2010 BAR EXAMINATION

PARTI
TRUE OR FALSE. Explain your answer briefly.
1. Deeds of release, waivers and quitclaims are always valid and binding. (2%)
SUGGESTED ANSWER:
FALSE. Deeds of release, waivers and quitclaims are not always valid and
binding. An agreement is valid and binding only if: (a) the parties understand the
terms and conditions of their settlement; (b) it was entered into- freely and voluntarily
by them; and (c) it is contrary to law, morals, and public policy.
ALTERNATIVE ANSWER:
FALSE. Not all deeds of release, waivers and quitclaims are valid and binding.
The Supreme Court, in Periquet v. NLRC( 186 SCRA 724 [1990]) and affirmed in
Solgus Corporation v. Court of Appeals (514 SCRA 522 [2007]), provided the following
guideposts in determining the validity of such release, waivers and quitclaims:
Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable settlement, it is
binding on the parties and may not later be disowned simply because of a change of
mind. But where it is shown that the person making the waiver did so voluntarily,
with full understanding of what he was doing, and the consideration for the quitclaim
is credible and reasonable, the transaction must be recognized as a valid and binding
undertaking.
2. The relations between employer and employee are purely contractual in nature.
(2%)
SUGGESTED ANSWER:
FALSE. Some aspects of the relations between employer and employee are
determined by certain labor standards.
ALTERNATIVE ANSWER:
FALSE. The Constitution, Labor Code, Civil Code and other social legislations are
replete with provisions that define employment relationship even without contract,
with the intention of insuring that all the rights of labor are protected.
Article 1700 of the Civil Code provides that [T]he relations between capital and
labor are not merely contractual. They are so impressed with public interest that labor
contracts must yield to the common good.
In Article 106 of the Labor Code, the principal is deemed as a direct employer in
labor-only contracting, despite absence of contractual relationship between the worker
and the principal reduced in writing.
Equity likewise affords the aggrieved party relief in a case where an agent was
given apparent authority by the employer to represent it to third persons, such as in a
relationship between hospitals and doctors practicing medicine in its establishment
(Nogtales v. Capitol Medical Center, 511 SCRA 204 [2006]).

3. As a general rule, direct hiring of Overseas Filipino Workers (OFWs) is not

allowed. (2%)
SUGGESTED ANSWER:
TRUE. Art. IS of the Labor Code provides that no employer may hire a Filipino
worker for overseas employment except through the Boards and entities authorized by
the Department of Labor and Employment (DOLE) except direct-hiring by members of
the diplomatic corps, international organizations and such other employers as may be
allowed by the DOLE.
Another exemption is Name Hire, which refers to a worker who is able to secure
an overseas employment opportunity with an employer without the assistance or
participation of any agency.
II
A. Distinguish the terms conciliation, mediation and arbitration. (3%)
SUGGESTED ANSWER:
There is a DOLE official called a Conciliator Mediator. He is an officer of the
NCMB whose principal function is to assist in the settlement and disposition of labor
- management disputes through conciliation and preventive mediation. However, he
does not promulgate decisions that settle controversies about rights, which are
demandable and enforceable. The latter is called arbitration and is the function of a
labor arbiter or a voluntary arbitrator.
ALTERNATIVE ANSWER:
(1)CONCILIATION is the process of dispute management whereby parties in dispute are
brought together for the purpose of: (1) amicably settling the case upon a fair
compromise; (2) determining the real parties in interest; (3) defining and simplifying
the issues in the case; (4) entering into admissions or stipulations of facts; and (5)
threshing out all other preliminary matters (Section 3, Rule V, 2005 NLRC Rules of
Procedure). In resolving labor disputes, this comes before arbitration, as a
mandatory process, pursuant to the State policy of promoting and emphasizing
conciliation as modes of settling labor disputes (Art. 211 (A)(a), Labor Code).
(2) MEDIATION is a voluntary process of settling dispute whereby the parties
elect a mediator to facilitate the communication and negotiation between the parties
in dispute for the purpose of assisting them in reaching a compromise (Sec. 3(q), Rep.
Act No. 9285 or the Alternative Dispute Resolution Law).
(3)
ARBITRATION is a system of dispute settlement that may be compulsory or
voluntary, whereby the parties are compelled by. the government, or agree to submit
their dispute before an arbiter, with the intention to accept the resolution of said
arbiter over the dispute as final and binding on them (Luzon Development Bank v.
Association of Luzon Development Employees, 249 SCRA 162 [1995]).
In this jurisdiction, compulsory arbitration in labor disputes are submitted to a
labor arbiter, whose powers and functions are clearly defined under Article 217(a) of
the Labor Code; whereas in voluntary arbitration, the powers and functions of the

voluntary arbitrator or panel of voluntary arbitrators elected to resolve the parties

dispute involve the interpretation and implementation of the parties collective
bargaining agreement, pursuant to Articles 260-262 of the Labor Code.
B. Differentiate surface bargaining from blue-sky bargaining. (2%)
SUGGESTED ANSWER:
(1)
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 partys conduct both at
and away from the bargaining table. It involves the question of whether an
employers 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]).
(2)
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.).
III
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?
(3%)
SUGGESTED ANSWER:
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 twelve-month 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 (See Section 14-A, Rep. Act No. 8282).
The same maternity benefits are ensured by Sec. 22 (b)(2) of the
Magna Carta of Women (Rep. Act No. 9710).
IV
A, a worker of ABC Company, was on leave with pay on March 31, 2010. He
reported for work on April 1 and 2.MaundyThursday and Good Friday, respectively,
both regular holidays. Is A entitled to holiday pay for the two successive holidays?
Explain. (3%)
SUGGESTED ANSWER:

YES. A is entitled to holiday pay equivalent to two hundred percent (200%) of his
regular daily wage for the two successive holidays that he worked (Section 6[a], Rule
IV, Book III of the Omnibus Rules implementing the Labor Code).
V
Company XYZ has two recognized labor unions, one for its rank-and-file
employees (RFLU), and one for supervisory employees (SELU). Of late, the company
instituted a restructuring program by virtue of which A, a rank-and-file employee and
officer of RFLU, was promoted to a supervisory position along with four (4) other
colleagues, also active union members and/or officers. Labor Union KMJ, a rival labor
union seeking recognition as the rank-and-file bargaining agent, filed a petition for
cancellation of the registration of RFLU on the ground that A and her colleagues have
remained to be members of RFLU. Is the petition meritorious? Explain. (3%)
SUGGESTED ANSWER:
NO. Having been promoted to supervisory positions, A and her colleagues are no
longer part of the rank-and- file bargaining unit. They are deemed removed from
membership of RFLU (Art. 245-A, Labor Code as amended by Rep. Act No. 9481).

VI
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.
A was dismissed from employment as a consequence of the strike.
SUGGESTED ANSWER:
NO. The strike was not legal due to the unions failure to satisfy the required
majority vote of union membership (251 votes), approving the conduct of a strike (See
Art. 263(f), Labor Code; Section 11, Rule XXII, Dept. Order No. 40-03).
Also, the strike was illegal due to the non-observance of the 30-day cooling off period
by the union (Art. 263(c), Labor Code). rights of employees to self-organization (Club
Filipino, Inc. v. Bautista, 592 SCRA 471 [2009]).
VII
A was an able seaman contracted by ABC Recruitment Agency for its foreign
principal, Seaworthy Shipping Company (SSC). His employment contract provided
that he would serve on board the Almieda II for eight (8) months with a monthly
salary of US $450. In connection with his employment, he signed an undertaking to

observe the drug and alcohol policy which bans possession or use of all alcoholic
beverages, prohibited substances and unprescribed drugs on board the ship. The
undertaking provided that: (1) disciplinary action including dismissal would be taken
against anyone in possession of the prohibited substances or who is impaired by the
use of any of these substances, and (2) to enforce the policy, random test sampling
would be done on all those on board the ship.
On his third month of service while the Almieda Uwas docked at a foreign port, a
random drug test was conducted on all members of the crew and A tested positive for
marijuana. He was given a copy of the drug test result. In compliance with the
companys directive, he submitted his written explanation which the company did not
find satisfactory. A month later, he was repatriated to the Philippines.
Upon arrival in the Philippines, A filed with the National Labor Relations
Commission (NLRC) a complaint against the agency and the principal for illegal
dismissal with a claim for salaries for the unexpired portion of his contract.
A. Was As dismissal valid? Explain. (3%)
SUGGESTED ANSWER:
NO, As dismissal was not valid. A was not found to be in possession of the
prohibited substance nor was he impaired by the use thereof. Being tested positive
for marijuana is not a ground for disciplinary action under the undertaking he
signed.
ALTERNATIVE ANSWER:
YES, As dismissal was valid. He was tested positive for marijuana. This is in
violation of the drug and alcohol policy, which bans possession, or use of all alcoholic
beverages, prohibited substances and un-prescribed drugs on board the ship.
B. Is his claim for salaries for the unexpired portion of his contract tenable? Explain.
(3%)
SUGGESTED ANSWER:
YES. Section 10 of Rep. Act No. 8042 (as amended by Rep. Act No. 10022)
provides that in case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, or any unauthorized deductions from
the migrant workers salary, the worker shall be entitled to the full reimbursement of
his placement fee with interest at twelve percent (12%) per annum, plus his salaries
for the unexpired portion of his employment contract or for three (3) years for every
year of the unexpired term, whichever is less (cf. Serrano v. Gallant Maritime, 582
SCRA 254 [2009]).
ALTERNATIVE ANSWER:
NO. Under Rep. Act No. 8042, money claim can be made only if there is dismissal
without just or authorized cause.

VIII
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. (3%)
SUGGESTED ANSWER:
YES, under Article 253 of the Labor Code, the parties are duty-bound to
maintain the status quo and to continue in full force and effect the terms and
conditions of the existing CBA until a new agreement is reached by the parties.
Likewise, Art. 253-A 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.
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.
IX
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 As 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? (3%)
SUGGESTED ANSWER:
The company policy is valid. However, it does not apply to A. As A and Bare 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.

X
A, an employee of XYZ Cooperative, owns 500 shares in the cooperative. He has
been asked to join the XYZ Cooperative Employees Association. He seeks your advice
on whether he can join the association. What advice will you give him? (3%)
SUGGESTED ANSWER:
A cannot join XYZ Cooperative Employees Association, because owning shares in
XYZ Cooperative makes him a co-owner thereof.
An employee-member of a cooperative cannot join a union and bargain collectively
with his cooperative for an owner cannot bargain with himself and his co-owners
(Cooperative Rural Bank, of Davao City, Inc. v. Calleja, 165 SCRA 725, 732 [1988];
San Jose City - Electric Service Cooperative, Inc. v. Ministry of Labor, 173
SCRA697,701- 703 [1989]).
XI
Because of continuing financial constraints, XYZ, Inc. gave its employees the
option to voluntarily resign from the company. A was one of those who availed of the
option. On October 5, 2007, he was paid separation benefits equivalent to seven (7)
months pay for his six (6) years and seven (7) months of service with the company and
he executed a waiver and quitclaim. A week later, A filed against XYZ, Inc. a complaint
for illegal dismissal. While he admitted that he was not forced to sign the quitclaim, he
contended that he agreed to tender his voluntary resignation on the belief that XYZ,
Inc. was closing down its business. XYZ, Inc., however continued its business under a
different company name, he claimed.
Rule on whether the quitclaim executed by A (Gabriel) is valid or not. Explain.
(3%)
SUGGESTED ANSWER:
The quitclaim executed by A is valid and binding.
Generally, deeds of release, waiver or quitclaims cannot bar employees from
demanding benefits to which they are legally entitled or from contesting the legality of
their dismissal, since quitclaims are looked upon with disfavor and are frowned upon
as contrary to public policy. However, where the person making the waiver has done
so voluntarily, with a full understanding thereof, and the consideration for the
quitclaim is credible and reasonable, the transaction must be recognized as being a
valid and binding undertaking (Francisco Soriano, Jr. v. NLRC, et al., 530 SCRA 526
[2007]).
A elected to voluntarily resign, and accepted a credible and reasonable separation

benefits package. In exchange, A executed a waiver and quitclaim.

As resignation could not have possibly been vitiated by any fraud or
misrepresentation on the part of XYZ, Inc. The company offered its voluntary
resignation package because of continuing financial constraints, and not preliminary
to closure of business. As belief is not the kind of proof required that will show he was
defrauded, his consent vitiated, and therefore the termination of his employment
illegal.
ALTERNATIVE ANSWER:
The quitclaim is invalid. The signing of the quitclaim was based on a wrong premise,
and the employer was deceitful by not divulging full information. The subsequent reopening of the business under another name is an indication of bad faith and fraud.
XII
On December 12, 2008, A signed a contract to be part of the crew of ABC
Cruises, Inc. through its Philippine manning agency XYZ. Under the standard
employment contract of the Philippine Overseas Employment Administration (POEA),
his employment was to commence upon his actual departure from the port in the
point of hire, Manila, from where he would take a flight to the USA to join the cruise
ship MS Carnegie However, more than three months after A secured his exit
clearance from the POEA for his supposed departure on January 15,2009, XYZ still
had not deployed him for no valid reason.
Is A entitled to relief?.Explain. (3%)
ALTERNATIVE ANSWER:
YES. Even if no departure took place, the contract of employment has already
been perfected which creates certain rights and obligations, the breach of which may
give rise to a cause of action against the erring party:
(1) A can file a complaint for Recruitment Violation for XYZs failure to deploy
him within the prescribed period without any valid reason, a ground for the
imposition of administrative sanctions against XYZ under Section 2, Rule I,
Part V of the 2003 POEA Rules on Employment of Seafarers.
(2) At the same time, A can file a case for illegal recruitment under Section 6(L)
of Rep. Act No. 8042 (cf: Section 11 Rule I, Part V of the 2003 POEA Rules
on Employment of Seafarers)
(3) A may likewise file a complaint for breach of contract, and claim damages
therefore before the NLRC, despite absence of employer-employee
relationship. Section 10 of Rep. Act No. 8042 conferred jurisdiction on the
Labor Arbiter not only on claims arising out of EER, but also by virtue of any
law or contract involving Filipino workers for overseas deployment including
claims for actual, moral, exemplary and other forms of damages. (Santiago

vs. CF Sharp Crew Management, 527 SCRA 165 [2007]).

XIII
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 XYRMU, he receives the benefits under the CBA that XYZ-EU had negotiated with the
company.
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 authorization to allow the
collection. Explain whether his claim is meritorious. (3%)
SUGGESTED ANSWER:
NO. The fee exacted from A takes the form of an AGENCY FEE. This is sanctioned
by Article 248 (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 Article 248(e) of the Labor
Code. The union may collect such fees even without any written authorization from
the non-union 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]).
PART II
XIV
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 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. May A validly refuse the plant managers directive? Explain. (2%)
SUGGESTED ANSWER:
YES. A may validly refuse to fill in for C. A may not be compelled to perform
overtime work considering that the plant managers directive is not for an emergency
overtime work, as contemplated under Article 89 of the Labor Code.
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. (3%)
SUGGESTED ANSWER:

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

XV
A. Should A be a member of the supervisory union? Explain.
SUGGESTED ANSWER:
YES, as long as A is not a confidential employee who has access to confidential
matters on labor relations (San Miguel Corporation Supervisors and Exempt
Employees Union v. Laguesma, 277 SCRA 370,374-375 [1997]).
If A performs supervisory functions, such as overseeing employees performance
and with power of recommendation, then A is a rightful member of the supervisory
union. Otherwise, he may not, because Samahang Manggagawa ng Terracota cannot
represent A, A being not part of SMTs bargaining unit.
B. Assuming that A is ineligible to join the union, should the registration of Samahang
Manggagawa ng Terracota be cancelled? Explain. (3%)
SUGGESTED ANSWER:
NO. Rep. Act No. 9481 introduced a new provision, Art. 245-A, which provides
that mixed membership is not a ground for cancellation of a union's registration, but
said employees wrongfully joined are deemed removed from said union.
XVI
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. 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 filed a petition for assumption of jurisdiction with the 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. (2%)
SUGGESTED ANSWER:
YES.
There was a strike. What the union engaged in was actually a work stoppage in
the guise of a protest rally.
Article 212(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 Coca- Cola Plant Employees Union, Donrico v. Sebastian, et al.

v. Coca-Cola Bottlers Phils., Inc., 512 SCRA 437 [2007]).

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. (2%)
SUGGESTED ANSWER:
The Unions contention is wrong. A strike may be declared only in cases of
deadlock in collective bargaining negotiations and unfair labor practice (Article 263(c,
Labor Code); Section 1, Rule V, NCMB Manual of Procedures).
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.
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.
C. 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 terminate AA? Explain. (2%)
SUGGESTED ANSWER:
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.
XVII
A was hired in a sugar plantation performing such tasks as weeding, cutting and
loading canes, planting cane points, fertilizing and cleaning the drainage. Because his
daily presence in the field was not required, A also worked as a houseboy at the house
of the plantation owner. For the next planting season, the owner decided not to hire A
as a plantation worker but as a houseboy instead. Furious, A filed a case for illegal
dismissal against the plantation owner. Decide with reason. (3%)
SUGGESTED ANSWER:
A is a regular seasonal employee. Therefore, he cannot be dismissed without
just or valid cause.

The primary standard for determining regular employment is the reasonable

connection between the particular activity performed by the employee in relation to
the usual trade or business of the employer (Pier 8 Arrastre & Stevedoring Services,
Inc., et al. v. Jeff B. Boclot, 534 SCRA 431 [2007]). Considering that A, as plantation
worker, performs work that is necessary and desirable to the usual business of the
plantation owner, he is therefore a regular seasonal employee and is entitled to
reinstatement upon onset of the next season unless he was hired for the duration of
only one season (Hacienda Bino v. Cuenca, 456 SCRA 300 [2005]).
Converting A to a mere houseboy at the house of the plantation owner amounts
to an act of severing his employment relations as its plantation worker (Angeles v.
Fernandez, 513 SCRA 378 [2007]).
ALTERNATIVE ANSWER:
It is management prerogative to determine what kind of worker is needed
by the plantation. Of course, if the prerogative is exercised and results in
redundancy, there must be payment of separation pay under Article 283 of the Labor
Code.
XVIII
Flight attendant A, five feet and six inches tall, weighing 170 pounds ended up
weighing 220 pounds in two years. Pursuant to the long standing Cabin and Crew
Administration Manual of the employer airline that set a 147-pound limit for As
height, management sent A a notice to shape up or ship out within 60 days. At the
end of the 60-day period, A reduced her weight to 205 pounds. The company finally
served her a Notice of Administration Charge for violation of company standards on
weight requirements. Should A be dismissed? Explain. (3%)
SUGGESTED ANSWER:
NO. While the weight standards for cabin crew may be a valid company policy in
light of its nature as a common carrier, the airline company is now estopped from
enforcing the Manual as ground for dismissal against
A. It hired A despite her weight of 170 pounds, in contravention of the same
Manual it now invoked.
The Labor Code gives to an airline the power to determine appropriate minimum
age and other standards for requirement or termination in special occupations such
as those of flight attendants and the like. Weight standards for cabin crew is a
reasonable imposition by reason of flight safety [Yrasuegui v. PAL, 569 SCRA 467
[2008]). However, A had already been employed for two (2) years before the airline
company imposed on her this weight regulation, and nary an incident did the airline
company raise which rendered her amiss of her duties.

XIX
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.

A.

Was the order to assume jurisdiction legal? Explain. (2%)

SUGGESTED ANSWER:
YES. The Secretary of Labor and Employment has plenary power to assume
jurisdiction under Article 263(g) of the Labor Code. When in his opinion, there 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], Labor Code). This extraordinary authority giyen 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 re-admit all employees under the same terms and conditions
prevailing before the strike or lockout (Art. 263(g), Labor Code; Sec. 15, Rule XXII,
Dept. Order No. 40-G-03).
B. Under the same set of facts the Secretary instead 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. (3%)
SUGGESTED ANSWER:
NO. The Secretary of Labors 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 Article 263(g) of the Labor Code.
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 Article 263(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.

XX
A, 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. (6%)
SUGGESTED ANSWER:
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]).
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, Labor Code).
ALTERNATIVE ANSWER:
The money claim as cause of action has prescribed because the claim was
filed after five (5) years from date of negotiation. Art. 291 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.
XXI
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
deployed for employment abroad. A was informed by the Philippine Overseas
Employment Administration (POEA) that while Alpha Personnel Sendees, 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.

A. May X be held criminally liable for illegal recruitment? Explain. (2%)
SUGGESTED ANSWER:
NO. X performed his work with the knowledge that he works for a licensed
recruitment 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, 325 SCRA 572
[20Q0] J. The fault not being attributable to him, he may be considered to have
apparent authority to represent Alpha on recruitment for overseas employment.
B. May the officers having control, management or direction of Alpha
Personnel Services, Inc. be held criminally liable for illegal recruitment? Explain. (3% )
SUGGESTED ANSWER:
Yes. Alpha, being a licensed recruitment agency, still has obligations to A for
processing his papers for overseas employment. Under Section 6(m) of Rep. Act No.
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 workers fault, amounts to illegal
recruitment.
XXII
A was recruited to work abroad by Speedy Recruitment Agency as a technician
for a Saudi Arabian construction firm, with a monthly salary of $650.00. When she
got to the construction site, the employer compelled her to sign another contract that
referred her to another employer for a salary of $350.00. She worked for the second
employer and was paid $350.00 until her two-year contract expired. Upon her return
to the Philippines, she filed a case against the agency and the two employers. May the
agency validly raise the defense that it was not privy to the transfer of A to the second
employer? Explain. (3%)
SUGGESTED ANSWER:
NO. Speedys obligation to A is joint and several with the principal employer (Sec.
10, Rep. Act No. 8042).
The liability of the principal/employer and the recruitment/placement agency for
any and all claims for money claims shall be joint and several, which undertaking
shall form part of As employment contract, and condition precedent for its approval.
This liability shall continue during the entire period or duration of the employment
contract and shall not be affected by any substitution, amendment or modification
made locally or in a foreign country of said contract (Sec. 10, Rep. Act No. 8042).
XXIII

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. (3%)
SUGGESTED ANSWER:
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]).
In Mabeza v. NLRC (271 SCRA 670 [1997]), the Supreme Court held that the
employer simply cannot deduct the value from the employees wages without satisfying
the following: (a) proof that such facilities are customarily furnished by the trade; (b)
the provision of deductible facilities is voluntarily accepted in writing by the employee;
and (c) the facilities are charged at fair and reasonable value.
XXIV
Rank-and-file workers from Peacock Feathers, a company with 120 employees,
registered their independent labor organization with the Department of Labor and
Employment (DOLE) Regional Office. Management countered with a petition to cancel
the unions registration on the ground that the minutes of ratification' of the union
constitution and-by-laws submitted to the DOLE were fraudulent. Specifically,
management presented affidavits of ten (10) out of forty (40) individuals named in the
list of union members who participated in the ratification, alleging that they were not
present at the supposed January 1, 2010 meeting held for the purpose. The union
argued that the stated date of the meeting should have read January 11, 2010,
instead of January 1, 2010, and that, at any rate, the other thirty (30) union
members were enough to register a union. Decide with reason. (3%)
SUGGESTED ANSWER:
Petition for cancellation is dismissed for want of merit.
The date specified therein is purely a typographical error as admitted by the
union itself. There was no willful or deliberate intention to defraud the union
members that will vitiate their consent to the ratification. To be a ground for the
cancellation of union registration under the Labor Code, the nature of the fraud must
be grave and compelling enough to vitiate the consent of the majority of union
members (Mariwasa Siam Ceramics v. Secretary, 60S SCRA 706 [2009]).

Moreover, 20% of 120 is 24. So, even if the 10 union members disown their
participation to the ratification of the union constitution and by-laws, the union is
correct in arguing that the 30 union members suffice to uphold the legitimacy of its
union (Art. 234, Labor Code).
XXV
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
employees-members 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. The
company filed a motion to dismiss, arguing that the case should be referred to the
grievance machinery7 pursuant to an existing Collective Bargaining Agreement with
Union X, and eventually to Voluntary Arbitration. Is the company 7 correct? Explain.
(3%)
SUGGESTED ANSWER:
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 Article 217 (c) and Article 261 of the Labor Code.
ALTERNATIVE ANSWER:
NO. The Regional Trial Court has jurisdiction to hear and decide the prohibitory
injunction case filed by Union X against Company C to enjoin the latter from
implementing the memorandum-policy against use of cell phones in the factory. What
is at issue is Union X S challenge against the validity and constitutionality of the cell
phone ban being implemented by Company C. The issue, therefore, does not involve
the interpretation of the memorandum-policy, but its intrinsic validity (Haliguefla v.
PAL, 602 SCRA 297 [2009]).
2009 BAR EXAMINATION
PART I
I

TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the statement
is false. Explain your answer in not more than two (2) sentences. (5%)
[a] An employment contract prohibiting employment in a competing company
within one year from separation is valid.
SUGGESTED ANSWER:
True. An employment contract prohibiting employment in a competing company
within a reasonable period of one year from separation is valid. The employer has the
right to guard its trade secrets, manufacturing formulas, marketing strategies and
other confidential programs and informations.
[b] All confidential employees are disqualified to unionize for the purpose of
collective bargaining.
SUGGESTED ANSWER:
False. Not all confidential employees are disqualified to unionize for the purpose
of collective bargaining. Only confidential employees, who, because of the nature of
their positions, have access to confidential information affecting labor-management
relations as an integral part of their position are denied the right of self-organization
for purpose of collective bargaining (San Miguel Corporation Supervisors v.
Laguesma, 277 SCRA 370 [1997]).
[c]

A runaway shop is an act constituting unfair labor practice.

SUGGESTED ANSWER:
False. A runaway shop is not automatically an unfair labor practice. It is an
unfair labor practice if the relocation that brought about the runaway shop is
motivated by anti-union animus rather than for business reasons.
ANOTHER SUGGESTED ANSWER:
True. The transfer 6f location of a strike bound establishment to another location
(run-away shop) can constitute an act of interference or restraint of the employees
right to self-organization. There is an inferred anti-union bias of the employer (Labor
Code, Art. 248[a]). The provisions of Art. 248[a] should be broadly and liberally
interpreted to achieve the policy objective of the law, i.e., to enhance the workers right
to selforganization and collectively bargain (Constitution, Art. XIII, Sec. 3 & Art. Ill,
Sec. 8; Labor Code, Arts. 243, 244 8e 245; Caltex Filipino Managers, etc. v. C1R, 44
SCRA 350 [1972]).
[d]

In the law on labor relations, the substitutionary doctrine prohibits a

new collective bargaining agent from repudiating an existing collective
bargaining agreement.

SUGGESTED ANSWER:

True. The existing collective bargaining agreement (in full force and effect) must
be honored by a new exclusive bargaining representative because of the policy of
stability in labor relations between an employer and the workers.
[e]

The visitorial and enforcement powers of the DOLE Regional Director to

order and enforce compliance with labor standard laws can be exercised
even when the individual claim exceeds P5,000.00.

SUGGESTED ANSWER:
True. The visitorial and enforcement powers of the DOLE Regional Director to
order and enforce compliance with labor standards laws can be exercised even when
the individual claims exceed P5,000.00 The authority under Article 128 may be
exercised regardless of the monetary value involved. Under Article 129, however the
authority is only for claims not exceeding P5,000.00 per claimant.
II
[a] Enumerate at least four (4) policies enshrined in Section 3, Article XIII of the
Constitution that are not covered by Article 3 of the Labor Code on
declaration of basic policy. (2%)
SUGGESTED ANSWER:
Four (4) policies enshrined in Section 3, Article XIII of the 1987 Constitution
which are not covered by Article 3 of the Labor Code on declaration of basic policy are:
1. All workers shall have the right to peaceful concerted activities, including
the right to strike in accordance with law.
2. They shall be entitled to a living wage.
3. They shall participate in policy and decision making processes affecting their
rights and benefits as may be provided by law.
4. The state shall promote the principle of shared responsibility between workers
and employers.
[b] Clarito, an employee of Juan, was dismissed for allegedly stealing Juans
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 Juans testimony doubtful. On appeal, the NLRC reversed the Labor
Arbiter holding that Article 4 applies only when the doubt involves
implementation and interpretation of the Labor Code provisions. The NLRC
explained that the doubt may not necessarily be resolved in favor of labor
since this case involves the application of the Rules on Evidence, not the
Labor Code. Is the NLRC correct? Reasons. (3%)
SUGGESTED ANSWER:

The NLRC is not collect. 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.
ANOTHER SUGGESTED ANSWER:
No, the NLRC is not correct. Art. 221 of the Labor Code read: In any proceeding
before the
Commission....the rules of evidence prevailing in Courts of law....shall not be
controlling and it is the spirit and intention of this Code that the Commission and its
members and the Labor Arbiters shall use every and reasonable means to ascertain
the facts in each case speedily and objectively without regard to technicalities of law
and procedure, all in the interest of due process. The question of doubt is not
important in this case.
III
Richie, a driver-mechanic, was recruited by Supreme Recruiters (SR) and its
principal, Mideast Recruitment Agency (MRA), to work in Qatar for a period of two (2)
years.
However, soon after the contract was approved by POEA, MRA advised SR to
forego Richies deployment because it had already hired another Filipino drivermechanic, who had just completed his contract in Qatar. Aggrieved, Richie filed with
the NLRC a complaint against SR and MRA for damages corresponding to his two
years salary under the POEA- approved contract.
SR and MRA traversed Richies complaint, raising the following arguments:
[a] The Labor Arbiter has no jurisdiction over the case; (2%)
SUGGESTED ANSWER:
The Labor Arbiter has jurisdiction. Sec. 10, R.A. No. 8042, reads:
Money Claims.- Notwithstanding any provision of law to the
contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the
complaint, the 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 damages.

ANOTHER SUGGESTED ANSWER:

The Labor Arbiter has no jurisdiction over the case. The failure to deploy a
worker within the prescribed period without valid reason is a recruitment violation
under the jurisdiction of the POEA.
[b] Because Richie was not able to leave for Qatar, no employer-employee
relationship was established between them; (2%) and
SUGGESTED ANSWER:
An employer-employee relationship already existed between Richie and MRA.
MRA and SR, as an agent of MRA, already approved and selected and engaged the
services of Richie.
(c) Even assuming that they are liable, their liability would, at most, be
equivalent to Richies salary for only six (6) months, not two years. (3%).
Rule on the validity of the foregoing arguments with reasons.
SUGGESTED ANSWER:
No. In the recent case of Serrano v. Gallant Maritime (G.R. No. 167614, March
24, 2009), the Supreme Court, held that the clause three (3) months for every year
of the unexpired term, whichever is less in Sec. 10, R.A. 8042 is unconstitutional.
Richie is therefore entitled to two (2) years salaries due him under the POEA
approved contract.
IV
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 Diosdados
employment? If so, what- are the due process requirements that the BIC must
satisfy? If not, why not? (3%)
SUGGESTED ANSWER:
The completion of the house should be valid cause for termination of Diosdados
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.
ANOTHER SUGGESTED ANSWER:
No. The completion of the house is not a valid cause for termination of
employment of Diosdado, because of the failure of the BIC to state the specific
project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee. (Labor Code, Art. 280). There being
no valid termination of employment, there is no need to comply with the requirements
of procedural due process.
V
[a] Baldo was dismissed from employment for having been absent without leave
(AWOL) for eight (8) months. It turned out that the reason for his absence
was his incarceration after he was mistaken as his neighbors killer.
Eventually acquitted and released from jail, Baldo returned to his employer
and demanded reinstatement and full backwages. Is Baldo entitled to
reinstatement and backwages? Explain your answer. (3%)
SUGGESTED ANSWER:
Yes. Baldo is entitled to reinstatement. Although he shall not be entitled to
backwages during the period of his detention, but only from the time the company
refused to reinstate him. (Magtoto v. NLRC, 140 SCRA 58 [1985]).
ANOTHER SUGGESTED ANSWER:
No. Baldo is not entitled to reinstatement and backwages. The dismissal was for
cause, i.e., AWOL. Baldo failed to timely inform the employer of the cause of his
failure to report for work; hence, prolonged absence is a valid ground to terminate
employment.
[b] 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
wailful 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. (2%)
SUGGESTED ANSWER:
Domingo as bus conductor holds a position wherein he was reposed with the

employers trust and confidence. In Bristol Mgers Squibb (Phils.) v. Baban (574 SCRA
198 [2008]), the Court established a second class of positions of trust that involve
rank-and-file 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.
VI
Albert, a 40-year old employer, asked his domestic helper, Inday, to give him a
private massage. When Inday refused, Albert showed her Article 141 of the Labor
Code, which says that one of the duties of a domestic helper is to minister to the
employers personal comfort and convenience.
[a]Is Indays refusal tenable? Explain. (3%)
SUGGESTED ANSWER:
Yes. Indays refusal to give her employer a private massage employer is in
accordance with law because the nature of the work of a domestic worker must be in
connection with household chores. Massaging is not a domestic work.
[b] Distinguish briefly, but clearly, a househelper from a homeworker. (2%)
SUGGESTED ANSWER:
Art. 141. - Domestic Helper - one who performs services in the employers house
which is usually necessary or desirable for the maintenance and enjoyment thereof
and includes ministering to the personal comfort and convenience of the members of
the employers household, including the services of a family driver.
Art. 153.-Homeworker -is an industrial worker who works in his/her home
processing raw materials into finished products for an employer. It is a decentralized
form of production with very limited supervision or regulation of methods of work.
VII
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]The union did not observe the cooling-off period mandated by the Labor Code; (2%)

and

SUGGESTED ANSWER:
Yes. The conduct of a strike action without observing the cooling-off period i a
violation of one of the requirements of law which must be observed. The cooling- off
periods required by Articles 263 (c) and 263 (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.
[b] The union went on strike without complying with the strike-vote
requirement under the Labor Code. (2%)
Rule on the foregoing contentions with reasons.
SUGGESTED ANSWER:
Yes. The conduct of the strike action without a strike vote violates Art. 263 (f) - 11
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.
[c| The Labor Arbiter found management guilty of unfair labor practice for the
unlawful dismissal of Johnny. The decision became final. Thereafter, the NMMR filed
a criminal case against the Manager of Manila Restaurant.
Would the Labor Arbiters finding be sufficient to secure the Managers
conviction? Why or why not? (2%)
SUGGESTED ANSWER:
No. The Administrative proceedings shall not be binding on the criminal case or
be considered as evidence of guilt, but merely as proof of compliance with the
requirements to file the said criminal case for the commission of an unfair labor
practice.
VIII
Alexander, a security guard of Jaguar Security Agency (JSA), could not be given
any assignment because no client would accept him. He had a face only a mother
could love. After six (6) months cf being on floating status, Alexander sued JSA for
constructive dismissal. The Labor Arbiter upheld Alexanders claim of constructive
dismissal and ordered JSA to immediately reinstate Alexander. JSA appealed the

decision to the NLRC. Alexander sought immediate enforcement of the reinstatement

order while the appeal was pending.
JSA hires you as lawyer, and seeks your advice on the following:
[a] Because JSA has no client who would accept Alexander, can it still be
compelled to reinstate him pending appeal even if it has posted an appeal
bond? (2%)
SUGGESTED ANSWER:
No. The posting of the bond of the employer does not have the effect of staying the
execution of the reinstatement aspect of the decision of the Labor Arbiter [Pioneer
Texturizina Cory, v. NLRC. 280 SCRA 806 [1997]).
ANOTHER SUGGESTED ANSWER:
Yes, JSA can be compelled to reinstate Alexander, pending appeal of the decision
of the Labor Arbiter to the NLRC, even if JSA post a bond.
Art. 223. Appeal, xxx In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated employee, insofar as the
reinstatement aspect is concerned shall be immediately executory, even
pending appeal and the posting of a bond.
[b] Can the order of reinstatement be immediately enforced in the absence of a
motion for the issuance of a writ of execution? (2%)
SUGGESTED ANSWER:
Yes. In Pioneer Texturizina Corp. v. NLRC, the Court held that an award or order
of reinstatement is self- executory and does not require a writ of execution to
implement and enforce it. To require the application for and issuance of a writ of
execution as prerequisite for the execution of a reinstatement award would certainly
betray and run counter to the very object and intent of Article 223 of the Labor Code
(on the immediate execution of a reinstatement order).
ANOTHER SUGGESTED ANSWER:
The decision to reinstate pending appeal is not self- executory. A motion for a writ
of execution is mandatory before an order of reinstatement can be enforced because
an employee needs, the assistance of the NLRC Sheriff to enforce the Order.
[c] If the order of reinstatement is being enforced, what should JSA do in order
to prevent reinstatement? (2%)
Explain your answers.
SUGGESTED ANSWER:

The employer cannot prevent reinstatement but may, however, opt for
reinstatement of the employee in the payroll of the company without requiring him to
report back to his work (Zamboanga Citu Water District v. Buat, 232 SCRA 587
[1994]).
PLEASE NOTE
In connection with security guards, Department Order No. 14 series of2001, if
there is lack of assignment then the security guard is entitled to separation pay.
IX
[a] What is wage distortion? Can a labor union invoke wage distortion as a valid
ground to go on strike? Explain. (2%)
SUGGESTED ANSWER:
Wage distortion refers to a situation where an increase in the prescribed wage
rates results in the elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service and other logical bases of differentiation.
(Art. 124, Labor Code)
No. the existence of wage distortion is not a valid ground for staging a strike
because Art. 124 of the Labor Code provides for a specific method or procedure for
correcting wage distortion. In Ilaw at Buklod ng Manggagawa vs. NLRC, (198 SCRA
586, 594-5 [1991]), the Cour said.
[b] What procedural remedies are open to workers who seek correction of wage
distortion? (2%)
SUGGESTED ANSWER:
The Procedural Remedies of Wage Distortion disputes are provided in Art. 242 of
the Labor Code, as follows.
1. Organized establishment - follow the grievance procedure as provided for in
the CBA, ending in voluntary arbitration.
2.
Unorganized establishments - employer and workers, with the aid of the
NCMB shall endeavor to correct the wage distortion, and if they fail, to
submit the issue to the NLRC for compulsory arbitration.
X
[a] State briefly the compulsory coverage of the Government Service Insurance
Act. (2%)
SUGGESTED ANSWER:
The following are compulsorily covered by the GSIS pursuant to Sec. 3 of R.A. No.

8291.
1. All employees receiving compensation who have not reached the compulsory
retirement age, irrespective of employment status.
2.
Members of the judiciary and constitutional commissions for life
insurance policy
[b] Can a member of a cooperative be deemed an employee for purposes of
compulsory' coverage under the Social Security Act? Explain. (2%)

SUGGESTED ANSWER:
Yes, an employee of a cooperative, not over sixty (60) years of age is,
under the SSS Law, subject to compulsory coverage. The Section 8(d)
SSS Law defines an employee as - Sec. 8(d) any person who performs
services for an 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.
PART II
XI
TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the statement
is false. Explain your answer in not more than two (2) sentences. (5%)
[a]

Seafarers who have worked for twenty (20) years on board the same
vessel are regular employees.

SUGGESTED ANSWER:
FALSE. Seafarers as overseas Filipino workers are fixed-term employees whose
continued rehiring should not be interpreted as a basis for regularization but rather
as a series of contract renewals sanctioned under the doctrine set by Millares vs.
NLRC (Gu-Miro v. Adorable, 437 SCRA 162 [2004]).
[b]
Employment of children below fifteen (15) years of age in any public or
private establishment is absolutely prohibited.
SUGGESTED ANSWER:
False. Children below fifteen (15) years of age (can be employed) when he/she
works directly under the sole responsibility of his/her parents or guardian, and his
employment does not in any way interfere with his schooling.
[c] Government employees have the right to organize and join concerted mass
actions without incurring administrative liability.

SUGGESTED ANSWER:
False. Government employees have the right to organize, but they may be held
liable for engaging in concerted mass actions, it being a prohibited activity under CSC
Law (E.O. 181). The right of government employees to organize is limited to the
formation of unions or associations without including the right to strike. (Gesite v. CA,
444 SCRA 51 [2004]).
[d]

A waiver of the right to claim overtime pay is contrary to law.

SUGGESTED ANSWER:
True. As a general rule, overtime compensation cannot be waived, whether
expressly or impliedly; and stipulation to the contrary is against the law. (Pampanga
Sugar Dev. Co., Inc. v. CIR, 114 SCRA 725 [1982].) An exception would be the
adoption of a compressed work week on voluntary basis, subject to the guidelines of
Department Order No. 02, Series of 2004.
[e]
Agency fees cannot be collected from a non-union member in the
absence of a written authorization signed by the worker concerned.
SUGGESTED ANSWER:
False. Agency fee can be collected from a union member even without his prior
written authorization as long as he receives the benefits of a CBA, and is a member of
the appropriate bargaining unit. (Arts. 248(e)& 241(o), Labor Code).

XII
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 employers 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.
The constitutionality of the two (2) laws is challenged in court. As judge, how will
you rule? (5%)
SUGGESTED ANSWER:
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 Section 3, Article XIII of the 1987 Constitution.

The second innovative measure, on a law allowing contractualization in all
areas needed in the employers business operations, is legal. Article 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.
Hence, it would be legal for Congress to do away with the prohibition on laboronly contracting and allow contractualization in all areas needed in the employers
business operations. Assuming, of course, that contractual workers are guaranteed
their security of tenure.
XIII
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 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 sightseeing. 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.
[a] Did Renan commit acts of sexual harassment in a work-related or
employment environment? Reasons. (3%)
SUGGESTED ANSWER:
Atty. Renan is guilty of sexual harassment. This conclusion is predicated upon
the following consideration:
1.

