University of Santo Tomas
Faculty of Civil Law
LABOR LAW AND
SOCIAL LEGISLATION
Questions Asked More Than Once
QuAMTO 2021
QuAMTO is a compilation of past bar questions with answers as suggested by the UPLC and other
distinct luminaries in the academe, and updated by the UST Academics Committee to fit for the
2021 Bar Exams.
Bar questions are arranged per topic in accordance with the bar syllabus released by the
Supreme Court and were selected based on their occurrence on past bar examinations from 1987
to 2019.
ACADEMICS COMMITTEE
MARIA FRANCES FAYE R. GUTIERREZ
JOHN EDWARD F. FRONDA
ANGEL ISAH M. ROMERO
KIRBY ANNE C. RENIA
KAREN ABBIE C. ASPIRAS
JOSE CHRISTIAN ANTHONY I. PINZON
NATHAN RAPHAEL D.L. AGUSTIN
MARIA FRANCES FAYE R. GUTIERREZ
SECRETARY GENERAL
EXECUTIVE COMMITTEE
LAYOUT AND DESIGN
QuAMTO COMMITTEE MEMBERS
KIARA LOUISE T. BALIWAG
NICOLO B. BONGOLAN
PATRICIA MAE H. CABAÑA
BEATRICE ROSE V. FANGON
DANICE GO GAN
ATTY. TEODORO LORENZO A. FERNANDEZ
ATTY. AL CONRAD ESPALDON
ADVISERS
OUR DEEPEST APPRECIATION TO OUR
MENTORS AND INSPIRATION
ATTY. ARNOLD E. CACHO
ATTY. BENEDICT G. KATO
ATTY. ROLAND L. MARQUEZ
DEAN SALVADOR A. POQUIZ
ATTY. CESAR E. SANTAMARIA, JR.
COMM. LEONARDO VINZ OCHOA IGNACIO
ATTY. JACQUELINE O. LOPEZ-KAW
ATTY. IRVIN JOSEPH FABELLA
ATTY. JERNY DE LEON
For being our guideposts in understanding
the intricate sphere of Labor Law and Social Legislation.
-Academics Committee 2021
QuAMTO (1987-2019)
a valuable consideration in the form of wages,
salaries, benefits, etc. Art. XIII, Sec. 3 of the
Constitution similarly provides and similarly
guarantees them the following rights:
LABOR LAW QUAMTO
____________________________________________________________
FUNDAMENTAL PRINCIPLES AND CONCEPTS
____________________________________________________________
1.
2.
3.
4.
5.
6.
LEGAL BASIS
1987 Constitution (State Policies, Bill of Rights
& Social Justice) (1996, 1998, 2009 BAR)
7.
Q: What are the salient features of the protection
to labor provision of the Constitution? (1998
BAR)
8.
A: The salient features of the Protection to Labor
provision of the Constitution (Sec. 3, Art. XIII, 1987
Constitution) are as follows:
•
Extent of Protection – Full protection to labor;
•
Coverage of Protection – Local and overseas,
organized and unorganized;
•
Employment Policy – Full employment and
equality of employment opportunities for all;
•
Guarantees:
Q: In her State of the Nation Address, the
President stressed the need to provide an
investor-friendly business environment so that
the country can compete in the global economy
that now suffers from a crisis bordering on
recession. Responding to the call, Congress
passed two innovative legislative measures,
namely: (1) a law abolishing the security of
tenure clause in the Labor Code; and (2) a law
allowing contractualization in all areas needed in
the employer’s business operations. However,
to soften the impact of these new measures, the
law requires that all employers shall obtain
mandatory unemployment insurance coverage
for all their employees.
Unionism and Method of Determination
Conditions of Employment – Right of all workers
to self-organization, collective bargaining and
negotiations.
The constitutionality of the two (2) laws is
challenged in court. As judge, how will you rule?
(2009 BAR)
Concerted Activities – Right to engage in
peaceful concerted activities, including the
right to strike in accordance with law.
A: The first innovative measure, on abolition of the
security of tenure clause in the Labor Code, is
unconstitutional as it goes against the entitlement
of workers to security of tenure under Sec. 3, Art.
XIII of the 1987 Constitution.
Working Conditions – Right to security of
tenure, humane conditions of work and a living
wage.
The second innovative measure, on a law allowing
contractualization in all areas needed in the
employer’s business operations, is legal. Art. 106 of
the Labor Code already allows the Secretary of
Labor and Employment not to make appropriate
distinction between labor-only and job contracting.
This means that the Secretary may decide, through
implementing regulation, not to prohibit labor-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 and place
by such person are performing activities which are
directly related to the principal business of the
employer.
Decision Making Processes – Right to
participate in policy and decision, making
processes affecting their rights and benefits as
way to provide by law.
•
Share in Fruits of Production – Recognition of
right of labor to its just share in fruits of
production.
Q: What are the rights of an employer and an
employee? (1996 BAR)
A: An employer is a person who employs the
services of another and pays for their wages and
salaries. As such, Art. XIII, Sec. 3 of the Constitution
provides and guarantees them with the following
rights:
1.
2.
3.
Hence, it would be legal for Congress to do away
with the prohibition on labor-only contracting and
allow contractualization in all areas needed in the
employer’s business operations. Assuming, of
course, that contractual workers are guaranteed
their security of tenure.
Reasonable return of investment
Expansion
Growth
On the other hand, an employee is a person who
works under the employ of another in exchange of
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Security of tenure
Receive a living wage
Humane conditions of work
Just share in the fruits of production
Right to self-organization
Conduct collective bargaining or negotiation
with management
Engage in peaceful concerted activities
including strike
Participate in policy and decision-making
process
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BAR OPERATIONS
Labor Law and Social Legislation
CONSTRUCTION IN FAVOR OF LABOR
(2017, 2010, 2009, 1993 BAR)
wrongdoing. (Corazon Jamer v. NLRC, 278 SCRA
632 [1997])
Q: Clarito, an employee of Juan, was
dismissed for allegedly stealing Juan’s
wristwatch. In the illegal dismissal case
instituted by Clarito, the Labor Arbiter, citing
Article 4 of the Labor Code, ruled in favor of
Clarito upon finding Juan’s testimony
doubtful.
RECRUITMENT AND PLACEMENT
ILLEGAL RECRUITMENT (2010 BAR)
Q: A was approached for possible overseas
deployment to Dubai by X, an interviewer of
job applicants for Alpha Personnel Services,
Inc., an overseas recruitment agency. X
required A to submit certain documents
(passport,
NBI
clearance,
medical
certificate) and to pay P25,000 as
processing fee. Upon payment of the said
amount to the agency cashier, A was
advised to wait for his visa. After five
months, A visited the office of Alpha
Personnel Services, Inc. during which X told
him that he could no longer be employed for
employment abroad.
On appeal, the NLRC reversed the Labor
Arbiter holding that Article 4 applies only
when the doubt involves “implementation
and interpretation” of the Labor Code
provisions. The NLRC explained that the
doubt may not necessarily be resolved in
favor of labor since this case involves the
application of the Rules on Evidence, not the
Labor Code. Is the NLRC correct? Reasons.
(2017, 2009 BAR)
A: The NLRC is not correct. It is a well settled
doctrine that if doubts exist between the
evidence presented by the employer and the
employee, the scale of justice must be tilted in
favor of the latter. It is a time-honored rule that
in controversies between laborer and master,
doubts necessarily arising from the evidence, or
in the implementation of the agreement and
writing should be resolved in favor of the
laborer.
A was informed by the Philippine Overseas
Employment Administration (POEA) that
while Alpha Personnel Services, Inc. was a
licensed agency, X was not registered as its
employee, contrary to POEA Rules and
Regulations. Under POEA Rules and
Regulations, the obligation to register
personnel with the POEA belongs to the
officers of a recruitment agency. (2010
BAR)
ALTERNATIVE ANSWER:
NO. Art. 227 [formerly 221] of the 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 reasonable means to ascertain the facts
speedily and objectively and without regard to
technicalities of law or procedure, all in the
interest of due process.
a.
May X be held criminally liable for illegal
recruitment? Explain.
SOCIAL JUSTICE
(2003, 1994 BAR)
A: NO. X performed his work with the
knowledge that he works for a licensed
recruitment agency. The obligation to register
its personnel with the POEA belongs to the
officers of the agency. He is in no position to
know that the officers of said recruitment
agency failed to register him as its personnel
(People v. Chowdury, G.R. No. 129577-80, Feb. 15,
2000).
Q: May social justice as a guiding principle in
labor law be so used by the courts in sympathy
with the working man if it collides with the
equal protection clause of the Constitution?
Explain. (2003 BAR)
b. May the officers having control,
management or direction of Alpha
Personnel Services, Inc. be held
criminally liable for illegal recruitment?
Explain.
A: YES. The State is bound under the
Constitution to afford full protection to Labor;
and when conflicting interests collide and they
are to be weighed on the scales of social justice,
the law should accord more sympathy and
compassion to the less privileged workingman.
(Fuentes v. NLRC, 266 SCRA 24 [1997])
A: YES. Alpha, being a licensed recruitment
agency, still has obligations to A for processing
his papers for overseas employment. Under
Sec. 6(m) of R.A. 8042, failure to reimburse
expenses incurred by the worker in connection
with his documentation and processing for
purposes of deployment, in cases where the
deployment does not actually take place
without the worker’s fault, amounts to illegal
recruitment.
However, it should be borne in mind that social
justice ceases to be an effective instrument for
the “equalization of the social and economic
forces” by the State when it is used to shield
Prohibited Activities (2015, 2006, 2005, 1991
2
QuAMTO (1987-2019)
Q: Wonder Travel and Tours Agency (WTTA)
is a well-known travel agency and an
authorized sales agent of the Philippine Air
Lines. Since majority of its passengers are
overseas workers, WTTA applied for a license
for recruitment and placement activities. It
stated in its application that its purpose is not
for profit but to help Filipinos find
employment abroad. Should the application
be approved? (2006 BAR)
BAR)
Q: Rocket Corporation is a domestic
corporation registered with the SEC, with
30% of its authorized capital stock owned by
foreigners and 70% of its authorized capital
stock owned by Filipinos. Is Rocket
Corporation allowed to engage in the
recruitment and placement of workers,
locally and overseas? Briefly state the basis
for your answer. (2015 BAR)
A: NO. The application should be disapproved.
The law clearly states that travel agencies and
sales agencies of airline companies are
prohibited from engaging in the business of
recruitment and placement of workers for
overseas employment whether for profit or not
(Art. 26, Labor Code).
A: NO. Art. 21 of the Labor Code mandates that,
for a Corporation to validly engage in
recruitment, and local and overseas placement of
workers, 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 capital stock is owned
by Filipinos, it cannot, as a result, validly engage
in recruitment, and local and overseas placement
of workers.
In the present case, it is clear WTTA is PAL’s
authorized sales agency. Thus, it falls within the
prohibition of Art. 26. Furthermore, its intention
of providing Filipinos with employment abroad
will not save its application, even with a noble
purpose, because Art. 26 provides for an absolute
prohibition and does not place any merit on the
applicant’s intention.
Q: Marino Palpak, Eddie Angeles, and Jose
Berdugo advertised in the Manila Bulletin the
following information: “20 Teachers wanted
for Egypt. Apply at No. 123 Langit, Manila."
Salvacion Inocente applied and was made to
pay minimal fees to cover administrative
expenses and the cost of her passport and
visa. For one reason or another, Salvacion did
not get the job and filed a complaint with the
POEA. Marino, Eddie, and Jose admitted
having no license or authority but claimed
that they are not covered by the Labor Code
since they are not engaged in the recruitment
and placement for profit and, at any rate, only
one prospective worker was involved. May
Marino, Eddie, and Jose be prosecuted? If so,
for what specific offense/s? (1991 BAR)
Q: Maryrose Ganda's application for the
renewal of her license to recruit workers for
overseas employment was still pending with
the Philippine Overseas Employment
Administration (POEA). Nevertheless, she
recruited Alma and her three sisters, Ana, Joan
and Mavic, for employment as housemaids in
Saudi Arabia. Maryrose represented to the
sisters that she had a license to recruit
workers for overseas employment. Maryrose
also demanded and received P30,000.00 from
each of them for her services. However,
Maryrose's application for the renewal of her
license was denied, and consequently failed to
employthe four sisters in Saudi Arabia.
A: Marino, Eddie, and Jose can be prosecuted.
Recruitment and placement by persons without a
license or authority constitute illegal activities.
Marino, Eddie, and Jose were engaged in
recruitment and placement when they advertised
that 20 teachers were wanted to Egypt.
Advertising for employment is one of the acts
considered as recruitment and placement in the
Labor Code. That they were not engaged in
recruitment and placement for profit does not
mean that the conditions for a person to engage
in recruitment and placement found in the Labor
Code are not applicable to them. The Code
applies to any recruitment or placement, whether
for profit or not. The fact that only one
prospective worker was involved does not mean
that they were not engaged in recruitment or
placement. The reference in the 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. They may be prosecuted for
those specific offenses. They already charged fees
even if they have not yet obtained employment
for the applicant.
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
The sisters charged Maryrose with large
scale illegal recruitment. Testifying in her
defense, Maryrose declared that she acted in
good faith because she believed that her
application for the renewal of her license
would be approved. Maryrose adduced in
evidence the Affidavits of Desistance which
the four private complainants had executed
after the prosecution rested its case. In the
said affidavits, they acknowledged receipt of
the refund by Maryrose of the total amount
of P120,000,00 and indicated that they were
no longer interested to pursue the case
against Maryrose. Resolve the case with
reasons. (2005 BAR)
A: Maryrose is still criminally liable for large
scale illegal recruitment. Good faith is not a
defense in illegal recruitment as defined in Sec. 6
of R.A. 8042. Illegal recruitment is malum
prohibitum.
Refund of the P120,000.00 she received does not
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BAR OPERATIONS
Labor Law and Social Legislation
likewise extinguish her criminal liability. If at all,
it satisfies only her civil liability. The affidavit of
desistance, moreover, does not bar Maryrose's
prosecution.
The
criminal
offense
is not extinguished by such desistance. Besides,
an affidavit of desistance, as a rule, is frowned
upon.
by a syndicate, that is when it is
carried out by a group of three (3) or
more persons conspiring and/or
confederating with one another; or
b.
Types of Illegal Recruitment (2015, 2007,
2002 BAR)
When illegal recruitment is committed
in large scale, that is when it is
committed against three (3) or more
persons whether individually or as a
group.
Q: When is illegal recruitment considered a
crime of economic sabotage? Explain briefly.
(2015, 2007, 2002 BAR)
REGULATION OF RECRUITMENT AND
PLACEMENT ACTIVITIES
(2017, 2002, 1998 BAR)
A: According to Art. 28 of the Labor Code, illegal
recruitment is considered a crime of economic
sabotage when committed by a syndicate or in
large scale.
Q: Is a corporation, seventy percent (70%) of
the authorized and voting capital of which is
owned and controlled by Filipino citizens,
allowed to engage in the recruitment and
placement of workers, locally or overseas?
Explain briefly. (2002 BAR)
Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or
more persons conspiring and/or confederating
with one another in carrying out any unlawful or
illegal transaction, enterprise or scheme which
is an act of illegal recruitment.
A: NO. Acorporation, seventy percent (70%) of the
authorized and voting capital stock of which is
owned and controlled by Filipino citizens cannot
be permitted to participate in the recruitment
and placement of workers, locally or overseas,
because Art. 27 of the Labor Code requires at
least seventy-five percent (75%).
Illegal recruitment is deemed committed in large
scale if committed against three (3) or more
persons individually or as a group.
Q: A Recruitment and Placement Agency
declared voluntary bankruptcy. Among its
assets is its license to engage in business. Is
the license of the bankrupt agency an asset
which can be sold in public auction by the
liquidator? (1998 BAR)
Q: When does the recruitment of workers
become an act of economic sabotage? (2015
BAR)
A: Under Sec. 6(m) of R.A. 8042, illegal
recruitment is considered economic sabotage if
it is committed by a syndicate or is large scale in
scope. It is syndicated illegal recruitment if the
illegal recruitment is carried out by three (3) or
more conspirators; and it is large scale in scope
when it is committed against three (3) more
persons, individually or as a group.
A: NO, because of the non-transferability of the
license to engage in recruitment and placement.
The Labor Code (in Art. 29) provides that no
license to engage in recruitment and placement
shall be used directly or indirectly by any person
other than the one in whose favor it was issued
nor may such license be transferred, conveyed or
assigned to any other person or entity.
Q: Discuss the types of illegal recruitment
under the Labor Code. (2007 BAR)
It may be noted that the grant of a license is a
governmental act by the Department of Labor
and
Employment
based
on
personal
qualifications, and citizenship and capitalization
requirements. (Arts. 27-28, Labor Code)
A: Under the Labor Code, as amended by
Republic Act No. 8042 otherwise known as the
“Overseas Filipinos and Migrant workers Act of
1995”, there are two types of illegal recruitment,
particularly simple illegal recruitment and
illegal recruitment which is considered as an
offense involving economic sabotage.
Q: W Ship Management, Inc. hired Seafarer G
as bosun in its vessel under the terms of the
2010 Philippine Overseas Employment
Administration - Standard Employment
Contract (POEA-SEC). On his sixth (6th) month
on board, Seafarer G fell ill while working. In
particular, he complained of stomach pain,
general weakness, and fresh blood in his
stool.
Simple illegal recruitment is committed when a
licensee/non-licensee or holder/non-holder of
authority undertakes either any recruitment
activities defined under Art. 13(b) of the Labor
Code, or any prohibited practices enumerated
under Sec. 6 of R.A. 8042, as amended.
Illegal recruitment as an offense involving
economic sabotage is committed under the
following qualifying circumstances, to wit:
a.
When his illness persisted, he was medically
repatriated on January 15, 2018. On the same
day, Seafarer G submitted himself to a postemployment medical examination, wherein
he was referred for further treatment. As of
When illegal recruitment is committed
4
QuAMTO (1987-2019)
September 30, 2018, Seafarer G has yet to be
issued any fit-to-work certification by the
company- designated physician, much less a
final and definitive assessment of his actual
condition.
Employment (DOLE). What permit, if any, can
the DOLE issue so that AB can assume as
Vice-President in the telecommunications
company? Discuss fully. (2007 BAR)
A: The Labor Code provides that “any alien
seeking admission to the Philippine for
employment purposes and any domestic or
foreign employer who desires to engage an alien
for employment in the Philippines shall obtain
an employment permit from the Department of
Labor.”
Since Seafarer G still felt unwell, he sought an
opinion from a doctor of his choice who later
issued an independent assessment stating
that he was totally and permanently disabled
due to his illness sustained during work.
Seafarer G then proceeded to file a claim for
total and permanent disability compensation.
The company asserts that the claim should be
dismissed due to prematurity since Seafarer G
failed to first settle the matter through the
third-doctor conflict resolution procedure as
provided under the 2010 POEA-SEC.
a.
The employment permit may be issued to a
nonresident alien or to the applicant employer
after a determination of the non-availability of a
person in the Philippines who is competent,
able, and willing at the time of application to
perform the services for which the alien is
desired. Thus, AB (or telecommunication
company) should be issued the abovementioned alien employment permit so that AB
can assume as Vice President of the
Telecommunication Company.
What is the third-doctor conflict
resolution procedure under the 2010
POEA-SEC? Explain.
A: In the event of conflicting medical
assessments, the parties are required to select a
third physician whose finding shall be final and
binding on them. Under Sec. 20(B) of the 2010
POEA-SEC, the selection is consensual; however,
jurisprudence has made it mandatory.
(Philippine Hammonia Ship Agency, Inc. v.
Eulogia Dumadag, G.R. No. 194362, Jun. 26, 2013)
Q: Phil-Norksgard Company. Inc., a domestic
corporation engaged in the optics business,
imported from Sweden highly sophisticated
and sensitive instruments for its laboratory.
To install the instruments and operate them,
the company intends to employ Boija Anders,
a Swedish technician sojourning as a tourist in
the Philippines.
b. Will Seafarer G's claim for total and
permanent disability benefits prosper
despite his failure to first settle the
matter through the third-doctor
conflict resolution procedure? Explain.
As lawyer of the company, what measures
will you take to ensure the legitimate
employment of Boija Anders and at the same
time protect Philippine labor? Discuss fully.
(1995 BAR)
A: YES, it will prosper. The Third Physician Rule
has no application when the companydesignated physician exceeds the 120-day
treatment period without making a final,
categorical, and definitive assessment. Here, he
allowed 209 days to elapse without issuing a fitto-work assessment or a disability grade.
(Alpines v. Elburg Shipmanagement Phil., Inc.,
G.R. No. 202114, Nov. 9, 2016)
c.
A: To ensure the legitimate employment of Boija
Anders, a non-resident alien, I will apply at the
Department of Labor and Employment for the
issuance of an employment permit, claiming that
there is no one in the Philippines who can
perform the work that Anders is being tasked to
do.
At the same time, to protect Philippine labor, I
will see to it that Anders will have an understudy
who will learn by working with Anders involving
the installation and operation of the highly
sophisticated and sensitive instruments from
Sweden.
Assuming that Seafarer G failed to
submit himself to a post- employment
medical examination within three (3)
working days from his return, what is
the consequence thereof to his
disability claim? Explain. (2019 BAR)
To protect Philippine Labor, the Labor Code
provides that the alien employee shall not
transfer to another job or change his employer
without prior approval of the Secretary of Labor.
Q: Phil, a resident alien, sought employment
in the Philippines. The employer, noticing
that Phil was a foreigner, demanded that he
first secure an employment permit from the
DOLE. Is the employer correct? Explain your
answer. (2017 BAR)
A: Non-compliance with the 3-day reporting
requirement results in the forfeiture of G’s
entitlement to disability compensation. (Sec.
20[B], POEA-SEC)
EMPLOYMENT OF NON-RESIDENT ALIENS
(2017, 2007, 1995 BAR)
Q: AB, a non-resident American, seeks entry
to the country to work as Vice- President of a
local telecommunications company. You are
with the Department of Labor and
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
A: NO, the employer is not correct. Only nonresident aliens who are seeking employment in
5
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BAR OPERATIONS
Labor Law and Social Legislation
the Philippines are required to secure first an
Alien Employment Permit. Here, Phil is a
resident alien, who is exempted from Alien
Employment Permit requirement. Hence, the
employer is not correct in demanding that Phil
first secure an employment permit from the
DOLE.
Q: Ana Cruz has a low IQ. She has to be told at
least three times before she understands her
daily work assignment. However, her work
output is at least equal to the output of the
least efficient worker in her work section. Is
Ms. Cruz a handicapped worker? Explain.
(2000 BAR)
Liability of Local Recruitment Agency and
Foreign Employer (2019, 2017, 2012, 2010
BAR)
A: NO, low IQ or low efficiency does not make the
worker “handicapped” in the contemplation of
law. Handicap means such physical or mental
infirmity that impairs capacity to work. The
deficiency may also be due to age or injury. (Art.
78, Labor Code)
Q: Andrew Manning Agency (AMA) recruited
Feliciano for employment by Invictus
Shipping, its foreign principal. Meantime,
AMA and Invictus Shipping terminated their
agency agreement. Upon his repatriation
following
his
premature
termination,
Feliciano claimed from AMA and Invictus
Shipping the payment of his salaries and
benefits for the unserved portion of the
contract. AMA denied liability on the ground
that it no longer had an agency agreement
with Invictus Shipping. Is AMA correct?
Explain your answer. (2017 BAR)
Equal Opportunity (2012, 2006, 1998 BAR)
Q: A lady worker was born with a physical
deformity, specifically, hard of hearing,
speech impaired and color blind. However,
these deficiencies do not impair her working
ability. Can the employer classify the lady
worker as a handicapped worker so that her
daily wage will only be seventy-five percent
(75%) of the applicable daily minimum wage?
(1998 BAR)
A: AMA is not correct. Under Sec. 10 of R.A. 8042,
the solidary liability of the principal and the
recruitment agency exists for the whole duration
of the employment contract and shall not be
affected by any substitution, amendment or
modification made locally or in a foreign country.
Here, AMA recruited Feliciano for employment
by Invictus Shipping.
A: NO, the employer cannot classify the lady
worker as a handicapped worker because
according to the facts in the question, her
deficiencies do not impair her working ability. If
her earning capacity is therefore not also
impaired, then she cannot be considered a
handicapped worker.
Hence, AMA remains solidary liable with Invictus
for any breach of the Feliciano’s employment
contract, even if AMA and Invictus had already
terminated their agency contract.
Because of the above fact, the employer shall not
pay her less than the applicable daily minimum
wage. (Art. 78, Labor Code)
Q: For humanitarian reasons, a bank hired
several handicapped workers to count and
sort out currencies. Their employment
contract was for six (6) months. The bank
terminated their employment on the ground
that their contract has expired prompting
them to file with the Labor Arbiter a
complaint for illegal dismissal. Will their
action prosper? (2012 BAR)
TRAINING AND EMPLOYMENT
OF SPECIAL WORKERS
Disabled Workers (2006, 2000 BAR)
Q: For humanitarian reasons, a bank hired
several handicapped workers to count and
sort out currencies. Their employment
contract was for six (6) months. The bank
terminated their employment on the ground
that their contract has expired prompting
them to file with the Labor Arbiter a complaint
for illegal dismissal. Will their action prosper?
(2006 BAR)
A: NO. Art. 80 provides that in cases of employing
handicapped
workers,
an
employment
agreement must be contracted. Art. 80 further
provides that such employment agreement shall
contain the duration of the employment period.
In the case at bar, the action will not prosper for
the bank cannot be held liable for illegal
dismissal for the handicapped employees
themselves have agreed that their term of
employment will only be limited to 6 months.
A: YES, their action will prosper. They are doing
necessary or desirable jobs and are qualified for
the job, and therefore they should be treated like
other qualified able-bodied employees (Bernardo
v. NLRC and Far East Bank, 310 SCRA 186 [1999]).
They cannot be terminated simply because of the
expiration of the contract. The nature of their
work gives them the status of regular employees.
What determines regularity is not the
employment contract but the nature of the job.
(A.M. Oreta and Co. Inc. v. NLRC, 176 SCRA 218
[1989])
NOTE: The contract signed by the workers is akin
to a probationary employment, during which the
bank determined the employees’ fitness for the
job. If the bank renewed the contract after the
lapse of the six-month probationary period, the
employees will then become regular employees
since the task of counting and sorting bills is
6
QuAMTO (1987-2019)
necessary and desirable to the business of the
bank. (Bernardo et. al. v. NLRC and Far East Bank
and Trust Co. G.R. No. 122917, July 12, 1999)
The conditions for an allowable "compressed
work week" are the following: the workers agree
to the temporary change of work schedule and
they do not suffer any loss of overtime pay,
fringe benefits or their weekly or monthly takehome pay. (DOLE Explanatory Bulletin on the
Reduction of Workdays on Wages issued on July
23, 1985)
LABOR STANDARDS
CONDITIONS OF EMPLOYMENT
Overtime (2015, 2010, 1997, 2003, 2002,
1991, 1987 BAR)
Hours of Work (2004, 1997 BAR)
Q: Socorro is a clerk-typist in the Hospicio de
San Jose, a charitable institution dependent
for its existence on contributions and
donations from well-wishers. She renders
work eleven (11) hours a day but has not
been given overtime pay since her place of
work is a charitable institution. Is Socorro
entitled to overtime pay? Explain briefly.
(2002 BAR)
Q: Gil Bates, a computer analyst and
programmer of Hard Drive Company, works
eight hours a day for five days a week at the
main office providing customers information
technology
assistance.
On
Saturdays,
however, the company requires him to keep
his cellular phone open from 8:00 A.M. to 5:00
P.M. so that the Management could contact him
in case of heavy workload or emergency
problems needing his expertise.
A: YES. Socorro is entitled to overtime
compensation. She does not fall under any of the
exceptions to the coverage of Art. 82 (Hours of
Work). The Labor Code is equally applicable to
non-profit institutions. A covered employee who
works beyond eight (8) hours is entitled to
overtime compensation.
May said hours on Saturdays be considered
compensable working hours “while on call”? If
so, should said compensation be reported to
the Social Security System? (2004 BAR)
A: Said hours on Saturdays should be considered
as compensable working hours "while on call". In
accordance with the Rules and Regulations
Implementing the Labor Code, an employee who
is not required to leave word at his home or with
company officials as to where he may be reached
is not working while on call. But in the question,
Gil Bates was required to keep his cell phone
open from 8:00 A.M. to 5:00 P.M. Therefore, Bates
should be considered as working while on call if
he cannot use effectively and gainfully for his
own purpose the time from 8:00 A.M. to 5:00 P.M.
on Saturdays when he is required to keep his
cellphone open.
Q: A case against an employer company was
filed charging it with having violated the
prohibition against offsetting undertime for
overtime work on another day. The
complainants were able to show that,
pursuant to the Collective Bargaining
Agreement (CBA), employees of the union
had been required to work "overtime" on
Saturday but were paid only at regular rates
of pay on the thesis that they were not
required to complete, and they did not in fact
complete, the eight-hour work period daily
from Monday through Friday.
The compensation actually received by Bates for
working while on call on Saturdays should be
reported to the Social Security System because
under the Social Security Law, compensation
means "all actual remuneration for employment."
Given the circumstances, the employer
contended that the employees were not
entitled to overtime compensation, i.e., with
premium rates of pay. Decide the
controversy. (2003 BAR)
NORMAL HOURS OF WORK
A: Art. 88 of the Labor Code provides that
undertime work on any particular day shall not
be offset by overtime work on any other day.
The CBA, the law between the parties and the
Union has shown that the employees are
required to render overtime work on Saturdays,
thus the contention of the employer is not
tenable. The employer cannot use the undertime
incurred from Monday through Friday to offset
the overtime on Saturday. Hence, the employees
are entitled to overtime compensation, i.e.,
premium rates of pay on Saturday.
Compressed Work week (2005 BAR)
Q: Under what conditions may a "compressed
work week" schedule be legally authorized as
an exception to the "eight-hour a day"
requirement under the Labor Code? (2005
BAR)
A: "Compressed work week" is resorted to by
the employer to prevent serious losses due to
causes beyond his control, such as when there is
a substantial slump in the demand for his goods
or services or when there is lack of raw
materials. (Explanatory Bulletin on the Reduction
of Workdays on Wages Issued by DOLE, July 23,
1985)
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Q: After working from 10 a.m. to 5 p.m. on a
Thursday as one of 5,000 employees in a
beer factory, A hurried home to catch the
early evening news and have dinner with his
7
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Labor Law and Social Legislation
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.
a.
differential. Is he correct? Explain briefly.
(2002 BAR)
A: YES. Under Art. 86 of the Labor Code, night
shift differential shall be paid to every employee
for work performed between 10:00 o’clock in
the evening to six o’clock in the morning.
Therefore, Goma is entitled to night shift
differential for work performed from 10:00 pm
until 6:00 am of the day following, but not from
6:00 am to 7:00 am of the same day.
May A validly refuse the plant manager’s
directive? Explain.
A: YES. A may validly refuse to fill in for C. A may
not be compelled to perform overtime work
considering that the plant manager’s directive is
not for an emergency overtime work, as
contemplated under Art. 89 of the Labor Code.
ALTERNATIVE ANSWER:
b. Assuming that A was made to work from
11 p.m. on Thursday until 2 a.m. on
Friday, may the company argue that, since
he was two hours late in coming to work
on Thursday morning, he should only be
paid for work rendered from 1 a.m. to 2
a.m.? Explain? (2010 BAR)
NO. The Omnibus Rules Implementing the Labor
Code (in Book III, Rule II dealing with night shift
differential) provides that its provisions on night
shift differential shall NOT apply to employees of
“retail and service establishments regularly
employing not more than five (5) workers”.
Because of this provision, Goma is not entitled to
night shift differential because the gasoline
station where he works has only five employees.
A: NO. Undertime is not offset by overtime. (Art.
88, Labor Code)
Q: 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 their regular hourly wage
for work rendered in excess of eight (8)
hours per day. Because of additional orders,
LKG now requires two (2) shifts of workers
with both shifts working beyond eight (8)
hours but only up to a maximum of four (4)
hours.
Rest Periods (1998, 1987 BAR)
Carding is an employee who used to render up
to six (6) hours of overtime work before the
change in schedule. He complains that the
change adversely affected him because now he
can only earn up to a maximum of four (4)
hours' worth of overtime pay. Does Carding
have a cause of action against the company?
(2015 BAR)
Q: Lawyer Antonio Martin recently formed a
law partnership with five other lawyerfriends of his. They hired two office
secretaries, an accounting clerk-cashier, one
bookkeeper, and two messengers. You are
among three associate attorneys. The
workweek is Monday to Friday. There is no
vacation leave but sick leave is 15 days for
every year of continuous and satisfactory
service.
Q: A Ladies Dormitory run or managed by a
charitable non-profit organization claims that
it is exempt from the coverage of the Weekly
Rest Period provision of the Labor Code. Is the
claim valid? (1998 BAR)
A: NO. The claim is not valid. The provisions on
weekly rest periods in the Labor Code cover
every employer, whether operating for profit or
not. (Art. 91, Labor Code)
A: NO. A change in work schedule is a
management prerogative of LKG. Thus, Carding
has no cause of action against LKG if, as a result
of its change to two (2) shifts, he now can only
expect a maximum of four (4) hours overtime
work. Besides, Art. 87 of the Labor Code does
not guarantee Carding a certain number of hours
of overtime work. In Manila Jockey Employees’
Union v. Manila Jockey Club (G.R. No. 167760,
March 7, 2007), the Supreme Court held that the
basis of overtime claim is an employee’s having
been “permitted to work.” Otherwise, as in this
case, such is not demandable.
Managing partner Martin is preparing a set of
personnel policies in terms and conditions of
employment for the staff and has asked you to
give him a brief memo on the questions listed
below. Should the law firm schedule a rest
day for the employees, including you? (1987
BAR)
A: There is no need under the Labor Code to
schedule a rest day. The Code (in Art. 91) requires
an employer to provide each of his employees a
weekly rest day after every six consecutive
normal work days. Here, the work week is such
that it is for five (5) days. The Saturdays and
Sundays when the employees are not required to
work more than satisfy the required weekly rest
day.
Night Shift Differential (2002 BAR)
Q: As a tireman in a gasoline station open
twenty-four (24) hours a day with only five
(5) employees, Goma worked from 10:00
P.M. until 7:00 A.M. of the following day. He
claims he is entitled to night-shift
Holiday Pay, 13th Month Pay (2018, 2012,
8
QuAMTO (1987-2019)
2005, 2004, 2002, 1998, 1994, 1987 BAR)
v. Court of Appeals, 425 SCRA 478 [2004])
Q: Dennis was a taxi driver who was being paid
on the "boundary" system basis. He worked
tirelessly for Cabrera Transport Inc. for
fourteen (14) years until he was eligible for
retirement. He was entitled to retirement
benefits. During the entire duration of his
service, Dennis was not given his 13th month
pay or his service incentive leave pay.
Q: TRX, a local shipping firm, maintains a
fleet of motorized boats plying the island
barangays of AP, a coastal town. At day's end
the boat operators/crew members turn over
to the boat owner their cash collections from
cargo fees and passenger fares, less the
expenses for diesel fuel, food, landing fees
and spare parts.
a.
Fifty percent (50%) of the monthly income or
earnings derived from the operations of the
boats are given to the boatmen by way of
compensation. Deducted from the individual
shares of the boatmen are their cash advance
and peso value of their absences, if any. Are
these boatmen entitled to overtime pay,
holiday pay, and 13th month pay? (2004
BAR)
Is Dennis entitled to 13th month pay and
service leave incentive pay? Explain.
A: NO. A taxi driver paid under the “boundary
system” is not entitled to a 13th month pay and a
SIL pay. Hence, his retirement pay should be
computed solely on the basis of his salary.
Specifically, Sec. 3 (e) of the Rules and
Regulations Implementing P.D. 851 excludes
from the obligation of 13th Month Pay “Employers
of those who are paid on x x x boundary” basis.
On the other hand, Sec. 1(d), Rule V, Book III of
the Omnibus Rules provides that those
“employees whose performance is unsupervised
by the employer” are not entitled to Service
Incentive Leave. A taxi driver paid under the
Boundary System is an “unsupervised” employee.
A: If the boatmen are considered employees, like
jeepney drivers paid on a boundary system, the
boatmen are not entitled to overtime and
holiday pay because they are workers who are
paid by results. Said workers, under the Labor
Code are not entitled to, among others, overtime
pay and holiday pay.
In accordance with the Rules and Regulations
implementing the 13th month pay law, however,
the boatmen are entitled to the 13th month pay.
Workers who are paid by results are to be paid
their 13th month pay.
b. Since he was not given his 13th month pay
and service incentive leave pay, should
Dennis be paid upon retirement, in
addition to the salary equivalent to fifteen
(15) days for every year of service, the
additional 2.5 days representing onetwelfth (1/12) of the 13th month pay as
well as the five (5) days representing the
service incentive leave for a total of 22.5
days? Explain. (2012 BAR)
Q: Nico is a medical representative engaged
in the promotion of pharmaceutical products
and
medical
devices
for
Northern
Pharmaceuticals, Inc. He regularly visits
physicians' clinics to inform them of the
chemical composition and benefits of his
employer's products. At the end of every day,
he receives a basic wage of PhP700.00 plus a
PhP150.00 "productivity allowance." For
purposes of computing Nico's 13th month
pay, should the daily "productivity
allowance" be included? (2018 BAR)
A: NO. Since he is not entitled to 13th month pay
and Service Incentive Leave, his retirement pay
should be computed solely on the basis of his
salary. (R&E Transport v. Latag, G.R. No. 155214,
Feb. 13, 2004)
Q: During the open forum following your
lecture before members of various unions
affiliated with a labor federation, you were
asked the following question:
Araw ng Kagitingan and Good Friday are
among the 10 paid regular holidays under
Article 94 of the Labor Code. How much will an
employee receive when both holidays fall on
the same day? (2005 BAR)
A: NO. The second paragraph of Sec. 5(a) of the
Revised Guidelines Implementing the 13th Month
Pay Law states that “employees who are paid a
fixed or guaranteed wage plus commission are also
entitled to the mandated 13th month pay, based on
their total earnings during the calendar year, i.e., on
both their fixed or guaranteed wage and
commission.”
A: The employee will receive 200% of his
regular daily wage when both regular holidays
fall on the same day and he does not work. The
law provides that he shall receive his regular
daily wage for each regular holiday. The
employee will receive 100% for Araw ng
Kagitingan and 100% for Good Friday, If he
works on that day, he is entitled to 400% of his
regular daily wage; otherwise, there will be
diminution of benefits. (Asian Transmission Corp.
However, the SC in Philippine Duplicators, Inc. v.
NLRC (G.R. No. 110068, Feb. 15, 1995), declared the
aforesaid provision as null and void with respect to
those medical representatives who do not obtain
productivity allowances by virtue of generated
sales. Such allowances are in the nature of profitsharing bonuses or commissions that should be
properly excluded from the ambit of the term
“basic salary” for purposes of computing 13th
month pay due to employees.
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
9
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Labor Law and Social Legislation
ALTERNATIVE ANSWER:
company be held liable for the salaries of the
supervisor? Decide (2008 BAR)
YES, the productivity allowance should be included
in the computation of the 13th month pay. The said
allowance is a fixed amount and made part of
Nico’s daily compensation, and as such this is
demandable and enforceable as a matter of right.
The “basic salary” of an employee for purposes of
computing the 13th month pay include all
remuneration or earnings paid by his employer for
services rendered but does not include allowances
and monetary benefits which are not considered or
integrated as part of the regular or basic salary.
(Protacio Laya Mananghaya & Co., G.R. No. 168654,
March 25, 2009)
A: NO, I will apply the “No work, No pay”
principle. The supervisors are not entitled to
their money claim for unpaid salaries, as they
should not be compensated for services skipped
during the strike of the rank-and-file union. The
age-old rule governing the relation between
labor and capital, or management and employee
of a “fair day’s wage for a fair day’s labor”
remains as the basic factor in determining
employees’ wages. (Aklan Electric Cooperative,
Inc. v. NLRC, G.R. No. 121439, Jan. 25, 2000)
Q: Benito is the owner of an eponymous
clothing brand that is a top seller. He employs
a number of male and female models who
wear Benito's clothes in promotional shoots
and videos. His deal with the models is that
Benito will pay them with 3 sets of free
clothes per week. Is this arrangement
allowed? (2015 BAR)
WAGES (2019, 2018, 2017, 2015, 2010, 2008,
1998, 1997, 1992 BAR)
Q: A worked as a roomboy in La Mallorca Hotel.
He sued for underpayment of wages before the
NLRC, alleging that he was paid below the
minimum wage. The employer denied any
underpayment, arguing that based on long
standing, 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 charged to the employees.
The employees’ corresponding share in the
costs was thus deducted from their wages. The
employer concluded that such valid deduction
naturally resulted in the payment of wages
below the prescribed minimum. If you were the
Labor Arbiter, how would you rule? Explain.
(2010 BAR)
A: NO. The arrangement is not allowed. The
models are Benito’s employees. As such, their
services are required to be paid only in legal
tender, even when expressly requested by the
employee (Art. 102, Labor Code). Hence, no lawful
deal in this regard can be entered into by and
between Benito and his models. The three (3)
sets of clothes, regardless of value, are in kind;
hence, the former’s compensation is not in the
form prescribed by law.
Wage versus Salary
A: I will rule in favor of A. Even if food and lodging
were provided and considered as facilities by the
employer, the employer could not deduct such
facilities from its workers’ wages without
compliance with law. (Mayon Hotel & Restaurant v.
Adana, 458 SCRA 609 [2005])
Q: Distinguish "salary" from "wages." (1994
BAR)
A: In the case of Gaa v. Court of Appeals (G.R. No.
L-44169, Dec. 3, 1985), the Supreme Court had the
opportunity to distinguish salary and wages.
According to the Supreme Court, the term wages
refer to the compensation given in consideration
of manual labor, skilled or unskilled. On the other
hand, salary denotes a compensation for a higher
degree of employment.
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.
b.
c.
