all criminal offenses penalized under the Labor
Page 305 of 307 Code and the Rules implementing the Labor Code?
Labor Law a. 3 years;
NO. The Regional Trial Court has jurisdiction to hear and decide the prohibitory b. 4 years;
injunction case filed by Union X against Company C to enjoin the latter from c. 5 years;
implementing the memorandum-policy against use of cell phones in the factory. d. 10 years.
What is at issue is Union X S challenge against the validity and constitutionality
of the cell phone ban being implemented by Company C. The issue, therefore,
does not involve the interpretation of the memorandum-policy, but its intrinsic a) 3 years [Art. 290, Labor Code]
validity (Haliguefla v. PAL, 602 SCRA 297 [2009]). Page 307 of 307
Labor Law
The State has a policy of promoting collective bargaining and voluntary
arbitration as modes of settling labor disputes. To this end, the voluntary Chito was illegally dismissed by DEF Corp. effective at the close of business
arbitrator’s jurisdiction has not been limited to interpretation and implementation hours of December 29, 2009.
of collective bargaining agreements and company personnel policies. It may IV (1). He can file a complaint for illegal dismissal without any legal bar within
extend to “all other labor disputes,” provided (2011 BAR) (A) the extension does _________. (2013 Bar Questions)
not cover cases of union busting. (B) the parties agreed to such extended (A) three (3) years
jurisdiction. (C) the parties are allowed to appeal the voluntary arbitrator's (B) four (4) years
decision. (D) the parties agreed in their CBA to broaden his jurisdiction. (C) five (5) years
H. Court of Appeals 1. Rule 65, Rules of Court (D) six (6) years
(E) ten (10) years
J refused to comply with the deployment assignment with K, a manning agency.
K filed a complaint against him for breach of contract before the Philippine
Overseas Employment Administration (POEA). The POEA penalized J with one (B) Basis: Article 1146 of the Civil Code.
(1) year suspension from overseas deployment. On appeal, the suspension was IV (2). If he has money claims against DEF Corp., he can make the claim
reduced to six (6) months by the Secretary of Labor. Is the remedy of appeal still without any legal bar within _________. (2013 Bar Questions)
available to J and where should he file his appeal? (2012 Bar Question) (A) three (3) years
a. Yes, he can file an appeal before the Court of Appeals via a Petition for (B) four (4) years
Certiorari under Rule 65; (C) five (5) years
b. Yes, he can file an appeal before the Supreme Court via a petition for (D) six (6) years
certiorari under Rule 65; (E) ten (10) years
c. Yes, he can file an appeal before the Office of the President since this is
administrative case;
d. Yes, he can file an appeal before the National Labor Relations Commission (A) Basis: Article 297 (formerly 291) of the Labor Code.
because there is an employer-employee relationship.

a. Yes, he can file an appeal before the Court of Appeals via a Petition
for Certiorari under Rule 65 [NFL v. Laguesma]

Prescription of actions
On October 30, 1980, A, an employee, was served notice of
dismissal allegedly for gross dishonesty. Forthwith, the Union
to which A was a member raised A’s dismissal with the
grievance machinery as provided for in its Collective
Bargaining Agreement (CBA). At that point, negotiations for a
new CBA was in progress. Hence, both the Union and the
Company had very little time to address A’s grievance. In fact,
said grievance, as it were, slept the sleep of the dead, being
resolved only with finality on November 23, 1983 when the
General Manager of the Company affirmed A’s dismissal on the
fifth and the last step of the grievance machinery. A filed an
action for illegal dismissal with the Arbitration Branch of the
NLRC on November 25, 1983. The Company immediately filed a
Motion to Dismiss on the ground of prescription, invoking
Article 290 of the Labor Code. If you were the Labor Arbiter,
how would you resolve the Company’s Motion to Dismiss?

As the Labor Arbiter. I will deny the Motion to Dismiss. Where an employee was
dismissed and the matter of his dismissal was then referred to the grievance
machinery pursuant to the provision in the existing collective bargaining
agreement, and the grievance machinery had a final meeting after quite a long
while thereafter, the complaint for illegal dismissal was then filed, the action was
not barred by laches, as the pendency of the matter before the grievance
machinery affected the ripeness of the cause of action for illegal dismissal.
[Radio Communications of the Philippines, Inc. (RCPI), us. National Labor