Atty. Renan has authority, influence or moral ascendancy over Miss

Maganda;
2.
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
vs. Rayala, 546 SCRA 90 [2008]);
3.
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.
4. 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. Renans act result in creating an

intimidating, hostile or offensive environment for Miss Maganda.
[b] The lady supervisors in the firm, slighted by Renans revelations about
them, succeeded in having him expelled from the firm. Renan then filed with
the Arbitration Branch of the NLRC an illegal dismissal case with claims for
damages against the firm. Will the case prosper? Reasons. (2%)
SUGGESTED ANSWER:
Yes, serious misconduct is a ground for termination of employment. The term
misconduct denotes intentional wrongdoing or deliberate violation of a rule of law or
standard of behavior.
ANOTHER SUGGESTED ANSWER:
No. The case for illegal dismissal with damages filed in the Office of Labor Arbiter
will not prosper. Renan was terminated for serious misconduct which is a just cause
under Art. 282 of the Labor Code. The act of Renan is grave and aggravated in
character, and committed in connection with his work (Echaverria v. Venutek Media,
516 SCRA 72 [2007], and indicates that he has become unfit to continue working for
his employer. (Torreda v. Toshiba Info. Equipment, Inc. Phils., 515 SCRA 133 [20007]).
XIV
Jolli-Mac Restaurant Company (Jolli-Mac) owns and operates the largest food
chain in the country. It engaged Matiyaga Manpower Services, Inc. (MMSI), a job
contractor registered with the Department of Labor and Employment, to provide its
restaurants the necessary personnel, consisting of cashiers, motorcycle deliver}' boys
and food servers, in its operations. The Service Agreement warrants, among others,
that MMSI has a paid-up capital of P2,000,000.00; that it would train and determine
the qualification and fitness of all personnel to be assigned to Jolli-Mac; that it would
provide these personnel with proper Jolli-Mac uniforms; and that it is exclusively
responsible to these personnel for their respective salaries and all other mandatory
statutory benefits.
After the contract was signed, it was revealed, based on research conducted, that
MMSI had no other clients except Jolli-Mac, and one of its major owners was a
member of the Board of Directors of Jolli-Mac.
[a] Is the Service Agreement between Jolli-Mac and MMSI legal and valid? Why
or why not? (3%)
SUGGESTED ANSWER:
No. It is not legal and valid because MMSI is engaged in labor-only contracting.
For one, the workers supplied by MMSI to Jolli-Mac are performing services which are
directly related to the principal business of Jolli-Mac. This is so because the duties
performed by the workers are integral steps in or aspects of the essential operations of

the principal. (Baguio, et al. v. NLRC, et al., 202 SCRA 465 [1991]; Kimberly
Independent Labor Union, etc. v. Drillon, 185 SCRA 190 [1990]. For another, MMSI
was organized by Jolli-Mac itself to supply its personnel requirements. (San Miguel
Corporation v. MAERC Integrated Services, Inc., et al., 405 SCRA 579 [2003]).
ANOTHER SUGGESTED ANSWER:
The Service Agreement is valid. The law, Art. 106, does not invalidate an
Independent Contractors Agreement because the Independent Contractor has only
one (1) client, or that the employer of the independent contractor is one of the major
owners of the employing establishment. MMSI, is an independent business,
adequately capitalized and assumed all the responsibilities of a legitimate
Independent Contractor.
[b] If the cashiers, delivery boys and food servers are not paid their lawful
salaries, including overtime pay, holiday pay, 13 ,h month pay, and sendee
incentive leave pay, against whom may these workers file their claims?
Explain. (2%)

SUGGESTED ANSWER:
They may file their claims against Jolli-Mac. A finding that MMSI is a labor-only
contractor is equivalent to declaring there is an employer-employee relationship
between Jolli-Mac and the workers of MMSI. (Associated Anglo-American Tobacco
Corp. v. Clave, 189 SCRA 127 [1990], Industrial Timber Corp. v. NLRC, 169 SCRA 341
[1989]). The liability of Jolli-Mac vis-a-vis the workers of MMSI is for a comprehensive
purpose, i.e., not only for the unpaid wages but for all claims under the Labor Code
and ancillary laws. (San Miguel Corp. v. Maerc Integrated Services, Inc., et al., 405
SCRA 579 [2003]).
ANOTHER SUGGESTED ANSWER:
The employers can file their claims against Jolli- Mac pursuant to Art. 106 of the
Labor Code which reads: Contractor or .subcontractorx x x In the event that the
contractor or subcontractor fails to pay the wages of his employees in accordance with
this Code, the employer shall be jointly and severally liable with his contractor or
subcontractor to such employees to the extent of the work performed under the
contract, in the same manner and extent, that he is liable to employee directly
employed by him.
XV
Among the 400 regular rank-and-file workers of MNO Company, a certification
election was ordered conducted by the Med-Arbiter of the Region. The contending
parties obtained the following votes:

6. Spoiled votes

There were no objections or challenges raised by any party on the results of the
election.
[a] Can Union B be certified as the sole and exclusive collective bargaining agent
among the rank-and- file workers of MNO Company considering that it
garnered the highest number of votes among the contending unions? Why
or why not? (3%)
SUGGESTED ANSWER:
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
MNOs rank-and- file workers.
[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. (3%)
SUGGESTED ANSWER:
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]
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.
(3%)
SUGGESTED ANSWER:
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.
XVI
The Company and Triple-X Union, the certified bargaining agent of rank-and-file
employees, entered into a Collective Bargaining Agreement (CBA) effective for the
period January 1, 2002 to December 31, 2007.

For the 4th and 5th years of the CBA, the significant improvements in wages and
other benefits obtained by the Union were:
1) Salary increases of PI,000 and PI,200 monthly, effective January 1, 2006
and January 1, 2007, respectively;
2) Vacation Leave and Sick Leave were adjusted from 12 days to 15 days
annually for each employee;
3) Medical subsidy of P3,000 per year for the purchase of medicines and
hospitalization assistance of P10,000 per year for actual hospital
confinement;
4)
Rice Subsidy of P600 per month, provided the employee has worked for at
least 20 days within the particular month; and
5)

Birthday Leave with Pay and Birthday Gift of PI,500.

As early as October 200*7, the Company and the Union started negotiations to
renew the CBA. Despite mutual good faith and earnest efforts, they could not agree.
However, no union filed a petition for certification election during the freedom period.
On March 30, 2008, no CBA had been concluded. Management learned that the
Union would declare a bargaining deadlock on the next scheduled bargaining meeting.
As expected, on April 3, 2008, the Union declared a deadlock. In the afternoon of
the same day, management issued a formal announcement in writing, posted on the
bulletin board, that due to the CBA expiration on December 31,2007, all fringe
benefits contained therein are considered withdrawn and can no longer be
implemented, effective immediately.
[a] When was the freedom period referred to in the foregoing narration of
facts? Explain. (2%)
SUGGESTED ANSWER:
The freedom period or the time within which a petition for certification election to
challenge the incumbent collective bargaining agent may be filed is from 60 days
before the expiry date of the CBA.
[b]
After April 3, 2008, will a petition for certification election filed by
another legitimate labor union representing the rank-and-file employees legally
prosper? Reasons. (3%)
SUGGESTED ANSWER:
Yes, because the deadlock declared by the Union had not been submitted to
conciliation or arbitration or had become the subject of a valid notice of strike or
lockout. Any of these measures is required to institute the so- called deadlock bar
rule.
ANOTHER SUGGESTED ANSWER:
The petition for Certification Election filed on April 3, 2008 by another union will

not prosper. Art. 253 of the Labor Code reads: It shall be the duty of both parties to
keep the status quo and to continue in full force and effect the terms and conditions
of the existing agreement...until a new agreement is reached by the parties.
Furthermore, the petition was filed outside of the freedom period. (Arts. 256 & 253-A,
Labor Code).
[c]

Is managements withdrawal of the fringe benefits valid? Reasons. (2%)

SUGGESTED ANSWER:
No. Pending renewal of the CBA, the parties are bound to keep the status quo
and to treat the terms and conditions embodied therein still in full force and effect,
until a new agreement is reached by the union and management. This is part and
parcel of the duty to bargain collectively in good faith under Article 253, the Labor
Code.
[d] If you were the lawyer for the union, what legal recourse or action would you
advise? Reasons. (3%)
SUGGESTED ANSWER:
I would recommend the filing of an unfair labor practice case against the
employer for violating the duty to bargain collectively under Article 248(g) of the Labor
Code. This arbitration case also institutes the deadlock bar that shall prevent any
other union from filing a petition for certification election.
ANOTHER SUGGESTED ANSWER:
I will advice the Union to continue negotiations with the aid of the NCMB (Art.
250, Labor Code), and to file a complaint for unfair labor practice, i.e., violation of an
economic provision, gross and serious in character under Articles 248(i) and Art. 261
of the Labor Code.
XVII
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 termination. He demands reinstatement with
full backwages.
[a] What are the twin-requirements of due process which the employer must
observe in terminating or dismissing an employee? Explain. (3%)
SUGGESTED ANSWER:
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. Philippine Telegraph and Telephon Company (G.R.
No. 152048, 7 April 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.
[b] Is Alfredo entitled to reinstatement and full backwages? Why or why not? (3%)
SUGGESTED ANSWER:
It depends. If the dismissal was without just cause and without due process, the
dismissal of the employee is patently illegal. If the dismissal was for just cause but
without due process, the dismissal is valid and the employer is only liable to pay
Indemnity in the form of nominal damages (Agabon v. NLRC, 44 SCRA 573 [2004]).
XVIII

[a] Cite four (4) instances when an illegally dismissed employee may be awarded
separation pay in lieu of reinstatement. (3%)

SUGGESTED ANSWER:
These four instances are: (i) in case the establishment where the employee is to be
reinstated has closed or ceased operations; (ii) where the company has been declared
insolvent; iii) former position no longer exists at the time of reinstatement for reason
not attributable to the fault of the employer; and (iv) where the employee decides not
to be reinstated as when he does not pray for reinstatement in his complaint or
position paper.
[b] Explain the impact of the union security clause to the employees right to
security of tenure. (2%)
SUGGESTED ANSWER:
A valid union security clause when enforced or implemented for cause, after
according the worker his substantive and procedural due process rights (Alabang
Country Club, Inc. v. NLRC, 545 SCRA 357 [2008]; does not violate the employee's
right to security of tenure. Art. 248(e) of the Labor Code allows union security clauses

and a failure to comply with the same is a valid ground to terminate employment.
Union security clause are designed to strengthen unions and valid law policy.

2008 BAR EXAMINATION

I
a) Explain the automatic renewal clause of collective bargaining agreements.
(3%)
SUGGESTED ANSWER:
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, Labor Code).
b)

Explain the extent of the workers right to participate in policy and

decision-making process as provided under Article XIII, Section 3 of the
Philippine Constitution. Does, it include membership in the Board of
Directors of a corporation? (3%)

SUGGESTED ANSWER:
b) The workers right to participate in policy and decision making processes of
the establishment where they are employed in so far as said processes affect their
rights, benefits and welfare as embodied in Section 3 of Article XIII of the Constitution
is reiterated in Art. 255 of the Labor Code where it is provided that for the purpose of
implementing such right, workers and employers may form labor management
councils provided that the representatives of workers in such labor management
councils shall be elected by the majority of all the employees in said establishment. It
is clear from the aforementioned Article of the Labor Code that the right of workers to
participate in policy and decision making processes as provided in Article XIII, Section
3 of the Constitution does not include membership in the Board of Directors of a
Corporation but this could be the proper subject of a Collective Bargaining Agreement.
ANOTHER SUGGESTED ANSWER:
b) In (Manila Electric Company v. Quisumbing 302 SCRA 173[1999]), the Supreme Court
recognized the right of the union to participate in policy formulation and decisionmaking process on matters affecting the Union members rights, duties and welfare.
However, the Court held that such participation of the union in committees of
employer Meralco is not in the nature of a co-management control of the business of
Meralco. Impliedly, therefore, workers participatory right in policy and decisionmaking processes does not include the right to put a union member in the

Corporations Board of Directors.

II
a) What issues or disputes may be the subject of voluntary arbitration under
the Labor Code? (4%)
SUGGESTED ANSWER:
a)Disputes or issues subject to Voluntary Arbitration:
i.

all unresolved grievances arising from the implementation

interpretation of the CBA after exhaustion of the grievance procedure

or

ii.

all unresolved grievances arising from

interpretation of company personnel policies;

or

the

implementation

iii.
all wage distortion issues arising from the application of any wage orders
in organized establishments;
iv.
all unresolved grievances arising from the interpretation and
implementation of productivity incentive programs under R.A. 6971;
v.
all other labor disputes including unfair labor practices and bargaining
deadlocks, upon agreement of the parties.
b) Can a dispute falling within the exclusive jurisdiction of the Labor Arbiter be
submitted to voluntary arbitration? Why or why not? (3%).
SUGGESTED ANSWER:
b) Yes. A labor dispute falling within the exclusive jurisdiction of a Labor
Arbiter may be submitted to voluntary arbitration. Any or all disputes under the
exclusive and original jurisdiction of the Labor Arbiter under Art. 217 of the Code,
maybe submitted for voluntary arbitration by a Voluntary Arbitrator by agreement of
the parties.
Art. 262. Jurisdiction over labor disputes. The voluntary arbitrator or panel of
voluntary arbitrators, upon agreement of the parties, shall also hear and decide all
other labor disputes, including unfair labor practice and bargaining deadlocks.
c) Can a dispute falling within the jurisdiction of a voluntary arbitrator be
submitted to compulsory arbitration? Why or why not? (3%)
SUGGESTED ANSWER:
c) A dispute falling within the jurisdiction of a voluntary arbitrator can be
submitted to compulsory arbitration. This situation can arise when the Secretary of
Labor and Employment has assumed jurisdiction over a labor dispute in an industry
indispensable to the national interest. In the foregoing situation, in accordance with
applicable Supreme Court decisions, the Secretary of Labor and Employment shall
also assume jurisdiction over subsequent labor cases involving the same
establishment, including those that maybe resolved by a Voluntary Arbitrator.

ANOTHER SUGGESTED ANSWER:

c) No. A dispute falling within the jurisdiction of a Voluntary Arbitrator cannot
be submitted for compulsory arbitration. Under Art. 263(g) of the Code, only the
following disputes can be submitted for compulsory arbitration:
1) Labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest; and
2)

Strikes and lockouts in hospitals, clinics, and similar medical institutions.

III

Savoy Department Store (SDS) adopted a policy of hiring salesladies on fivemonth cycles. At the end of a salesladys 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.
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 Linas hunger strike.
a) Lina and 20 other salesladies filed a complaint for illegal dismissal,
contending that they are SDS regular employees as they performed
activities usually necessary or desirable in the usual business or trade of
SDS and thus, their constitutional right to security of tenure was violated
when they were dismissed without a valid, just or authorized cause. SDS, in
defense, argued that Lina, et al. agreed- prior to engagement to a fixed
period employment and thus waived their right to a full-term tenure. Decide
the dispute (4%)
SUGGESTED ANSWER:
a) I would rule in favor of Lina, et al. In Pure Foods Corporation v. NLRC (283 SCRA
135(1997]), the scheme of the employer in hiring workers on a uniformly fixed
contract basis of 5 months and replacing them upon the expiration of their contracts
with other workers with the same employment status was found to have been
designed to prevent casual employees from attaining the status of a regular
employee.
ANOTHER SUGGESTED ANSWER:
a) The Complaint of Lina and 20 other employees should be dismissed. Under existing
jurisprudence, there is no dismissal to speak of when the term of fixed-period
employments expires.
As such, there is no violation of the right to security of tenure of these fixedperiod employees even if they performed activities usually necessary or desirable
in the usual trade of business, because they knew beforehand that their contract
is to expire after five (5) months.

ANOTHER SUGGESTED ANSWER:

I will resolve the illegal dismissal case in favor of SDS. In Brent, the Supreme
Court En Banc held that while fixed term employment has already been repealed by
the various amendments to the Labor Code, the Civil Code still allows fixed term
employment. Such kind of employment is valid as long as it is established that: (1) the
fixed period of employment was knowingly and voluntarily agreed upon by the parties,
without any force, duress or improper pressure being brought to bear upon the
employee and absent any other circumstance vitiating his consent; and (2) the
employer and employee dealt with each other on more or less equal terms with no
moral dominance on the latter.
Since admittedly, Lina, et al. agreed, prior to their engagement, to the fixed term
employment, and It appearing that their consent was not vitiated, and considering
further that it has not been argued that the parties dealt with each other on less
equal terms, it then follows that Lina, et als fixed term employment is valid. No illegal
dismissal can take place upon expiration of such fixed term employment.
b) 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 enjoin the hunger strike.
What answer will you give if you were the Secretary of Labor? (3%)
SUGGESTED ANSWER:
b) 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, SDSs 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.
ANOTHER SUGGESTED ANSWER:
b) As Secretary of Labor, I could not assume jurisdiction over the hunger
strike, simply because there is no strike to speak of. Lina et al. had already
been terminated when they staged their concerted action, hence there was no
temporary stoppage of work at SDS.
c)
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 Codes 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. (3%)
SUGGESTED ANSWER:
c) 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.
ANOTHER SUGGESTED ANSWER:
c) T he compliance order is not valid. Without any of the salesladies
complaining, there could be no basis for a finding that their employment contract for a
fixed term was invalid.
IV
Super Comfort Hotel employed a regular pool of extra waiters who are called or
asked to report for duty when the Hotels volume of business is beyond the capacity of
he 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 Pedros status as an employee under the Labor Code? Why? Explain your
answer fully. (6%)
SUGGESTED ANSWER:
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 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, Labor Code).
ANOTHER SUGGESTED ANSWER:
Pedro is a regular, but seasonal worker. He is regular because as waiter, he was
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of employer Super Comfort Hotel. However, his security of tenure is
coterminous with the seasonal need for which he was hired (Art. 280, 1st par., Labor
Code).
V
The Pizza Corporation (PizCorp) and Ready Supply Cooperative (RSC) entered into
a service agreement where RSC, in consideration of service fees to be paid by
PizCorp, will exclusively supply PizCorp with a group of RSC motorcycle- owning
cooperative members who will henceforth perform PizCorps pizza delivery service.
RSC assumes - under the agreement - full obligation for the payment of the salaries
and other statutory benefits of its members deployed to PizCorp. The parties also
stipulated that there shall be no employer-employee relationship between PizCorp and

the RSC members. However, if PizCorp is materially prejudiced by any act of the
delivery crew that violates PizCorps directives and orders, PizCorp can directly impose
disciplinary sanctions on, including the power to dismiss, the erring RSC member/s.
a) Is the contractual stipulation that there is no employer-employee relationship
binding on labor officials? Why? Explain fully. (3%)
SUGGESTED ANSWER:
a) The contractual stipulation that there is no employer-employee relationship between
PizCorp and the RSC members is not binding on labor officials because what
determines the existence or non-existence of employer-employee relationship is the
actual factual situation between PizCorp and RSC members and not what is
stipulated in the contract.
ANOTHER SUGGESTED ANSWER:
a) The agreement between PizCorp and RSC, that there is, or will not be, an employeremployee relationship between the RSC motorcycle-owning cooperative members
performing delivery services is not binding on labor officials because the test of
employer-employee relationship is law and not agreement between the parties
(Insular Life etc., v. NLRC, 287 SCRA 476[1998).
b) Based on the test/s for employer-employee relationship, determine the issue
of who is the employer of the RSC members. (4%)
SUGGESTED ANSWER:
b)Using the control test, the employer of the RSC members is PizCorp. According
to the facts, the RSC members are supposed to make their deliveries in accordance
with PizCorp directives and orders. In addition, the PizCorp can directly impose
disciplinary sanction, including the power to dismiss the RSC members.
c) Assume that RSC has a paid-up capitalization of PI,000,000.00. Is RSC
engaged in labor only contracting, permissible job contracting or simply,
recruitment? (3%)
SUGGESTED ANSWER:
c) Even if the RSC has a paid up capitalization of PI,000,000.00 it is not engaged
in labor-only contracting, or permissible job contracting. It is engaged simply in
recruiting. RSC merely provides PizCorp the formers motorcycle-owning members to
deliver the product of PizCorp in accordance with PizCorps directives and orders.
ANOTHER SUGGESTED ANSWER:
c) RSC is engaged in labor-only contracting.
It is not enough to show substantial capitalization or investment in the form of tools,
equipment, machinery and work premises. In addition, the following factors have to be
considered: (a) whether the contractor is carrying on an independent business; (b) the

nature and extent of the work; (c) the skill required; (d) the term and duration of the
relationship; (e) the right to assign the performance of specified pieces of work; (f) the
control and supervision of the workers; (g) the power of employer with respect to the
hiring, firing and payment of workers of the contractor; (h) the control and
supervision of the workers; (g) the power of employer with respect to the hiring, firing
and payment of workers of the contractor; (h) the control of the premises; (j) the mode,
manner and terms of payment (Alexander Vinoya v. NLRC, Regent Food Corporation
and/or Ricky See, 324 SCRA 469[2000]; Osiasl. Corporal, Sr., et al. v. NLRC, Lao
Enteng Company, Inc. and/or Trinidad IMO Ong, 341 SCRA 658[2000]).
VI
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
retum-to-work 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. The Union members did not
return to work on the day the Secretarys assumption order was served, nor on the
next day; instead, they held a continuing protest rally against the companys 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 3 rd day, the workers reported for
work, claiming that they do so in compliance with the Secretarys retum-to-work order
that binds them as well as the Company. The Company, however, refused to admit
them back since they had violated the Secretarys retum-to-work order and are now
considered to have lost their employment status.
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.
You are the Labor Arbiter to whom the case was raffled. Decide, ruling on the
following issues:
a) Was there a strike? (4%)
SUGGESTED ANSWER:
a) Yes, there was a strike because of the concerted stoppage of work by the union
members.
ANOTHER SUGGESTED ANSWER:
Yes, there was a strike. No matter how they call it, the continuing protest rally
against the companys alleged unfair labor practices constitutes a temporary
stoppage of work by he concerted action of employees as a result of an industrial or
labor dispute - a case of strike as defined in Art. 212(o) of the Labor Code.

Recently, in SantaRos& Coca-Cola Plant Employees Union, etal. vs. Coca-Cola

Bottlers 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.
b) Were the employees simply exercising their constitutional right to petition for
redress of their grievances? (3%)
SUGGESTED ANSWER:
b) No. After the issuance of a return to work order based on the assumption
powers of the Secretary of Labor under Art. 263(g) of the Labor Code, the strike was
already taken outside of the employees constitutionally protected right to engage in
peaceful concerted activities for redress of their grievances.
ANOTHER SUGGESTED ANSWER:
b) The employees were not simply exercising their constitutional right to
petition for redress of their grievances. Specifically, they were focusing on alleged
unfair labor practice which made the continuing protest rally a strike.
c)

What are the consequences, if any of the acts of the employees? (3%)

SUGGESTED ANSWER:
c)
The consequences of defiance of the Return to Work Order is loss of
employment of all those who participated in the illegal activity. The workers continued
their strike activity after the issuance of the RTW.
The Supreme Court in Philcom Employees
Communication (495 SCA 214[2006]), ruled:

Union

v.

Philippine

Global

A strike undertaken despite the Secretary is issuance of an assumption or

certification order becomes a prohibited activity, and thus illegal, under Article 264(a)
of the Labor Code. The union officers who knowingly participate in that illegal strike
are deemed to have lost their employment status the union members, including union
officers, who commit specific illegal acts or who knowingly defy a return to work order
arc also deemed to have lost their employment status.
VII
Tito Paciencioso is an employee of a foundry shop in Malabon, Metro Manila. He
is barely able to make ends meet with his salary of P4.000.00 a month. One day, he
asked his employer to stop deducting from his salary his SSS monthly contribution,
reasoning out that he is waiving his social security coverage.
If you were Titos employer, would you grant his request? Why? (6%)

SUGGESTED ANSWER:
No. As Titos employer, I am bound by law to remit to SSS Titos 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 (Sec. 89[c]).
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]).
VIII
Carol de la Cruz is the secretary of the proprietor of an auto dealership in
Quezon City. She resides in Caloocan City. Her office hours start at 8 a.m. and end at
5 p.m. On July 30, 2008, at 7 a.m. while waiting for public transport at Rizal Avenue
Extension as has been her routine, she was sideswiped by a speeding taxicab
resulting in her death. The father of Carol filed a claim for employees compensation
with the Social Security System. Will the claim prosper? Why? (6%)
SUGGESTED ANSWER:
Yes, the claim will prosper.
In a line of cases, it has been held that an injury sustained by the employee
while on his way to or from his place of work, and which is otherwise compensable, is
deemed to have arisen out of and in the course of his employment (Lentejas v.
Employees Compensation Commission, 197SCRA 44[1991]).
Carol died while going to her place of work. As held in the case of Alano v.
Employees Compensation Commission (158 SCRA 669(1988]), she was at the place
where her job necessarily required her to be if she was to reach her place of work on
time. There was nothing private or personal about Carols place being at the place of
the accident. She was there because her employment required her to be there.
ANOTHER SUGGESTED ANSWER:
The claim will not prosper as a claim for employees compensation will prosper
only in the event of work- connected disability or death and the death of Carol dela
Cruz will be considered as work connected only if it was because of any accident
arising out of and in the course of employment. This was not the case of Carol dela
Cruz. She was not yet working when the accident that caused her death took place.

IX
Assume that in Problem 5, Mario, an RSC member disgusted with the nonpayment of his night shift differential and overtime pay, filed a complaint with the
DOLE Regional Office against RSC and PizCorp. After inspection, It was found that
indeed Mario was not getting his correct differential and overtime pay and that he
was not declared an SSS member (so that no premiums for SSS membership were
ever remitted). On this basis, the Regional Director issued a compliance order holding
PizCorp and RSC solidarily liable for the payment of the correct differential and
overtime pay and ordering PizCorp to report Mario for membership with SSS and
remit the overdue SSS premiums.
Who has the obligation to report the RSC members for membership with the SSS,
with the concomitant obligation to remit SSS premiums? Why? (6%)

SUGGESTED ANSWER:
Ordinarily, if RSC is engaged in permissible job contracting, it would be RSC who
would be the employer and, therefore, would have the obligation to report its
employees to the SSS and remit its premiums.
However, since RSC is only a labor-only contractor and, therefore, considered
merely as agent of PizCorp, the latter (PizCorp) as the real employer has the legal
obligation to report the RSC members as its employees for membership with the SSS
and remit its premiums.
X
Pepe Santos was an international Flight steward of FlySafe Airlines. Under FSAs
Cabin Crew Administration Manual, Santos must maintain, given his height and
body frame, a weight of 150 to 170 pounds.
After 5 years as a flight steward, Santos began struggling with his weight; he
weighed 200 lbs., 30 pounds over the prescribed maximum weight. The Airline gave
him a one- year period to attain the prescribed weight, and enrolled him in several
weight reduction programs. He consistently failed to meet his target. He,was given a
6-month grace period, after which he still failed to meet the weight limit. FSC thus
send him a Notice of Administrative Charge for violation of company standards on
weight requirements. He stated in his answer that, for medical reasons, he cannot
have a rapid weight loss. A clarificatory hearing was held where Santos fully
explained his predicament. The explanation did not satisfy FSA and so it decided to
terminate Santoss service for violation of company standards.
Santos Filed a complaint for illegal dismissal, arguing that the companys weight

requirement policy js unreasonable and that his case is not a disciplinary but a
medical issue (as one gets older, the natural tendency is to grow heavier). FSA
defended its policy as a valid exercise of management prerogative and from the point
of view of passenger safety and extraordinary diligence required by law of common
carriers; it also posited that Santos failure to achieve his ideal weight constituted
gross and habitual neglect of duty, as well s willful disobedience to lawful employer
orders. The Labor arbiter found the dismissal illegal for there was neither gross and
habitual neglect of duty nor willful disobedience.
Is the Labor Arbiter correct? Why or why not? Explain fully. (6%)
SUGGESTED ANSWER:
The Labor Arbiter is correct. There is no gross and habitual neglect because it
appears that Pepe was trying to meet the weight limit, but just could not do so. His
acts or omissions were not willfully or intentionally done with conscious indifference
to the consequences of such acts or omissions.
There was no willful disobedience because Pepes actions or omissions were not
motivated by a wrongful or perverse attitude. Besides, the rigid requirement of
meeting the 170-pound maximum weight limit is not reasonable, considering a
person who could just be a few pounds over shall already be terminated. At worst,
Pepe could be suspended or reprimanded for his inability to reach the weight limit.
Dismissal would be too harsh a penalty to impose.
ANOTHER SUGGESTED ANSWER:
The Labor Arbiter is not correct in finding the dismissal of Santos illegal.
Pepe Santos, right at the commencement of his employment at FSA as flight
steward, knew that he must maintain, given his height and body frame, a weight of
130 to 170 pounds.
The FSA, through its Cabin Crew Administrative Manual, told Santos, that given his
height and body frame, he must maintain his weight between 130 and 170 pounds.
This pre-requisite is an exercise of management prerogative. When Santos became a
flight steward at FSA, he accepted his employment with this prerequisite which is not
violative of any law but is instead positively based on passenger safety and
extraordinary diligence required by law of common carrier.
Thus, the termination of Santos was for a valid reason: He was no longer
complying with a pre-requisite which was in his contract of employment from the
very beginning.
XI
Complainants had worked five (5) years as waitresses in a cocktail lounge owned
by the respondent. They did not receive any salary directly from the respondent but
shared in all services charges collected for food and drinks to the extent of 75%. With

respondents prior permission, they could sit with and entertain guests inside the
establishment and appropriate for themselves the tips given by guests. After five (5)
years, the complainants individual shares in the collected service charges dipped to
below minimum wage level as a consequence of the lounges marked business
decline. Thereupon, complainants asked respondent to increase their share in the
collected service charges to 85%, or the minimum wage level, whichever is higher.
Respondent terminated the services of the complainants who countered by filing
a consolidated complaint or unlawful dismissal, with prayer for 85% of the collected
services or the minimum wage for the appropriate periods, whichever is higher.
Decide. (6%)
SUGGESTED ANSWER:
The waitresses were employees of the owner of the cocktail lounge. Article 138 of
the Labor Code provides: 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.
Thus, the said waitresses are employees with the right to security of tenure and
cannot be dismissed just because they filed complaint against the owner of the
cocktail lounge.
And as such waitresses, who are considered employees of the cocktail lounge,
they are at the very least entitled to receive the applicable minimum wage.
ANOTHER SUGGESTED ANSWER:
Complainants are not employees of the cocktail lounge, hence, they are not
entitled to coverage of the Labor Code. There is no finding that they are under the
effective control or supervision of the employer for a substantial period time as
determined by the Secretary of Labor. The Labor Code reads
Art. 138. Classification of certain workers. Any worker who is permitted to work,
with or without compensation, in any night clubs, 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 an employee, of such establishment for purposes of labor and social
legislation.
XII

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. (6%)
SUGGESTED ANSWER:
Arnaldo was illegally dismissed. None of the cases allowing compulsory overtime
work were present. Hence, the employers demand for Arnaldo to render such
overtime work was unjustified.
ANOTHER SUGGESTED ANSWER:
Arnaldo cannot be dismissed for insubordination. This is so because one of the
requisites for insubordination is absent. It cannot be said that Arnaldos 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.
XIII
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 company be held liable for the
salaries of the supervisors? Decide. (6%)
SUGGESTED ANSWER:
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 days wage for a fair days labor remains as the
basic factor in determining employees wages (Aklan Electric Cooperative, Inc. v.
NLRC, 323 SCRA 258[2000]).
XIV

Puwersa, a labor federation, after having won in a certification election held in

the company premises, sent a letter to respondent company reminding it of its
obligation to recognize the local union the federation represents and to enter into a
CBA with the local union. Respondent Company replied that though it is willing, the
rank-and-file employees had already lost interest in joining the local union as they
had dissolved it. Puwersa argued that since it won in a certification election, it can
validly perform its function as a bargaining agent and represent the rank-and- file
employees despite the unions dissolution.
Is the argument of Puwersa tenable? Decide with reasons. (6%)
SUGGESTED ANSWER:
A new provision, Article 239-A is inserted into the Labor Code by RA 9481, as
follows:
ART. 239-A. Voluntary Cancellation of Registration.
- The registration of a legitimate labor organization may be cancelled by the
organization itself: Provided, That at least two-thirds of its general membership votes,
in a meeting duly called for that purpose to dissolve the organization: Provided,
further, That an application to cancel registration is thereafter submitted by the
board of the organization, attested to by the president thereof.
If indeed the local union was dissolved in accordance with the above provision
of law, the argument of Puwersa is not tenable. This is so because Puwersa only
had the status of an agent, while the local union remained the basic unit of the
association [Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66
SCRA 52[1975J; cited in Filipino Pipe and Foundry Corp. v. NLRC, 318 SCRA
68[1999]).
ANOTHER SUGGESTED ANSWER:
No. Local unions do not owe their creation and existence to the national
federation to which they are affiliated, but to the will of their members. The act of
voluntary dissolution already constitutes a ground for cancellation for union
registration under Article 239 as amended by Republic Act No. 9481. Hence, the
collective bargaining agents legal personality has been extinguished, with Puwersa
reduced to being an agent without a principal.
ALTERNATIVE SUGGESTED ANSWER:
Yes, Puwersa is right. Article 256 of the Labor Code mandates 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. On the assumption that it has been so
certified, Puwersa is then correct in its argument that since it won in the certification
election, it can validly perform its functions as a bargaining agent and represent the
rank- and-file employees despite the (local) unions dissolution. The refusal of the
company to bargain with Puwersa is violative of its duty to bargain collectively under

Arts. 251 and 252 of the Code, thereby subjecting it to the penalty of considering
Puwersas proposed CBA as the parties effective CBA. Such was the ruling of the
Supreme Court in Divine Word University of Tacloban vs. Secretary of Labor and
Employment (213 SCRA 759 [1992]).

2007 BAR EXAMINATION

I.
(5 POINTS)
1. a) What is the principle of codetermination?

SUGGESTED ANSWER:
1. a) The principle of codetermination is one which grants to the workers the right to
participate in policy and decision-making processes affecting their rights and
benefits. (Art. 255, Labor Code)
FIRST ALTERNATIVE ANSWER:
By the principle of codetermination, the workers have a right to participate in the
decision making process of employers on matters affecting their rights and benefits,
through collective bargaining agreements, grievance machineries, voluntary modes of
settling disputes and conciliation proceedings mediated by government.
SECOND ALTERNATIVE ANSWER:
Codetermination is a term identified with workers participation in the
determination of business policy. Under the German model, the most common form of
codetermination, employees of some firms are allocated control rights by law, in the
form of board seats. It is based on the conviction that democratic legitimacy cannot
be confined to government but must apply to all sectors of society. Besides corporate
control rights, the German system deals with dual channels of representation of
employees by unions (at the industry-wide, and macroeconomic level) and works
councils (at the firm level).
b) What, if any, is the basis under the Constitution for adopting it?
SUGGESTED ANSWER:
Art. XIII, Sec. 3 of the Constitution guarantees labor their right to participate in
decision and policy-making processes affecting their rights, duties and welfare.

FIRST ALTERNATIVE ANSWER:

The adoption of codetermination is based on the police power of the state and the
constitutional mandate to the State to promote, the principle of shared responsibility
between the workers and the employers. The Constitution expressly provides that:
It shall guarantee the rights of all workers to xxx collective bargaining and
negotiations, xxx. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law. (Art. XIII,
Sec. 3, 1987 Constitution)
II.
(5 POINTS)
2. a) Discuss the statutory restrictions on the employment of minors?
SUGGESTED ANSWER:
Article 140 of the Labor Code provides that employers shall not discriminate
against any person in respect to terms and conditions of employment on account of
his
age.
The employer is duty-bound to submit a report to DOLE of all children under
his employ, with a separate report on children found to be handicapped after a
conduct of medical examination. Moreover, an employer in any commercial,
industrial, or agricultural establishment or enterprise is required to keep a register of
all children under his employ, indicating therein their respective dates of birth; and a
separate file on written consent of their respective parents/guardians, another file for
their educational and medical certificates, and a separate file for special work permits
issued by Secretary of DOLE. For children employed as domestic, the head of the
family shall give the domestic an opportunity to complete at least elementary
education. (Arts. 110, 108, and 109, PD 603 of the Revised Penal Code)
Art. 272 provides that no person shall retain a minor in service against his will,
in payment of a debt incurred by an ascendant, guardian or person entrusted with
the custody of the said minor.
Art. 278 enumerates various acts of exploitations of minors prohibited under the
law, to wit:
1.

Any person who shall cause any boy or girl under 16 years of age to perform any
dangerous feat of balancing physical strength or contortion.

2. Any person who, being an acrobat, gymnast, rope-walker, diver, wild animal tamer or
circus manager or engaged in a similar calling, shall employ in exhibitions of these
kinds of children under 16 years of age who are not his children or descendants.
3.

Any person engaged in any of the callings enumerated in the next paragraph who
shall employ any descendant of his under 12 years of age in such dangerous
exhibitions.

4. Any ascendant, guardian, teacher or person entrusted in any capacity with the care of
a child under 16 years of age, who shall deliver such child graciously to any person
following any of the callings enumerated in par. 2 hereof, or to any habitual vagrant or

beggar.
PD 603: Child and Youth Welfare Code
Art. 107 of Child and Youth Welfare Code provides that children below 16 years
of age may only be employed to perform light work which is not harmful to their
safety, health or normal development, and which is not prejudicial to their studies.
RA 9231, amending RA 6710
RA 6710 included a provision allowing a minor below 15 years of age to
participate in public entertainment or information through cinema, theater, radio or
television, provided the contract is concluded by the childs parents or legal
guardian, with the express agreement of the child, and approval of DOLE. The
employer is charged to secure a work permit for the child with DOLE prior to
engaging the child to work. The employer is also required to: (a) ensure the
protection, health, safety, morals and normal development of the child; (b) institute
measures to prevent the childs exploitation and discrimination taking into account
the system and level of remuneration, and the duration and arrangement of working
time; and
(c) formulate and implement a continuing program for training and skills acquisition of
the child.
The Department of Education is charged to promulgate a course design under
its non-formal program aimed at promoting the intellectual, moral and vocational
efficiency to working children who have not undergone or finished elementary or
secondary education.
b) May a househelp be assigned to non-household work?
SUGGESTED ANSWER:
A househelp may be assigned to non-household work' hut a househelper assigned to
work in a commercial, industrial or agricultural enterprise should have a wage or
salary rate not lower than that provided for agricultural or non-agricultural workers
as prescribed by law.
FIRST ALTERNATIVE ANSWER:
No. Pursuant to Article 141 of the Labor Code, a househelper is defined as a
person who renders domestic or household services exclusively to a household
employer. Domestic or household service is defined as service in the employers
home, which is usually necessary or desirable for the maintenance and enjoyment
thereof, and includes ministering to the personal comfort and convenience of the
members of the employers household, including services of family drivers. (Rule XIII,

Section 1(b), Book 3 of the Labor Code)

A househelper cannot be assigned non-household work because to do so would
place that person outside the ambit of the special Labor Code provisions on
househelpers. In such a situation, terms and conditions of employment would differ.
III.
(5 POINTS)
3. a) Discuss the types of illegal recruitment under the Labor Code.
SUGGESTED ANSWER:
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. Illegal recruitment as
an offense involving economic sabotage is committed under the following qualifying
circumstances, to wit:
When illegal recruitment is committed 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
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.
FIRST ALTERNATIVE ANSWER:
Under the Labor Code, illegal recruitment refers to any recruitment activity
undertaken by non-licensees or non-holders of authority. It includes the acts of
canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring, referrals,
contract services and advertising (Art. 13(b), Arts. 34 & 38, Labor Code).
The following prohibited acts are also considered acts of illegal recruitment when
undertaken by non-licensees or non-holders of authority:
a. Charging or accepting directly or indirectly, any amount greater than that specified in
the schedule of allowable fees prescribed by the Secretary of Labor, or to make a
worker pay any amount greater than that actually received by him as a loan or
advance;
b. Furnishing or publishing any false notice or information or document in felation to
recruitment or employment;
c. Giving any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this Code;
d. Inducing or attempting to induce a worker already employed to quit his employment in
order to offer him to another unless the transfer is designed to liberate the worker
from oppressive terms and conditions of employment;
e. Influencing or to attempting to influence any person or entity not to employ any
worker who has not applied for employment through his agency;

f.

Engaging in the recruitment or placement of workers in jobs harmful to public health

or morality or to the dignity of the Republic of the Philippines;

g.

Obstructing or attempting to obstruct inspection by the Secretary of Labor or by his

duly authorized representatives;

h. Failing to file reports on the status of employment, placement vacancies, remittance

of foreign exchange earnings, separation from jobs, departures and such other
matters or information as may e required by the secretary of labor;
i.

Becoming an officer or member of the Board of any corporation engaged in travel

agency or to be engaged direct or indirectly in the management of a travel agency; and
k. Withholding or denying travel documents from applicant workers before
departure for monetary or financial considerations other than those authorized under
this code and its implementing rules and regulations. (RA 8042, Migrant Workers &
Overseas Filipinos Act of 1995)
b) In initiating actions against alleged illegal recruits, may the Secretary of
Labor and Employment issue search and arrest warrants?
SUGGESTED ANSWER:
No. Under the 1987 Constitution, only judges may issue warrants of arrest or
search warrant.
IV
(5 POINTS)
4.Explain
a) The Globe Doctrine
SUGGESTED ANSWER:
Under the Globe doctrine the bargaining units may be formed through
separation of new units from existing ones whenever plebiscites had shown the
workers desire to have their own representatives (Globe Machine and Stamping Co. 3
NLRB 294, applied in Democratic Labor Union v. Cebu Stevedoring Co., 103 Phil.
1103 [1958]).
b) The Community of Interest Rule.
SUGGESTED ANSWER:
The Community of Interest Rule - The Community of Interest Rule states that in
choosing the appropriate bargaining unit, there must be a determination of the
community of interests of employees. A bargaining unit under DO 40-03 refers to a

group of employees sharing mutual interests within a given employer unit, comprised
of all or less than all of the entire body of employees in the employer unit or any
specific occupation or geographical grouping within such employer unit. The test
grouping is community or mutuality of interests, such as substantial similarity of
works and duties or of compensation and working conditions, because the basic test
of an asserted bargaining units acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective
bargaining rights.
V.
(5 POINTS)
May non-lawyers appear before the NLRC or Labor Arbiter? May they charge
attorneys fee for such appearance provided it is charged against union funds and in
an amount freely agreed upon by the parties? Discuss fully.

SUGGESTED ANSWER:
Yes. Non-lawyers can appear before the NLRC or Labor Arbiters
1.
2.
3.

if they represent themselves,

if they represent their legitimate labor organization or members thereof,
if they are duly accredited members of the legal aid office recognized by the
DOJ or IBP (Art. 222, Labor Code).

Non-lawyers cannot charge attorneys fees because the latter presuppose the
existence of attorney-client relationship which exists only if the representative is
a lawyer (PAFLU v. BISCOM, 42 SCRA 302 [1997]).
FIRST ALTERNATIVE ANSWER:
Yes, non-lawyers may appear before the labor arbiter or the NLRC but only in the
following instances:
1. if they represent themselves, or
2. if they represent their organization or members thereof, (Article 222, Labor
Code) provided that he presents a verified certification from the said organization that
he is properly authorized;
3. he is duly accredited member of any legal aid office duly recognize by the DOJ
or IBP (Kanlaon Conxtruction Enterprises v. NLRC, 279 SCRA 337 [1997])
Yes, attorneys fees may be charged against union funds in an amount agreed
upon by the parties. Any stipulation to the contrary is void (Art. 222, 2(b). However, 3

requisites must be complied with in order that a unions attorneys fees and
representation expenses may be valid and upheld:
1. authorization by a written resolution of majority of all the members at the
general membership meeting duly called for the purpose;
2. secretarys record of the minutes of the meeting; and
3.

individual written authorization for check-off duly signed by the

employee concerned (ABS- CBN Supervisors Employees Union Members v.
ABS-CBN Corp. et al., Article 241 (n) (o). 304 SCRA 489 [1999]).