Proof that such facilities are customarily
furnished by the trade;
The provision of deductible facilities is
voluntarily accepted in writing by the
employee; and
The facilities are charged at fair and
reasonable value.
Q: Tarcisio was employed as operations
manager and received a monthly salary of
P25,000.00 through his payroll account with
DB Bank. He obtained a loan from Roberto to
purchase a car. Tarcisio failed to pay Roberto
when the loan fell due. Roberto sued to collect
and moved to garnish Tarcisio’s payroll
account. The latter vigorously objected and
argued that salaries were exempt from
garnishment. Is Tarcisio correct? Explain your
answer. (2017 BAR)
Q: The rank-and-file union staged a strike in
the company premises which caused the
disruption of business operations. The
supervisors union of the same company filed
a money claim for unpaid salaries for the
duration of the strike, arguing that the
supervisors' failure to report for work was
not attributable to them. The company
contended that it was equally faultless, for the
strike was not the direct consequence of any
lockout or unfair labor practice. May the
A: NO, Tarcisio is not correct. Under Art. 1708 of
the Civil Code, only wages, which are the
compensation paid for manual skilled or
unskilled labor, are exempt from garnishment.
Here, the subject of garnishment is Tarcisio’s
salary as a managerial employee, which is not
10
QuAMTO (1987-2019)
considered as wages. Hence, Tarcisio’s salary
may be garnished.
A: NO, if the agreement is with regards to
reduction, Art. 100 provides for the prohibition
against elimination or diminution of benefits.
However, if the agreement seeks to increase the
minimum percentage, it is allowed because
there is nothing in the law which prohibits the
same. What is expressly prohibited under the
law is only reduction.
ALTERNATIVE ANSWER:
YES, Tarcisio is correct. Under Art. 1708 of the
Civil Code, “(t)he laborer’s wages shall not be
subject to execution or attachment, for debts
incurred for food, shelter, clothing and medical
attendance.” The indebtedness of Tarcisio was
due to a purchase of a car which is one of the
exceptions under the said law.
Q: D, one of the sales representatives of OP,
Inc., was receiving a basic pay of P50,000.00
a month, plus a 1 % overriding commission
on his actual sales transactions. In addition,
beginning three (3) months ago, or in August
2019, D was able to receive a monthly gas
and transportation allowance of P5,000.00
despite the lack of any company policy
therefor.
Payment of Wages (2004, 1998 BAR)
Q: TRX, a local shipping firm, maintains a fleet
of motorized boats plying the island
barangays of AP, a coastal town. At day’s end
the boat operators/crew members turn over
to the boat owner their cash collections from
cargo fees and passenger fares, less the
expenses for diesel fuel, food, landing fees
and spare parts. Fifty percent (50%) of the
monthly income or earnings derived from the
operations of the boats are given to the
boatmen by way of compensation. Deducted
from the individual shares of the boatmen are
their cash advance and peso value of their
absences, if any. Are these boatmen entitled
to overtime pay, holiday pay, and 13th month
pay? (2004 BAR)
In November 2019, D approached his
manager and asked for his gas and
transportation allowance for the month. The
manager declined his request, saying that the
company had decided to discontinue the
aforementioned allowance considering the
increased costs of its overhead expenses. In
response, D argued that OP, Inc.' s removal of
the gas and transportation allowance
amounted to a violation of the rule on nondiminution of benefits. Is the argument of D
tenable? Explain. (2019 BAR)
A: NO. The boatmen are considered as workers
who are paid by results. More specifically, they
are task workers who are paid not based on the
number of units produced, but based on the
completion of their task, with appropriate
deductions based on circumstances such as road
and traffic conditions (Adriano Quintos, et al. v.
D.D. Transportation Co., NLRC Case No. RB-IV20941, May 31, 1979). In the case at bar, the
boatmen’s pay differs depending on conditions
such as the increase or decrease of the price of
diesel, food expenses, landing fees and spare
parts.
A: NO, the argument of D is not tenable. The
principle of non-diminution of benefits, which
has been incorporated in Art. 100 of the Labor
Code, forbids an employer from unilaterally
reducing,
diminishing,
discontinuing
or
eliminating compensation or privilege which are
given as a company practice. In Netlink v. Delmo
(G.R. No. 160827, Jun. 18, 2014), the Supreme
Court said that the length of time has not been
laid out on what constitutes a company practice.
However, there are Supreme Court decisions
that say a period of two years, more or less, is
deemed a company practice (Sevilla Trading
Company v. Semana, G.R. No. 152456, Apr. 28,
2004). In the question, the monthly gas and
transportation allowance was given to D for
three months only. Such a short period appears
not to fall under the category of company
practice using the above decisions as a basis.
In connection thereto, their payment although
being direct remunerations or compensation for
their service cannot be considered as wages
because they do not partake the nature of wages
as defined by the laws on labor. Instead, their pay
is considered as commissions; and as held by the
Supreme Court in the case of King of Kings
Transport, Inc. et al. v. Mamac, (GR No. 166208,
June 29, 2007), workers who are paid by
commission are not entitled to the 13th month
pay.
Q: Far East Bank (FEB) is one of the leading
banks in the country. Its compensation and
bonus packages are top of the industry. For
the last 6 years, FEB had been providing the
following bonuses across-the-board to all its
employees:
Non-Diminution of Benefits (2019, 2015,
2006, 2005, 2003, 2002, 1995 BAR)
a.
b.
c.
d.
e.
Q: Can an employer and an employee enter
into an agreement reducing or increasing the
minimum percentage provided for night
differential pay, overtime pay, and premium
pay? (2006 BAR)
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
11
13th month pay;
14th to 18th month pay;
Christmas basket worth P6,000;
Gift check worth P4,000; and
Productivity-based incentive ranging
from a 20%-40% increase in gross
monthly salary for all employees who
would receive an evaluation of
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BAR OPERATIONS
Labor Law and Social Legislation
"Excellent" for 3 straight quarters in the
same year.
Because of its poor performance over-all, FEB
decided to cut back on the bonuses this year
and limited itself to the following:
a.
b.
c.
d.
13th month pay;
14th month pay;
Christmas basket worth P4,000; and
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 bonus. After learning
that FEB had modified the bonus scheme, she
objected. Is Katrina's objection justified?
Explain. (2015 BAR)
a.
An existing hierarchy of positions with
corresponding salary rates;
b.
A significant change or increase in salary rate
of a lower pay class without a corresponding
increase in the salary of a higher one;
c.
The elimination of the distinction between
two groups or classes; and
d.
The distortion exists in the same region of
the country. (Prubankers Association v.
Prudential Bank and Trust Co., 302 SCRA 74
[1999])
Q: How should a wage distortion be settled?
(2006, 1997, 2009 BAR)
A: Any dispute arising from wage distortion shall
be resolved through the grievance procedure as
provided in the applicable collective bargaining
agreement and, if the dispute remains
unresolved, then through voluntary arbitration.
A: Katrina’s objection is justified. Having
enjoyed the across-the-board bonuses, Katrina
has earned a vested right. Hence, none of them
can be withheld or reduced. In the problem, the
company has not proven its alleged losses to be
substantial. Permitting reduction of pay at the
slightest indication of losses is contrary to the
policy of the State to afford full protection to
labor and promote full employment. (Linton
Commercial Co. v. Hellera, G.R. No. 163147, Oct.
10, 2007)
In cases where there are no collective bargaining
agreements or recognized labor unions, the
employers and workers shall endeavor to correct
such wage distortions. Any dispute arising
therefrom shall be settled through the National
Conciliation and Mediation Board and, if it
remains unresolved after ten (10) calendar days
of conciliation, the issue of wage distortion shall
be referred to the appropriate branch of the
National Labor Relations Commission (NLRC).
As to the withheld productivity-based bonuses,
Katrina is deemed to have earned them because
of her excellent performance ratings for three
quarters. On this basis, they cannot be withheld
without violating the Principle of NonDiminution of Benefits.
Q: Can the issue of wage distortion be raised in a
notice of strike? Explain. (2006, 1997, 2009
BAR)
A: In Ilaw ng Manggagawa v. NLRC, 198 SCRA 586
(1991), the Supreme Court held that any issue
involving wage distortion shall not be a ground
for a strike or lockout. The legislative intent is to
solve wage distortion problems through
voluntary negotiation or arbitration.
Moreover, it is evident from the facts of the case
that what was withdrawn by FEB was a
productivity bonus. Protected by R.A. 6791
which mandates that the monetary value of the
productivity improvement be shared with the
employees, the “productivity-based incentive”
scheme of FEB cannot just be withdrawn
without the consent of its affected employees.
Q: How should a wage distortion be resolved
(1) In case there is a collective bargaining
agreement and (2) in case there is none?
Explain briefly. (2002 BAR)
Wage Order, Wage Distortion (2019, 2017,
2009, 2008, 2006, 2002, 1997 BAR)
A: According to Art. 124 of the Labor Code, in
case there is a collective bargaining agreement, a
dispute arising from wage distortions shall be
resolved through the grievance machinery
provided in the CBA, and if remains unresolved,
through voluntary arbitration. In case there is no
collective bargaining agreement the employers
and workers shall endeavor to correct such
distortions. Any dispute arising therefrom shall
be settled through the National Conciliation and
Mediation Board and if it remains unresolved
after ten (10) calendar days of conciliations, then
the dispute is referred to the appropriate branch
of the National Labor Relations Commission.
Q: When is there a wage distortion? (2019,
2009, 2006, 1997 BAR)
A: There is wage distortion where an increase in
prescribed wage rates results in the elimination
or severe contraction of intentional quantitative
differences in wage or salary rates between and
among employee groups in an establishment as
to effectively obliterate the distinctions
embodied in such wage structure based on
skills, length of service, or other logical bases of
differentiation.
Wage distortion arises when (4) essential
elements are present:
Q: The Regional Tripartite Wages and
12
QuAMTO (1987-2019)
Productivity Board (RTWPB) for Region 3
issued a wage order on November 2, 2017
fixing the minimum wages for all industries
throughout Region 3.
a.
Q: Dennis was a taxi driver who was being
paid on the “boundary” system basis. He
worked tirelessly for Cabrera Transport Inc.
for fourteen (14) years until he was eligible for
retirement. He was entitled to retirement
benefits. During the entire duration of his
service, Dennis was not given his 13th month
pay or his service incentive leave pay.
Is the wage order subject to the approval
of the National Wages and Productivity
Commission before it takes effect?
a.
A: NO, the wage order is not subject to the
approval of the National Wages and Productivity
Commission (NWPC) before it takes effect. Under
the Labor Code, the NWPC only exercises
technical and administrative supervision over the
RTWPB.
A: NO. A taxi driver paid under the “boundary
system” is not entitled to a 13th month pay and a
SIL pay. Hence, his retirement pay should be
computed solely on the basis of his salary.
ALTERNATIVE ANSWER:
Specifically, Sec. 3(e) of the Rules and
Regulations Implementing P.D. 851 excludes
from the obligation of 13th Month Pay
“Employers of those who are paid on x x x
boundary” basis. On the other hand, Sec. 1 (d),
Rule V, Book III of the Omnibus Rules provides
that those “employees whose performance is
unsupervised by the employer” are not entitled
to Service Incentive Leave. A taxi driver paid
under
the
Boundary
System
is
an
“unsupervised” employee.
NO, the Wage Order becomes effective fifteen
(15) days after its publication in at least one (1)
newspaper of general circulation in the region
pursuant to the Rules of Procedure in Minimum
Wage Fixing.
ANOTHER ALTERNATIVE ANSWER:
YES. In NWPC v. Alliance of Progressive Labor
(G.R. No. 150326, March 12, 2014), it was ruled
that “(t)he very fact that the validity of the
assailed sections of Wage Order No. NCR-07 had
been already passed upon and upheld by the
NWPC meant that the NWPC had already given
the wage order its necessary legal imprimatur.
Accordingly, the requisite approval or review
was complied with.
b. Since he was not given his 13th month pay
and service incentive leave pay, should
Dennis be paid upon retirement, in
addition to the salary equivalent to fifteen
(15) days for every year of service, the
additional 2.5 days representing onetwelfth (1/12) of the 13th month pay as
well as the five (5) days representing the
service incentive leave for a total of 22.5
days? Explain. (2012 BAR )
b. The law mandates that no petition for
wage increase shall be entertained within
a period of 12 months from the effectivity
of the wage order. Under what
circumstances may the Kilusang Walang
Takot, a federation of labor organizations
that publicly and openly assails the wage
order as blatantly unjust, initiate the
review of the wage increases under the
wage order without waiting for the end of
the 12-month period? Explain your
answer. (2017 BAR)
A: NO. Since he is not entitled to 13th month pay
and Service Incentive Leave, his retirement pay
should be computed solely on the basis of his
salary. (R&E Transport v. Latag, G.R. No. 155214,
Feb. 13, 2004)
Q: A driver for a bus company, sued his
employer for non-payment of commutable
service incentive leave credits upon his
resignation after five years of employment.
The bus company argued that A was not
entitled to service incentive leave since he
was considered a field personnel and was
paid on commission basis and that, in any
event, his claim had prescribed. If you were
the Labor Arbiter, how would you rule?
Explain. (2010 BAR)
A: Kilusang Walang Takot may initiate the review
of wage order without waiting for the end of the
12-month period when there are supervening
conditions that demand a review of the minimum
wage rates.
These supervening conditions include:
1.
2.
Extraordinary increase in prices of
petroleum products; and
Extraordinary increase in the cost of basic
goods and services.
A: I will grant the prayer of A. Payment on
commission basis alone does not prove that A is
a field personnel. There must be proof that A is
left to perform his work unsupervised by his
employer. Otherwise, he is not a field personnel,
thus entitled to commutable service incentive
leave (SIL) credits. (Auto Bus v. Bautista, 458
SCRA 578 [2005])
LEAVES
Service Incentive Law (2012, 2010, 1987
BAR)
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Is Dennis entitled to 13th month pay and
service
leave
incentive
pay?
Explain.
13
UST
BAR OPERATIONS
Labor Law and Social Legislation
His action has not yet prescribed. In Auto Bus v.
Bautista (supra.), the Supreme 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. Therefore, when A
resigned after five years, his right of action to
claim ALL of his SIL benefits accrued at the time
when the employer refused to pay him his
rightful SIL benefits. (Art. 291 [now 306], Labor
Code)
termination of pregnancy.
Such maternity leave benefits may be availed of
by qualified female workers regardless of the
civil status, employment status, legitimacy of the
child, and frequency of the pregnancy.
Furthermore, such qualified female workers shall
be entitled to full pay during the maternity leave
which consists of their basic salary and
allowances as may be provided under existing
guidelines. (Sec. 3, R.A. 11210)
Q: A, single, has been an active member of the
Social Security System for the past 20 months.
She became pregnant out of wedlock and on
her 7th month of pregnancy, she 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 many days can she go on
maternity leave? If not, why is she not
entitled? (2010 BAR)
Q: Mrs. B, the personal cook in the household
of X, filed a monetary claim against her
employer, X, for denying her service
incentive leave pay. X argued that Mrs. B did
not avail of any service incentive leave at the
end of her one (1) year of service and hence,
not entitled to the said monetary claim.
a.
Is the contention of X tenable? Explain.
A: No, the contention of X is not tenable. Mrs. B
being a kasambahay is entitled to service
incentive leave under R.A. 10361 as clarified by
Labor Advisory No. 010-18. As such, she has the
prerogative to use it, monetize it after 12
months of service, or commute it until
separation from service. If she elects the second,
she has three (3) years to demand for payment
to avail of the benefit. Hence, not being a
prescribed claim, it’s withholding is unlawful.
(Lourdes Rodriguez v. Park N Ride, G.R. No.
222980, March 20, 2017, as penned by J. Leonen)
A: YES. The SSS Law does not discriminate based
on the civil status of a female member- employee.
As long as said female employee has paid at least
three (3) monthly contributions in the twelvemonth period immediately preceding the
semester of her childbirth, she can avail of the
maternity benefits under the law.
Since A gave birth through C-section, she is
entitled to one hundred percent (100%) of her
average salary credit for seventy-eight (78) days,
provided she notifies her employer of her
pregnancy and the probable date of her
childbirth, among others. (Sec. 14-A, R.A. 8282, as
amended)
b. Assuming that Mrs. B is instead a clerk in
X's company with at least 30 regular
employees, will her monetary claim
prosper? Explain. (2019 BAR)
The same maternity benefits are ensured by Sec.
22 (b) (2) of the Magna Carta of Women. (R.A.
9710)
A: Yes, the money claim will prosper. A clerk is
not one of those exempt employees in Art. 82 of
the Labor Code which refers to government
employees,
managerial
employees,
field
personnel members of the family who are
dependent on him for support, domestic helpers,
persons in the personal service of another and
persons who are paid by results.
Maternity Leave (2010, 2007, 2005 BAR)
NOTE: Under the Expanded Maternity Leave
Law, A shall be entitled to a minimum of 105 days
maternity leave with full pay. As long as a female
SSS member has paid at least three (3) monthly
contributions in the twelve-month period
immediately preceding the semester of her
childbirth,
miscarriage,
or
emergency
termination of pregnancy, she can avail of the
maternity benefits under the law, regardless of
whether she gave birth via caesarian section or
natural delivery, subject to the conditions set
forth under Sec. 5 of R.A. 11210.
NOTE: Under R.A. 11210, otherwise known as
the “Expanded Maternity Leave Law” which took
effect on March 11, 2019, qualified female
workers in the public sector, private sector, and
informal economy shall be entitled to maternity
leave with full pay for:
a.
105 days for live childbirth, regardless of the
mode of delivery, with an option to extend
for an additional 30 days without pay; and
an additional 15 days paid leave if the
female worker qualifies as a solo parent
under R.A. 8972, otherwise known as the
“Solo Parents’ Welfare Act of 2000”; OR
b.
60 days for miscarriage and emergency
Further, A may also avail of an additional
maternity leave of thirty (30) days without pay,
provided that she gives due notice to her
employer in writing at least forty-five (45) days
before the end of her maternity leave. However,
no prior notice shall be necessary in the event of
a medical emergency but subsequent notice shall
be given to her employer (Sec. 3, IRR of R.A.
11210). Lastly, if A qualifies as a solo parent
under R.A. 8972, she shall also be granted an
additional fifteen (15) days maternity leave with
14
QuAMTO (1987-2019)
full pay. (Sec. 3, R.A. 11210)
A: The contention of Weto is correct. The law
provides that every married male is entitled to a
paternity leave of seven (7) days for the first
four (4) deliveries of the legitimate spouse with
whom he is cohabiting. (Sec. 2, R.A. 8187)
Q: AB, single and living-in with CD (a married
man), is pregnant with her fifth child. She
applied for maternity leave but her employer
refused the application because she is not
married. Who is right? Decide (2007 BAR)
Jovy is Weto's legitimate spouse with whom he
is cohabiting. The fact that Jovy is his second
wife and that Weto had 4 children with his first
wife is beside the point. The important fact is
that this is the first child of Jovy with Weto. The
law did not distinguish and we should therefore
not distinguish.
A: AB is right. The Social Security Law, which
administers the Maternity Benefit Program does
not require that the relationship between the
father and the mother of the child be legitimate.
The law is compensating the female worker
because of her maternal function and resultant
loss of compensation. The law is morality free.
The paternity leave was intended to enable the
husband to effectively lend support to his wife in
her period of recovery and/or in the nursing of
the newly born child (Sec. 3, R.A. 8187). To deny
Weto this benefit would be to defeat the
rationale for the law.
NOTE: AB is right. Under the Expanded Maternity
Leave Law, all female members of the Social
Security System, regardless of their civil status,
shall be granted maternity leave. (R.A. 11210, Sec.
7)
Q: How many times may a male employee go
on Paternity Leave? Can he avail of this
benefit, for example, 50 days after the first
delivery by his wife? (2002 BAR)
In older laws, maternity leave may be availed for
up to four (4) pregnancies only. Now, being
pregnant for a fifth child should not affect AB’s
application because the Expanded Maternity
Leave Act allows maternity leave to female
workers in every instance of pregnancy. (R.A.
11210, Sec. 3)
A: A male employee may go on Paternity Leave
for the first four deliveries of the legitimate
spouse (Sec. 2, R.A. 8187). The male employee
can avail this benefit 50 days after the delivery
of his wife because the Rules Implementing the
Paternity Leave Act says that the availment
should not be later than 60 days after the date of
delivery.
Q: Mans Weto had been an employee of Nopolt
Assurance Company for the last ten (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.
Special Leaves for Women Workers (Magna
Carta for Women) (2013 BAR)
In October this year, Weto's new wife is
expected to give birth to her first child. He has
accordingly filed his application for paternity
leave, conformably with the provisions of the
Paternity Leave Law which took effect in
1996. The HRD manager of the assurance firm
denied his application, on the ground that
Weto had already used up his entitlement
under that law. Weto argued that he has a
new wife who will be giving birth for the first
time, therefore, his entitlement to paternity
leave benefits would begin to run anew.
Q: Because of the stress in caring for her four
(4) growing children, Tammy suffered
miscarriage late in her pregnancy and had to
undergo an operation. In the course of the
operation,
her
obstetrician
further
discovered a suspicious-looking mass that
required the subsequent removal of her
uterus (hysterectomy).
After surgery, her physician advised Tammy
to be on full bed rest for six (6) weeks.
Meanwhile, the biopsy of the sample tissue
taken from the mass in Tammy's uterus
showed a beginning malignancy that
required
an
immediate
series
of
chemotherapy once a week for four (4) weeks.
What benefits can Tammy claim under
existing social legislation? (2013 BAR)
a. Is Jovy entitled to maternity leave benefits?
(2005 BAR)
A: YES, if Jovy, as a female employee, has paid at
least three (3) monthly contributions in the
twelve-month period immediately preceding the
semester of her childbirth (Sec. 14-A, R.A. 8282, as
amended); otherwise, she is not entitled to the
benefit.
A: Assuming she is employed, Tammy is entitled
to a special leave benefit of two months with full
pay (Gynecological Leave) pursuant to R.A. 9710
or the Magna Carta of Women. She can also
claim Sickness Leave Benefit in accordance with
the SSS Law.
NOTE: Under the Expanded Maternity Leave Law
(R.A. 11210), the relevant provision is Sec. 5
thereof.
Paternity Leave (2005, 2002 BAR)
SPECIAL GROUPS OF EMPLOYEES
b. Whose contention is correct, Weto or the
HRD manager? (2005 BAR)
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
APPRENTICES AND LEARNERS
15
UST
BAR OPERATIONS
Labor Law and Social Legislation
(2017, 2016, 2012, 2011 BAR)
Code provides that the Secretary of Labor and
Employment shall establish standards that will
ensure the safety and health of women
employees, including the authority to determine
appropriate minimum age and other standards
for retirement or termination in special
occupations such as those of flight attendants
and the like.
Q: Distinguish a learner from an apprentice.
(2017 BAR)
A: The distinctions between a learner and an
apprentice are as follows:
a.
As to nature: a learner trains in a semiskilled job; whereas an apprentice trains in
a highly technical job.
b.
As to period: a learner works for 3 months;
whereas an apprentice works for not less
than three (3) months but not more than six
(6) months, as a rule.
c.
As to commitment to employ: for a learner,
there is a commitment to employ the
learner as a regular employee if he so
desires, upon the completion of the
learnership; whereas, for an apprentice,
there is no such commitment.
d.
As to necessity of TESDA approval: for a
learner, TESDA approval is not necessary,
only TESDA inspection is required; whereas,
for an apprentice, prior approval by TESDA
is required.
e.
f.
CAVEAT:
It could be argued that Art. 132 (d) [now
130(d)] may be unconstitutional because this
may constitute discrimination in violation of the
spirit of Sec. 14 of Art. XIV of the Constitution
which provides that the State shall protect
working women by providing safe and healthful
working conditions, taking into account their
maternal functions, and such facilities and
opportunities that will enhance their welfare
and enable them to realize their full potential in
the service of the nation.
Q: An exclusive school for girls, run by a
religious order, has a policy of not employing
unwed mothers, women with live-in
partners, and lesbians.
a.
As to deductibility of expenses: for a learner,
there is no provision for deductibility of
expenses; whereas, for an apprentice,
expenses of training are deductible from
income tax.
Is the policy violative of any provision of
the Labor Code on employment of
women?
A: NO, the policy does not violate the Labor Code.
The practice is a valid exercise of management
function. Considering the nature and reason for
existence of the school, it may adopt such policy
as will advance its laudable objectives. In fact, the
policy accords with the constitutional precept of
inculcating ethical and moral values in schools.
The school policy does not discriminate against
women solely on account of sex (Art. 135 [now
133], Labor Code) nor are the acts prohibited
under Art. 137 [now 135] of the Labor Code.
As to compensation: a learner has
compensation; whereas, an apprentice may
be uncompensated, if DOLE authorizes such
as when apprenticeship is part of OJT
required by schools.
WOMEN
Discrimination (2000, 1998 BAR)
b. The same school dismissed two female
faculty members on account of pregnancy
out of wedlock. Did the school violate any
provision of the Labor Code on
employment of women? (2000 BAR)
Q: An airline which flies both the
international and domestic routes requested
the Secretary of Labor and Employment to
approve the policy that all female flight
attendants upon reaching age forty (40) with
at least fifteen (15) years of service shall be
compulsorily retired; however, flight
attendants who have reached age forty (40)
but have not worked for fifteen (15) years
will be allowed to continue working in order
to qualify for retirement benefits, but in no
case will the extension exceed four (4) years.
A: NO, because to tolerate pregnancy out of
wedlock will be a blatant contradiction of the
school’s laudable mission which, as already
stated, accords with high constitutional precepts.
This answer does not contradict the ruling in
Chua-Qua where the teacher merely fell in love
with a bachelor student and the teacher, also
single, did not get pregnant out of wedlock.
Does the Secretary of Labor and Employment
have the authority to approve the policy?
(1998 BAR)
Stipulation against Marriage (2017, 2012,
1998, 1995, 1991 BAR)
Q: Fil-Aire Aviation Company (FIL-AIRE) is a new
airline company recruiting flight attendants
for its domestic flights. It requires that the
applicant be single, not more than 24 years old
attractive, and familiar with three (3) major
A: YES, the Secretary of Labor and Employment
has the authority to approve a policy dealing
with the retirement of flight attendants of
airlines. Art. 132 (d) [now 130(d)] of the Labor
16
QuAMTO (1987-2019)
Visayan dialects, viz: Ilongo, Cebuano and
Waray. Lourdes, 23 years old, was accepted as
she possessed all the qualifications.
A: As counsel for Josephine, I will file a
complaint for work-related sexual harassment
which, as in the case at bar, occurs when a
person who has authority, influence or moral
ascendancy over another demands, requests or
otherwise requires any sexual favor from the
latter as a condition for, inter alia, the continued
employment of said individual. (Sec. 3, R.A.
7877)
After passing the probationary period.
Lourdes disclosed that she got married when
she was 18 years old but the marriage was
already in the process of being annulled on
the ground that her husband was afflicted
with a sexually transmissible disease at the
time of the celebration of their marriage. As a
result of this revelation, Lourdes was not
hired as a regular flight attendant.
Consequently, she filed a complaint against
FIL-AIRE alleging that the pre-employment
qualifications violate relevant provisions of
the Labor Code and are against public policy.
Is the contention of Lourdes tenable? Discuss
fully. (2012, 1995 BAR)
I will likewise file a complaint for illegal
dismissal citing Art. 136 [now 134] of the Labor
Code which provides that it is unlawful for an
employer to require as a condition of continued
employment or continuation of employment
that a woman employee shall not get married, or
to stipulate expressly or tacitly that upon getting
married a woman employee shall be deemed
resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a
woman employee merely by reason of her
marriage.
A: The contention of Lourdes is tenable. When
she was not hired as a regular flight attendant by
FIL-AIRE because she disclosed that she got
married when she was 18 years old, the airline
company violated the provision of the Labor
Code which states:
Q: Pedrito Masculado, a college graduate
from the province, tried his luck in the city
and landed a job as a utility/maintenance
man at the warehouse of a big shopping mall.
After working as a casual employee for six
months, he signed a contract for
probationary employment for six months.
“It shall be unlawful for an employer to require as
a condition of employment or continuation of
employment that a woman employee shall not
get married, or to stipulate expressly or tacitly
that upon getting married a woman employee
shall be deemed resigned or separated, or to
actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely
by reason of her marriage."
Because Pedrito was well-built and
physically attractive, Pedrito’s supervisor,
Mr. Hercules Barak, took special interest to
befriend him. When his probationary period
was about to expire, he was surprised when
one afternoon after working hours, Mr.
Barak followed him to the men's comfort
room. After seeing that no one else was
around, Mr. Barak placed his arm over
Pedrito's shoulder' and softly said: "You have
great potential to become regular employee
and I think I can give you a favorable
recommendation. Can you come over to my
condo unit on Saturday evening so we can
have a little drink? I'm alone, and I'm sure
you want to stay longer with the company."
ALTERNATIVE ANSWER:
A:
YES.
[FIL-AIRE]’s
pre-employment
requirement cannot be justified as a “bona fide
occupational
qualification,”
where
the
particular requirements of the job would justify
it. The said requirement is not valid because it
does not reflect an inherent quality that is
reasonably necessary for a satisfactory job
performance. (PT&T v. NLRC, G.R. No. 118978,
May 23, 1997, citing 45A Am. Jur. 2d, Job
Discrimination, Sec. 506, p. 486)
Is Mr. Barak liable for sexual harassment
committed in a work-related or employment
environment? (2004 BAR)
Sexual Harassment (2018, 2009, 2006, 2005,
2004, 2003, 2000 BAR)
A: YES, the elements of sexual harassment are
all present:
Q: As a condition for her employment,
Josephine signed an agreement with her
employer that she will not get married,
otherwise, she will be considered resigned or
separated from the service.
Josephine got married. She asked Owen, the
personnel manager, if the company can
reconsider the agreement. He told Josephine
he can do something about it, insinuating
some sexual favors. She complained to
higher authorities but to no avail. She hires
you as her counsel. What action or actions
will you take? Explain. (2006 BAR)
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
17
a.
The act of Mr. Barak was committed in a
workplace.
b.
Mr. Barak, as supervisor of Pedrito
Masculado, has authority, influence and
moral ascendancy over Masculado.
c.
Given the specific circumstances mentioned
in the question like Mr. Barak following
Masculado to the comfort room, etc. Mr.
Barak was requesting a sexual favor from
Masculado for a favorable recommendation
UST
BAR OPERATIONS
Labor Law and Social Legislation
regarding the latter's employment.
d.
Maganda. After the seminar, Renan requested
Maganda to stay, purportedly to discuss some
work assignment. Left alone in the training
room, Renan asked Maganda to go out with
him for dinner and ballroom dancing.
Thereafter, he persuaded her to accompany
him to the mountain highway in Antipolo for
sight-seeing.
It is not impossible for a male, who is a
homosexual, to ask for a sexual favor from
another male.
Q: Can an individual, the sole proprietor of a
business enterprise, be said to have violated
the Anti-Sexual Harassment Act of 1995 if he
clearly discriminates against women in the
adoption of policy standards for employment
and promotions in the enterprise? Explain.
(2003 BAR)
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 and lucrative posts, because of his
favorable endorsement. Did Renan commit
acts of sexual harassment in a work-related or
employment environment? Reasons. (2009
BAR)
A: When an employer discriminates against
women in the adoption of policy standards for
employment and promotion in his enterprise, he
is not guilty of sexual harassment. Instead, the
employer is guilty of discrimination against
women employees which is declared to be
unlawful by the Labor Code.
A: YES. Atty. Renan is guilty of sexual
harassment. This conclusion is predicated upon
the following consideration:
For an employer to commit sexual harassment,
he - as a person of authority, influence or moral
ascendancy - should have demanded, requested
or otherwise required a sexual favor from his
employee whether the demand, request or
requirement for submission is accepted by the
object of said act. In the question, no such act was
committed by the sole proprietor.
Q: Nena worked as an Executive Assistant for
Nesting, CEO of Nordic Corporation. One day,
Nesting called Nena into his office and showed
her lewd pictures of women in seductive
poses which Nena found offensive. Nena
complained before the General Manager who,
in turn, investigated the matter and
recommended the dismissal of Nesting to the
Board of Directors. Before the Board of
Directors, Nesting argued, that since the AntiSexual Harassment Law requires the
existence of "sexual favors," he should not be
dismissed from the service since he did not
ask for any sexual favor from Nena. Is Nesting
correct? (2018 BAR)
A: No, Nesting’s argument on lack of sexual favor
is incorrect. While his actions require further
proof of being a “sexual favor” in terms of
criminal liability under R.A. 7877, he may still be
held liable under the just causes of termination in
Art. 297 of the Labor Code.
a.
Atty. Renan has authority, influence or moral
ascendancy over Miss Maganda;
b.
While the law calls for a demand, request or
requirement of a sexual favor, it is not
necessary that the demand, request or
requirement of a sexual favor be 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 [2008]);
c.
The acts of Atty. Renan towards Miss
Maganda resound with deafening clarity the
unspoken request for a sexual favor,
regardless of whether it is accepted or not by
Miss Maganda;
d.
In sexual harassment, it is not essential that
the demand, request or requirement be made
as a condition for continued employment or
promotion to a higher position. It is enough
that Atty. Renan’s act result in creating an
intimidating,
hostile
or
offensive
environment for Miss Maganda.
MINORS
(2007, 2006, 2004, 2002 BAR)
Q: Determine whether the following minors
should be prohibited from being hired and
from performing their respective duties
indicated hereunder: (2006 BAR)
In Villarama v. NLRC and Golden Donuts (G.R. No.
106341, Sept. 2, 1994), the Supreme Court held
that a managerial employee is bound by more
exacting work ethics, with a high standard of
responsibility. Sexual harassment of a
subordinate amounts to “moral perversity” which
provides a justifiable ground for dismissal due to
lack of trust and confidence.
a.
A 17-year-old boy working as a miner at
the Walwaldi Mining Corporation.
A: YES, he should be prohibited from being hired
and from performing the duties of a miner
because such constitutes hazardous work under
D.O. No. 04 Series of 1999. Art. 139 (c) [now
137(c)] of the Labor Code expressly prohibits the
employment of persons below 18 years of age in
an undertaking which is hazardous or deleterious
in nature as determined by the Secretary of
Q: Atty. Renan, a CPA-lawyer and Managing
Partner of an accounting firm, conducted the
orientation seminar for newly hired
employees of the firm, among them, Miss
18
QuAMTO (1987-2019)
Labor.
undertaking which is hazardous or deleterious in
nature as identified in the guidelines issued by
the DOLE Secretary. Working as a dealer in a
casino is classified as hazardous under D.O. No.
04 Series of 1999 as it exposes children to
physical, psychological, or sexual abuses.
b. An 11-year-old boy who is an
accomplished singer and performer in
different parts of the country.
A: NO, he should not be prohibited from being
hired and from performing as a singer. Under Art.
VIII, Sec. 12, par. 2 of R.A. 7610 as amended by
R.A. 7658, this constitutes an exception to the
general prohibition against the employment of
children below 15 years of age, provided that the
following requirements are strictly complied
with:
Q: You were asked by 3 paint manufacturing
company regarding the possible employment
as a mixer of a person, aged seventeen (17),
who shall be directly under the care of the
section supervisor. What advice would you
give? Explain briefly. (2002 BAR)
A: I will advise the paint manufacturing company
that it cannot hire a person who is aged
seventeen (17). Art. 139 (c) [now Art. 137(c)] of
the Labor Code provides that a person below
eighteen (18) years of age shall not be allowed to
work in an undertaking which is hazardous or
deleterious in nature as determined by the
Secretary
of
Labor.
Paint
manufacturing has been classified by the
Secretary of Labor as a hazardous work.
(a) The employer shall ensure the protection,
health, safety and morals of the child;
(b) The employer shall institute measures to
prevent the child’s exploitation or
discrimination taking into account the
system and level of remuneration, and the
duration and arrangement of working time;
and
(c)
The employer shall formulate and
implement, subject to the approval and
supervision of competent authorities, a
continuing program for training and skill
acquisition of the child.
KASAMBAHAY
(2018, 2015, 2014, 2012, 2009,
2007, 2000, 1998 BAR)
Q: Soledad, a widowed school teacher, takes
under her wing one of her students, Kiko, 13
years old, who was abandoned by his parents
and has to do odd jobs in order to study. She
allows Kiko to live in her house, provides
him with clean clothes, food, and a daily
allowance of 200 pesos. In exchange, Kiko
does routine housework, consisting of
cleaning the house and doing errands for
Soledad.
Moreover, the child must be directly under the
sole responsibility of his parents or guardian and
his employment should not in any way interfere
with his schooling.
c.
A 15-year-old girl working as a library
assistant in a girls’ high school.
A: NO, she should not be prohibited from
working as a library assistant because the
prohibition in the Labor Code against
employment of persons below 18 years of age
merely pertains to employment in an
undertaking which is hazardous or deleterious in
nature as identified in the guidelines issued by
the DOLE Secretary. Working as a library
assistant is not one of undertakings identified to
be hazardous under D.O. No. 04 Series of 1999.
One day, a representative of the DOLE and
the DSWD came to Soledad's house and
charged her with violating the law that
prohibits work by minors. Soledad objects
and offers as a defense that she was not
requiring Kiko to work as the chores were
not hazardous. Further, she did not give him
chores regularly but only intermittently as
the need may arise. Is Soledad's defense
meritorious? (2015 BAR)
d. A 16-year-old girl working as model
promoting alcoholic beverages.
A: Soledad’s defense is meritorious. Sec. 4(d) of
the Kasambahay Law (R.A. 10361) provides that
the term “Domestic Worker” shall not include
children who are under foster family
arrangement, and are provided access to
education and given an allowance incidental to
education, i.e., “baon”, transportation, school
projects and school activities.
A: YES, she should be prohibited from working as
a model promoting alcoholic beverages. R.A.
7610 categorically prohibits the employment of
child
models
in
all
commercials
or
advertisements promoting alcoholic beverages
and intoxicating drinks, among other things.
e.
A 17-year-old boy working as dealer in a
casino.
Q: Linda was employed by Sectarian
University (SU) to cook for the members of a
religious order who teach and live inside the
campus. While performing her assigned task,
Linda accidentally burned herself. Because of
the extent of her injuries, she went on medical
leave. Meanwhile, SU engaged a replacement
A: YES, he should be prohibited from working as
a dealer in a casino, because Art. 139 [now Art.
137] of the Labor Code prohibits the employment
of persons below 18 years of age in an
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cook. Linda filed a complaint for illegal
dismissal, but her employer SU contended
that Linda was not a regular employee but a
domestic househelp. Decide. (2014 BAR)
Q. Distinguish briefly, but clearly, a
“househelper” from a “homeworker.” (2017,
2009 BAR)
A: As to persons included, househelpers include
those who minister exclusively to the personal
comfort and enjoyment of the employer’s family;
whereas homeworkers include those who work
in a system of production under an employer or
contractor whose job is carried out at his or her
home.
A: The employer's argument that Linda was not
a regular employee has no merit. The definition
of
domestic
servant
or
househelper
contemplates one who is employed in the
employer’s home to minister exclusively to the
personal comfort and enjoyment of the
employer’s family. The Supreme Court already
held that the mere fact that the househelper is
working in relation to or in connection with its
business warrants the conclusion that such
househelper or domestic servant is and should
be considered as a regular employee (Apex
Mining Co., Inc. v. NLRC, G.R. No. 94951, April 22,
1991).
As to applicable law, househelpers are covered
by the Kasambahay Law; whereas homeworkers
are covered by Book III of the Labor Code.
As to place of work, househelpers work in their
employers’ homes; whereas homeworkers work
in their own homes.
Here, Linda was hired not to minister to the
personal comfort and enjoyment of her
employer's family but to attend to other
employees who teach and live inside the
campus.
As to existence of definite employers,
househelpers work for a definite employer;
whereas homeworkers have none.
As to security of tenure, househelpers have
security of tenure; whereas homeworkers have
none.
Q: The weekly work schedule of a driver is as
follows:
Q: Nova Banking Corporation has a resthouse
and recreational facility in the highlands of
Tagaytay City for the use of its top executives
and corporate clients. The resthouse staff
includes a caretaker, two cooks and
laundrywoman. All of them are reported to
the Social Security System as domestic or
household employees of the resthouse and
recreational facility and not of the bank.
Monday, Wednesday, Friday – 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.
Is the driver a househelper? (2012, 1998
BAR)
a.
A: The driver is a househelper. A person is a
househelper or is engaged in domestic or
household service if he/she renders services in
the employer's home which are usually
necessary or desirable for the maintenance and
enjoyment thereof and includes ministering to
the personal comfort and convenience of the
members of the employer's household including
the services of family drivers.
Can the bank legally consider the
caretaker, cooks and laundrywoman as
domestic employees of the rest house
and not of the bank?
A: 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 executives and clients of the
bank. (Art. 141 [now 139], Labor Code; Apex
Mining Co., Inc. v. NLRC, 196 SCRA 251
[1991];Traders Royal Bank v. NLRC, G.R. No.
127864, Dec. 22, 1991)
A family driver who drives the family van to
fetch merchandise from suppliers and delivers
the same to a boutique in a mall owned by the
family for whom he works should be paid the
minimum daily wage of a driver in a commercial
establishment.
b. Mrs. Josie Juan is the confidential
secretary of the Chairman of the Board of
the bank. She is presently on maternity
leave. In an arrangement where the
Chairman of the Board can still have
access to her services, the bank allows her
to work in her residence during her leave.
For this purpose, the bank installed a fax
machine in her residence, and gave her a
cellphone and a beeper. Is Mrs. Juan a
homeworker under the law? Explain.
(2000 BAR)
The Labor Code (in Art. 143) provides that no
househelper shall be assigned to work in a
commercial, industrial or agricultural enterprise
at a wage or salary rate lower than that provided
by law for agricultural or non-agricultural
workers.
HOMEWORKERS
(2017, 2009, 2000, 1998 BAR)
A: NO, she is actually an office worker. She is not
an industrial homeworker who accepts work to
20
QuAMTO (1987-2019)
be fabricated or processed at home for a
contractor, which work, when finished, will be
returned to or repurchased by said contractor.