VI
(5 POINTS)
Procedurally, how do you stay a decision, award or order of the Labor Arbiter?
Discuss fully.
SUGGESTED ANSWER:
Decisions, awards, or orders of the Labor Arbiter may be stayed by the filing of
an appeal to the Commission by any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders.
In case of appeal of a LAs judgment involving a monetary award, it may only be
stayed upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from. (Art. 223, Labor Code)

FIRST ALTERNATIVE ANSWER:

By perfecting an appeal, through the filing an Appeal Memorandum within 10
days from receipt of such decision, verified by the appellant and accompanied by his
Non- Forum Certification, proof of service on the other party, proof of payment of the
appeal fee and cash or surety bond in the amount equivalent to the monetary award
in the judgment appealed from. Reinstatement is immediately executory. (Art. 223,
Labor Code)
VII
(5 POINTS)
a)

May the NLRC or the courts take jurisdictional cognizance over

compromise agreements/ settlements involving labor matters?

SUGGESTED ANSWER:
No. Any compromise agreement, including those involving labor standards laws,
voluntary agreed upon by the parties with the assistance of the Bureau or the

regional office of the Department of Labor, shall be final and binding upon the
parties. The National Labor Relations Commission or any court shall not assume
jurisdiction over issues involved therein except in case of non- compliance thereof or
if there is prima facie evidence that the settlement was obtained through fraud,
misrepresentation, or coercion. (Art. 227, Labor Code)
b)

How sacrosanct are statements/data made at conciliation proceedings

in the Department of Labor and Employment? What is the philosophy
behind your answer?

SUGGESTED ANSWER:
It is sacrosanct as privilege communication. This is so because information
and statements at conciliation proceedings cannot be used as evidence in the NLRC.
Conciliators and similar officials cannot testify in any court or body regarding any
matter taken up at conciliation proceedings conducted by them. (Article 233, Labor
Code.) This is to enable the conciliator to ferret out all the important facts of the
controversy which the parties may be afraid to divulge if the same can be used
against them.
VIII
(5 POINTS)
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.

SUGGESTED ANSWER:
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, attorneys fee and
other affirmative relief, shall be under the jurisdiction of the Labor Arbiters.
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. (Article 247,
Labor Code.)
IX
(5 POINTS)

Discuss the legal requirements of a valid strike.

SUGGESTED ANSWER:
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. 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.
3.A decision to declare a strike must be approved by a majority of the total
union membership in the bargaining unit concerned, obtained by secret ballot
in meetings or referenda called for that purpose.
4. In every case, the union shall furnish the Department of Labor and
Employment the voting at least seven 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
employers premises for lawful purposes, or obstruct public thoroughfares.
FIRST ALTERNATIVE ANSWER:
1)
2)

Valid and factual ground;

Notice of strike filed by the bargaining agent (if collective bargaining
deadlock) or a registered union in the affected bargaining unit (if unfair labor
practice);

3) Notice of strike filed with the NCMB;

4) Notice of strike filed at least 24 hours prior to taking a strike vote by secret

balloting, informing said office of the decision to conduct a strike vote, and
the date, place, and time thereof;
5)

Strike vote where majority of union members approve the strike;

6) Strike vote report should be submitted to the NCMB at least 7 days before the
intended date of strike;
7) Except in cases of union busting, the cooling-off period prescribed (15 days,
unfair labor practice; 30 days, collective bargaining deadlock) should be fully
observed;
8) 7-day waiting period or strike bans after submission of the strike vote report to
NCMB should be fully observed;
9)

Not on grounds of ULP in violation of no-strike clause in CBA;

10) Not visited with widespread violence;

11) Not in defiance of the Secretarys assumption of jurisdiction order;
12) Not prohibited by law (such as unions in the banking industry).
SECOND ALTERNATIVE ANSWER:
A valid strike requires compliance of both substantial and procedural grounds.
Substantially, a valid strike has to be grounded on either unfair labor practice or
deadlock in collective bargaining. Procedurally, the same must comply with the
requirements of: (1) notice of strike to filed at least 15 days before the intended ULP
grounded strike or at least 30 days prior to the deadlock in bargaining grounded
strike; (2) Must comply with the strike vote requirement, meaning, a majority of the
union membership in the bargaining unit must have voted for the staging of the
strike, and notice hereon shall be furnished NCMB at least 24 hours before the strike
vote is taken; and (3) the strike vote results must be furnished to the NCMB at least 7
days before the intended strike. The dismissal of a duly elected officer excuses,
however, the union from the 15/30 days cooling off requirement in Art. 263 (c) of the
Labor Code.
X.
(5 POINTS)
Discuss briefly the instances when non-compliance by the employer with a
reinstatement order of an illegally dismissed employee is allowed.
SUGGESTED ANSWER:
Despite a reinstatement order, an employer may not reinstate an employee in the
following instances: (a) when the position or any substantial equivalent thereof no
longer exists; (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; or (c) the existence of strained relations between the
employer and the illegally dismissed employee, provided the matter is raised before

the Labor Arbiter.

FIRST ALTERNATIVE ANSWER:
When reinstatement is not feasible due to the strained employer-employee
relationship; or that the reinstatement is rendered moot by the bona fide closure of
business; or when the position previously held by the employee no longer exists and
there is no equivalent position available; or that the employee is sick with an illness
that cannot be cured within 6 months, or that the employee has reached the age of
retirement; or that the employee himself refuses to be reinstated for one reason or
another; in view of the expiration of the 4-year prescriptive period; RA 8042 (Migrant
Workers and Overseas Act) does not allow reinstatement to overseas Filipinos
workers especially seamen. In these instances, separation pay in lieu of
reinstatement may be ordered at the rate of one month or one month for ever year of
service, a fraction of at least 6 months equivalent to one year, whichever is higher.
XI
(5POINTS)
11.

a)

As a rule, when is retirement due?

SUGGESTED ANSWER:
Article 287 provides for two types of retirement:
(a) 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.
b)When is retirement due for underground miners?
SUGGESTED ANSWER:
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.
XII
(5POINTS)
12. a) How do you execute a labor judgment which, on appeal, had become
final and executory? Discuss fully.
SUGGESTED ANSWER:

Execution shall issue upon an order, resolution or decision that finally disposes
of the action or proceedings after the counsel of record and the parties shall have
been furnished with copies of the decision in accordance with these Rules but only
after the expiration of the period of appeal if no appeal has been duly perfected.
The Labor Arbiter, the Regional Director, or his duly authorized hearing officer of
origin shall, motu propio or upon motion of any interested party, issue a writ of
execution on a judgment only within five (5) years from the date it becomes final and
executory, so requiring the sheriff or duly deputized officer to execute the same. No
motion for execution shall be entertained nor a writ be issued unless the Labor
Arbiter is in possession of the records of the case which shall include an entry of
judgment in case of appeal except that, as provided for in Section 10 of Rule VI, and
in those cases where partial execution is allowed by law, the Labor Arbiter shall
retain duplicate original copies of the decision to be implemented and proof of service
thereof for the purpose of its immediate enforcement.
b) Cite two instances when an order of execution may be appealed.
SUGGESTED ANSWER:
An Order of Execution may be appealed:
1. Where the Order of Execution varies or goes beyond the terms of the
judgment it seeks to enforce or the terms of the judgment are ambiguous (DBP
v. Union Bank, 419 SCRA 131 [2004]);
2. Where the implementation of the Order was irregular (Metrobank v. C.A. 356,
SCRA 563 [2001]).

FIRST ALTERNATIVE ANSWER:

1.When its execution becomes impossible or unjust, it may be modified or altered on
appeal or harmonize the same with justice and the facts. (Torres v. NLRC, 330 SCRA
311 [2000]).
2. Supervening events may warrant modification in the execution of the judgment, as
when reinstatement is no longer possible because the position was abolished as a
cost-cutting measure due to losses. (Abalos v. Philex Mining Corp., 393 SCRA 134
[2000]).
XIII
(5 POINTS)
May a decision of the Labor Arbiter, which has become final and executory be
novated through a compromise agreement of the parties?
SUGGESTED ANSWER:
Yes. Although Article 221 of the Labor Code requires the Labor Arbiter to exert all
efforts to amicably settle the case before him on or before the first hearing, it must

be noted that neither the Labor Code nor its implementing rules as well as the NLRC
Rules prohibit the amicable settlement of cases during the pendency of the
proceedings or after a judgment is issued thereupon.
The established rule is that the compromise agreement or amicable settlement
may still be made even after the judgment has become final and executory. Settlement
of cases is encouraged and authorized by law. Article 2040 of the Civil Code impliedly
authorizes this. It is even encouraged by express provisions of law.
FIRST ALTERNATIVE ANSWER:
Yes, provided that the same is not unconscionable, and the agreement was
approved by the Labor Arbiter, the NLRC or the Court of Appeals, before whom the
case is pending.
SECOND ALTERNATIVE ANSWER:
Yes, provided that the new agreement is not tainted with fraud, duress or undue
influence.

XIV
(5 POINTS)
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

SUGGESTED ANSWER:
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.
FIRST ALTERNATIVE ANSWER:
Neither party is correct. The employer cannot refuse the application on the
ground that she is only living with CD, as a legitimate marriage is not a precondition
for the grant of maternity leave. Neither is AB correct, since maternity leave is only
available for the first four deliveries or miscarriages.

XV

(5 POINTS)
Some officers and rank-in-file members of the union staged an illegal strike.
Their employer wants all the strikers dismissed. As the lawyer, what will you advise
the employer? Discuss fully.
SUGGESTED ANSWER:
I will advise the employer that not all the strikers can be dismissed. Any union
officer who knowingly participates in an illegal strike maybe declared to have lost his
employment status but a worker who is not a union officer may be declared to have
also lost his employment status only if he commits illegal acts during a strike.
(CCBPI Postmix Workers Union v. NLRC 299 SCRA 410 [1998])
XVI
(5 POINTS)
A Carpenter is employed by a private university in Manila. Is the carpenter a
regular or a casual employee? Discuss fully.
SUGGESTED ANSWER:
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 of the schools 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. (Article 280, Labor Code; See
also Philippine Geothermal, Inc. v. NLRC, 189 SCRA 211 [1990]); Kimberly
Independent Labor Union, etc. v. Drilon, 185 SCRA 190 [1990]).
FIRST ALTERNATIVE ANSWER:
A carpenter employed by a university is a casual employee. The carpenter is
engaged to perform a job, work or service which is mostly incidental to the business of
the employer, and such job, work or service is for a definite period made known to the
employee at the time of engagement: Provided, that any employee who has rendered at
least one year of service, whether such service is continuous or not, 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.
XVII
(5 POINTS)
P.D. 1508 requires the submission of disputes before the Barangay Lupong
Tagapamayapa prior to the filing of cases with the courts or other government
bodies. May this decree be used to defeat a labor case filed directly with the Labor
Arbiter? Discuss fully.

SUGGESTED ANSWER:
No. Requiring conciliation of labor disputes before the Barangay Lupong
Tagapamayapa would defeat the salutary purposes of the law. Instead of simplifying
labor proceedings designed at expeditious settlement or referral to the proper courts
or office to decide it finally, the conciliation of the issues before the Barangay Lupong
Tagapamayapa would only duplicate the conciliation proceedings and unduly delay
the disposition of labor cases (Montoya v. Escayo, 171 SCRA 446[1989]).
FIRST ALTERNATIVE ANSWER:
No, because under Article 217 of the Labor Code, the Labor Arbiter exercises
original and exclusive jurisdiction to hear and decide cases involving all workers,
whether agricultural or non-agricultural.
SECOND ALTERNATIVE ANSWER:
P.D. 1508 does not apply to labor dispute because labor cases have their own
grievance and mediation processes.
XVIII
(5 POINTS)
Inday was employed by mining company X to perform laundry service at its
staffhouse. While attending to her assigned task, she slipped and hit her back on a
stone. Unable to continue with her work, she was permitted to go on leave for
medication, but thereafter she was not allowed to return to work. She filed a
complaint for illegal dismissal but her employer X contended that Indav was not a
regular employee but a mere househelp. Decide.
SUGGESTED ANSWER:
Inday is a regular employee. Under Rule XIII, Section 1(b), Book 3 of the Labor
Code, as amended, the terms househelper or domestic servant are defined as
follows:
The term househelper as used herein is synonymous to the term domestic
servant and shall refer to any person, whether male or female, who renders services
in and about the employers home and which services are usually necessary or
desirable for the maintenance and enjoyment thereof, and ministers exclusively to the
personal comfort and enjoyment of the employers family.
The foregoing definition clearly contemplates such househelper or domestic
servant who is employed in the employers home to minister exclusively to the
personal comfort and enjoyment of the employers family. The definition cannot be
interpreted to include househelp or laundrywomen working in staffhouses of a
company, like Inday who attends to the needs of the companys guest and other
persons availing of said facilities. The criteria is the personal comfort and enjoyment
of the family of the employer in the home of said employer. While it may be true that
the nature of the work of a househelper, domestic servant or laundrywoman in a
home or in a company staffhouse may be similar in nature, the difference in their

circumstances is that in the former instance they are actually serving the family while
in the latter case, whether it is a corporation or a single proprietorship engaged in
business or industry or any other agricultural or similar pursuit, service is being
rendered in the staffhouses or within he premises of the business of the employer. In
such instance, they are employees of the company or employed in the business
concerned entitled to the privileges of a regular employee.
The mere fact that the househelper or domestic servant is working within the
premises of the business of the employer and in relation to or in connection with its
business, as in its staffhouses for its guest or even for its officers and employees,
warrants the conclusion that such househelper or domestic servant is and should be
considered as a regular employee of the employer and not as a mere family
househelper or domestic servant as contemplated in Rule XIII, Section 1(b), Book 3
of the Labor Code, as amended. (Apex Mining Company, Inc. v. NLRC, 196 SCRA
251(1991]).
XIX
(5 POINTS)
Cite five grounds for disciplinary action by the Philippine Overseas Employment
Administration (POEA) against overseas workers.
SUGGESTED ANSWER:
Under the Section 1(A) and (B), Rule III, Part VII of the 2002 POEA Rules and
Regulations Governing the Recruitment and Employment of Land-based Overseas
Workers, the following are the grounds for disciplinary action against overseas
workers:
A.

Pre-Employment Offenses
1. Using, providing, or submitting false information or documents for
purposes of job application or employment;
2.

B.

Unjustified refusal to depart for the worksite after all employment and
travel documents have been duly approved by the appropriate government
agency/ies.

Offenses during Employment

1. Commission of a felony or crime punishable by Philippine Laws or by the
laws of the host country;
2.
3.

Unjustified breach of employment contract;

Embezzlement of company funds or monies and/or properties of a fellow
worker
entrusted for delivery to kin or relatives in the Philippines; and

4. Violation/s of the sacred practices of the host country.

Further, under Section 1(A) and (B), Rule II Part VI of the 2003 Rules and

Regulations Governing the Recruitment and Employment of Seafarers, the

following are the grounds for disciplinary action against seafarers:
A. Pre-Employment Offenses
1. Submission/furnishing or using false information or documents or any
form of misrepresentation for the purpose of job application or employment;
2. Unjust refusal to join ship after all employment and travel documents
have been duly approved by the appropriate government agencies.
B. Offenses During Employment

1.
2.

Smuggling or violation of any custom rules

and regulations of the Philippines and
foreign
port;
Desertion;

3.

Absence without leave;

4.

Sleeping on post while on duty;

5.

Insubordination;

6.

Drunkenness;
7. Creating trouble outside the vessels premises;
8.

Gambling;

9.

Violation of company policies and regulations;

10. Incompetency and inefficiency;

11. Inciting mutiny, malicious destruction of ships
property or any activity which will hamper the efficient operation of the vessel;
12. Concerted action to breach approved contracts;
13. Any activity which tends to destroy harmonious relationship of the company;
14. Grave abuse of authority;
15.Other gross misbehaviors prejudicial to good order and discipline;
16. Negligence causing damage, loss, spoilage or deterioration of vessels stocks and
property;
17. Connivance with or cuddling of stowaway;
18. Willfully making false statements, reports, certification or spurious seafarers
documents for personal gain with or with intent to misled or defraud the
company;

19. Any other case as to cast aspersion on the good name of the company and
vessel;
20. Violation of safety and environmental rules/ regulations; and
21. Failure to observe the drug and alcohol policy of the company.
XX
(5 POINTS)
AB, a non-resident American, seeks entry to the country to work as VicePresident 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 Vice-President in the telecommunications company? Discuss fully.
SUGGESTED ANSWER:
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.
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 above-mentioned
alien employment permit so that AB can assume as Vice President of the
Telecommunication Company.
2006 BAR EXAMINATION
1. What is the purpose of labor legislation? 2.5%

SUGGESTED ANSWER:
There are these state policies and mandates dealing with labor in the 1987
Constitution: (1) The State affirms labor as a primary social economic force. It shall
protect the rights of workers and promote their welfare. (2) The State shall afford full
protection to labor, local and overseas, organized and unorganized. It is the purpose
of labor legislation to implement the aforesaid state policies and mandates enunciated
in the Constitution.
ANOTHER SUGGESTED ANSWER:
The purpose of labor legislation is to afford protection to labor, promote full

employment, ensure equal work opportunities regardless of sex, race or creed, and
regulate the relations between workers and employers. The State shall assure the
rights of workers to self-organization, collective bargaining, security of tenure, and
just and humane conditions of work.
ANOTHER SUGGESTED ANSWER:
Purpose of Labor Legislation
1. Labor Standards Law - to provide minimum terms and conditions of employment
necessary to maintain decent living conditions, safety, and welfare of workers and
their families.
2. Labor Relations Law - to regulate the relationships of:
a.
b.
c.
d.

Employer and employees organized into a union

Union and its members
State and the unions
Unions as institutions

The purpose of labor legislation is social justice, which was defined in Calalang v.
Williams as the humanization of laws and the equalization of social an economic
forces by the State so that justice in its rational and objectively secular conception
may at least be approximated [Anflo Management Si Investment Corp. et al. v. Rodojfo
Bolanio, 390 SCRA 473 [2002]).
2. What is the concept of liberal approach in interpreting the Labor Code and its
Implementing Rules and Regulations in favor of labor? 2.5%
SUGGESTED ANSWER:
In carrying out and interpreting the Labor Codes provisions and its
implementing regulations, the workingman's welfare should be the primordial and
paramount consideration. This kind of interpretation gives meaning and substance to
the liberal and compassionate spirit of the law as provided in Article 4 of the Labor
Code as amended, which states that all doubts in the implementation and
interpretation of the provisions of the Labor Code including its implementing rules
and regulations shall be resolved in favor of labor," as well as the Constitutional
mandate that the State shall afford full protection to labor and promote full
employment opportunities for all (PLOT v. NLRC, 276 SCRA 1 [1997]).
3. What property right is conferred upon an employee once there is an employeremployee relationship? Discuss briefly. 5%
4.

SUGGESTED ANSWER:
The right to employment and the right to continue in one's employment constitute the

property right conferred upon an employee once there is an employer- employee

relationship. Thus, the very important constitutional right that "no person may be
deprived of life, liberty or property without due process of law is violated when an
employer terminates the employment of an employee without due process of law
because said employment is a property right of the latter.
ANOTHER SUGGESTED ANSWER:
In Callanta. v. NLRC, 145 SCRA 270 (1986), the Court ruled: It is a principle in
American jurisprudence which, undoubtedly, is well-recognized in this jurisdiction
that ones employment, profession, trade or calling is a property right," and the
wrongful interference therewith is an actionable wrong. The right is considered to be
property within the protection of a constitutional guaranty of due process of law.
II
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? 5%
SUGGESTED ANSWER:
The application should be disapproved. Despite WTTAs noble purpose, 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 (Article 26, Labor Code).
III
Can an overseas worker refuse to remit his earnings to his dependents and
deposit the same in the country where he works to gain more interests? Explain. 5%
SUGGESTED ANSWER:
No. Art. 22 of the Labor Code provides that it shall be mandatory for all Filipino
workers abroad to remit a portion of their foreign exchange earnings to their families,
dependents and/or beneficiaries in the country in accordance with rules and
regulations prescribed by the Secretary of Labor and Employment.
ANOTHER SUGGESTED ANSWER:

The answer must be qualified. While Article 22 of the Labor Code provides that it
shall be mandatory for all Filipino workers abroad to remit a portion of foreign
exchange earnings to beneficiaries in the Philippines, such an imposition can be
implemented in accordance with rules and regulations prescribed by the Secretary of
Labor. There are currently no rules issued by the Secretary pertaining to Article 22.
There was a mandatory remittance provision in the 1991 POEA Rules and
Regulations, but such provision was deleted in the 2002 POEA Rules and
Regulations.
The answer is likewise, no if the overseas worker signs an employment contract
with a mandatory remittance provision. Such is the case of seafarers, where the
standard practice is to have a provision on mandatory remittance provision
amounting to 80% of their salary.
ANOTHER SUGGESTED ANSWER:
No. Art. 22 of the Labor Code provides that it shall be mandatory for all Filipino
workers abroad to remit a portion of their foreign exchange earnings to their families,
dependents, and/or beneficiaries in the country in accordance with the rules and
regulations prescribed by the Secretary of Labor and Employment.
Executive Order No. 857 prescribe the percentage of foreign exchange
remittance from 50% to 80% of the basic salary, depending on the worker's kind of
job.
An overseas worker, therefore, cannot refuse to remit his earnings.
IV
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? 5%
SUGGESTED ANSWER:
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 ablebodied 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]).
ANOTHER SUGGESTED ANSWER:

No. their action will not prosper. The employment contract in this case is an
example of a fixed-term employment contract, i.e. one to which the parties by free
choice have assigned a specific date of termination. It is not per se illegal or against
public policy. To be valid, it must be shown that the fixed period was knowingly and
voluntarily agreed upon by the parties. There should have been no force, duress, or
improper pressure brought to bear upon the employee. Neither should there be any
other circumstance that vitiates the employees consent. Moreover, the employer and
employee must have dealt with each other on more or less equal terms with no moral
dominance being exercised by the employer over the employee. Should the contract in
the case at bar be shown to comply with the aforementioned requirements, the action
for illegal dismissal will not prosper; otherwise, it should (Brent School v. Zamora,
181 SCRA 702 [1990]).
V
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? 5%
SUGGESTED ANSWER:
An employer and employee can enter into a contract increasing night
differential pay, overtime pay, and premium pay benefits, as this is beneficial to the
worker and no fraud or vice of consent could be inferred from it.
An employer and employee could not, however, enter into a contract reducing
the minimum pay for the above-stated benefits, as these would be against public
policy and therefore void ab initio.
VI
1. When is there a wage distortion?
SUGGESTED ANSWER:
1. There is wage distortion where an increase e 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.
ANOTHER SUGGESTED ANSWER:
Wage distortion arises when (4) essential elements are present:
a. An existing hierarchy of positions with corresponding salary rates;

b. A significant change or increase in the 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]).
2.

How should a wage distortion be settled?

SUGGESTED ANSWER:
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.
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).
3.
Explain. 10%

Can the issue of wage distortion be raised in a notice of strike?

SUGGESTED ANSWER:
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.
VII
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.
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.
5%

SUGGESTED ANSWER:
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 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 written notice of termination must be served on the employee indicating that upon
due consideration of all the circumstances, grounds have been established to justify
his termination.

VIII
The modes of determining an exclusive bargaining agreement (agent) are:
a. voluntary recognition
b. certification election
c. consent election
Explain briefly how they differ from one another. 5%
SUGGESTED ANSWER:
a. There is voluntary recognition when in an unorganized establishment with only one
legitimate labor organization, the employer voluntarily recognizes the representation
status of such a union. Within thirty (30) days from such recognition, the employer
and union shall submit a notice of voluntary recognition with the Regional Office of
the Department of Labor and Employment which issued the recognized labor unions
certificate of registration or certificate of creation of a chartered local.
b. 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.
c. 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.
IX

Armstrong Corporation, a foreign corporation intends to engage in the

exploration of Philippine natural resources. Mr. Antonio Reyes offered the forest land
he owns to the president of the corporation. May Armstrong Corporation enter into a
financial and technical assistance agreement (FTAA) with Mr. Reyes to explore,
develop, and utilize the land? Explain. 5%
SUGGESTED ANSWER:
No, Armstrong Corporation may not enter into an FTAA with Mr. Reyes for the
exploration of natural resources found on his forest land. Even assuming that Mr.
Reyes could validly own forest land (like an industrial tree plantation), all natural
resources found therein are owned by the State under the Regalian doctrine. The
exploration, development and utilization of natural resources shall be under the full
supervision and control of the State (Article XII, Sec. 2, Constitution). An FTAA for
large-scale exploration, development and exploitation of natural resources may only
be negotiated with the DENR Secretary, executed and approved by the President.
X

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.
1. As counsel for the corporation, what steps will you take prior to its closure? 2.5%
SUGGESTED ANSWER:
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.
2. Are the employees entitled to separation pay? 2.5%
ANOTHER SUGGESTED ANSWER:
The employees of the corporation are not entitled to separation pay because
Article 283 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.
If the reason for the closure is due to old age of the brothers and sisters:

1. Is the closure allowed by law? 2.5%

SUGGESTED ANSWER:
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 managements 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 (Alahang Country
Club, Inc. vs. NLRC, 466 SCRA 329 [2005]).
2. Are the employees entitled to separation benefits? 2.5%
SUGGESTED ANSWER:
The employees of the corporation are entitled to separation pay because the Labor
Code expressly provides that the only time that they are not entitled to separation pay
is when the closure or cessation of operation is due to serious business losses or
financial reverses.
XI
As a result of bargaining deadlock between ROSE Corporation and ROSE
Employees Union, its members staged a strike. During the strike, several employees
committed illegal acts. The company refused to give in to the union's demands.
Eventually, its members informed the company of their intention to return to work.
10%
1. Can ROSE Corporation refuse to admit all the strikers?
SUGGESTED ANSWER:
1. Article 264 of the Labor Code provides that mere participation of a worker in a lawful
strike shall not constitute sufficient ground for termination of employment even if a
replacement had been hired by the employer during such lawful strike."
2. On the other hand, the same Article of the Labor Code also provides: Any worker or
union officer who knowingly participates in the commission of illegal acts during a
strike may be declared to have lost his employment status.
3. Because of the above-quoted provisions of the Labor Code, ROSE Corporation cannot
refuse to admit all the strikers who inform the company of their intention to return to
work, except those workers who may have committed illegal acts during the strike who
can be declared as having lost their employment status."
3. Assuming the company admits all the strikers, can it later on dismiss those

employees who committed illegal acts?

SUGGESTED ANSWER:
Even if as its initial response, the company admitted all the strikers, the
company is not estopped from afterwards dismissing those employees who committed
illegal acts during the strike. Article 264 of the Labor Code expressly states that "any
worker xxx who knowingly participates in the commission of illegal acts during a
strike may be declared to have lost his employment status."
3. If due to the prolonged strike. ROSE Corporation hired replacements, can it
refuse to admit the replaces strikers?
SUGGESTED ANSWER:
ROSE Corporation cannot refuse to admit the strikers if they did not commit any
illegal acts during a lawful strike. The Labor Code is very clear: Workers who went on
strike have not lost their employment status even if the company had hired their
replacements.
XII
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? 10%
SUGGESTED ANSWER:
I will rule in favor of management.
First of all, 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.
The probationary workers could, however, be terminated for failing to meet
probationary standards. If the reasons for the supervisors berating and insulting
behavior were poor or substandard performance on the part of the workers, their
probationary employment could be legally terminated.
ANOTHER SUGGESTED ANSWER:

I will rule against the employer. The probationary employees are entitled to
security of tenure and may not be dismissed except for cause, and are entitled to be
hired as regular employees if they are qualified for the position.
There is no abandonment, because the absence of the employees has valid and
justifiable cause, and they did not intend of severe employment or lose the intention to
return to work.
ANOTHER SUGGESTED ANSWER:
As Labor Arbiter, I will rule that the complaint for illegal dismissal is premature.
What the supervisor did - he told the eight (8) employees to go home and never to
report back to work - did not have the effect of terminating the employment of said
employees. As supervisor, he is not a managerial employee with the power, among
others, to discharge employees.
XIII
1. Can a no-union" win in a certification election? 2.5%
SUGGESTED ANSWER:
Yes, because the objective in a certification election is to ascertain the majority
representation of the bargaining representative, if the employees desire to be
represented at all by anyone. Hence, no union is one of the choices in a certification
election.
ANOTHER SUGGESTED ANSWER:
No, a no-union" cannot win in a certification election. The purpose of a
certification election is to select an exclusive bargaining agent and a no union vote
would precisely mean that the voter is not choosing any of the contending unions. If
the no union votes constitute a majority of the valid votes cast, this fact will all the
more mean that no union won in the certification election. A one-year bar will
consequently stop the holding of another certification election to allow the employer
to enjoy industrial peace for at least one year.
2.

When does a "run-off election occur? 2.5%

SUGGESTED ANSWER:
A run-off or second election occurs when an election which provides for three
(3) or more choices results in no choice receiving a majority of the valid votes cast,
and no objections or challenges have been presented which, if sustained, can

materially change the results; the election officer shall motu proprio conduct a runoff election within (10) calendar days from the close of the election proceedings
between the labor unions receiving the (2) highest number of votes; provided that, the
total number of votes for all contending unions is at least fifty per cent (50%) of the
number of votes cast (Rule X, Dept. Order 40-03).
XIV
Determine whether the following minors should be prohibited from being hired
and from performing their respective duties indicated hereunder: 5%
1. A 17-year old boy working as a miner at the Walwaldi Mining Corporation.
SUGGESTED ANSWER:

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) 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 Labor .
2. An 11-year old boy who is an accomplished singer and performer in different parts of
the country.
SUGGESTED ANSWER:

No, he should not be prohibited from being hired and from performing as a
singer. Under Art. VIII Sec. 12 par. 2 of RA 7610 as amended by RA 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: (a) the employer shall ensure the protection, health, safety and morals of the
child; (b) the employer shall institute measures to prevent the childs 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. 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.
3. A 15-year old girl working as a library assistant in a girls high school.
SUGGESTED ANSWER:

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.

4. A 16-year old girl working as a model promoting alcoholic beverages.

SUGGESTED ANSWER:

Yes, she should be prohibited from working as a model promoting alcoholic

beverages. RA 7610 categorically prohibits the employment of child models in all
commercials or advertisements promoting alcoholic beverages and intoxicating
drinks, among other things.
5. A 17 -year old boy working as dealer in a casino

SUGGESTED ANSWER:

Yes, he should be prohibited from working as a dealer in a casino, because Art.

140 of the Labor Code prohibits the employment of persons below 18 years of age in
an 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.
XV
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. 5%.
SUGGESTED ANSWER:

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, RA 7877).
I will likewise file a complaint for illegal dismissal citing Art. 136 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.
ANOTHER SUGGESTED ANSWER:
I shall advise my client to file a complaint with the grievance machinery (if the
establishment is organized) or with the companys Committee on Decorum and
Investigation (organized or unorganized) tasked to investigate sexual harassment
cases. The personnel manager Owen can definitely be held administratively liable for
his action.
I shall also advise my client to file a criminal case for sexual harassment
pursuant to Republic Act No. 7877 .
ANOTHER SUGGESTED ANSWER:
I will not take any action at all because insinuating some sexual favor" is not an
act of sexual harassment which require demands, requests, or otherwise require any
sexual favor from the other. (Sec. 3, R.A. No. 7877).
2005 Bar Examination
(1) As Human Resources Department (HRD) manager of EZ Components, an
unorganized manufacturer of electric and electronic components for household
appliances, you are suddenly confronted with demands for recognition and collective
bargaining negotiations from two competing labor unions. They both claim to represent
all the rank-and-file employees. Union A is led by moderate faction, while Union B is
affiliated with militant federation identified with leftist ideology.
Which of the following courses of action should you take to best protect the
interests of your company and employees?
(a) Recognize Union A as the rightful bargaining representative because it will be more
reasonable to deal with:
(b) Recognize Union B because you do not want to antagonize its leftist connections and
foment inter-union conflicts.

(c) Ignore the demands of either union since you cannot be compelled legally to deal with
them at this stage; or
(d) Petition the Bureau of Labor Relations to conduct a certification election to determine
which union really represents the majority of the employees in the bargaining unit (10
%)
SUGGESTED ANSWER:
(1) (d) Petition the Bureau of labor Relations to conduct a certification election to
determine which union really represents the majority of the employees in the
appropriate bargaining unit.
Art.258. When employer may file petition. When requested to bargain
collectively, an employer may petition the Bureau for an election.
ANOTHER SUGGESTED ANSWER:
( C ) Ignore the demands of either union since you cannot be compelled legally to deal
with them at this stage. The reason why I am opting for ( c) instead of (d) is because
option ( d) calls for the EZ Components filing of a petition for certification election with
the Bureau of Labor Relations. Book V, Rule VIII, Sec. 2 of the Omnibus Rule
Implementing the labor Code ( as amended by D.O. 10-03, Series of 2003), which
implements Arts. 257 and 258 of the Labor Code, is explicit that a petition for
certification election shall be filed with the Regional Office which issued the petitioning
unions certificate of registration/certification of creation of chartered local. The
petition shall be heard and resolved by the MED- Arbiter. Filing it with the Bureau of
Labor relations rendered (d) a wrong answer.
Art. 258 of the Code, which empowers the "Bureau" to entertain the petition for
certification election of an employer, must be read alongside Art. 212 (b) of the Labor
Code which defines "Bureau" to mean as "the Bureau of Labor Relations and/or the
Labor Relations Division in the regional offices xxx in the Department of Labor, as well
as Art. 259 of the Code which tells us that it is the MED-Arbiter of the Labor Relations
Division in the regional offices who hears and decides certification election and that
appeal therefrom is not even to the Bureau of Labor Relations but to the DOLE
Secretary,
(2) Little Hands Garment Company, an unorganized manufacturer of children's
apparel with around 1,000 workers, suffered losses for the first time in history when
its US and European customers shifted their huge orders to China and Bangladesh.
The management informed its employees that it could no longer afford to provide

transportation shuttle services. Consequently, it announced that a nominal Fare

would be charged depending on the distance traveled by the workers availing of the
service.
Was the Little Hands Garments Company within its rights to withdraw this
benefit which it had unilaterally been providing to its employees? Select the best
answer(s) and briefly explain your reason(s) therefor.
(a) Yes, because it can withdraw a benefit that is unilaterally given;
(b) Yes, because it is suffering losses for the first time;
(c) Yes, because this is a management prerogative which is not due to any legal
or contractual obligation;
(d) No, because this amounts to a diminution of benefits which is prohibited by
the Labor Code;
(e) No, because it is a fringe benefit that has already ripened into a demandable
right or entitlement.10%

SUGGESTED ANSWER:
(c) Yes, because this is a management prerogative which Is not due to any legal
or contractual Obligation, - The facts of the case do not state the circumstances
through which the shuttle service may be considered as a benefit that ripened into a
demandable right, There is no showing that the benefit has been deliberately and
consistently granted, i.e. with the employer's full consciousness that despite its not
being bound by law or contract to grant it, it just the same granted the benefit.
ANOTHER SUGGESTED ANSWER:
(c) Yes, because this is a management prerogative which is not due to any legal
or contractual obligation;
An employer cannot be forced to continue giving a benefit, which is unilaterally
given as a management prerogative, when it can no longer afford to pay for it. To hold
otherwise, would be to penalize the employer for his past generosity. [Producers Bank
of the Philippines v. NLRC, 355 SCRA 489 (2001)].

ANOTHER SUGGESTED ANSWER:

(a)Yes, because it can withdraw a benefit that is unilaterally given. The shuttle
service was not payable pursuant to a contract.
For a benefit, supplement or facility provided by the employer to ripen into a
demandable legal or contractual obligation, it must be shown that it was given over a
long period of time. It must be consistent. It must be with the deliberate intent of the
employer so as to make it amount to established practice. [Globe Mackay Cable and
Radio Corp, v. NLRC. 163 SCRA 71 (1988)], The Labor Code also provides that
facilities must be customarily provided by the employer to make their fair and
reasonable value form part of the wage.
The shuttle service must be part ofthe consideration for accepting the
employment. In one case decided by the Supreme Court, where the employees were
assigned in a remote place away from civilization, it was held that the fair and
reasonable value of housing, board, and recreational facilities was part of the wage.
Such facilities were considered part of the incentive for agreeing to be assigned in a
remote and secluded place of work. [Millares v. NLRC, 305 SCRA 500 (1999)]. Hence in
that case, they could not be withheld unilaterally by the employer without causing
diminution of benefits for the employee.

No similar fact is present in the problem given. It is not alleged how long this
shuttle service has been provided by the company. It does not appear to be part of the
incentive for accepting the employment.
In the Manila Bank case, it was also held that there is nothing to compel the employer
to be liberal and generous to its employees in granting benefits when the employer is
suffering financial loss.
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.
(a) If you were ABC's legal counsel, how would you respond to this demand?
SUGGESTED ANSWER:
(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.
(b) How is a project worker different from a casual or contractual worker?
Briefly explain your answers, (6% )
SUGGESTED ANSWER:
(b) 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.
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 co-terminus with a project or phase thereof 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 (Jan, 2. 1997)]; There is no such requirement (or
an ordinary contractual worker.

III
(1.)

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. 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 da~ 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
the following:
(a) Antonio's charge of illegal dismissal; and
(b) Antonio's claim for overtime and other benefits, (6%)
SUGGESTED ANSWER:
(a) This is a case involving permissible job contracting. Antonio's charge of illegal
dismissal against Yosi Cigarette Factory will not prosper. Wagan Security Agency, an
independent contractor, is Antonio's direct employer. Yosi is only Antonio's indirect
employer (Art. 109, Labor Code). By force of law, there is in reality no employeremployee relationship between Yosi and Antonio. [Baguio, et al. v. NLRC,et al. 202
SCRA 465 (Oct. 4, 1991)].
(b) 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.
(2) 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.
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.
(a) Whose contention is correct, Weto or the HRD manager?
SUGGESTED ANSWER:
(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 (Section 2, RA6187). Jovyis 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.
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, RA 8187). To deny Weto this benefit would be to defeat the rationaie for
the law.
ANOTHER SUGGESTED ANSWER:
The HRD manager is correct. Since it is conceded that Weto earlier availed of four (4)
paternity leaves when his first wife gave birth to their four (4) children, he clearly
"already used up his entitlement under the law". His new wife's giving birth for the
first time would not, matter as the benefit given by. Section 2 of R.A. 8187 is an
exhaustible benefit granted to a father "for the first four (4) deliveries of the legitimate
spouse with whom he is cohabiting".
(b) Is Jovy entitled to maternity leave benefits? (6%)
SUGGESTED ANSWER:
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. 1161, as amended); otherwise; she is not entitled to the benefit.

(I.) 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 talkshow 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) 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?

SUGGESTED ANSWER:

(a) As the network's legal counsel, I will argue that no employer employee relationship
exists between the network and Ms. Vartan. Reference has to be made to the terms
and conditions provided under the contract and the parties shall be governed by the
provisions of the New Civil Code. In the case of Jay Sonza v. ABS-CBN, 431 SCRA583
(2004) it was held that a TN 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,OOO for her to be considered a mere employee.
(b) As counsel for the-talk-show host, how would you argue your case? (6%)

SUGGESTED ANSWER:
(b) 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, 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 dismiss; and (4) power of
control.
V
During the open forum following your lecture' before members of various unions
affiliated with a labor federation, you were asked the following questions:
(a) 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? (4%)
SUGGESTED ANSWER:
The employee will receive 200% of his regular dally wage when both regular holidays
fall on the same day and he does not work. The law provides that he shall receive his
regular dally 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. v. Court of Appeals, 425 SCRA 478 (2004)],

(a)Maya rank-and-file employee. Who is not a member of the union representing his
bargaining unit, avail of the wage increases which the union negotiated for its
members? (4%).
SUGGESTED ANSWER:
(a) Yes. The beneficiaries of a Collective Bargaining Agreement include NonUnion Members; other Wise, there will be discrimination which is prohibited by law.
[New Pacific Timber and Supply Co., Inc. v. NLRC, 328 SCRA 424 (2000)).
(b) What is ,meant by "payroll reinstatement" and when does it apply? (4%)
SUGGESTED ANSWER:
(b) Payroll reinstatement is a form of reinstatement which an employer may opt
to exercise in lieu of an actual reinstatement. Here, the illegally dismissed employee is
to receive his basic pay without the obligation of rendering any service to the employer.
This occurs when a Labor Arbiter decides that an employee was illegally dismissed and
as a consequence awards reinstatement, pursuant to Article 279 of the Labor Code.
Such award of reinstatement, according to Art. 223 of the Code, is immediately
executory even pending appeal.
(b) 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? (4%)
State your answers and your reasons therefor.
SUGGESTED ANSWER:
(c) A "compressed work week" schedule may be authorized under the following
conditions:
I.)
II.)
III.)
IV.)

V.)
VI.)

The employee voluntarily agrees to it.

There is no diminution in their weekly or monthly take home pay or fringe
benefits.
The benefits are more than or at least commensurate or equal to what is due
the employees without the compressed work week.
Overtime pay will be due and demandable when they are required to work on
those days which should have ceased to be working days because of the
compressed work week schedule.
No strenuous physical exertion or that they are given adequate rest periods.
It must be for a temporary duration as determined by the Department of
Labor.

VI

A group of employees in XYZFactory belonging to a religious sect. in conformity with

the teachings and dictates of their religion, refused to join the labor union in the
factory. The labor union was able te negotiate a substantial wage increase in its
collective bargaining agreement with management. Aprovision therein stated that the
wage increase would be paid to the members of the union only in view of a "closed
shop" union security clause in the new agreement. The members of the sect protested
and demanded that the wage increase be extended to them. The officers of the union
countered by demanding their termination from the company pursuant to the "closed
shop" provision in the just-concluded
CBA.
(a) is the CBA provision valid?
SUGGESTED ANSWER:
(a) No, the CBA provision is not valid. The benefits of a CBA are extendible to all
employees regardless of their membership in the union, because to withhold the same
from non-union members would be to discriminate against them. [National Brewery &
A. Wed Industries Labor Union of the Philippines v. San Miguel Brewery, Inc., 8 SCRA
805 (1963).
(b) Should the company comply with the union's demand of terminating the members of
tile religious sect? [6%)

SUGGESTED ANSWER:
(c) No, the company should not comply with the union's demand. In the case of
[Victonano v. Elizalde Rope Workers' Union, 59 SCRA 54 (1974)] religious freedom is
superior to the freedom to contract. In the hierarchy of values, religious freedom takes
a preferred position and the right to contract must yield; accordingly, the CBA
provision which is contractual in nature must not prevail over the duty to respect the
workers' constitutional right to religious freedom.
VII
(1.)

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.
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.
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. (5% )
SUGGESTED ANSWER:

Code.

(1) I will grant RickylViar;in the retirement benefits under Art. 287 of the Labor

Art. 287 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.
(2) Carissa. a comely bank teller, was due for her performance evaluation which
is conducted every six months. A rating of "outstanding" is rewarded with a merit
increase. She was given a "below average" rating in the last two periods. According to
the bank's personnel policy, a, third rating of "below average" will result in
termination. Mr. Perry Winkle called Carissa into his office a few days before
submitting her performance ratings. He entitled her to spend the night with him in his
rest house. She politely declined. Undaunted, Mr. Winkle renewed his invitation, and
Carissa again declined. He then warned her to "watch out" because she might regret, it
later on. A few days later, Carissa found that her third and last rating was again "below
average." Carissa then filed a complaint for sexual harassment against Mr. Winkle with
the Department of Labor and Employment, in his counter-affidavit, he claimed that he
was enamored with Carissa. He denied having demanded, much less received any
sexual favors from her in consideration of giving her an "outstanding' rating. He also
alleged that the complaint was premature because Carissa failed to refer the matter to
the Committee on Decorum and Discipline for investigation and resolution before the
case against him was filed. In her reply affidavit, Carissa claimed that there was no
need for a prior referral to the Committee on Decorum and Discipline of her complaint.

Resolve the case with reasons. (5%)

SUGGESTED ANSWER:
(2) I will hold Mr. Perry Winkle guilty of sexual harassment. This resolution is predicated
mainly upon the following considerations:
1. Mr. Perry Winkle exercises authority, Influence or moral ascendancy over
Carissa;
2. Mr. Winkle's insistence in inviting Carissa "to spend the night with him in his
rest house" is pregnant with sexual meaning as to imply the request or demand for a
sexual favor;
3. My. Winkles warning of "watch out" clearly manifests that the refusal of such
sexual favor would jeopardize Carissa's continued employment; and
4, Mr. Winkle's invitation for such sexual favor will clearly result in an
intimidating, hostile, or otherwise offensive working environment for Carissa, Carissa
is correct in stating that there was no need for a prior referral of her complaint to the
Committee on Decorum and Discipline, because nothing in the law shall preclude the
victim of sexual harassment from instituting a separate and independent action for
damages and other affirmative relief (Section 6, R.A. No. 7877).
VIII
(I) 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. 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. (5%)
SUGGESTED ANSWER:
The GSIS is not correct in denying the claim, because Odeck was on leave when
he was killed. The law only requires that the GSIS member was in the service at the
time of his death so that his beneficiaries may claim survivorship benefits. Odeck was

still in the service. He was just on leave. He intends to report back to work after his
leave.
ANOTHER SUGGESTED ANSWER:
The GSIS is correct in denying the claim because Zhop was not the dependent spouse.
Though she may still be the legal spouse who at the same time may not have
remarried, she is no longer dependent of Odeck for support. Odeck left her years back.
The law defines as primary beneficiary the spouse who is a legal and dependent of the
member for support.
ANOTHER SUGGESTED ANSWER:
GSIS is wrong. Anent (a), for Zhop to be entitled to death benefit all that Sec. 21
(a). par. l(i} of the GSIS law requires is that Odeck be "in the service at the time of his
death". It does not require that death occurs while Odeck is on duty. A leave of
absence is in fact a benefit of an employee who is in service. Therefore, Odeck was "in
service" at the time of his death.
Regarding (b) what .section 21(a) provides is an entitlement of "primary
beneficiaries", not dependents. In this regard, Sec. 2 (g) defines a primary beneficiary
to mean - "The legal dependent spouse until he/she remarries xxx". Having been
abandoned by Odeck does not necessarily mean that Zhop no longer depends on
Odeck's support. She in fact, needs it all the more.
(2) 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 falJed to employ the four sisters in Saudi Arabia.
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 PI20.000,00
and indicated that they were no longer interested to pursue the case against Maryrose.
Resolve the case with reasons, (5%)

SUGGESTED ANSWER:
(3) 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 PI20.000.00 she received does not likewise extinguish her
criminal liability. If at all, It satisfies only her availability. The affidavit of desistance,
moreover, does not bar Maryrose's prosecution, The criminal offense Is not
extinguished by such desistance. Besides, affidavit of desistance, as a rule, is frowned
upon.
IX
Kitchie Tempo was one of approximately 500 production operators at HlTEC
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.
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 our advice be? (5%)
SUGGESTED ANSWER:
Kitchies "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. 1of Art. 280, Kitchie is a regular (not casual)
employee.
Also, Kitchie obtained permanent regular employment .when she was repeatedly
re hired by HITEC. 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 of the Labor Code.
A "below average" rating would matter if Kitchie was made to undergo
probationary employment, or was a probationary employee under Art. 281 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 of the Labor Code.
A. 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 neuro psychiatric evaluation test by Mahusay Medical Center. RS said he
already submitted the result of his evaluation test by Brent Medical Clinic a~
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. 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. (5%)

SUGGESTED ANSWER:
The facts in the question raise these issues:
1. When RSwas placed on "off detail" or "floating status" for more than six months, can
RS claim that he was terminated?
2. Is there a valid reason for the termination of RS?
On the first issue, based on prevailing jurisprudence, RS can be considered as
terminated because he has been placed on "off detail" or "floating status" for a period
which Is more than six (6) months.
On the second Issue, it is true that disease is Ii ground for termination. But the
neuro-psychiatric evaluation test by the Mahusay Medical Center Is not the
certification required for disease to be a ground for termination. The Rules and
Regulations implementing the Labor Code require a certification by a public health

authority that the disease is of such nature or at such a stage that it cannot be cured
within a period of six (6) months even with proper medical treatment.
ANOTHER SUGGESTED ANSWER:
The issues involved are as follows:
1. Is there constructive dismissal?
2. Is there a valid exercise of management prerogative?
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 SCRA74, [1990]. On the second
issue, there is no valld 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.
B. A spinster schlool teacher took pity on one of her pupils, a robust and precocious 12year old boy whose poor family could barely afford the cost of his schooling. She lives
alone at her house near the school after her housemaid left. In the afternoon, she lets
the boy do various chores as cleaning, fetching water and all kinds of errands after
school hours. She gives him rice and P30.00 before the boy' goes home at 7:00 every
night. The school principal learned about it and charged 'her with violating the law
which prohibits the employment of children below 15 years of age. In her defense, the
teacher stated that the work performed by her pupil is not hazardous and she invoked
the exception provided in the Department Order of DOLE for the engagement of
persons in domestic and household service.
Is her defense tenable? Reason. (5%)
SUGGESTED ANSWER:
No, her defense is not tenable. Under Article 139 of the Labor Code on
"minimum employable age", no child below 15"years of age shall be employed except
when he works directly under the sole responsibility of his parents or guardian, the
provisions of the alleged Department Order of DOLE to the contrary notwithstanding.
A mere Department Order cannot prevail over the express prohibitory provisions of the
Labor Code.
[Note: Sec. 3, RA9231 allows a child below 15 years of age to work for not more
than 20 hours a week; provided, that the work shall not be more than four (4) hours at
any given day; provided. further, that he does not work between 8 o'clock in the
evening and 6 o'clock in the morning of the following day; and provided, finally, that

the work is not hazardous or deleterious to his health or morals. THIS IS A RECENT
LAW APPROVED ON JULY 28, 2003, which is beyond the cut-off period of the Bar
Exams]
II
A. Distinguish clearly but briefly between:
1. Sympathy strike and general strike.
2. Company union and union shop.
3. Lock-out and closed shop.
4. Consent election and certification election.

5.

Social security and union security.

SUGGESTED ANSWERS:
A. 1. In both a sympathy strike and in a general strike, there is a stoppage of work by the
concerted action of employees. In both kinds of strike, the strike is not the result of a
labor or Industrial dispute.
As the name implies, workers go on a sympathy strike to show their sympathy
for certain workers who are on strike. On the other hand, in a general strike, workers
in the country or in a region, province, or city or municipality go on a strike to publicly
protest a certain policy or action taken by the government. Thus, for instance, a
general strike may be declared by workers to publicly protest the stand of President
Arroyo that she is against an Increase of the minimum wage at this time.
2. A company union is a union of employees dominated or under the control of
the employer of said employees. A union shop, on the other hand, refers to a union
security clause in a collective bargaining agreement whereby the employer agrees to
terminate the employment of an employee who has not become a "member of the
union which Is the exclusive collective bargaining representative of the employees in a
bargaining unit within a certain period after the employment of said employee or has
ceased to become a union member.
3. Lockout refers to the temporary refusal of an employer to furnish work as a result of a
labor or Industrial dispute. Closed shop, on the other hand, refers to a union security
clause in a collective bargaining agreement whereby the employer agrees not to employ

any person who is not a member of the exclusive collective bargaining representative of
the employees in a bargaining unit.
4. "A certification election and a consent election are" both elections held to determine
through secret ballot the sole and exclusive representative of the" employees in an
appropriate bargaining unit for the purpose of collective bargaining or negotiations.
There is this difference, however. 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 of the Social Security is the protection given
by social insurance programs such as the programs of the SSS, GSIS and PHIC
undertaken pursuant to their respective charters, including the employees
compensation program provided for in the Labor Code. The aforesaid programs provide
income benefits and/or medical care when contingencies like sickness, (also maternity
in the case of SSS) disability, death, or retirement, including in the case of the GSIS,
separation and unemployment benefits.
On the other hand, union security refers to a clause in a collective bargaining
agreement whereby the employer agrees to employ or continue in employment only
workers who are members of the exclusive collective bargaining representative of the
employees of said employer in a bargaining unit.
B. Enumerate and discuss briefly:
1. What are the statutory requisites for a valid strike by the workers? Should these
requisites be complied with substantially or strictly?
2. What are the authorized causes for a valid dismissal by the employer of an employee?
Why are they distinct from the just causes? (5%)
SUGGESTED ANSWERS:

B. 1. The statutory requisites for a valid strike are the following:

A strike may be declared only in cases of bargaining deadlocks or unfair labor
practices. Violations of collective bargaining agreements, except flagrant and/or
malicious refusal to comply with its economic provisions, shall not be considered
unfair labor practice and shall not be strikeable. No strike or lockout may be declared
on grounds involving inter-union and intra-union disputes.
No strike may be declared without first having filed a notice of strike or without
the necessary strike vote having been obtained and reported to the National
Conciliation and Mediation Board. A strike may actually take place only after a 3D-

daywaiting period after notice was filed for a strike arising from a bargaining deadlock
or after a 15-day waiting period for an unfair labor practice strike. Notice about a
strike vote should be given seven days before the intended strike.

No strike can be declared after assumption of jurisdiction by the Secretary of

Labor and Employment 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 or lockout.
ANOTHER SUGGESTED ANSWER:
1. 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
(1) Notice of Intent. Filing of Notice of Intent to Strike with NCMB.
(2) Cooling off Period.- Observance of Cooling-off Period.
(a) ULP - 15 days before intended date of strike
(b) Bargaining Deadlock - 30 days before intended date of strike.
(3) Strike Vote and Filing of the same with the NCMB and the observance
of the seven (7) days strike ban. [Art. 263 (c-f). Labor Code].
(c) CauseThe cause of a strike must be a labor or industrial dispute. [Art. 212(0],
Labor Code],
Compliance with all legal requirements are meant to be and should be
mandatory. (National Federation of Sugar Workers v. Ovajera. 114 SCRA354 [1982].
2. The authorized causes for a valid dismissal are the following:
a. installation of labor-saving devices

b. redundancy
c. retrenchment to prevent losses
d. the closing or cessation of operation of the establishment or
undertaking
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.
III
A. Which of the following may be considered among industries most vital to national
interest as to be the subject of immediate assumption of jurisdiction by the
Secretary of Labor and Employment or certification for compulsory arbitration in
case of strike or work stoppage arising from a labor dispute?
(1) Bulletin daily newspaper publishing company.
(2) Local franchise of Jollibee and Starbucks.
(3) Shipping and port services in Cebu and Manila.
(4) Enchanted Kingdom, Elephant island and Boracay Resort,
(5) LBC, DHL and FedEx centers.
Justify your answer or choice. [5%)
SUGGESTED ANSWER:
Certification of labor dispute for immediate assumption of jurisdiction by the
Secretary of the Department of Labor and Employment, as Indispensable to national
interest. (Art. 263 [g].Labor Code).
1. Bulletin Daily Newspaper. Access to Information. e.g. local, foreign, or
otherwise are requirements for an informed citizenry.
2. Shipping and port services in Cebu and Manila. The country needs domestic sea
transport due to our topography and for the smooth flow of business, and government
operations.

3. LBC, DHL, FEDEx Centers. Couriers are essential to foreign and domestic business
and government operations.
B. Concerned Filipino contract workers in the Middle East reported to the Department of
Foreign Affairs (DFA) that XYZ, a private recruitment and placement agency, is
covertly transporting extremists to, terrorist training camps abroad. Intelligence
agencies of the government allegedly confirmed the report.
Upon being alerted by the DFA, the Department of Labor and Employment
issued orders cancelling the licenses of XYZ, and imposing an immediate travel ban
on its recruits for the Middle East. XYZ appealed to the Office of the President to
reverse and set aside the DOLE orders, citing damages from loss of employment of its
recruits, and violations of due process including lack of noNce and hearing by DOLE.
The DOLE in its answer claimed the existence of an emergency in the Middle East
which required prompt measures to protect the life and limb of OFWs from a clear
and present danger posed by the ongoing war against terrorism.
Should the DOLE orders be upheld or set aside? (5%].
SUGGESTED ANSWER:
B. 1. The DOLE order cancelling the licenses of XYZ is void because a report
that an agency is covertly transporting extremists is not a valid ground for cancellation
of a Certificate of Registration (Art. 239, Labor Code) and there is failure of due
process as no hearing was conducted prior to the cancellation (Art. 238, Labor Code).
2. The DOLE order imposing the travel ban is valid because it is a valid exercise
of police power to protect the national interest (Sec. 3, Art. XIll, Constitution on full
protection to labor safety of workers) and on the rule making authority of the
Secretary of Labor (Art. 5. Labor Code; Phil. Assn. of Service Exporters v. Drilon, 163
SCRA 386 [1988]).

ANOTHER SUGGESTED ANSWER:

The DOLE orders should be set aside. It is true that the Migrant Workers and
Overseas Filipinos Act, particularly Its Section 5, could be the basis of the power, of
DOLE to effect a ban on the deployment of OFWs by XYZ, If the ban, however " is for
the purpose of preventing XYZ from transporting extremists to terrorist training camps
abroad, this is a -police and national security, problem better dealt with by the police
or the Office of the National Security Adviser.

More importantly, the cancellation of the license of XYZ requires notice and
hearing. Absent such notice and hearing, the order of cancellation of the Secretary of
Labor and Employment is null and void because of the denial of due process.
IV
A. Under a seaman's contract of employment with a local manning agent of a foreign
shipping company. Capt. TROY embarked on an ocean-going vessel in good health, one
stormy night at sea, he was drenched, with rainwater. The following morning, he
contracted fever which lasted for days. He suffered loose bowel movement, lost his
appetite, and eventually he died before a scheduled airlift to the nearest port.
Subsequently, the widow of Capt. TROY complained against the local manning agent
and its foreign principal before the Regional Arbitration, Branch of DOLE, for actual
and exemplary damages and attorney's fees. She invoke the Labor Code provision
which requires the employer to provide all necessary assistance to ensure the
adequate and necessary medical attendance and treatment of the injured or sick
employee in case of emergency.
Respondents moved to dismiss the complaint on the ground that the Labor
Arbiter has no jurisdiction over the complaint for damages arising from illness and
death of Capt. TROY abroad. Resolve the motion with reasons. (5%).
SUGGESTED ANSWER:
In Tolosa v. NLRC, (G.R. 149578. April 10, 2003, the Supreme Court held that
what we have in this case is a claim arising from tort or quasi-delict. In such a
situation; the seaman who died on November 18, 1992, cannot sue before the Labor
Arbiter. But this will not apply now, as under Sec. 10, RA. 8042. [effective June
7.1995], what we have is a claim "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 damages, cognizable
by the "Labor Arbiters of the National Labor Relations Commission" (NLRC) who have
the original and exclusive jurisdiction thereon.
B. Pedrito Masculado. a college graduate from the province, tried his luck in the city and
landed a job as 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. Being well-built and physically attractive,
his 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."
Is Mr. Barak liable for sexual harassment committed in a work-related or
employment environment? (5%)
SUGGESTED ANSWER:
Yes, the elements of sexual harassment are all present.
The act of Mr. Barak was committed in a workplace.
Mr. Barak. as supervisor of Pedrito Masculado, has' authority, influence and
moral ascendancy over Masculado.
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 regarding the latter's employment.
It is not impossible for a male, who is a homosexual, to ask for a sexual favor
from another male.
ANOTHER SUGGESTED ANSWER:
I do not see any sexual favor being solicited. Having a "little drink" in Mr.
Barak's Condo Unit, as condition for a "favorable recommendation is not one of the
prohibited acts enumerated in Sec. 3 (a) of R.A. 7877, otherwise known as the AntiSexual Harassment Act of 1995.
V
A. MPH Labor Union is the duly certified bargaining representative of the rank-and-file
employees of MM Park Hotel since the 1970's. The collective bargaining agreement
contained union shop security provisions. After the signing of the 2000 - 2005 CBA,
the Union demanded the dismissal of 3 employees, XX. YY and ZZ, pursuant to the
union security clause in the CBA.
The Hotel Management replied that it was legally impossible to comply with the
demand of the Union. It might even be construed as unfair labor practice. For it
appeared that XX, YY and ZZ had been recently promoted as supervisors and resigned
from the Union. But according to the Union. The three submitted their resignations
outside the freedom period after the 1996 - 2000 CBA expired on June 30. 2000. The

Union argued that the Hotel Management could not skirt its obligation to respect and
implement the union security clause by promoting the three employees. That could be
viewed as rewarding employees for their disloyalty to the union, said the union officers.
Does the union security clause sufficiently justify the demand for dismissal of
the three employees or not? May the Hotel Management validly refuse the Union's
demand? (5%)
SUGGESTED ANSWER:
No. The Union Security Clause does not justify the dismissal of the promoted
supervisors who were formerly members of the rank- and-file union. 1
Yes. The Hotel Management may validity refuse to dismiss the supervisors.
As supervisors, they are no longer covered by the CBA of the employer and the
rank-and- file union. The law does not require a promoted supervisor to resign upon
promotion from their membership in the rank-and- file.1e union; rather, by operation
of law, they can no longer continue their membership with the rank-and-file union.
Art. 245. Of the Labor Code provides that supervisory employees shall not be
eligible for membership in a labor organization 'of the rank-and-file employees but,
may join, assist, or form separate labor organizations of their own.
B. The CBA between the Company and the rank and- file Union contained the following
provision;
"Section 3. MEAL ALLOWANCE. The Company agrees to grant a MEAL,
ALLOWANCE of TEN PESOS (PIO.OO) to all employees who render at least TWO (2)
hours or more of actual overtime work on a workday, and FREE MEALS, as presently
practiced, not exceeding TWENTY FIVE PESOS (P25.00) after THREE (3) hours of
actual overtime work."
Dispute in the interpretation of the above provision arose as the Company
asserts that the phrase "after three (3) hours of actual overtime work " does not mean
after exactly three (3) hours of actual overtime work: it means after more than three (3)
hours of actual overtime work. The Union. On the other hand, maintained that "after
three (3) hours of actual overtime work" simply means after rendering exactly, or no
less than three (3) hours of actual overtime work.
Which interpretation do you think should prevail? (5%)
SUGGESTED ANSWER:

The interpretation of the union should prevail.

In a Supreme Court decision, it was ruled that the condition "after three (3)
hours of actual overtime work is satisfied after exactly three (3) hours of actual
overtime work.
VI
A. Gabriela Liwanag has been working as 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. 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? (5%)
SUGGESTED ANSWER:
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 public health authority that the disease is of such a
nature or such a stage that it cannot be cured within a period of six (6) months even
with proper medical treatment. (Implementing Rules, Book VI, Rule I, Sec. 8, Labor
Code).
B. 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.
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 SSl.

SSI learned that FX's group was not registered. No strike vote and strike notice
were filed prior to the picket. The guards were told not to allow FX entry 10 the
company premises as management considered him effectively terminated. Other union
members were accepted back to work by SSl.
Was the dismissal of FX for a valid cause? Was due process observed? (5%)
SUGGESTED ANSWER:
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.
VII
A. 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 work load or emergency problems needing his expertise.
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?
(5%)
SUGGESTED ANSWER:
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 v/ho 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

VIII

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.
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.
ANOTHER SUGGESTED ANSWER:
If Gil Bates can effectively utilize the Saturdays in his own interest even "while on
call", said hours on Saturdays are not compensable. However, if during said hours on
Saturdays, Bates is actually required to attend to urgent work to the extent of leaving
what he is doing, then the same are compensable, working hours to the extent of the
actual hours of work rendered by him.
The compensation paid by the company to Bates for said hours worked on
Saturdays should be reported to the SSS. This is so because the basis of computing
the SSS contribution includes all actual, remuneration, including allowances and
cash value of any compensation paid in any medium other than cash.
B. 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 deiived 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.
(5%)

Are these boatmen entitled to overtime pay, holiday pay, and 13 th month pay?

SUGGESTED ANSWER:
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, among others, to 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.
ANOTHER SUGGESTED ANSWER:
No. The arrangement between the boat owner and the boat operators/crew
members partook of the nature of a joint venture. The boatmen did not receive, fixed
compensation as they shared only in the cash collections from cargo fees and
passenger fares, less expenses for fuel, food, landing fees and spare parts. It

appears that there was neither right of control nor actual exercise of such right on
the part of the beat owner over the boatmen. It is clear that there was no employeremployee relationship between the beat owner and the boatmen. As such, these
boatmen are not entitled to overtime pay, holiday pay and 13th month pay.
VIII
A. Clean Manpower Inc. (CMI) had provided 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.
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. (5%)
SUGGESTED ANSWER:
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 xxx (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" xxx 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 xxx," (Arts. 106 and 107, Labor Code)
B.

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. (5%)
SUGGESTED ANSWER:
The benefits Atty. CLM could claim from the GSIS are:

1. Employees compensation which shall include both income and medical and related benefits,
including rehabilitation;
2. Temporary total disability benefit;
3. Permanent total disability benefit;

4. Separation benefit; and

5. Retirement benefit.

IX

A. 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.
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? (5%)
SUGGESTED ANSWER:
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.
ANOTHER SUGGESTED ANSWER:
The workers are entitled to the constitutional (Art. XIII, Sec. 3, 1987
Constitution) and statutory (Art. 279, Labor Code) guarantees of security of tenure.
When this right to security of tenure is violated, an action for illegal dismissal, is an
available remedy.
If they are dismissed because of union activities, an action for unfair labor
practice can be filed (Sec. 3, Art. XIII, Constitution; Art. 243, Labor Code.) If
successful, the workers will be entitled to full backwages, including money value of
benefits, and reinstatement without loss of seniority (Art. 279, Labor Code).
B. A, B, C and D (treasurer, accountant, elementary department Principal, and
secretary of the Director, respectively), regular employees of a private educational
institution, were administratively charged for their participation in a picket held in
front of the campus after office hours. Several faculty members, non-academic stall
and students joined the peaceful prayer rally organized by disgruntled employees to
protest certain alleged abuses of the incumbent School Director. Subsequently, the
rank- and-file employees succeeded in forming the first and only union of the School.
During the investigation, the administration discovered that two (2) days prior to
the rally, A, B, C and D attended the meeting of the School's employees' association
which planned the protest activity. Two well-known organizers/leaders of a national
labor federation were also present.
A, B, C and D were dismissed by the School on the ground of violating the Labor

Code which prohibits managerial employees to join, assist or form any labor
organization.
Is the contention of the School tenable? Is the dismissal of A, B, C and D valid?
Explain. (5%)
SUGGESTED ANSWER:
The dismissal of A, B, C and D on the ground that they violated the Labor Code
provision which states that managerial employees "are not eligible to join, assist or
form any labor organization" is not valid. The Labor Code does not provide for any
sanction for the aforesaid acts. These acts could not be considered as just cause for
the termination of employment, either.
ANOTHER SUGGESTED ANSWER:
The dismissal of the managerial employees is invalid. The dismissal of the
management employees because of union activities, no matter how erroneous or
tenous may be the basis of the exercise, is a violation of the constitutional and
statutory guaranteed rights of self-organization, and an act of unfair labor practice.
(Sec. 3, Art. XIII, Constitution; Art. 243, Labor Code. See also Art. 248 (a), Labor
Code).
X
A. 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. 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 countrys supply
of chlorine for water treatment (which die company produces) would be affected
adversely if ABCs operations were closed down by the strikers.
Could the DOLE Secretary intervene, assume jurisdiction and issue a TRO
(Temporary Restraining Order)? Briefly justify your answer. (5%)
SUGGESTED ANSWER:
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 countrys supply of chlorine for water
treatment.
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 return to work order by
the Secretary of Labor and Employment upon her assumption of jurisdiction.
B. Because of alleged unfair labor practices" by the management of GFI System, a
government-owned and controlled financial corporation, Its employees walked out
from their jobs and refused to return to work until the management would grant their
union official recognition and start negotiations with them.

The leaders of the walk-out were dismissed, and the other participants were
suspended for sixty days. In arguing their case before the Civil Service Commission,
they cited the principle of social justice for workers and the right to self- organization
and collective action, including the right to strike. They claimed that the Constitution
shielded them from any penalty because their walk-out was a concerted action
pursuant to their rights guaranteed by the basic law.
Is the position taken by the walk-out leaders and participants legally correct?
Reason briefly. (5%)
SUGGESTED ANSWER:
The position taken by the walk-out leaders and participants is not legally correct.
They are government employees, and as such, they do not have the right to strike.
According to the actual wording of Section 3 of Article XIII of the Constitution, the
State "shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities including the right to
strike in accordance with law."
Thus, the last clause of the above-quoted provision of the Constitution makes it
very clear: the right to strike is not constitutional, it is statutory because the right
should be "in accordance with law. And there is as yet no law giving government
employees the right to strike.
ANOTHER SUGGESTED ANSWER:

No. What Art. XIII, Sec. 3 of the 1987 Constitution guarantees is "the right to
strike in accordance with law.
Assuming that what we have is a chartered government-owned and controlled
corporation, they cannot, under EO 180 and related jurisprudence, stage such walkout which is basically a case of strike.
Even if GFI was organized under the corporation law, still no such walk-out is
allowed without the employees complying with the requirements of a valid strike,
among which is that said strike or walk-out should be validly grounded on a (a)
deadlock in collective bargaining, or (b) unfair labor practice, either of which is not
present here.

5%
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.
SUGGESTED ANSWER:

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 119971) 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
wrongdoing. (Corazon Jamer v. NLRC, 278 SCRA 632 [1997])
ANOTHER SUGGESTED ANSWER:
No, social justice as a guiding principle in law may not be used by the courts if it
collides with the equal protection clause of the Constitution. Social justice is not a
magic wand applicable in all circumstances. Not all labor cases will be automatically
decided in favor of the worker. Management has also rights which are entitled to
recognition and protection; justice must be dispensed according to facts and law; and
social justice is not designed to destroy or oppress the employer.
Social justice as a guiding principle in Labor Law can be implemented side by side
with the equal protection clause of the Constitution.
In implementation of the principle of social justice, the Constitution commands
that the State shall afford protection to labor. Thus Labor Law may be pro-labor in
the sense that labor is given certain benefits not given to management. But this is
not necessarily violative of the equal protection clause of the Constitution because
said clause allows reasonable classification.
II
8%
Pablo was a farm-hand, in a plantation owned by ABC & Co., working
approximately 6 days a week for a good 15 years. Upon 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 memberemployee. Pablos 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. 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?
SUGGESTED ANSWER:
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 maybe 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 Pablos employer.
ANOTHER SUGGESTED ANSWER:
It is not a valid defense, for Pablo could be considered an employee of ABC & Co.
The elements of hiring, payment of wages, power to dismiss and power to control are
presumed from the fact that Pabio is working 6 days a week, for * 5 years now. Pablo's
use of his plow, harrow, burrow, carabao and other implements and his having his
own schedule of work hours withoutany supervision from the company do not erase
the element of control on the part of ABC & Co. because under the control test, it is
enough that the employers right to control exists. It is not necessary that the same
be exercised by the employer, it is enough that such right to control exists. (Religious
of the Virgin Mary v. NLRC, 316 SCRA 614, 629 [9991]).
Ill
5%
In a labor dispute, (he Secretary of Labor issued an "Assumption Order" Give the
legal implications of such an order.
SUGGESTED ANSWER:
Under Art. 263(g) of the Labor Code, such assumption shall have the effect of
automatically enjoining the intended or impending strike or lockout as specified 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. 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. Those who violate the foregoing
shall be subject to disciplinary action or even criminal prosecution.
Under Art. 264 of the Labor Code, no strike or lockout shall be declared after the
assumption of jurisdiction by the Secretary.
IV
8%
Magdalo, a labor union in Oakwood, a furniture manufacturing firm, after
failing in its negotiations with Oakwood, filed with the Department of Labor and
Employment (DOLE) a notice of strike The DOLE summoned Magdalo and Oakwood
for conciliation hearings to resolve the deadlock. Unable to agree despite efforts of
the DOLE, Magdalo called a strike participated in by its officers and union members
including Cesar Trinio, a rank-and-file employee, who led the "walk out." Oakwood
filed a petition to declare illegal the strike which Magdalo staged without observing
the seven-day ban under the Labor Code. Oakwood claimed that the strike being
illegal, all those who participated therein, including Cesar Trinio, could be dismissed

as, in fact, they were so dismissed by Oakwood. Decide the case.

SUGGESTED ANSWER:
When Oakwood dismissed all the officers and members of the union who
participated in the strike which was declared illegal because it was staged without
observing the seven- day ban under the Labor Code, Oakwood illegally dismissed the
union members, including Cesar Trinio. The Labor Code provides that a union officer
who knowingly participates in an illegal strike loses his employment status. Thus,
the union officers were legally dismissed. But for a union member to lose his
employment status, he should have committed illegal acts during the strike, like acts
of violence, coercion or intimidation or obstruction of ingress to or egress from the
employers premises for lawful purposes or obstruction of public thoroughfares. The
union members, including Cesar Trino, did not commit any of these acts. Thus, it
would be illegal to dismiss them.
V
6%
The Labor Code treats differently in various aspects the employment of (i)
.managerial employees, (ii) supervisory employees, and (iii) rank-and-file
employees. State the basic distinguishing features of each type of employment.

SUGGESTED ANSWER:
Under Book Three of the Labor Code, a managerial employee refers to one whose
primary duty consists of the management of the establishment in which he is
employed or of a department or subdivision thereof, and to other officers or
members of the managerial staff. A supervisor and a rank and file employee can be
considered as members of the managerial staff, and therefore, a managerial
employee if their primary duty consists of work directly related to management
policies; if they customarily and regularly exercise discretion and independent
judgment; regularly and directly assist a proprietor or a managerial employee whose
primary duty consists of the management of the establishment in which they are
employed or a subdivision thereof; or execute under general supervision work along
specialized or technical lines requiring special training, experience,-or knowledge; or
execute under general supervision special assignments and tasks; and who do not
devote more than 20 percent of their hours worked in a work-week to activities
which are not directly and closely related to the performance of the work described
above. AH others are rank and file employees under said Book (Art. 82, Labor Code,
Sec. 2 (c), Rule I, Bk. Ill, Omnibus Rules Implementing the Labor Code).
Under Book Five of the Labor Code, Managerial employee is one who is vested
with powers or prerogatives to lay down, and execute management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. A
supervisory employee is one who, in the interest of the employer, effectively
recommends such managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent judgment. All
employees not falling within any of the above definitions are considered rank-and-file
employees for purposes of this Book (Art. 212 (M), Labor Code).

On the matter of right to self-organization, a managerial employee cannot exercise

such right; while a supervisor and a rank and file employee can (Arts. 245, 243, Labor
Code).
VI
8%
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. 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.

SUGGESTED ANSWER:

The employer is correct. While Art. 88 of the Labor Code clearly provides that
undertime work on any other particular day shall not be offset by overtime work on
any other day, this rule is inapplicable in this case pertaining to Saturday work which
in reality does not constitute overtime work as Saturday is stiil a working day under
the law and there is no CBA stipulation against it.

ANOTHER SUGGESTED ANSWER:

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 being the law between the
parties and the Union having shown that the employees rendered overtime work on
Saturday, the contention of the employer is not tenable. The employer cannot use the
undertime of 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.
VII
5%
There are instances when a certification election is mandatory. What is the
rationale for such a legal mandate?

SUGGESTED ANSWER:
According to the Labor Code, in any establishment where there is no certified
bargaining agent, a certification election shall 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.
VIII
8%
The employer company, in a directive to the union president, ordered the transfer of
some of its employees, including a number of union officials, to its plant offices. The
order was opposed by the union. Ultimately, the union filed an unfair labor practice
against the company alleging that the purported transfer of its union officials was
unjust and in violation of the Collective Bargaining Agreement (CBA). Pursuant to the
terms of the CBA, the dispute was referred to a voluntary arbitrator who later ruled
on the issues raised by the parties. Could it later be validly asserted that the
decision" of the voluntary arbitrator would have no 'compulsory" effect on the
parties? Explain.
No. A voluntary arbitrator chosen under the Grievance Machinery of a CBA can
exercise jurisdiction not only on disputes involving interpretation/implementation of
a CBA and/or company rules, personnel policies (Art. 261, Labor Code) but also,
upon agreement of the parties, all other labor disputes including unfair labor
practice (Art. 262, Labor Code). As no objection was raised by any of the parties
when the dispute was referred to a voluntary arbitrator who later ruled on the issues
raised by the parties, itfollows that what we have is voluntary arbitration agreed
upon by the parties. His decision is binding upon the parties and may be enforced
through any of the sheriffs, including those of the NLRC, he may deputize.
ANOTHER SUGGESTED ANSWER:
No. The award of voluntary arbitrators acting within the scope of their authority
determines the rights of the parties, and their decisions have the same legal effects
as a judgment of the Court. Such decisions on matters of fact or law are conclusive,
and all matters in the award are thenceforth res judicata on the theory that the
matter has been adjudged by the tribunal which the parties have agreed to make final
as tribunal of last resort. (Volkschel Labor Union v. NLRC, 98 SCRA 314 f19801).
IX
5%
At what particular point does a labor organization acquire a legal personality?

(a) On the date the agreement to organize the union is signed by the majority of all its
members; or
(b) On the date the application for registration is duly filed with the Department of
Labor; or
(c) On the date appearing on the Certificate of Registration;
or
(d) On the date the Certificate of Registration is actually issued; or
(e) None of the above.
Choose the correct answer.
SUGGESTED ANSWER:
On the date the Certificate of Registration is actually issued. Any applicant labor
organization, association or group of unions or workers shall acquire legal personality
and shall be entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration.
ANOTHER SUGGESTED ANSWER:
On the date appearing on the Certificate of Registration.
When the law provides that a labor organization xxx shall acquire legal personality
xxx upon issuance of the certificate of registration, the date appearing therein is
legally presumed - under the rule on presumption of regularity - to be its date of
issuance. Actual issuance is a contentious evidentiary issue that can hardly be
resolved, not to mention that the law does not speak of actual issuance.
X
8%
XYZ Employees Association filed a complaint against ABC Bank for wrongful
diminution of benefits. It alleged that the bank had been providing for a mid-year
bonus equivalent to one-month basic pay and a Christmas bonus equivalent to onemonth basic pay since 1971. Upon the effectivity of Presidential Decree (P.D.) No. 851
in 1975 which granted the 13 th month pay, the bank started giving its employees a
one-month basic pay as mid-year bonus, one-month basic pay as Christmas bonus,
and one-month basic pay as 13 th month pay. In 1980, the bank was placed under
conservatorship and by virtue of a monetary board resolution of the Central Bank,
the bank only gave one month basic pay mandated by P.D. 851, and it no longer gave
its employees the traditional mid-year and Christmas bonuses. Could ABC Bank be
compelled, given the circumstances, to continue paying its employees the traditional
mid-year and Christmas bonuses in addition to the 13th month pay?
SUGGESTED ANSWER:

No. The grant of a bonus is a prerogative, not an obligation, of the employer.

(Traders Royal Bank v. NLRC, 189 SCRA 274 PI9901). The matter of giving a bonus
over and above that which is required by law is entirely dependent on the financial
capability of the employer to give it. (Businessday v. NLRC. 221 SCRA 9 f19931).
Hence, given the circumstances, ABC Bank cannot be compelled to continue
paying its employees the traditional mid-year and Christmas bonuses in addition to
the 13th month pay.
XI
5%
How do the provisions of the law on labor relations interrelate, if at all, with the
provisions pertaining to labor standards?

SUGGESTED ANSWER:

Labor relations law focuses its provisions on the collective aspects of employeremployee relationship. Its legal provisions deal with employees organizing unions
and how through these unions, employees are able to have collective bargaining with
their employer.
On the other hand, labor standards law focuses on the terms and conditions of
employment of employees as individual employees or those legal provisions dealing
with wages, hours of work and other terms and conditions of employment.
There may be instances when the provisions of labor relations law may interrelate
with provisions of labor standards law. Thus, a CBA which is dealt with in labor
relations law may have provisions that improves upon the minimum terms and
conditions of employment prescribed in labor standards law, like a CBA providing for
a higher minimum wage, or for the computation of a higher overtime pay or the
payment of holiday pay not only for regular holidays but also for certain special
holidays.
XII
8%
Premiere Bank, a banking corporation, being the creditor- mortgagee of XYZ & Co.,
a garment firm, foreclosed the hypothecated assets of the latter. Despite the
foreclosure, XYZ & Co. continued its business operations. A year later, the bank took
possession of the foreclosed property. The garment firms business operations ceased
without a declaration of bankruptcy. Jose Gaspar, an employee of XYZ & Co., was
dismissed from employment due to the cessation of business of the firm. He filed a
complaint against XYZ & Co. and the bank. The Labor Arbiter, after hearing, so found
the company liable, as claimed by Jose Gaspar, for separation pay. Premiere Bank was
additionally found subsidiarily liable upon the thesis that the satisfaction of labor

benefits due to the employee is superior to the right of a mortgagee of property. Was
the Labor Arbiter correct in his decision?
SUGGESTED ANSWER:
No. The preference of credits established in Art. 110 of the Labor Code cannot be
invoked in the absence of any insolvency proceedings, declaration of bankruptcy, or
judicial liquidation. (DBP v. Santos. 171 SCRA 138 [19891] ).

ANOTHER SUGGESTED ANSWER:

No. What Art. 110 of the Labor Code establishes is not a lien but a preference of
credit in favor of employees. Unlike a lien, a preference of credit does not create a
charge upon any particular property of the debtor. (Development Bank of the
Philippines v. Secretary of Labor, 179 SCRA 630 f1989]).
ANOTHER SUGGESTED ANSWER:

The Decision of the Labor Arbiter holding Premiere Bank (as foreclosing mortgageecreditor) subsidiarily liable for a money obligation of XYZ & Co, (as mortgagor) to
Gaspar, its employee, has no legal basis.
1. There is no privity of relationship between the Bank and Gaspar. The relationship,
upon which the obligation to pay a sum of money is based, is between XYZ (the
mortgagor) and Gaspar as its employee arising from the Labor Code provision
requiring an employer to pay separation pay, re: other causes of employment.
2. At both times - Labor Arbiter Decision to pay separation pay and foreclosure - XYZ &
Co. was an existing business entity and neither bankrupt or in liquidation, although
its business operations after the foreclosure ceased.
3. The decision of the Labor Arbiter for XYZ & Co. to pay a sum of money to Gaspar was
based on an action in personam, not in rem, enforceable against any party.
(Sundowner Corporation vs. Drilon, 180 SCRA 14 f19891)
4. The reference in the Decision to labor benefits due to an employee is superior to the
right of a mortgagee of property is misplaced. The preferential claim rule has no
basis and runs contrary to law and jurisprudence.
XIII
8%
Daisys 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 co-employees working in the same

section, were terminated on the same day. A month after the dismissal of Leo, Daisys
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?
SUGGESTED ANSWER:
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. Losses orexpected 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 [19901]).
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.

ANOTHER SUGGESTED ANSWER:

Yes. The authorized cause to dismiss due to redundancy or retrenchment under

Art. 283 of the Labor Code has been disproved by Daisys engaging the services of a
substitute checker at a^alary much lower than that which Leo used to receive. Also,
it appears that the one (1) month notice rule required in said law was not complied
with. Such being the case, the twin requirements for a valid dismissal under Arts.
277 (b) and 283 of the Code have clearly not been complied with. That no separation
pay was paid Leo, in violation of Art. 283 of the Code, his dismissal can all the more
be successfully assailed.
XIV
8%
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. 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.
SUGGESTED ANSWER:
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 employees 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.
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.
XV
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.
SUGGESTED ANSWER:
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.
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.
I.
A.

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. (2%)

B.

State your agreement or disagreement with the following statement and

explain your answer briefly: The period of prescription in Article 291 of the

Labor Code applies only to money claims so that the period of prescription for
other cases of injury to the rights of employees is governed by the Civil Code.
Thus, an action for reinstatement for injury to an employees rights prescribes
in four (4) years as provided in Article 1146 of the Civil Code. (3%)
SUGGESTED ANSWER:
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.
ANOTHER SUGGESTED ANSWER:
I agree. An action for illegal dismissal is an administrative case which is entirely
separate and distinct from a criminal action. Each may proceed independently of
each other 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.
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.
XV
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.
SUGGESTED ANSWER:
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.
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.

I.
A. 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. (2%)
B. State your agreement or disagreement with the following statement and
explain your answer briefly: The period of prescription in Article 291 of the Labor
Code applies only to money claims so that the period of prescription for other cases
of injury to the rights of employees is governed by the Civil Code. Thus, an action
for reinstatement for injury to an employees rights prescribes in four (4) years as
provided in Article 1146 of the Civil Code. (3%)
SUGGESTED ANSWER:
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.
ANOTHER SUGGESTED ANSWER:
I agree. An action for illegal dismissal is an administrative case which is entirely
separate and distinct from a criminal action. Each may proceed independently of
each other.
The right to fiie an action for illegal dismissal is not dependent upon the
outcome of the criminal case. Guiit or innocence in the criminal case is not
determinative of the,existence of a just or authorized cause for a dismissal. [Pepsi
Cola Bottling Co. v. Guanzon 172 SCRA 571(1989)]
B.I agree with the statement
A case of illegal dismissal filed by an employee who has been terminated
without a just or authorized cause is not a money claim covered by Art 291 of the
Labor Code. An employee who is unjustly dismissed from work is entitled to
reinstatement and to his backwage3. A case of illegal dismissal is based upon an
injury to the right to security of tenure of an employee. Thus, in accordance with Art.
1146, it must be instituted within four years. [Callanta v. Carnation Phil. 145 SCRA
268(1986); Baliwag Transit v. Op/e 171 SCRA 250(1989); International Harvester
Macleod, Inc. v. NLRC, 200 SCRA 817(1991)]

II.
Design Consultants, Inc. was engaged by the PNCC to supervise the
construction of the 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. (5%)

SUGGESTED ANSWER:
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 projector 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 companys 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.
ANOTHER SUGGESTED ANSWER:

Omar is not correct. Omar is a project employee as defined by Art. 280 of Labor
Code. He was hired for a specific project with fixed periods of employment,
specifically: two (2) years for the first contract, and nine (9) months for the second
contract. A project employee who is hired for a specific project only is not a regular
employee notwithstanding an extension of the project provided that the contract of
project employment clearly specifies the project and the duration thereof. [Palomares
v. NLRC, 277 SCRA 439 (1997))
III.
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. (5%)

Yes. Socorro is entitled to overtime compensation. She does not fall under any of
the exceptions to the coverage of Art. 82, under the provisions of Hours of Work. The
Labor Code is equally applicable to non-profit institutions. A covered employee who
works beyond eight (8) hours is entitled to overtime compensation.
IV.
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. 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. (5%)
SUGGESTED ANSWER:
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 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.
The Supreme Court has ruled: In stark contrast to the Companys regular
employees, there are independent, free-lance operators who are permitted by the
Company to position themselves proximate to the Company premises. These
independent operators are allowed by the Company to wait on Company customers
who would be requiring their services. In exchange for the privileges of favorable
recommendation by the Company and immediate access to the customers in need of
their services, these independent operators allow the Company to collect their service
fee from the customer and this fee is given back to the independent operator at the
end of the week. In effect, they do not earn fixed wages from the Company as their
variable fees are earned by them from the customers of the Company. The Company
has no control over and does not restrict the methodology or the means and manner
by which these operators perform their work. These operators are not supervised by
any employee of the Company since the results of their work is controlled by the
customers who hire them. Likewise, the Company has no control as an employer over
these operators. They are not subject to the regular hours and days of work and may
come and go as they wish. They are not subject to any disciplinary measures from
the Company, save merely for the inherent rules of general behavior and good
conduct. [Ushio Marketing v. NLRC, 294 SCRA 673(1998)]
V.