(Art. 155 [now 153], Labor Code)
driving the jeepney operator’s vehicle. The
jeepney driver operating under the boundary
system is an employee of the jeepney operator.
Q: Don Luis, a widower, lived alone in a house
with a large garden. One day, he noticed that
the plants in his garden needed trimming. He
remembered that Lando, a 17-year-old out-ofschool youth, had contacted him in church the
other day looking for work. He contacted
Lando who immediately attended to Don
Luis’s garden and finished the job in three
days. Is there an employer-employee
relationship between Don Luis and Lando?
(2014 BAR)
POST-EMPLOYMENT
EMPLOYER-EMPLOYEE RELATIONSHIP
Tests to Determine Employer-Employee
Relationship (2019, 2018, 2017, 2016, 2014,
2006, 2005, 2002, 2001, 1997, 1996, 1993,
1988, 1987 BAR)
A: YES. All the elements of employer-employee
relationship are present, viz:
Q: What are the accepted tests to determine
the existence of an employer-employee
relationship? (2017 BAR)
1.
The selection and engagement of the
employee;
2. The power of dismissal;
3. The payment of wages; and
4. The power to control the employee's
conduct.
A: The accepted tests to determine the existence
of an employer-employee relationship are the
four-fold test and the economic reality test.
The four-fold test requires the following
requisites: (a) the power to hire employees; (b)
the power of dismissal; (c) payment of wages; (d)
power to control employee’s conduct, which is
the most important requisite.
There was also no showing that Lando has his
own tools, or equipment so as to qualify him as
an independent contractor.
ALTERNATIVE ANSWER:
The economic reality test examines the
economic realities prevailing within the activity
or between the parties, taking into consideration
the totality of circumstances surrounding the
true nature of the relationship between the
parties. (Orozco v. CA, G.R. No. 155207, Aug. 13,
2008)
Q: Applying the tests to determine the
existence
of
an
employer-employee
relationship, is a jeepney driver operating
under the boundary system an employee of
his jeepney operator or a mere lessee of the
jeepney? Explain your answer. (2017 BAR)
None. Lando is an independent contractor for
Don Luis does not exercise control over Lando’s
means and method in tending to the former’s
garden.
Q: Pandoy, an electronics technician, worked
within the premises of Perfect Triangle, an
auto accessory shop. He filed a complaint for
illegal dismissal, 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
independent contractor. It was common
practice for shops like Perfect Triangle to
collect the service fees from customers and
pay the same to the independent contractors
at the end of each week. The auto shop
explained that Pandoy was like a partner who
worked within its premises, using parts
provided by the shop, but otherwise Pandoy
was free to render service in the other auto
shops.
A: The jeepney driver operating under the
boundary system is an employee of the jeepney
operator.
Applying the four-fold test:
a.
b.
c.
d.
The jeepney operator has the power to
choose the jeepney drivers who can drive his
vehicles;
The jeep operator has the power to dismiss
the jeepney driver by refusing to let the
latter drive;
The jeepney driver’s wage is the excess of the
boundary; and
Most importantly, the jeepney operator
exercises control over the jeepney driver,
since the owner must see to it that the driver
follows the route prescribed under the
certificate of public convenience.
On the other hand, Pandoy insisted that he
still was entitled to the benefits because he
was loyal to Perfect Triangle, it being a fact
that he did not perform work for anyone else.
Is Pandoy correct? Explain briefly. (2002
BAR)
A: Pandoy is not correct. He is not an employee
because he does not meet the fourfold test for
him to be an employee of Perfect Triangle. Ail
that he could claim is he worked within the
premises of Perfect Triangle. Pandoy was NOT
Applying the economic reality test, the jeepney
driver is dependent solely on his income from
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engaged as an employee by Perfect Triangle. He
was NOT paid wages by Perfect Triangle. Perfect
Triangle does NOT have the power to dismiss
him although Perfect Triangle may not continue
to allow him to work within its premises. And
most important of all, Pandoy was NOT under
the control of Perfect Triangle as regards the
work he performs for customers.
dismiss; and (4) power of control.
Q: Gregorio was hired as an insurance
underwriter by the Guaranteed Insurance
Corporation (Guaranteed). He does not
receive any salary but solely relies on
commissions earned for every insurance
policy approved by the company. He hires
and pays his own secretary but is provided
free office space in the office of the company.
He is, however, required to meet a monthly
quota of twenty (20) insurance policies,
otherwise, he may be terminated. He was
made to agree to a Code of Conduct for
underwriters and is supervised by a Unit
Manager.
Q: Malyn Vartan is a well-known radio-N talk
show host. She signed a contract with XYZ
Entertainment Network to host a one-hour
daily talk show where she interviews various
celebrities on topical subjects that she herself
selects. She was paid a monthly remuneration
of P300.000.00.
The program had been airing for almost two
years when sponsors' advertising revenues
dwindled, constraining the network to cancel
the show upon the expiration of its latest
contract with Ms. Vartan. The talk-show host
protested the discontinuance of her monthly
talent fee, claiming that it was tantamount to
her illegal dismissal from the network since
she has already attained the status of a regular
employee.
a.
a.
Is Gregorio an employee of Guaranteed?
A: NO, Gregorio is not an employee of
Guaranteed. Control is the most important
element of employer-employee relationship,
which refers to the means and methods by
which the result is to be accomplished (Avelino
Lambo and Vicente Belocura v. NLRC and J.C.
Tailor Shop and/or Johnny Co., 375 Phil. 855
[1999] citing Makati Haberdashery, Inc. v. NLRC,
259 Phil. 52 [1989]). The requirement of
complying with quota, company code of conduct
and supervision by unit managers do not go into
means and methods by which Gregorio must
achieve his work. He has full discretion on how
to meet his quota requirement, hence, there is
no employer-employee relationship between
Gregorio and Guaranteed.
As the network’s legal counsel, how
would you justify its decision to cancel
Ms. Vartan’s program which in effect
terminated her services in the process?
A: If I were the network's legal counsel, I would
argue that no employer-employee relationship
exists between the network and Ms. Vartan.
Reference must be made to the terms and
conditions in the contract and the parties shall
be governed by the provisions of the New Civil
Code.
ALTERNATIVE ANSWER:
YES, Gregorio is Guaranteed’s employee. The
fact that Gregorio was made to agree to a Code
of Conduct and was supervised by a Unit
manager are indicators that he is an employee of
Guaranteed by using the control test mentioned
in the Makati Haberdashery case. Furthermore,
the fact that he was given a quota and can be
terminated if he does not meet it all the more
indicated that he is indeed an employee of
Guaranteed.
In the case of Jay Sonza v. ABS-CBN (431 SCRA
583 [2004]) it was held that a TV and radio talent
is not an employee of the network company.
Similarly in this case, Ms. Vartan cannot be
considered an employee of the network. Under
the control test, the network had no control on
the manner and means through which Ms.
Vartan will perform her work. She herself selects
the topical subjects in her interviews. She is also
paid an extraordinary huge amount of P300,000
for her to be considered a mere employee.
In Francisco v. NLRC, Kasei Corporation, (G.R.
No. 170087, Aug. 31, 2006), the court added
another element to ascertain employeremployee relationship. This is whether or not
the worker is dependent on the alleged
employer for his continued employment. This
was dubbed as the economic dependence test.
The fact that Guaranteed can terminate Gregorio
if he does not meet the quota of 20 insurance
policies a month, mean that the latter is
economically dependent on the former which
negates his status as an independent contractor
and proves that he is an employee.
b. As counsel for the talk show host, how
would you argue your case? (2005 BAR)
A: As counsel for Ms. Vartan, I will argue that an
employer-employee relationship exists, and that
she is a regular employee of the Network
because of the nature of her work in relation to
the nature of the business of the Network. Her
work is usually necessary or desirable in the
usual, trade or business of the employer (Art.
280 [now 295], Labor Code). I will invoke the
four-fold
test
of
employer-employee
relationship, i.e. (1) selection and engagement of
employee: (2) payment of wages; (3) power to
b. Suppose Gregorio is appointed as Unit
Manager and assigned to supervise
several underwriters. He holds office in
the company premises, receives an
22
QuAMTO (1987-2019)
overriding
commission
on
the
commissions of his underwriters, as well
as a monthly allowance from the
company, and is supervised by a branch
manager. He is governed by the Code of
Conduct for Unit Managers. Is he an
employee of Guaranteed? Explain. (2016
BAR)
the payment of wages; (c) the employer’s power
to control the employee’s conduct; and (d) the
power of dismissal.
The first element is present, as Matibay Shoe
allowed shoe shine boys in its shoe shine stand to
render services that are desirable in the line of
business of Matibay Shoe. In issuing ID’s to the
shoe shine boys, the same signifies that they can
represent themselves as part of the work force of
Matibay Shoe.
A: YES, Gregorio is an employee. In fact, he is
deemed as a regular employee. As a unit manager
who was tasked to supervise underwriters, he
can be said to be doing a task which is necessary
and desirable to the usual business of
Guaranteed. Art. 295 of the Labor Code provides
that “The provisions of written agreement to the
contrary notwithstanding and regardless of the
oral agreement of the parties, an employment
shall be deemed to be regular where the
employee has been engaged to perform activities
which are usually necessary or desirable in the
usual business or trade of the employer, x x x.”
The second element is also present. Requiring the
customers to pay through the Matibay Shoe’s
cashier signifies that their services were not
engaged by the customers. Equally important, it
was Matibay Shoe which gave the shoe shine
boys their daily wage.
The third element is satisfied. Requiring the shoe
shine boys to be present from store opening until
store closing and to follow company rules on
cleanliness and decorum shows that they cannot
conduct their activity anywhere else but inside
the store of Matibay Shoe, hence, their means and
methods of accomplishing the desired services
for the customers of Matibay Shoe was controlled
by it.
ALTERNATIVE ANSWER:
YES. Art. 219(m) of the Labor Code defines a
Managerial employee as one who is vested with
the powers or prerogatives to lay down and
execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign
or discipline employees. As Gregorio was
appointed Unit Manager, the means and methods
of accomplishing his goal come under the
guideline laid down by Guaranteed.
Lastly, the fourth element is made apparent when
Matibay Shoe barred the shoe shine boys from
continuing with their work-related activity inside
its establishment.
ALTERNATIVE ANSWER:
ANOTHER ALTERNATIVE ANSWER:
NO. The elements to determine the existence of
an employment relationship are: (a) the selection
and engagement of the employee; (b) the
payment of wages; (c) the employer’s power to
control the employee’s conduct; and (d) the
power of dismissal.
NO. Guaranteed did not define the duties and
responsibilities of Gregorio; Guaranteed left it to
Gregorio’s discretion as to how he will achieve
his goal. Therefore, the only interest Guaranteed
has is in the result of Gregorio’s work.
The first element is absent. The mere issuance of
an ID to the boys is not conclusive of the power of
selection of Matibay Shoe. They may be given IDs
merely as a security measure for the
establishment
Q: Matibay Shoe and Repair Store, as added
service to its customers, devoted a portion of
its store to a shoe shine stand. The shoe shine
boys were tested for their skill before being
allowed to work and given ID cards. They
were told to be present from the opening of
the store up to closing time and were
required to follow the company rules on
cleanliness and decorum. They bought their
own shoe shine boxes, polish and rags. The
boys were paid by their customers for their
services but the payment is coursed through
the store’s cashier, who pays them before
closing time. They were not supervised in
their work by any managerial employee of the
store but for a valid complaint by a customer
or for violation of any company rule, they can
be refused admission to the store. Were the
boys employees of the store? Explain. (2016
BAR)
Furthermore, using the control test, the boys
have exclusive power over the means and
method by which the shoe shining activity is to
be conducted.
Q: Section 255 [245] of the Labor Code
recognizes three categories of employees,
namely: managerial, supervisory, and rankand-file. Give the characteristics of each
category of employees, and state whether the
employees in each category may organize and
form unions. Explain your answer. (2017,
2003 BAR)
A: Managerial employees are those who are
vested with the powers or prerogatives to lay
down and execute management policies and/or
to hire, transfer, lay-off, recall, discharge, assign
A: YES. The elements to determine the existence
of an employment relationship are: (a) the
selection and engagement of the employee; (b)
UNIVERSITY OF SANTO TOMAS
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Labor Law and Social Legislation
or discipline employees. Managerial employees
cannot organize and form labor unions since
their managerial duties present a conflict of
interest with that of a union member or officer.
the hospital because the hospital controlled the
means and the details of the process by which
the resident doctors accomplished their task. In
this case, the hospital maintained the specific
work schedules of A,B, & C. Moreover, the
hospital monitored their specific instructions on
how they should perform their respective tasks,
including diagnosis, treatment and management
of their patients. The element of control having
been established, A, B, & C are employees of MM
Medical Center, Inc. (Calamba Medical Center,
Inc. v. NLRC, et al., G.R. No. 176484, Nov. 25, 2008)
Supervisory employees are those who, in the
interest of the employer, effectively recommend
such managerial actions if the exercise of such
functions is not merely routinary or clerical in
nature but requires the use of independent
judgment. Supervisory are allowed to organize
and form unions.
Rank-and-file employees include those which do
not fall under the classification of managerial or
supervisory
employees.
Rank-and-file
employees are allowed to organize and form
unions.
KINDS OF EMPLOYMENT
Probationary (2016, 2006, 2001, 1998, 1995,
1993, 1992, 1988, 1987 BAR)
Q: What limitations, if any, do the law and
jurisprudence impose on an employer's right
to terminate the services of a probationary
employee? (2001 BAR)
Q: A, B, and C were hired as resident-doctors
by MM Medical Center, Inc. In the course of
their engagement, A, B, and C maintained
specific work schedules as determined by the
Medical Director. The hospital also
monitored their work through supervisors
who gave them specific instructions on how
they should perform their respective tasks,
including
diagnosis,
treatment,
and
management of their patients.
A: The Labor Code (in Art. 281 [now 296])
provides that the services of an employee who
has been engaged on a probationary basis may
be terminated for a just cause or when he fails to
qualify as a regular employee in accordance with
reasonable standards made known by the
employer to the employee at the time of his
engagement. If the probationary employee is
being terminated for just cause, he must, of
course, be given due process before his
termination.
One day, A, B, and C approached the
Medical Director and inquired about the
non-payment of their employment benefits.
In response, the Medical Director told them
that they are not entitled to any because
they are mere "independent contractors" as
expressly stipulated in the contracts which
they admittedly signed. As such, no
employer-employee relationship exists
between them and the hospital.
a.
Q: During their probationary employment,
eight (8) employees were berated and
insulted by their supervisor. In protest, they
walked out. The supervisor shouted at them
to go home and never to report back to work.
Later, the personnel manager required them
to explain why they should not be dismissed
from employment for abandonment and
failure to qualify for the positions applied
for. They filed a complaint for illegal
dismissal against their employer. As a Labor
Arbiter, how will you resolve the case? (2006
BAR)
What is the control test in determining
the existence of an employer-employee
relationship?
A: This test is premised on the exercise or the
reservation of the right to control the manner
and method to do a job. The important factor
to consider is how the work itself is done, not
just the end result thereof. (Reyes v. Glaucoma,
June 17, 2015, G.R. No. 189255)
A: If I were the Labor Arbiter, I would rule
against
management.
There
was
no
abandonment because there was no intention
not to return to work. It was just that the 8
employees were berated and insulted and even
told never to report back to work. It was but
natural for them to feel demoralized, but there
was never an indication to abandon their
employment.
b. Is the Medical Director's reliance on the
contracts signed by A, B, and C to refute
the existence of an employer-employee
relationship correct? If not, are A, B,
and C employees of MM Medical Center,
Inc.? Explain. (2019 BAR)
A: NO, the Medical Director’s reliance on the
contracts signed by A,B & C to refute the
existence
of
an
employer-employee
relationship is not correct. A, B & C are
employees of MM Medical Center, Inc.
The probationary workers could, however, be
terminated for failing to meet probationary
standards. If the reasons for the supervisor’s
berating and insulting behavior were poor or
substandard performance on the part of the
workers, their probationary employment could
be legally terminated.
Under the “control test” the employment
relationship existed between the physicians and
24
QuAMTO (1987-2019)
Q: Mr. X was hired by Y Company on
probation for six months as general utility
worker. On the expiration of the
probationary period, Mr. X was informed by
Y Co. that his work was unsatisfactory and
failed to meet the required standard. To give
him a chance to improve his performance, Y
Co. instead of terminating Mr. X’s services,
extended, with X’s written consent, the
probation period for another three months.
This
extension
notwithstanding,
his
performance did not improve, on account of
which, Y Co. terminated Mr. X's services at
the end of the extended period.
na yun x x x Alam mo ba, kahit wala naming
diperensya yung baby, ipinapa-isolate niya?”
The SFH President asks you, being the
hospital’s counsel, which of these two (2)
options is the legal and proper way of
terminating Amaya: (a) terminate her for a
just cause under Art. 228 of the Labor Code
(termination by Employer); or (b) terminate
her for violating her probationary contract.
Explain. (2016 BAR)
A: I will advise the President of SFH to terminate
Amaya for violating her probationary contract.
Part and parcel of the standards of her
employment is to strictly follow the Code of
Conduct of SFH. The act of defaming Dr. Ligaya is
certainly a misdemeanor that is usually not
acceptable in any work environment. With such
attitude Amaya displayed, she cannot pass the
company standard of SFH.
Mr. X filed a case for illegal dismissal
contending that he was already regular at the
time of his dismissal pursuant to Art. 281
[now 296] of the Labor Code, the particular
portion of which provides:
“x x x An employee who is allowed to work
after a probationary period shall be
considered a regular employee."
I will not suggest the dismissal of Amaya under
Art. 297. Though she displayed misconduct, the
same is not work-related, as spreading a rumor
against a Doctor does not go into the duties and
responsibilities of a staff nurse.
Therefore, he could not have been lawfully
dismissed for failure to meet company
standards as a probationary worker. Decide
with reason. (1993 BAR)
ALTERNATIVE ANSWER:
A: Mr. X could not argue that because his
probationary period was extended beyond six
months he was now a regular employee and thus
could no longer be terminated except for Just
cause or when authorized by law. The fact is that
the probationary period of Mr. X was extended
beyond six months with his consent. It was to
give him an opportunity to improve his
performance.
I will advise the President of SFH to terminate
Amaya for a just cause under Art. 297 of the
Labor Code in relation Art. 296. The Labor Code
assigns a separate provision, Art. 296, and
provides a different set of grounds for the
dismissal of probationary employees.
The law does not preclude the employer from
terminating the probationary employment, if the
employer finds that the probationary employee is
not qualified for regular employment. As long as
the termination was made for reasons provided
under Art. 296 of the Labor code before the
expiration of the six-month probationary period,
the employer is well within its rights to sever the
employer-employee relationship. (Pasamba v.
NLRC, G.R. No. 168421, June 8, 2007)
Thus, it was legal for Y Company to terminate Mr.
X for his failure to meet company standard as a
probationary worker. The Labor Code provides
that probationary employment shall not exceed
six (6) months. But the Supreme Court has ruled
that said probationary period could be extended
with the consent of the probationary employee to
give him an opportunity to improve his
performance. (Art. 281 [now 296], Labor Code)
Regular (2019, 2008, 2007, 2005 BAR)
Q: Amaya was employed as a staff nurse by St.
Francis Hospital (SFH) on July 08, 2014 on a
probationary status for six months. Her
probationary contract required, among
others, strict compliance with SFH’s Code of
Discipline.
Q: Super Comfort Hotel employed a regular
pool of “extra waiters” who are called or
asked to report for duty when the Hotel’s
volume of business is beyond the capacity of
the regularly employed waiters to undertake.
Pedro has been an “extra waiter” for more
than 10 years. He is also called upon to work
on weekends, on holidays and when there are
big affairs at the hotel. What is Pedro’s status
as an employee under the Labor Code? Why?
Explain your answer fully. (2008 BAR)
On October 16, 2014, Dr. Ligaya, filed a
complaint with the SFH Board of Trustees
against Amaya for uttering slanderous
remarks against the former. Attached to the
complaint was a letter of Minda, mother of a
patient, who confirmed the following remarks
against Dr. Ligaya:
A: Pedro has acquired the status of a regular
employee. Pedro was engaged to perform
activities which are necessary or desirable in the
usual business or trade of the employer.
Moreover, Pedro has been “extra waiter” for
“Bakit si Dr. Ligaya pa ang napili mong ‘pedia’
eh ang tanda tanda na n’un? E makakalimutin
UNIVERSITY OF SANTO TOMAS
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Labor Law and Social Legislation
more than 10 years. Under the law, any employee
who has rendered service at least one year of
service, whether such service is continuous or
broken, shall be considered a regular employee
with
respect
to
the
activity
in
which he is employed and his employment shall
continue while such activity exists. (Art. 280 [now
295], Labor Code)
President for Sports expressed to Ms. A the
University's expectation that she would bring
the University a championship at the end of
the year.
In her first volleyball season, the University
placed ninth (9th) out of 10 participating
teams. Soon after the end of the season, the
Vice-President for Sports informed Ms. A that
she was a mere probationary employee and
hence, she need not come back for the next
season because of the poor performance of
the team. In any case, the Vice-President for
Sports claimed that Ms. A was a fixed-term
employee whose contract had ended at the
close of the year.
Q: Kitchie Tempo was one of approximately
500 production operators at HITEC
Semiconductors, Inc., an export-oriented
enterprise whose business depended on
orders for computer chips from overseas.
She was hired as a contractual employee four
years ago. Her contracts would be for a
duration of five (5) months at a time usually
after a one-month interval. Her re- hiring
was contingent on her performance for the
immediately preceding contract.
a.
Six months after the expiration of her last
contract, Kitchie went to HITEC's personnel
department to inquire why she was not yet
being recalled for another temporary
contract. She was told that her performance
during her last stint was "below average."
Since there was no union to represent her,
Kitchie seeks your advice as labor lawyer
about her chances of getting her job back.
What will your advice be? (2005 BAR)
Is Ms. A a probationary, fixed-term, or
regular employee? Explain your reasons
as to why she is or she is not such kind of
an employee for each of the types of
employment given.
A: There being no specific indication as to the
nature of the engagement or that her
performance was to be evaluated in accordance
with standards for regularization made known
at the time of engagement, it is thus presumed
that Ms. A was hired as a regular employee. She
cannot also be categorized as a term employee
since it was not agreed upon by her and the
University that her employment would only be
for a definite period of time. As a matter of fact,
there being no mention of a contract in the facts,
Ms. A can only be considered as a regular
employee.
A: Kitchie’s "below average" rating will not
matter. She was a regular employee from day 1
of her service as her work was evidently usually
necessary or desirable to HITEC's usual
business. Under par. 1 of Art. 280 [now 295],
Kitchie is a regular (not casual) employee. Also,
Kitchie
obtained
permanent
regular
employment when she was repeatedly re-hired
by HITEC.
b. Assuming that Ms. A was dismissed by
the University for serious misconduct but
was never given a notice to explain, what
is the consequence of a procedurally
infirm dismissal from service under our
Labor law and jurisprudence? Explain.
(2019 BAR)
As a permanent regular employee, working for
an indefinite period, Kitchie is, entitled to the
reliefs of reinstatement and full backwages as
mandated in Art. 279 [now 294] of the Labor
Code.
A: The University should pay nominal damages
to Ms. A in the amount of P30,000.00. Applying
the Agabon Doctrine, if the dismissal of the
employee was for just cause but procedural due
process was not observed, the lack of statutory
due process should not nullify the dismissal or
render it illegal or ineffectual (Agabon v. NLRC,
G.R. No. 158693, Nov. 17, 2004). However, the
employer should indemnify the employee for the
violation of his right to procedural due process.
A “below average” rating would matter if Kitchie
was
made
to
undergo
probationary
employment, or was a probationary employee
under Art. 281 [now 296] of the Code. She was
not obviously, she was a qualified and
competent production operator; She would not
have been repeatedly re-hired if she were not
that qualified and competent. I will thus, advise
her to sue for illegal dismissal, with prayer for
regularization in addition to the reliefs of
reinstatement and full backwages provided for
in Art. 279 [now 294] of the Labor Code.
Casual (2007, 2005 BAR)
Q: A Carpenter is employed by a private
university in Manila. Is the carpenter a
regular or a casual employee? Discuss fully.
(2007 BAR)
Q: Ms. A is a volleyball coach with five (5)
years of experience in her field. Before the
start of the volleyball season of2015, she was
hired for the sole purpose of overseeing the
training and coaching of the University's
volleyball team. During her hiring, the Vice-
A: If the employment of the carpenter is sporadic
and brief in nature or occasional, his
employment is casual especially because the
work he is performing is not in the usual course
26
QuAMTO (1987-2019)
of the school’s trade or business. However, if the
carpenter has rendered services for at least one
year, whether continuous or broken, he becomes
a regular employee by operation by law, with
respect to the activity in which he is employed
and his employment shall continue while such
activity exists. (Art. 280 [now 295], Labor Code;
See also Philippine Geothermal, Inc. v. NLRC, 189
SCRA 211 [1990]; Kimberly Independent Labor
Union, etc. v. Drilon, 185 SCRA 190 [1990])
working? (2013 BAR)
A: He would be considered a contractual
employee, not a regular employee. His salaries
and benefits will be in accordance with the
stipulations of the contract he signed with the
company.
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 that the company, in employing a
retired employee whose knowledge, experience
and expertise the company recognized, as an
employee or as a consultant, is not an illegality;
on the contrary, it is a recognized practice in this
country.
Contractual (2017, 2014, 2013, 2002 BAR)
Q: Lina has been working as a steward with a
Miami, U.S.A.-based Loyal Cruise Lines for the
past 15 years. She was recruited by a local
manning agency, Macapagal Shipping, and
was made to sign a 10-month employment
contract every time she left for Miami.
Macapagal Shipping paid for Lina’s round-trip
travel expenses from Manila to Miami.
Because of a food poisoning incident which
happened during her last cruise assignment,
Lina was not re-hired. Lina claims she has
been illegally terminated and seeks
separation pay. If you were the Labor Arbiter
handling the case, how would you decide?
(2014 BAR)
Q: Marciano was hired as Chief Engineer on
board the vessel MN Australia. His contract of
employment was for nine months. After nine
months, he was re-hired. He was hired a third
time after another nine months. He now
claims entitlement to the benefits of a regular
employee based on his having performed
tasks usually necessary and desirable to the
employer’s business for a continuous period
of more than one year. Is Marciano’s claim
tenable? Explain your answer. (2017 BAR)
A: No, Marciano’s claim is not tenable. Seafarers
are contractual employees for a fixed term and
cannot attain regular status. Here, Marciano is a
considered a seafarer since he is hired as Chief
Engineer on board a vessel. Hence, Marciano’s
claim that he is a regular employee is not tenable.
A: I will dismiss Lina's complaint. Lina is a
contractual employee and the length of her
employment is determined by the contracts she
entered into. Here, her employment was
terminated at the expiration of the contract.
(Millares, et al. v. NLRC, 385 SCRA 306, 318
[2002])
Project (2019, 2009, 2005, 2002, 1998, 1994
BAR)
Q: After thirty (30) years of service, Beta
Company compulsorily retired Albert at 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. Thereafter, out of
compassion, the company allowed Albert to
continue working and paid him his old
monthly salary rate, but without the
allowances that he used to enjoy.
Q: How is a project worker different from a
casual or contractual worker? (2005 BAR)
A: A project worker is employed for a specific
project or undertaking the 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
may exceed 1 year without necessarily making
him a regular employee.
After five (5) years under this arrangement,
the company finally severed all employment
relations with Albert; he was declared fully
retired in a fitting ceremony but the company
did not give him any further retirement
benefits. 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 were not
paid to him, and for retirement benefits for
his additional five (5) working years, based
either on the company's Retirement Plan or
the Retirement Pay Law, whichever is
applicable.
A casual employee is engaged to perform a job,
work, or service which is incidental to the
business of the employer; moreover, the definite
period of his employment is made known to him
at the time of his engagement. His continued
employment after the lapse of one year makes
him a regular employee. Under the Social
Security Law, employment that is purely casual
and not for the purpose of occupation or business
of the employer is not under the coverage of the
aforesaid law.
A "project worker", on the other hand, is a specific
term used to designate workers in the
construction industry hired to perform a specific
undertaking for a fixed period which is coterminus with a project or phase thereof
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
UNIVERSITY OF SANTO TOMAS
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Labor Law and Social Legislation
determined at the time of the engagement of the
employee (Policy Instruction No, 19. DOLE), and it
is mandatorily required that a termination report
be submitted to the nearest public employment
office upon the completion of the construction
project (Aurora Land Projects Corp. v. NLRC. 266
SCRA 48 [1997]). There is no such requirement
for an ordinary contractual worker.
South
Expressway
Extension.
Design
Consultants, Inc. hired Omar as a driver for
two (2) years. After his two-year contract
expired, he was extended another contract
for nine (9) months. These contracts were
entered into during the various stages and
before the completion of the extension
project. Omar claims that because of these
repeated contracts, he is now a regular
employee of Design Consultants, Inc. Is he
correct? Explain briefly. (2002 BAR)
Q: Diosdado, a carpenter, was hired by
Building Industries Corporation (BIC), and
assigned to build a small house in Alabang.
His contract of employment specifically
referred to him as a “project employee,”
although it did not provide any particular
date of completion of the project. Is the
completion of the house a valid cause for the
termination of Diosdado’s employment? If so,
what are the due process requirements that
the BIC must satisfy? If not, why not? (2009
BAR)
A: YES. The principal test for determining
whether a particular employee is a “project
employee” as distinguished from a “regular
employee” is whether or not the “project
employee” was assigned to carry out a “specific
project or undertaking,” the duration and scope
of which were specified at the time the
employee was engaged for the projects.
In the problem given, there is no showing that
Omar was informed that he was to be assigned
to a “specific project or undertaking.” Neither
has it been established that he was informed of
the duration and scope of such project or
undertaking at the time of his engagement.
(Philex Mining Corp. v. NLRC, 312 SCRA 119
[1999])
Moreover, the re-hiring of Omar is sufficient
evidence of the necessity or the indispensability of
his services to the company’s business (Aurora
Land Projects Corp v. NLRC, 266 SCRA 48 [1997]).
Hence, Omar is correct in claiming that he is a
regular employee of Design Consultants, Inc.
A: The completion of the house should be valid
cause
for
termination
of
Diosdado’s
employment. Although the employment contract
may not state a particular date, but if it did
specify that the termination of the parties
employment relationship was to be on a “day
certain” – the day when the phase of work would
be completed – the employee cannot be
considered to have been a regular employee.
(Filipinos Pre-Fabricated Building Systems v.
Puente, 453 SCRA 820 [2005])
To satisfy due process requirement, under DOLE
Department Order No. 19, series of 1993, the
employer is required to report to the relevant
DOLE Regional Office the fact of termination of
project employees as a result of the completion
of the project or any phase thereof in which one
is employed.
Seasonal (2019 BAR)
Q: Define, explain or distinguish the following
terms: x x x (b) Seasonal and project employees
(2019 BAR)
Q: Martillo and other similarly-situated
project workers demanded that the
increases be extended to them, inasmuch as
they should now be considered regular
employees and members of the bargaining
unit. If you were ABC's legal counsel, how
would you respond to this demand? (2005
BAR)
A: Seasonal employees are those who are called to
work from time to time according to the
occurrence of varying need during a season, and
the employment is only for the duration of said
season. They are laid off after completion of the
required phase of work for the season.
Project employees are those who are assigned to
carry out a specific project or undertaking, the
duration and scope of which were specified at the
time the employees were engaged for the project,
hence, the services of the project employees are
coterminous with the project for which they were
hired. (Art. 295, Labor Code)
A: As legal counsel for ABC, I would argue that
the employment of Martillo was fixed for a
specific project or undertaking, the completion
or termination of which has been determined at
the time of his engagement. Rendering 14
months of work does not make him a regular
employee, when to begin with, he was 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 regular applies only to casual
employees, hence, Mariano does not belong to
the bargaining unit of regular employees.
Fixed-term (2014 BAR)
Q: Lucy was one of approximately 500 call center
agents at Hambergis, Inc. She was hired as a
contractual employee four years ago. Her
contracts would be for a duration of five (5)
months at a time, usually after a one-month
interval. Her re-hiring was contingent on her
performance for the immediately preceding
contract.
Q: Design Consultants, Inc. was engaged by
the PNCC to supervise the construction of the
28
QuAMTO (1987-2019)
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 work. She was told that her
performance during her last contract was
“below average.” Lucy seeks your legal advice
about her chances of getting her job back. What
will your advice be? (2014 BAR)
been hired by the independent contractor to
perform said work, task, job or project.
In the event that the independent contractor fails
to pay the wages of his employees, an indirect
employer, in the same manner and extent that he
is liable to employees directly employed by him,
is jointly and severally liable with the
independent contractor to the employees of the
latter to the extent of the work performed under
the contract.
A: Lucy cannot get her job back. She is a fixed- term
employee and as such, her employment terminates
upon the expiration of her contract. (Rowell
Industrial Corporation v. Court of Appeals, 517 SCRA
691 [2007])
As for the person who engages the services of a
"labor only" contractor, the latter is considered
merely as an agent of the former who shall be
responsible to the workers hired by the “labor
only" contractor in the same manner and extent
as if he directly employed such workers.
Subcontracting vs. Labor-Only Contracting
(2019, 2017, 2016, 2015, 2012, 2005, 2004,
2003, 2002, 2000, 1994 BAR)
Q: What is a “labor-only" contract? (1994 BAR)
Q: Dr. Crisostomo entered into a retainer
agreement with AB Hotel and Resort whereby
he would provide medical services to the
guests and employees of AB Hoteland Resort,
which, in turn, would provide the clinic
premises and medical supplies. He received a
monthly retainer fee of P60,000.00, plus a
70% share in the service charges from AB
Hotel and Resort’s guests availing themselves
of the clinic’s services.
A: “Labor-only" contract is a contract between an
employer and a person who supplies workers to
such employer where the person supplying
workers does not have substantial capital or
investment in the form of tools, equipment,
machineries, work premises, among others, and the
workers recruited and placed by such person are
performing activities which are directly related to
the principal business of such employer. (Art. 106,
Labor Code)
The clinic employed nurses and allied staff,
whose salaries, SSS contributions and other
benefits he undertook to pay. AB Hotel and
Resort issued directives giving instructions to
him on the replenishment of emergency kits
and forbidding the clinic staff from receiving
cash payments from the guests.
Q: The labor sector has been loudly agitating
for the end of labor-only contracting, as
distinguished from job contracting. Explain
these two kinds of labor contracting, and give
the effect of a finding that one is a labor-only
contractor. Explain your answers. (2017 BAR)
A: There is job contracting if a contractor carries
on a distinct and independent business free from
the control of the principal in all matters except
as to the results thereof; and has substantial
capital or investment.
In time, the nurses and the clinic staff claimed
entitlement to rights as regular employees of
AB Hoteland Resort, but the latter refused on
the ground that Dr. Crisostomo, who was their
employer, was an independent contractor.
Rule, with reasons. (2017 BAR)
There is labor-only contracting when the
principal retains the power to control the
contracted employees; or when the contractor
has insufficient capital and performs activities
directly related to the business of the principal.
A: I will rule in favor of AB Hoteland Resort.
Applying the Four-Fold Test will readily show
that the real employer of the nurses and the clinic
staff is Dr. Crisostomo and not AB Hoteland
Resort, viz:
A finding that there is labor-only contracting
makes the principal the direct employer of the
contracted employees and is solidarily liable with
the contractor for the wages and other benefits of
the contracted employees.
1.
2.
As a matter of fact, SSS contributions were paid
by him which, by itself, is already an indication
that he is the employer. Although he did not
exercise the power of dismissal, it can be said
that as the doctor, he has the control of his
employee’s conduct in the dispensing of medical
services to the guests and personnel of the resort.
The fact that AB Hoteland Resort gave
instructions to him regarding replenishment of
emergency kits and forbidding his staff from
receiving cash payments from guests is of no
consequence. They are nothing more but
Q: Distinguish the liabilities of an employer
who engages the services of a bona fide
“independent contractor” from one who
engages a “labor-only" contractor? (2012,
1994 BAR)
A: A person who engages the services of a bona
fide
“Independent
contractor"
for
the
performance of any work, task, job or project is
the indirect employer of the employees who have
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
The selection and engagement of the nurses
and clinic staff were made by Dr. Crisostomo;
Their wages were paid by Dr. Crisostomo.
29
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Labor Law and Social Legislation
guidelines which will not create an employeremployee relationship. (Insular Life Co., Ltd. v.
NLRC, G.R. No. 84484, Nov. 15, 1989)
Pablo's death, his widow filed a claim for
burial grant and pension benefits with the
Social Security System (SSS) The claim was
denied on the ground that Pablo had not
been a registered member-employee. Pablo’s
widow filed a petition before the SSS asking
that ABC & Co. be directed to pay the
premium contributions of Pablo and that his
name be reported for SSS coverage.
ALTERNATIVE ANSWER:
I will rule in favor of the employees. In labor
contracting, the party with the power to control
is considered the employer of the contracted
employees. Here, AB Hoteland Resort exercises
the power to control by requiring replenishment
of emergency kits and forbidding the clinic staff
from receiving cash payments from the guests.
Hence, the employees are correct in arguing that
they are regular employees of AB Hoteland
Resort.
ABC & Co. countered that Pablo was hired to
plow, harrow and burrow, using his own
carabao and other implements and following
his own schedule of work hours, without any
supervision from the company. If proven,
would this factual setting advanced by ABC &
Co. be a valid defense against the petition?
(2003 BAR)
Q: Star Crafts is a lantern maker based in
Pampanga. It supplies Christmas lanterns to
stores in Luzon, Metro Manila, and parts of
Visayas, with the months of August to
November being the busiest months. Its
factory employs a workforce of 2,000 workers
who make different lanterns daily for the
whole year. Because of increased demand,
Star Crafts entered into a contractual
arrangement with People Plus, a service
contractor, to supply the former with
100 workers for only 4 months, August to
November, at a rate different from what they
pay their regular employees.
A: ABC & Co. has a valid defense. Pablo should be
an employee of ABC & Co. to be under the
compulsory coverage of the SSS. To be an
employee, Pablo should be under the control of
ABC & Co. as regards his employment. But the
facts show that he was not under the control of
ABC & Co. as regards his employment. Among
others, he had his own schedule of work hours,
without any supervision from the company.
Thus, he is an independent contractor and not
an employee.
An independent contractor is not under the
compulsory coverage of the SSS. He may be
covered as a self-employed person. But then as
such, ABC & Co. has no legal obligation to report
Pablo for coverage under the SSS because ABC &
Co. is not Pablo’s employer.
The contract with People Plus stipulates that
all equipment and raw materials will be
supplied by Star Crafts with the express
condition that the workers cannot take any
of the designs home and must complete their
tasks within the premises of Star Crafts. Is
there an employer-employee relationship
between Star Crafts and the 100 workers
from People Plus? Explain. (2015 BAR)
Q: 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 provided the
equipment and tools because Arnold had
neither tools and equipment nor capital for
the job. Arnold, on the other hand, hired his
friends, relatives and neighbors for the job.
Their wages were paid by Sta. Monica
Plywood Corp. to Arnold, based on their
production or the number of workers and
the time used in certain areas of work. All
work activities and schedules were fixed by
the company. Is Arnold a job contractor?
Explain briefly. (2002 BAR)
A: YES. People Plus is a labor-only-contractor
because it is not substantially capitalized.
Neither does it carry on an independent
business in which it uses its own investment in
the form of tools, equipment, machineries or
work premises. Hence, it is just an agent or
recruiter of workers who perform work directly
related to the trade of Star Crafts. Since both the
essential element and the conforming element of
labor-only contracting are present, Star Crafts
becomes the employer of the supplied worker.
As principal, Star Crafts will always be an
employer in relation to the workers supplied by
its contractor. Its status as employer is either
direct or indirect depending on whether the
contractor is legitimate or not. Thus even if
People Plus were a legitimate job contractor,
still Star Crafts will be treated as a statutory
employer for purposes of paying the workers’
unpaid wages and benefits.
A: NO. In two cases decided by the Supreme
Court, it was held that there is “job contracting”
where:
1.
Q: Pablo was a farm-hand, in a plantation
owned by ABC & Co., working approximately
6 days a week for a good 15 years. Upon
30
The contractor carries on an independent
business and undertakes the contract work
in his own account, under his own
responsibility according to his own manner
and method, free from the control and
direction of his employer or principal in all
matters connected with the performance of
the work except as to the results thereof;
and
QuAMTO (1987-2019)
2.
The contractor has substantial capital or
investment in the form of tools, equipment,
machineries, work premises and other
materials which are necessary in the
conduct of his business. (Lim v. NLRC, 303
SCRA 432 [1999]; Baguio v. NLRC, 202 SCRA
465 [1991])
elements is
contracting:
In the problem given, Arnold did not have
sufficient capital or investment for one. For
another Arnold was not free from the control
and direction of Sta. Monica Plywood Corp.
because all work activities and schedules were
fixed by the company. Therefore, Arnold is not a
job contractor. He is engaged in labor-only
contracting.
there
is
labor-only
a.
The contractor or subcontractor does not
have substantial capital or investment which
relates to the job, work or service to be
performed and the employees recruited,
supplied or placed by such contractor or
subcontractor are performing activities
which are directly related to the main
business of the principal; or
b.
The contractor does not exercise the right to
control over the performance of the work of
the contractual employee.
The first element is present herein, as Style has
no substantial capital or investment in engaging
in the supply of services contracted out by
Empire which is directly related to the marketing
and promotion of its clothing line. The second
element is present as it is inevitable for Empire to
direct the activities of the 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 Empire as, through the Marketing
Director of Empire, the 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
employment status with Empire. In addition,
such scheme undermined the security of tenure
of the TMRs which is constitutionally guaranteed,
hence, the contract of the TMRs with Wave is
void ab initio.
Q: Empire Brands (Empire) contracted the
services of Style Corporation (Style) for the
marketing and promotion of its clothing line.
Under the contract, Style provided Empire
with Trade Merchandising Representatives
(TMRs) whose services began on September
15, 2004 and ended on June 6, 2007, when
Empire terminated the promotions contract
with Style.