Nemia earns P7.00 for every manicure she does in the barber shop of a friend
which has nineteen (19) employees. At times she takes home P 175.00 a day and at
other times she earns nothing. She now claims holiday pay. Is Nemia entitled to this
benefit? Explain briefly. (5%)
,
SUGGESTED ANSWER:
No, Nemia is not entitled to holiday pay.
Art. 82 of the Labor Code provides that workers who are paid by results are, among
others, not entitled to holiday pay. Nemia is a worker who is paid by results. She earns
P7.00 for every manicure she does.
SUGGESTED ANSWER:
Yes. Nemia is entitled to holiday pay.
The Supreme Court has ruled: As to the other benefits, namely, holiday pay,
premium pay, 13m month pay, and service incentive leave which the labor arbiter
failed to rule on but which the petitioners prayed for in their complaint, we hold that
petitioners are so entitled to these benefits. Three (3) factors lead us to conclude that
petitioners, although piece rate workers, were regular employees of private
respondents. First as to the nature of the petitioners tasks, their job of repacking
snack food was necessary or desirable in the usual business of private respondents,
who were engaged in the manufacture and selling of such food products; second,
petitioners worked for private respondents throughout the year, their employment not
having been dependent on a specific project or season; and third, the length of time
that petitioners worked for private respondents. Thus, while petitioners mode of
compensation was on a per piece basis the status and nature of their employment
was that of regular employees. [Labor Congress of the Philippines v. NLRC, 290 SCRA
509(1998)]
VI
A. Malou is the Executive Secretary of the Senior Vice- President of a bank
while Ana is the Legal Secretary of the bank's lawyer. They and other
executive secretaries would like to join the union of rank and file employees
of the bank. Are they eligible to join the union? Why? Explain briefly. (3%)
A. Mang Bally, owner of a shoe repair shop with 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. (2%)
SUGGESTED ANSWER:

A. The following rules will govern the right of self- organization of Malou,
Ana, and the other Executive Secretaries;
1.

No Right to Self-Organization Confidential employees who act in a

confidential capacity to persons who formulate, determine, and effectuate
management policies in the field of labor-management relation. The two
criteria are cumulative and both must be met. [San Miguel Corporation
Union v. Laguesma, 277 SCRA 370 (1997)]

2.

With Right to Self-Organization When the employee does not have access
to confidential labor relations information, there is no legal prohibition
against confidential employees from forming, assisting, or joining a labor
organization. [Sugbuanon Rural Bank, Inc. v. Laguesma, 324 SCRA 425
(2000)]

No right of self-organization for Legal Secretaries Legal Secretaries fall under the
category of confidential employees with no right to self-organization. [Pier & Arrastre
Stevedoring Services, Inc. v. Confesser, 241 SCRA 29* (1995)]
B. None. First, Mang Ballys shoe business is a commercial enterprise, albeit a service
establishment. 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,
317 SCRA 420 (1899)]. Third, the employees right to self-organization is not
delimited by their number.
The right to self-organization 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, Labor Code]
VII.
The union deducted P20.00 from Rogelios 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 briefly. (5%)
SUGGESTED ANSWER:
Yes. In order that the special assessment (death aid benefit) may be upheld as valid,
the following requisites must be complied with: (1) Authorization by a written
resolution of the majority of all the members at the general membership meeting duly
called for the purpose; (2) Secretarys 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, 304 SCRA 489(1999)]
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.
VIII.

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.
A. Is Arnold a job contractor? Explain briefly. (2%)
B. Who is liable for the claims of the workers hired by Arnold? Explain briefly. (3%)
SUGGESTED ANSWER:
A. No. In two cases decided by the Supreme Court, it was held that there is job
contracting where (1) 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 (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)]
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.
B. Sta. Monica Plywood Corp. is liable for the claims of the workers hired by
Arnold. A finding that Arnold is a labor only contractor is equivalent to
declaring that there exist an
Employer - employee relationship between Sta. Monica Plywood Corp. and workers
hired by Arnold. This is so because Arnold is considered a mere agent of Sta. Monica
Plywood Corp. [Lim v. NLRC, 303 SCRA 432, (1999); Baguio et. al. v. NLRC, 202
SCRA 465 (1991)]
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. 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 companys
memorandum. In her explanation, she admitted having encashed the checks without

the company's permission. 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 PI15,420.79 representing separation pay and
backwages. The NLRC affirmed the ruling of the Labor Arbiter. Is the ruling of the
NLRC correct? Explain briefly. (5%)
SUGGESTED ANSWER:
The ruiir.g of the NLRC affirming the Labor Arbiters decision ordering Lyric Theater
to pay P115, 420.79 representing separation pay and backwages is wrong.
The Labor Arbiters decision is wrong because:
1. 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,
meantime directing her to explain why she should not be dismissed for violation of
companys memoranda.
1. 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. Melody is not entitled to reinstatement because there is a just
cause for her termination.
2. The order for Lyric Theater to pay backwages has no factual basis. If after
investigation, Lyric Theater dismisses Melody, there is just cause for such
termination. 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 companys memorandum prohibiting the encashment of checks. [Jo
Cinema Corp. v. Avellana, GR No. 132637, June 28, 2001]
X.
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 Eaglestars 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 factorys operations and causing it huge losses. 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.
(5%)

SUGGESTED ANSWER:
The contention of the union is NOT correct.
In the case, it is clear that the employees agreed to work on Sundays and Holidays?
their work schedule required them to do so for which they would be paid additional
compensation as provided by law.
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 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, December 19, 2001]
XI.
Tomas and Cruz have been employed for the last 22 years in various capacities on
board the ships of BARKO Shipping Company. Their employment was made through a
local manning company. They have signed several ten (10)-month employment
contracts with BARKO Shipping. The NLRC ruled that they were contractual
employees and that their employment was tenninated each time their contracts
expired. Is the ruling of the NLRC correct? Explain your answer fully. (5%)
SUGGESTED ANSWER:
Yes. A contract of employment for a definite period terminates by its own terms at
the end of such period. Since Tomas and Cruz signed ten (10)-month contracts, their
employment terminates by its own terms at the end of each ten (10)-month period.
The decisive determinant in term employment should not be the activities that the
employee Is called upon to perform but the day certain agreed upon by the parties for
the commencement and termination of their employment relation (not the character
of his duties as being usually necessary or desirable in the usual business of the
employer).
Stipulation in the employment contracts providing for term employment or fixed
period employment are valid when the period are agreed upon knowingly and
voluntarily by the parties without force, duress or improper pressure exerted on the
employee; and when such stipulations were not designed to circumvent the laws on
security of tenure. [Brent School v. Zamora, 181 SCRA 702 (1990)]
Moreover, in Brent School v. Zamora, supra, the Supreme Court stated that Art.
280 of the Labor Code does not apply to overseas employment.
In Pablo Coyoca v. NLRC, 243 SCRA 190, (1995), the Supreme Court also held that
a seafarer is not a regular employee and Filipino seamen are governed by the rules

and regulations governing overseas employment and the said rules do not provide for
separation or termination pay.
From the foregoing cases, it is clear that seafarers are considered contractual
employees. They cannot be considered as regular employees under Art 280 of the
Labor Code. Their employment is governed by the contracts they sign every time they
are rehired and their employment is terminated when the contract expires. Their
employment is contractually fixed for a certain period of time. They fall under the
exception of Art. 280 whose employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time
of engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season. We need
not depart from the rulings of this court in the two aforementioned eases which
indeed constitute stare decisis with respect to the employment status of seafarers.
[Douglas Millares v. NLRC, et. al. 328 SCRA 79, (2000)]
Therefore, Tomas and Cruz are contractual employees. The ruling of the NLRC is
correct
ANOTHER SUGGESTED ANSWER:
No. The ruling of the NLRC is not correct. Such repeated re-hiring, which continued
for twenty years cannot but be appreciated as sufficient evidence of the necessity and
indispensability of petitioners service to the [employers] trade. Verily, as petitioners
had rendered 20 years of service, performing activities that were necessary and
desirable in the trade (of the employer), they are, by express provision of Art. 280 of
the Labor Code, considered regular employees. [Milliares v. NLRC, 328 SCRA 79
(2000)]
XII.
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. (5%)
SUGGESTED ANSWER:
No. Under Section 8 (j) of RA 1161, as amended, employment of purely casual and
not for the purpose of the occupation or business of the employer are excepted from
compulsory coverage.
An employment is purely casual if it is not for the purpose of occupation or
business of the employer.
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, excepted
from the compulsory coverage of the SSS law.
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 Section 8(j) of the Social
Security Law, they are excepted form the compulsory coverage of the Social Security
System.
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.
XIII.
A. 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 differential. Is he correct? Explain briefly. (3%)
B. On orders of his superior, Efren, a high-speed sewing machine technician, worked on
May 1, Labor Day. If he worked eight (8) hours on that day, how much should he
receive if his daily rate is P400.00? (2%)
SUGGESTED ANSWER:
A. Yes. Under Art. 86 of the Labor Code, night shift differential shall be paid to every
employee for work performed between 10:00 oclock in the evening to six oclock 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.
The Omnibus Rules Implementing the Labor Code (In Book ill, Rule lI 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.
B. Efren should receive P800.00. Art 92 of the Labor Code provides that the employer
may require an employee to work on any regular holiday but such employee shall

be paid compensation equivalent to twice his regular rate.

XIV.
This year, National Heroes Day (August 2.5) falls on a Sunday. Sunday is the
rest day of Bonifacio whose daily rate is P500.00.
A. If Bonifacio is required by his employer to work on that day for eight (8)
hours, how much should he be paid for his work? Explain.
(3%)
B. If he works for ten (10) hours on that day, how much should he receive for his
work? Explain. (2%)
SUGGESTED ANSWER:
A. For working on his scheduled rest day, according to Art. 93(a), Bonifacio should be
paid P500.00 (his daily rate) plus P150.00 (30% of his daily rate) = P650.00. This
amount of P650.00 should be multiplied by 2 = P1, 300.00. This is the amount that
Bonifacio as employee working on his scheduled rest day which is also a regular
holiday, should receive. Art. 94(c) of the Labor Code provides that an employee shall
be paid a compensation equivalent to twice his regular rate for work on any regular
holiday. The regular rate of Bonifacio on May 1, 2002 is with an additional thirty
percent because the cay is also his scheduled rest day.
B. P1.300.00 which is the amount that Bonifacio is to receive for working on May 1,
2002 should be divided by 8 to determine his hourly rate of P162.50. This hourly rate
should be multiplied by 2 (the number of hours he worked overtime). Thus, the
amount that Bonifacio is entitled to receive for his overtime work on May 1, 2002 is
P325.00.
XV.
A. When is illegal recruitment considered a crime of economic sabotage? Explain briefly.
(3%)
B.

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. (2%)

SUGGESTED ANSWER:
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.
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.
Illegal recruitment is deemed committed in large scale if committed against three (3)

or more persons individually or as a group.

B. No. A corporation, seventy percent (70%) of the authorized arid, 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%).
XVI.
A. How many times may a male employee go on Paternity Leave? Can he avail himself of
this benefit, for example, 50 days after the first delivery by his wife? (3%)
B. 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. (2%)
SUGGESTED ANSWER:
A. A male employee may go on Paternity Leave up to four (4) children. (Sec. 2, RA 8187)
On the question of whether or not he can avail himself of this benefit 50 days after
the delivery of his wife, the answer is: Yes, he can because the Rules Implementing
Paternity Leave Act says that the availment should not be later than 60 days after the
date of delivery.
B. 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)]
ANOTHER SUGGESTED ANSWER:
It depends. If there is a legal obligation on the part of Suerte Co. to pay a bonus of
its employees equivalent to 50% of their monthly compensation, because said
obligation is included in a collective bargaining agreement, then Suerte Co. cannot
reduce the bonus to 5% of their monthly compensation. But if the payment of the
bonus is not a legal obligation but only a voluntary act on the part of the employer,
said employer, unilaterally, can only reduce the bonus from 50% to 5% of the monthly
compensation of its employees; the employer can, in fact, not give any bonus at all.
XVII.
A. 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. (3%)
B.

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. (2%)
SUGGESTED ANSWER:
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 foodSation Board and
if it remains unresolved after ten calendar days of conciliations, then the dispute is
referred to the appropriate branch of the National Labor Relations Commission.
B. I will advise the paint manufacturing company that it cannot hire a person who is
aged seventeen (17). Art. 139 (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.
XVIII.
A. Distinguish managerial employees from supervisory employees. (3%)
B.

Do employees of a cooperative have a right to form a union? Explain briefly. (2%)

SUGGESTED ANSWER:
A. A managerial employee is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or disciple employees. Supervisory employees, on the other hand,
are those who in the interest of the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely routinary or clerical in nature
but requires the use of independent judgment [Art. 212 (m), Labor Code]
In a case, the Supreme Court said: In the petition before us, a thorough dissection
of the job description of the concerned supervisory employees and section heads
indisputably show that they are not actually managerial but only supervisory
employees since they do not lay down company policies. PICOPs contention that the
subject section heads and unit managers exercise the authority to hire and fire is
ambiguous and quite misleading for the reason that any authority they exercise Is
not supreme but merely advisory In character. Theirs is not a final determination of
the company policies inasmuch as any action taken by them on matters relative to
hiring, promotion, transfer, suspension and termination of employees is still subject
to confirmation and approval by their respective superior. [See Atlas Lithographic
Services, Inc. v. Laguesma, 205 SCRA 12, 17 (1992)] Thus, where such power, which
is in effect recommendatory In character, is subject to evaluation, review and final
action by the department heads and higher executives of the company, the same,
although present, is not effective and not an exercise of independent judgment as
required by law. [Philippine Appliance Corp. v. Laguesma, 226 SCRA 730, 737 (1993)
citing Franklin Baker Company of the Philippines v. Trajano, 157 SCRA 416, 422-433
(1988)]." (Paper Industries Corp. of the Philippines v. Bienvenido E. Laguesma, 330

SCRA 295, (2000)]

A. Employees who
members, they
employees who
Electric Service

are members of a cooperative cannot form a union because, as

are owners and owners cannot bargain with themselves. However,
are not members of the cooperative can form a union. [San Jose
Cooperative v. Ministry of Labor, 173 SCRA 697 (1989)]
XIX.

A. On what ground or grounds may a union member be expelled from the organization?
(3%)
B. May the general manager of a company be held jointly and severally liable for
backwages of an illegally dismissed employee? (2%)
A. Union members may be expelled from the labor organization only on valid grounds
provided for in the Union Constitution, By-Laws, or conditions for union membership.
ANOTHER SUGGESTED ANSWER:
Whenever appropriate for any violation of the rights as:
1. Refusal to pay union dues and special assessments;
2. Disloyalty to the union; and
3. Violation of the constitution and by-laws of the union.
SUGGESTED ANSWER:
B. Yes. If it is shown that he acted in bad faith, or without or In excess of authority, or
was motivated by personal ill-will in dismissing the employee, the general manager
may be held jointly and severally liable for the backwages of an illegally dismissed
employee. [ARB Construction C. v. Court of Appeals, 332 SCRA 427, (2000), Lim v.
NLRC, 303 SCRA 432, (1999)]
ANOTHER SUGGESTED ANSWER:
Yes. The General Manager may be held jointly and severally liable for back wages of
an illegally dismissed employee if he or she actually authorized or ratified the
wrongful dismissal of the employee under the rule of respondent superior. In case of
illegal dismissal, corporate directors and officers are solidarily liable with the
corporation where termination of employment are done with malice or bad faith.
{Bogo- Medellin Sugar Planters Assoc., Inc. v. NLRC, 296 SCRA 108, (1998)]
XX
A. An employee was ordered reinstated with backwages. Is he entitled to the benefits

and increases granted during the period of his lay-off? Explain briefly. (3%)
B. Aside from the just causes enumerated in Article 282 of the Labor Code for the
termination of employment, state three (3) lawful or authorized causes for the
dismissal of an employee. (2%)
SUGGESTED ANSWER:
A. Yes. An employee who is ordered reinstated with backwages is entitled to the benefits
and increases granted during the period of his lay-off. The Supreme Court has ruled:
Backwages are granted for earnings a worker lost due to his illegal dismissal and an
employer is obliged to pay an illegally dismissed employee the whole amount of
salaries plus all other benefits and bonuses and general increases to which the latter
should have been normally entitled had he not been dismissed. [Sigma Personnel
Services v. NLRC, 224 SCRA 181 (1993)]
B. According to Art. 283 of the Labor Code, the lawful or authorized causes for the
termination of an employee are:
1. installation of labor saving devices
2. redundancy
3. retrenchment to prevent losses or;
4. closing or cessation of operation of the establishment or undertaking, unless the
closing Is for the purpose of circumventing the provisions of the Labor Code. Art 284
also provides that an employer may terminate the services of an employee who has
been found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his coemployees.
End
2001 BAR EXAMINATION
I
Company A and Union B had a 3-year CBA that expired on June 12, 1990.
Negotiations 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? (5%)
SUGGESTED ANSWER:
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.) 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.
But in a case {Manila Electric Co. vs. Secretary of Labor Leonardo
Quisumbing, G.R. No. 127598, February 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 re-negotiated.

ANOTHER SUGGESTED ANSWER:

The retroactive Order of the Labor Arbiter is void for want of jurisdiction.
Jurisdiction is conferred by law. Nowhere in the Labor Code, more specifically, Article
217, is the Labor Arbiter given jurisdiction over unresolved issues in collective
bargaining, including determining the period or duration of a Collective Bargaining
Agreement.
II
(a) 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 is
stand valid or not? For what reason(s)? (2%)
SUGGESTED ANSWER:
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 self- organization. (Art.
248(c) of the. Labor Code)
ANOTHER SUGGESTED ANSWER:
The union's stand that there must be a prior consultation by the employer with
the union before contracting out can be effected is valid. Article XJH, Section 3 of the
Constitution, and Article 255 of the Labor Code- guarantee the right of workers to
participate. ID. policy and decision making processes which affect their rights, and
benefits. Job contracting will undoubtedly and directly affect their rights, benefits and
welfare. Philippine Airlines vs. NLRC, 255 SCRA 301 (1993), and Manila Electric
Company vs. Quisumbing, 302 SCRA 173 (1999).
(b) "A", an employee, sued company "B" for unfair labor practice, illegal dismissal and
damages as a consequence thereof. The Arbiter granted A's prayer for reinstatement,
backwages, and Included an award for attorney's fees. On appeal to the NLRC, the
Commission affirmed the Arbiter's decision but deleted the award for attorney's fees

since fees were not claimed in A's complaint. Who was correct, the Arbiter or the
NLRC? Why? (2%)
SUGGESTED ANSWER:
The NLRC was correct in deleting the award for attorney's fees if an employee did
not include attorney's fees among his claims and, therefore, did not give any evidence
to support the payment of attorney's fees.
ANOTHER SUGGESTED ANSWER:
The decision of the Labor Arbiter to award attorneys fees even if the same is not
claimed is correct. Article 2208 of the New Civil Code allows the award of attorney's
fees when the defendant's act or omission has compelled the plaintiff to litigate or
incur expenses to protect his interest. Attorney's fees may be considered as a part of
an equitable relief awarded in the concept of damages.
(c) Would your answer be different if the attorneys fees awarded by the Arbiter was
over fifteen percent of the total award? Why? (1%)
SUGGESTED ANSWER:
An award of attorney's fees which is over fifteen percent of the total award is
not in conformity with the provision of the Labor Code (Art. 111(a)) that in cases of
unlawful withholding of wages, the culpable party may be assessed attorney's fees
equivalent to ten percent of the amount of wages recovered.
III
"A" worked for company "B" as a rank and file employee until April 1990 when
A's services were terminated due to loss of confidence in A. However, before effecting
As dismissal, B accorded A due process including full opportunity to answer the
charges against him in the course of the investigation. Was B justified in dismissing A
after the investigation? Why? (5%)
SUGGESTED ANSWER:
In the case of PLDT vs. NLRC, (G.R. No. 106947, February 11, 1999), the
Supreme Court ruled that the basic requisite for dismissal on the ground of loss of
confidence is that the employee concerned must be one holding a position of trust and
confidence.
Rank-and-file employees may only be dismissed for loss of confidence if the same
is because of a willful breach of trust by a rank and file employee of the trust reposed
in him by his employer or duly authorized representative (Art. 282(c), Labor Code).

ANOTHER SUGGESTED ANSWER:

"B" is justified in dismissing "A" for loss of confidence after according him the
right to procedural due process. However, the following guidelines must be observed,
as ruled in Nokom vs. NLRC, G.R. No. 140034, July 18, 2000:
a. loss of confidence should not be simulated;
b. it should not be used as subterfuge for causes which are improper, illegal or
unjustified;
c. it may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary; and
d. it must be genuine, not a mere after thought to justify their action.
IV
What economic components constitute backwages for a rank and file employee?
Are these components equally applicable to a managerial employee? (5%)
SUGGESTED ANSWER:
The Labor Code (Art. 279) provides that an employee who is unjustly dismissed
from work is entitled to reinstatement and also 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 his actual reinstatement.
An employee is entitled to all the above benefit regardless of whether he is a
rank-and-file employee or a managerial employee.
However, backwages may also include the 13th month pay which are paid to
rank-and-file employees, as well as benefits arising from a CBA given only to
employees in the bargaining unit. Managerial employees cannot be given the same
since they sue ineligible to join a labor organization.
V
"A" was hired by company B" In January 1980 until A was illegally dismissed on April
30, 1990 as found by a Labor Arbiter who ordered reinstatement and full backwages
from April 30, 1990 until A's reinstatement. The Arbiter's decision was promulgated
on April 29, 1995. B appealed claiming, among others, that the award for backwages
was excessive in that it went beyond three-year rule set forth in Mercury Drug u. CIR
(56 SCRA 696). Is B's contention tenable? Why? (5%)

SUGGESTED ANSWER:

No, the contention of "B" is not tenable.

Rep. Act No. 6715, which was enacted in 1989, in effect set aside the three-year
rule set forth in Mercury Drug us. CLR (56 SCRA 696) when it provided that the full
backwages that an unjustly dismissed employee shall receive shall be computed from
the time his compensation was withheld from him. up to the time of his actual
reinstatement.
The word "actual" was inserted in the law by Rep. Act No. 6715. Thus, in
accordance with the aforesaid law, an unjustly dismissed employee shall receive his
full backwages computed from the time his compensation was withheld from him up
to the time of his actual reinstatement even if this period is more than three years.
ANOTHER SUGGESTED ANSWER:
No, the contention of "B" is net tenable. The Supreme Court (In Ferrer vs. NLRC,
July 5, 1993) abandoned the Mercury Drug Rule and in 1996 Bustamante vs. NLRC,
265 SCRA 61 the Supreme Court said:
[Quoting Article 279 of the Labor Code] Under the above quoted provision, it
became mandatory to award backwages to illegally dismiss regular employees. The law
specifically declared that the award of backwages was to be computed from the time
compensation was withheld from the employee up to the time of his reinstatement.
XXX
The clear legislative intent of the amendment in RJL No. 6715 is to give more
benefits to the workers than was previously given them under the Mercury Drug
rule. In other words, the provision calling for "full backwages" to illegally dismissed
employees is clear, plain and free from ambiguity, and, therefore, must be applied
without attempted or strained interpretation.
VI
Company "A" was engaged in the manufacture of goods using the by-products
of coconut trees and employed some fifty workers who lived in the coconut plantation
in Quezon Province. The land upon which A conducted its operation was subjected to
land reform under R.A. 6657 for distribution to the tenants and residents of the
land. Consequently, A had to close its operations and dismiss its workers. The union
representing the employees demanded that a pay the dismissed workers separation
pay under Art. 283 of the Labor Code that requires, among others, the payment of
separation pay to employees in cases of "closing or cessation of operations of the
establishment or undertaking". Is the union is claim correct or not? Why? (5%)

SUGGESTED ANSWER:
The union's claim is not correct.
In the case of National Federation of Labor vs. NLRC, G.R. No. 12771.8, March 2,
2000, the Supreme Court ruled that there is no obligation to pay separation pay if the
closure is not a 'unilateral and voluntary act of the employer.
In the question, the closure was brought about not by a unilateral and voluntary
act of the employer but due to the act of government in the implementation of the
Comprehensive Agrarian Reform Law.
VII
Company "A" and Union "B" negotiated the last two years of their five-year CBA on
April 1. 1990 to expire on March 31, 1992. Considering the amicable relations
between the parties, neither one moved for the extension or termination of the
agreement.
Sometime in 1995, some disgruntled employees filed a complaint demanding that
they be paid the annual salary increases and other related annual increases specified
in the CBA of April 1990, citing the provision in Art. 253 of the Labor Code which
requires the parties to "xxx keep the status quo and to continue in full force and effect
the terms and conditions of the existing agreement during the 60 day period and/or
until a new agreement is reached by the parties".
A, however, maintained that the annual salary increases and related benefits
specifically provided for in the CBA were, pursuant to contract and law, effective only
for the term specified therein, namely, until March 31, 1992 only.
Who is correct? State the reason(s) for your answer. (5%)
SUGGESTED ANSWER:
The disgruntled employees are correct in their claim that the expired CBA
remains In full force and effect until a new CBA is signed in accordance with Article
253 of the Labor Code.
The SC ruled in New Pacific Timber and Supply Co., Inc. vs. NLRC, G.R. No.
124224, March 17, 2000;
Article 253 of the Labor Code explicitly provided that until a new
Collective Bargaining Agreement has been executed by and between the
parties, they are duly bound to keep the status quo and to continue in full
force and effect the terms and conditions of the existing agreement. The law
does not provide for any exception or qualification as to which of the
economic provisions of the existing agreement are to retain force and effect,
therefore, it must be understood as encompassing all the terms and
conditions in the said agreement."

ANOTHER SUGGESTED ANSWER:

With Art. 253 of the Labor Code as basis, the disgruntled employees should be
paid the annual salary increases and other related annual increases provided in the
1990-1992 CBA even after the expiration of said CBA as long as said CBA did not
provide that said increases were to be paid only for certain specific years.
VIII
The affected members of the rank and file elevated a labor arbiter's decision to
the NLRC via a petition for review filed after the lapse of the ten-day reglementary
period for perfecting an appeal. Should the NLRC dismiss the petition outright or may
the NLRC take cognizance thereof? (5%).
SUGGESTED ANSWER:
The NLRC should dismiss the appeal outright because the same was filed
beyond the reglementary period of appeal. Article 223 of the Labor Code reads:
"Decisions, awards, or orders of the Labor Arbiter are final and
executory unless , appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards, or orders."
ANOTHER SUGGESTED ANSWER:
The NLRC could dismiss outright the appeal for being filed out of time. But if
there are good reasons that may justifiably explain why there was a delay in the filing
of the appeal, substantial justice may be the basis for the NLRC to take cognizance of
the appeal.
IX
Company "A", within the reglementary period, appealed the decision of a Labor
Arbiter directing the reinstatement of an employee and awarding backwages. However,
A's cash bond was filed beyond the ten day period. Should the NLRC entertain the
appeal? Why? (5%).
SUGGESTED ANSWER:
No, the NLRC should not entertain the appeal, as the same was not perfected for
failure to file a bond. Art. 223 of the Labor Code reads:
"In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of cash or surety bond, in
the amount equivalent to the monetary award in the judgment appealed
from."
In ABA vs. NLRC, G.R. No. 122627, July 18, 1999, the Supreme Court ruled:

"An appeal bond is necessary. the appeal may be perfected only upon

the posting of cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in
the judgment appealed from."
ANOTHER SUGGESTED ANSWER:
The NLRC may still entertain the appeal.
It is true that the Labor Code (in Art. 223) provides that appeal is perfected
only upon the posting of a cash or surety bond. But if Company A filed a motion for
the reduction of the bond, and said motion was only acted upon after the
reglementary period, then, the NLRC, in the interest of substantial justice, may still
take cognizance of the appeal.
X
"A" was able to obtain a Judgment against his former employer, Company "B",
for P750.000.00. In executing the Judgment in favor of A. the Labor Arbiter sought to
levy on B's office equipment. B filed an action for damages and injunction against the
Labor Arbiter before the Regional Trial Court of the province where B's offices are
located. Is B's action tenable? Why? (5%).
SUGGESTED ANSWER
B's action is not tenable.
In the case of Delta Ventures Resources vs. Hon. Fernando P. Labato, G.R.
No. 118216, March 9, 2000, the Supreme Court ruled that the regular courts have
no jurisdiction to act on labor cases or various incidents arising therefrom, including
the execution of decisions, awards or orders.
ANOTHER SUGGESTED ANSWER
Yes, B's action before the Regional Trial Court is tenable if said action is limited
to the filing of a damage suit against the Labor Arbiter because there exists no
employer-employee relationship between "B" and the Labor Arbiter, and there is no
labor dispute between them. In Lapanday Agricultural Development Corporation vs.
Court of Appeals, G.R. No. 112139, January 31, 2Q00, the Supreme Court, ruled:
"It is well settled in law and jurisprudence that where NO employeremployee relationship exists between the parties and no issue is involved
which may be resolved by reference to the Labor Code, other labor
statutes or any collective bargaining agreement, it is the Regional Trial
Court that has jurisdiction."

XII

(a) What damages can an illegally dismissed employee collect from his employer? (2%).
SUGGESTED ANSWER:
An illegally dismissed employee may collect from his employer actual or
compensatory damages, moral damages and exemplary damages, aa well as attorney's
fees as damages.
ANOTHER SUGGESTED ANSWER:
Moral and exemplary damages are only proper where the employee has been
harassed and arbitrarily terminated by the employer. Nueva Ecija vs. Electric
Cooperative Employees Association (G.R. No. 116066, January 24, 2000; Cruz vs.
NLRC, G.R. No. 16384, February 7, 2000; Philippine Aeolus etc., vs. Chua (G.R. No.
124617, April 28, 2000; and Lucas vs. Royo, G.R. No. 136185, October 30, 2000).
(b) May the Labor Arbiter, NLRC or Court of Appeals validly award attorney's fees
in favor of a complainant even if not claimed or proven in the proceedings? Why? (3%).

A Labor Arbiter, NLRC and Court of Appeals may validly award attorney's fees in
favor of a complainant only if the claimant claimed and proved that he is entitled to
attorney's fees.
ANOTHER SUGGESTED ANSWER:
Article 2208 of the New Civil Code allows the award of attorney's fees when the
defendant's act or omission has compelled the plaintiff to litigate or incur expenses to
protect his interest. Attorney's fees may be considered as a part of an equitable relief
awarded in the concept of damages.
*
XII
(a) What limitations, if any, do the law and jurisprudence impose on an employer's right
to terminate the services of a probationary employee? (2%).
SUGGESTED ANSWER:
The Labor Code (in Art. 281) 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.

(b) What requisites must a Union comply with before it can validly impose special
assessments against its members for incidental expenses, attorneys fees,
representation expenses and the like? (3%).
The Labor Code (in Art. 241(n)) provides that "no special assessments or other
extraordinary fees may be levied upon the members of a labor organization unless
authorized by a written resolution of a majority of all the members at a general
membership meeting duly called for the purpose."
ANOTHER SUGGESTED ANSWER:
In the case of ABC-CBN Employees Supervisors Union vs. ABS-CBN
Boardcasting Corp., and Union Officers, G.R. No. 106518, March 11, 1999, the
Supreme Court ruled that the following are the requisites:
1) Authorization by a written resolution of the majority of all the members at the
general, membership meeting duly called for the purpose;

and

2} Secretarys record of the minutes of the meeting;

3) Individual written authorization for check-off duly signed by the employee

concerned. (See also: Gabriel vs. Secretary of Labor, G.R. No. 115949, March 16,
2000).
XIII
(a) "X'
isa bona fide service contractor providing manpower services to various
companies, possessing the necessary capital and equipment needed to effectively
carry out its commitments. "Y is an employee of "X" and assigned to work as a janitor
in Company "Z". In the course of Ys assignment, Z's supervisors and employees would
give verbal instructions to Y as to how and where to perform his work. X pays Y salary.
Subsequent!}-, Ys services were terminated by X. Y sued Z for illegal dismissal. May
Ys case against Z prosper? Why? (2%).
SUGGESTED ANSWER:

Ys case against Z will not prosper, because Z is not the employer of Y. The
employer of "Y" is "X".
"Y" would be an employee of "Z" if "X" here is a labor- only contractor but X is not
a labor-only contractor. Re possesses the necessary capital and equipment needed to
effectively carry out its commitment as a service contractor.

Applying the control test, the fact that "Z's" supervisors and employees give
verbal instructions to Y as to how and where to perform his work does not
necessarily mean that thereby he is under the control of Z as regards his
employment as long as X, as service contractor, actually directs the work of Y. It
should also be noted that X pays the salary of Y as the employee of the former.
ANOTHER SUGGESTED ANSWER:
Yes, Ys case against Company "Z" will prosper. Company "Z" will be deemed the
direct employer because the Company directly and specifically controlled the manner
by which the work should be done and, and by doing so also the result/ (See Traders
Royal Bank vs. NLRC, December 2, 1999).
The presence of the element or factor of control, which is the most important
factor in determining the existence of an employer-employee relationship is present.
In Religious of the Virgin Mary vs. NLRC, G.R. No. 103606, October 13, 1999, the
Supreme Court, ruled:
As this Court has consistently ruled, the power of control is the most
decisive factor in determining the existence of employer- employee relationship.
(b)In 1960, Juan hired Pablo to drive for the formers lumber company. In 1970, Pablo
got sick and was temporarily laid-off. In 1972, Pablo recovered and resumed working
for the same lumber company, now run by Juan's wife since Juan had already
passed away. In 1996, Pablo retired. When Pablo applied for retirement benefits with
the SSS that same year, he discovered that the lumber company never enrolled him
as an employee, much less remitted his contributions that were deducted from his
salary. The lumber company agreed to pay for Pablo's contributions plus penalties
but maintained that most of Pablos claims had already prescribed under Art. 1150
of the Civil Code. (Art. 1150 provides "The time for prescription of all kinds of
actions, when there is no special provision which ordains otherwise, shall be counted
from the day they may be brought."). Is the Lumber Companys contention correct?
Why? (3%).
SUGGESTED ANSWER:
The lumber company's contention is not correct.
The Social Security Law (in Sec. 22(b) provides that the right to institute the
necessary action against an employer may be commenced within twenty (20) years
from the time the delinquency is known or the assessment is made by the SSS, or
from the time the benefit accrues, as the case may be.

XIV

Company "A" and Union "B" could not resolve their negotiations for a new CBA.
After conciliation proceedings before the NCMB proved futile, B went on strike.
Violence during the strike prompted A to file charges against striker- members of B for
their illegal acts. The Secretary of Labor assumed jurisdiction, referred the strike to
the NLRC and issued a return-to-work order. The NLRC directed the parties to submit
their respective position papers and documentary evidence. At the initial hearing
before the NLRC, the parties agreed to submit the case for resolution after the
submission of the position papers and evidence.
Subsequently, the NLRC issued an arbitral award resolving the disputed
provisions of the CBA and ordered the dismissal of certain strikers for having
knowingly committed illegal acts during the strike. The dismissed employees elevated
their dismissal to the Court of Appeals claiming that they were deprived of their right
to due process and that the affidavits submitted by A were self-serving and of no
probative value. Should the appeal prosper? State the reason(s) for your answer
clearly. (5%).
SUGGESTED ANSWER:
The appeal should not prosper.
The Supreme Court, in many cases, has ruled that decisions made by the NLRC
may be based on position papers. In the question, it is stated that the parties agreed
to submit the case for resolution after the submission of position papers and
evidence. Given this fact, the striker-members of B cannot now complain that they
were denied due process. They are in estoppel. After voluntarily submitting a case
and encountering an adverse decision on the merits, it is too late for the loser to
question the jurisdiction or power of the court a party cannot adopt a posture of
double dealing. [Marquez vs. Secretary of Labor, 16 March 1989).
ANOTHER SUGGESTED ANSWER:
No, the appeal will not prosper. In CMP Federal Security Agency vs. NLRC, G.R.
No. 125298, February II, 1999, the Supreme Court ruled:
"The standard of due process that must be met in administrative,
tribunals allows a certain degree of latitude as long as fairness is not
ignored. Hence, it is not legally objectionable for being violative of due
process, for the labor arbiter to resolve a case based solely on the position
papers, affidavits or documentary evidence submitted by the parties. The
affidavits of witnesses in such case may take the place of direct testimony."
XV
(a) "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 bad closed down and
was in the process of winding up. Nonetheless, B paid A his backwages and
separation pay. A complained that Bis computation was erroneous in that A's
allowances was not included. Is A correct in his claim? For what reason(s)? (2%).
SUGGESTED ANSWER:
A is correct. After its amendment by Rep. Act No. 6715, the backwages that an
employee who has been unjustly dismissed is entitled to receive is not limited to bis
full backwages but also includes his allowances and the other benefits ox- their
monetary equivalent.
ANOTHER SUGGESTED ANSWER:
I& the ease of Consolidated Rural Bank vs. NLRC, G.R. No. 123810, January 20,
1999, the Supreme Court .ruled that allowances of the employee should be included
in the computation of backwages.
(b) Soon after the Aslan meltdown began in October 1997, ABC Realty and Management
Corporation undertook a downsizing program and terminated nearly a third of its
regular workforce. The affected employees questioned their' termination arguing that
the action was precipitate in that A3C had not proved that it sustained any losses. Is
the claim of the employees correct? Explain your answer. (3%).
SUGGESTED ANSWER:
The claim of the employees may or may not be correct.
When the Corporation undertook its "downsizing" program, it may have
terminated its employees on either one of two grounds, namely, redundancy or
retrenchment.
For redundancy, there is no requirement of losses, whereas in retrenchment,
substantial losses, actual or anticipated, is a requirement. (Article 283, Labor Code).
In Atlantic Gulf and Pacific Company vs. NLRC, G.R. No. 127516, May 28, 1999, the
Supreme Court ruled:

"... it is necessary to distinguish redundancy from retrenchment...

Redundancy exists when the services of an employee are in excess of what is
required by an enterprise. Retrenchment on the other hand, is resorted to
primarily to avoid or minimize business losses."

In Escareal vs. NLRC, 213 SCRA 472 (1992), the Supreme Court ruled that the
law does not require financial loss as a basis for redundancy.
- XVI
(a)What conditions must prevail and what requirements, if any, must an employer
comply with to Justify/effect a valid retrenchment program? (2%).
SUGGESTED ANSWER:
In the case of Asian Alcohol Corp. vs. 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 not
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 month pay or at least one month pay for every year of service,
whichever is higher; (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.
(a)What conditions must prevail and what requirements, If any, must an
employer comply with to justify/effect a valid redundancy program? (2%).
SUGGESTED ANSWER:
In the case of Asian Alcohol Corp. (supra), the Supreme Court stated that
redundancy exists when the service capability of the work is in excess of what is
reasonably needed to meet the demands on the enterprise. A redundant position is
one rendered superfluous by any number of factors, such as overhiring of workers,
decreased volume of business dropping of a particular line previously manufactured
by the company or phasing out of a service activity previously undertaken by the
business. Under these conditions, the employer has no legal obligation to keep in its
payroll more employees than are necessary for the operation of its business.

For the implementation of a redundancy program to be valid, the employer must

comply with the following requisites: (1) written notice served on both the employees
and the Department of Labor and Employment at least one month prior to the
intended date of retrenchment; (2) payment of separation pay equivalent to at least

one month pay or at least one month pay for every year of service whichever is
higher; (3) good faith in abolishing the redundant positions; and (4) fair and
reasonable criteria in ascertaining what positions are to be declared redundant and
accordingly abolished.
(b)Is the seniority rule or "last in first out" policy to be strictly followed in effecting a
retrenchment or redundancy program? (1%).
SUGGESTED ANSWER:
Again, in Asian Alcohol Corp., the Supreme Court stated that with regard the
policy of "first in, last out" in choosing which positions to declare as redundant or
whom to retrench to prevent further business losses, there is no law that mandates
such a policy. The reason is simple enough. A hoot of relevant factors come into play
in determining cost efficient measures and in choosing the employees who will be
retained or separated to save the company from closing shop. In determining these
issues, management plays a pre-eminent role. The characterization of positions as
redundant is an exercise of business judgment on the part of the employer. It will be
upheld as long as it passes the test of arbitrariness
XVII
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
from his family and his usual work assignments in Metro Manila. 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.
Is the award of attorney's fees valid? State the reasons for your answer. (2%).
SUGGESTED ANSWER:
No, the award of attorney's fees is not valid. According to the Labor Code (Art.
111(a)), attorney's fees may be assessed in cases of unlawful withholding of wages
which does not exist in the case. The worker refused to comply with a lawful transfer
order, and hence, a refusal to work. Given this fact, there can be no basis for the
payment of attorney's fees.
(a) Could the labor arbiter have validly awarded moral and exemplary damages to
Santiago instead of attorney's fees? Why? (3%).
SUGGESTED ANSWER:

No, moral and exemplary damages can be awarded only if the worker was illegally
terminated in an arbitrary or capricious manner. (Nueva Ecija Electric Cooperative
Inc., Employees Assn., vs. NLRC, G.R. No. 116066, January 24, 2000; Cruz vs. NLRC,
G.R. No. 116384, February 7, 2000; Phil. Aeolus etc., vs. NLRC, G.R. No. 124617,
April 28, 2000).
XVIII
(a) Under what conditions may the Secretary of Labor or his duly authorized
representative inquire into the financial activities or legitimate labor organizations?
(2%).
SUGGESTED ANSWER:

The Labor Code (in Art. 274), the Secretary of Labor and Employment or his
duly authorized representative is empowered to inquire into the financial activities of
legitimate labor organization upon the filing of a complaint under oath and duly
supported by the written consent of at least twenty (20%) percent of the total
membership of the labor organization concerned and to examine their books of
accounts and other records,
(b) 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 Directors
decision to the NLRC. The union officers moved to dismiss on the ground of lack of
jurisdiction. Are the union officers correct? Why? (3%).
SUGGESTED ANSWER:
Yes, the union officers are correct in claiming that the NLRC has no jurisdiction
over the appealed ruling of the Regional Director. In Barles vs. Bitonio. G.R. No.
120220, June 16, 1999, the Supreme Court ruled:
"Appellate authority over decisions of the Regional Director involving
examination of union accounts is expressly conferred on the BLR under the
Rule of Procedure on Mediation- Arbitration,
xxx
Section 4. Jurisdiction of the Bureau (b) The Bureau shall exercise
appellate jurisdiction over all cases originating from the Regional Director
involving. Complaints examination of union books of accounts.
The language of the law is categorical. Any additional explanation on the matter is

superflous."
XIX
(a) B. Ukol was compulsorily retired by his employer, Kurot Bottling Corporation, upon
the formeris reaching 65 years of age having rendered 30 years of service. Since there
was no CBA, B. Ukol was paid his retirement benefits computed 15 days' pay for every
year of service, based on B. Ukolis highest salary during each year of his employment.
Not satisfied, B. Ukol filed action with the Arbitration Branch of the NLRC claiming
that his retirement benefits were not computed properly. Is B. Ukol's claim
meritorious? What are the components of his retirement benefits? (2%).
SUGGESTED ANSWER:
Ukol's claim is meritorious. His retirement benefit is to be computed in
accordance with Article 287, which reads: "In the absence of a retirement plan or
agreement providing for retirement benefits of employees in the establishment, an
employee may retire ... and 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 months
being considered as one whole year. The same Article then explains that the term onehalf (1/2) month salary means fifteen days plus one-twelfth (1/12) of the 13th month
pay and the cash equivalent of not more than five (5) days of service incentive leaves.

The components of retirement pay are:

1. 15 days pay
2.1/12 of 13th month pay, and
3.. cash equivalent of not more than five {5) days of ser vice incentive leave.
(b) What exception(s) do (es) the law on retirement benefits provide(s) if any?
(3%).
SUGGESTED ANSWER:
Retail, service and agricultural establishments or operations employing not more
than ten (10) employees or workers are exempted from the coverage of the provision
on retirement benefits in the Labor Code.
Also, where there is a retirement plan of the employer that grants more than
what the Labor Code grants.
XX
UNIDAD, a labor organization claiming to represent the majority of the rank and
file workers of BAGSAK Toyo Manufacturing Corp. (BMTC), filed a petition for

certification election during the freedom period obtaining in said corporation. Despite
the opposition thereto by SIGAW Federation on the ground that UNIDAD was not
possessed with all the attributes of a duly registered union, the Med- Arbiter issued
an Order calling for a certification election on July 25, 2001.
This Order was promulgated and served on the parties on July 12, 2001. On July
14, 2001, UNIDAD submitted and served the required documents for its registration
as an independent union, which documents were approved by the DOLE on July 15,
2001.
During the elections, UNIDAD won over SIGAW. SIGAW questioned UNIDAD's
victory on the ground that UNIDAD was not a duly registered union when it filed the
petition for a certification election. Shall SIGAWs case prosper or not? Why? (5%).
SUGGESTED ANSWER:
No, SIGAWs case will not prosper. The application of technicalities of procedural
requirements in certification election disputes will serve no lawful objective or
purpose. It is a statutory policy that no obstacles should be placed on the holding of a
certification election, (Samaha ng ng Manggagawa sa Pacific Plastic vs. Laguesma, 267
SCRA 203, (1997) and that the law is indisputably partial to the holding of a
certification election. (Western Agusan vs. Trajano, 196 SCRA 622 (1331).
At any rate, UNIDAD completed all the requirements for union registration on July
14, 2001, and legitimate union status was accorded on July 15, 2000, or at least ten
(10) days before the scheduled date for holding the Certification Election.
2000 BAR EXAMINATION
I
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. (5%)
SUGGESTED ANSWER:
Yes, she can claim maternity benefit. Entitlement thereto is not dependent on the
claimant's being legally married. (Sec. 14-A, Social Security Act of 1997).
II
The Collective Bargaining Agreement of the Golden Corporation Inc. and the
Golden Corporation Workers Union provides a package of welfare benefits far superior

in comparison with those provided for in the Social Security Act of 1997. The welfare
plan of the company is funded solely by the employer with no contributions from the
employees. Admittedly, it is the best welfare plan in the Philippines. The company and
the union jointly filed a petition with the Social Security System for exemption from
coverage. Will the petition for exemption from coverage prosper? Reason. (5%)
SUGGESTED ANSWER:
No, because coverage under the SSS is compulsory where employer-employee
relations exist. However, if the private plan is superior to that of the SSS, the plan
may be integrated with the SSS plan. Still, it is integration and net exemption from
SSS law. [Philippine Blooming Mills Co.,. Inc. v. Social Security System, 17 SCRA 107
(1966): R.A. No. 1161 as amended by R.A. No. 8282].
III
Banco de Manila and the Ang Husay Janitorial and Pest Control Agency entered
Into an Independent Contractor Agreement with the usual stipulations; specifically,
the absence of employer-employee relationship, and the relief from liability clauses.
Can the Bank, as a client, and the Agency, as an independent contractor, stipulate
that no employer-employee relationship exists between the Bank and the employees of
the Agency who may be assigned to work in the Bank? Reason. (5%)
SUGGESTED ANSWER:
They can so stipulate if the relationship is indeed job contracting. Yet the
stipulation cannot prevail over the facts and the laws. The existence of employeremployee relationship is determined by facts and law and not by stipulation of the
parties. [Insular Life Assurance Co., Ltd. u. NLRC, 287 SCRA 476 (1998); Tabas v.
California Manufacturing Co.. Inc.. 169 SCRA 497 (1989)).

ALTERNATIVE ANSWER:
Yes, they can stipulate provided that the contract of independent contractor is
valid in accordance with Art. 106 of the Labor Code.
XV
a) Do workers have a right not to join a labor organization? (3%)
b) Do the following workers have the right to self- organization? Reasons/basis (2%)
i.

Employees of non-stock, non-profit organizations? li. Alien employees?

SUGGESTED ANSWER:
Yes, workers decide whether they will or will not become members of a labor
organization. Thats why a unions constitution and by-laws need the members
adoption and ratification. 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, 209 SCRA 484 (1992)).
b)(i) Even employees of non-stock non-profit organizations have the right
to self-organization. This is explicitly provided for in Art. 243 of the Labor
Code.
A possible exception, however, are employee- members of non-stock nonprofit cooperatives.
(ii) Alien employees with valid work permits in RP 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, Labor
Code).
V
Professor Juan dela Cruz, an author of the textbook Commentaries on the
Labor Code of the Philippines, citing an American case, wrote: It is said that the
prohibition against the issuance of a writ of injunction in labor cases creates
substantive and not purely procedural law." Is there any statutory basis for the
statement/comment under Philippine law? (5%)
SUGGESTED ANSWER:
Yes. The statutory basis is Article 254 of the Labor Code. It prohibits issuance
of injunction, as a matter of policy, to resolve disputes except as otherwise provided
in Articles 218 and 264 of the Labor Code. [Caltex Filipino Managers and
Supervisors Association v. CIR, 44 SCRA 350 (1972)1.
VI
Distinguish between dismissal of an employee for just cause and termination of
employment for authorized cause. Enumerate examples of just cause and authorized
cause. (5%)
SUGGESTED ANSWER:
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, 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 labor saving device and authorized
cause. [Art. 283-284, Labor Code).

VII
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. (5%)
SUGGESTED ANSWER:
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).
VIII
a) What is the rationale for the State regulation of strike activity and what are the
interests involved that the State must balance and reconcile? (3%)
b) Cite two (2) examples on how the law regulates the use of tire strike as a form of
concerted activity. (2%)
SUGGESTED ANSWER:
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 socioeconomic 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, Labor
Code: Raw at Buklod rig Manggagawa v. NLRC, 198 SCRA. 586 (1991); Lapanday
Workers Union u. NLRC, 248 SCRA 96 (1995)].
b) 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; (2) use of violence, intimidation or coercion and blockade of ingress-egress are
not allowed. (Art 263 (b) (c) (f) (g), Labor Code).
IX
a) 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. Can the
bank legally consider the caretaker, cooks and laundrywoman as domestic employees
of the resthouse and not of the bank? (3%)
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. (3%)
SUGGESTED ANSWER:
I
a) No, they are not domestic employees. They are bank employees because the resthouse
and recreational facility are business facilities as they are for use of the top executives
and clients of the bank. [Art. 141, Labor Code; Apex Mining Co., Inc. v. NLRC, 196
SCRA 251 (1991)-, Traders Royal Bank v. NLRC, G.R. No. 127864, December 22,
19991.
No, she is actually an office worker. She is not an industrial homeworker who
accepts work to be fabricated or processed at home for a contractor, which work,
when finished, will be returned to or repurchased by said contractor. [Art. 155, Labor
Code)
X
a) 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. Is the policy violative of
any provision of the Labor Code on employment of women7 (3%)
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? (3%)
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, Labor Code) nor are the acts prohibited under Art. 137 of the Labor
Code.
ALTERNATIVE ANSWER:
The school violated Art. 137 (2) of the Labor Code which states that: It shall be
unlawful for any employer to discharge such woman on account of pregnancy". The
pregnancy here could obviously have resulted from love and such only lends
substance to the saying that the heart has reasons of its own which reason does not
know", a matter that cannot be so casually equated with immorality". [Chua-Qua v.
Clave, 189 SCRA 117(1990)1.

SUGGESTED ANSWER:
b) No, because to tolerate pregnancy out of wedlock will be a blatant contradiction of the
schools 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.
XI
a) A Personnel Manager, while interviewing an attractive female applicant for
employment, stared directly at her for prolonged periods, albeit in a friendly manner.
After the interview, the manager accompanied the applicant to the door, shook her
hand and patted her on the shoulder. He also asked the applicant if he could invite
her for dinner and dancing at some future time. Did the Personnel Manager, by the
above acts, commit sexual harassment? Reason. (3%)
b) In the course of an interview, another female applicant inquired from the same
Personnel Manager if she had the physical attributes required for tire position she
applied for. The Personnel Manager replied: You will be more attractive if you will
wear micro-mini dresses without the undergarments that ladies nomKdly wear. Did
the Personnel Manager, by the above reply, commit an act of sexual harassment?
Reason. (3%)

SUGGESTED ANSWER:
Yes, because the Personnel Manager, a man, is in a position to grant or not to
grant a favor (a job) to the applicant. Under the circumstances, inviting the applicant
for dinner or dancing creates a situation hostile or unfriendly to the applicants
chances for a job if she turns down the invitation. (Sec. 3 (a) (3), R.A. No. 7877, AntiSexual Harassment Act].
ALTERNATIVE ANSWER:
a)

There is no sexual harassment because there was no solicitation of sexual favor in

exchange of employment. Neither was there any intimidating, hostile or offensive
environment for the applicant.
SUGGESTED ANSWER:

b) No, the Personnel Managers reply to the applicant's question whether she qualifies for
the position she is applying for does not constitute sexual harassment. The Personnel
Manager did not ask for or insinuate a request for a sexual favor in return for a
favorable action on her application for a job. But the Managers statement may be
offensive if attire or physical look is not a criterion for the job being applied for.
ALTERNATIVE ANSWER:

(b) Yes. The remarks would result in an offensive or hostle environment for the
employee. Moreover, the remarks did not give due regard to the applicants' feelings
and it is a chauvinistic disdain of her honor, justifying the finding of sexual
harassment. (Villarama v. NLRC, 236 SCRA 280 (1994)].
XII
a) Can redundancy exist where the same is due to the companys failure to properly
forecast its manpower requirements? (3%)
b) Can redundancy exist where the work performed by twelve (12) workers can be
performed as efficiently by ten (10) workers by increasing the speed of a machine
without detriment to the health and safety of the workers? (3%)
SUGGESTED ANSWER:
a) Yes, redundancy exists when a position has become an excess or superfluous which,
in turn, may be caused by reorganization, closure of a section or department, or
adoption of labor-saving arrangements. Poor forecasting does not invalidate
redundancy. Forecasting after all is not fail-free. [Wiltshire File Co.,Inc. v. NLRC, 193
SCRA 665 (1991)].
b) Yes, redundancy can exist where work efficiency has been improved mechanically
thus resulting in excessive or superfluous manpower. (Wiltshire File Co., Inc. v.
NLRC, 193 SCRA 665 (1991)].
XIII
Metro Grocery Inc. arranged with Mr. Juan Dado, a Barangay Chairman, to
provide the grocery with workers who will work as cashiers, bag boys, shelf counter
helpers and sanitation workers. The grocery will pay Mr. Dado an amount equivalent
to the direct and hidden costs of the wages of each worker assigned, plus ten percent
(10%) to cover the administrative costs related to their arrangement. Mr. Dado, in
turn, will pay directly the workers their wages. As far as the workers are concerned,
Mr. Dado is their employer. A group of concerned workers consulted you if Mr. Dado
is really under the law their employer.
a) How will you analyze the problem in order to formulate your answer? (3%)
b) What is the legal significance, if any, of the question of the concerned workers as to
who is their employer? (3%)

SUGGESTED ANSWER:
a) I will analyze the problem by applying the four-fold test of employer-employee
relationship. I will examine if Mr. Dado exercises power of control or supervision over
the workers manner and method of doing their work. Control is the most important
factor in examining employer-employee relationship. The other factors are hiring,
payment of wages, and power to dismiss. I will also examine whether there was job
contracting or labor-only contracting.

ALTERNATIVE ANSWER:
a) My analytical framework will be an analysis of the law on Independent contractor and
labor only contracting.
If there is a valid independent contractor situation. Mr. Dado will be the direct
employer, and the Metro Grocery
will be the Indirect employer.
If there is a labor-contractor only relationship, the Metro Grocery will be the
employer as it directly hired
the employees.
b) The legal significance is the determination of employee-employer relationship, which
gives rise to certain rights and obligation of both employer and employee, such as SSS
membership, union membership, security of tenure, etc.
XIV
Distinguish between "Certification Election", Consent Election," and "Run-off
Election". (6%)
SUGGESTED ANSWER:
Certification election requires a petition for a Certification Election filed by a
union or employer. A med-arbiter grants the petition and an election officer is
designated by the regional director to supervise the election. (Art. 256, 257,258,
Labor Code).
Consent election is held by agreement of the unions with or without
participation of the med-arbiter. [Warren Manufacturing Workers Union v. Bureau of
Labor Relations, 159 SCRA 387 (1988)].
Run-off election takes place between the unions who received the two highest
number of votes where not one of the unions obtained the majority of the valid votes
cast, provided that the total union votes is at least 50% of the votes cast. (Art. 256,
Labor Code).
XV
a) 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. (3%)
b)

A Collective Bargaining Agreement was signed between the Ang Sarap Kainan
Company and the Ang Sarap Kainan Workers Union. Should the Collective
Bargaining Agreement be registered with, the Bureau of Labor Relations? If so, why?

(3%)
SUGGESTED ANSWER:
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), Labor Code). .
b) So that the contract-bar rule may apply the CBA should be registered, assuming it
has been validly ratified and contains the mandatory provisions. (Art. 232, Labor
Code).
c)

XVI

a) The Samahan ng Mga Manggagawa sa Pids and Co. Inc. lost its majority status in the
bargaining unit one year after the signing of the Collective Bargaining Agreement.
Bickering among all the three other unions in the bargaining unit were a daily
occurrence, with each union asserting majority status. To resolve this pestering
problem, the Company and the three other unions agreed to hold a consent election
under the supervision of the Bureau of Labor Relations. In the consent election. Pids
and Co. Workers Union won, and was accordingly recognized by the Company as the
exclusive bargaining representative in the bargaining unit. Is the Pids and Co.
Workers Union bound by the Collective Bargaining Agreement signed between the
Company and the Sam ah an ng Mga Manggagawa Sa Pids and Co. Inc.? Explain. (3%)
b)

Shortly after the consent election, Pids and Co. Inc. sold the Groceries Division to
Metro Manila Grocery Inc. The employees of the sold division formed part of the
bargaining unit described in the Collective Bargaining Agreement, and all were
absorbed by Metro Manila Grocery Inc. Is Metro Manila Grocery' Inc. as the new
employer, bound by the Collective Bargaining Agreement existing at the time of the
sale? Explain. (3%)

a)

Yes, because the Collective Bargaining Agreement is not invalidated by the change of
the bargaining agent while the CBA is still effective. The substitutionary doctrine"
applies. [Benguet Consolidated Inc. v. BCI Employees. 23 SCRA 465 (1968)].

b)

No. There are no indications that the sale is simulated or intended to defeat the
employees' right to organize. A bonafide sale terminates the employment relationship
between the selling company and its employees. The CBA does not bind the purchaser
in good faith because the CBA is a personam contract, unless the buyer agrees to be
bound. [Sundowner Dev. Corp. v. Drilon, 180 SCRA 14 (1989); Associated Labor
Union v. NLRC, 204 SCRA 913 (1993)].
XVII
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) Was the walkout a strike? And if so, was it a valid activity? (3%)
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? (3%)
SUGGESTED ANSWER:
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, (o), (I) Labor Code].
b) Yes, the employer may discipline the union officer. An Illegal strike is a cause for the
union officer to be declared to have lost his employment status. [Art. 263 (c), (d),( e),(J): Art. 264 (a), Labor Code].
The workers engaged in picketing activity in the course of a strike.
a)

Will picketing be legal if non-employees of the strike-bound employer participate in

the activity? (3%)

b) Can picketing activity be curtailed when Illegal acts are committed by the picketing
workers in the course of the activity? (3%)
SUGGESTED ANSWER:
Yes, the picketing is legal even though non-employees 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 u. Cinema
Stage, etc.101 Phil. 1259 (1957)].

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), 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 u. Libron, 124
SCRA 448 (1983); Free telephone Workers Union u. PLOT. 113 SCRA 662 (1982)].
1999 Bar Examination
I
FACTS: Samahan ng mga Manggagawa sa Companya ng Tabaco (SMCT) filed a
Petition for Certification Election among the supervisory employees of the Tabaco
Manufacturing Company (Tabaco) before the NCR Regional Office of the Department
of Labor and Employment. It alleged, among other things, that it is a legitimate labor
organization, a duly chartered local of NAFLU; that Tabaco is an organized
establishment; and that no certification election has been conducted within one year
prior to the filing of its petition for certification election.
The Petition filed by SMCT showed that out of its 50 members, 15 were rankand-filers and two (2) were managers.
Tabaco filed a Motion to Dismiss on the ground that SMCT union is composed of
supervisoiy and rank-and-file employees and. therefore, cannot act as bargaining
agent for the proposed unit.
SMCT filed an opposition to the said Motion alleging that the infirmity, if any, in
the membership of the union can be remedied in the pre-election conference thru the
exclusion- Lnclusion proceedings wherein those employees who are occupying rankand-file positions will be excluded from the list of eligible voters.
1. Should the Motion to Dismiss filed by the Tabaco be granted or denied? Explain. (3%)
SUGGESTED ANSWER:
The Motion to Dismiss filed by Tabaco should be granted.
According to the Labor Code (iri Article 245), supervisory employees shall not be
eligible for membership in

a labor organization of rank-and-file employees but may join or form separate labor
organizations of their own.
Because of the above-mentioned provision of the Labor Code, a labor organization
composed of both rank- and-file and supervisory employees is no labor organization at
all. It cannot, for any guise or purpose, be a legitimate labor organization.

Not being a legitimate labor organization, it cannot possess the requisite

personality to file a petition for certification election.
(See Toyota Motor Philippines Corp. vs. Toyota Motor Philippines Corp. Labor
Union, 268 SCRA 573)
ALTERNATIVE ANSWER:
The Motion to Dismiss should be denied. In the first place, the general rule is
that in a certification election the employer is a mere bystander. An employer has no
legal standing to question a certification election as it is the sole concern of the
workers. The exceptions to the general rule of which are 1) when the existence of an
employer-employee relationship is denied; and 2) when the employer questions the
legal personality of the union because of irregularities in its registration are not pres ent in this case.
2. Can the two (2) Managers be part of the bargaining unit? Why? (2%)
SUGGESTED ANSWER:
No, the two (2) Managers cannot be part of the bargaining unit composed of
supervisory employees.
A bargaining unit must effect a grouping of employees who have substantial,
mutual interests in v/ages, hours, working conditions and other subjects of collective
bargaining. (San Miguel Corp. Supervisors and Exempt Employees Union v.
Laguesma, 227 SCRA 370)
The Labor Code (in Article 245 provides that managerial employees are not eligible to
join, assist or form any labor organization.
The above provision shows that managerial employees do not have the same
Interests as the supervisory employees which compose the bargaining unit where
SMCT wishes to be the exclusive collective bargaining representative.
II
1. Distinguish between contract bar rule" and dead lock bar rule". (3%)
SUGGESTED ANSWER:
Under the contract bar rule, a certification election cannot be held if there is in
force and in effect a collective bargaining agreement that has been duly registered
with the Department of Labor and Employment except during the freedom period of
such CBA which is the 60-day period prior to the expiry date of said CBA. (See

Articles 231, 253-A and 256)

Under the deadlock bar rule" a certification election cannot be held if a
bargaining deadlock to which an Incumbent or certified bargaining agent is a party
had been submitted to conciliation or mediation or had become the subject of a
valid notice of strike or lockout. (See Section 3, Rule XI, Book V of the Implementing
Rules and Regulations of the Labor Code)
2. What is the automatic renewal clause" in a collective bargaining agreement? (2%)

SUGGESTED ANSWER:
The automatic renewal clause1 in a CBA refers to that provision of the Labor
Code (Article 253) which states that it shall be the duty of both parties (to a CBA)
to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day (freedom) period and/or
until a new agreement is reached by the parties.

III
FACTS: 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. everyday, including
Sundays and holidays. 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.
May the GROs form SUKI as a labor organization for purposes of collective
bargaining? Explain briefly. (5%).
SUGGESTED ANSWER:
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.

The Labor Code (in Article 138) 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.
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.
IV
1. In what instance may a petition for certification election be filed outside the freedom
period of a current collective bargaining agreement? (3%).
SUGGESTED ANSWER:
As a general rule, in an establishment where there is in force and effect a CBA, a
petition for certification election may be filed only during the freedom period of such
CBA.
But to have the above-mentioned effect, the CBA should have been filed and
registered with the Department of Labor and Employment (See Article 231, 253-A and
256)
Thus, a CBA that has not been filed and registered with the Department of Labor
and Employment cannot be a bar to a certification election and such election can be
held outside of the freedom period of such CBA.
ALTERNATIVE ANSWER:
A petition for certification election may be filed outside the freedom period of a
current CBA if such CBA is a new CBA that has been prematurely entered into,
meaning, it was entered into before the expiry date of the old CBA. The filing of the
petition for certification election shall be within the freedom period of the old CBA
which is outside of the freedom period of the new CBA that had been prematurely
entered into.
1. Are probationary employees entitled to vote in a certification election? Why? (2%).
SUGGESTED ANSWER:

In a certification election, all rank-and-file employees in the appropriate

bargaining unit are entitled to vote. This principle is clearly stated in Article 255 of the
Labor Code which states that the "labor organization designated or selected by the
majority of the employees in such unit shall be the exclusive representative of the
employees in such unit for the purpose of collective bargaining." Collective bargaining
covers all aspects of the employment relation and the resultant CBA negotiated by the
certified union binds all employees in the bargaining unit. Hence, all rank-and-file
employees, probationary or permanent, have a substantial interest in the selection of
the bargaining representative. The Code makes no distinction as to their employment
status as basis for eligibility to vote in the petition for certification election. The law
refers to "all" the employees in the bargaining unit. All they need to be eligible to vote
is to belong to the bargaining unit." (Airtime Specialists, Inc. v. Ferrer-Calleja, 180
SCRA 749)

ALTERNATIVE ANSWER:
Probationary employees may not be entitled to vote in a certification election
where only regular employees belong to a bargaining unit and probationary employees
do not belong to such bargaining unit. It is the belonging to a bargaining unit that
entitles an employee to vote in a certification election.
ANOTHER ALTERNATIVE ANSWER:
Yes. Any employee, whether employed for a definite period or not, shall, beginning
on his first day of service, be considered an employee for purposes of membership in
any labor union (Art. 277(c)).
V
FACTS: Mariet Demetrio was a clerk-typist in the Office of the President of a
multi-national corporation. One day she was berated by the President of the
company, the latter shouting invectives at her in the presence of employees and
visitors for a minor infraction she committed. Mariet was reduced to tears out of
shame and felt so bitter about the incident that she filed a civil case for damages
against the company president before the regular courts. Soon thereafter, Mariet
received a memorandum transferring her to the Office of the General Manager
without demotion in rank or diminution in pay. Mariet refused to transfer.

With respect to the civil suit for damages, the company lawyer filed a Motion to
Dismiss for lack of jurisdiction considering the existence of an employer-employee
relationship and therefore, it is claimed that the case should have been filed before

the Labor Arbiter.

1. Will Mariet Demetrios refusal to transfer constitute the offense of insubordination?
Explain briefly. (2%)

SUGGESTED ANSWER:
Mariet Demetrio's transfer constitutes the offense of insubordination. The
transfer is a lawful order of the employer.
It is the employer's prerogative, based on its assessment and perception of its
employees' qualifications, aptitudes, and competence, to move its employees around in
the various areas of its business operations in order to ascertain where they will
function with maximum bene- fit to the company. An employees right to security of
tenure does not give him such a vested right in his position as would deprive the
company of its prerogative to change his assignment or transfer him where he will be
most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial
to him, and it does not involve a demotion in rank or a diminution of his salaries,
benefits, and other privileges, the employee may not refuse to obey the order of
transfer. (Philippine Japan Active Carbon Corp. V. NLRC, 171 SCRA 164)
2. Rule on the Motion to Dismiss. Should it be granted or denied? Explain briefly (3%).
SUGGESTED ANSWER:
The Motion to Dismiss should be denied.
It is a regular court and not a Labor Arbiter that has jurisdiction on the suit for
damages.
The damages are not arising from the employer- employee relations which would
have placed the suit under the jurisdiction of a Labor Arbiter. The suit arises from the
fact that the President of the company shouted invectives at Mariet Demetrio in the
presence of employees and visitors. Her complaint for damages is against an officer of
the Company based on slanderous language allegedly made by the latter. This falls
under the jurisdiction of the ordinary courts. There is here a simple action for
damages for tortious acts allegedly committed by the defendant. Such being the case,
the governing statute is the Civil Code and not the Labor Code. (Medina v. CastroBartolome, 116 SCRA 597)
ALTERNATIVE ANSWER:
The Motion to dismiss should be granted.
According to the Labor Code (in Article 217 (a) 4), the Labor Arbiter has original and
exclusive jurisdiction to hear and decide, among others, claims for actual, moral,
exemplary and other forms of damages arising from the employer-employee relations.

The claim for damages in the case in question arose from the fact that the
President of the Company shouted invectives at Mariet Demetrio in the presence of
employees and visitors for a minor infraction she committed. If the infraction has
something to do with her work, then, the claim for damages could be considered as
arising from employer-employee relations. Thus, the claim is under the exclusive
jurisdiction of the Labor Arbiter.

VI
FACTS: 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.
By reason of this intra-union dispute within PAFLU. J & J obstinately and
consistently refused to offer any counterproposal and to bargain collectively with
JEU-FAFLU until the representation issue within PAFLU shall have been resolved
with finality. JEU-PAFLU filed a Notice ot Strike. The Secretary of Labor subsequently
assumed jurisdiction over the labor dispute.
1. 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. (3%)
SUGGESTED ANSWER:
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.
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
Supervising Union (FFW), 127 SCRA 263 [1984]).

2. Can the Secretary of Labor decide the labor dispute by awarding the JEU CBA
Proposals as the Collective E3argaining Agreement of the parties? Explain briefly.
(2%)
SUGGESTED ANSWER:
Yes. The Secretary of Labor can decide the labor dispute by awarding the JEU
CBA proposals as the Collective Bargaining Agreement of the parties because when
the Secretary of Labor (under Article 263[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 Lai or 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 vs. Secretary of Labor, 213 SCRA 759)
ALTERNATIVE ANSWER:
What is involved in the case in the question 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.
VII
FACTS: Marvin Patrimonio is a caddy rendering caddying services for the
members and guests of the Barili Golf &I Country Club. As such caddy, he is subject
to Barili golfs rules and regulations governing Caddies regarding conduct, dress,
language, etc. However, he does not have to observe any working hours, he is free to
leave anytime he pleases: and he can stay away for as long as he likes. Nonetheless, if
he is found remiss in the observance of club rules, he can be disciplined by being
barred from the premises of Barili Golf.
Is Marvin within the compulsory coverage of the Social Security
System? Why? (5%)
SUGGESTED ANSWER:
Because he is not an employee of the Barili Golf & Country Club, Marvin is net
within the compulsory coverage of the Social Security System. Marvin is not an
employee of the club because under the specific circumstances of his relations with
the club, he is not under the orders of the club as regards employment which would
have made him an employee of the club. (See Manila Golf 8t Country Club, Inc. v,
LAC, 237 SCRA 207)

Bui Marvin is within the compulsory coverage of the SSS as a self-employed

person. (See Section 3-A, Social Security Law of 1957)

VIII

FACTS: Polaris Drug Company had an existing Collective Bargaining Agreement

with Polaris Workers Union (PWU) which was due to expire on May 31. 1999. PWU
had a total membership of one hundred (100) rank-and-file employees of the company.
Mike Barela, a militant member of the union, suspected that the union officers were
misappropriating union funds as no financial report was given to the general
membership during the unions general assembly. Hence, Mike Barela prepared a
sworn written complaint and filed the same with the Office of the Secretary of Labor
on May 10, 1999, petitioning for an examination of the financial records of PWU.
1. Is the Secretary of Labor authorized by law to examine the financial records of the
union? If so, what power? If not, why not? (3%)
SUGGESTED ANSWER:
The Secretary of Labor is expressly authorized by the Labor Code (In Article 274)
to examine the financial records of the unions to determine compliance or noncompliance with the pertinent provisions of the Labor Code and to prosecute any
violation of the law and the union constitution-and-by-Iaws. But this authority may
be exercised only upon the filing of a complaint under oath and duly supported by the
written consent of at least twenty percent (20%) of the total membership of the labor
organization concerned.
ALTERNATIVE ANSWER:
Among the rights and conditions of membership in a labor organization is the right
implied by the proviso in the Labor Code (Article 241 (m)) stating that the books of
accounts and other records of the financial activities of any labor organization shall
be open to inspection by any officer or member thereof during office hours.
As a union member, Mike Barela could file an intra-union case that may entail
the act of the Secretary of Labor examining the financial records of the union. (See
La Tondeha Workers Union v. Secretary of Labor and Employment, 239 SCRA 117)
2. Under the facts given above, could an examination or audit of the financial records of
the union be ordered? Why? (2%)
SUGGESTED ANSWER:
Under the facts given in the question, an examination or audit of the financial

records of the union cannot be ordered because for such examination or audit to
take place, there should be a complaint under oath and duly supported by written
consent of at least twenty (20%) per cent of the total membership of the labor
organization concerned. In this case, the aforementioned requirement was not
fulfilled. It was only a sworn written complaint by one union member that was filed.
Also, the Labor Code provides that an examination of the books of a union shall
not be conducted during the sixty (60) day freedom period nor within thirty (30)
days immediately preceding the date of election of union officials.
In the case, the complaint was filed on May 10, 1999 which is within the
freedom period of the current CBA which was to expire on May 31, 1999.
IX

FACTS: In the illegal dismissal case filed by Sharon Cometa against Up & Down
Company, the labor Arbiter rendered a decision directing her immediate
reinstatement and payment of full backwages. The Company appealed to the NLRC.
Following her lawyer's advise that the reinstatement aspect of the decision is
immediately executory. Sharon went to the HRD Office of the Company and
demanded immediate reinstatement. When the Company refused, her lawyer. Atty.
Maximiano Anunciacion, filed a motion to cite the employer in contempt. Acting on
the motion, the NLRC ordered the payroll reinstatement of Sharon Cometa.
1. Can the company or any of its officials be cited for contempt for refusing to reinstate
Sharon Cometa? Why? (3%)
SUGGESTED ANSWER:
Yes. The company or any of its officials can be cited for contempt. It is rioted that
in his decision, the Labor Arbiter specifically directed the immediate reinstatement of
Sharon Cometa. This directive under the Labor Code (Article 223) is immediately
executory, even pending appeal. (Pioneer Texturizing Corporation v. NLRC, 280 SCRA
806)
ALTERNATIVE ANSWER:
Yes. Under Art. 223 of the Labor Code, an employer has two options in order for
him to comply with an order of reinstatement, which is immediately executory, even
pending appeal. Firstly, he can admit the dismissed employee back to work under the
same terms and conditions prevailing prior to his dismissal or separation or to a
substantially equivalent position if the former position is already filled up. Secondly,

the employer can be reinstated in the payroll. Failing to exercise any of the above
options, the employer can be compelled under PAIN OF CONTEMPT, to pay instead the
salary of the employee effective from the date the employer failed to reinstate despite
an executory writ of execution served upon him. Under Art. 218 of the Labor Code,
the NLRC has the power to cite persons for direct and indirect contempt.
ANOTHER ALTERNATIVE ANSWER
In a case (Maranaw Hotel Corp. v. NLRC, 238 SCRA 1ST), the Supreme Court
said that although the reinstatement aspect of a Labor Arbiter's decision was
immediately executory, it does not follow that it is self- executory. There must still be
a writ of execution issued motu proprio or upon motion of the interested party. (See
Article 224)
2. May the NLRC order the payroll reinstatement of Sharon Cometa? Why? (2%)

SUGGESTED ANSWER:
The NLRC may NOT order the payroll reinstatement of Sharon Cometa. The
Labor Code (Article 223) provides that in the Immediate reinstatement of a dismissed
employee, the employee shall be admitted back to work under the same terms and
conditions prevailing prior to the employee's dismissal or, at the option of the employer, merely reinstated in the payroll. Thus, the reinstatement of the employee in
the payroll is at the option of the employer and not of the NLRC or the Labor Arbiter
who have the power only to direct reinstatement.
X
FACTS: Teofilo Lacson was one of more than one hundred (100) employees who
were terminated from employment due to the closure of LBM Construction
Corporation (LBM).
LBM was a sister company of Lastimoso Construction. Inc. and RL Realty &
Development Corporation. All three (3) entitles formed what came to be known as the
Lastimoso Group of Companies. The three (3) corporations were owned and
controlled by members of the Lastimoso Family: their incorporators and directors all
belonged to the Lastimoso family. The three (3) corporations were engaged in the
same line of business, under one management, and used the same equipment
including manpower services.
Teofilo Lacson and his co-employees filed a complaint with the Labor Arbiter
against LBM. RL Realty and Lastimoso Construction to hold them jointly and
severally liable for backwages and separation pay.
Lastimoso Construction. Inc. and RL Realty & Development Corporation
interposed a Motion to dismiss contending that they are juridical entities with distinct

and separate personalities from LBM Construct ion Corporation and therefore, they
cannot be held jointly and severally liable for the money claims of workers who are not
their employees.
Rule on the Motion to Dismiss. Should it be granted or denied? Why? (5%)
SUGGESTED ANSWER:
It is very clear that even If LBM Construction Company, Lastimoso Construction
Company, Inc. and RL Realty & Development Corporation all belong to the Lastimoso
family and are engaged In the same line of business under one management and used
the same equipment including manpower services, these corporations were separate
juridical entities.
Thus, only the LBM Construction Corporation is the employer of Teofilo Lacson.
The other corporation do not have any employer-employee relations with Lacson.
The case in question does not include any fact that would justify piercing the veil
of corporate fiction of the other corporations in order to protect the rights of workers.
In a case (Concept Builders, Inc. v. NLRC, 257 SCRA 149), the Supreme Court
ruled that it is a fundamental principle of corporation law that a corporation is an
entity separate and distinct from its stockholders and from other corporations to
which it maybe connected.

But this separate and distinct personality of a corporation is merely a fiction created
by law for convenience and to promote justice. So, when the notion of separate
juridical personality is used to defeat public convenience, justify wrong, protect fraud
or defend crime, or is used as a device to defeat the labor laws, this separate
personality of the corporation may be disregarded or the veil of corporate fiction
pierced.

ALTERNATIVE ANSWER:
Motion to Dismiss should be denied. In the case at bar, the Labor Arbiter would
be justified in piercing the corporate veil and considering the three (3) corporations as
one and the same entity as the employer of Teofilo Lacson because based on the facts
"the three corporations were owned and controlled by members of the Lstimoso
family; their incorporators and directors all belonged to the Lastimoso family. The
three (3) corporations were engaged in the same line of business, under one
management and used the same equipment including manpower services. The facts
show that "the notion of legal entity is used to defeat public convenience, justify

wrong, protect fraud, or defend crime, the law will regard the corporation as an
association of persons, or in the case of two corporations, will merge them into one."
XI
FACTS: International Motors Corporation (IMC) undertook a reorganization of the
company and right-sizing of its personnel complement due to the current financial
crisis. The affected employees were given the option to resign with corresponding
generous benefits attending such option. The said employees opted to resignation on
account of these negotiated benefits; and after receipt of which, they executed
quitclaims in favor of IMC. Immediately thereafter, the employees voluntarily resigned
for valuable consideration and that, in any case, they have executed quitclaims in
favor of the company. The employees, however, claimed that they

were forced to resign, and that they executed the quitclaims only because of dire
necessity.
1. Is the company guilty of illegal dismissal? Why?
(3%)
SUGGESTED ANSWER:
NO. The company is not guilty of illegal dismissal since the facts clearly indicate
that the employees were given the option to resign with corresponding generous
benefits attending such option and that these employees "opted for resignation on
account of these negotiated benefits. Nothing in the facts indicate that their consent
to the waiver of benefits under the Labor Code was vitiated by fraud, violence, undue
influence or any other vice or defect.
ALTERNATIVE ANSWER:
The company is not guilty of illegal dismissal.
According to the facts of the case, the employees opted to resign voluntarily,
considering the generous benefits given to them in connection with such resignation.
Voluntary resignation cannot be considered as illegal dismissal. (Samaniego v.
NLRC, 198 SCRA 111)
2. Can the quitclaim be annulled on the ground of dire necessity? Why? (2%)
SUGGESTED ANSWER:
A quitclaim case can be annulled on the ground of its being entered into

involuntarily by employees because of dire necessity. Thus, if it was dire necessity

that forced a worker tc sign a quitclaim even if the amount of money given to him by
the employer was very much less than what the workers was entitled to receive, then
the quitclaim was not voluntary, and thus, the said quitclaim Is null and void. In a
case (Veloso v. DOLE, 200 SCRA 201) the Supreme Court held that dire necessity" is
not an acceptable ground for annulling the releases, especially since it has not been
shown that the employees had been forced to execute them. It has not been proven
that the considerations for the quitclaims were unconscionably low and that the
petitioners had been tricked into accepting them.
XII
1. Can a final and executory judgment be compromised under a Release and-Quitclaim"
for a lesser amount? (3%)
SUGGESTED ANSWER:
Yes, as long as the "Release and Quitclaim is signed by the very same person
entitled to receive whatever is to be paid under the final and executory judgment that
was the subject of the compromise agreement and that the Release and Quitclaim
was signed voluntarily.
In Alba Patio de Makati v. NLRC: A final and executory judgment can no longer
be altered, even if the modification is meant to c'orrect what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether the modification is
attempted to be made by the court rendering it or by the highest court of the land.
Moreover, a final and executory judgment cannot be negotiated, hence, any act to
subvert It is contemptuous.
It was incumbent upon the counsel for the complainant to have seen to it that
the interest of all complainants was protected. The quitclaim and the release in the
preparation of which he assisted clearly worked to the grave disadvantage of the
complainants. To render the decision of this Court meaningless by paying the backwages of the affected employees in a much lesser amount clearly manifested a willful
disrespect of the authority of this Court as the final arbiter of cases brought to it.
A final and executory judgment cannot be compromised under a Release and
Quitclaim" if said Release and Quitclaim is clearly to the grave disadvantage of the
affected employees by paying them much lesser amounts than what they were entitled
to receive under the judgment. (See Alba Patio de Makati vs. NLRC, 201 SCRA 355).
2. May an ordinary rank-and-file employee be terminated for loss of trust and
confidence? If so, what proof is required? If not, why not? (2%)
SUGGESTED ANSWER:
An ordinary rank and file employee may be terminated for loss of trust and
confidence as long as loss of trust and confidence is brought about objectively due to
a willful breach by the employee of the trust reposed in him by his employer or duly

authorized representative, and said willful breach is proven by substantial evidence.

When adequately proven, the dual grounds of breach of trust and loss of
confidence constitute valid and ample bases to warrant termination of an errant
employee. As a general rule, however, employers are allowed a wider altitude of
discretion in terminating the employment of managerial personnel or those of similar
rank performing functions which by their nature requires the employer's full trust
and confidence, than in the case of an ordinary rank-and-file employee, whose
termination on the basis of these same grounds requires proof of involvement in the
events in question; mere uncorroborated assertions and accusations by the employer
will not suffice. (Manila Midtown Commercial Corporation v. Nuwhrain, 159 SCRA
212).
XIII
FACTS: On September 3. 1998, the National Bureau of Investigation (NBI)
extracted from Joko Diaz without the assistance of counsel a sworn statement
which made it appear that Joko, in cahoots with another employee, Reuben Padilla,
sold ten (10) cash registers which had been foreclosed by North-South Bank for
P50.000.00 and divided the proceeds therefrom in equal shares between the two of
them.
On September 10, 1998, Joko was requested by Rolando Bato, the bank manager,
to appear before the Disciplinary Board for an investigation in the following tenor:
You are requested to come on Thursday, September 14, 1998, at 11:00 a.m. the
Board Room, without counsel or representative, in connection with the investigation
of the foreclosed cash registers which you sold without authority.
Mr. Bato himself conducted the investigation, and two (2) days thereafter, he
dismissed Joko. The bank premised its action in dismissing Joko solely on the latter's
admission of the offense imputed to him by the NBI in its interrogation on September
3, 1998. Aside from this sworn statement, no other evidence was presented by the
bank to establish the culpability of Joko in the fraudulent sale of the banks foreclosed
properties.
1. Is the dismissal of Joko Diaz by North-South Bank legally justified? Explain briefly.
(3%)
SUGGESTED ANSWER:
The dismissal of Joko Diaz by North-South Bank is not legally justified.
Diaz was not given the required due process by the Bank. He should have been
given a written notice that he was being terminated and a statement of the causes for
his termination.
He was instead given a just notice about an investigation relative to an incident.