Empire then entered into an agreement for
manpower supply with Wave Human
Resources (Wave). Wave owns its condo
office, owns equipment for the use by the
TMRs, and has assets amounting to
P1,000,000.00.
Wave
provided
the
supervisors who supervised the TMRs, who,
in turn, received orders from the Marketing
Director of Empire. In their agreement, the
parties stipulated that Wave shall be liable
for the wages and salaries of its employees or
workers, including benefits and protection
due them, as well as remittance to the proper
government entities of all withholding taxes,
Social Security Service, and PhilHealth
premiums, in accordance with relevant laws.
Q: W Gas Corp. is engaged in the manufacture
and distribution to the general public of
various petroleum products. On January 1,
2010, W Gas Corp. entered into a Service
Agreement with Q Manpower Co., whereby
the latter undertook to provide utility
workers for the maintenance of the former's
manufacturing plant. Although the workers
were hired by Q Manpower Co., they used the
equipment owned by W Gas Corp. in
performing their tasks, and were likewise
subject to constant checking based on W Gas
Corp.' s procedures.
As the TMRs wanted to continue working at
Empire, they submitted job applications as
TMRs with Wave. Consequently, Wave hired
them for a term of five (5) months, or from
June 7, 2007 to November 6, 2007, specifically
to promote Empire’s products.
When the TMRs’ 5 month contracts with Wave
were about to expire, they sought renewal
thereof, but were refused. Their contracts
with Wave were no longer renewed as empire
hired another agency. This prompted them to
file complaints for illegal dismissal,
regularization, non-payment of service
incentive leave and 13th month pay against
Empire and Wave. Are the TMRs employees of
Empire? (2016 BAR)
On February 1, 2010, Mr. R, one of the utility
workers, was dismissed from employment in
line with the termination of the Service
Agreement between W Gas Corp. and Q
Manpower Co. Thus, Mr. R filed a complaint
for illegal dismissal against W Gas Corp.,
claiming that Q Manpower Co. is only a laboronly contractor. In the course of the
proceedings, W Gas Corp. presented no
evidence to prove Q Manpower CO.'s
capitalization.
A: YES. From the time Empire contracted the
services of Style, both engaged in labor-only
contracting. In BPI Employees Union-Davao City
FUBU v. BPI (G.R. No. 174912, July 24, 2013), it
was ruled that where any of the following
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
present,
a.
Is Q Manpower Co.
contractor? Explain.
a
labor-only
A: YES, Q Manpower Co. is a labor-only
31
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Labor Law and Social Legislation
contractor. Art. 106 of the Labor Code provides
that there is “labor-only” contracting 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 and placed by such contractor are
performing activities which are directly related
to the business.
janitorial services to the National Economic
Development Authority (NEDA) since April
1988. Its service contract was renewed every
three months. However, in the bidding held
on July 1992, CMI was disqualified and
excluded. In 1993, six janitors of CMI
formerly assigned at NEDA filed a complaint
for underpayment, of wages. Both CMI and
NEDA were impleaded as respondents for
failure to comply with NCR Wage Orders Nos.
01 and 02, which took effect on November 1,
1990 and January 2, 1992, respectively.
In the question posed, the equipment belonged to
W Gas Corp. In the course of the proceedings, no
evidence was presented to prove Q Manpower
Co’s substantial capitalization.
Should NEDA, a government agency subject
to budgetary constraints, be held liable
solidarity with CMI for the payment of salary
differentials due the complainants? Cite the
legal basis of your answer. (2004 BAR)
b. Will Mr. R's complaint for illegal dismissal
against W Gas Corp. prosper? Explain.
(2019 BAR)
A: YES, Mr. R's complaint for illegal dismissal
against W Gas Corp will prosper as it is solidarily
liable with Q Manpower Corp. under Art. 106 of
the Labor Code. Having proved that Q Manpower
is only a labor-only contractor, it is considered
merely as an agent of W Gas Corp. Consequently,
there exists an employer-employee relationship
between Mr. R and W Gas Corp. It cannot
terminate Mr. R on the pretext that the service
contract it had entered with Q Manpower Co. has
already lapsed, but must prove just or authorized
cause after due process.
A: NEDA shall be held solidarity liable with CMI
for the payment of salary differentials due to the
complainants, because NEDA is the indirect
employer of said complainants. The Labor Code
provides that x x x (A) person, partnership,
association or corporation which, not being an
employer, contracts with an independent
contractor for the performance of any work, task,
job or project" x x x “shall be jointly and severally
liable with his contractor or subcontractor to
such employees (of the contractor or
subcontractor) to the extent of work performed
under the contract x x x." (Arts. 106 and 107,
Labor Code)
Solidary Liability (2009, 2005, 2004 BAR)
Q: Antonio Antuquin, a security guard, was
caught sleeping on the job while on duty at the
Yosi Cigarette Factory, As a result, he was
dismissed from employment by the Wagan
Security Agency, an independent contractor.
TERMINATION OF EMPLOYMENT
(2019, 2015, 2014 BAR)
Q: Gabriela Liwanag has been working as a
bookkeeper at Great Foods, Inc. which
operates a chain of high-end restaurants
throughout the country, since 1970 when it
was still a small eatery at Binondo.
At the time of his dismissal, Antonio had been
serving as a watchman in the factory for many
years, often at stretches of up to 12 hours,
even on Sundays and holidays, without
overtime, nighttime and rest day benefits. He
thereafter filed a complaint for illegal
dismissal and non-payment of benefits
against Yosi Cigarette Factory, which he
claimed was his actual and direct employer. As
the Labor Arbiter assigned to hear the case,
how would you correctly resolve Antonio's
claim for overtime and other benefits? (2005
BAR)
In the early part of the year 2003, Gabriela,
who was already 50 years old, reported for
work after a week-long vacation in her
province. It was the height of the SARS (Severe
Acute Respiratory Syndrome) scare, and
management learned that the first confirmed
SARS death case in the Philippines, a
“balikbayan” nurse from Canada, is a
townmate of Gabriela. Immediately, a
memorandum was issued by management
terminating the services of Gabriela on the
ground that she is a probable carrier of SARS
virus and that her continued employment is
prejudicial to the health of her co-employees.
Is the action taken by the employer justified?
(2004 BAR)
A: Antonio's claim for overtime and other
benefits should be paid by Yosi Cigarette
Factory. The Labor Code provides that in the
event that the contractor or subcontractor fails
to pay the wages of his employees, the employer
shall be jointly and severally liable to the extent
of the work performed under the contract in the
same manner and extent that he is liable to
employees directly employed by his contractor
or subcontractor for any violation of any
provision of the Labor Code.
A: The employer’s act of terminating the
employment of Gabriela is not justified. There is
no showing that said employee is sick with SARS,
or that she associated or had contact with the
deceased nurse. They are merely townmates.
Furthermore, there is no certification by a
competent authority that the disease is of such a
Q: Manpower Inc. (CMI) had provided
32
QuAMTO (1987-2019)
nature or such a stage that it cannot be cured
within a period of six months even with proper
medical treatment. (Implementing Rules, Book VI,
Rule 1, Sec. 8, Labor Code)
Resignation is voluntary, whereas in constructive
dismissal there is vitiated consent.
Resignation means no separation pay, whereas
constructive dismissal means payment of
separation pay and damages.
Q: Rico has a temper and, in his work as
Division Manager of Matatag Insurance,
frequently loses his temper with his staff. One
day, he physically assaults his staff member
by slapping him. The staff member sues him
for physical injuries. Matatag insurance
decides to terminate Rico, after notice and
hearing, on the ground of loss of trust and
confidence. Rico claims that he is entitled to
the presumption of innocence because he has
not yet been convicted. Comment on Matatag’s
action in relation to Rico’s argument. (2015
BAR)
Resignation must be at least with 30 days’ notice
on the part of the employee, whereas in
constructive dismissal the employee can leave
anytime.
b. Will Ms. T's claim for constructive
dismissal prosper? Explain. (2019 BAR)
A: NO. The Supreme Court ruled that “...the
employer did not violate any law when it gave
the employee the option to resign because there
is nothing illegal with the practice of allowing an
employee to resign instead of being separated for
cause, so as not to smear her employment…” This
case applies to Ms. T as she was caught stealing
and her resignation gives her a chance not to
smear her records. (Sicangco v. NLRC, G.R. No.
110261, Aug. 4, 1994)
A: 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,
two of which are criminal and administrative. To
establish them, the evidence of the crime must
amount to proof beyond reasonable doubt;
whereas, the evidence of the ground for dismissal
is substantial evidence only. In this regard, the
company has some basis already for withholding
the trust it has reposed on its manager. Hence,
Rico’s conviction need not precede the
employee’s dismissal.
Q: An accidental fire gutted the JKL factory in
Caloocan. JKL decided to suspend operations
and requested its employees to stop reporting
for work. After six (6) months, JKL resumed
operations but hired a new set of employees.
The old set of employees filed a case for
illegal dismissal. If you were the Labor
Arbiter, how would you decide the case?
(2014 BAR)
TERMINATION BY EMPLOYEE
Resignation versus Constructive dismissal
(2019, 2014, 2004, 1996 BAR)
A: I will rule in favor of the employees. JKL
factory merely suspended its operations as a
result of the fire that gutted its factory. Art. 286
[now Art. 301] 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
termination of the employment of the employees,
but only a temporary displacement. Since, the
suspension of work lasted more than six months,
there is now constructive dismissal. (Sebuguero v.
NLRC, 245 SCRA 532 [1995])
Q: Ms. T was caught in the act of stealing the
company property of her employer. When
Ms. T admitted to the commission of the said
act to her manager, the latter advised her to
just tender her resignation; otherwise, she
would face an investigation which would
likely lead to the termination of her
employment and the filing of criminal
charges in court.
Acting on her manager's advice, Ms. T
submitted a letter of resignation. Later on, Ms.
T filed a case for constructive dismissal
against her employer. While Ms. T conceded
that her manager spoke to her in a calm and
unforceful manner, she claimed that her
resignation was not completely voluntary
because she was told that should she not
resign, she could be terminated from work for
just cause, and worse, criminal charges could
be filed against her.
a.
Q: RS, a security guard, filed a complaint for
illegal dismissal against Star Security Agency.
He alleged he was constructively dismissed
after ten years of service to the Agency. Having
'been placed on "off detail" and "floating
status" for 6 months already, he claimed the
Agency just really wanted to get rid of him
because it required him to take a
neuropsychiatric evaluation test by Mahusay
Medical Center. RS said he already submitted
the result of his evaluation test by Brent
Medical Clinica – precondition to a new
assignment, but the report was rejected by
the Agency. RS added that Mahusay Medical
Center had close ties with Star's president. It
could manipulate tests to favor only those
guards whom the Agency wanted to retain.
What is the difference between
resignation and constructive dismissal?
A: Resignation is at the instance of the employee,
whereas constructive dismissal is at the instance
of the employer.
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
33
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BAR OPERATIONS
Labor Law and Social Legislation
Star defended its policy of reliance on
Mahusay Medical Center because it has been
duly accredited by the Philippine National
Police. It is not one of those dubious testing
centers issuing readymade reports. Star cited
its sad experience last year when a guard ran
amuck and shot an employee of a client bank.
Star claimed management prerogative in
assigning its guards, and prayed that RS'
complaint be dismissed. What are the issues?
Identify and resolve them. (2004 BAR)
treasurer. Lincoln is not one of them. There is
likewise no showing that his position as
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] [now Art. 224(a)(2)], Labor Code)
Q: Due to his employer's dire financial
situation, Nicanor was prevailed upon by his
employer to voluntarily resign. In exchange,
he demanded payment of salary differentials,
13th month pay, and financial assistance, as
promised by his employer. Management
promised to pay him as soon as it is able to
pay off all retrenched rank-and-file
employees.
A: On the first issue, there is constructive
dismissal. RS cannot be placed on "off - detail"
and "floating status" indefinitely. If it lasts for
more than six (6) months, RS shall be, deemed to
have been constructively dismissed thus entitling
him to separation benefits. (Superstar Security
Agency v. NLRC, 1114 SCRA 74 [1990])
Five years later, and before management was
able to pay Nicanor the amount promised to
him, Nicanor died of a heart attack. His
widow, Norie, filed a money claim against the
company before the National Labor Relations
Commission (NLRC), including interest on
the amount of the unpaid claim. She also
claimed additional damages arguing that the
supposed resignation letter was obtained
from her spouse through undue pressure and
influence.
On the second issue, there is no valid exercise of
management prerogative. Star's claim of
management prerogative in assigning its guards
cannot be exercised to defeat or circumvent RS'
right to security of tenure.
Q: Lincoln was in the business of trading
broadcast equipment used by television and
radio networks. He employed Lionel as his
agent. Subsequently, Lincoln set up Liberty
Communications to formally engage in the
same business. He requested Lionel to be one
of the incorporators and assigned to him 100
Liberty shares. Lionel was also given the title
Assistant Vice-President for Sales and Head of
Technical Coordination.
The employer filed a motion to dismiss on
the ground that (a) the NLRC did not have
jurisdiction over money claims, and (b) the
action has prescribed.
a.
After several months, there were allegations
that Lionel was engaged in “under the table
dealings”
and
received
“confidential
commissions” from Liberty’s clients and
suppliers. He was, therefore, charged with
serious misconduct and willful breach of
trust, and was given 48 hours to present his
explanation on the charges.
May Nicanor's spouse successfully claim
additional damages as a result of the
alleged undue pressure and influence?
A: Norrie failed to establish that Nicanor’s
consent was vitiated when he filed his
resignation letter. In BMG Record v. Aparecio,
(G.R. No. 153290, Sept. 5, 2007), the SC ruled that
the matter of “financial assistance” was an act of
generosity on the part of management. Under
the circumstances, Nicanor had the intention to
resign. Once management had accepted the
resignation, Nicanor could not unilaterally
withdraw this voluntary act of termination of
employment.
Lionel was unable to comply with the 48-hour
deadline and was subsequently barred from
entering company premises. Lionel then filed a
complaint with the Labor Arbiter claiming
constructive dismissal. Among others, the
company sought the dismissal of the complaint
alleging that the case involved an intracorporate controversy which was within the
jurisdiction of the Regional Trial Court (RTC).
If you were the Labor Arbiter assigned to the
case, how would you rule on the company’s
motion to dismiss? (2014 BAR)
b. Does the NLRC have jurisdiction to award
money claims including interest on the
amount unpaid? (2018 BAR)
A: The NLRC has jurisdiction over money claims
arising from an employer-employee relationship
where the amount claimed is in excess of P5,000,
including interest, regardless of whether or not
there is a claim for reinstatement. (Sec. 10, R.A.
8042, as amended by R.A. 10022)
A: I will deny the motion to dismiss. "Corporate
officers" in the context of Presidential Decree
No. 902-A are those officers of the corporation
who are given that character by the Corporation
Code or by the corporation's by-laws. Sec. 25 of
the Corporation Code enumerates three specific
officers that in law are considered as corporate
officers – the president, secretary and the
TERMINATION BY EMPLOYER
a. Just Causes (2019, 2017, 2016, 2014, 2013,
2009, 2008, 2004, 2003, 2000, 1996, 1995,
1993, 1989 BAR)
34
QuAMTO (1987-2019)
Q: Distinguish between dismissal of an
employee for just cause and termination of
employment
for
authorized
cause.
Enumerate examples of just cause and
authorized cause. (2019, 2000 BAR)
Q: Arnaldo, President of “Bisig” Union in
Femwear Company, readied himself to leave
exactly at 5:00 p.m. which was the end of his
normal shift to be able to send off his wife
who was scheduled to leave for overseas.
However, the General Manager required him
to render overtime work to meet the
company's export quota. Arnaldo begged off,
explaining to the General Manager that he
had to see off his wife who was leaving to
work abroad. The company dismissed
Arnaldo for insubordination. He filed a case
for illegal dismissal. Decide. (2008 BAR)
A: A termination based on just cause under Art.
282 [now Art. 297] of the Labor Code means that
the employee has committed a wrongful act or
omission inimical to the interests of the
employer, which justifies the severance of the
employer-employee relationship, e.g., the
employee has committed some serious
misconduct; gross insubordination; fraud or loss
of trust and confidence; gross and habitual
neglect of duty; crime committed against the
employer and his family; other analogous cases.
Payment of separation pay is not mandated by
law.
A: Arnaldo cannot be dismissed for
insubordination. This is so because one of the
requisites for insubordination is absent. It cannot
be said that Arnaldo’s conduct was characterized
by a “wrongful and perverse attitude.” Arnaldo
can be said to have been motivated by his honest
belief that the order was unreasonable because
he had to send off his wife who was scheduled to
leave for overseas.
On the other hand, termination based on
authorized cause under Art. 283 and Art. 284
[now 298 and 299] of the Labor Code means
that there exists a ground which the law itself
authorizes to be invoked to justify the
termination of an employee even if he has not
committed any wrongful act or omission. Under
the same provisions, authorized causes are
classified into two (2) classes, namely, businessrelated causes such as installation of laborsaving devices; retrenchment; redundancy; or
closure not due to serious losses; and healthrelated causes, such as disease.
Q: Sergio, an employee of Encantado
Philippines, Inc. (EPI), was at the company
canteen when Corazon, a canteen helper,
questioned him for his use of somebody else’s
identification card (ID). Sergio flared up and
shouted at Corazon “Wala kang pakialam!
Kung gusto mo, itapon ko itong mga pagkain
ninyo!”
When Sergio noticed that some people where
staring at him rather menacingly, he left the
canteen but returned a few minutes later to
remark challengingly “Sino ba ang nagagalit"
Sergio then began smashing some food items
that were on display for sale in the canteen,
after which he slapped Corazon which caused
her to fall and suffer contusions. The incident
prompted Corazon to file a written complaint
with Gustavo, the personnel manager of EPI
against Sergio.
ALTERNATIVE ANSWER:
A: Dismissal for a just cause is founded on faults
or misdeeds of the employee. Separation pay, as
a rule, will not be paid. Examples: Serious
misconduct, willful disobedience, commission of
crime, gross and habitual neglect, fraud and
other causes analogous to the foregoing. (Art.
282 [now 297], Labor Code)
Termination for authorized causes are based on
business exigencies or measures adopted by the
employer, not constituting faults of the
employee. Payment of separation pay at varying
amounts is required. Examples: Redundancy,
closure, retrenchment, installation of laborsaving device and authorized cause. (Art. 283284 [now 298-299], Labor Code)
Gustavo required Sergio to explain in writing
why no disciplinary action should be taken
against him. In his written explanation, Sergio
admitted his misconduct but tried to explain
it away by saying that he was under the
influence of liquor at the time of the incident.
Gustavo thereafter issued a letter of
termination from the employment of Sergio
for serious misconduct. Sergio now files a
complaint for illegal dismissal, arguing that
his acts did not constitute serious misconduct
that would justify his dismissal. Decide. (1996
BAR)
Q: Give the procedure to be observed for
validly terminating the services of an
employee based on a just cause? (2017 BAR)
A: Termination of an employee based on just
causes requires compliance with the twin-notice
requirement. First, a notice should be served on
the employee specifying the grounds
for
termination. The employee should be given
reasonable opportunity to explain his side
Second, a notice should be served on the
employee indicating the termination of his
services.
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
A: The acts of Sergio constituted serious
misconduct. Thus, there was just cause for his
termination. The fact that he was under the
influence of liquor at the time that he did what he
did does not mitigate instead it aggravates, his
misconduct. Being under the influence of liquor
while at work is by itself serious misconduct.
35
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Labor Law and Social Legislation
Q: Roman had been a driver of Double-Ten
Corporation for ten (10) years. As early as his
fifth year in the service he was a ready
commended as a Model Employee and given a
salary increase. On his seventh year, he
became a steward of his labor union. Since
then he became disputatious and obstinate
and his performance fell below par.
ardent suitor; the two were on their way back to
the office from a sales call on Silver Drug, a
major drug retailer. In a fit of extreme jealousy,
Jose rammed Paolo's car, causing severe
injuries to Paolo and Erica. Jose's flare up also
caused heavy damage to the two companyowned cars they were driving.
a.
One day his manager told him to pick up some
documents from a certain bank which were
needed to close a business transaction.
Roman did not obey. He said he had an
important personal engagement. Moreover,
he did not want to drive a vehicle that was not
airconditioned.
When
his
immediate
supervisor asked him in the afternoon to
drive an airconditioned car, Roman again
refused. He said he did not want to drive as he
wanted to leave the office early.
As lawyer for Magna, advise the company
on whether just and valid grounds exist to
dismiss Jose.
A: Jose can be dismissed for serious misconduct,
violation of company rules and regulations, and
commission of a crime against the employer’s
representatives. Art. 282 [now 297] of the Labor
Code provides that an employer may terminate
an employment for any serious misconduct or
willful disobedience by the employee of the
lawful orders of his employer or his
representatives in connection with his work.
Roman was asked to explain. After hearing his
explanation, Roman was dismissed for willful
disobedience. Roman filed a case for illegal
dismissal against the Double-Ten Corporation
with prayer for reinstatement and full back
wages without loss of seniority rights, plus
moral and exemplary damages and attorney's
fees.
Misconduct involves “the transgression of some
established and definite rule of action, forbidden
act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in
judgment.” For misconduct to be serious and
therefore a valid ground for dismissal, it must
be:
Roman contended that since there was no
emergency situation and there were other
drivers available, his refusal to drive for the
manager, and later for his supervisor, was not
serious enough to warrant his dismissal. On
the other hand, he claimed that he was being
punished because of his activities as a
steward of his union. If you were the Labor
Arbiter, would you sustain Roman? Discuss
fully. (1995 BAR)
1.
2.
Of grave and aggravated character and not
merely trivial or unimportant and;
Connected with the work of the employee.
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 dismissal
was illegal? (2013 BAR)
A: 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) must show that the employee has
become unfit to continue working for the
employer.
A: If I were the Labor Arbiter. I would not sustain
Roman. It is true that it would be an unfair labor
practice for an employer to discriminate against
his employee for the latter’s union activities.
But in the case, the Corporation is not
discriminating against Roman because he is a
union official. When Roman’s manager told him
to pick up some documents from a certain bank,
this was a lawful order and when Roman did not
obey the order, he was disobedient; and when he
disobeyed a similar request made later in the
afternoon of same day, he was guilty of willful
disobedience to do what management asked him
to do. This is just cause for his termination.
On the basis of the foregoing guidelines, it can be
concluded that Jose was not guilty of serious
misconduct; Jose was not performing official
work at the time of the incident (Lagrosas v.
Bristol Myers Squibb, G.R. No. 168637 and 170684
[2008]). Additionally, there was no compliance
with the rudimentary requirements of due
process.
Q: Jose and Erica, former sweethearts, both
worked as sales representatives for Magna, a
multinational
firm
engaged
in
the
manufacture and sale of pharmaceutical
products. Although the couple had already
broken off their relationship, Jose continued
to have special feelings for Erica.
Q: Oscar Pimentel was an agent supervisor,
rising from the ranks, in a corporation
engaged in real estate. In order to promote
the business, the company issued a
memorandum to all agent supervisors
requiring them to submit a feasibility study
within their respective areas of operation. All
agent supervisors complied except Oscar.
One afternoon, Jose chanced upon Erica riding
in the car of Paolo, a co-employee and Erica's
36
QuAMTO (1987-2019)
Reminded by the company to comply with
the memorandum, Oscar explained that
being a drop-out in school and uneducated,
he would be unable to submit the required
study. The company found the explanation
unacceptable
and
terminated
his
employment. Aggrieved, Oscar filed a
complaint for illegal dismissal against the
company. Decide the case. (2003 BAR)
among others, a “brown monkey.” Hurt, Lee
decided to file a criminal complaint for grave
defamation against Lanz. The prosecutor
found probable cause and filed an
information in court. Lobinsons decided to
terminate Lanz for committing a potential
crime and other illegal acts prejudicial to
business.
Can Lanz be legally terminated by the
company on these grounds? (2014 BAR)
A: For failure to comply with the memorandum
to submit a feasibility study on his area of
operation, Oscar cannot be terminated
(presumably for insubordination or willful
disobedience) because the same envisages the
concurrence of at least two requisites:
1.
The employee’s assailed conduct must have
been willful or intentional, the willfulness
being characterized by a wrongful and
perverse attitude; and
2.
The order violated must have been
reasonable, or lawful, made known to the
employee and must pertain to the duties
which he had been engaged to discharge.
A: NO. The grounds relied upon by Lobinsons are
not just causes for dismissal under the Labor
Code. Defamation is not a crime against person
which is a ground to dismiss under Art. 282 [now
Art. 297 (d)] of the Labor Code.
Q: Nicodemus was employed as a computer
programmer by Network Corporation, a
telecommunications firm. He has been coming
to work in shorts and sneakers, in violation of
the "prescribed uniform policy" based on
company rules and regulations. The company
human resources manager wrote him a letter,
giving him 10 days to comply with the
company uniform policy.
In the case at bar, at least two requisites are
absent, namely: (1) Oscar did not willfully
disobey the memorandum with a perverse
attitude; and (2) the directive to make a
feasibility study did not pertain to his duties.
Hence, the termination from employment of
Oscar Pimentel is not lawful.
Nicodemus asserted that wearing shorts and
sneakers made him more productive, and
cited his above-average output. When he
came to work still in violation of the uniform
policy, the company sent him a letter of
termination of employment. Nicodemus filed
an illegal dismissal case. The Labor Arbiter
ruled in favor of Nicodemus and ordered his
reinstatement with backwages. Network
Corporation, however, refused to reinstate
him.
Q: Domingo, a bus conductor of San Juan
Transportation Company, intentionally did
not issue a ticket to a female passenger, Kim,
his long-time crush. As a result, Domingo was
dismissed from employment for fraud or
willful breach of trust. Domingo contests his
dismissal, claiming that he is not a
confidential employee and, therefore, cannot
be dismissed from the service for breach of
trust. Is Domingo correct? Reasons. (2009
BAR)
The NLRC 1st Division sustained the Labor
Arbiter's judgment. Network Corporation still
refused to reinstate Nicodemus. Eventually,
the Court of Appeals reversed the decision of
the NLRC and ruled that the dismissal was
valid. Despite the reversal, Nicodemus still
filed a motion for execution with respect to
his accrued backwages.
A: Domingo as bus conductor holds a position
wherein he was reposed with the employer’s
trust and confidence.
a.
In Bristol Myers Squibb (Phils.) v. Baban (574
SCRA 198 [2008]), the Court established a second
class of positions of trust that involve rank-andfile employees who, in the normal and routine
exercise of their functions, regularly handle
significant amounts of money. A bus conductor
falls under such second class of persons. This
does not mean, however, that Domingo should
be dismissed. In Etcuban v. Sulpicio Lines (448
SCRA 516 [2005]), the Court held that where the
amount involved is miniscule, an employee may
not be dismissed for loss of trust and confidence.
Q: Lanz was a strict and unpopular VicePresident for Sales of Lobinsons Land. One
day, Lanz shouted invectives against Lee, a
poor performing sales associate, calling him,
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Were there valid legal grounds to dismiss
Nicodemus from his employment?
A: YES. Nicodemus clearly committed willful
disobedience of lawful orders issued by the
Network Corporation, with respect to the
uniform policy. This is a ground for termination
under Art. 297(a) of the Labor Code.
b. Should Nicodemus' motion for execution
be granted? (2018 BAR)
A: YES In Garcia v. Philippine Airlines, Inc. (G.R.
No. 164856, Jan. 20, 2009) the employer who did
not reinstate an employee pending appeal may
be held liable for wages of the dismissed
employee covering the period from the time he
was ordered reinstated by the Labor Arbiter to
37
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Labor Law and Social Legislation
the reversal of the NLRC’s decision by the Court
of Appeals.
month pay or at least one month pay for
every year of service, whichever is higher;
b. Authorized Causes (2018, 2017, 2016,
2006, 2004, 2003, 2002, 2001, 2000, 1999,
1998, 1994, 1990 BAR)
Q: What are the authorized causes for a valid
dismissal by the employer of an employee?
Why are they distinct from the just causes?
(2004, 2002 BAR)
4.
That the employer exercises its prerogative
to retrench employees in good faith for the
advancement of its interest and not to defeat
or circumvent the employees' right to
security of tenure; and
5.
That the employer used fair and reasonable
criteria in ascertaining who would be
dismissed and who would be retained among
the employees, such as status (i.e., whether
they are temporary, casual, regular or
managerial employees), efficiency, seniority,
physical fitness, age, and financial hardship
for certain workers.
The authorized causes for a valid dismissal are
the following:
a.
b.
c.
d.
Installation of labor-saving devices
Redundancy
Retrenchment to prevent losses
The closing or cessation of operation of the
establishment or undertaking
Q: Hagibis Motors Corporation (Hagibis) has
500 regular employees in its car assembly
plant. Due to the Asian financial crisis,
Hagibis experienced very low car sales
resulting to huge financial losses. It
implemented several cost-cutting measures
such as cost reduction on use of office
supplies,
employment
hiring
freeze,
prohibition on representation and travel
expenses, separation of casuals and reduced
work week. As counsel of Hagibis, what are
the measures the company should undertake
to implement a valid retrenchment? Explain.
(2016 BAR)
The authorized causes for a valid dismissal are
distinct from just causes because where the
dismissal of an employee is based on just causes,
these just causes are acts committed by the
employee which provide the basis for his
dismissal. On the other hand, where the dismissal
is based on authorized causes, these authorized
causes are the results of the proper exercise by
the employer of his management prerogatives.
If a valid dismissal is based on just causes, there
is no liability on the part of the employer,
although sometimes, financial assistance to be
given to the dismissed employee is asked of the
employer. If a valid dismissal is based on
authorized causes, the employer has to pay
separation pay except In case of closure or
cessation of operation due to serious business
losses or financial reverses.
A: For a valid retrenchment, the following
requisites must be complied with:
a.
b.
Q: What conditions must prevail and what
requirements, if any, must an employer
comply with to justify/effect a valid
retrenchment program? (2001 BAR)
c.
A: In the case of Asian Alcohol Corp. v. NLRC (G.R.
No. 131108, March 25, 1999), the Supreme Court
stated that the requirements for a valid
retrenchment must be proved by clear and
convincing evidence:
1.
That the retrenchment is reasonably
necessary and likely to prevent business
losses which, if already incurred, are merely
de minimis, but substantial, serious, actual
and real or if only expected, are reasonably
imminent as perceived objectively and in
good faith by the employer;
2.
That the employer served written notice
both to the employees and to the Department
of Labor and Employment at least one month
prior to the intended date of retrenchment;
3.
That the employer pays the retrenched
employees separation pay equivalent to one
The retrenchment is necessary to prevent
losses and such losses are proven;
Written notice to the employees and to the
DOLE at least one month prior to the
intended date of retrenchment; and
Payment of separation pay equivalent to
one-month pay or at least one-half month
pay for every year of service, whichever is
higher.
Jurisprudential standards for the losses
which may justify retrenchment are: firstly,
the losses expected should be substantial
and not merely de minimis in extent. If the
loss purportedly sought to be forestalled by
retrenchment is clearly shown to be
insubstantial and inconsequential in
character, the bona fide nature of the
retrenchment would appear to be seriously
in question; secondly, the substantial loss
must be reasonably imminent, as such
imminence can be perceived objectively and
in good faith by the employer; x x x thirdly,
because of the consequential nature of
retrenchment, it must be reasonably
necessary and is likely to be effective in
preventing the expected losses; x x x lastly,
alleged losses if already realized, and the
expected imminent losses sought to be
forestalled, must be proved by sufficient and
convincing evidence. (Manatad v. Philippine
38
QuAMTO (1987-2019)
Telegraph and Telephone Corporation, G.R.
No. 12363, March 7, 2008)
Q: ABC Tomato Corporation, owned and
managed by three (3) elderly brothers and
two (2) sisters, has been in business for 40
years. Due to serious business losses and
financial reverses during the last five (5)
years, they decided to close the business.
(2006 BAR)
Hagibis should exercise its prerogative to
retrench employees in good faith. It 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 criteria such as status,
efficiency, seniority, physical fitness, age and
financial hardship for certain workers in
ascertaining who would be dismissed and
who would be retained among the
employees.
a.
A: As counsel for the corporation, I will see to it
that the corporation shall serve a written notice
on its intended date of closing or cessation of
operation on the workers of the corporation and
the Department of Labor and Employment at
least one month before the intended date of the
closure or cessation of operation.
Q: Daisy’s Department Store hired Leo as a
checker to apprehend shoplifters. Leo later
became Chief of the Checkers Section and
acquired the status of a regular employee. By
way of a cost-cutting measure, Daisy's decided
to abolish the entire Checkers Section. The
services of Leo, along with those of his coemployees working in the same section, were
terminated on the same day.
b. Are the employees entitled to separation
pay?
A: The employees of the corporation are not
entitled to separation pay because Art. 283 [now
298] of the Labor Code expressly provides that if
the closure or cessation of operation of an
establishment is due to serious business losses
or
financial
reverses,
the
employees are not entitled to separation pay.
A month after the dismissal of Leo, Daisy’s
engaged the services of another person as an
ordinary checker and with a salary much
lower than that which Leo used to receive.
Given the above factual settings (nothing
more having been established), could the
dismissal of Leo be successfully assailed by
him? (2003 BAR)
c.
Losses or expected losses should be
substantial and not merely de minimis;
2.
The expected losses must be reasonably
imminent, and such imminence can be
perceived objectively and in good faith by
the employer.
3.
It must be necessary and likely to prevent
the expected losses. The employer must
have taken other measures to cut costs
other than labor costs; and
4.
Losses if already realized, or the expected
losses must be proved by sufficient and
convincing evidence. (Lopez Sugar Corp. v.
Federation of Sugar Workers, 189 SCRA 179
[1990])
Q: Zienna Corporation (Zienna) informed the
Department of Labor and Employment
Regional Director of the end of its operations.
To carry out the cessation, Zienna sent a
Letter Request for Intervention to the NLRC
for permission and guidance in effecting
payment of separation benefits for its fifty
(50) terminated employees.
Each of the terminated employees executed a
Quitclaim and Release before Labor Arbiter
Nocomora, to whom the case was assigned.
After the erstwhile employees received their
separation pay, the Labor Arbiter declared
the labor dispute dismissed with prejudice on
the ground of settlement. Thereafter, Zienna
sold all of its assets to Zandra Company
(Zandra), which in turn hired its own
employees.
Moreover, the notice requirements to be given
by Daisy’s Department Store to DOLE and the
employees concerned 30 days prior to the
intended date of termination, as well as the
requisite separation pay, were not complied
with.
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
If the reason for the closure is due to old
age of the brothers and sisters: Is the
closure allowed by law?
A: YES, the closure is allowed by law. For a bona
fide reason, an employer can lawfully close shop
at any time. Just as no law forces anyone to go
into business, no law can compel anybody to
continue the same. It would be stretching the
intent and spirit of the law if the Court interferes
with management’s prerogative to close or cease
its business operations just because the business
is not suffering from any loss or because of the
desire
to
provide
workers
continued
employment. (Alabang Country Club, Inc. v. NLRC,
466 SCRA 329 [2005])
A: YES. Given the factual setting in the problem,
and since ‘‘nothing more (have) been
established”, the dismissal of Leo can be
successfully assailed by him. This is so because
the burden of proof is upon the employer to
show compliance with the following requisites
for reduction of personnel:
1.
As counsel for the corporation, what
stepswill you take prior to its closure?
39
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Labor Law and Social Legislation
Each of the terminated employees executed a
Quitclaim and Release before Labor Arbiter
Nocomora, to whom the case was assigned.
After the erstwhile employees received their
separation pay, the Labor Arbiter declared
the labor dispute dismissed with prejudice on
the ground of settlement. Thereafter, Zienna
sold all of its assets to Zandra Company
(Zandra), which in turn hired its own
employees.
(Arts. 279 [now 294] and 277 [b] [now 292(b)],
Labor Code)
Nelle, one of the fifty (50) terminated
employees, filed a case for illegal dismissal
against Zienna. She argued that Zienna did
not cease from operating since the
corporation subsists as Zandra. Nelle pointed
out that aside from the two companies having
essentially the same equipment, the
managers and owners of Zandra and Zienna
are likewise one and the same.
A: Assuming that there is a valid ground to
terminate employment, the employer must
comply with the requirement of procedural due
process – written notice of intent to terminate
stating the cause for termination; Hearing and
Notice of Termination. The Labor Code reads:
Twin-notice Requirement (2017, 2009, 2006,
1998 BAR)
Q: Assuming the existence of valid grounds for
dismissal, what are the requirements before
an employer can terminate the services of an
employee? (1998 BAR)
A. Notice and Hearing
Art. 277 [now 292]. Miscellaneous provisions. –
xxx
For its part, Zienna countered that Nelle is
barred from filing a complaint for illegal
dismissal against the corporation in view of
her prior acceptance of separation pay. Is
Nelle correct in claiming that she was illegally
dismissed? (2016 BAR)
(b) x x x The employer shall furnish the worker
whose employment is sought to be
terminated a written notice containing a
statement of the causes for termination
and shall afford the latter ample
opportunity to be heard and to defend
himself with the assistance of his
representative if he so desires x x x
A: NO. In SME Bank v. De Guzman (G.R. No.
184517 and 186641, Oct. 8, 2013), there are two
(2) types of corporate acquisitions: asset sales
and stock sales. In asset sales, the corporate
entity sells all or substantially all its assets to
another entity. In stock sales, the individual or
corporate shareholders sell a controlling block of
stock to new or existing shareholders.
The Supreme Court ruled in Salaw v. NLRC (202
SCRA 7 [1991]):
x x x Not only must the dismissal be for a valid
or unauthorized cause as provided by law x x x
but the rudimentary requirements of due
Asset sales happened in this case; hence, Zienna
is authorized to dismiss its employees, but must
pay separation pay. The buyer, Zandra, is not
obliged to absorb the employees affected by the
sale, nor is it liable for the payment of their
claims. The most that Zandra may do, for reasons
of public policy and social justice, is to give
preference in hiring qualified separated
personnel of Zienna.
process - notice and hearing - must
also be observed before an employee
must be dismissed.
B. Two (2) Notice Requirements
The Supreme Court in Tanala v. NLRC (252 SCRA
314 [1996]), and in a long line of earlier cases,
ruled:
c. Due Process (2016, 2006, 1999, 1998, 1997,
1995, 1994, 1990 BAR)
x x x This Court has repeatedly held that to
meet the requirements of due process, the
law requires that an employer must furnish
the workers sought to be dismissed with
two written notices before termination of
employment can be legally effected, that is,
(1) a notice which apprises the employee of
the particular acts or omissions for which
his dismissal is sought; and (2) subsequent
notice, after due hearing, which informs the
employee of the employers decision to
dismiss him.
Q: Distinguish between the substantive and the
procedural requirements for the dismissal of
an employee (1994 BAR)
A: 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 termination is authorized by law.
This is the procedural requirement: The
employer should furnish the employee whose
employment is sought to be terminated a written
notice containing a 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 with the
assistance of his representative if he so desires.
Q: Alfredo was dismissed by management for
serious misconduct. He filed suit for illegal
dismissal, alleging that although there may
be just cause, he was not afforded due
process by management prior to his
40
QuAMTO (1987-2019)
termination. He demands reinstatement with
full backwages.
circumstances,
grounds
have
been
established to justify his termination.
What are the twin requirements of due
process which the employer must observe in
terminating or dismissing an employee?
Explain. (2009 BAR)
Hearing; Ample Opportunity to be Heard
(1994, 1999)
Q: Atty. Oliza heads the legal department of
Company X with the rank and title of VicePresident. During his leave of absence, his
assistant took over as acting head of the legal
department. Upon his return, Atty. Oliza was
informed in writing that his services were no
longer needed, it appearing that the
Company had lost so many cases by default
due to his incompetence. Atty. Oliza filed a
case for illegal dismissal. Will his case
prosper?
A: The twin requirements of due process are
notice and hearing to be given to the worker.
There is likewise a two-notice requirement rule,
with the first notice pertaining to specific causes
or grounds for termination and a directive to
submit a written explanation within a
reasonable period. “The second notice pertains
to notice of termination. Pursuant to Perez v.
PT&T Company (G.R. No. 152048, April 7, 2009),
the Court held that a hearing or conference is
not mandatory, as long as the employee is given
“ample opportunity to be heard”, i.e., any
meaningful opportunity (verbal or written) to
answer the charges against him or her and
submit evidence in support of the defense,
whether in a hearing, conference, or some other
fair, just and equitable way.
A: His case will prosper. He was not given
procedural due process. He was not given the
required notice, namely, a written notice
containing a statement of the causes for
termination, and he was not afforded ample
opportunity to be heard and to defend himself.
But if, before the Labor Arbiter, in a hearing of
the case of illegal dismissal that Atty. Oliza may
have filed, he is found to be grossly incompetent,
this is just cause for his dismissal. (Art. 277[b]
[now 292(b)], Labor Code)
Q: Inday was employed by Herrera Home
Improvements, Inc. (Herrera Home) as
interior decorator. During the first year of
her employment, she did not report for work
for one month. Hence, her employer
dismissed her from the service. She filed with
the Labor Arbiter a complaint for illegal
dismissal alleging she did not abandon her
work and that in terminating her
employment, Herrera Home deprived her of
her right to due process. She thus prayed that
she be reinstated to her position.
Q: Joseph Vilriolo (JV), a cashier of Seaside
Sunshine Supermart (SSS), was found after
an audit, to have cash shortages on his
monetary accountability covering a period of
about five months in the total amount of
P48,000.00. SSS served upon JV the written
charge against him via a memorandum order
of preventive suspension, giving JV 24 hours
to submit his explanation. As soon as JV
submitted his written explanation within the
given period, the same was deemed
unsatisfactory by the company and JV was
peremptorily dismissed without any hearing.
Inday hired you as counsel. In preparing the
position paper to be submitted to the Labor
Arbiter, explain the standards of due process
which should have been observed by Herrera
Home
in
terminating
your
client's
employment. (2006 BAR)
The day following his termination from
employment. JV filed a case of illegal
dismissal against SSS. During the hearing
before the Labor Arbiter, SSS proved by
substantial evidence JVs misappropriation of
company funds and various infractions
detrimental to the business of the company.