It was also contrary to law for the Bank to tell Diaz that he should attend the
investigation without counsel or representative. Instead, he should have been afforded as provided In the Labor Code (in Article 277[b]) ample opportunity to be heard
and to defend himself with the assistance of his representative if he so desires.
If the evidence that was the basis for the termination of Joko Diaz was only his
own statement 'extracted from him by the NBI when Joko was without the assistance of counsel, then the statement cannot be substantial evidence for Jokos
termination.
ALTERNATIVE ANSWER:
NO. Under Sec, 12of Art. in of the 1987 Constitution any confession or
admission obtained in violation of Sec. 12 and 17 shall be Inadmissible in evidence
against him. Since the sole basis for his dismissal was the confession procured by
the NBI in violation of his right to counsel which is inadmissible for any purpose and
any proceeding including an administrative case, his dismissal is illegal. Diaz's
termination is likewise illegal because he was deprived of his light to due process
since during the investigation he was required to attend without counsel or
representative.
2. Can Reuben Padillas participation in the fraudulent sale of the bank's foreclosed
properties be made to rest solely on the unilateral declaration of Joko Diaz? Why?
(2%)
SUGGESTED ANSWER:
No. The unilateral declaration of Joko, where Joko has not been subjected to
cross-examinations cannot be considered as substantial evidence; it is just hearsay.
ALTERNATIVE ANSWER:
No. The unilateral declaration of Joko is not enough. Such declaration must be
corroborated by other competent and convincing evidence. At the very least, what the
Bank should do should be to confront Reuben Padilla with the declaration of Joko
(Century Textile Mills, Inc. vs, NLRC, 161 SCRA 628).
FACTS: Asia Security & Investigation Agency (ASIA) executed a one-year contract
with the Baron Hotel (BARON) for the former to provide the latter with twenty (2,0)
security guards to safeguard the persons and belongings of hotel guests, among
others. The security guards filled up Baron application form and submitted the
executed forms directly to the Security Department of Baron. The pay slips of the
security guards bore Barons logo and showed that Baron deducted therefrom the
amounts for SSS premiums, medicare contributions and withholding taxes.
Assignments of security guards, who should be on duty or on call, promotions,
suspensions, dismissals and award citations for meritorious services were all done

upon approval by Barons chief Security officer.

After the expiration of the contract with Asia, Baron did not renew the same and
instead executed another contract for-security services with another agency. Asia
placed the affected security guards on floating status" on no work no pay basis.
Having been displaced from work, the Asia security guards filed a case against the
Baron Hotel for illegal dismissal, overtime pay, minimum wage differentials, vacation
leave and sick leave benefits, and 13th month pay.
Baron Hotel denied liability alleging that Asia is the employer of the security
guards and therefore, their complaint for illegal dismissal and payment of money
claims should be directed against Asia. Nevertheless, Baron filed a Third Party
Complaint against Asia.
1. Is there an employer-employee relationship between the Baron Hotel, on one hand,
and the Asia security guards, on the other hand? Explain briefly. (3%)
SUGGESTED ANSWER:
As a general rule, the security guards of a private security guard agency are the
employees of the latter and not of the establishment that has entered into a contract
with the private security guard agency for security services.
But under the facts in the question, Baron Hotel appear to have hired the
security guards, to have paid their wages, to have the power to promote, suspend or
dismiss the security guards and the power of control over them, namely, the security
guards were under orders of Baron Hotel as regard their employment.
Because of the above-mentioned circumstances, Baron Hotel is the employer of
the security guards.
2. Assuming that ASIA is the employer, is the act of ASIA in placing the security guards
on "floating status" lawful? Why? (2%)

SUGGESTED ANSWER:
It is lawful for a private security guard agency to place its security guard on a
floating status if it has no assignment to give to said security guards.
But if the security guards are placed on a floating status for more than six (6)
months, the security guards may consider themselves as having been dismissed.
XV
FACTS: The Labor Arbiter dismissed the complaint for illegal dismissal filed by

Genevieve Cruz against Bulag Optical Inc. (BOI) which denied her prayer for
reinstatement but awarded Financial assistance in her favor. BOI appealed the
decision of the Labor Arbiter to the NLRC within the regle- mentary period. Genevieve
filed an opposition io the appeal. The NLRC affirmed in toto the decision of the Labor
Arbiter. Both the BOI and Genevieve are not satisfied with the decision of the NLRC.
1. What is the remedy, if any, of BOI and before what forum? Explain briefly. (3%)
SUGGESTED ANSWER:
BOI can file a Motion for Reconsideration with the NLRC after ten (10) calendar
days from receipt of the decision.
If the NLRC denies the Motion for Reconsideration, BOI can file a petition for
certiorari with the Court of Appeals under Rule 65 of the Rules of Court since the
decision of the NLRC is final and executory.
2. Can Genevieve Cruz avail herself of the same remedy as that of BOI? Why? (2%)
SUGGESTED ANSWER:
Genevieve Cruz can avail herself of the same remedy as that of the BOI. The
remedies described for the BOI are also the same remedies available to Genevieve
Cruz as a party to the case, pursuant to the Labor Code (Article 223) and the Rules of
Court (Rule 65).
Panel: But the facts of the case indicates that Genevieve did not appeal. She
therefore cannot avail of the remedy.
XVI
FACTS: In a certification election conducted by the Department of Labor,
Associated Workers Organization in Laguna (AWOL) headed by Cesar Montanyo, won
over Pangkat ng mga Manggagawa sa Laguna (PML), headed by Eddie Graciaa. Hence,
AWOL was certified as the exclusive bargaining agent of the rank-and-file employees
of the Laguna Transportation Company (LTC).
Shortly, thereafter, a Collective Bargaining Agreement was concluded by LTC and
AWOL which provided for a closed shop. Consequently, AWOL, demanded that Eddie
Graciaa and all the PML members be required to become members of AWOL as a
condition for their continued employment; other- wise, they shall be dismissed
pursuant to the closed shop provision of the CBA.
The union security clause of the CBA also provided for the dismissal of employees
who have not maintained their membership in the union. For one reason or another,
Francis Magallona, a member of AWOL, was expelled from the union membership for

acts inimical to the interest of the union. Upon receipt of the notice that Francis
Magallona failed to maintain his membership in good standing with AWOL, LTC
summarily dismissed him from employment.
1. Can Eddie Graciaa and all the PML members be required to become members of the
AWOL pursuant to the closed shop provision of the CBA? Why? (3%)
SUGGESTED ANSWER:
Eddie Gracia and all the PML members can not be required to become members
of AWOL pursuant to the closed shop provision of the CBA.
According to the Labor Code (Article 248(e), a closed shop provision cannot be
applied to those employees who are already members of another union at the time of
the signing of the CBA_
2. Is the termination from employment of Francis Magallona by LTC lawful? Why? (2%)
SUGGESTED ANSWER:
Pursuant to the closed shop provision of the CBA entered into by AWOL with
LTC, membership in AWOL has become a condition of employment in LTC.
As long as the expulsion of Francis Magallona from AWOL was done in
accordance with applicable provisions of law and with the Constitution and By-laws of
the AWOL, then it was lawful for LTC to terminate Magallona.
Panel: The termination is unlawful (Ferrer v. NLRC).

XVII
FACTS: Joseph Vilriolo (JV), a cashier of Seaside Sunshine Supremart (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.
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.
1. Did SSS comply with the requirements of procedural due process in the dismissal
from employment of J'V? Explain briefly (2%)

SUGGESTED ANSWER:
In connection with the right to due process in the termination of an employee,
the Labor Code (in Article 277(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 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.
2. If you were the Labor Arbiter, how would you decide the case? Explain briefly (3%)
SUGGESTED ANSWER:
I will decide that the termination of JV was legal. It was for just cause. JV's
misappropriation of company funds and various infractions detrimental to the business of the company duly proven by substantial evidence constitute a willful breach
by JV of the trust reposed in him by his employer which is a just cause for termination. (See Article 282)
But I will award him indemnity of, say PI, 000, for the failure of the employer to
give him due process.
XVIII

FACTS: Lowland Cement & Factory Company (LCFC) borrowed P500M from the
Development Bank of the Philippines and mortgaged the entire company, inclusive of
its land, buildings and equipment, to guarantee the payment of the loan. However,
because of the economic conditions. LCFC incurred heavy losses and eventually failed
to pay DBP the required monthly amortizations over a period of more than one (1)
year. In due time. DBP foreclosed the mortgaged assets of LCTC resulting in the
closure of the company and the displacement of all its employees for want of work.
The LCFC Labor Union (Union) filed in behalf of the displaced workers a labor

case against DBP as the new owner of the defunct cement factory for wage
differentials, retirement pay and other money claims. The Labor Arbiter decided In
the favor of the Union. DBP appealed to the NLRC.
DBP contended in its appeal that its acquisition of the mortgage assets of LCFC
through foreclosure sale did not make It the owner of the defunct Lowland Cement,
and that the doctrine of successor-employer is not applicable in this case, since DBP
did not continue the business operation of LCFC.
The NLRC while finding merit in DBP's contention, nonetheless held DBP liable to
the extent of the proceeds of the foreclosure sale since the Unions claims in behalf of
the workers constitute a first preference with respect thereto pursuant to article 110
of the Labor Code.
Is the NLRC correct in holding DBP liable to the extent of the proceeds of the
foreclosure sale? Explain briefly (5%)
SUGGESTED ANSWER:
No. DBP is not liable. DBP has a lien over the properties of LCFC which were
mortgaged to DBP and said lien is superior to Jhe preference that the workers have
under the Labor Code (in Article 110) with respect to their claims as workers against
LCFC.
Panel: All claims must be filed in insolvency proceedings, which are outside the
jurisdiction of the NLRC (Republic v. Peralta)
XIX
FACTS: Harvester Independent Ventures (HIV) adopted a redundancy program to
streamline operations. Positions which overlapped each other, or which are in excess
of the requirements of the service, were declared redundant. This program resulted in
the reduction of manpower complement and consequent termination of fifteen (15)
employees, which included the secretary of the local union and the companys
Pollution control Officer.
Ilaw at Buklod ng Manggagawa (IBM), questioned the termination of the 15
employees, contending that the same constituted union busting and therefore, illegal,
if the same is undertaken without prior union approval.
1. Is IBM correct in its contention that redundancy can be implemented by HIV only
upon prior union approval? Why? (3%)
The Labor Code (in Article 283) very clearly gives the employer the right to
terminate any of its employees for redundancy.
2. Can the position of Pollution Control Officer be declared redundant? Why? (2%)

SUGGESTED ANSWER:
If there is a law requiring companies to have a Pollution Officer, then HIV cannot
declare such office redundant.
If there is no such law, then the Pollution Officer could be considered redundant.
Panel: Consider case of Escareal. A position created by law cannot be declared
redundant.
XX
FACTS: 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.
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 or school the forthcoming Division Search for Outstanding
Improvised Secondary'Science Equipment forTeach- ers 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."
Mordero complied with his superiors instruction and constructed an improvised
electric microdam, which he took home to enable him to finish it before the deadline.
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. Pepay Palaypay
(Pitoy Mordero's common-law 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 Mordenos 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.

1. Is Pepay Palaypay entitled to file a claim for death benefits with the GSIS? Why?
(2%)
SUGGESTED ANSWER:
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.

Not being a beneficiary, Pepay Palaypay is not entitled to receive survivorship

benefits. She is not a beneficiary because she is a common-law wife and not a legal
dependent spouse.
2. Is the cause of death of Pitoy Mordeno (cardiac arrest due to accidental electrocution
in his house) compensable? Why? (3%).
SUGGESTED ANSWER:
Yes. To be compensable under the GSIS Law, the death need not be work
connected.

1998 BAR EXAMINATION

I.
What are the salient features of the protection to labor provision of the
Constitution? [5%1
SUGGESTED ANSWER:
The salient features of the Protection to Labor provision of the Constitution
(Article XIII. Section 3} are as follows:
1. Extent of Protection - Full protection to labor;
2. Coverage of Protection - Local and overseas, organized and unorganized;
3.

Employment Policy - Full employment and equality of employment opportunities for

all;

4. Guarantees
4.1.
Unionism and Method of Determination Conditions of
Employment - Right of all workers to self-organization, collective
bargaining and negotiations.
4.2.
Concerted Activities - Right to engage in peaceful concerted
activities, including the right to strike in accordance with law.
4.3.
Working Conditions - Right to security of tenure, humane
conditions of work and a living wage.
4.4.
Decision Making Processes - Right to participate in policy and
decision, making processes affecting their rights and benefits as way
to provide by law.

5. Share In Fruits of Production - Recognition of right of labor to ita just share in fruits
of production.
ANOTHER SUGGESTED ANSWER;
The Constitution (In Article XJH, Section 3) provides that the State shall afford
protection to labor, local and overseas, organized and unorganized.
The State shall afford protection to labor by promoting full employment and
equality of employment opportunities for all.
Workers are entitled to security of tenure, humane conditions of work and a
living wage.
The State shall guarantee the right of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right to
strike, in accordance with law.
Workers shall also participate in policy and decision making processes affecting
their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers
and employers and the preferential us of voluntary modes in settling labor disputes,
including conciliation, and shall enforce mutual compliance therewith to foster
industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the right
of enterprises to reasonable returns on investments, and to expansion and growth.
II
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? [5%]
SUGGESTED ANSWER:

No, because of the non-transferability of the license to engage in recruitment and

placement.
The Labor Code (in Article 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.
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)
III.
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? [5%]
SUGGESTED ANSWER:
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.
Because of the above fact, the employer shall not pay her less than the applicable
daily minimum wage. (See Article 78 of the Labor Code)

ANOTHER SUGGESTED ANSWER:

Yes, the employer can classify the lady worker as a handicapped worker because
her earning capacity maybe impaired by her physical deficiencies. As such handicapped worker, the employer may enter into an employment agreement with her
whereby the rate to be paid to her may be les* than the applicable legal minimum
wage but not less than 75% of such wage.
IV.
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? (5%)
SUGGESTED ANSWER:
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. (See Article 91 of the Labor Code)
V.

An explosion in a mine site resulted In the death of fifty (50) miners. At the time
of the accident:
1. The Mining Company has not yet paid the wages, overtime, holiday and rest day
compensation of the deceased miners:
2. All the deceased miners owed the Miners Cooperative Union sums of money:
3. The Mining Company was served by a sheriff Writs of Garnishment of Wages of some
of the deceased miners by virtue of final Judgments in several collection suits.
After the accident, the wives, paramours, brothers, sisters and parents of the
deceased miners filed their claims for unpaid wages, overtime, holiday and rest day
compensation. The Company has acknowledged its obligations. However, it is in a
quandary as to how to adjudicate the conflicting claims: and whether it can deduct
from the monies due the miners their unpaid debts with the credit union.
How will you advise the mining company on the following:
1. Can the Mining Company defer payment of the money claims until an appropriate
court has ruled on the conflicting claims? [3%]
2. Can the Mining Company deduct from the amount due to each miner an amount
equivalent to their debt and remit the same to the Credit Union? [2%]
SUGGESTED ANSWER:
1.

I will advise the Mining Company to pay to the respective heirs of the deceased
miners whatever were the unpaid wages, overtime, holiday and rest day compensation
of said deceased miners without the necessity of intestate proceedings. The claimants,
if they are all of age, shall execute an affidavit attesting to their relationship to the
deceased and the fact that they are his heirs, to the exclusion of all other persons. If
any of the heirs is a minor, the affidavit shall be executed on his behalf by his natural
guardian or next of kin. The affidavit shall be presented to the employer who shall
make payment through the Secretary of Labor or his representative. The
representative of the Secretary of Labor shall act as referee in dividing the amount
paid among the heirs. (See Art. 105 (b) of the Labor Code)

2. I will advise the Mining Company not to deduct from the amount due to each miner
the amount equivalent to his debt to the Credit Union. The debts of a deceased worker
to the Credit Union is not one of the allowable deductions under the Labor Code, or
any rules and regulations of the Department of Labor and Employment. (See Art. 113
of the Labor Code)
ANOTHER SUGGESTED ANSWER:
Yes, if pursuant to CBA provision or authorized by worker in writing; otherwise, No.
What would be your advice to your client, a manufacturing company, who asks
for your legal opinion on whether or not the 13th Month Pay Law (Presidential Decree
No. 851) covers a casual employee who is paid a daily wage? [5%]
SUGGESTED ANSWER:

I will advise the manufacturing company to pay the casual employee 13th Month
Pay if such casual employee has worked for at least one (1) month during a calendar
year.
The law on the 13th Month Pay provides that employees are entitled to the
benefit of said law regardless of their designation or employment status.
The Supreme Court ruled in Jackson Building Condominium Corporation v.
NLRC, 246 SCRA 329, (1995) interpreting P.D. No. 851, as follows:
xxx employees are entitled to the thirteenth-month pay benefits
regardless of their designation and irrespective of the method by which their
wages are paid.
VII.
At any given time, approximately ninety percent (90%) of the production
workforce of a semi-conductor company are females. Seventy-five percent (75%) of the
female workers are married and of child-bearing years. It is imperative that the
Company must operate with a minimum number of absences to meet strict delivery
schedules. In view of the very high number of lost working hours due to absences for
family reasons and maternity leaves, the Company adopted a policy that it will employ
married women as production workers only if they are at least thirty-five (35) years of
age.
Is the policy violative of any law? [5%)
SUGGESTED ANSWER:
Yes, it is violative of Article 140 of the Labor Code which provides that no
employer shall discriminate against any person in respect to terms and conditions of
employment on account of his age.
ANOTHER SUGGESTED ANSWER:
The policy of the company to employ married women as production workers only
if they are at least thirty-five (35) years of age is valid. There is no prohibition in the
Labor Code for such an employer to exercise this management function. There is a
justifiable basis for the company policy, i.e., the need for continuity of production
with minimum absences because of the peculiar business conditions and needs of
the company, i.e., very tight delivery schedules. The company respects the institution
of marriage as shown by the fact that it employs married women. There is no
violation of the stipulation against marriage (Art. 136), and prohibited acts (Art. 137)
of the Labor Code.
STILL ANOTHER SUGGESTED ANSWER:
It may be noted that the policy is directed only to married women. This may
violate the spirit of Article 136 of the Labor Code which provides that it shall be

unlawful for an employer to require as a condition of employment or continuation of

employment that a woman shall not get married.
VIII.
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.
Does the Secretary of Labor and Employment have the authority to approve the
policy? [5%]
SUGGESTED ANSWER:
Yes, the Secretary of Labor and Employment has the authority to approve a
policy dealing with the retirement of flight attendants of airlines.
Article 132 (d) of the Labor 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.
CAVEAT:
It could be argued that Article 132 (d) may be unconstitutional because this may
constitute discrimination in violation of the spirit of Section 14 of Article xni 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.
IX.
The weekly work schedule of a driver is as follows:
0
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? [3%)
The same driver claims that for work performed on Tuesday. Thursday and
Saturday, he should be paid the minimum daily wage of a driver of a commercial
establishment.
Is the claim of the driver valid? [2%]

SUGGESTED ANSWER:

The driver is a househelper. A person is a househelpers 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.
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.
The Labor Code (in Article 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.
X.
The services of an employee were terminated upon the completion of the
probationary period of employment for failure to quality for the position. The employee
filed a complaint for Illegal Dismissal on the ground that the employer failed to inform
him in writing the reasonable standards for regular employment.
Will the complaint for Illegal Dismissal prosper? [5%]
SUGGESTED ANSWER:
Yes, the Complaint for Illegal Dismissal will prosper. The Labor Code provides:
Art. 281. Probationary employment. - xxx The services of an employee
who has been
engaged on 8 probationary basis may be terminated xxx when
he falls to qualify as a regular employee in accordance with reasonable standards made known to the employee at the time of his engagement.
The Supreme Court in A.M. Greta and Co., Inc. v. NLRC, 176 SCRA 218 (1989),
ruled:
The law is clear to the effect that in all cases involving employees
engaged on probationary basis, the employer shall make known to the
employee at the time he is hired, the standards by which he will qualify as a
regular employee.
The failure of the employer to inform the employee of the qualification for
regularization is fatal. The failure violates the rules of fair play which is a cherished
concept in labor law.
ANOTHER SUGGESTED ANSWER:

The complaint for illegal dismissal will prosper.

The Labor Code (in Article 281) provides that a probationary employee may be
terminated 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 the
latters engagement. In the question, the probationary employee was not informed of
such reasonable standards at the time he was employed. Thus, if he is to be legally
terminated, it should be because of gross and habitual neglect of duties.
XI.
A Construction Group hired Engineer "A" as a Project Engineer in 1987. He was
assigned to five (5) successive separate projects. All five (5) Contracts of Employment
he signed, specified the name of the project, its duration, and the temporary-project
nature of the engagement of his services. Upon completion of the fifth (5th) project in
August 1998, his services were terminated. He worked for a total of ten (10) years
(1987-1998) in the five (5) separate projects.
Six months after his separation, the Group won a bid for a large construction
project. The Group did not engage the services of Engineer "A" as a Project Engineer
for this new project: Instead, it engaged the services of Engineer "B". Engineer A"
claims that by virtue of the nature of his functions, i.e.. Engineer in a Construction
Group, and his long years of service he had rendered to the Group, he is a regular
employee and not a project engineer at the time he was first hired. Furthermore, the
hiring of Engineer B" showed that there is a continuing need for his services.
Is the claim of Engineer A" correct? [5%]
SUGGESTED ANSWER:
The claim of Engineer "A that he is a regular employee and not a project,
employee is not correct. The Labor Code provides:
Art. 280. Regular and casual employment.
- 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, except, where the employment has
been fixed for a specific project or undertaking the completion of which has
been determined at the time of the engagement of the employee,
(underscoring supplied)
In all the five (5) successive contracts of employment of Engineer "A the name of
the project, its duration, and the temporary project nature of the engagement of his
services are clearly stated; hence, Engineer A falls within the exemption of Art. 280.
The Supreme Court has ruled as follows:
Manansag v. NLRC, 218 SCRA 722 (1993)
The fact that the petitioners worked for several projects of private respondent
company is no basis to consider them as regular employees. By the very nature of
their employer's business, they will always remain project empl03'ees regardless of the
number of projects in which they have worked.
De Ocampo v. NLRC, 186 SCRA 361 (1990)

(Project employees] are not considered regular employees, their services, being
needed only when there are projects to be undertaken. The rationale for this rule, is
that if a project has already been completed, it would be unjust to require the
employer to maintain them in the payroll while they are doing absolutely nothing
except waiting for another project.
ANOTHER SUGGESTED ANSWER:
The claim of Engineer A is not correct.
The fact that he has been working for Construction Group for a total of ten (10)
years does not make him a regular employee when it is very clear from the Contracts
of Employment he signed that he was always being engaged as a project employee.
The tenure of a project employee is co-terminus with the project in connection
with which his services were engaged. Thus, after the end of the project, the
employer-employee relationship ceases to exist. Such project employee has no legal
right to insist that he should be employed by the Construction Group for a
subsequent project of said Group.
XII.
Assuming the existence of valid grounds for dismissal, what are the requirements
before an employer can terminate the services of an employee? [5%]
SUGGESTED ANSWER:
The employee being terminated should be given due process by the employer.
For termination of employment based on any of the just causes for termination,
the requirements of due process that the employer must comply with are:
A written notice should be served on the employee specifying the ground or
grounds for termination' and giving to said employee reasonable opportunity within
which to explain his side.
A hearing or conference should be held during which the employee concerned,
with the assistance of counsel if the employee so desires, is given the opportunity to
respond to the charge, present his evidence and present the evidence presented
against him.
A written notice of termination, if termination is the decision of the employer,
should be served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.
For termination of employment based on authorized causes, the requirements of
due process shall be deemed complied with upon service of a written notice to the
employee and the appropriate Regional Office of the Department of Labor &
Employment at least thirty (30) days before the effectivity of the termination
specifying the ground or grounds for termination.
ANOTHER SUGGESTED ANSWER:

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:
A. Notice and Hearing
Art. 277. Miscellaneous provisions. - xxx
(a) xxx 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 ...
The Supreme Court ruled in Salaw v. NLRC, 202 SCRA 7 (1991)
xxx Not only must the dismissal be for a valid or unauthorized cause as
provided by law xxx but the rudimentary requirements of due process notice and hearing - must also be observed before an employee must be
dismissed.

B. Two (21 Notice Requirements The Supreme Court in Tanala v. NLRC, 252 SCRA 314 (1996), and in a long line
of earlier cases, ruled:
xxx 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 acta 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.
XIII.
The Company Legal Counsel advised the Board of Directors as follows: "A
company cannot retrench to prevent losses until actual losses occur. The Company
must wait until the end of the Business Year when its Books of Accounts, Profit and
Loss Statement showing the actual loss and Balance Sheet have been audited by an
independent auditing firm."
Is the legal advice of counsel correct? [5%]
SUGGESTED ANSWER:
The legal advice is not correct.

The Labor Code (in Article 283) provides that retrenchment may be resorted to
to prevent losses" Thus, there could be legal basis for retrenchment even before
actual losses as long as the losses are imminent and serious.
ANOTHER SUGGESTED ANSWER:
The advise of the Company Legal Counsel that an employer cannot retrench to
prevent losses until actual losses occur is not correct. The Labor Code provides:
Art. 283. Closure of establishment and reduction of personnel. - The
employer may also terminate the employment of any employee xxx
retrenchment to prevent losses.
The Law does not require that retrenchment can be undertaken by an
employer only after an actual business loss occurs. The Supreme Court in
Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179
(1990), said:
In its ordinary connotation, the phrase to prevent losses" means that
the retrenchment or termination ot some employees is authorized to be
undertaken by the employer sometime before the losses anticipated are
actually sustained or realized. It is not, in other words, the intention of the
lawmaker to compel the employer to stay his hand and keep all his
employees until sometime after losses shall have in fact materialized; if such
an Intent were expressly written into law, the law may well be vulnerable to
constitutional attack as taking property from one man to another, (underscoring supplied)
XIV.
The Secretary of Labor and Employment, after receipt of a Notice to Terminate
Employment of one hundred (100) workers, enjoined the employer from implementing
their termination.
Has the Secretary of Labor and Employment the authority to enjoin the employer
from terminating the employment of the workers? If so on what grounds? (5%)
SUGGESTED ANSWER:
The Secretary of Labor and Employment has the authority to enjoin an employer
from terminating the employment of workers.
The Labor Code (in Article 277(b) provides that the Secretary of Labor and
Employment may suspend the effectivity of the termination of workers pending the
resolution of a labor dispute in the event of a prima facie finding of an appropriate
official of the Department of Labor and Employment before whom such dispute is

pending that the termination may cause a serious labor dispute or is In

Implementation of a mass lay off.
XV.
A labor union lawyer opined that a labor organization is a piivate and voluntary
organization; hence, a union can deny membership to any and all applicants.
Is the opinion of counsel in accord with law? [5%]
SUGGESTED ANSWER:
No, the opinion of counsel is not In accord with law.
The Labor Code (in Article 249 (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.
ANOTHER SUGGESTED ANSWER:
Yes, the legal opinion of counsel, on the nature of a Labor union and Its
admission policy is in accord with law, but must be qualified.
The Supreme Court ruled in Salunga v. CTR, 21 SCRA 216 (1967) as follows:
Generally, a state may not compel ordinary voluntary association to
admit thereto any given individual, because membership therein may be
accorded or withheld as a matter of privilege.
The same case further ruled that the law can compel a labor union to admit an
applicant for membership when the union is The rule is qualified in respect of labor unions holding a monopoly in
the supply of labor, either in a given locality or as regards a particular
employer with which it has a closed- shop agreement. The reason is that
[union security provisions] cause the admission requirements of trade
unions to be affected with public interest.
XVI.
What is an appropriate bargaining unit for purposes of collective bargaining? (5%]
SUGGESTED ANSWER:
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, indicate to
be the best suited to serve reciprocal rights and duties of the parties under the
collective bargaining provisions of the law. (See, e.g.t University of the Philippines v.
Ferrer-Calle/a, 211 SCRA 451 (1992).
XVII.
Is it required that an employer-employee relationship exists between an employer
and the employees in the appropriate bargaining unit before a certification election
can be ordered? If so why? (5%)
SUGGESTED ANSWER:
Yes, it is required that an employer-employee relationship is existing between the
employer and the employees in the appropriate bargaining unit before a certification
election can be ordered for the simple reason that a certification election is held for
the purpose of determining which labor organization shall be the exclusive collective
bargaining representative of the employees in an appropriate bargaining unit. There
could be no collective bargaining between persons who do not have any employeremployee relationship.
ANOTHER SUGGESTED ANSWER:
Yea, the Supreme Court has ruled that the existence of an employer-employee
relationship is required before a certification election can be held.
The Supreme Court in Allied Force Waters Union v. Compania Maritima, 19
SCRA 258 (1967), ruledxxx There being no employer-employee relationship between the parties
disputants, there is neither a duty to bargain collectively" to speak of. And
there being no such duty, to hold certification elections would be pointless.
There is no reason to select a representative to negotiate when there can be
no negotiations in the first place. Where there is no duty to bargain
collectively, it is not proper to hold certification elections in connection
therewith.
XVIII.
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? [5%]
SUGGESTED ANSWER:
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) 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.

ANOTHER SUGGESTED ANSWER:

No, the Bureau of Labor Relations cannot certify a union as the exclusive
bargaining representative without conducting a certification election.
The Supreme Court, in Colgate Palmolive Philippines, Inc. v. Ople, 163 SCRA 323
(1988), ruled The procedure for a representation case is outlined [in the] Labor
Code ... the main purpose of which is to aid in ascertaining majority
representation. The requirements under the law ... are all calculated to
ensure that the certified bargaining representative is the true choice of the
employees against all contenders, xxx When an ... official by-passes the law
on the pretext of retaining a laudable objective, the Intendment or purpose of
the law will lose its meaning as the law itself is disregarded. When the
[Bureau of Labor Relations] directly [certifies] a union, he in fact disregarded
this procedure and its legal requirements. There was therefore failure to
determine with legal certainty whether the union indeed enjoyed majority
representation.
XIX.
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? [5%]
SUGGESTED ANSWER:
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 Article 212(o) of the Labor Code)
ANOTHER SUGGESTED ANSWER:
No, slowdown in not a valid form of strike activity. The Supreme Court in Ilaw at
Buklod ng Manggagawa NLRC, 198 SCRA 586 (1991) ruled The Court is in substantial agreement with the petitioner's concept of
a slowdown as a "strike on the installment plan, as a willful reduction in
the rate of work by concerted action of workers for the purpose of restricting
the output of the employer, in relation to a labor dispute, as an activity by
which workers, without a complete stoppage of work retard production or

their performance of their duties... The Court' also agrees that such
slowdown Is generally condemned as inherently illicit and unjustifiable,
because while the employees "continue to work and remain at their
positions, and accept wages paid to them", they at the same time select
what part of their alloted tasks they care to perform of their own volition or
refuse openly, or secretly, to the employers damage, to do other work; in
other words, they work on their own terms.
Likewise, a slowdown is not a valid form of concerted activity, absent a labor
dispute between the parties. The Labor Code reads
Art.212. -xxx
(1) "Strike** means any temporary stoppage of work by the concerted
action of employees as a result of an industrial or labor dispute.
ANOTHER SUGGESTED ANSWER:
No. It is a prohibited activity. It can be said to be a violation of the duty to
bargain collectively. They union is guilty of bad faith. The workers should resume operations under the same terms and conditions prevailing prior to the strike.

XX
The Secretary of Labor and Employment, after assumption of jurisdiction over a
labor dispute in an airline issued a Return to Work Order. The airline filed a Motion
for Reconsideration of the Order and pending resolution of the motion, deferred the
implementation of the Order.
Can the airline defer the implementation of the Return to Work Order pending
resolution of the motion for reconsideration? [5%]
SUGGESTED ANSWER:
The airline cannot defer the implementation of the Return To Work Order on the
basis of there being a pending Motion for Reconsideration re: the assumption of
jurisdiction by the Secretary of Labor and Employment of a labor dispute.
According to the Supreme Court, the Return to Work Order issued by the
Secretary of Labor and Employment upon his assumption of jurisdiction over a labor
dispute in an industry indispensable for the national Interest is immediately
executory.
ANOTHER SUGGESTED ANSWER:
No, the airline cannot defer the implementation of a return to work order pending
resolution of a Motion for Reconsideration.
The Labor Code reads -

Art. 263. Strikes, picketing, and lockouts. - xxx

(g) When, in his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national
interest, the Secretary of Labor and Employment may assume jurisdiction
over the dispute and decide it or certify the same to the Commission for
compulsory arbitration. Such assumption or certification shall have the
effect of automatically enjoining the intended or impending strike ...as
specified in the assumption or certification order. If one has already taken
place at the of assumption or certification, all striking employee.... shall
immediately return to work, (underscoring supplied)
The Supreme Court, in Baguio Colleges Foundation . NLRC, 222 SCRA 604 (1995),
ruled
xxx assumption and certification orders are executory in character and
are to be strictly complied with by the parties even during the pendency of any
petition questioning their validity.
Being executory in character, there was nothing for the parties to do but
implement the same, (underscoring supplied)
1997 BAR EXAMINATION

Question No.1:

Differentiate labor standards law from labor relations law. Are the two mutually
exclusive?
Answer:
Labor standards law is that labor law which prescribes terms and conditions of
employment like Book in, Book IV, Title I and Book VI of the Labor Code. These Books
of the Labor Code deal with working conditions, wages, working conditions for
women, minors, househelpers and home-workers, medical and dental services,
occupational health and safety, termination and retirement.
On the other hand, labor relations law is that labor law which regulates the
relations between employers and workers like Book V of the Labor Code which deals
with labor organizations, collective bargaining, unfair labor practices and strikes and
lockouts.
Labor standards laws and labor relations laws are not mutually exclusive; they
are complement to each other. Thus, the law on strikes and lockouts which is an
example of labor relations law includes some provisions on the security of tenure of
workers who go on strike or who are locked out. These provisions are examples of
labor standards law.

Question No. 2:
Danilo Flores applied for the position of driver in the motorpool of Gold Company,
a multinational corporation. Danilo was informed that he would frequently be working
overtime as he would have to drive for the company's executives even beyond the
ordinary eight-hour work day. He was provided with a contract of employment
wherein he would be paid a monthly rate equivalent to 35 times his daily wage,
regular sick and vacation leaves. 5 day-leave with pay every month and time off with
pay when the companys executives using the cars do not need Danilos service for
more than eight hours a day, in lieu of overtime.
Are the above provisions of the contract of employment in conformity with, or
violative of, the law?
Answer:
Except for the provision that Danilo shall have time off with pay when the
company's executives using the cars do not need Danilo's service for more than eight
hours a day. in lieu of overtime, the provisions of the contract of employment of
Danilo are not violative of any labor law because they instead improve upon the
present provisions of pertinent labor laws.
Thus, the monthly rate equivalent to 35 times the daily wage may be sufficient to
include overtime pay.
9
There is no labor law requiring the payment of sick and vacation leaves except
the provision for a five-day service incentive leave in the Labor Code.
The 5-day-leave with pay every month has no counterpart in Labor Law and is
very generous.
As for the provision in Danilo's contract of employment that he shall receive time
off with pay in lieu of overtime, this violates the provision of the Labor Code which
states that undertime work on any particular day shall not be offset by overtime work
on any other day. Permission given to the employer to go on leave on some other day
of the week shall not exempt the employer from paying the additional compensation
required by the Labor Code.
Question No. 3:
Robert Suarez is a salesman for Star Pharmaceuticals. Star Pharmaceuticals has
applied with the Department of Labor and Employment for clearance to terminate (by
way of retrenchment) the services of Suarez due to financial losses. Robert Suarez,
aside from his monthly salary, receives commissions on the sales he makes. He also
receives allowances. The existing CBA between Star Pharmaceuticals and the union,
of which Robert Suarez is a member, states that any employee separated from
employment for causes not due to the fault of the employee shall receive from the
company a retirement gratuity in an amount equivalent to one months salary per
year of service.

Robert Suarez contends that in computing his separation pay, his sales
commission and his allowances should be included in the monthly salary. Do you
agree?
Answer:
I agree, with some conditions.
In computing separation pay, the monthly salary should include commissions
because commissions received by a salesman is part of his salary.
But for allowances to be included as part of salary, they should be for services
rendered or to be rendered, like a cost of living allowance. But transportation and
representation allowances are not considered as part of salary because they are to
meet expenses for transportation and representation. Thu s. cost of living allowances,
but not transportation or representation allowances, shall be included as part of
salary in the computation of separation pay.
Note:
Re: allowances as part of salary, in Santos us. NLRC, 154 SCRA 166, the
Supreme Court said: "in the computation of backwages and separation pay, account
must be taken not only of basic salary but also her transportation and emergency
living allowances."
Question No. 4:
Ruben Padilla entered into a written agreement with Gomburza College to work
for the latter in exchange for the privilege of studying in said institution. Ruben's work
was confined to keeping clean the lavatory facilities of the school. One schoolday,
Ruben got into a fistfight with a classmate, Victor Monteverde, as a result of which the
latter sustained a fractured arm
Victor Monteverde held a civil case for damages against Ruben Padilla, impleading
Gomburza College due to the latter's alleged liability as an employer of Ruben Padilla.
Under the circumstances, could Gomburza College be held liable by Victor
Monteverde as an employer of Ruben Padilla?
Answer:
Gomburza College is not liable for the acts of Ruben Padilla because there is no
employer-employee relationship between them. As provided in the Rules and
Regulations implementing the Labor Code "there is no employer-employee
relationship between students on one hand, and schools, colleges, or universities on
the other, where students work with the latter in exchange for the privilege to study
free of charge, provided the students are given real opportunity, including such
facilities as may be reasonable and necessary to finish their chosen courses under
such arrangement."
Alternative Answer:
Gomburza College canbe held liable by Victor Monteverde as an employer of

Ruben Padilla.
Applying the control test, the College is the employer of Padilla because in the
latter's work of keeping clean the lavatory facilities of the school, he is under the
control of the College as regards his employment.
However, Ruben Padilla was not acting within his assigned tasks. Art. 2180. New
Civil Code provides: The obligation imposed by Art. 2176 (Quasi-delicts) is demandable xxx (also from) employers (who) shall be liable for the damages caused by their
employees xxx acting within the scope of their assigned tasks, even though the
former are not engaged in any business or industry." It could be argued that Ruben
Padilla was not acting within the scope of his assigned tasks; thus, his employer,
Gomburza College is not liable.
Question No. 5:
(a) Describe a closed shop agreement, does it differ from an agency shop agreement."
(b) Are the above agreements legal?
Answer:
(a) A "closed shop agreement" Ls that agreement embodied in a collective bargaining
agreement (CBA) whereby the employer binds itself not to hire any person unless he
Is first a union member of the collective bargaining representative. An "agency shop
agreement" is different from a closed shop agreement in that under the former, the
employer does not bind itself not to hire a person unless he is first a union member of
the collective bargaining representative. Instead, the employer binds itself to check off
from those who are not union members of the collective bargaining representative a
reasonable fee equivalent to the dues and other fees paid by union members if the
non-union members accept the benefits of the CBA.
(b) The above agreements are legal or they are expressly allowed by the Labor
Code.
Question No. 6:
The Kilusang Kabisig, a newly-formed labor union claiming to represent a
majority of the workers in the Microchip Corporation, proceeded to present a list of
demands to the management for purposes of collective bargaining. The Microchips
Corporation, a multinational corporation engaged in the production of computer chips
for export, declined to talk with the union leaders, alleging that they had not as yet
presented any proof of majority status.
The Kilusang Kabisig then charged Microchip Corporation with unfair labor
practice, and declared a wildcat" strike wherein means of ingress and egress were
blocked and remote and isolated acts of destruction and violence were committed.
(a) Was the strike legal?
(b) Was the company guilty of an unfair labor practice when it refused to negotiate with
the Kilusang Kabisig?
Answer:
(a) Because what was declared is a "wildcat" strike, the strike is illegal. A "wildcat" strike

is one that is one declared by a group of workers without formal union approval.
Thus, it is Illegal because the Labor Code requires that for a strike to be legal, among
others, the decision to declare a strike must be approved by a majority of the total
union membership in the bargaining unit concerned, obtained by a secret ballot in
meetings or referenda called for that purpose.
Alternative Answer:
a. 1) The strike is illegal. The Labor Code recognizes only one of two (2) grounds for a
strike to be legal: bargaining deadlock or unfair labor practice. A strike to compel an
employer to recognize a union is not allowed by law.
2) The strike is not illegal. For the strike to be illegal because of violence, it
should be characterized by pervasive violence. Here, there were only remote and
violated acts of destruction and violence. But even if the strike is not illegal, those
strikers who committed illegal acts, namely, those who blocked the means of ingress
and egress and who committed acts of destruction and violence, these strikers can be
legally dismissed.
9
(b)No. It is not an unfair labor practice (ULP) not to bargain with a union which has not
presented any proof of its majority status. The Labor Code imposes on an employer
the duty to bargain collectively only with a legitimate labor organization designated or
selected by the majority of the employees in an appropriate collective bargaining unit.
It is not a ULP for an employer to ask a union requesting to bargain collectively that
such union first show proof of its being a majority union.
Question No. 7:
On 01 August 1992, Pro-Knit, a corporation engaged in the manufacture of
textile garments, entered into a collective bargaining agreement with the Kamao
Union in representation of the rank and file employees of the corporation.
The CBA was effective up to 20 June 1995. The contract had an automatic
renewal clause which would allow the agreement after its expiry date to still apply
until both parties would have been able to execute a new agreement.
On 10 May 1995 Kamao Union submitted to Pro-Knit's management their
proposals for the renegotiation of a new CBA. Tire next day, Pro-Knit suspended
negotiations while Kamao Union since Pro-Knit had entered into a merger with Eagle
Garments, a corporation also engaged in the manufacture of textile garments. Eagle
Garments assumed all the assets and liabilities of Pro-Knit.
Kamao filed a complaint with the Regional Trial Court for specific performance
and damages with a prayer for preliminary injunction against Pro-Knit and Eagle Garments.
Pro-Knit and Eagle Garments filed a Motion to Dismiss based on lack of
jurisdiction. How would you rule on the Motion to Dismiss?
Answer:

I will grant the Motion to Dismiss. The act of Pro-knit suspending negotiations
with Kamao Union could be an unfair labor practice. It could be a violation of the duty
to bargain collectively. As such, the case is under the jurisdiction of a Labor Artbiter
and not of a regular Court.
Alternative Answer:
I will deny the Unions Motion to Dismiss. There is no labor dispute between the
parties; hence, the Regional Trial Court has Jurisdiction over the complaint. Art. 212
of the Labor Code,reads

Labor dispute includes any controversy or matter concerning terms or

conditions of employment or the association or representation of persons
in negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment regardless of whether the disputants stand in
the proximate relations of employer and employee.
In addition, the Company can claim that labor contracts are contracts in
personam and do not generally bind successors in interest except under special
circumstances. In Sundowner Development Corporation v. Drilon, 180 SCRA 14, the
Court said:
The rule is that unless expressly assumed, labor contracts such as xxx
collective bargaining agreements are not enforceable against a transferee
of an enterprise, labor contracts being in personam thus binding only
between the parties.
Question No. 8:
(a) Define Wage Distortion.
(b) May a wage distortion, alleged by the employees but rejected by the employer to be
such, be a valid ground for staging a strike?
Answer:
(a) A wage distortion is that brought about where an increase in the prescribed wage
rates results in the elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage rates
based on skills, length of service and other logical bases of differentiation.
(b) No. the existence of wage distortion is not a valid ground for a strike because
Art. 124 of the Labor Code provides for a specific method of procedure for correcting
wage distortion. In Raw at Buklod ng Manggagawa vs. NLRC, 198 SCRA 586, the
Court said:It goes without saying that these joint or coordinated activities may be
forbidden or restricted by law or contract. For the particular instance of
"distortions of the wage structure within an establishment" resulting
from the application of any prescribed wage increase by virtue of a law or
wage order, Section 3 of Republic Act No. 6727 prescribes a specific,

detailed and comprehensive procedure for the correction thereof, thereby

implicitly excluding strikes or lockouts or other concerted activities as
modes of settlement of the issue.
Alternative Answer:
(b) A wage distortion, alleged by the employees but rejected by the employer can be a
valid ground for staging a strike if it happens that in rejecting the allegation of wage
distortion, the employer refuses to consider the issue under the grievance procedure
provided for in the applicable CBA and later on through Voluntary Arbitration. These
acts of the employer could be considered as a violation of its duty to bargain
collectively which is unfair labor practice (ULP). A ULP strike is legal.
Question No. 9:
Mr. Jonathan Pe, a registered stockholder of New Wave Beauty Shop, Inc. was
elected Vice-President of New Wage at a regular monthly meeting.
At a subsequent meeting of the Board of Directors, it was resolved to dismiss
Jonathan as Vice-President due to loss of trust and confidence. Jonathan Pe filed
with the National Labor Relations Commission a complaint for illegal dismissal with
damages against New Wage claiming that he was dismissed without due process. New
Wage filed a Motion to Dismiss based on lack of Jurisdiction.
Resolve the motion.
Answer:
The Motion to Dismiss should be granted. The election of Jonathan Pe as Vice
President of NewWave Beauty Shop, Inc., made him a corporate officer.
His subsequent dismissal as such corporate officer is considered an intracorporate matter. Thus, the dismissal of Pe is not a case of a termination dispute
which is under the jurisdiction of a Regional Branch of the NLRC. Instead, it is under
the jurisdiction of the Securities and Exchange Commission, it having jurisdiction
over intra-corporate matters.
Question No. 10:
Are the principal officers of a corporation liable in their personal capacity for
non-payment of unpaid wages and other monetary benefits due its employees?
Answer:
As a general rule, the obligations incurred by the principal officers and employees
of a corporation are not theirs but the direct accountabilities of the corporation they
represent. However, solidary liabilities may at times be incurred but only when
exceptional circumstances warrant such as, generally, in the following cases: when
directors and trustees or in appropriate cases, the officers of a corporation:
(a) vote for or assent to patently unlawful acts of the corporation; (b) act in bad faith or
with gross negligence in directing the corporate affairs; (c) are guilty of conflict of
interest to the prejudice of the corporation, its stockholders or members, and other

persons.
In labor cases, the Supreme Court has held corporate directors and officers
solidarity liable with the corporation for the termination of employment of employees
done with malice or bad faith. (Sunto u. NLRC, 127 SCRA 390; General Bank and
Trust Co. v. Court of Appeals, 135 SCRA 659).
Alternative Answer:
No. Unless they are guilty of malice or bad faith In connection with the nonpayment of unpaid wages and other monetary benefits due to employees.
Question No. 11:
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.
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'sfees and another
sum of PI00.00 each for services rendered by the union officers. Several members of
the Welga Labor Union approached you to seek advice on the following matters.
(a) Whether or not the copllection of the amount assessed on the individual members to
answer for the Attorneys fees was valid.
(b) Whether or not the assessment of PI00.00 from the individual members of the Welga
Labor Union for services rendered by the union officers In the CBA negotiations was
valid.
Answer:
(a) The assessment of P 100.00 from each union member as attorney's fees - for union
negotiation, is not valid. Art. 222(b) of the Labor Code, reads:
"No attorneys fees, negotiation fees or similar charges of any kind arising from
any collective bargaining negotiations or conclusion of the collective agreement shall
be imposed on any individual member of the contracting union; Provided, however,
that attorneys fees may be charged against union funds in an amount to be agreed
upon by the parties. Any contract, agreement or arrangement of any sort to be
contrary shall be null and void."
(b) The assessment of PI00.00 as negotiation fees charged to each individual union
member and payable to union officers is also not valid, for the same reason as stated
above. The assessment is an act violative of Art. 222(b).
Alternative Answer:
(a) The collection of the amount assessed on the individual members to answer for the
attorney's fees would be valid if it was authorized by a written resolution of a majority
of all the members in a general membership meeting called for the purpose.