JV, however, contended that his dismissal
was illegal because the company did not
comply with the requirements of due
process. Did SSS comply with the
requirements of procedural due process in
the dismissal from employment of JV?
Explain briefly. (1999 BAR)
A: The Labor Code provides the following
procedure to be observed in terminating the
services of an employee based on just causes as
defined in Art. 282 [now 297] of the Code:
a.
A written notice must be served on the
employee specifying the ground or grounds
for termination and giving him reasonable
opportunity within which to explain his
side;
b.
A hearing or conference shall be conducted
during which the employee concerned,
with the assistance of counsel if he so
desires, is given an opportunity to respond
to the charge, present his evidence or rebut
the evidence presented against him; and
c.
A: In connection with the right to due process in
the termination of an employee, the Labor Code
(in Art. 277[b] [now 292(b)]) requires that the
employer furnish the worker whose employment
is sought to be terminated a written notice
containing a statement of the causes for
termination and shall afford ample opportunity
to be heard and to defend himself with the
A written notice of termination must be
served on the employee indicating that
upon due consideration of all the
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
41
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Labor Law and Social Legislation
from his family and his
assignments in Metro Manila.
assistance of his representative if he so desires.
SSS did not comply with the above-described
requirements for due process. The memorandum
order was for the preventive suspension of JV,
not a notice for his termination and the causes of
his termination.
a.
Q: Discuss briefly the instances when
noncompliance by the employer with a
reinstatement order of an illegally dismissed
employee is allowed. (2007 BAR)
b.
When reinstatement has been rendered
moot and academic by supervening events,
such as insolvency of the employer as
declared by the court or closure of the
business;
c.
The existence of strained relations between
the employer and the illegally dismissed
employee, provided the matter is raised
before the Labor Arbiter.
Is the award of attorney's fees valid? State
the reasons for your answer.
A: YES. What Art. 111 (b) prohibits is the demand
or acceptance by any person in a judicial or
administrative proceedings for the recovery of
wages, attorney’s fees which exceed 10% of the
amount of wages recovered. Since in this case,
the amount of attorney’s fees is exactly
equivalent to the 10% of the separation fee
recovered, the award is valid.
A: Despite a reinstatement order, an employer
may not reinstate an employee in the following
instances:
When the position or any substantial
equivalent thereof no longer exists;
work
The Labor Arbiter found that there was no
constructive dismissal but ordered the
payment of separation pay due to strained
relations between Santiago and Bagsak
Builders plus attorney's fees equivalent to ten
percent (10%) of the value of Santiago's
separation pay.
Reliefs for Illegal Dismissal (2019, 2009,
2007, 2002, 2001, 1997, 1995, 1994 BAR)
a.
usual
b. Could the labor arbiter have validly
awarded moral and exemplary damages
to Santiago instead of attorney’s fees?
Why? (2001 BAR)
A: NO. In the case of Lirag Textile Mills, Inc. et al.
v. Court of Appeals, et al., (GR No. L-30786, April
14, 1975), the Supreme Court held that when the
termination of the services of an employee is
attended by fraud or bad faith on the part of the
employer as when the latter knowingly made
false allegations of a supposed valid cause when
none existed, moral and exemplary damages may
be awarded in favour of the former.
In the event that reinstatement is no longer
feasible, or if the employee chooses not to be
reinstated, the employer shall pay him separation
pay in lieu of reinstatement pending appeal. (Art.
223 [now 229], Labor Code)
In this case, there was no showing that there was
a bad faith on the part of the employer. In fact,
the bad faith and false allegations were on the
part of the employee when he refused to obey the
transfer mandated by his employer solely on the
shallow basis that he will be away from his
family.
Q: A strike was staged in Mella Corporation
because of a deadlock in CBA negotiations
over certain economic provisions. During the
strike, Mella Corporation hired replacements
for the workers who went on strike.
Thereafter, the strikers decided to resume
their employment. Can Mella Corporation be
obliged to reinstate the returning workers to
their previous positions? (1997 BAR)
Q: What damages can an illegally dismissed
employee collect from his employer? (2001
BAR)
A: An illegally dismissed employee may collect
from his employer ACTUAL and COMPENSATORY
damages, MORAL damages and EXEMPLARY
damages, as well as attorney’s fees as damages.
A: YES. Mella Corporation can be obligated to
reinstate the returning workers to their previous
positions. Workers who go on strike do not lose
their employment status except when, while on
strike, they knowingly participated in the
commission of illegal acts. The Labor Code
expressly provides: Mere participation of a
worker in a lawful strike should not constitute
sufficient ground for termination of his
employment, even if a replacement had been
hired by the employer during such lawful strike.
Q: Lyric Theater Corp. issued a memorandum
prohibiting all ticket sellers from encashing
any check from their cash collections and
requiring them instead to turn over all cash
collections to the management at the end of
the day. In violation of this memorandum,
Melody, a ticket seller, encashed five (5)
checks
from
her
cash
collection.
Subsequently the checks were dishonored
when deposited in the account of Lyric
Theater.
Q: Eduardo Santiago, a project worker, was
being assigned by his employer, Bagsak
Builders, to Laoag, Ilocos Norte. Santiago
refused to comply with the transfer claiming
that it, in effect, constituted a constructive
dismissal because it would take him away
42
QuAMTO (1987-2019)
For this action, Melody was placed under a
20-day suspension and directed to explain
why she should not be dismissed for
violation of the company's memorandum. In
her explanation, she admitted having
encashed the checks without the company's
permission.
process of winding up. Nonetheless, B paid A
his backwages and separation pay.
While the investigation was pending, Melody
filed a complaint against Lyric Theater for
backwages and separation pay. The Labor
Arbiter ordered Lyric Theater to pay Melody
P115, 420.79 representing separation pay
and backwages. The NLRC affirmed the ruling
of the Labor Arbiter. Is the ruling of the NLRC
correct? Explain briefly. (2002 BAR)
A: A is correct. Art. 279 [now 294] provides that
an employee who is unjustly dismissed from
work shall be entitled to reinstatement without
loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances,
and to his other benefits or their monetary
equivalent computed from the time his
compensation was withheld from him up to the
time of his actual reinstatement. Clearly, based
from the foregoing provision, A is entitled to his
allowances.
A complained that B’s computation was
erroneous in that A’s allowances was not
included. Is A correct in his claim? For what
reasons? (2001 BAR)
A: The ruling of the NLRC affirming the Labor
Arbiter's decision ordering Lyric Theater to pay
P115,420.79 representing separation pay and
backwages is wrong. The Labor Arbiter's
decision is wrong because:
a.
b.
c.
RETIREMENT
(2018, 2013, 2007, 2005, 2001, 1994 BAR)
It is premature. There was still no
termination. All that was done by the
employer (Lyric Theater) was to place the
employee (Melody) under a 20-day
suspension, meanwhile directing her to
explain why she should not be dismissed for
violation of company's memoranda.
Q: As a rule, when is retirement due? (2007
BAR)
A: Art. 287 [now 302] provides for two types of
retirement:
The order for Lyric Theater to pay
separation pay has no factual basis.
Separation pay is to be paid to an employee
who is terminated due to the installation of
labor-saving
devices,
redundancy,
retrenchment to prevent losses or the
closing or cessation of operation of the
establishment undertaking. None of these
events has taken place. Neither is separation
pay here in lieu of reinstatement applicable
because there is just cause if Melody is
terminated under the circumstances.
Optional retirement – which may be
availed of by an employee reaching the
age of 60 years;
b.
Compulsory retirement – which may be
availed of by an employee upon reaching
the age of 65 years.
In both instances, the law imposes the minimum
service requirement of 5 years with the
establishment.
Q: Discuss the differences between
compulsory
and
voluntary/optional
retirement as well as the minimum benefits
provided under the Labor Code for retiring
employees of private establishments. (2019
BAR)
The order for Lyric Theater to pay
backwages has no factual basis either
because there is just cause if she will be
terminated after investigation. In this case,
there is willful disobedience by the
employee of the lawful orders of her
employer in connection with her work. She
did not just violate the lawful order of the
employer, she violated it five times. Melody
did not give any justifiable reason for
violating the company's memorandum
prohibiting the encashment of checks. (Jo
Cinema Corp. v. Avellana, G.R. No. 32837, June
28, 2001)
A: A voluntary/optional retirement is a
termination of employment based on a bilateral
agreement to terminate employment at an
agreed age regardless of years in service, or
after a certain number of years in service
regardless of age. It is a matter of contract. In
contrast, a compulsory retirement is a
termination of employment by operation of law.
It is a matter of statute.
Under Art. 302 of the Labor Code, retiring
employees shall be paid retirement benefits
computed as follows:
Q: “A”, an employee of Company “B” was found
to have been illegally dismissed and was
ordered to be reinstated and paid backwages
from the time of dismissal until actual
reinstatement. The case was elevated all the
way to the Supreme Court. By the time the
Supreme Court’s decision became final and
executory, B had closed down and was in the
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
a.
(22.5 days x Daily Rate) x Length of Service
The 22.5 days consist of 15 days representing
half-month salary, 5 days as service incentive
leave, and 2.5 days representing 1/12 of 13th
month pay. The full 22.5 days shall be used if the
43
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BAR OPERATIONS
Labor Law and Social Legislation
retiree is entitled to both service incentive leave
and 13th month pay. Meantime, the 15 days
must always be used.
relations with Albert; he was declared fully
retired in a fitting ceremony but the company
did not give him any further retirement
benefits. 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 were not
paid to him, and for retirement benefits for
his additional five (5) working years, based
either on the company's Retirement Plan or the
Retirement Pay Law, whichever is applicable.
Q: When is retirement due for underground
miners? (2007 BAR)
A: Pursuant to R.A. 8558, in the absence of a
retirement plan or other applicable agreement
providing for retirement benefits of underground
mine employees in the establishment, any such
employee may retire upon reaching the age of 50
years or more if he has served for at least 5 years
as underground mine employee or in
underground mine of the establishment.
Is he entitled to additional retirement benefits
for the additional service he rendered after
age 65? (2013 BAR)
Q: Ricky Marvin had worked for more than
ten (10) years in 1GB Corporation. Under the
terms of the personnel policy on retirement,
any employee who had reached the age of 65
and completed at least ten (10) years of
service would be compulsorily retired and
paid 30 days’ pay for every year of service.
A: NO. He cannot be compulsorily retired twice in
the same company.
Q: A Collective Bargaining Agreement (CBA)
between Company A and its employees
provides for optimal retirement benefits for
employees who have served the company for
over 25 years regardless of age, equivalent to
one-and- one-half months pay per year of
service based on the employee’s last pay. The
CBA further provides that “employees whose
services are terminated, except for cause,
shall receive said retirement benefits
regardless of age or service record with the
company or to the applicable separation pay
provided by law, whichever is higher."
Ricky Marvin, whose immigrant visa to the
USA had just been approved, celebrated his
60th birthday recently. He decided to retire
and move to California where the son who
petitioned him had settled. The company
refused to grant him any retirement benefits
on the ground that he had not yet attained the
compulsory retirement age of 65 years as
required by its personnel policy; moreover, it
did not have a policy on optional or early
retirement.
The Company, due to poor business conditions,
decided to cease operations and gave its
employees the required one month’s advance
notice as well as notice to DOLE, with the
further advice that each employee may claim
his corresponding separation or retirement
benefits whichever is higher after executing
the required waiver and quitclaim.
Taking up the cudgels for Ricky Marvin, the
union raised the issue in the grievance
machinery as stipulated in the CBA. No
settlement was arrived at and the matter was
referred to voluntary arbitration. If you were
the Voluntary Arbitrator, how would you
decide? Briefly explain the reasons for your
award. (2007 BAR)
Dino Ramos and his co-employees who have
all rendered more than 25 years of 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. Who is
correct, the employees or the Company? (1994
BAR)
A: I will grant Ricky Marvin the retirement
benefits under Art. 287 [now 302] of the Labor
Code. Art. 287 [now 302] of the Labor Code, as
the minimum standard in law, allows an
employee an optional retirement upon reaching
the age of 60 years provided he rendered at least
5 years of service – requirements that Ricky
Marvin met under the facts of the case.
A: The employees are correct. In the absence of a
categorical provision in the Retirement Plan and
the CBA that an employee who receives
separation pay is no longer, entitled to
retirement benefits, the employee is entitled to
the payment of both benefits pursuant to the
social justice policy. (Conrado Aquino, et al. v.
NLRC, et al., G.R. No. 87653, Feb. 11, 1992)
Q: After thirty (30) years of service, Beta
Company compulsorily retired Albert at 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. Thereafter, out of
compassion, the company allowed Albert to
continue working and paid him his old
monthly salary rate, but without the
allowances that he used to enjoy.
Q: Narciso filed a complaint against Norte
University for the payment of retirement
benefits after having been a part-time
professional lecturer in the same school since
1974.
After five (5) years under this arrangement,
the company finally severed all employment
44
QuAMTO (1987-2019)
Narciso taught for two semesters and a
summer term for the school year 1974-1975,
took a leave of absence from 1975 to 1977,
and resumed teaching until 2003. Since then,
his contract has been renewed at the start of
every semester and summer, until November
2005 when he was told that he could no
longer teach because he was already 75 years
old.
MANAGEMENT PREROGATIVE
Management Prerogative (2019, 2015, 2014,
2013, 2010, 2003, 2002, 1994, 1993, 1989
BAR)
Q: Which takes precedence in conflicts
arising between employer’s management
prerogative and the employee’s right to
security of tenure? Why? (1993 BAR)
Norte University also denied Narciso's claim
for retirement benefits stating that only fulltime permanent faculty, who have served for
at least five years immediately preceding the
termination of their employment, can avail
themselves of post-employment benefits. As
part-time faculty member, Narciso did not
acquire permanent employment status
under the Manual of Regulations for Private
Schools, in relation to the Labor Code,
regardless of his length of service.
a.
A: The employee's right to security of tenure
takes precedence over the employer's
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
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 recognizes and guarantees an
employee’s right to security of tenure. (Art. 279
[now 294], Labor Code; Sec. 3, Art. XIII, 1987
Constitution)
Is Narciso entitled to retirement benefits?
A: As a part-time employee with fixed-term
employment, Narciso is entitled to retirement
benefits. Book VI, Rule II of the Rules
Implementing the Labor Code states that the
rule on retirement shall apply to all employees
in the private sector, regardless of their
position, designation or status and irrespective
of the method by which their wages are paid,
except to those specifically exempted. Parttime faculty members do not fall under the
exemption. Based also on the Retirement Pay
Law, and its Implementing Rules, part-time
faculty members of private educational
institutions are entitled to full retirement
benefits even if the services are not
continuous, and even if their contracts have
been renewed after their mandatory age of
retirement.
Q: Harbor View Hotel has an existing
Collective Bargaining Agreement (CBA) with
the union of rank-and-file employees
consisting, among others, of bartenders,
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 areas.
Over the protest of the Union, the Hotel
contracted out the aforementioned job to the
City Service Janitorial Company, a bona fide
independent contractor which has a
substantial capital in the form of janitorial
tools,
equipment,
machineries
and
competent manpower. Is the action of the
Harbor View Hotel legal and valid? (1994
BAR)
b. If he is entitled to retirement benefits,
how should retirement pay be computed
in the absence of any contract between
him and Norte University providing for
such benefits? (2018 BAR)
A: In the absence of any contract providing for
higher retirement benefits, private educational
institutions, including Norte University, are
obligated to set aside funds for the retirement
pay of all its part-time faculty members. A
covered employee who retires pursuant to the
Retirement Pay Law shall be entitled to
retirement pay equivalent to at least one-half
(1/2) month salary for every year of service, a
fraction of at least six (6) months being
considered as one whole year. One-half month
salary shall mean fifteen (15) days plus onetwelfth (1/12) of the 13th month pay and the
cash equivalent of not more than five (5) days
service incentive leaves. In total, this should
amount to 22.5 days for every year of service.
(De La Salle Araneta University v. Bernardo, G.R.
No. 190809, Feb. 13, 2017)
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
A: The action of Harbor View Hotel is legal and
valid. The valid exercise of management
prerogative,
discretion
and
judgment
encompasses all aspects of employment,
including the hiring, work assignments, working
methods, time, place and manner of work, tools
to be used, processes to be followed, supervision
of workers, working regulations, transfer of
employees, work supervision, lay-off of workers,
and the discipline, dismissal and recall of
workers, except as provided for, or limited by
special laws.
Company policies and regulations, unless shown
to be grossly oppressive or contrary to law, are
generally binding and valid on the parties and
must be complied with until finally revised or
amended unilaterally or preferably through
45
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BAR OPERATIONS
Labor Law and Social Legislation
negotiation or by competent authority (San
Miguel Corporation v. Reynaldo Ubaldo and
Emmanuel Noel Cruz, Chairman and Member
respectively of the Voluntary Arbitration Panel, et
al., G.R. No. 92859, Feb. 1, 1993).
citing, among others, the inconvenience of the
50
concerned
employees
and
union
discrimination, as 8 of the 50 concerned
ground crew personnel were union officers.
Also, the Union argued that Northeast Airlines
could easily hire additional employees from
Mindanao to boost its ground operations in the
Mindanao airports.
Q: Define, explain or distinguish the
following terms: x x x (d) Bona fide
occupational qualifications (2019 BAR)
a.
A: Employment in particular jobs may not be
limited to persons of a particular sex, religion,
or national origin unless the employer can
show that sex, religion, or national origin is an
actual qualification for performing the job. The
qualification is called a bona fide occupational
qualification (BFOQ). (Armando Yrasuegui v.
PAL, G.R. No. 168081, Oct. 17, 2008)
Will the transfer of the 50 ground crew
personnel amount to illegal dismissal?
A: YES. The transfer of an employee is an exercise
of a managerial prerogative, which must be
exercised without grave abuse of discretion,
bearing in mind the basic elements of justice and
fair play. Such transfer cannot be used as a
subterfuge by the employer to rid itself of an
undesirable worker.
TRANSFER OF EMPLOYEES
(2018, 2015, 1999 BAR)
In particular, the employer must be able to show
that the transfer is not undesirable, inconvenient
or prejudicial to the employee; nor does it involve
a demotion in rank or a diminution of his salaries,
privileges, and other benefits. Should the
employer fail to overcome this burden of proof,
the employee’s transfer shall be tantamount to
constructive dismissal which exists when an act of
clear discrimination, insensibility or disdain by an
employer has become so unbearable to the
employee, leaving him with no option but to
forego with his continued employment. (Best Wear
Garments v. De Lemos, G.R. No. 191281, Dec. 5,
2012)
Q: 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 informed by her boss that
she is being promoted to a managerial
position but she is now being transferred to
the Visayas. Din Din does not want to uproot
her family and refuses the offer. Her boss is so
humiliated by Din Din's refusal of the offer that
she gives Din Din successive unsatisfactory
evaluations that result in Din Din being
removed from the supermarket. Din Din
approaches you, as counsel, for legal advice.
What would you advise her? (2015 BAR)
In the present case, the impending transfer of 50
employees based in Luzon to Mindanao, allegedly
borne out of business necessity, is unreasonable
and inconvenient to the concerned employees and
their families. It was not shown also if Northeast
Airlines looked into the option of hiring workers
from Mindanao to run its counters in the
Mindanao airports.
A: I will advise Din Din to sue her boss and the
supermarket for illegal dismissal. Din Din cannot
be compelled to accept the promotion. Her
unsatisfactory evaluations as well as her boss’
insistence that she should agree to the intended
transfer to Visayas are badges of an abuse of
management prerogative. In Pfizer Inc. v. Velasco
(645 SCRA 135 [2011]), the Supreme Court held
that the managerial 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.
b. Will the unfair labor
prosper? (2018 BAR)
practice
case
A: NO. In ascertaining whether Northeast Airlines’
proposed transfer amounted to an unfair labor
practice or interference with, restraint or coercion
of the employees’ exercise of their right to selforganization, the “totality of conduct doctrine” test
should be applied (Insular Life Assurance Co., Ltd.
Employees Association-NATU v. Insular Life
Assurance Co., Ltd., G.R. No. L-25291, Jan. 30, 1971).
Q: Northeast Airlines sent notices of transfer,
without diminution in salary or rank, to 50
ground crew personnel who were frontliners at Northeast Airlines counters at the
Ninoy Aquino International Airport (NAIA).
The 50 employees were informed that they
would be distributed to various airports in
Mindanao to anticipate robust passenger
volume growth in the area.
A finding of an unfair labor practice should not be
based on a single act in isolation, but should be
viewed on the basis of the employer’s acts outside
of the bigger context of the accompanying labor
relation situation. In the case at hand, Northeast
Airlines’ act of transferring the 50 employees,
while it may amount to constructive dismissals,
cannot translate into an unfair labor practice,
absent any other indicia of anti-union bias on the
part of the Company.
North Union, representing rank-and-file
employees, filed unfair labor practice and
illegal dismissal cases before the NLRC,
46
QuAMTO (1987-2019)
BONUS
(2015, 2003, 2002 BAR)
Because of its poor performance overall, FEB decided to cut back on the
bonuses this year and limited itself to
the following:
Q: 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 reduced the
bonus to 5% of their compensation. Can the
company unilaterally reduce the amount of
bonus? Explain briefly. (2002 BAR)
a.
b.
c.
d.
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 bonus. After learning
that FEB had modified the bonus scheme, she
objected. Is Katrina's objection justified?
Explain. (2015 BAR)
A: Yes. The granting of a bonus is a management
prerogative, something given in addition to what
is ordinarily received by or strictly due the
recipient. An employer, like Suerte Co., cannot be
forced to distribute bonuses when it can no longer
afford to pay. To hold otherwise would
be to penalize the employer for his past
generosity. (Producers Bank of the Phil. v. NLRC,
355 SCRA 489 [2001])
A: Katrina’s objection is justified. Having
enjoyed the across-the-board bonuses, Katrina
has earned a vested right. Hence, none of them
can be withheld or reduced. In the problem, the
company has not proven its alleged losses to be
substantial. Permitting reduction of pay at the
slightest indication of losses is contrary to the
policy of the State to afford full protection to
labor and promote full employment. (Linton
Commercial Co. v. Hellera, G.R. No. 163147, Oct.
10, 2007)
Q: Lito was anticipating the bonus he would
receive for 2013. Aside from the 13th month
pay, the company has been awarding him and
his other co-employees a two to three months
bonus for the last 10 years. However, because
of poor over-all sales performance for the
year, the company unilaterally decided to
pay only a one month bonus in 2013. Is Lito’s
employer legally allowed to reduce the
bonus? (2014 BAR)
As to the withheld productivity-based bonuses,
Katrina is deemed to have earned them because
of her excellent performance ratings for three
quarters. On this basis, they cannot be withheld
without violating the Principle of NonDiminution of Benefits.
A: Yes. A bonus is an act of generosity granted
by an enlightened employer to spur 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 given in addition to what
is ordinarily received by or strictly due the
recipient. Thus, a bonus is not a demandable and
enforceable obligation, except when it is made
part of the wage, salary or compensation of the
employee. It may, therefore, be withdrawn,
unless they have been made a part of the wage
or salary or compensation of the employees, a
matter which is not in the facts of the case.
(American Wire and Cable Daily Rated Employees
Union v. American Wire and Cable Co., Inc. and the
Court of Appeals, G.R. No. 155059, April 29, 2005)
Moreover, it is evident from the facts of the case
that what was withdrawn by FEB was a
productivity bonus. Protected by R.A. 6791
which mandates that the monetary value of the
productivity improvement be shared with the
employees, the “productivity-based incentive”
scheme of FEB cannot just be withdrawn
without the consent of its affected employees.
CHANGE OF WORKING HOURS
Q:
Inter-Garments
Co.
manufactures
garments for export and requires its
employees to render overtime work ranging
from two to three hours a day to meet its
clients' deadlines. Since 2009, it has been
paying its employees on overtime an
additional 35% of their hourly rate for work
rendered in excess of their regular eight
working hours.
Q: Far East Bank (FEB) is one of the leading
banks in the country. Its compensation and
bonus packages are top of the industry. For the
last 6 years, FEB had been providing the
following bonuses across-the-board to all its
employees:
a.
b.
c.
d.
e.
13th month pay;
14th to 18th month pay;
Christmas basket worth P6,000;
Gift check worth P4,000; and
Productivity-based incentive ranging
from a 20% to 40% increase in gross
monthly salary for all employees who
would receive an evaluation of
"Excellent" for 3 straight quarters in the
same year.
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
13th month pay;
14th month pay;
Christmas basket worth P4,000; and
Gift check worth P2,000.
Due to the slowdown of its export business in
2012, Inter-Garments had to reduce its
overtime work; at the same time, it adjusted
the overtime rates so that those who worked
overtime were only paid an additional 25%
instead of the previous 35%. To replace the
workers' overtime rate loss, the company
granted a one-time 5% across-the-board
wage increase.
47
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BAR OPERATIONS
Labor Law and Social Legislation
Vigilant Union, the rank-and-file bargaining
agent, charged the company with Unfair
Labor Practice on the ground that (1) no
consultations had been made on who would
render overtime work; and (2) the unilateral
overtime pay rate reduction is a violation of
Article 100 (entitled Prohibition Against
Elimination or Diminution of Benefits) of the
Labor Code. Is the union position
meritorious? (2013 BAR)
The GROs, however, are free to ply their
trade elsewhere at anytime but once they
enter the premises of the night club, they are
required to stay up to closing time. The GROs
earned their keep exclusively from
commissions for food and drinks, and tips
from generous customers.
In time, the GROs formed the Solar Ugnayan ng
mga Kababaihang Inaapi (SUKI), a labor union
duly registered with DOLE. Subsequently, SUKI
filed a petition for certification election in
order to be recognized as the exclusive
bargaining agent of its members. Solar Plexus
opposed the petition for certification election
on the singular ground of absence of employeremployee relationship between the GROs on
one hand and the night club on the other hand.
A: The allegation of ULP by the Union is not
meritorious. The selection as to who would
render overtime work is a management
prerogative.
However, the charge of the Union on the
diminution of benefits (violation of Art. 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 policy, and cannot anymore be removed
(Sevilla Trading v. Semana, 428 SCRA 239 [2004]).
This is deliberate, consistent and practiced over
a long period of time.
May the GROs form SUKI as a labor
organization for purposes of collective
bargaining? Explain briefly. (2012, 1999 BAR)
A: The GROs may form SUKI as a labor
organization for purposes of collective bargaining.
There is an employer-employee relationship
between the GROs and the night club.
MARRIAGE BETWEEN EMPLOYEES OF
COMPETITOR-EMPLOYERS
The Labor Code (in Art. 138 [now 136]) provides
that any woman who is permitted or suffered to
work, with or without compensation, in any night
club, cocktail lounge, massage clinic, bar or similar
establishment, under the effective control or
supervision of the employer for a substantial
period of time as determined by the Secretary of
Labor, shall be considered as an employee of such
establishment for purposes of labor and social
legislation.
Q: A was working as a medical representative
of RX pharmaceutical company when he met
and fell in love with B, a marketing strategist
for Delta Drug Company, a competitor of RC.
On several occasions, the management of RX
called A’s attention to the stipulation in his
employment contract that requires him to
disclose any relationship by consanguinity or
affinity with co-employees or employees of
competing companies in light of a possible
conflict of interest. A seeks your advice on
the validity of the company policy. What
would be your advice? (2010 BAR)
In the case at bar, it is clearly stated that the
women once they enter the premises of the night
club would be under the direct supervision of the
manager from 8:00 p.m. to 4:00 a.m. everyday
including Sundays and holidays. Such is indicative
of an employer-employee relationship since the
manager would be exercising the right of control.
A: 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. The case of Duncan v. Glaxo
Wellcome (438 SCRA 343 [2004]) does not apply
in the present case.
Q: How does the government employees’ right
to self-organization differ from that of the
employees in the private sector?(1996 BAR)
A: There is no substantial difference of the right of
self-organization between workers in the private
sector and those in the public sector. In the public
sector, Executive Order No. 180, the purpose of
self-organization is stated as "for the furtherance
and protection of their interest." In the private
sector, Art. 243 [now 253] of the Labor Code
states, "for the purpose of collective bargaining",
and "for the purpose of enhancing and defending
their interests and for their mutual aid and
protection." Furthermore, no less than the
Constitution itself guarantees that ALL workers
have the right to self- organization. (Sec. 3, Art. 13,
1987 Constitution)
LABOR RELATIONS
RIGHT TO SELF-ORGANIZATION
Who May/May Not Exercise the Right (2018,
2014, 2012, 2010, 2009, 2004, 2003, 2002,
2000, 1999, 1996 BAR)
Q: Solar Plexus Bar and Night Club allowed by
tolerance fifty (50) Guest Relations Officers
(GRO) to work without compensation in its
establishment under the direct supervision
of its Manager from 8:00 p.m. to 4:00 a.m.
every day, including Sundays and holidays.
Q: Do workers have a right not to join a labor
48
QuAMTO (1987-2019)
organization? (2000 BAR)
union as affiliates thereof.
A: YES. The constitutional right to selforganization has two aspects, the right to join or
form labor organizations and the right not to join
said organization (Victoriano v. Elizalde Rope
Worker’s Union, G.R. No. L-25246, Sept. 12, 1974).
Moreover, if they are members of a religious group
whose doctrine forbids union membership, their
right not to be compelled to become union
members has been upheld. However, if the worker
is not a "religious objector" and there is a union
security clause, he may be required to join the
union if he belongs to the bargaining unit. (Reyes v.
Trajano, G.R. No. 84433, June 2, 1992)
Q: Mang Bally, owner of a shoe repair shop
with only nine (9) workers in his
establishment,
received
proposals
for
collective bargaining from the Bally Shoe
Union. Mang Bally refused to bargain with the
workers for several reasons. First, his shoe
business is just a service establishment.
Second, his workers are paid on a piecework
basis (i.e., per shoe repaired) and not on a time
basis. Third, he has less than ten (10)
employees in the establishment. Which reason
or reasons is/are tenable? Explain briefly.
(2002 BAR)
Q: Do the following workers have the right to
self-organization? Reasons/basis:
A: NONE. First, Mang Bally's shoe business is a
commercial enterprise, albeit a service
establishment.
a.
Employees of non-stock,
organizations?
b. Alien employees? (2000)
non-profit
Second, the mere fact that the workers are paid on
a piece-rate basis does not negate their status as
regular employees. Payment by piece is just a
method of compensation and does not define the
essence of the relation. (Lambo v. NLRC, G.R. No.
111042, Oct. 26, 1999)
A:
a. Even employees of non-stock non-profit
organizations have the right to selforganization. This is explicitly provided for
in Art. 243 [now 253] of the Labor Code. A
possible exception, however, are employee
members
of
non-stock,
non-profit
cooperatives.
b.
Third, the employees' right to self-organization is
not delimited by their number. The right to selforganization covers all persons employed in
commercial,
industrial
and
agricultural
enterprises and in religious, charitable, medical, or
educational institutions whether operating for
profit or not. (Art. 243 [now 253], Labor Code)
ALIEN EMPLOYEES with valid work permits
may exercise the right to self- organization on
the basis of parity or reciprocity, that is, if
Filipino workers in the aliens' country are
given the same right. (Art. 269 [now 283],
Labor Code)
Q: PhilHealth is a government-owned and
controlled corporation employing thousands
of Filipinos. Because of the desire of the
employees of PhilHealth to obtain better
terms and conditions of employment from
the government, they formed the PhilHealth
Employees Association (PEA) and demanded
PhilHealth to enter into negotiations with
PEA regarding terms and conditions of
employment which are not fixed by law. Are
the employees of PhilHealth allowed to selforganize and form PEA and thereafter
demand PhilHealth to enter into negotiations
with PEA for better terms and conditions of
employment? (2014 BAR)
Q: Nexturn Corporation employed Nini and
Nono, whose tasks involved directing and
supervising rank-and-file employees engaged
in company operations. Nini and Nono are
required to ensure that such employees obey
company rules and regulations, and
recommend to the company's Human
Resources
Department
any
required
disciplinary action against erring employees.
In Nexturn Corporation, there are two
independent unions, representing rank-andfile and supervisory employees, respectively.
(2018 BAR)
a.
A: YES. Employees of PhilHealth are allowed to
self-organize under Sec. 8, Art. III and Sec. 3, Art.
XIII of the Constitution which recognize the
rights of all workers to self-organization. They
cannot demand, however, for better terms and
conditions of employment for the same are fixed
by law (Art. 244 [now 254], Labor Code), besides,
their salaries are standardized by Congress. (Art.
276 [now 291], Labor Code)
May Nini and Nono join a union?
A: YES. Nini and Nono, in effect, are supervisors
as defined under Art. 219(m) who may join a
supervisory union pursuant to Art. 255 of the
Labor Code.
b. May the two unions be affiliated with
the same Union Federation?
Doctrine of Necessary Implication
A: YES. Art. 255, as amended by R.A. 9481,
allows a rank-and-file union and a supervisors’
union operating within the same establishment
to join one and the same federation or national
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Q: Section 255 [245] of the Labor Code
recognizes three categories of employees,
namely: managerial, supervisory, and rankand-file.
49
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Labor Law and Social Legislation
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.
Determination of Representation Status (2018,
2017, 2016, 2014, 2009, 2007, 2006, 2005,
2004, 1999, 1998, 1996, 1993, 1992, 1990
BAR)
Q: The modes of determining the exclusive
bargaining agent of the employees in a
business are: (a) Voluntary Recognition; (b)
Certification Election; and (c) Consent Election.
Explain how they differ from one another.
(2017, 2006, 2005, 2000, 1989 BAR)
A: Managerial employees are those vested with
the powers or prerogatives to lay down and
execute management policies and/or to hire,
transfer, lay-off, recall, discharge, assign or
discipline employees. Managerial employees
cannot organize and form labor unions since
their managerial duties present a conflict of
interest with that of a union member or officer.
A: NOTE: Voluntary recognition has been repealed
by DO 40-I-15, series of 2015, and replaced with
Request for SEBA recognition.
Supervisory employees are those who, in the
interest of the employer, effectively recommend
such managerial actions if the exercise of such
functions is not merely routinary or clerical in
nature but requires the use of independent
judgment. Supervisory are allowed to organize
and form unions.
Rank-and-file employees include those which do
not fall under the classification of managerial or
supervisory
employees.
Rank-and-file
employees are allowed to organize and form
unions.
a.
Request for SEBA recognition is the process of
certifying a labor union as the exclusive
bargaining agent when there is only one
legitimate labor union in an unorganized
establishment.
b.
Certification election is the process by which
an employer or the employees file a petition
with the med-arbiter to determine the
exclusive bargaining agent through secret
ballot.
Alternative Answer:
b. May confidential employees who assist
managerial employees, and who act in
a confidential capacity or have access
to confidential matters being handled
by persons
exercising
managerial functions in the field of
labor relations form, or assist, or join
labor unions? Explain your answer.
(2017 BAR)
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 bargaining or negotiation. A
certification election is ordered by the
Department of Labor and Employment, while a
consent election is voluntarily agreed upon by
the parties, with or without the intervention by
the Department.
A: NO, confidential employees to managerial
employees may not form, assist, or join labor
unions.
c.
Applying the doctrine of necessary implication,
confidential employees are also covered by the
prohibition on joining or forming unions imposed
on managerial employees. The policy of the law is
not to place confidential employees in a position
involving a conflict of interest because of their
access to matters handled by managerial
employees whom they assist.
Consent election is the process by which the
employees, voluntarily by agreement, with
or without the DOLE’s intervention,
determine the exclusive bargaining agent
through secret ballot.
ALTERNATIVE ANSWER:
When the process of determining through secret
ballot the sole and exclusive representative of
the employees in an appropriate bargaining unit
is not ordered by the Department of Labor and
Employment, but has been voluntarily agreed
upon by the parties with or without the
intervention of the Department of Labor and
Employment, then the process is a consent
election.
BARGAINING REPRESENTATIVE
Q: The Ang Sarap Kainan Workers Union
appointed Juan Javier, a law student, as
bargaining representative. Mr. Javier is neither
an employee of Ang Sarap Kainan Company
nor a member of the union. Is the appointment
of Mr. Javier as a bargaining representative in
accord with law? Explain. (2000 BAR)
Q: There are instances when a certification
election is mandatory. What is the rationale
for such a legal mandate? (2005 BAR)
A: YES, the law does not require that the
bargaining representative be an employee of the
company nor an officer or member of the union.
(Art. 212[j] [now 219(j)], Labor Code)
A: According to the Labor Code, in any
establishment where there is no certified
bargaining agent, a certification election shall
50
QuAMTO (1987-2019)
A: None of them should represent the rank- andfile employees. (Art. 255 [now Art. 265], Labor
Code)
automatically be conducted by the Med-Arbiter
upon the filing of a petition by a legitimate labor
organization. In the above-described situation, a
certification election is made mandatory because
if there is no certified bargaining agent as
determined by a certification election, there
could be no collective bargaining in the said
unorganized establishment.
e.
Q: Liwayway Glass had 600 rank-and-file
employees. Three rival unions A, B, and C –
participated in the certification elections
ordered by the Med-Arbiter. 500 employees
voted. The unions obtained the following
votes: A-200; B-150; C-50; 90 employees
voted “no union”; and 10 were segregated
votes.
A: YES. The Labor Code provides that the Labor
Union receiving majority of the valid votes cast
shall be certified as the exclusive bargaining agent
of all the workers in the unit (Art. 256 [now Art.
266], Labor Code). Here, the number of valid votes
cast is 490. Thus, the winning union should
receive at least 246 votes; Union A received 250
votes.
Out of the segregated votes, four (4) were cast
by probationary employees and six (6) were
cast by dismissed employees whose
respective cases are still on appeal. (2014
BAR)
a.
Q: Samahang East Gate Enterprises (SEGE) is a
labor organization composed of the rank-andfile employees of East Gate Enterprises (EGE),
the leading manufacturer of all types of gloves
and aprons. EGE was later requested by SEGE
to bargain collectively for better terms and
conditions of employment of all the rank-andfile employees of EGE. Consequently, EGE filed
a petition for certification election before the
Bureau of Labor Relations (BLR).
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?
A: YES. Rule IX, Sec. 5 of DOLE Department Order
40-03 provides that “[a]ll employees who are
members of the appropriate bargaining unit
sought to be represented by the petitioner at the
time of the issuance of the order granting the
conduct of a certification election shall be
eligible to vote. An employee who has been
dismissed from work but has contested the
legality of the dismissal in a forum of
appropriate jurisdiction at the time of the
issuance of the order for the conduct of a
certification election shall be considered a
qualified voter, unless his/her dismissal was
declared valid in a final judgment at the time of
the conduct of the certification election.”
During the proceedings, EGE insisted that it
should participate in the certification process.
EGE reasoned that since it was the one who
filed the petition and considering that the
employees concerned were its own rank-andfile employees, it should be allowed to take an
active part in the certification process. Is the
contention of EGE proper? Explain. (2014 BAR)
A: NO. Under Art. 258-A [now 271] of the Labor
Code, an employer is a mere bystander in
certification elections, whether the petition for
certification election is filed by said employer or a
legitimate labor organization. The employer shall
not be considered a party thereto with a
concomitant right to oppose a petition for
certification election.
b. Was there a valid election?
A: YES. To have a valid election, at least majority
of all eligible voters in the unit must have cast
their votes (Art. 256 [now Art. 266], Labor Code).
In the instant case, 500 out of 600 rank-and-file
employees voted.
Q: Among the 400 regular rank-and-file
workers of MNO Company, a certification
election was ordered conducted by the MedArbiter of the Region. The contending parties
obtained the following votes:
c. Should Union A be declared the winner?
Union A – 70
Union B – 71
Union C – 42
No union – 180
Spoiled votes - 4
A: NO. The Labor Code provides that the Labor
Union receiving the majority of the valid votes
cast shall be certified as the exclusive bargaining
agent of all the workers in the unit (Art. 256 [now
Art. 266], Labor Code). Here, the number of valid
votes cast is 490; thus, the winning union should
receive at least 246 votes. Union A only received
200 votes.
There were no objections or challenges
raised by any party on the results of the
election.
d. Suppose the election is declared invalid,
which of the contending unions should
represent the rank-and-file employees?
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Suppose that in the election, the unions
obtained the following votes: A-250; B150; C-50; 40 voted “no union”; and 10
were segregated votes. Should Union A be
certified
as
the
bargaining
representative?
a. Can Union B be certified as the sole and
exclusive collective bargaining agent
among the rank-and-file workers of MNO
51
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BAR OPERATIONS
Labor Law and Social Legislation
Company considering that it garnered the
highest number of votes among the
contending unions? Why or why not?
The Labor Code provides (in Art. 256 [now 268])
that to have a valid certification election, at least
a majority of all eligible voters in the bargaining
unit must have cast their votes in the election. In
the facts of the case in the question, 1,000
employees are eligible voters and 900 voters,
which is very much more than the majority (501)
of the eligible voters cast their votes.
A: NO. To be certified as bargaining agent, the
vote required is majority of the valid votes cast.
There were 396 valid votes cast, the majority of
which is 199. Since Union B got only 71 votes, it
cannot be certified as the sole and exclusive
bargaining agent of MNO’s rank-and-file
workers.
Q: Nayon Federation issued a charter
certificate creating a rank-and-file Neuman
Employees Union. On the same day, New
Neuman Employees Union filed a petition for
certification election with the Department of
Labor and Employment (DOLE) Regional
Office, attaching the appropriate charter
certificate.
The
employer,
Neuman
Corporation, filed a motion to dismiss the
petition for lack of legal personality on the
part of the petitioner union.
b. May the management or lawyer of MNO
Company legally ask for the absolute
termination of the certification election
proceedings because 180 of the workers
— a clear plurality of the voters — have
chosen not to be represented by any
union? Reasons.
A: NO, because 216 workers want to be
represented by a union as bargaining agent.
Only 180 workers opted for No Union. Hence, a
clear majority is in favor of being represented by
a union.
c.
a.
Should the motion be granted?
A: NO. The motion should be denied. Under Art.
241 of the Labor Code, a petition for certification
election may be filed on the basis of a valid
charter certificate issued to a chartered local by a
duly registered federation.
If you were the duly designated election
officer in this case, what would you do to
effectively achieve the purpose of
certification
election
proceedings?
Discuss. (2009 BAR)
b. The employer likewise filed a petition for
cancellation of union registration against
New Neuman Employees Union, alleging
that Nayon Federation already had a
chartered local rank-and-file union,
Neuman Employees Union, pertaining to
the same bargaining unit within the
establishment. Should the petition for
cancellation prosper? (2018 BAR)
A: I will conduct a run-off election between the
labor unions receiving the two highest number
votes. To have a run-off election, all the
contending unions (3 or more choices required)
must have garnered 50% of the number of votes
cast. In the present case, there are four (4)
contending unions and they garnered 216 votes.
There were 400 vote cast. The votes garnered by
the contending unions is even more than 50% of
the number of vote cast. Hence, a run-off
election is in order.
A: NO. The existence of another chartered local
under the same federation within the same
bargaining unit is not among the grounds to
cancel union registration under Art. 247 of the
Labor Code, as amended by R.A. 9481.
Q: The Construction and Development
Corporation has a total of one thousand and
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
determined that only one thousand (1,000)
employees are eligible voters. In the election
a total of nine hundred (900) ballots was
cast. There were fifteen (15) spoiled ballots
and five (5) blank ballots.
Q: A certification election was conducted in
Nation Manufacturing Corporation, whereby
55% of eligible voters in the bargaining unit
cast their votes. The results were as follows:
Union Nana: 45 votes
Union Nada: 40 votes
Union Nara: 30 votes
No Union: 80 votes
Union Nana moved to be declared as the
winner of the certification election.
A total of four hundred (400) votes was cast
for ABC Labor Union, a total of two hundred
forty (240) votes was cast in favor of JVP
Labor Union, and a total of two hundred and
forty (240) votes was in favor of RLG Labor
Organization. Is there a valid certification
election? Why? (1990 BAR)
a.
Can Union Nana be declared as the
winner?
A: Union Nana cannot be immediately declared as
the winner. A run-off election pursuant to Art.
268 of the Labor Code must be first be conducted.
A run-off election is required since the present
case involves an election which provided for
three or more choices, with no choice receiving a
majority of the valid votes cast, and the total
A: There is a valid certification election. In the
facts of the case in question, there is no bar to the
holding of the certification election.
52
QuAMTO (1987-2019)
number of votes for all contending unions being
at least 50% of the number of votes cast.
concerned.
(ABS-CBN
Supervisors
Employees Union Members v. ABS-CBN
Broadcasting Corp, and Union Officers, G.R.
No. 106518, March 11, 1999; Art. 241[n]
and [o] [now 250], Labor Code)
b. Assume that the eligibility of 30 voters
was challenged during the pre-election
conference. The ballots of the 30
challenged voters were placed inside an
envelope sealed by the DOLE Election
Officer. Considering the said envelope
remains sealed, what should be the next
course of action with respect to the said
challenged votes? (2018 BAR)
In the problem given, none of the above
requisites were complied with by the union.
Hence, Rogelio can object to the deduction made
by the union for being invalid.
NOTE:
Substantial
compliance
of
the
requirements is not enough in view of the fact
that the special assessment will diminish the
compensation of union members. (Palacol v.
Ferrer-Calleja, G.R. No. 85333, Feb. 26, 1990)
A: Since the challenged votes may materially
affect the results of the election, and may in fact
even give Union Nada or Union Nara an absolute
majority, then the said challenged votes should
be opened. Pursuant to Rule IX, Sec. 11 of the
Rules Implementing Book V of the Labor Code,
the envelope with the challenged votes shall be
opened and the question of eligibility shall be
passed upon by the DOLE med-arbiter.
Q: Atty. Facundo Veloso was retained by
Welga Labor Union to represent it in the
collective bargaining negotiations. It was
agreed that Atty. Veloso would be paid in the
sum of P20,000.00 as attorney's fees for his
assistance in the CBA negotiations.
RIGHTS OF LABOR ORGANIZATIONS
After the conclusion of the negotiations
Welga Labor Union collected from its
individual members the sum of P100.00 each
to pay for Atty. Veloso's fees and another sum
of P100.00 each for services rendered by the
union officers. Several members of the Welga
Labor Union approached you to seek advice
on the following matters.
Check Off, Assessment, Agency Fees (2002,
2001, 1997 BAR)
Q: What requisites must a Union comply with
before it can validly impose special
assessments against its members for
incidental
expenses,
attorney's
fees,
representation expenses and the like? (2001,
2002 BAR)
a.
A: In order that the special assessment may be
upheld as valid, the following requisites must be
compiled 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 (3) Individual written authorization
for the check-off duly signed by the employee
concerned. (ABS-CBN Supervisors Employees
Union Members v. ABS-CBN Broadcasting Corp,
and Union Officers, G.R. No. 106518, March 11,
1999; Art. 241[n] and [o] [now 250], Labor Code)
A: The assessment for attorney’s fees is not
valid. The Labor Code prohibits the payment of
attorney’s fees when it is effected through forced
contributions from the workers from their own
funds as distinguished from the union funds
(Art. 222[b] [now 228], Labor Code). The
obligation to pay the attorney’s fees belongs to
the union and cannot be shunted to the workers
as their direct responsibility. (BPI Employees’
Union v. NLRC, G.R. Nos. 69746-47, March 31,
1989)
Q: The union deducted P20.00 from Rogelio’s
wages for January. Upon inquiry he learned
that it was for death aid benefits and that the
deduction was made pursuant to a board
resolution of the directors of the union. Can
Rogelio object to the deduction? Explain
b. Whether or not the assessment of
P100.00 from the individual members of
the Welga Labor Union for services
rendered by the union officers in the
CBA negotiations was valid? (1997 BAR)
briefly. (2002 BAR)
A: The assessment for negotiation fees is not
valid. The Labor Code prohibits negotiation fees
and other similar charges of any kind arising
from any collective bargaining negotiations to be
imposed on any individual member of the
contracting union. (Art. 222[b] [now 228], Labor
Code)
A: YES. In order that the special assessment
(death aid benefit) may be upheld as valid, the
following requisites must be compiled with:
1.
2.
3.
Authorization by a written resolution of
the majority of all the members at the
general membership meeting duly called
for the purpose;
Secretary's record of the meeting; and
Individual written authorization for the
check-off duly signed by the employee
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Whether or not the collection of the
amount assessed on the individual
members to answer for the attorney's
fees was valid?
NOTE: Special assessments may be allowed like
attorney’s fees and negotiation fees provided
that there be strict compliance with the
requisites of a valid special assessment. (Art. 241
53
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BAR OPERATIONS
Labor Law and Social Legislation
[n] and [o] [now 250(n) and (o)], Labor Code)
Q: What is an appropriate bargaining unit for
purposes of collective bargaining? (1999
BAR)
COLLECTIVE BARGAINING
Duty to Bargain Collectively (2010, 2009,
2008, 2001, 1999, 1996, 1992, 1991 BAR)
A: An APPROPRIATE BARGAINING UNIT is a
group of employees of a given employer
comprised of all or less than all of the entire body
of employees, which the collective interest of all
the employees, consistent with the interest of the
employer, indicated to be the best suited to serve
reciprocal rights and duties of the parties under
the collective bargaining provisions of the law.
(University of the Philippines v. Ferrer-Calleja, G.R.
No. 96189, July 14, 1992)
Q: ABC company and U labor union have been
negotiating for a new Collective Bargaining
Agreement (CBA) but failed to agree on
certain economic provisions of the existing
agreement. In the meantime, the existing
CBA expired. The company thereafter
refused to pay the employees their midyear
bonus, saying that the CBA which provided
for the grant of midyear bonus to all
company employees had already expired.
Are the employees entitled to be paid their
midyear bonus? Explain your answer. (2010
BAR)
Q: On December 1, 2018, GHI Co., an
organized establishment, and Union J, the
exclusive bargaining agent therein, executed
a five (5)-year collective bargaining
agreement (CBA) which, after ratification, was
registered with the Bureau of Labor Relations.
A: YES, under Art. 253 [now 264] of the Labor
Code, the parties are duty-bound to maintain the
status quo and to continue in full force and effect
the terms and conditions of the existing CBA
until a new agreement is reached by the parties.
Likewise, Art. 253-A [now 265] provides for an
automatic renewal clause of a CBA. Although a
CBA has expired, it continues to have legal
effects as between the parties until a new CBA
has been entered into.
a.
A: It can ask for the renegotiation of the terms of
the CBA within sixty (60) days prior to the
expiration of its economic period, viz., from
October 2, 2018 until November 30, 2021.
The same is also supported by the principle of
holdover, which states that despite the lapse of
the formal effectivity of the CBA, the law stills
considers the same as continuing in force and
effect until a new CBA shall have been validly
executed (MERALCO v. Hon. Sec. of Labor, 337
SCRA 90 [2000] citing National Congress of
Unions in the Sugar Industry of the Philippines v.
Ferrer-Calleja, 205 SCRA 478 [1992]). The terms
and conditions of the existing CBA remain under
the principle of CBA continuity.
According to Art. 253-A [now 265] of the Labor
Code, all other provisions of the [CBA] shall be
renegotiated not later than three (3) years after
its execution. Any agreement of such other
provisions of the [CBA] entered into within six
(6) months from the date of expiry of the term of
such other provisions as fixed in such [CBA], shall
retroact to the day immediately following such
date. If any such agreement is entered into
beyond six months, the parties shall agree on the
duration of retroactivity thereof. In case of a
deadlock in the renegotiation of the [CBA], the
parties may exercise their rights under this Code.
Q: What jurisdictional pre-conditions must
be present to set in motion the mechanics of
a collective bargaining? (1996 BAR)
Hence, they may submit the demand for
renegotiation at any time between October 2,
2021 to November 30, 2021. The earliest day
would be October 2, 2021.
A: To set in motion the mechanics of collective
bargaining, these jurisdictional pre-conditions
must be present, namely:
1.
The employees in a bargaining unit
should form a labor organization;
2.
The labor organization should be a
legitimate labor organization;
3.
As such legitimate labor organization, it
should be recognized or certified as the
collective bargaining representative of
the employees of the bargaining unit; and
4.
When can the union ask, at the earliest,
for the renegotiation of all the terms of
the CBA, except its representation
aspect? Explain.
b. When is the earliest time that another
union can file for a petition for
certification election? Explain. (2019
BAR)
A: The sixty-day freedom period is from October
2, 2023 to November 30, 2023. Hence, they can
file a petition for CE on October 2, 2023 at the
earliest.
According to Art. 253-A of the Labor Code, any
Collective Bargaining Agreement that the parties
may enter into shall, insofar as the
representation aspect is concerned, be for a term
of five (5) years. No petition questioning the
majority status of the incumbent bargaining
agent shall be entertained and no certification
The labor organization as the collective
bargaining representative should request
the employer to bargain collectively. (See
Arts. 243, 234, 255 and 250 [now 253, 240,
267, and 261, respectively], Labor Code)
54
QuAMTO (1987-2019)
election shall be conducted by the Department of
Labor and Employment outside of the sixty-day
period immediately before the date of expiry of
such five-year term of the [CBA].
Supervising Union (FFW), G.R. No. L-35120, Jan. 30,
1984)
b. Can the Secretary of Labor decide the
labor dispute by awarding the JEU CBA
Proposals as the Collective Bargaining
Agreement of the parties? Explain
briefly. (1999 BAR)
COLLECTIVE BARGAINING AGREEMENT (CBA)
Mandatory Provisions of CBA (2019, 2018,
2008, 1999 BAR)
A: YES, the Secretary of Labor can decide the
labor dispute by awarding the JEU CBA
proposals as the Collective Bargaining
Agreement between the parties because when
the Secretary of Labor (under Art. 263 [g] [now
278(g)]) assumes jurisdiction over a labor
dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
national interest, the Secretary of Labor
exercises the power of compulsory arbitration
over the labor dispute, meaning, that as an
exception to the general rule, the Secretary of
Labor now has the power to set or fix wages,
rates of pay, hours of work or terms and
conditions of employment by determining what
should be the CBA of the parties. (See Divine
Word University v. Secretary of Labor, G.R. No.
91915, Sept. 11, 1992)
Q: Jenson & Jenson (J & J) is a domestic
corporation engaged in the manufacturing of
consumer products. Its rank-and-file workers
organized the Jenson Employees Union (JEU),
a duly registered local union affiliated with
PAFLU, a national union.
After having been certified as the exclusive
bargaining agent of the appropriate
bargaining unit, JEU-PAFLU submitted its
proposals for a Collective Bargaining
Agreement with the company. In the
meantime, a power struggle occurred within
the national union PAFLU between its
National President, Manny Pakyao, and its
National Secretary General, Gabriel Miro. The
representation issue within PAFLU is pending
resolution before the Office of the Secretary of
Labor.
Alternative Answer:
By reason of this intra-union dispute within
PAFLU, J & J obstinately and consistently
refused to offer any counterproposal and to
bargain collectively with JEUPAFLU until the
representation issue within PAFLU shall have
been resolved with finality. JEU-PAFLU filed a
Notice of Strike. The Secretary of Labor
subsequently assumed jurisdiction over the
labor dispute.
a.
What is involved in the case is a corporation
engaged in the manufacturing of consumer
products. If the consumer products that are
being manufactured are not such that a strike
against the company cannot be considered a
strike in an industry indispensable for the
national interest, then the assumption of
jurisdiction by the Secretary of Labor is not
proper. Therefore, he cannot legally exercise the
powers of compulsory arbitration in the labor
dispute.
Will the representation issue that has
arisen involving the national union
PAFLU, to which the duly registered
local union JEU is affiliated, bar
collective bargaining negotiation with J
& J? Explain briefly.
Q: Nagrab Union and Nagrab Corporation
have an existing CBA which contains the
following provision: "New employees within
the coverage of the bargaining unit who may
be regularly employed shall become
members of Nagrab Union. Membership in
good standing with the Nagrab Union is a
requirement for continued employment with
Nagrab Corporation."
A: The representation issue that has arisen
involving the national union PAFLU should not
bar collective bargaining negotiation with J and J.
It is the local union JEU that has the right to
bargain with the employer J and J, and not the
national union PAFLU.
Nagrab Corporation subsequently acquired
all the assets and rights of Nuber Corporation
and absorbed all of the latter's employees.
Nagrab Union immediately demanded
enforcement of the above-stated CBA
provision with respect to the absorbed
employees. Nagrab Corporation refused on
the ground that this should not apply to the
absorbed employees who were former
employees of another corporation whose
assets and rights it had acquired.
It is immaterial whether the representation issue
within PAFLU has been resolved with finality or
not. Said squabble could not possibly serve as a
bar to any collective bargaining since PAFLU is
not the real party-in interest to the talks; rather,
the negotiations are confined to the corporation
and the local union JEU. Only the collective
bargaining agent, the local union JEU, possesses
the legal standing to negotiate with the
corporation. A duly registered local union
affiliated with a national union or federation does
not lose its legal personality or independence.
(Adamson and Adamson, Inc. v. The Court of
Industrial Relations and Adamson and Adamson
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
a.
55
Was Nagrab Corporation correct in
refusing to enforce the CBA provision
with
respect
to
the
absorbed
employees? May a newly-regularized
UST
BAR OPERATIONS
Labor Law and Social Legislation
employee of Nagrab Corporation (who is
not part of the absorbed employees)
refuse to join Nagrab Union?
process of Collective Bargaining.
Q: Natasha Shoe Company adopted an
organizational streamlining program that
resulted in the retrenchment of 550
employees in its main plant. After having been
paid their separation benefits, the retrenched
workers demanded payment of retirement
benefits under a CBA between their union and
management. Natasha Shoe Company denied
the workers' demand.
A: Nagrab Corporation’s argument that the
union security clause should not apply to
absorbed employees resulting from the
acquisition is untenable. In BPI Employees UnionDavao City-FUBU (BPIEU-Davao City-FUBU) v.
BPI, (G.R. No. 174912, July 24, 2013), the Supreme
Court ruled that the subject union security
clause does not make a distinction as to how a
regular employee should attain such status as a
“new employee” in order to be covered by the
clause. Absorbed employees as a result of
merger or acquisition of assets and rights
between two corporations, therefore, should be
considered as “new employees” of the surviving
or acquiring corporation.
a.
A: The parties may resolve this through plantlevel mechanisms such as a labor-management
committee or a grievance machinery under a
collective bargaining agreement.
b. How would you advise the human
resources manager of Nagrab
Corporation to proceed? (2018 BAR)
b. Can the workers claim both separation
pay and retirement benefits? (2018 BAR)
A: In Santos v. Senior Philippines, (G.R. No. 166377,
Nov. 28, 2008), the Supreme Court held that
retirement benefits and separation pay are not
mutually exclusive, and both benefits may be paid
in the absence of a contrary stipulation in the
retirement plan and/or in the CBA.
A: The HR Manager should heed the Supreme
Court’s proscription in Alabang Country Club,
Inc. v. NLRC (G.R. No. 170287, Feb. 14, 2008), in
cases involving termination of employment due
to enforcement of a union security clause. The
following requirements must be observed:
1.
2.
3.
What is the most procedurally peaceful
means to resolve this dispute?
ALTERNATIVE ANSWER:
The union security clause is applicable;
The certified bargaining agent is
requesting for enforcement of such
clause; and
There is sufficient evidence to support the
sole and exclusive bargaining agent’s
decision to expel the employee from
membership.
YES. In the absence of any express or implied
prohibition against it, collection of both
retirement benefits and separation pay upon
severance from employment is allowed. This is
grounded on the social justice policy that doubts
should always be resolved in favor of labor.
(Goodyear Philippines, Inc. v. Angus, G.R. No.
185449, Nov. 12, 2014)
Q: Explain the automatic renewal clause of
collective bargaining agreements. (2008
BAR)
UNFAIR LABOR PRACTICE
Nature, Aspects (2019, 2010, 2009, 2007,
2005 BAR)
A: The automatic renewal clause of Collective
Bargaining Agreements means that although a
CBA has expired, it continues to have legal
effects as between the parties until a new CBA
has been entered into (Pier 8 Arrastre &
Stevedoring Services, Inc. v. Roldan-Confessor, 241
SCRA 294 [1995]). This is so because the law
makes it a duty of the parties to keep the status
quo and to continue in full effect the terms and
conditions of the existing agreement until a new
agreement is reached by the parties. (Art. 253
[now 264], Labor Code)
Q: When resolving a case of unfair labor
practice (ULP) filed by a union, what should
be the critical point of analysis to determine if
an act constitutes ULP? (2019 BAR)
A: The critical point of analysis is the violation of
the rights of workers to self-organization,
characterized by interference, coercion, restraint
by the employer to discourage unionism and
refusal to bargain a collective bargaining
agreement.
Q: Define, explain or distinguish the
following terms: x x x (e) Grievance
machinery (2019 BAR)
Q: Is the commission of an unfair labor
practice by an employer subject to criminal
prosecution? (2005 BAR)
A: Under the Labor Code, grievance machinery
refers to the mechanism for the adjustment and
resolution of grievances arising from the
interpretation or implementation of a Collective
Bargaining Agreement and those arising from the
interpretation or enforcement of company
personnel policies. It is part of the continuing
A: Yes. The second paragraph of Art. 247 [now
258] of the Labor Code expressly so provides.
The last paragraph of Art. 247 [now 258]
provides that no criminal prosecution for unfair
labor practice may be made without a prior final
56
QuAMTO (1987-2019)
judgment in an unfair labor practice
administrative case (filed before the Labor
Arbiter of the NLRC pursuant to Art. 217(a)(1)
[now 224(a)(1)] of the Labor Code). And even
with such final judgment in an administrative
case, still, the final judgment would not be
binding in the criminal case. Neither would such
final judgment be considered as evidence in the
criminal case. At best, it would only serve as
proof of compliance of the required prior
exhaustion of administrative complaint.
2001, 1999, 1996, 1992, 1991, 1990 BAR)
Q: Article 248(d) of the Labor Code states
that it shall be unlawful for an employer to
initiate, dominate, assist in or otherwise
interfere
with
the
formation
or
administration of any labor organization.
Including the giving of financial or other
support to it or to its organizers or officers.
X Company, Inc. has been regularly
contributing money to the recreation fund of
the labor union representing its employees.
This fund, including the financial assistance
given by the employer, is used for
refreshment and other expenses of 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 248(d) of the Labor
Code? Explain your answer. (1990 BAR)
Q: Discuss in full the jurisdiction over the civil
and criminal aspects of a case involving an
unfair labor practice for which a charge is
pending with the Department of Labor and
Employment. (2007 BAR)
A: Unfair labor practices are not only violations of
the civil rights of both labor and management but
are also criminal offenses against the State.
The civil aspect of all cases involving unfair labor
practices, which may include claims for actual,
moral, exemplary, and other forms of damages,
attorney’s fees and other affirmative relief, shall
be under the jurisdiction of the Labor Arbiters.
A: NO. If the contributions of the employer
benefit all the employees and there is no
employee discriminated against, there is no
unfair labor practice. The contributions may be
considered a fringe benefit given by the
employer.
However, no criminal prosecution shall be
instituted without a final judgment, finding that
an unfair labor practice was committed, having
been first obtained in the administrative
proceeding. During the pendency of such
administrative proceeding, the running of the
period for prescription of the criminal offense
herein penalized shall be interrupted. The final
judgment in the administrative proceeding shall
not be binding in the criminal case nor be
considered as evidence of guilt but merely as
proof of compliance of the requirements set forth
by law. (Art. 247 [now 258], Labor Code)
Q: Company "A" contracts out its clerical and
janitorial services. In the negotiations of its
CBA, the union insisted that, henceforth, the
company may no longer engage in
contracting out these types of services, which
services the union claims to be necessary in
the company's business, without prior
consultation. Is the union’s stand valid or
not? For what reason(s)? (2001 BAR)
A: The union's stand is not valid. It is part of
management prerogative, to contract out any
work, task, job or project except that it is an
unfair labor practice to contract out services or
functions performed by union members when,
such will interfere with, restrain or coerce
employees in the exercise of their rights to selforganization. (Art. 248[c], [now 259] Labor Code)
Q: Differentiate “surface bargaining” from
“blue-sky bargaining”. (2010 BAR)
A: Surface Bargaining is defined as “going
through the motions of negotiating” without any
legal intent to reach an agreement. The
determination of whether a party has engaged in
unlawful surface bargaining is a question of the
intent of the party in question, which can only be
inferred from the totality of the challenged
party’s conduct both at and away from the
bargaining table. It involves the question of
whether an employer’s conduct demonstrates an
unwillingness to bargain in good faith or is
merely hard bargaining. (Standard Chartered
Bank Employees Union (NUBE) v. Confesor, 432
SCRA 308 [2004])
Q: Give three (3) examples of unfair labor
practices on the part of the employer and
three (3) examples of unfair labor practices
on the part of the labor union. (1996 BAR)
A: Any three (3) from the following enumeration
in the Labor Code:
ART. 248 [now 259]. Unfair labor practices of
employers. – It shall be unlawful for an employer
to commit any of the following unfair labor
practice:
Blue-Sky Bargaining is defined as “unrealistic
and 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, supra.)
By Employers (2018, 2010, 2009, 2004,
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
57
a.
To interfere with, restrain or coerce
employees in the exercise of their right to
self-organization;
b.
To require as a condition of employment
that a person or an employee shall not join
a labor organization or shall withdraw from
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BAR OPERATIONS
Labor Law and Social Legislation
one to which he belongs;
c.
d.
e.
denied or to terminate an employee on any
ground other than the usual terms and
conditions under which membership or
continuation of membership is made
available to other members;
To contract out services or functions being
performed by union members when such
will interfere with, restrain or coerce
employees in the exercise of their rights to
self-organization;
To initiate, dominate, assist or otherwise
interfere
with
the
formation
or
administration of any labor organization,
including, the giving of financial or other
support to it, or its organizations, or
supporters;
To discriminate in regard to wages, hours
of work, and other terms and conditions of
employment in order to encourage or
discourage membership in any labor
organization. Nothing in this Code or in any
other law shall stop the parties from
requiring membership in a recognized
collective bargaining agent as a condition
for employment, except those employees
who are already members of another union
at the time of the signing of the collective
bargaining agreement. Provided, that the
individual authorization required under
Art. 241 [now 250], paragraph (o) of this
Code shall not apply to the non-members of
the recognized collective bargaining agent;
f.
To dismiss, discharge, or otherwise
prejudice or discriminate against an
employee for having given or being about
to give testimony under this Code;
g.
To violate the duty to bargain collectively
as prescribed by this Code;
h.
To pay negotiation or attorney's fees to the
union or its officers or agents as part of the
settlement of any issue in collective
bargaining or any other dispute; or
i.
To violate
agreement.
c.
To violate the duty, or refuse to bargain
collectively with the employer, provided it
is the representative of the employees;
d.
To cause or attempt to cause an employer
to pay or deliver or agree to pay or deliver
any money or other things of value, in the
nature of an exaction, for services which
are not performed or not to be performed,
including the demand for fee for union
negotiations;
e.
To ask for or accept negotiations of
attorney's fees from employers as part of
the settlement of any issue in collective
bargaining or any other dispute; or
f.
To violate
agreement.
a
collective
bargaining
Q: Around 100 workers of a mill in a coconut
plantation organized themselves for the
purpose of promoting their common interest
and welfare. The workers’ association
prepared a petition for increasing the daily
pay of its members in compliance with
minimum wage rates for their sector in the
region and for granting benefits to which they
are entitled under the law.
However, the workers became restless and
anxious after the owner-manager threatened
them with mass lay-off if the association
would press for their demands. Most of its
members have worked in the mill for 10 to 15
years with no improvement in working
conditions and monetary benefits.
Any three (3) from the following provisions
of the Labor Code:
The leaders of the workers' association
approached you and asked: What legal steps
could they take to protect their security of
tenure? What advice could you give them?
(2004 BAR)
ART. 249 [now 260]. Unfair labor practices
of labor organizations. – It shall be unfair
labor practice for a labor organization, its
officers, agents, or representatives:
A: I would advise them to register the workers’
association with the Department of Labor and
Employment. Then, have the workers' association
file a ULP case against the employer.
a.
To restrain or coerce employees in the
exercise of their rights to self- organization.
However, a labor organization shall have
the right to prescribe its own rules with
respect to the acquisition or retention of
membership;
Q: A is employed by XYZ Company where XYZ
Employees Union (XYZ-EU) is the recognized
exclusive bargaining agent. Although A is a
member of rival union XYR-MU, he receives
the benefits under the CBA that XYZ-EU had
negotiated with the company.
b.
To cause or attempt to cause an employer
to discriminate against an employee,
including discrimination against an
employee with respect to whom
membership in such organization has been
XYZ-EU assessed A a fee equivalent to the
dues and other fees paid by its members, but
A insists that he has no obligation to pay said
dues and fees because he is not a member of
XYZ-EU and he has not issued an
a
collective
bargaining
58
QuAMTO (1987-2019)
authorization to allow the collection. Explain
whether his claim is meritorious. (2010 BAR)
A: NO. In Digitel Telecommunications Philippines,
Inc. v. Digitel Employees Union (DEU) (G.R. No.
184903-04, Oct. 10, 2012), the Supreme Court
ruled that the award of moral and exemplary
damages in illegal dismissal cases (applicable to
suspension) resulting from unfair labor practices
may be made in individual or aggregate amounts.
If the offended parties can be identified, then
damages may be awarded individually, such as in
the case at hand.
A: NO. The fee exacted from A takes the form of
an AGENCY FEE. This is sanctioned by Art. 248
(e) [now 259(e)] of the Labor Code.
The collection of agency fees in an amount
equivalent to union dues and fees from
employees who are not union members is
recognized under Art. 248(e) [now 259(e)] of the
Labor Code. The union may collect such fees even
without any written authorization from the nonunion member employees, if said employees
accept the benefits resulting from the CBA. The
legal basis of agency fees is quasi-contractual.
(Del Pilar Academy v. Del Pilar Academy
Employees Union, 553 SCRA 590 [2008])
Q: Pablo works as a driver at the National Tire
Company (NTC). He is a member of the
Malayang Samahan ng Manggagawa sa NTC,
the
exclusive
rank-and-file
collective
bargaining representative in the company.
The union has a CBA with NTC which contains
a union security and a check-off clause. The
union security clause contains a maintenance
of membership provision that requires all
members of the bargaining unit to maintain
their membership in good standing with the
union during the term of the CBA under pain
of dismissal. The check- off clause on the
other hand authorizes the company to deduct
from union members' salaries defined
amounts of union dues and other fees.
Q: In Northern Lights Corporation, union
members Nad, Ned, and Nod sought
permission from the company to distribute
flyers with respect to a weekend union
activity. The company HR manager granted
the request through a text message sent to
another union member, Norlyn.
While Nad, Ned, and Nod were distributing the
flyers at the company assembly plant, a
company supervisor barged in and demanded
that they cease from distributing the flyers,
stating that the assembly line employees were
trying to beat a production deadline and were
thoroughly distracted. Norlyn tried to show
the HR manager's text message authorizing
flyer distribution during work hours, but the
supervisor brushed it aside.
Pablo refused to issue an authorization to the
company for the check- off of his dues,
maintaining that he will personally remit his
dues to the union.
a.
Would the NTC management commit
unfair labor practice if it desists from
checking off Pablo's union dues for lack
of individual authorization from Pablo?
As a result, Nad, Ned, and Nod were
suspended for violating company rules on
trespass and highly-limited union activities
during work hours. The Union filed an unfair
labor practice (ULP) case before the NLRC for
union discrimination.
A: NO. Under R.A. 9481, violation of the Collective
Bargaining Agreement, to be an unfair labor
practice, must be gross in character. It must be a
flagrant and malicious refusal to comply with the
economic provisions of the CBA.
a.
ALTERNATIVE ANSWER:
Will the ULP case filed by the Union
prosper?
NO. Check-offs in truth impose an extra burden
on the employer in the form of additional
administrative and bookkeeping costs. It is a
burden assumed by management at the instance
of the union and for its benefit, to facilitate the
collection of dues necessary for the latter’s life
and sustenance. But the obligation to pay union
dues and agency fees obviously devolves not
upon the employer, but the individual employee.
It is a personal obligation not demandable from
the employer upon default or refusal of the
employee to consent to a check-off. The only
obligation of the employer under a check-off is to
effect the deductions and remit the collections to
the union. (Holy Cross of Davao College v. Joaquin,
G.R. No. 110007 [1996])
A: YES. The supervisor of Nad, Ned and Nod
directly interfered with union activities and
ultimately with the right to self-organization.
Good faith can be ascribed to Nad, Ned and Nod’s
actions, as prior permission was obtained thru
the HR Manager who apparently failed to
communicate such permission to the plant
supervisor.
b. Assume the NLRC ruled in favor of the
Union. The Labor Arbiter's judgment
included, among others, an award for
moral and exemplary damages at
P50,000.00 each for Nad, Ned, and Nod.
Northern Lights Corporation argued that
any award of damages should be given to
the Union, and not individually to its
members. Is Northern Lights Corporation
correct?
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
b. Can the union charge Pablo with
disloyalty for refusing to allow the check
off of his union dues and, on this basis,
59
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BAR OPERATIONS
Labor Law and Social Legislation
ask the company to dismiss him from
employment? (2013 BAR)
A: NO, the opinion of counsel is not in accord
with law. The Labor Code (in Art. 249 [now 260
(a) and (b)]) provides that a labor organization
has the light to prescribe its own rules for the
acquisition or retention of membership, but it is
an unfair labor practice act for a labor
organization to restrain or coerce employees in
the exercise of their right to self-organization.
Thus, a labor organization cannot discriminate
against any employee by denying such employee
membership in the labor organization on any
ground other than the usual terms and
conditions under which membership or
continuation of union membership is made
available to other members.
A: NO. The “check-off clause” in the CBA will not
suffice. The law prohibits interference with the
disposition of one’s salary. The law requires
“individual 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 union security
clause. As a matter of fact, filing a complaint
against the union before the Department of
Labor for forcible deduction from salaries does
not constitute acts of disloyalty against the
union. (Tolentino v. Angeles, 52 O.G. 4262)
Q: The Collective Bargaining Agreement
(CBA) between Libra Films and its union,
Libra Films Employees' Union (LFEU),
contains the following standard clauses:
PEACEFUL CONCERTED ACTIVITIES
BY LABOR ORGANIZATIONS
Strike (2019, 2018, 2017, 2010, 2008, 2002,
2000, 1998 BAR)
1. Maintenance of membership;
2. Check off for union dues and
agency fees; and
3. No strike, no lock-out.
Q: Define, explain or distinguish the
following terms: x x x (c) Strikes and lockouts
(2019 BAR)
While Libra Films and LFEU are in renegotiations for an extension of the CBA,
LFEU discovers that some of its members
have resigned from the union, citing 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
membership clause. Libra Films refuses,
citing its obligation to remain a neutral
party.
A: Strikes are any temporary stoppage of work
by the concerted action of employees as a result
of an industrial labor dispute; whereas, lockouts
are the temporary refusal of an employer to
furnish work as a result of an industrial or labor
dispute. (Art. 219 [formerly 212], par. o and p,
Labor Code)
Q: The day following the workers' voluntary
return to work, the Company Production
Manager discovered an unusual and sharp
drop in workers' output. It was evidently
clear that the workers are engaged in a work
slowdown activity. Is the work slowdown a
valid form of strike activity? (1998 BAR)
As a result, LFEU declares a strike and after
filing a notice of strike and taking a strike
vote, goes on strike. The union claims that
Libra Films grossly violated the terms of the
CBA and engaged in unfair labor practice. Are
LFEU's claims correct? Explain. (2015 BAR)
A: A work slowdown is not a valid form of strike
activity. If workers are to strike, there should be
temporary stoppage of work by the concerted
action of employees as a result of an industrial
or labor dispute. (See Art. 212[o] [now 219(o)],
Labor Code)
A: LFEU’s claim that Libra Films committed ULP
based on its violation of the CBA is not correct.
For violation of a CBA to constitute ULP, the
violation must be violation of its economic
provisions. Moreover, said violation must be
gross and flagrant. Based on the allegation of the
union, what was violated was the maintenance
of membership clause which was a political or
representational provision; hence, no ULP was
committed. (BPI Employees Union-Davao City v.
BPI, 702 SCRA 42 [2013])
Q: Due to business recession, Ballistic
Company retrenched a part of its workforce.
Opposing the retrenchment, some of the
affected employees staged a strike.
Eventually, the retrenchment was found to
be justified, and the strike was declared
illegal; hence, the leaders of the strike,
including the retrenched employees, were
declared to have lost their employment
status.
By Labor Organizations
Q: A labor union lawyer opined that a labor
organization is a private and voluntary
organization; hence, a union can deny
membership to any and all applicants. Is the
opinion of counsel in accord with law? (1998
BAR)
Are the striking retrenched employees still
entitled to separation pay under Sec. 298
[283] of the Labor Code despite the illegality
of their strike? Explain your answer. (2017
BAR)
60
QuAMTO (1987-2019)
A: 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 retrenched union officials and
members who were found guilty of having
staged an illegal strike, which constituted
serious misconduct, will not be entitled to
separation pay. (C. Alcantara & Sons, Inc. v.
Court of Appeals, G.R. No. 155109, March 14,
2012; citing Toyota Motors Phils. Corp. Workers
Association v. NLRC, G.R. No. 158786 & 158789,
Oct. 19, 2007)
agreement contrary to morals, good customs,
public order or public policy.
Thus, when the workers did not report for work
when by agreement they were supposed to be on
duty, there was a temporary stoppage of work by
the concerted action of the employees as a result
of an industrial or labor dispute because they
were on strike. (See Interphil Laboratories
Employees Union-FFW v. Interphil Laboratories
Inc., CR No. 142924, Dec. 19, 2001)
Q: On the day that the Union could validly
declare a strike, the Secretary of Labor issued
an order assuming jurisdiction over the
dispute and enjoining the strike, or if one has
commenced, ordering the striking workers to
immediately return to work. The return-towork order required the employees to return
to work within twenty-four hours and was
served at 8 a.m. of the day the strike was to
start. The order at the same time directed the
Company to accept all employees under the
same terms and conditions of employment
prior to the work stoppage.
ALTERNATIVE ANSWER:
YES, the striking retrenched employees are still
entitled to separation pay despite the illegality of
their strike. Union members who participate in
an illegal strike do not lose their employment if
they did not commit illegal acts during the strike.
Here, there is no evidence that the retrenched
employees committed illegal acts during the
strike. Hence, they are entitled to separation pay
as retrenched employees.
The Union members did not return to work on
the day the Secretary’s assumption order was
served, nor on the next day; instead, they held
a continuing protest rally against the
company’s alleged unfair labor practices.
Because of the accompanying picket, some of
the employees who wanted to return to work
failed to do so. On the 3rd day, the workers
reported for work, claiming that they do so in
compliance with the Secretary’s return-towork order that binds them as well as the
Company. The Company, however, refused to
admit them back since they had violated the
Secretary’s return-to-work order and are now
considered to have lost their employment
status.
Q: Eaglestar Company required a 24-hour
operation and embodied this requirement in
the employment contracts of its employees.
The employees agreed to work on Sundays
and Holidays if their work schedule required
them, to do so for which they would be paid
additional compensation as provided by law.
Last March 2000, the union filed a notice of
strike. Upon Eaglestar’s petition, the
Secretary of Labor certified the labor dispute
to the NLRC for compulsory arbitration. On
April 20, 2000 (Maundy Thursday), while
conciliation meetings were pending, the
union officers and members who were
supposed to be on duty did not report for
work. Neither did they report for work on
April 21 (Good Friday) and on April 22 (Black
Saturday), disrupting the factory’s operations
and causing it huge losses.
The Union officers and members filed a
complaint for illegal dismissal arguing that
there was no strike but a protest rally which
is a valid exercise of the workers’
constitutional right to peaceable assembly
and freedom of expression. Hence, there was
no basis for the termination of their
employment.
The union denied it had gone on a strike
because the days when its officers and
members were absent from work were legal
holidays. Is the contention of the union
correct? Explain briefly. (2002 BAR)
You are the Labor Arbiter to whom the case
was raffled. Decide, ruling on the following
issues: Was there a strike? (2008 BAR)
A: The contention of the union is NOT correct. In
the case, it is clear that the employees agreed to
work on Sundays and Holidays if their work
schedule required them to do so for which they
would be paid additional compensation as
provided by law.
A: YES, there was a strike. No matter how they
call it, the “continuing protest rally against the
company’s alleged unfair labor practices”
constitutes a “temporary stoppage of work by the
concerted action of employees as a result of an
industrial or labor dispute” - a case of strike as
defined in Art. 212(o) [now 219(o)] of the Labor
Code.
The above-mentioned agreement that the
employees voluntarily entered into is valid. It is
not contrary to law. It is provided in the
agreement that if they will work Sundays or
Holidays that they will be paid additional
compensation as provided by law. Neither is the
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Recently, in Santa Rosa Coca-Cola Plant
Employees Union, et al. v. Coca-Cola Bottlers
61
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Labor Law and Social Legislation
Phils., Inc. (512 SCRA 437 [2007]), the Supreme
Court clarified that a strike comes in varied
forms, from “slowdowns, mass leaves, sit
downs” to other “similar activities.” A protest
rally which results in temporary stoppage of
work by the concerted action of employees, as a
result of a labor or industrial dispute, is clearly a
case of strike.
off period” mandated by the Labor Code;
and
b. The union went on strike without
complying
with
the
strike-vote
requirement under the Labor Code.
(2009 BAR)
Rule on the foregoing contentions with
reasons.
Q: What is the rationale for the State
regulation of strike activity and what are the
interests involved that the State must
balance and reconcile? (2000 BAR)
A:
a.
A: The first rationale is the constitutional
provision that the right to strike is to be
exercised “in accordance with law”. Another
rationale is the Civil Code provision that the
relations between employer and employee are
imbued with public interest and are subject to
the provisions of special law. A third rationale is
the police power of the state.
The interests to be balanced are the rights of the
workers, as primary socio-economic force, to
protection of the law, to security of tenure, to
concerted activities, etc. These should be
balanced with the right of the employer to
reasonable return on investment and to
expansion and growth. General welfare or the
general peace and progress of society should
also be considered. This is why assumption of
jurisdiction and certification to NLRC are
allowed in “national interest" cases. (Art. 263
[now 278], Labor Code: Ilaw at Buklod ng
Manggagawa v. NLRC, 198 SCRA 586 [1991];
Lapanday Workers Union v. NLRC, 248 SCRA 96
[1995])
b.
YES. The conduct of the strike action
without a strike vote violates Art. 263 (f)
[now 278(f)] – In every case, the union or
the employer shall furnish the [DOLE] the
results of the voting at least seven days
before the intended strike...” to enable the
DOLE and the parties to exert the last effort
to settle the dispute without strike action.
Q: Upon compliance with the legal
requirements on the conduct of a strike,
Navarra Union staged a strike against
Newfound Corporation on account of a
collective bargaining deadlock. During the
strike, some members of Navarra Union
broke the windows and punctured the tires
of the company-owned buses. The Secretary
of Labor and Employment assumed
jurisdiction over the dispute.
Q: Cite two (2) examples on how the law
regulates the use of tire strike as a form of
concerted activity. (2000 BAR)
A: Examples:
1. Procedural requirements should be
observed, namely, filing of notice of strike,
observance of cooling-off period, taking of strike
note, and report of the strike vote;
a.
2. Use of violence, intimidation or coercion
and blockade of ingress-egress are not allowed.
(Art. 263 [now 278] [b] [c] [f] [g], Labor Code)
Should all striking employees be
admitted back to work upon the
assumption of jurisdiction by the
Secretary of Labor and Employment?
Will these include striking employees
who damaged company properties?
A: YES. Under Art. 278(g) of the Labor Code, all
striking employees shall immediately return to
work and the employer shall immediately resume
operations and re-admit all workers under the
same terms and conditions prevailing before the
strike or lockout.
Q: Johnny is the duly elected President and
principal
union
organizer
of
the
Nagkakaisang Manggagawa ng Manila
Restaurant (NMMR), a legitimate labor
organization. He was unceremoniously
dismissed by management for spending
virtually 95% of his working hours in union
activities. On the same day Johnny received
the notice of termination, the labor union
went on strike. Management filed an action
to declare the strike illegal, contending that:
a.
YES. The conduct of a strike action without
observing the cooling-off period is a
violation of one of the requirements of law
which must be observed. The cooling-off
periods required by Arts. 263 (c) [now
278(c)] and 263 (f) [now 278(f)] of the
Labor Code are to enable the DOLE to exert
efforts to amicably settle the controversy,
and for the parties to review and
reconsider their respective positions
during the cooling-off periods. But the
Labor Code also provides that if the
dismissal constitutes union busting, the
union may strike immediately.
Regarding the striking union members who
damaged company property, the employer
should still reinstate them, but after their
reinstatement, the employer may institute the
appropriate disciplinary proceedings, or raise the
matter on the illegality of the strike on the
ground of violence and illegal acts committed
The union did not observe the “cooling62
QuAMTO (1987-2019)
during the strike before the Secretary of Labor
and Employment assumed jurisdiction.
Secretary of Labor and Employment. The
Union opposed the petition, arguing that it
did not intend to stage a strike. Should the
petition be granted? Explain.
b. May the company readmit strikers only
by restoring them to the payroll? (2018
BAR)
A: YES. There was a strike. What the union engaged
in was actually a “work stoppage” in the guise of a
protest rally.
A: As a general rule, the answer is no, as actual
reinstatement is envisioned by Art. 278(g) of
the Labor Code. The purpose of the law is to
bring back the workers to their original work
under the same terms and conditions prevailing
before the strike.
Art. 212(o) [now 219(o)] of the Labor Code defines
strike as a temporary stoppage of work by the
concerted action of employees as a result of an
industrial or labor dispute. The fact that the
conventional term "strike” was not used by the
striking employees to describe their common
course of action is inconsequential. What is
controlling is the substance of the situation, and
not its appearance. The term "strike” encompasses
not only concerted work stoppages, but also
slowdowns, mass leaves, sit-downs, attempts to
damage, destroy or sabotage plant equipment and
facilities, and similar activities. (Santa Rosa CocaCola Plant Employees Union, Donrico v. Sebastian, et
al. v. Coca-Cola Bottlers Phils., Inc., 512 SCRA 437
[2007])
Q: A is a member of the labor union duly
recognized
as
the
sole
bargaining
representative of his company. Due to a
bargaining deadlock, 245 members of the
500-strong union voted on March 13, 2010
to stage a strike. A notice of strike was
submitted to the National Conciliation and
Mediation Board on March 16, 2010. Seven
days later or on March 23, 2010, the
workers staged a strike in the course of
which A had to leave and go to the hospital
where his wife had just delivered a baby.
The union members later intimidated and
barred other employees from entering the
work premises, thus paralyzing the business
operations of the company.
b. The Union contended that assuming
that the mass leave will be considered
as a strike, the same was valid because
of the refusal of the company to discuss
the economic provisions of the CBA.
Rule on the contention.
A was dismissed from employment as a
consequence of the strike. Was the strike
legal? Explain (2010 BAR)
A: The Union’s contention is wrong. A strike may
be declared only in cases of deadlock in collective
bargaining negotiations and unfair labor practice.
(Art. 263[c] [now 278(c)], Labor Code; Sec. 1, Rule V,
NCMB Manual of Procedures)
A: NO. The strike was not legal due to the
union’s failure to satisfy the required majority
vote of union membership (251 votes),
approving the conduct of a strike (See Art.
263[f] [now 278(f)], Labor Code; Sec. 11, Rule
XXII, Dept. Order No. 40-03). Also, the strike was
illegal due to the non-observance of the 30-day
cooling off period by the union. (Art. 263[c]
[now 278(c)], Labor Code; Club Filipino, Inc. v.
Bautista, 592 SCRA 471 [2009])
The proposal of the company to discuss political
provisions pursuant to the ground rules agreed
upon does not automatically mean that the
company refuses to discuss the economic
provisions of the CBA, or that the company was
engaged in “surface bargaining” in violation of its
duty to bargain, absent any showing 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.
Q: On the first day of collective bargaining
negotiations between rank-and-file Union A
and B Bus Company, the former proposed a
P45/day increase. The 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 union representatives
reiterated their proposal for a wage
increase.
The duty to bargain does not compel either party
to agree to a proposal or require the making of a
concession. The parties’ failure to agree which to
discuss first on the bargaining table did not amount
to ULP for violation of the duty to bargain.
Besides, the mass leave conducted by the union
members failed to comply with the procedural
requirements for a valid strike under the Rules,
without which, the strike conducted taints of
illegality.
When company representatives suggested a
discussion of political provisions in the
Collective
Bargaining
Agreement
as
stipulated in the ground rules, union
members went on mass leave the next day to
participate in a whole-day prayer rally in
front of the company building.
a.
The company
assumption of
filed a petition
jurisdiction with
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
c.
for
the
63
Union member AA, a pastor who headed
the prayer rally, was served a notice of
termination by management after it filed
the
petition
for
assumption
of
jurisdiction. May the company validly
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BAR OPERATIONS
Labor Law and Social Legislation
terminate AA? Explain. (2010 BAR)
A: NO. The company cannot terminate AA
because the Labor Code provides mere
participation of a worker in a strike shall
not constitute sufficient ground for
termination of his employment.
Q: Given that the liability for an illegal strike
is individual, not collective, state when the
participating union officers and members
may be terminated from employment
because of the illegal strike. Explain your
answer. (2017 BAR)
A: When a strike is declared illegal because of
non-compliance with statutory or contractual
requirements or because of the use of unlawful
means, the consequence is loss of employment
status of the officers of the union who knowingly
participated in the illegal strike.
Ordinary union members will lose their
employment status only if they participated in
the commission of illegal acts during the strike,
thus, mere union membership does not result in
automatic loss of employment as a result of an
illegal strike. (Arts. 263-264 [now Arts. 278-279],
Labor Code; Pepsi-Cola Labor Union v. NLRC, G.R.
No. L-58341, June 29, 1982; Solidbank Corp. v.
Solidbank Union, G.R. No. 159461, Nov. 15, 2010)
3.
A decision to declare a strike must be
approved by majority of the total union
membership in the bargaining unit
concerned, obtained by secret ballot in
meetings or referenda called for that
purpose.
4.
In every case, the union shall furnish the
Department of Labor and Employment the
voting at least seven (7) days before the
intended strike subject to the cooling-off
period herein provided.
5.
No labor organization shall declare a strike
without first having bargained collectively;
without first having filed the notice
required or without the necessary strike
vote first having been obtained and
reported to the Department of Labor and
Employment.
6.
No strike shall be declared after
assumption of jurisdiction by the President
or the Secretary or after certification or
submission of the dispute to compulsory
or voluntary arbitration or during the
pendency of cases involving the same
grounds for the strike.
7.
In a strike, no person engaged in picketing
should commit any act of violence,
coercion or intimidation or obstruct the
free ingress to or egress from the
employer’s premises for lawful purposes,
or obstruct public thoroughfares.
Valid versus Illegal strikes (2017, 2010,
2007, 2004, 2003, 2000, 1994 BAR)
Q: Discuss the legal requirements of a valid
strike. (2007 BAR)
Q: A division manager of a company taunted a
union officer two days after the union
submitted to the Department of Labor and
Employment (DOLE) the result of the strike
vote. The division manager said: “Your union
threat of an unfair labor practice strike is
phony or a bluff. Not even ten percent (10%)
of your members will join the strike.’' To
prove union member support for the strike,
the union officer immediately instructed its
members to cease working and walk out. Two
hours after the walkout, the workers
voluntarily returned to work.
A: The legal requirements of a valid strike are as
follows:
1.
No labor union may strike on grounds
involving inter-union and intra-union
disputes.
2.
In cases of bargaining deadlocks, the duly
certified or recognized bargaining agent may
file a notice of strike with the Department of
Labor and Employment at least 30 days
before the intended date thereof. In cases of
unfair labor practice, the period of notice
shall be 15 days and in the absence of a duly
certified or recognized bargaining agent, the
notice of strike may be filed by any
legitimate labor organization in behalf of its
members.
a.
Was the walkout a strike? And if so, was it
a valid activity?
A: YES it was a strike because there was a work
stoppage by concerted action and there is an
existing labor dispute. It was not a valid activity
because the requisites for a valid strike were
not observed. (Art. 212 [now 219] [o], [i], Labor
Code)
However, in case of dismissal from
employment of union officers duly elected in
accordance with the union constitution and
by-laws, which may constitute union busting
where the existence of the union is
threatened, the 15-day cooling-off period
shall not apply and the union may take
action immediately.
b. Can the union officer who led the short
walk-out, but who likewise voluntarily
led the workers back to work, be
disciplined by the employer? (2000
BAR)
A: YES, the employer may discipline the union
64
QuAMTO (1987-2019)
officer. An Illegal strike is a cause for the union
officer to be declared to have lost his
employment status. (Art. 263 [now 278] [c], [d],
[e], [f]; Art. 264 [a] [now 279(a)], Labor Code)
cellular phone equipment, with a nationwide
network of 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 reassigned to the
warehouse while five (5) others were
reinstated on payroll only. The company
justified its acts as an exercise of management
prerogative.
Q: What are the statutory requisites for a
valid strike by the workers? Should these
requisites be complied with substantially or
strictly? (2004 BAR)
A: Statutory Requirements for a Valid Strike:
a.
Status of Striking Union – For a ULP strike or
bargaining deadlock strike, only a duly
certified
or
recognized
bargaining
representative may declare such strike.
b.
Procedural Requirements:
During the strike, may the striking union picket
the company's outside outlets although they
are not company-owned but independent
dealers? (1991 BAR)
i. Notice of Intent. Filing of Notice of Intent
to Strike with NCMB.
ii. Cooling off Period – Observance of
Cooling-off Period.
A: Peaceful picketing conducted by employees in a
strike area during any labor controversy is given
protection by the Labor Code.
(a) ULP – 15 days before intended date
of strike
(b) Bargaining Deadlock – 30 days
before intended date of strike.
Thus, if the place being picketed is a strike area
which is defined by the Labor Code as “the
establishment, warehouses, depots, plants or
offices, including the sites or premises used as
runaway shops, of the employer struck against, as
well as the immediate vicinity actually used by
picketing strikers in moving to and fro before all
points of entrance to and exit from said
establishment,” then the picketing is protected, if it
is peaceful.
iii. Strike Vote and Filing of the same with
the NCMB and the observance of the
seven (7) days strike ban. (Art. 263[c-f]
[now 278(c-f)], Labor Code)
c.
Cause – The cause of the strike must be a labor
or industrial dispute. (Art. 212[o] [now
219(o)], Labor Code)
In the question given, however, since the striking
union is picketing the 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.
Compliance with all legal requirements is meant
to be and should be mandatory. (National
Federation of Sugar Workers v. Ovajera, 114 SCRA
354 [1982])
Q: A sympathetic strike is stoppage of work to
make common cause with other strikers in
another establishment or business. Is the
sympathetic strike valid? Explain your
answer. (2017 BAR)
Q: President FX, head of a newly formed labor
union composed of 1/3 of the total number of
rank-and-file employees in Super Stores, Inc.,
agitated his fellow employees to demand from
management pay increases and overtime pay.
His supervisor summoned him to explain his
tardiness and refusal to obey regulations.
A: NO, a sympathetic strike is not valid. A strike is
not valid if there is no labor dispute between the
employer and the employees. In a sympathetic
strike, there is no labor dispute in the employees’
work since they are merely making common
cause with strikers in another establishment.
Hence, a sympathetic strike is not valid.
Feeling threatened, he gathered 20 of his
members and staged a 2-day picket in front of
the shopping mall. Security staff arrived and
dismantled the placards and barricades
blocking the employees' entry to the mall. In
retaliation, FX threw stones at the guards, but
the other striking workers just stood by
watching him. Seven days after the picket, FX
who had gone absent without leave returned to
the mall and announced that he had filed a
complaint for illegal dismissal and unfair labor
practice against SSI.
Picket (2016, 2004, 2000, 1992, 1991 BAR)
Q: 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) days later,
went on strike and picketed the gates of the
UP-UP Company, paralyzing its operations.
The
company
is
engaged
in
telecommunications, including the supply of
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
SSI learned that FX's group was not
registered. No strike vote and strike notice
were filed prior to the picket. The guards
65
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BAR OPERATIONS
Labor Law and Social Legislation
were told not to allow FX entry in the
company
premises
as
management
considered him effectively terminated. Other
union members were accepted back to work
by SSI. Was the dismissal of FX for a valid
cause? Was due process observed? (2004
BAR)
Q: Fifty percent (50%) of the employees of
Grandeur Company went on strike after
negotiations for a collective bargaining
agreement ended in a deadlock. Grandeur
Company, being a public utility, immediately
petitioned the Secretary of Labor and
Employment to assume Jurisdiction and
certify the case to the NLRC. On the fourth day
of the strike and before the DOLE Secretary
could assume jurisdiction or certify the case
to the NLRC, the strikers communicated in
writing their offer to return to work.
Grandeur Company refused to accept the offer
of the strikers because it realized that they
were not at all capable of paralyzing the
operations of the company. The strikers
accused Grandeur Company of illegal lockout.
Has Grandeur Company committed the act
charged by refusing to accept the offer of the
strikers to return to work? Discuss fully.
(1995 BAR)
A: There is a valid cause for the dismissal of FX,
but due process was not observed.
Peaceful picketing is part of the constitutional
freedom of speech. The right to free speech,
however, has its limits, and picketing as a
concerted activity is subject to the same
limitations as a strike, particularly as to lawful
purpose and lawful means. But it does not have
to comply with the procedural requirements for
a lawful strike, like the notice of strike or the
strike vote.
However, in the problem given, picketing
became illegal because of unlawful means, as
barricades blocked the employees' entry to the
mill, and violence, ensued when FX threw stones
at the guards. There was thus, valid cause for the
dismissal of FX, however, due process was not
observed because SSI did not comply with the
twin requirements of notice and hearing.
A: There is no law that prohibits strikers to
decide not to continue with a strike that they
have started. Thus, the company committed an
illegal lockout in refusing to accept the offer of
the strikers to return to work. Under the set of
facts in the question, the Company did not give
the required notice to lockout, much less did it
observe the necessary waiting period, nor did it
take a needed vote on the lockout. Thus, the
lockout is illegal.
Q: The workers engaged in picketing activity
in the course of a strike.
a.
Will picketing be legal if nonemployees
of
the
strike-bound
employer participate in the activity?
ASSUMPTION OF JURISDICTION
Nature (2017, 2004, 1998, 1997, 1996, 1994,
1992, 1991 BAR)
Q: Calabarzon Transportation Company (CTC)
and the Calabarzon Workers Union (CWU) are
parties to a collective bargaining agreement
(CBA), which is effective until December 31,
1992. The CBA provides for among others, a
bipartite committee composed of CTC and
CWU representatives to evaluate all positions
in the CTC and determine adjustment of
wages and allowances. The Committee
members having failed to agree on the
adjustments, the CWU filed a notice of strike.
Conciliation
efforts
by
the
National
Conciliation and Mediation Board failed. The
CWU then declared a strike.
A: YES, the picketing is legal even though nonemployees join it. Picketing is a form of the
exercise of freedom of speech. Picketing,
provided it is held peacefully, is a constitutional
right. The disputants in a legal dispute need not
be employer-employee of each other. (De Leon v.
National Labor Union, 100 Phil. 789 [1957]; Cruz
v. Cinema Stage, etc., 101 Phil. 1259 [1957])
b. Can picketing activity be curtailed
when illegal acts are committed by the
picketing workers in the course of the
activity? (2000 BAR)
A: NO, the picketing activity itself cannot be
curtailed. What can be curtailed are the illegal
acts being done in the course of the picket.
However, if this is a “national interest" case under
Art. 263(g) [now 278(g)], the strike or work
stoppage may be stopped by the power of
assumption of jurisdiction or certification of the
case to the National Labor Relations Commission
(Nagkakaisang Mangagawa sa Cuison Hotel v.
Libron, 124 SCRA 448 [1983]; Free Telephone
Workers Union v. PLDT, 113 SCRA 662 [1982])
The Secretary of Labor and Employment
assumed jurisdiction over the dispute and
after proceedings issued an order (a)
awarding certain monetary benefits to the
strikers, (b) declaring the strike legal on the
ground that CWU complied with all the
requirements for a valid strike, and (c)
restraining CTC from taking retaliatory
actions against the officers and members of
CWU who were responsible for the strike.
BY EMPLOYERS
a.
Lockout
As lawyer for CTC what action
should you take?
A: As lawyer of CTC, I will first file with the
66
QuAMTO (1987-2019)
Secretary of Labor and Employment a Motion
for Reconsideration. If this Motion is denied,
then I will file with the Supreme Court a
petition for certiorari under Rule 65 of the
Rules of Court. I will assail the issuance by the
Secretary of Labor of his Order, and his refusal
to reconsider said Order as a grave abuse of
discretion amounting to lack or excess of
jurisdiction.
down by the strikers.
Could the DOLE Secretary intervene, assume
jurisdiction and issue a TRO (Temporary
Restraining Order)? Briefly justify your
answer. (2004 BAR)
A: YES, the Secretary of Labor and Employment
can assume jurisdiction over the dispute because
ABC could be considered as an industry
indispensable to the national interest since it
produces the country’s supply of chlorine for
water treatment.
b. Was the assumption of the labor dispute
by the Secretary of Labor and
Employment valid?
A: It is valid. Under the Labor Code, (in Art. 263
[g] [now 278(g)]) the Secretary of Labor has the
power to assume jurisdiction over a labor
dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
national interest. CTC, as a transportation
Company, is in an industry indispensable to the
national interest.
The assumption of jurisdiction by the Secretary of
Labor and Employment has the effect of ending
the strike. The strikers will be subject to a returnto-work order by the Secretary of Labor and
Employment upon her assumption of jurisdiction
c.
Q: 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) days later,
went on strike and picketed the gates of the
UP-UP Company, paralyzing its operations.
The
company
is
engaged
in
telecommunications, including the supply of
cellular phone equipment, with a nationwide
network of facilities.
Effects of Assumption of Jurisdiction (2017,
2010, 2008, 2003, 1998, 1997, 1991 BAR)
Was the Secretary’s order granting
monetary benefits, declaring the strike of
CWU legal and restraining the CTC from
penalizing CWU members valid? Reasons.
(1992 BAR)
A: The Secretary's order declaring the strike of
CWU legal and restraining the CTC from
penalizing CWU members on the basis of the
finding of the Secretary that the strike is legal, is
illegal. He is acting in excess of his jurisdiction. It
is a Labor Arbiter, not the Secretary of Labor that
has the jurisdiction to determine the legality of a
strike (Art. 217 [now 224], Labor Code; Philippine
Airlines, Inc. v. Secretary of Labor and
Employment et al., G.R. No. 88210, Jan. 23, 1991)
but in International Pharmaceuticals v. Secretary
of Labor (G.R. No. 92981-83, Jan. 9, 1992), the
Supreme Court held that the Secretary of Labor,
when he assumes jurisdiction under Art. 263(g)
[now 278(g)] of the Labor Code, could deal with
all the incidents of the labor dispute including the
issue as to whether or not a strike is legal.
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 reassigned to
the warehouse while five (5) others were
reinstated on payroll only. The company
justified its acts as an exercise of management
prerogative.
Q: Employees of ABC declared a strike after
filing a Notice of Strike with the DOLE. They
barricaded company gates and damaged
vehicles entering company premises. On the
second day of the strike, ABC filed a petition
with the DOLE Secretary to intervene through
the issuance of an assumption of jurisdiction
order that the Secretary may issue when a
strike or lock-out will adversely affect
national interest.
a.
A: The certification of the dispute for
compulsory arbitration was proper. The dispute
was causing a strike in an industry
indispensable to the national interest. The
company was engaged in telecommunication
including the supply of cellular equipment, with
a nationwide network of facilities. All these
activities are at present indispensable to the
national interest.
ABC furnished the Secretary with evidence to
show that company vehicles had been
damaged; that electric power had been cut off;
and equipment and materials were damaged
because electric power was not immediately
restored. ABC forecast that the country’s
supply of chlorine for water treatment (which
die company produces) would be affected
adversely if ABC’s operations were closed
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Was the certification of the dispute for
compulsory arbitration proper?
b. Were the temporary reassignment and
payroll reinstatement valid? (1991 BAR)
A: NO. The temporary re-assignment and payroll
rein- statement are not valid. According to the
Labor Code, when the Secretary of Labor assumes
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Labor Law and Social Legislation
Jurisdiction, 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 same terms and conditions
prevailing before the strikes.
enjoin the hunger “strike”. What answer will
you give if you were the Secretary of Labor?
(2008 BAR)
A: I will deny the letter-request of SDS because
its business is not indispensable to the national
interest. Although the Secretary of Labor has a
wide latitude of discretion in deciding whether
or not to assume jurisdiction over a labor
dispute or certify the same to the NLRC for
compulsory arbitration, SDS’s business is clearly
not one which is indispensable to the national
interest. Moreover, the grounds relied upon by
SDS, to wit: “eyesore and disruptive of its
business”, betrays the weakness of its case.
Q: In a labor dispute, the Secretary of Labor
issued an "Assumption Order" Give the legal
implications of such an order. (2017, 2003
BAR)
A: Under Art. 263(g) [now 278(g)] of the Labor
Code, such assumption shall have the effect of
automatically enjoining the intended or
impending strike or lockout as specified in the
assumption order. If one had already taken
place at the time of assumption, all striking or
lockout employees shall immediately return to
work and the employer shall immediately resume
operations and re-admit all workers under the
same terms and conditions prevailing before the
strike or lockout.
Q: 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 company. The management then filed a
petition for the Secretary of Labor and
Employment to assume jurisdiction over the
dispute. Without the benefit of a hearing, the
Secretary issued an Order to assume
jurisdiction and for the parties to revert to
the status quo ante litem.
The Secretary of Labor and Employment may
seek the assistance of law enforcement agencies
to ensure compliance with this provision as well
as with such orders as he may issue to enforce
the same. The mere issuance of an assumption
order by 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.
a.
Was the order to assume jurisdiction
legal? Explain.
A: YES. The Secretary of Labor and Employment
has plenary power to assume jurisdiction under
Art. 263(g) [now 278(g)] of the Labor Code.
When in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in
an industry indispensable to the national
interest, the Secretary of Labor may assume
jurisdiction over the dispute and decide it or
certify it to the NLRC for compulsory arbitration.
(Art. 263[g] [now 278(g)], Labor Code)
Those who violate the foregoing shall be subject
to disciplinary action or even criminal
prosecution. Under Art. 264 [now 279] of the
Labor Code, no strike or lockout shall be declared
after the assumption of jurisdiction by the
Secretary.
Q: Savoy Department Store (SDS) adopted a
policy of hiring salesladies on five-month
cycles. At the end of a saleslady’s five-month
term, another person is hired as 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 the 5-month
employment contract are not hired.
This extraordinary authority given to the
Secretary of Labor is aimed at arriving at a
peaceful and speedy solution to labor disputes,
without jeopardizing national interests. (Steel
Corporation v. SCP Employees Union, 551 SCRA
594 [2008])
Such assumption shall have the effect of
automatically enjoining an impending strike or
lockout, or an order directing immediate return
to work and resume operations, if a strike
already took place, and for the employer to readmit all employees under the same terms and
conditions prevailing before the strike or
lockout. (Art. 263[g] [now 278(g)], Labor Code;
Sec. 15, Rule XXII, D.O. No. 40-G-03)
The day after the expiration of her 5-month
engagement, Lina wore her SDS white and
blue uniform and reported for work but was
denied entry into the store premises.
Agitated, she went on a hunger strike and
stationed herself in front of one of the gates
of SDS. Soon thereafter, other employees
whose 5-month term had also elapsed joined
Lina’s hunger strike.
b. Under the same set of facts, the
Secretary issued an Order directing all
striking workers to return to work
within 24 hours, except those who
were terminated due to redundancy.
Was the Order legal? Explain. (2010
BAR)
The owner of SDS considered the hunger
strike staged by Lina, et al., an eyesore and
disruptive of SDS’ business. He wrote the
Secretary of Labor a letter asking him to
assume jurisdiction over the dispute and
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A: NO. The Secretary of Labor’s order will be
inconsistent with the established policy of the
State of enjoining the parties from performing
acts that undermine the underlying principles
embodied in Art. 263(g) [now 278(g)] of the
Labor Code.
Under the Social Security Act of 2018, the
coverage of SSS is:
1.
Compulsory Coverage
a.
In this case, excepting the employees terminated
due to redundancy from those who are required
to return-to-work, which was the very labor
dispute that sparked the union to strike, the
Secretary of Labor comes short of his duty under
Art. 263(g) [now 278(g)] to maintain status quo
or the terms and conditions prevailing before
the strike. In fact, the Secretary could be accused
of disposing of the parties’ labor dispute without
the benefit of a hearing, in clear derogation of
due process of law.
b.
SOCIAL WELFARE LEGISLATION
g.
h.
c.
d.
e.
f.
Q: State the respective coverage of:
a. Social Security Law
b. Revised Government Service Insurance
Act
c. Employees Compensation Act. (1997
BAR)
2.
Voluntary Coverage
a.
A:
a. Social Security Law:
b.
c.
d.
e.
Spouses who devote full time to
managing the household and family
affairs;
XPN: If they are also engaged in other
vocation or employment which is subject
to mandatory coverage
Coverage of SSS includes (Sec. 9 and 9-A, Social
Security Act of 1997):
a.
All Ees not over sixty (60) years of age
and their Ers;
Domestic helpers whose income is not
less than P1,000/month and not over
sixty (60) years of age and their Ers;
All self-employed professionals;
Partners and single proprietors of
business;
Actors
and
actresses,
directors,
scriptwriters and news correspondents
who do not fall within the definition of
the term “employee” in Sec. 8(d) of this
Act;
Professional athletes, coaches, trainers,
and jockeys;
Individual farmers and fishermen;
All sea-based and land-based OFWs, as
defined under R.A. 8042, as amended,
provided they are not over sixty (60)
years of age.
b.
Employees not over sixty years of age and
their employers;
Domestic helpers, provided their monthly
income shall not be less than P1,000;
Self-employed persons as provided by law
and as determined by the Commission;
Spouse that is fully devoted to management
of household and family affairs, on
voluntary basis; and
Filipinos recruited by foreign-based
employers abroad, on voluntary basis.
c.
d.
e.
3.
An OFW upon the termination of his/her
employment overseas;
A covered employee who was separated
from employment who continues to pay
his/her contributions;
Self-employed who realizes no income
for a certain month; and
Filipino permanent migrants, including
Filipino
immigrants,
permanent
residents, and naturalized citizens of
their host countries.
By agreement
NOTE: Under R.A. 10361 (Kasambahay Law),
domestic helpers who have rendered at least 1
month of service regardless of the amount of
their salary shall be covered by the SSS.
Premium payments or contributions shall be
shouldered by the employer. However, if the
domestic worker is receiving a wage of Five
thousand pesos (P5,000.00) and above per
month, the domestic worker shall pay the
proportionate share in the premium payments
or contributions, as provided by law. (Sec. 30,
R.A. 10361)
b. Revised GSIS Act:
NOTE: R.A. 11199, otherwise known as the
“Social Security Act of 2018” which took effect on
March 5, 2019, repealed R.A. 1161, as amended
by R.A. 8282 (Social Security Act of 1997).
Membership in the Government Service
Insurance System (Art. 3, R.A. 8291) shall be
compulsory for all employees receiving
compensation who have not reached the
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a.
Any foreign government, international
organization or their wholly owned
instrumentality employing workers in
the Philippines or employing Filipinos
outside of the Philippines.
XPN: Those already covered by
their respective civil service
retirement systems.
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Labor Law and Social Legislation
compulsory retirement age, irrespective of
employment status, except members of the AFP,
PNP, and contractuals that have no employeremployee relationship with the agencies that they
serve. Employees included are any person
receiving compensation while in the service of
employers, which includes the national
government, its political subdivisions, branches,
agencies, or instrumentalities including GOCCs
and financial institutions with original charters,
constitutional commissions, and judiciary,
whether by election or appointment irrespective
of status of appointment, including barangay and
sanggunian officials. (Sec. 2 [c] and [d]; Sec. 3, GSIS
Act of 1997)
c.
benefits under the SSS Act. Is she entitled to
claim? (2015, 2010, 2007, 2000 BAR)
A: YES. Provided, Luisa has reported to her
employer her pregnancy and date of expected
delivery and paid at least three-monthly
contributions during the 12-month period
immediately preceding her miscarriage then she
is entitled to maternity benefits up to four
deliveries. As to the fact that she got pregnant
outside wedlock, as in her past three
pregnancies, this will not bar her claim because
the SSS is non-discriminatory.
NOTE: The law merely says, “a female
employee”. It does not qualify the term to mean
legally married woman. (Sec. 14-A, Social
Security Act of 1997 [now Sec. 14-A, R.A. 11199])
Employees Compensation Act:
Coverage in the State Insurance Fund (Art. 168
[now 174], Labor Code) shall be compulsory upon
all employers and their employees not over sixty
(60) years of age; Provided, that an employee who
is over (60) years of age and paying contributions
to qualify for the retirement or life insurance
benefit administered by the System shall be
subject to compulsory coverage. The employer or
employee may either belong to the public or
private sector as covered by their own respective
systems. (Art. 168 [now 174], Labor Code)
NOTE: Under the Expanded Maternity Leave
Law, which took effect on March 11, 2019, all
covered female workers in government and the
private sector, including those in the informal
economy, regardless of civil status or legitimacy
of the child, shall be granted maternity leave
with full pay in every instance of pregnancy,
miscarriage, or emergency termination of
pregnancy, regardless of frequency. (Sec. 3, R.A.
11210)
Q: The owners of FALCON Factory, a company
engaged in the assembling of automotive
components, decided to have their building
renovated. Fifty (50) persons, composed of
engineers, architects and other construction
workers, were hired by the company for this
purpose. The work was estimated to be
completed in three (3) years. The employees
contended that since the work would be
completed after more than one (1) year, they
should be subject to compulsory coverage
under the Social Security Law. Do you agree
with their contention? Explain your answer
fully. (2002 BAR)
SSS LAW
NOTE: R.A. 11199, otherwise known as the
“Social Security Act of 2018” which took effect
on March 5, 2019, repealed R.A. 1161, as
amended by R.A. 8282 (Social Security Act of
1997). Thus, the given suggested answers to the
succeeding questions may no longer be correct
and/or applicable under the new law.
Coverage and Exclusions (2015, 2010, 2009,
2007, 2004, 2000, 1997, 1995, 1993, 1989
BAR)
Q: State the respective coverage of (a) the
Social Security Law; x x x (1997 BAR)
A: NO. Under Sec. 8 (j) of R.A. 1161, as amended,
employment of purely casual and not for the
purpose of the occupation or business of the
employer are excepted from compulsory
coverage. An employment is purely casual if it is
not for the purpose of occupation or business of
the employer.
A: Coverage of SSS (Sec. 9, R.A. 8282) shall be
compulsory upon all employees not over sixty
years of age and their employers. Filipinos
recruited in the Philippines by foreign-based
employers for employment abroad may be
covered by the SSS on a voluntary basis.
Coverage in the SSS shall also be compulsory
upon all self-employed persons earning P1,800
or more per annum.
In the problem given, Falcon Factory is a
company engaged in the assembling of
automotive components.
The fifty (50) persons (engineers, architects and
construction workers) were hired by Falcon
Factory to renovate its building. The work to be
performed by these fifty (50) people is not in
connection with the purpose of the business of
the factory. Hence, the employ of these fifty (50)
persons is purely casual. They are, therefore,
exempted from the compulsory coverage of the
SSS law.
NOTE: Refer to the coverage of the Social
Security Act of 2018 in the preceding question.
Q: Luisa is an unwed mother with 3 children
from different fathers. In 2004, she became a
member of the Social Security System (SSS).
That same year, she suffered a miscarriage of
a baby out of wedlock from the father of her
third child. She wants to claim maternity
70
QuAMTO (1987-2019)
I agree with the contention that the employees
hired by the owners of FALCON factory as
construction workers in the renovation of its
building should be under the compulsory
coverage of the Social Security Law. It is true that
in connection with FALCON Factory, which is
engaged in the assembling of automotive
components, the construction workers may be
considered casual employees because their
employment is not for the purpose of occupation
of business of FALCON Factory. As such, In
accordance with Sec. 8 (j) of the Social Security
Law, they are excepted form the compulsory
coverage of the Social Security System.
employer in which either or both mental and
physical efforts are used and who receives
compensation for such service, where there is an
employer-employee relationship.” (now Sec. 8[d],
R.A. 11199)
Dependents, Beneficiaries (2019, 2017, 2008,
1992, 1990, 1987 BAR)
Q: A is an employee of B who in turn
registered A with the Social Security System
as required by law. Unfortunately, B did not
remit A’s contributions to the System. In the
course of his employment, A met a serious
accident requiring his hospitalization.
But they could also be considered project
employees of FALCON Factory and as such could
be under the compulsory coverage of the SSS,
applying Art. 4 of the Labor Code that provides
that all doubts in the implementation and
interpretation of the provisions of Labor Law
shall be resolved in favor of labor. The employees
here therefore, should be considered as under the
compulsory coverage of the SSS.
a.
A: A is entitled to receive benefits from the Social
Security System even if his employer did not
remit A’s contribution to the System because the
Social Security Law provides in Sec. 22(b) that
the failure or refusal of the employer to pay or
remit contributions shall not prejudice the right
of the covered employee to the benefits of the
coverage.
NOTE: Under the Social Security Act of 2018 (R.A.
11199), the relevant provision is likewise Sec. 8(j)
thereof.
Q: Tito Paciencioso is an employee of a
foundry shop in Malabon, Metro Manila. He is
barely able to make ends meet with his salary
of P4,000.00 a month. One day, he asked his
employer to stop deducting from his salary
his SSS monthly contribution, reasoning out
that he is waiving his social security coverage.
If you were Tito’s employer, would you grant
his request? Why? (2008 BAR)
But A is not entitled to retirement benefits in the
form of a monthly pension unless at the time of
the accident, he has reached the age of sixty years
and has paid at least 120 monthly contributions
prior to the semester of the accident. (Sec. 12-B,
Social Security Law [now Sec. 12-B, R.A. 11199])
b. Suppose that he died because of the
accident, are his heirs entitled to death
benefits under the System? Explain your
answer. (1990 BAR)
A: NO. As Tito’s employer, I am bound by law to
remit to SSS Tito’s monthly contribution. The SSS
law covers any person natural, juridical, domestic
or foreign, carrying in the Philippines trade,
business industry, undertaking or activity and
uses the services of another under his order as
regards employment.
A: The heirs are not entitled, but his primary
beneficiaries or in the absence of primary
beneficiaries, his secondary beneficiaries are
entitled.
The compulsory coverage of employers and
employees under the SSS law is actually a legal
imposition on the employers and employees,
designed to provide 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 agreement of
any party. (Phil. Blooming Mills, Co., Inc. v. SSS, 17
SCRA 1077 [1966])
Q: X is a member of the Social Security System
(SSS). In 2015, he died without any spouse or
children. Prior to the semester of his death, X
had paid 36 monthly contributions. His
mother, M, who had previously been receiving
regular support from X, filed a claim for the
latter's death benefits.
a.
Q: Can a member of a cooperative be deemed
an employee for purposes of compulsory
coverage under the Social Security Act?
Explain. (2009 BAR)
Is M entitled to claim death benefits from
the SSS? Explain.
A: YES. R.A. 8282, otherwise known as the SSS
Law, states that if a member has no primary
beneficiaries, his secondary beneficiaries shall be
entitled to a lump sum benefit equivalent to
thirty-six (36) times the monthly pension. Thus,
the mother of X, as a secondary beneficiary, is
entitled to a lump sum death benefits for X, who
has made at least 36 monthly contributions. (Sec.
13 in relation to Sec. 8[k], R.A. 8282)
A: YES, an employee of a cooperative, not over
sixty (60) years of age is, under the SSS Law,
subject to compulsory coverage. The Sec. 8 (d)
SSS Law defines an employee as - “Sec. 8 (d) —
any person who performs services for an
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Suppose he decides to retire from the firm
because of the accident, is he entitled to
recover retirement benefits under the
System? Explain your answer.
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Labor Law and Social Legislation
b. Is Gene entitled to the funeral aid for the
death of his widowed mother? Explain
your answer. (2017 BAR)
NOTE: Under the Social Security Act of 2018 (R.A.
11199), the relevant provision is likewise Sec. 13
in relation to Sec. 8(k) thereof.
A: YES, Gene is entitled to the funeral aid for the
death of his widowed mother.
b. Assuming that X got married to his
girlfriend a few days before his death, is M
entitled to claim death benefits from the
SSS? Explain. (2019 BAR)
In Philippine Journalists, Inc. v. Journal Employees
Union (G.R. No. 192601, June 3, 2013), the
Supreme Court held that term “legal dependent”
as used CBA should be construed as similar to the
meaning
that
contemporaneous
social
legislations have set if the CBA is silent about it.
A: YES. The presumption that the surviving
spouse whose marriage to SSS members were
contracted after the latter’s retirement entered
into the marriage for the purpose of securing
survivor’s benefits is not necessarily or
universally true. (Dycaico v. Social Security
System, G.R. No. 161357, Nov. 30, 2005)
Here, the CBA is silent about the coverage of the
term “legal dependent.” Hence, the definition of
legal dependent in the Social Security Law, which
includes a legitimate parent dependent on the
employee for support, should be used.
Benefits (2010, 2007, 2005, 200 BAR)
Q: Ms. Sara Mira is an unwed mother with
three children from three different fathers. In
1999, she became a member of the Social
Security System. In August 2000, she suffered
a miscarriage, also out of wedlock, and again
by a different father. Can Ms. Mira claim
maternity benefits under the Social Security
Act of 1997? Reason. (2000 BAR)
GSIS LAW
Coverage and Exclusions (2015, 2009, 2005,
2004, 1999 BAR)
Q: Odeck, a policeman, was on leave for a
month. While resting in their house, he heard
two of his neighbors fighting with each other.
Odeck rushed to the scene intending to pacify
the protagonists. However, he was shot to
death by one of the protagonists.
A: YES, she can claim maternity benefits.
Entitlement thereto is not dependent on the
claimant’s being legally married. (Sec. 14-A, Social
Security Act of 1997)
Zhop, a housemaid, was Odeck's surviving
spouse whom he had abandoned for another
woman years back. When she learned of
Odeck's death, Zhop filed a claim with the
GSIS for death benefits. However, her claim
was denied because: (a) when Odeck was
killed, he was on leave; and (b) she was not
the dependent spouse of Odeck when he
died. Resolve with reasons whether GSIS is
correct in denying the claim. (2005 BAR)
Q: Gene is a married regular employee of
Matibay Corporation. The employees and
Matibay Corporation had an existing CBA that
provided for funeral or bereavement aid of
P15,000.00 in case of the death of a legal
dependent of a regular employee. His
widowed mother, who had been living with
him and his family for many years, died;
hence, he claimed the funeral aid. Matibay
Corporation denied the claim on the basis that
she had not been his legal dependent as the
term legal dependent was defined by the
Social Security Law.
a.
A: YES, because under the law, a dependent is
one who is a legitimate spouse living with the
employee (Art. 167 [i] [now 173(i)], Labor Code).
In the problem given, Zhop had been abandoned
by Odeck who was then living already with
another woman at the time of his death.
Moreover, Odeck was on leave when he was
killed. The 24-hour duty rule does not apply
when the policeman is on vacation leave
(Employees’ Compensation Commission v. CA, G.R.
No. 121545, Nov. 14, 1996). Taking together
jurisprudence and the pertinent guidelines of the
ECC with respect to claim for death benefits,
namely:
Who may be the legal dependents of Gene
under the Social Security Law?
A: The legal dependents of Gene under the Social
Security Law are as follows:
1. Legitimate, legitimated or legally adopted
child, who is unmarried, not gainfully
employed, and not over 21 years or age, or
over 21 years of age but congenitally
incapacitated and incapable of selfsupport;
a.
b.
2. The legitimate spouse dependent for
support from the employee; and
c.
3. The legitimate parents wholly dependent
on the employee for support.
That the employee must be at the place
where his work requires him to be;
That the employee must have been
performing his official functions; and
That the injury is sustained elsewhere,
the employee must have been
executing an order for the employer.
It is not difficult to understand then why Zhop’s
72
QuAMTO (1987-2019)
claim was denied by the GSIS (Tancinco v. GSIS,
G.R. No. 132916, Nov. 16, 2001). In the present
case, Odeck was resting at his house when the
incident happened; thus, he was not at a place
where his work requires him to be. Although at
the time of his death Odeck was performing a
police function, it cannot be said that his death
occurred elsewhere other than the place where
he was supposed to be because he was executing
an order for his employer.
Pepay Palaypay (Pitoy Mondero's commonlaw wife for more than twenty years) and a
Pitoy Mordero Jr. (his only son) filed a claim
for death benefits with the Government
Service Insurance System (GSIS), which was
denied on the ground that Pitoy Mordero's
death did not arise out of and in the course of
employment and therefore not compensable
because the accident occurred in his house
and not in the school premises.
Q: Luis, a PNP officer, was off duty and resting
at home when he heard a scuffle outside his
house. He saw two of his neighbors fighting
and he rushed out to pacify them. One of the
neighbors shot Luis by mistake, which
resulted in Luis's death. Marian, Luis's widow,
filed a claim with the GSIS seeking death
benefits. The GSIS denied the claim on the
ground that the death of Luis was not servicerelated as he was off duty when the incident
happened. Is the GSIS correct? (2015 BAR)
a.
A: No. The GSIS is not correct. Luis, a policeman,
just like a soldier, is covered by the 24-Hour Duty
Rule. He is deemed on round-the clock-duty
unless on official leave, in which case his death
outside performance of official peace-keeping
mission will bar death claim. In this case, Luis
was not on official leave and he died in the
performance of a peace-keeping mission.
Therefore, his death is compensable.
b. Is the cause of death of Pitoy Mordero
(cardiac arrest due to accidental
electrocution in his house) compensable?
Why? (1999 BAR)
A: The beneficiaries of a member of the GSIS are
entitled to the benefits arising from the death of
said member. Death benefits are called
survivorship benefits under the GSIS Law. Pepay
Palaypay is not entitled to receive survivorship
benefits since she is not a beneficiary being a
common-law wife and not a legal dependent
spouse. (Sec. 2[g], GSIS Act of 1997)
A: YES.To be compensable under the GSIS Law, the
death need not be work connected.
NOTE: As long as the decedent-member was (a) in
service; (b) rendered 3 years of service and at
least paid 36 monthly contributions within the
five-year period immediately preceding his
death; or (c) paid a total of at least 180 monthly
contributions prior to his death.
Dependents, Beneficiaries (2018, 1999, 1997,
1991 BAR)
Q: Pitoy Mondero was employed as a public
school teacher at the Marinduque High
School from July 1, 1983 until his untimely
demise on May 27, 1997.
Q: Sgt. Nemesis was a detachment noncommissioned officer of the Armed Forces of
the Philippines in Nueva Ecija. He and some
other members of his detachment sought
permission from their Company Commander
for an overnight pass to Nueva Vizcaya to
settle some important matters. The
Company Commander orally approved their
request and allowed them to carry their
firearms as the place they were going to was
classified as a "critical place."
On April 27, 1997, a memorandum was
issued by the school principal, which reads:
"You are hereby designated to prepare the
MODEL DAM project, which will be the
official entry of our school in the forthcoming
Division Search for Outstanding Improvised
Secondary Science Equipment for Teachers
to
be
held
in
Manila on June 4, 1997. You are hereby
instructed to complete this MODEL DAM on or
before the scheduled date of the contest."
Mondero complied with his superior's
instruction and constructed an improvised
electric microdam, which he took home to
enable him to finish it before the deadline.
They arrived at the place past midnight; and
as they were alighting from a tricycle, one of
his companions accidentally dropped his
rifle, which fired a single shot, and in the
process hit Sgt. Nemesis fatally. The shooting
was purely accidental.
At the time of his death, he was still legally
married to Nelda, but had been separated de
facto from her for 17 years. For the last 15
years of his life, he was living in with Narda,
with whom he has two minor children. Since
Narda works as a kasambahay, the two
children lived with their grandparents, who
provided their daily support. Sgt. Nemesis
and Narda only sent money to them every
year to pay for their school tuition.
On May 27, 1997, while working on the
MODEL DAM Project in his house, he came to
contact with a live wire and was electrocuted.
He was immediately brought to a clinic for
emergency treatment but was pronounced
dead on arrival. The death certificate showed
that he died of cardiac arrest due to
accidental electrocution.
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Is Pepay Palaypay entitled to file a claim for
death benefits with the GSIS? Why?
73
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BAR OPERATIONS
Labor Law and Social Legislation
Nelda and Narda, both for themselves and
the latter, also on behalf of her minor
children, separately filed claims for
compensation as a result of the death of Sgt.
Nemesis. The line of Duty Board of the AFP
declared Sgt. Nemesis' death to have been
"in line of duty", and recommended that all
benefits due to Sgt. Nemesis be given to his
dependents. However, the claims were
denied by GSIS because Sgt. Nemesis was not
in his workplace nor performing his duty as
a soldier of the Philippine Army when he
died.
a.
means of living as determined by his position in
life. One need not be in the deceased’s household
in order to be a dependent. (Malate Taxicab v.
Del Villar G.R. No. L-7489, Feb. 29, 1956)
Benefits
Q: Atty. CLM, a dedicated and efficient public
official, was the top executive of a
government
owned
and
controlled
corporation (GOCC). While inspecting an
ongoing project in a remote village in
Mindanao, she suffered a stroke and since
then had been confined to a wheelchair. At
the time she stopped working because of her
illness in line of duty, Atty. CLM was only
sixty years old but she had been an active
member of the GSIS for thirty years without
any break in her service record. What
benefits could she claim from the GSIS? Cite
at least five benefits. (2004 BAR)
Are the dependents of Sgt. Nemesis
entitled to compensation as a result of
his death?
A: The death of Sgt. Nemesis arose out of and in
the course of his employment as a soldier on
active duty in the AFP and hence, compensable.
The concept of a “workplace” cannot always be
literally applied to a soldier on active duty. Sgt.
Nemesis had permission to go to Nueva Vizcaya
and he and his companions had permit to carry
their firearms which they could use to defend
themselves when attacked. A soldier on active
duty is really on duty 24 hours a day since he
can be called upon anytime by his superiors,
except when he is on vacation leave status,
which Sgt. Nemesis was not, at the time of his
death. (Hinoguin v. ECC, G.R. No. 8430, April 17,
1989).
A:
2.
3.
4.
5.
6.
b. As between Nelda and Narda, who
should be entitled to the benefits? (2018
BAR)
7.
Separation Benefit (Secs. 11-12, GSIS Act
of 1997)
Retirement Benefits (Secs. 13-14, GSIS
Act of 1997)
Permanent Disability Benefits (Secs. 1517, GSIS Act of 1997)
Temporary Disability Benefits (Secs. 1819, GSIS Act of 1997)
Survivorship Benefits (Secs. 20-22, GSIS
Act of 1997)
Funeral Benefits (Sec. 23, GSIS Act of
1997)
Life Insurance Benefits (Secs. 24-27, GSIS
Act of 1997)
PORTABILITY LAW
(2014, 2005 BAR)
A: To be considered as a beneficiary, the spouse
must be the legal spouse and living with the
employee at the time of his death.
Q: How are the "portability" provisions of
Republic Act No. 7699 beneficial or
advantageous to SSS and GSIS members in
terms of their creditable employment
services in the private sector or the
government, as the case may be, for purposes
of death, disability or retirement? Please
explain your answer briefly. (2005 BAR)
Nelda, as the surviving spouse who has been
separated de facto from the deceased employee,
may still however be entitled if the separation
was due to the covered employee’s abandonment
of the spouse without valid reason, or for other
justifiable reasons.
Narda, not being a legitimate spouse, is not
entitled to the benefits; however, the ECC may act
as referee and arbitrator between two (2)
claimants to help each other reach a mutually
acceptable compromise settlement of allocating
the compensation among themselves and their
dependent children. (Samar Mining Co. Inc. v.
WCC, G.R. No. L-29938-39, March 31, 1971)
c.
1.
A: Portability provisions of R.A. 7699 shall
benefit a covered worker who transfers
employment from one sector to another or is
employed in both sectors, whose creditable
services or contributions in both systems
credited to his service or contribution record in
each of the system and shall be totalized for
purposes of old age, disability, survivorship and
other benefits (Sec. 3, R.A. 7699).
Are the minor children entitled to the
benefits considering that they were
not fully dependent on Sgt. Nemesis for
support?
In the event the employees transfer from the
private sector to the public sector, or vice versa,
their creditable employment services and
contributions are carried over and transferred
as well.
A: Being a dependent does not mean absolute
dependency for the necessities of life, but rather,
that the claimant looked up to and relied on the
contribution of the covered employee for his
Q: Luisito has been working with Lima Land
74
QuAMTO (1987-2019)
for 20 years. Wanting to work in the public
sector, Luisito applied with and was offered a
job at Livecor. Before accepting the offer, he
wanted to consult you whether the payments
that he and Lima Land had made to the Social
Security System (SSS) can be transferred or
credited to the Government Service Insurance
System (GSIS). What would you advice? (2014
BAR)
twin requisites of compensability. However,
despite his knowledge of his medical condition,
he failed to report to his manning agent within
three (3) days from his arrival as required by
Sec. 20-B(3) of the POEA-SEC. Since he already
felt the manifestations of TB before his sign-off,
he should have submitted to post-employment
medical examination (Jebsens Maritime Inc. v.
Enrique Undag, G.R. No. 191491, Dec. 14, 2011).
The effect of his omission is forfeiture by him of
disability benefits (Coastal Safeway Marine
Services, Inc. v. Elmer Esguerra, G.R. No. 185352,
Aug. 10, 2011). In effect, the 120-day rule has no
application at all.
A: YES. Under R.A. 7699, otherwise known as the
Portability Law, one may combine his years of
service in the private sector represented by his
contributions to the Social Security System (SSS)
with his government service and contributions to
the GSIS. The contributions shall be totalized for
purposes of old-age, disability, survivorship and
other benefits in case the covered member does
not qualify for such benefits in either or both
Systems without totalization.
Q: Rosa was granted vacation leave by her
employer to spend three weeks in Africa with
her family. Prior to her departure, the General
Manager of the company requested her to
visit the plant of a client of the company in
Zimbabwe in order to derive best
manufacturing practices useful to the
company. She accepted the request because
the errand would be important to the
company and Zimbabwe was anyway in her
itinerary.
EMPLOYEE’S COMPENSATION –
COVERAGE AND WHEN COMPENSABLE
(2018, 2017, 2015 BAR)
Q: Victor was hired by a local manning agency
as a seafarer cook on board a luxury vessel for
an eight-month cruise. While on board,
Victor complained of chronic coughing,
intermittent fever, and joint pains. He was
advised by the ship's doctor to take complete
bed rest but was not given any other
medication. His condition persisted but the
degree varied from day to day. At the end of
the cruise, Victor went home to Iloilo and
there
had
himself
examined.
The
examination
revealed
that
he had
tuberculosis.
a.
It appears that she contracted a serious
disease during the trip. Upon her return, she
filed a claim for compensation, insisting that
she had contracted the disease while serving
the interest of her employer.
Under the Labor Code, the sickness or death of
an employee, to be compensable, must have
resulted from an illness either definitely
accepted as an occupational disease by the
Employees’ Compensation Commission, or
caused by employment subject to proof that
the risk of contracting the same is increased
by working conditions.
Victor
sued
for
medical
reimbursement,
damages
and
attorney's fees, claiming that
tuberculosis was a compensable
illness. Do you agree with Victor?
Why or why not?
Is the serious disease Rosa contracted
during her trip to Africa compensable?
Explain your answer. (2017 BAR)
A: TB is listed under Sec. 32-A of the POEA-SEC
as a work-related disease. It was also either
contracted or aggravated during the effectivity
of Victor’s contract. Having shown its
manifestations on board, Victor should have
been medically repatriated for further
examination and treatment in the Philippines.
This obligation was entirely omitted in bad
faith by the company when it waited for his
contract to expire on him before signing him
off. On this basis, Victor is entitled to medical
reimbursement, damages and attorney’s fees.
A: NO, the serious disease Rosa contracted
during her trip to Africa is not compensable. For
an occupational disease to be compensable, it
must be an illness accepted as occupational
disease by the Employees’ Compensation
Commission or otherwise shown that the risk of
contracting the disease is increased by the
working condition. Here, Rosa failed to present
proof that there is increased risk of contracting
the disease because of the General Manager’s
request for her to visit a client’s plant. Hence,
Rosa’s serious disease is not compensable.
b. Due to his prolonged illness, Victor
was unabletoworkformorethan120
days. Will this entitle him to claim
total
permanent
disability
benefits? (2015 BAR)
ALTERNATIVE ANSWER:
YES, although Rosa’s leave of absence was
approved, she was merely on a partial vacation
due to the business assignment that her
employer gave her to visit the plant of a client in
Zimbabwe to derive best manufacturing
practices useful to the company; thus, she had
A: NO. Victor’s TB is work-related and it
developed on board, thereby satisfying the
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
75
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BAR OPERATIONS
Labor Law and Social Legislation
to go and observe said activity beneficial to her
employer in the performance of her assigned
task. As she contracted the disease during her
trip, the same must be construed as workrelated.
proved futile so the unresolved issues were
referred to an Arbiter who rendered a
decision on March 15, 1992 retroactive to
December 14, 1990. Is the Arbiter's decision
providing for retroactivity tenable or not?
Why? (2001 BAR)
A: The referral of the unresolved issues of the
collective bargaining negotiations to an Arbiter is
not within the jurisdiction of the Arbiter. But
assuming that the unresolved issues in the
collective bargaining negotiations were properly
referred to the Arbiter pursuant to the provision
of the Labor Code (Art. 262 [now 275]) that states
that a Voluntary Arbitrator may hear and decide
any labor dispute, including bargaining
deadlocks, the Arbiter's decision providing for
retroactivity
is
tenable.
Exercising
his
compulsory arbitration power, the Arbiter could
decide the issue of retroactivity in any way which
is not contrary to law, morals, good customs,
public order or public policy.
JURISDICTION AND REMEDIES
LABOR ARBITER
Jurisdiction (2017, 2015, 2014, 2008, 2001,
1995, 1991, 1990 BAR)
Q: Lincoln was in the business of trading
broadcast equipment used by television and
radio networks. He employed Lionel as his
agent. Subsequently, Lincoln set up Liberty
Communications to formally engage in the
same business. He requested Lionel to be
one of the incorporators and assigned to
him 100 Liberty shares. Lionel was also
given the title Assistant Vice-President for
Sales and Head of Technical Coordination.
But in the case Manila Electric Co v. Secretary of
Labor Leonardo Quisumbing (G.R. No. 127598,
Feb. 22, 2000), the Supreme Court said that an
arbitral award shall retroact to the first day after
the six-month period following the expiration of
the last day of the CBA that was being renegotiated.
After several months, there were allegations
that Lionel was engaged in “under the table
dealings”
and
received
“confidential
commissions” from Liberty’s clients and
suppliers. He was, therefore, charged with
serious misconduct and willful breach of
trust, and was given 48 hours to present his
explanation on the charges.
Q: Mario comes from a family of coffee bean
growers. Deciding to incorporate his
fledgling coffee venture, he invites his best
friend, Carlo, to join him. Carlo is hesitant
because he does not have money to invest
but Mario suggests a scheme where Carlo can
be the Chief Marketing Agent of the company,
earning a salary and commissions. Carlo
agrees and the venture is formed. After one
year, the business is so successful that they
were able to declare dividends. Mario is so
happy with Carlo's work that he assigns 100
shares of stock to Carlo as part of the latter's
bonus.
Lionel was unable to comply with the 48hour deadline and was subsequently barred
from entering company premises. Lionel
then filed a complaint with the Labor Arbiter
claiming constructive dismissal. Among
others, the company sought the dismissal of
the complaint alleging that the case involved
an intra-corporate controversy which was
within the jurisdiction of the Regional Trial
Court (RTC). If you were the Labor Arbiter
assigned to the case, how would you rule on
the company’s motion to dismiss? (2014
BAR)
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 but he does so
without giving Carlo the opportunity to
explain.
A: I will deny the motion to dismiss. "Corporate
officers" in the context of Presidential Decree No.
902-A are those officers of the corporation who
are given that character by the Corporation Code
or by the corporation's by-laws. Sec. 25 of the
Corporation Code enumerates three specific
officers that in law are considered as corporate
officers – the president, secretary and the
treasurer. Lincoln is not one of them. There is
likewise no showing that his position as Assistant
Vice-President is a corporate officer in the
company's by-laws. The Labor Arbiter therefore,
has jurisdiction over the case. (Art. 217 [now 224]
[a] [2], Labor Code)
Carlo filed a case against Mario and the
company for illegal dismissal. Mario objected
on the ground that the Labor Arbiter had no
jurisdiction over the case as it would
properly be considered as an intracorporate
controversy cognizable by the RTC. Further,
Mario claimed that because Carlo's dismissal
was a corporate act, he cannot be held
personally liable.
a.
Q: Company A and Union B had a 3-year CBA
that expired on June 12, 1990. Negotiations
76
As the Labor Arbiter assigned to this
case, how would you resolve the
jurisdiction question.
QuAMTO (1987-2019)
A: The Labor Arbiter has jurisdiction over
Carlo’s illegal dismissal complaint as he was
hired by Mario on a “salary and commission”
basis. In Grepalife v. Judico (G.R. No. 73887, Dec.
21, 1989) it was held that a worker who is paid
on a salary plus commission basis is an
employee. While regular courts have jurisdiction
over Mario’s corporate act of severing ties with
Carlo, the Labor Arbiter, pursuant to Art. 217
(a)(2) [now 224(a)(2)] of the Labor Code, has
jurisdiction over Carlo’s illegal dismissal
complaint.
Marcel countered that he had only been
removed as Vice President for Finance and
Administration, not as a member of the Board
of Directors. He also argued that his position
was not listed as among the corporate offices
in Mercedes Corporation's by-laws. Is the
argument of Marcel correct? Explain your
answer. (2017 BAR)
A: YES, the argument of Marcel is correct. The
term “Corporate officers” in the context of P.D.
No. 902-A are these officers of the corporation
who are given that character by the Corporation
Code or by the corporation’s by-laws. Sec. 25 of
the
Corporation
Code
ALTERNATIVE ANSWER:
Carlo is party to a joint venture. Hence, he is not
related to Mario as an 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 jurisdiction because the matter did
not arise from employer-employee relationship
and the issue between the disputants is not
resolvable solely through the application of
Labor Law.
enumerates three specific officers that in law are
considered as corporate officers – the president,
secretary and the treasurer. Marcel is not one of
them. More, his position was not listed as among
the corporate offices in Mercedes Corporation’s
by-laws.
Q: Due to serious business reverses, ABC Co.
decided to terminate the services of several
officers
receiving
"fat"
compensation
packages. One of these officers was Mr. X, its
Vice-President for External Affairs and a
member of the Board of Directors. Aggrieved,
Mr. X filed a complaint for illegal dismissal
before the National Labor Relations
Commission (NLRC) - Regional Arbitration
Branch.
b. What is the rule on personal liability of
corporate officers for a corporate act
declared to be unlawful? (2015 BAR)
A: Corporate officers are not, as a general rule,
personally liable for the corporate acts they
performed in behalf of the corporation they
represent. They are, however, personally liable
for their corporate acts if they acted with malice
or bad faith. (Girly Ico v. Systems Technology
Institute, Inc., G.R. No. 185100, July 9, 2014)
ABC Co. moved for the dismissal of the case on
the ground of lack of jurisdiction, asserting
that since Mr. X occupied the position of VicePresident for External Affairs which is listed
in the by-laws of the corporation, the case
should have been filed before the Regional
Trial Court.
Q: State the cases when a labor dispute would
fall under the jurisdiction of voluntary
arbitrators or panel of voluntary arbitrators.
(2017, 1997 BAR)
The Labor Arbiter (LA) denied ABC Co.'s
motion and proceeded to rule that Mr. X was
illegally dismissed. Hence, he was reinstated
in ABC Co.'s payroll pending its appeal to the
NLRC.
A: A labor dispute falls under the jurisdiction of a
voluntary arbitrator or a panel of voluntary
arbitrator if a labor dispute arises from an
unresolved grievance which in turn arises from
the interpretation of implementation of a
Collective Bargaining Agreement or of company
personnel policies.
a.
Upon agreement of parties, a voluntary arbitrator
or panel of voluntary arbitrators may also hear
and decide all other labor disputes including
unfair labor practices and bargaining deadlock.
A: NO, the LA did not err. There is a two-tiered
test to determine whether a dispute is with the
LA or the RTC, to wit:
1.
Q: Marcel was the Vice President for Finance
and Administration and a member of the
Board of Directors of Mercedes Corporation.
He brought a complaint for illegal suspension
and illegal dismissal against Mercedes
Corporation, which moved to dismiss the
complaint on the ground that the complaint
pertained to the jurisdiction of the RTC due to
the controversy being intracorporate based
on his positions in the corporation.
UNIVERSITY OF SANTO TOMAS
2021 ACADEMICSCOMMITTEE
Did the LA err in denying ABC Co.'s motion
to dismiss on the ground of lack of
jurisdiction? Explain.
2.
The status or the relationship of the parties,
and
The nature of the question that is the subject
of the controversy. (Viray v. CA, G.R. No.
92481, Nov. 9, 1990)
Distinction should be made between a labor
controversy and an intra-corporate dispute. Not
all conflicts between a corporation and a
stockholder involve corporate matters (Cosare v.
Broadcom, G.R. No. 201298, Feb. 5, 2014). In the
77
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BAR OPERATIONS
Labor Law and Social Legislation
case at bar, since Mr. X seeks to recover his
position as a Vice-President of External Affairs
and not as a member of the board of ABC Co.,
then the LA has jurisdiction to try his case and
therefore the motion to dismiss was correctly
denied by the LA.
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 company for a period
of three years from the expiration of her
contract. Anya proceeds to sign with PNN
which then asks her to anchor their nightly
newscast.
b. Assuming that jurisdiction is not at issue
and that the NLRC reverses the LA's ruling
of illegal dismissal with finality, may ABC
Co. claim reimbursement for the amounts
it paid to Mr. X during the time that he
was on payroll reinstatement pending
appeal? Explain. (2019 BAR)
NNN sues Anya and PNN before the National
Labor Relations Commission (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.
A: NO, it may not. A reinstatement order by the
LA is immediately executory and no
reimbursement is due even if it is reversed on
appeal. (Garcia v. PAL, G.R. No. 164856, Jan. 20,
2009)
a.
Is NNN's remedy correct? Why or why
not?
A: The NLRC has no jurisdiction. As to PNN, there
is no employer-employee relationship between
itself and NNN; hence, the NLRC cannot hear and
resolve their dispute (Reasonable Causal
Connection Rule). As to Anya, the injunctive
power of the NLRC is ancillary in nature; hence,
it requires a principal case, which is absent.
Besides, the dispute between her and PNN is not
resolvable solely through the application of Labor
Code, other labor statutes, CBA or employment
contract (Reference to Labor Law Rule).
Q: Juanito initiated a case for illegal dismissal
against Mandarin Company. The Labor
Arbiter decided in his favor and ordered his
immediate reinstatement with full backwages
and without loss of seniority and other
benefits. Mandarin Company did not like to
allow him back in its premises to prevent him
from influencing his co-workers to move
against the interest of the company; hence, it
directed his payroll reinstatement and paid
his full backwages and other benefits even as
it appealed to the NLRC. A few months later,
the NLRC reversed the ruling of the Labor
Arbiter and declared that Juanito’s dismissal
was valid. The reversal ultimately became
final.
b. What are the grounds for a labor
injunction to issue?
A: The NLRC may issue an injunctive writ to
enjoin an illegal activity under Art. 264 [now 279]
of the Labor Code; as an ancillary remedy to
avoid irreparable injury to the rights of a party in
an ordinary labor dispute pursuant to Rule X,
2011 NLRC Rules of Procedure, as amended; and
to correct the Labor Arbiter’s grave abuse of
discretion pursuant to Rule XII of the 2011 NLRC
Rules of Procedure, as amended. Moreover, for
labor injunction to issue, it must be proven under
Art. 218(e) [now 225(e)] Labor Code:
May Mandarin Company recover the
backwages and other benefits paid to Juanito
pursuant to the decision of the Labor Arbiter
in view of the reversal by the NLRC? Rule, with
reasons. (2017 BAR)
A: NO, Mandarin Company may not recover the
backwages and other benefits paid to Juanito.
In Garcia v. Philippine Airlines, Inc. (G.R. No.
164856, Jan. 20, 2009), the Supreme Court held
that a reinstated employee need not refund the
backwages and other benefits paid pursuant to an
order of reinstatement by the Labor Arbiter. The
rationale is to help the employee make both ends
meet during the pendency of the appeal and to
prevent a situation where the dismissed
employee will not spend the reinstatement wages
for fear of refunding the same if the decision of
Labor Arbiter is subsequently reversed.
NATIONAL LABOR RELATIONS COMMISSION
(NLRC)
Jurisdiction (2015, 2001, 1997, 1996, 1995
BAR)
Q: Philippine News Network (PNN) engages
the services of Anya, a prominent news
a.
That the prohibited or unlawful acts have
been threatened and will be committed and
will be continued unless restrained;
b.
That substantial and irreparable injury to
the complainant’s property will follow;
c.
That greater injury will be inflicted upon
complainant by the denial of relief than will
be inflicted upon defendants by the granting
of relief;
d.
That complainant has no adequate remedy
at law; and
e.
That public officers charged with the duty to
protect complainant’s property are unable
or unwilling to furnish adequate protection.
c.
78
Distinguish the jurisdiction of a
Labor Arbiter from that of the NLRC.
QuAMTO (1987-2019)
(2015 BAR)
of the Labor Code: x x x (b) Bureau of Labor
Relations (2019 BAR)
A: As to jurisdiction, the Labor Arbiter can hear
and resolve cases under Art. 217 [now 224] of the
Labor Code, money claims under Sec. 7 of R.A.
10022; and referred wage distortion disputes in
unorganized establishments, as well as the
enforcement
of
compromise
agreements
pursuant to the 2011 NLRC Rules of Procedure,
as amended. On the other hand, the NLRC
reviews decisions rendered by the LA; decisions
or orders rendered by the RD under Art. 129 of
the Labor Code; and conducts compulsory
arbitration in certified cases.
A: The BLR has the following administrative
functions:
a.
b.
c.
Jurisdiction (2019, 2001, 1998, 1996 BAR)
Q: Can the Bureau of Labor Relations certify a
union
as
the
exclusive
bargaining
representative after showing proof of
majority
representation
thru
union
membership cards without conducting an
election? (1998 BAR)
As to the power to issue a labor injunction, the
NLRC can issue an injunctive writ. On the other
hand, the Labor Arbiter cannot issue an
injunctive writ.
A: The Bureau of Labor Relations cannot certify a
union as the exclusive collective bargaining
representative after showing of proof of majority
representation thru union membership cards
without conducting a certification election. The
Labor Code (in Arts. 256, 257 and 258 [now Arts.
268, 269, and 270]) provides only for a
certification election as the mode for determining
the exclusive collective bargaining representative
if there is a question of representation in an
appropriate bargaining unit.
Q: What is the jurisdiction of the National
Labor Relations Commission? (1995 BAR)
A:
1. Exclusive Original Jurisdiction:
a.
b.
c.
d.
e.
2.
Certified labor disputes causing or
likely to cause a strike or lockout in
an industry indispensable to national
interest, certified to it by the
Secretary of Labor or the President
for compulsory arbitration;
Injunction in ordinary labor disputes
to enjoin or restrain any actual or
threatened commission of any or all
prohibited or unlawful acts or to
require the performance of a
particular act in any labor dispute
which, if not restrained or performed
forthwith may cause grave or
irreparable damage to any party;
Injunction in strikes or lockouts
under Art. 264 [now 279] of the Labor
Code;
Contempt cases;
Claims arising out of an employer
employee relationship or by virtue of
any law or contract involving Filipino
workers for overseas deployment
including claims for actual, moral,
exemplary and other forms of
damage.
Q: Some disgruntled members of Bantay
Labor Union filed with the Regional Office of
the DOLE a written complaint against their
union officers for mismanagement of union
funds. The Regional Director did not rule in
the complainants' favor. Not satisfied, the
complainants elevated the Regional Director's
decision to the NLRC. The union officers
moved to dismiss on the ground of lack of
Jurisdiction. Are the union officers correct?
Why? (2001 BAR)
A: YES. NLRC has no jurisdiction over the
appealed ruling since the appellate authority over
decisions of the Regional director involving
examination of union accounts is expressly
conferred upon the Bureau of Labor Relations of
DOLE by the Rule of Procedure on Mediation
Arbitration. (Barles v. Bitonio, G.R. No. 120270,
June 16, 1999)
DOLE REGIONAL DIRECTORS
(2009, 2008, 1996 BAR)
Exclusive Appellate Jurisdiction
a.
b.
All cases decided by the Labor
Arbiters (Art. 217[b] [now 224(b)],
Labor Code);
Cases decided by the Regional Offices
of DOLE in the exercise of its
adjudicatory function. (Art. 129, Labor
Code)
Recovery/Adjudicatory power
Q: Savoy Department Store (SDS) adopted a
policy of hiring salesladies on five-month
cycles. At the end of a saleslady’s five- month
term, another person is hired as 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 the 5-month
employment contract are not hired.
BUREAU OF LABOR RELATIONS (BLR)
Q: Briefly discuss the powers and
responsibilities of the following in the scheme
UNIVERSITY OF SANTO TOMAS
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Registration of labor unions;
Keeping of registry of labor unions; and
Maintenance and custody of CBAs.
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Labor Law and Social Legislation
The day after the expiration of her 5-month
engagement, Lina wore her SDS white and
blue uniform and reported for work but was
denied entry into the store premises.
Agitated, she went on a hunger strike and
stationed herself in front of one of the gates of
SDS. Soon thereafter, other employees whose
5-month term had also elapsed joined Lina’s
hunger strike.
Assume
that
no
fixed-term
worker
complained, yet in a routine inspection a
labor inspector of the Regional Office of the
DOLE found the 5-month term policy of SDS
violative of the Labor Code’s security of
tenure provisions and recommended to the
Regional Director the issuance of a
compliance order. The Regional Director
adopted the recommendation and issued a
compliance order. Is the compliance order
valid? Explain your answer. (2008 BAR)
A: No, the Compliance Order is not valid. The
Regional Director only exercises both visitorial
and enforcement powers over labor standard
cases and empowered to adjudicate uncontested
money claims of persons still employed. The
Regional Director has no jurisdiction to rule on
SDS’ 5-month term policy.
Q: AB, a non-resident American, seeks entry to
the country to work as Vice-President of a
local telecommunications company. You are
with the Department of Labor and
Employment (DOLE). What permit, if any, can
the DOLE issue so that AB can assume as VicePresident
in
the
telecommunications
company? Discuss fully. (1995, 2007 BAR)
A: Art. 40 of the Labor Code states that “Any alien
seeking admission to the Philippines for
employment purposes and any domestic or
foreign employer who desires to engage an alien
for employment in the Philippines shall obtain an
employment permit from the Department of
Labor. The employment permit may be issued to
a nonresident alien or to the applicant employer
after a determination of the non-availability of a
person in the Philippines who is competent, able
and willing at the time of application to perform
the services for which the alien is desired.”
a.
Power to inspect employer’s records and
premises at any time of the day or night
whenever work is being undertaken therein,
and the right to copy therefrom, to question
any employee and investigate any fact,
condition or matter which may be necessary
to determine violations or which may aid in
the enforcement of the Labor Code and of any
labor law, wage order or rules and
regulations issued pursuant thereto. (Art.
128[a], Labor Code)
b.
Power to issue compliance orders to give
effect to the labor standards provisions of
this Code and other labor legislation based
on the findings of labor employment and
enforcement officers or industrial safety
engineers made in the course of inspection.
(Art. 128[b], Labor Code)
c.
Power to issue writs of execution to the
appropriate authority for the enforcement of
their orders, except in cases where the
employer contests the findings of the labor
employment and enforcement officer and
raises issues supported by documentary
proofs which were not considered in the
course of inspection. (Art. 128[b], Labor Code)
d.
Power to order stoppage of work or
suspension of operations of any unit or
department of an establishment when noncompliance with the law or implementing
rules and regulations poses grave and
imminent danger to the health and safety of
workers in the workplace. (Art. 128[c], Labor
Code)
e.
Assumption
of
Jurisdiction
and/or
Certification to the NLRC for Compulsory
Arbitration in labor disputes causing or likely
to cause a strike or lockout in an industry
indispensable to the national interest. (Art.
278[g], Labor Code; Art. 128[a], Labor Code)
Visitorial and Enforcement Powers (2016,
2008, 2001, 1999 BAR)
Q: Under what conditions may the Secretary
of Labor or his duly authorized representative
inquire into the financial activities or
legitimate labor organizations? (2001 BAR)
Thus, AB should be issued the abovementioned
employment permit so that AB can assume as
Vice President of the Telecommunication
Company.
A: The Labor Code authorizes the Secretary of
Labor and Employment or his duly authorized
representative to inquire into the financial
activities of any labor organization on the basis of
a complaint under oath, supported by 20% of the
membership in order to determine compliance or
noncompliance with the law and to aid in the
prosecution of any violation thereof. (Art. 274
[now 289], Labor Code)
DOLE SECRETARY
Powers and Responsibilities (2019 BAR)
Q: Briefly discuss the powers and
responsibilities of the following in the scheme
of the Labor Code: (a) Secretary of Labor x x x
(2019 BAR)
Q: Inggo is a dram talent hired on a per drama
“participation basis” by DJN Radio Company.
He worked from 8:00 am until 5:00 pm, six
days a week, on a gross rate of P80.00 per
A:
80
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script, earning an average of P20,000.00 per
month. Inggo filed a complaint before the
Department of Labor and Employment (DOLE)
against DJN Radio for illegal deduction, nonpayment of service incentive leave, and 13th
month pay, among others. On the basis of the
complaint, the DOLE conducted a plant level
inspection.
1995 BAR)
Q: State the jurisdiction of the Voluntary
Arbitrator or Panel of Voluntary Arbitrators in
labor disputes. (2019, 2017, 1997 BAR)
A: Under the Labor Code, the jurisdiction of the
Voluntary Arbitrator or Panel of Voluntary
Arbitrators include disputes involving:
The DOLE Regional Director issued an order
ruling that Inggo is an employee of DJN Radio,
and that Inggo is entitled to his monetary
claims in the total amount of P30,000.00. DJN
Radio elevated the case to the Secretary of
Labor who affirmed the order.
The case was brought to the Court of Appeals.
The radio 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 the DOLE because Inggo’s
claim exceeded P5, 000.00
a.
a.
b.
c.
Q: Company C, a toy manufacturer, decided to
ban the use of cell phones in the factory
premises. In the pertinent Memorandum,
management explained that too much texting
and phone-calling by employees disrupted
company operations.
Two employeesmembers of Union X were terminated from
employment due to 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 of the cell phone ban.
May the DOLE make a prima facie
determination of the existence of an
employer-employee relationship in the
exercise of its visitorial and enforcement
powers?
A: YES. Pursuant to Art. 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 Code and
other labor legislation.
The company filed a motion to dismiss,
arguing that the case should be referred to the
grievance machinery pursuant to an existing
Collective
Bargaining
Agreement
with Union X, and eventually to Voluntary
Arbitration. Is the company correct? Explain.
(2010 BAR)
The DOLE, in the exercise of its visitorial and
enforcement powers, somehow has to make a
determination of the existence of an employeremployee relationship. Such determination,
however, cannot be co-extensive with the visitorial
and enforcement power itself. Indeed, such
determination is merely preliminary, incidental
and collateral to the DOLE’s primary function of
enforcing labor standards provisions. (People’s
Broadcasting Bombo Radyo Phils., Inc. v. Secretary
of Labor, G.R. No. 179652, May 8, 2009)
A: YES. Termination cases arising in or resulting
from the interpretation and implementation of
collective
bargaining
agreements,
and
interpretation and enforcement of company
personnel policies which were initially processed
at the various steps of the plant-level Grievance
Procedures under the parties collective
bargaining agreements, fall within the original
and exclusive jurisdiction of the voluntary
arbitrator pursuant to Art. 217(c) [now 224(c)]
and Art. 261 [now 274] of the Labor Code.
b. If the DOLE finds that there is an employeeemployer relationship, does the case fall
under the jurisdiction of the Labor Arbiter
considering that the claim of Inggo is more
than P5, 000.00. Explain. (2016 BAR)
PRESCRIPTION OF ACTIONS
A: NO. As held in the case of Meteoro v. Creative
Creatures, Inc. (G.R. No. 171275, July 13, 2009), the
visitorial and enforcement powers of the Secretary,
exercised through his representatives, encompass
compliance with all labor standards laws and other
labor legislation, regardless of the amount of the
claims filed by workers; thus, even claims
exceeding P5,000.00.
Q: For purposes of prescription, within what
periods from the time the cause of action
accrued should the following cases be filed:
(2019 BAR)
a.
VOLUNTARY ARBITRATOR
Money claims arising from employeremployee relations
A: All money claims arising from employeremployee relations accruing during the effectivity
of this Code shall be filed within three (3) years
Jurisdiction (2019, 2017, 2010, 2005, 1997,
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Unresolved grievances arising from the
interpretation or implementation of a
collective bargaining agreement;
The interpretation or enforcement of
company personnel policies;
All labor disputes, upon agreement of
the parties, including unfair labor
practices and bargaining deadlock;
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Labor Law and Social Legislation
from the time the cause of action accrued;
otherwise they shall be forever barred. (Art. 306
[formerly 291], Labor Code)
Q: Due to his employer's dire financial
situation, Nicanor was prevailed upon by his
employer to voluntarily resign. In exchange,
he demanded payment of salary differentials,
13th month pay, and financial assistance, as
promised by his employer. Management
promised to pay him as soon as it is able to
pay off all retrenched rank-and-file
employees.
b. Illegal dismissal
A: The prescriptive period for filing an illegal
dismissal complaint is four years from the time
the cause of action accrued. (Teekay Shipping
Philippines, Inc., v. Ramier Concha, G.R. No.
185463, Feb. 22, 2012; Art. 1146, Civil Code)
c.
Five years later, and before management was
able to pay Nicanor the amount promised to
him, Nicanor died of a heart attack. His
widow, Norie. filed a money claim against the
company before the National Labor Relations
Commission (NLRC), including interest on the
amount of the unpaid claim. She also claimed
additional damages arguing that the supposed
resignation letter was obtained from her
spouse through undue pressure and
influence.
Unfair labor practice
A: All unfair labor practices arising from Book V
shall be filed with the appropriate agency within
one (1) year from accrual of such unfair labor
practice; otherwise, they shall be forever barred.
(Art. 305 [formerly 290], Labor Code)
d. Offenses under the Labor Code
A: Offenses penalized under this Code and the
rules and regulations issued pursuant thereto
shall prescribe in three (3) years. (Art. 305
[formerly 290], Labor Code)
e.
The employer filed a motion to dismiss on the
ground that (a) the NLRC did not have
jurisdiction over money claims; and (b) the
action has prescribed. Assuming that the
NLRC has jurisdiction, has the action
prescribed? (2018 BAR)
Illegal recruitment
A: Illegal recruitment cases under this Act shall
prescribe in five (5) years: Provided, however,
that illegal recruitment cases involving economic
sabotage as defined herein shall prescribe in
twenty (20) years. (Migrant Workers and
Overseas Filipinos Act of 1995, Sec. 12, R.A. 8042,
Jun. 7, 1995)
A: In Accessories Specialists, Inc. v. Alabama, (G.R.
No. 168985, July 23, 2008), the Supreme Court
held that the principle of promissory estoppel can
apply as a recognized exception to the three-year
prescriptive period under Art. 291 [now 306] of
the Labor Code. Nicanor relied on the promise of
the employer that he would be paid as soon as
the claims of retrenched employees were paid. If
not for this promise, there would have been no
reason why Nicanor would delay the filing of the
complaint. Great injustice would be committed if
the employee’s claim were brushed aside on
mere technicality, especially when it was the
employer’s action that prevented Nicanor from
filing the claims within the required period.
Note that R.A. 8042 only applies to Migrant
Workers.
Illegal
recruitment
for
local
employment is subject to the provisions of the
Labor Code, in particular, Art. 305, first
paragraph, to wit: offenses penalized under this
Code x x x shall prescribe in three (3) years.
Money Claims (2018, 2013, 2010 BAR)
Q: Chito was illegally dismissed by DEF Corp.
effective at the close of business hours of
December 29, 2009. If he has money claims
against DEF Corp., he can make the claim
without any legal bar within _______. (2013
BAR)
Q: A driver for a bus company, sued his
employer for non-payment of commutable
service incentive leave credits upon his
resignation after five years of employment.
The bus company argued that A was not
entitled to service incentive leave since he
was considered a field personnel and was
paid on commission basis and that, in any
event, his claim had prescribed. If you were
the Labor Arbiter, how would you rule?
Explain. (2010 BAR)
A: Three (3) years. (Basis: Art. 297 [formerly
291] of the Labor Code)
Illegal Dismissal (2002, 1997, 1994, 1991
BAR)
A: The money claim as cause of action has
prescribed because the claim was filed after five
(5) years from date of negotiation. Art. 291 [now
306] of the Labor Code provides 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.
Q: 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
82
QuAMTO (1987-2019)
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.
by his employer. Illegal dismissal, as a cause of
action, prescribes after four (4) years from the
time the cause of action, namely, illegal dismissal
took place. This is pursuant to the Civil Code
which provides that actions upon an injury to the
rights of a person should be initiated within four
years from the time the right of the action
accrues. (Art. 1146 of the Civil Code)
A filed an action for illegal dismissal with the
Arbitration Branch of the NLRC on November
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? (1994 BAR)
Q: State your agreement or disagreement with
the following statement and explain your
answer briefly: A criminal case filed against
an employee does not have the effect of
suspending or interrupting the running of the
prescriptive period for the filing of an action
for illegal dismissal. (2002 BAR)
A: 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], v.
NLRC, et al., G.R No. 102958, June 25, 1993)
A: I agree. The two (2) cases, namely: the criminal
case where the employee is the accused; and the
case for illegal dismissal, where the employee
would be the complainant, are two (2) separate
and independent actions governed by different
rules, venues, and procedures. The criminal case
is within the jurisdiction of the regular courts of
law and governed by the rules of procedure in
criminal cases. The action for the administrative
aspect of illegal dismissal would be filed with the
NLRC and governed by the procedural rules of
the Labor Code.
ALTERNATIVE ANSWER:
If I were the Labor Arbiter, I will deny the motion
to dismiss because the action for illegal dismissal
has not yet prescribed. The prescriptive period
for an action for illegal dismissal is four (4) years.
(Callanta v. Carnation, G.R. No. 70615, Oct. 28,
1986)
Q: The general manager of Junk Food
Manufacturing
Corporation
dismissed
Andrew Tan, a rank-and-file employee on the
ground of insubordination. The general
manager served on Andrew Tan the letter of
termination effective upon receipt which was
on March 8, 1992. Shocked by his unexpected
dismissal. Andrew Tan confronted the
general manager and hit the latter on the
head with a leap pipe.
Junk Food Manufacturing filed a complaint in
court against Andrew Tan for less serious
physical injuries. Somehow, Andrew Tan was
acquitted by the court assigned to hear the
criminal case. A few days following his
acquittal, or on 01 March 1996, Andrew Tan
filed complaint against the company for
illegal dismissal, reinstatement and the
payment of backwages and damages. Was the
complaint filed by Andrew Tan for illegal
dismissal within the reglementary period
granted by law? (1997 BAR)
A: YES. The complaint was filed within four (4)
years from the date Andrew Tan was dismissed
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