(b) The assessment of PI00.00 from the individual members of the Welga Labor Union for
services rendered by the union officers in the CBA negotiations would be valid if it
was authorized by a written resolution of a majority of all the members in a general
membership meeting duly called for the purpose. (Art. 241(N)].
Question No. 12:
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 cf termination effective upon receipt which was on 08
March 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.
(a) Was the complaint filed by Andrew Tan for illegal dismissal within the reglementary
period granted by law?
(b) What reliefs may Andrew Tan be entitled to if the Labor Arbiter finds Just cause for
termination but that the , requirements of notice and hearing are not complied with?
Answer:
(a) Yes. The complaint was filed within four (4) years from the date Andrew Tan was
dismissed 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)
(b) Andrew Tan would be entitled to an Indemnity of PI.000 to P 10,000 from his
employer for the latter's non-compliance of the requirements of notice and hearing
In cases of termination of employment. (Wenphil Philippines v. NLRC, 176 SCRA 66)
Question No. 13:
State the cases when a labor dispute would fall under the jurisdiction of
voluntary arbitrators or panel of voluntary arbitrators.
Answer:
A labor dispute falls under the jurisdiction of a voluntary arbitrator or a panel
of voluntary arbitrator if a labor disputes arises from an unresolved grievance
which in turn arises from the Interpretation or implementation of a Collective
Bargaining Agreement or of company personnel policies. (Art. 261)
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. (Art. 262)

Question No. 14:

The Secretary of Labor assumed jurisdiction over a strike in Manila Airlines and
eventually issued a return-to-work. The Manila Airlines Employees Union defied the
return-to-work order and continued with their strike. The management of Manila
Airlines then declared all the employees who participated in the strike dismissed from
employment.
(a) Was the act of Manila Airlines' management in dismissing the participants in the
strike valid?
(b) What are the effects of an assumption of jurisdiction by the Secretary of Labor upon
the striking employees and Manila Airlines?
Answer:
(a) Yes. The act of Manila Airlines' management in dismissing the participants in the
strike is valid. In a number of Supreme Court decisions, it has ruled that the defiance
by workers of a return to work order of the Secretary of
Labor Issued when he assumes jurisdiction over a labor dispute is an illegal act
and could be the basis of a legal dismissal. The return to work order imposes a duty;
it must be discharged as a duty even against the workers' will.
(b) When the Secretary of Labor assumes jurisdiction over a strike, all striking
employees shall immediately return to work and the employer shall immediately
resume operations and readmit all workers under the same terms and conditions
prevailing before the strike. (Art. 263(q)
Question No. 15:
A strike was staged in Mella Corporation because of a deadlock in CEA
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?
Answer:
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.
Question No. 16:
Distinguish between job contracting" and labor-only contracting."

Answer:
When a person, not being an employer, contracts with an independent contractor
for the performance of any work, task, job or project, there is "job contracting. When
the independent contractor does the work that is contracted out, he is not under the
control of the person who contracted out the work to be done.
4
In "labor-only contracting", a person supplies workers to an employer. Said
person does not have substantial capital or Investments in the form of tools,
equipment, machineries, work premises, among others, and the workers recruited
and placed by such person are performing activities related to the principal business
of the employer to whom the workers are supplied.
Question No. 17:
Lita Cruz, a full time professor in San Ildefonso University, is paid on a regular
monthly basis. Cruz teaches for a period of ten months in a school year excluding the
two month's summer break.
During the semestral break, the University did not pay Lita Cruz her emergency
Cost of living allowance (ECOLA) although she received her regular salary since the
semestral break was allegedly not an integral part of the school year and no teaching
service were actually rendered by her. In short, the University invoked the principle of
no work, no pay".
Lita Cruz seeks your advice on whether or not she is entitled to receive her
ECOLA during semestral breaks. How would you respond to the query?
Answer:
There is no longer any law making it the legal obligation of an employer to grant
an Emergency Cost of Living Allowance (ECOLA). Effective 1981, the mandatory living
allowances provided for in earlier Presidential Decrees were integrated into the basic
pay of all covered employees.
Thus, whether the ECOLA will be paid or not during the semestral break now
depends on the provisions of the applicable wage order or contract, which may be a
CBA, that many grant said ECOLA
Alternative Answer:
The "no work, no pay" principle does not apply. The teachers receive their regular
salaries during the semestral break. The law granting emergency cost of living
allowances was designed to augment the income of the employees to enable them to
cope with the rising cost of living and inflation. It was enacted pursuant to the State's
duty to protect labor and to alleviate the plight of the workers. To uphold the school's
interpretation of the law would run counter to the intent of the law and constitution
(University of Pangaskm FacuLty Union v. University of Pangastnan, 127 SCRA 691).

Question No. 18:

'

Lito Kuiangkuiang and Bong Urongsulong are employed as truck drivers of Line
Movers. Inc. Usually. Lito is required by the personnel manager to just stay at the
head office after office hours because he could be called to drive the trucks. While at
the head office, Lito merely waits in the managers reception room. On the other hand,
Bong is allowed to go home after office hours but is required to keep his cellular phone
on so that he could be contacted whenever his services as driver becomes necessary.
Would the hours that Lito and Bong are on call be considered compensable
working hours?
Answer:
The hours of Lito and Bong while on call can be considered compensable hours.
The applicable rule is: "An employee who is required to remain on call in the
employer's premises or so close thereto that he cannot use the time effectively and
gainfully for his own purpose shall be considered as working while on call. An
employee who is not required to leave word at his home or with company officials
where be may be reached is not working while on call." Here, Bong is required to stay
at the office after office hours so he could be called to drive the trucks of the
Company. As for Bong, he is required to keep his cellular phone so that he could be
contacted whenever his services as driver as needed. Thus, the waiting time of Lito
and Bong should be considered are compensable hours.
Note: It could be argued that in the case of Bong who is not required to stay
in the office but is allowed to go home, if he is not actually asked by cellular phone to
report to the office to drive a car, he can use his time effectively and gainfully to his
own purpose, thus, the time that he is at home may mean that there are not
compensable hours.
Question No. 19:
Dinna Ignacio was hired by Stag Karaoke Club as a guest relations officer. Dinna
was also required to sing and dance with guests of the club.
In Dinna Ignacios employment contract, which she signed, the following
stipulations appeared:
Compensation

Tips and commissions coming from

guests shall be subjected to 15% deduction.

Hours of work

5 P.M. up to 2 AM. Daily Including

Sundays and Holidays

Other conditions :

Must maintain a body weight of 95

lbs., remain single. Marriage or pregnancy will be considered as
a valid ground for a termination of employment.

A year later. Dinna Ignacio requested to go on leave because she would be getting
married to one of the club's regular guests. The management of the club dismissed
her.

Dinna filed a complaint for illegal dismissal, night shift differential pay,
backwages, overtime pay and holiday pay. Discuss the merits of Dinnas complaint.
Answer:
The first issue to be resolved is: Is Dinna Ignacio an employee of the Star Karaoke
Club? Yes, she is an employee per the provision of the Labor Code that states: "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 shall be
considered an employee of such establishment for purposes of labor and social
legislation"(Art. 138). In Dinnas conditions of employment have all the aforesaid
characteristics.
She has been illegally dismissed. The Labor Code expressly provides, that "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." (Art. 136)
Because of her illegal dismissal, she is entitled to backwages from the time her
compensation was withheld from her to the time of her actual reinstatement.
Dinna is not entitled to night differential pay, overtime pay and holiday pay
because she belongs to one of those classes of employees who are not covered by the
provision of the Labor Code providing for these benefits. She is a worker paid by
results, since her compensation is determined by the tips and commission that she
receives from her guests.
Question No. 20:
State the respective coverages of (a) the Social Security Law; (b) the Revised
government Service Insurance Act and the Employees Compensation Act.
Answer:
(a)Coverage of SSS (Sec. 9, RA 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 maybe covered by the SSS on a voluntary basis.
Coverage in the SSS shall also be compulsory upon all self-employed persons
earning PI, 800 or more per annum.
(b) Membership in the Government Service Insurance System (Art. 3, RA8291) shall be
compulsory for all permanent employees below 60 years of age upon appointment to
permanent status, and for all elective officials for the duration of their tenure.
Any person, whether elected or appointed. In the service of an employer is a
covered employee if he receives compensation for such service.
(c) Coverage in the State Insurance Fund (Art. 168.' 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 Employees Compensation Commission shall ensure adequate coverage of
Filipino employees employed abroad, subject to regulations as it may prescribe. (Art.
170)
Any person compulsorily covered by the GSIS Including the members of the
Armed Forces of the Philippines, and any person employed as casual, emergency,
temporary, substitute or contractual, or any person compulsorily covered by the SSS
are covered by the Employees Compensation Program.
1996 BAR EXAMINATION
Question No. 1:
1) When does an employer-employee relationship exist? Answer:
The Supreme Court, in a long line of decisions has consistently ruled that the
following are the elements of an employer-employee relationship:
a. Selection and engagement of the employee:
b. Payment of wages;
c.

Power of discipline and dismissal; and

d.

Power to control the employees conduct as regards his employment.

Alternative Answer:

An employer-employee relationship exists when a person (an employer) who

carries on a business, trade, industry, undertaking, or activity of any kind uses the
services of another person (an employee) who, receiving compensation, is under the
employer's orders as regards the employment.'
2) What are the rights of an employer and an employee?
Answer:
The Constitution in Art. XIII, Section 3 provides for the following rights of
employers and employees:
A. Employers Right to a reasonable return on investments, and to expansion and
growth.
1. To a just share in the fruits of production;
2. Right to self organization, collective bargaining and negotiations and
peaceful concerted activities, including the right to strike in accordance
with law;
3.

To security of tenure, humane conditions of work, and a living wage; and

4.

To participate in policy and decision-making processes affecting their

rights and benefits as may be provided by law.

Alternative Answer:
In an employer-employee relationship, it is the right of the employer to use the
services of an employee who is under his (employers) orders as regards the
employment. On the other hand, it is the right of the employee to receive compensation for the services he renders for the employer.

Question No. 2:
1) What is the importance of labor organizations? Answer:
A labor organization exists in whole or in part for the purpose of collective
bargaining or of dealing with employers concerning terms and conditions of
employment. Employees may form labor organizations for their mutual aid and
protection. (See Arts. 212(a) and 243 of the Labor Code)
Alternative Answer:
The importance of labor unions are:
a) The enhancement of democracy and the promotion of social Justice and development.
b) As instrumentalities through which worker welfare may be promoted and fostered.
(Mactan Workers Union v. Aboitiz, 45 SCRA 577 (1972])
It is the instrumentality through which an individual laborer who is helpless as
against a powerful employer may, through concerted effort and activity, achieve the
goal of economic well-being. [Gullarno v. CIR. 52 SCRA307 [1993]).
How does the government employees' right to self-organization differ from that of
the employees in the private sector?

Answer:
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 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."
Alternative Answer:
In government, managerial employees shall not be eligible to join the organization
of rank-and-file employees per Executive Order No. 180 but said law does not provide
that they are not eligible to join, assist or form any labor organization, meaning, they
could join, assist or form any labor organization of their own. In the private sector,
managerial employees are not eligible to join, assist or fonn any labor organization.

(See Art. 243 of the Labor Code and Sec. 3 of Executive Order No. 180)
Question No. 3:
1) Who are the managerial, supervisory and rank-and- file employees?
Answer:
Managerial employee" is one who is vested with powers or prerogatives to lay
down and execute management policies or to hire, transfer, suspend, layoff, recall,
discharge, assign or discipline employees Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature but requires the use of
Independent judgment. All employees who are neither managerial or supervisory
employees are considered rank- and-file employees. (Art. 212(m) of the Labor Code)
2) Distinguish the project employees from regular employees.
Answer:
A regular employee is one engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer. On the other
hand, a project employee is one whose employment is fixed for a specific project or
undertaking the completion or termination of which has been determined at the time
of the engagement of the employee. (See Art. 280 of the Labor Code)
Question No. 4:
1)

Define unfair labor practice.

Answer:

Unfair labor practice means any unfair labor practice as expressly defined by the
Labor Code (Arts. 248 and 249 of the Labor Code). Essentially, an unfair labor
practice is any act committed by an employer or by a labor organization, its officers,
agents or representatives which has the effect of preventing the full exercise by
employees of their rights to self-organization and collective bargaining. (See Arts 248
and 249 of the Labor Code).
2)

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.
Answer:
Any three (3) from the following enumeration in the Labor Code:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an
employer to commit any of the following unfair labor practice:

a) To interfere with, restrain or coerce employees in the exercise of their right to selforganization;

b) To require as a condition of employment that a person or an employee shall not join a

labor organization or shall withdraw from one to which he belongs;
c)

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 selforganization;

d)

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;

e)

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 Article 241, 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 a collective bargaining agreement.

Any three (3) from the following provisions of the Labor Code:
ART. 249. Unfair labor practices of labor organizations. It shall be unfair labor
practice for a labor organization. Its officers, agents or representatives:

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;
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 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;
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 a collective bargaining agreement.
Question No. 5:

1) What matters are considered mandatory subjects of collective bargaining?

Answer:
Wages, hours of work and all other terms and conditions of employment
including proposals for adjusting any grievances or questions arising from the
collective bargaining agreement are considered mandatory subjects of collective
bargaining. (See Art. 252 of the Labor Code)
2) What jurisdictional pre-conditions must be present to set in motion the mechanics of
a collective bargaining?
Answer:
To set in motion the mechanics of collective bargaining, these jurisdictional preconditions must be present, namely:
a. The employees in a bargaining unit should form a labor organization:
b. The labor organization should be a legitimate labor organization:
c.

As such legitimate labor organization, it should be recognized or certified as the

collective bargaining representative of the employees of the bargaining unit; and

d. The labor organization as the collective bargaining representative should request the
employer to bargain collectively. (See Arts. 243, 234, 255 and 250 of the Labor Code)
Alternative Answer:
The mechanics of collective bargaining are set in motion only when the following
jurisdictional pre-conditions are met: (1) possession of the status of majority
representation of the employees representative in accordance with any of the means
of selection or designation provided for by the Labor Code: 2) proof of majority of
representation: and (3) a demand to bargain under Art. 251(g), of the Labor Code.
(Ktok Loy v. NLRC, 141 SCRA 179 (1986))
Question No. 6:
1) Daisy, the branch manager of Tropical Footwear Inc.was dismissed for serious
misconduct. She filed a complaint for illegal dismissal and damages. The Labor
Arbiter sustained Daisys dismissal but awarded her separation pay based on social
Justice and as an act of compassion considering her 10-year service with the
company.
Was the award of the separation pay proper? Explain.
Answer:
No. the award of separation pay is not proper because the employee was
terminated for serious misconduct and payment of separation pay will be to reward
an employee for a wrongdoing. In PhiLippine Long Distance Telephone Co., vs NLRC,

164 SCRA 671 (1988).

We hold that henceforth separation pay shall be allowed as a measure of social
justice only in those instances where the employee is validly dismissed for causes
other than serious misconduct or those reflecting his moral character.
The policy of social justice is not intended to countenance wrongdoing.
Compassion for the poor is an imperative of every human society but only when the
recipient is not a rascal claiming an undeserve privilege. Those who invoke social J
ustice may do so only if their hands are clean and their motives blameless.
A contrary rule would have the effect of rewarding rather than punishing the
erring employee for his offense.
Alternative Answer:
The award of the separation pay was not proper.
According to the Labor Code, separation pay is to be paid to an employee whose
employment 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 or undertaking. When an employer terminates the services of an
employee who has been found to be suffering from any disease, the employee is also
to be paid separation pay.
But on the basis of equity, the Supreme Court has ruled that an employee
whose employment has been terminated for just cause may nevertheless, for
humanitarian reasons, be granted financial assistance in the form of separation pay.
But also according to the Supreme Court, a terminated employee is not deserving of
said financial assistance if her termination is due to serious misconduct.
In the case, Daisy was dismissed because of serious misconduct. Thus, she
should not be paid separation pay.
2) Jose applied with Mercure Drug Company for the position of Sales Clerk. Mercure
Drug Company maintains a chain of drug stores that are open everyday till late at
night. Jose was informed that he had to work on Sundays and holidays at night as
part of the regular course of employment. He was presented with a contract of
employment setting forth his compensation on an annual basis with an express waiver
of extra compensation for work on Sundays and holidays, which Jose signed.
Is such a waiver binding on Jose? Explain.
Answer:
As long as the annual compensation is an amount that is not less than what Jose
should receive for all the days that he works, plus the extra compensation that he
should receive for work on his weekly rest days and on special and regular holidays
and for night differential pay for late night work, considering the laws and wage orders
providing for minimum wages, and the pertinent provisions of the Labor Code, then

the waiver that Jose signed is binding on him for he Is not really waiving any right
under Labor Law. It is not contrary to law, morals, good customs, public order or
public policy for an employer and employee to enter into a contract where the
employees compensation that is agreed upon already includes all the amounts he is
to receive for overtime work and for work on weekly rest days and holidays and for
night differential pay for late night work.
Alternative Answer:
The waiver of benefits provided for by law is void. Art. 6 of the New Civil Code
provides:
Rights may be waived, unless the waiver is contrary to law, public order, public
policy, morals or good customs."
Question No. 7:
Marimar is a teacher in Santibanez High School. She is the class adviser of the
senior batch where Sergio is enrolled. Since it is the policy of the school to extend
remedial instructions to its students, Sergio is imparted such Instructions in school
by Marimar after regular class hours. In the course thereof. Marimar and Sergio fell in
love with each other and shortly after got married. Marimar is 31 years old while
Sergio is only 16.
Santibanez High School thereafter seeks to terminate the employment of
Marimar for abusive and unethical conduct unbecoming of a dignified school teacher
and that her continued employment is Inimical to the best interest and would
downgrade the high moral values of the school. Marimar, according to the school,
recklessly took advantage of her position as a teacher by luring a graduating student
under her advisory section and 15 years her junior into an amorous relationship, in
violation of the Code of Ethics for teachers which states, among others, that a school
official or teacher should never take advantage of his/her position to court a pupil or
student." While no one directly saw Marimar and Sergio doing any intimate acts
inside the classroom, the school nonetheless maintains that the marriage between
the two is the best proof which confirms the suspicion that Marimar and Sergio
indulged in amorous relations inside the classroom after class hours.
Marimar, on the other hand, contends that there is nothing wrong with a
teacher falling in love with her pupil and consequently, contracting marriage with
him.
How would you decide the case. Explain.
Answer:
The fact that Marimar and Sergio got married is not by itself sufficient proof that
Marimar, as a 31 year old teacher, took advantage of her position to court Sergio, a
16-year old student, whom she was tutoring after regular class hours. Thus,
Marimar could not be considered as violating the schools Code of Ethics which

could have been a valid cause for her termination. Marimars falling in love with her
student cannot be considered serious misconduct which is a Just cause for
termination of employment.
Of course, if it is proven that Marimar and Sergio indulged in amorous relations
inside the classroom after class hours, this would constitute serious misconduct on
the part of Marimar as a teacher and could be just cause for the termination of her
employment.
The case should be decided in favor of Marimar, the school teacher. The school
failed to adduce evidence in support of its claim of immoral conduct on the part of
Marimar; hence, its claim that the marriage between the two (teacher and student) is
best proof which confirm the suspicion that Marimar and Sergio indulged in amorous
relations inside the classroom after office hours" is a gratuitous statement.
Furthermore, marriage between two parties of disparate ages, even as between an
older teacher and a younger student is not an immoral act.
In Chua Qua v. Clave, 189 SCRA 117 (1990) a case which is exactly similar to
the problem, the Supreme Court ruled:
[Where] there is no substantial evidence of the imputed immoral acts, it follows
that the alleged violation of the Code of Ethics would have no basis. If the two
eventually fell in love, despite the disparity on their ages and academic levels, this
only lends substance, to the truism that the heart has reasons of its own which
reason does not know. But, definitely, yielding to this gentle and universal emotion is
not to be casually equated with immorality. The deviation of the circumstances of
their marriage from the usual societal pattern cannot be considered as a defiance of
contemporary social norms.
Question No. 8:
Mansueto was hired by the Philippine Packing Company (PPC) sometime in 1960
as an hourly paid research field worker at its pineapple plantation in Bukidnon. In
1970, he was transferred to the general crops plantation in Misamis Oriental.
Mansueto was promoted to the position of a monthly paid regular supervisor four
years after.
Subsequently, research activity in Misamis Oriental was phased out in March of
1982 for having become unnecessary. Mansueto thereafter received a written memorandum from the PPC, reassigning him to the Bukidnon plantation effective April 1.
1982, with assurance that his position of supervisor was still there for him to hold.
Mansueto tried to persuade the PPC management to reconsider his transfer and
if this was not possible, to at least consider his position as redundant so that he
could be entitled to severance pay. PPC did not accept Mansueto's proposal.
When Mansueto continuously failed to report for work at the Bukidnon
plantation, PPC terminated his employment by reason of his refusal to accept his new
assignment.
Mansueto claims that his reassignment is tantamount to an illegal constructive
dismissal.
Do you agree with Mansueto? Explain.

Answer:
There is no constructive dismissal by the mere act of transferring an employee.
The employees contention cannot be sustained simply because a transfer causes
inconvenience. There is no constructive dismissal where, as in Philippine Japan
Active Carbon Corp., us. NLRC, 171 SCRA 164 (1989), the Court ruled that
constructive dismissal means:
A quitting because continued employment is rendered impossible, unreasonable
or unlikeable; as, an offer involving a demotion in rank and a diminution in pay.
The transfer will not substantially alter the terms and conditions of employment
of the Supervisor. The right to transfer an employee is part of the employers
managerial function.
Furthermore, the Court ruled that an employee has no vested right to a position,
and in justifiable cases employment may be terminated.
An employer's right to security of tenure does not give him such a vested right to
his position as would deprive the Company of its prerogative to change his
assignment or transfer him where he will be most useful. When his transfer is not
unreasonable, not inconvenient, nor prejudicial to him and it does not involve a
demotion in rank or a diminution of his salaries, benefits, and other privileges, the
employee may not complain that it amounts to a constructive dismissal.
Question No. 9:

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
elses 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.
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.
Answer:
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.
Alternative Answer:
The dismissal is not justified because the serious misconduct committed by the
employee is not Ln connection with his work. Art. 282(g) of the Labor Code was
interpreted by the Supreme Court in Aris Philippines, Inc. v. NLRC, as follows:
"It is not disputed that private respondent has done, indeed he admitted to have
committed, a serious misconduct. In order to constitute a just cause" for dismissal,
however, the act complained of must be related to the performance of the duties of
the employee such as would show him to be thereby unfit to continue working for the
employer."
Question No. 10:
A deadlock in the negotiations for the collective bargaining agreement between X
College and the Union prompted the latter, after duly notifying the DOLE, to declare a
strike on November 5 which totally paralyzed the operations of the school.
The Labor Secretary immediately assumed jurisdiction over the dispute and
issued on the same day (November 5) a return to work order. Upon receipt of the
order, the striking union officers and members on November 7, filed a motion for
reconsideration thereof questioning the Labor Secretarys assumption of jurisdiction,
and continued with the strike during the pendency of their motion.
On November 30, the Labor Secretary denied reconsideration of his return to
work order and further noting the strikers failure to immediately return to work
terminated their employment.
In assailing the Labor Secretarys decision, the Union contends that:
1) the Labor Secretary erroneously assumed jurisdiction over the dispute since X
College could not be considered an Industry indispensable to national interest:
2) the strikers were under no obligation to Immediately comply with the November 5
return to work order because of their then pending motion for reconsideration of
such order: and
3) the strike being legal, the employment of the striking Union officers and members
cannot be terminated.

Rule on these contention. Explain.

Answer:
1) The Supreme Court has already ruled that educational institutions are in an industry
indispensable to the national interest, considering the grave adverse effects that their
closure entails on their students and teachers.
2)

The striking workers must immediately comply with a Return to Work Order even
pending their motion for reconsideration. Compliance is a duty imposed by law, and a
Return to Work Order is immediately executory in character.
The nature of a Return to Work Order, was characterized by the Supreme Court
in Sarmiento v. Juico, 162 SCRA 676 (1988) as:
It is also important to emphasize that the return to work order not so much
confers a right as it imposes a duty . It must be discharged as a duty even against the
workers' will. Returning to work in this situation is not a matter of options or
voluntariness but of obligation.
In Baguio Colleges Foundation u. NLRC, 222 SCRA 604 (1993) the Court ruled:
Assumption and certification ordes are executory in character and are to be
strictly complied with by the parties even during the pendency of any petition
questioning their validity.

3) The continuing strike is illegal because it is in defiance of a return to work order of

the Secretary of I abor and Employment, hence, termination of employment of all
those who participated whether officer or member, is legal.
In Sta. Scholastica's College u. Torres, 210 SCRA 565 (1992), the Court ruled:
Any worker or union officer who knowingly participates in a strike defying a
return to work order may consequently, be declared to have lost his employment
status in accordance with Art. 246 of the Labor Code.
Question No. 1 1 :

Diego, Executive Vice-President of Evergreen Development Corporation (EDC)

was dismissed by the Board of Directors for his involvement in irregularities
prejudicial to EDCs interests. He filed a complaint for illegal dismissal with the Labor
Arbiter, praying for reinstatement with backwages, P5 million pesos as moral
damages. PI million pesos as exemplary damages and attorney's fees. EDC questioned
the Jurisdiction of the Labor Arbiter. Diego, in turn contended that the Labor Arbiter
has Jurisdiction over the case as it Involves the termination of an employee and
claims for backwages, benefits and damages.

Decide.
Answer:
The dismissal of an Executive Vice-President of a Corporation who is a corporate
officer, by the Board of Directors of the corporation is not a termination dispute
under the jurisdiction of a Labor Arbiter. It is an intra-corporate dispute that is under
the jurisdiction of the Securities and Exchange Commission.
Question No. 12:
The national council of X Union, the exclusive bargaining representative of all
daily paid workers of Z Corp., called a general meeting and passed a resolution which
provides that each union member was to be assessed P1,000.00 to be deducted from
the lump sum of P 10,000.00 which each employee was to receive under the CBA.
Sergio, a Union member, protested and refused to sign the authorization slip for the
deduction. X Union then passed a resolution expelling Sergio from the union. Sergio
filed a complaint before the Labor Arbiter for illegal deduction and expulsion from the
union.
Will the complaint prosper? Explain.
The complaint will not prosper before the Labor Arbiter because there is here an
intra-union conflict which is under the jurisdiction of the Med-Arbiter. (See Art. 226
and Rule V of Book V of the Rules and Regulations Implementing the Labor Code).
Question No. 13:
PT & T Supervisory Employees Union filed a petition for the holding of a
certification election among the supervisory employees of the PT & T Company. The
company moved to dismiss the petition on the ground that Union members were
performing managerial functions and were not merely supervisory employees. The
company also alleged that a certified bargaining unit existed among its rank and file
employees which barred the filing of the petition.
1) Does the company have the standing to file the motion to dismiss? Explain.
2) If you were the Med-Arbiter how would you resolve the petition.
3) What is the proper remedy of an employer to ensure that the employees are qualified
to hold a certification election?
Answer:
1) No. the company has no standing to file the Motion to Dismiss as the employer has no
right to interfere in a purely union matter or concern. (Philippine Fruits and Vegetable
Industries, Inc., us Torres, 211 SCRA 95 (1992)
The Court would wish to stress once more the rule which it has consistently
pronounced in many earlier cases that a certification election is the sole concern of
the workers and the employer is regarded as nothing more than a bystander with no
right to interfere at all in the election.

2)

As the MedArbiter I will:

a. Deny, for lack of merit, the employer's Motion to dismiss the Unions Petition for
Certification Election.
b. Proceed to hear the merits of the petition, especially:
1.

the appropriation of the claimed bargaining unit;

2.

inclusion and exclusion of voters, or the proposed voter list; and

3.

if the petition is in order, to set the date, time and place of the election.

3) The employer has no remedy. The petition for certification election was initiated by the
Union; hence, the employer is a total stranger or a bystander in the election process.
(Philippine Fruits and Vegetable Industries, Inc. v. Torres, 211 SCRA 95 [1992]). To
allow an employer to assert a remedy is an act of interference in a matter which is
purely a concern of the Union.
Alternative Answer:
1) The company does not have the standing to file a motion to dismiss the petition for
certification election, but it could move for the exclusion of the employees it alleged to
be managerial employees from the bargaining unit for which a petition for certification
election has been filed.
As a general rule, an employer has no standing in a petition for certification
election because the purpose of a certification election is to determine who should be
the collective bargaining representative of the employees. Thus, a certification election
is the concern of the employees and not of the employer.
But in the case at bar, the employer may have a standing because the petition for
certification election involves personnel which the employer alleges to be managerial
employees. And managerial employees under the Labor Code are not eligible to form,
assist or join labor organizations, implying that they cannot be part of the bargaining
unit for which a petition for certification election has been filed.
2) As the Med-Arbiter. I will order the holding of the certification election. The fact that
there is already a certified collective bargaining representative of the rank and file
employees of the Company is not a bar to the holding of a certification election for the
determination of the collective bargaining representative of the supervisory employees.
But I will exclude those employees found to be managerial from participating in the
certification election.
1) The proper remedy of an employer to ensure that only the employees are qualified to
hold a certification election is to move for the exclusion of those whom he alleges to be
managerial personnel.
Question No. 14:
Efrenia Reyes was a classroom teacher assigned by the Department of Education.
Culture and Sports (DECS) in Panitan, Capiz. She has been in the government service
since 1951 up to November. 1985 when she retired at 55 due to poor health.
In March, 1982, while she was teaching her Grade 1 pupils the proper way of
scrubbing and sweeping the floor, she accidentally slipped. Herback hit the edge of a
desk. She later complained of weak lower extremities and difficulty in walking. After
an X-ray examination, she was found to be suffering from Pott's disease and was
advised to undergo an operation. In 1985, she filed with the GSIS a claim for disability

benefits under Presidential Decree No. 626, as amended. The GSIS granted the claim
and awarded Efrenia permanent partial disability benefits.
After she underwent a surgical operation on her spine in November. 1985, her
condition worsened.
In 1990, Efrenia filed with the GSIS a petition for conversion of her disability
status to permanent total disabilities with corresponding adjustment of benefits. GSIS
denied the claim stating that after Efrenia's retirement, any progression of her ailment
is no longer compensable.
Is the GSIS correct in denying the claim. Explain.
Answer:
Considering that the disability of Reyes is work connected the provisions of the
Labor Code dealing with employees compensation should determine her right to
benefits.
According to said provisions, if any employee under permanent partial disability
suffers another injury which results in a compensable disability greater than the
previous injury, the State Insurance Fund shall be liable for the income benefit of the
new disability even after her retirement. Was Reyes still an employee for the purpose
of applying the above provision of the Labor Code? Liberally construing said
provision, Reyes may be considered still as an employee so that she could receive
additional benefits for the progression of her ailment.
Alternative Answers:
a) No. When an employee is constrained to retire at an early age due to his illness and
the illness persists even after retirement, resulting in his continued unemployment,
such condition amounts to total disability which should entitle him to the maximum
benefits allowed by law. Her disability which should entitle her to the maximum falls
within the definition of permanent total disability.
b) No, the GSIS erred in denying the claim. Note,.that the original claim and grant of
benefits was based on Presidential Decree No. 626, or Book IV, Title II of the Labor
Code: Employees Compensation and State Insurance Fund. The same law does not
provide for separation fee from employment as a basis for denial of benefits.
The worsening of the school teachers condition is a direct result, or a continuing
result of the first injury which was deemed work-connected by the GSIS and hence
compensable.
Diopenes vs. GSIS. 205 SCRA 331 (1992), the Supreme Court cautioned against
a too strict interpretation of the law which may be detrimental to claimants and
advised the GSIS of the constitutional mandate on protection to labor and the
promotion of social justice. Said the Court:
The GSIS and the ECC should be commended for their vigilance against
unjustified claims that will only deplete the funds intended to be disbursed for the
benefit only of deserving disabled employees. Nevertheless, we should caution against
a too strict interpretation of the rules that will result in the withholding of full

assistance from those whose capabilities have been diminished if not completely
impaired as a compensation of their service in the government. A humanitarian
impulse dictated by no less than the Constitution itself under the social justice
policy, calls for a liberal and sympathetic approach to the legitimate appeals of
disabled public servants. Compassion for them is not a dole but a right.
Question No. 15:
Sara has been working as housemaid for the Bojilov spouses for three (3) years.
In the early morning of July 28, the spouses and Sara were watching the live coverage
of the finals of an Olympic boxing match between a Bulgarian and a Filipino which the
foreign fighter won on points. Peeved by Saras angrily remarks that the scoring was
unfair, the Bojilov spouses fired her on the spot.
Sara thereafter filed a complaint with the Regional Director of the DOLE for
unpaid salaries totaling P5.500.00. The Bojilov spouses moved to dismiss the
complaint on the belief that Sara's claim falls within the jurisdiction of the Labor
Arbiter. Sara, however, claimed that the Regional Director can decide on her claim by
virtue of his plenary visitorial powers under Art. 128 and of Art. 129 of the Labor
Code, as amended, which empowers the Regional Director to hear and decide, among
others, matters involving recovery of wages.
1) Whose position will you sustain? Explain.
2)

Will your answer be the same if Saras claim is P4.500.00 with reinstatement?
Explain.
Answer:

1) I will sustain the position of the Bojilov spouses. Art. 128 is not applicable because
the case did not arise as a result of the exercise of visitorial and enforcement powers
by the Regional Director, as the duly authorized representative of the Secretary of
Labor and Employment. Instead, the case is a simple money claim under Art. 129.
which could be under the Jurisdiction of the Regional Director if the claim does not
exceed P5.000.00.

But the claim exceeds P5.000.00. Thus, it is the Labor Arbiter who has
jurisdiction under Art. 217(a) of the Labor Code.
2) I will still hold that it is the Labor Arbiter that has jurisdiction. It is true that the
money claim no longer exceeds P5.000.00. But there is a claim for reinstatement.
Thus, this claim is under the jurisdiction of a Labor Arbiter, per Art. 129 of the Labor
Code.
1995 BAR EXAMINATION
Question No. 1:
1. What are the three (3) general classifications of labor statutes? Describe and give an

example of each classification.

Answer:
are:

The three (3) general classifications of labor statutes

a)
b)
c)

Labor Relations Laws;

Labor Standards Laws: and
Social Security Laws.

Labor Relations Laws are those labor statutes that deal with the relations of
labor and management, like the laws on unions, collective bargaining, unfair labor
practices, strikes, lockouts and picketing.
Labor Standards are those labor statutes that prescribe standards relating to
terms and conditions of employment for compliance by employers, like the laws on
hours of work, weekly rest periods, holiday pay, wages, and laws dealing with women,
minors, househelpers, and industrial homeworkers.
Social security laws are those labor statutes that provide protection not only to a
worker but also to members of his family in case of loss of income or when there is
need for medical care brought about by contingencies like sickness, disability, death,
and old age. Examples of social security laws are the Social Security Law, Revised
Government Service Insurance Act, the Articles of the Labor Code on Employees
Compensation, the State Insurance Fund, and the National Health Insurance Act.
Another way of classifying labor statutes may be:
a) Labor Legislation like the Labor Code:
b) Social Legislation, like the Social Security Law and Agrarian Law
(Comprehensive Agrarian Reform Law); and
c)

Social Security Laws may also be referred to as

Welfare Legislation.

2. Is there any distinction between labor legislation and social legislation? Explain.
Answer:
Labor legislation is sometimes distinguished from social legislation by the former
referring to labor statutes, like Labor Relations Law and Labor Standards, and the
latter to Social Security Laws. Labor legislation focuses on the rights of the worker in
the workplace. Social legislation is a broad term and may include not only laws that
give social security protection, but also those that help the worker secure housing and
basic necessities. The Comprehensive Agrarian Reform law could also be considered a
social legislation.
Alternative Answer:
Yes. Labor Legislation is limited in scope, and deals basically with the rights and
duties of employees and employers. Social Legislation is more encompassing and
includes such subjects as agrarian relations, housing and human settlement,
protection of women and children, etc. All labor laws are social legislation, but not all

social legislation is labor law.

Article 4 of the Labor Code provides that in case of doubt in the implementation
and interpretation of the provisions of the Code and its Implementing Rules and
Regulations, the doubt shall be resolved in favor of labor. Article 1702 of the Civil
Code also provides that in case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the laborer.
Mica-Mara Company assails the validity of these statutes on the ground that they
violate its constitutional right to equal protection of the laws.
3. Is the contention of Mica Mara Company tenable? Discuss fully.
Answer:
No, the Constitution provides that the state shall afford full protection to labor.
Furthermore, the State affirms labor as a primary economic force. It shall protect the
rights of workers and promote their welfare.
Alternative Answer:
a)

No, because a law which promotes a constitutional mandate does not violate the
equal protection clause. The constitutional mandate is for the State to afford full
protection to labor such that, when conflicting interests of labor and capital are to be
weighed on the scales of justice, the heavier influence of the latter should be counterbalanced by the sympathy the law should accord the underprivileged.

b) The contention of Mica-Mara Company is not tenable.

The constitutional right to equal protection of the laws is not violated by
reasonable classification. Thus, it is constitutionally possible to treat workers
differently from employers.
The social justice principle embodied in the Constitution could be the basis for
treating workers more favorably than employers, in the implementation and
interpretation of the provisions of the Labor Code and of its implementing rules and
regulations.
Question No. 2:
1. Gary, a salesman of Astro Chemical Company (ASTRO), was reported to have
committed some serious anomalies in his sale and distribution of company products.
ASTRO designated its Chief Legal Officer to investigate Gary. Instead of submitting to
the investigation. Gary filed a petition to enjoin the investigation on theground that
ASTRO would appear to be his accuser, prosecutor, and judge at the same time.
Will the petition to enjoin the investigation prosper? Discuss fully.
Answer:

The petition to enjoin the investigation will not prosper. It is inevitable that in
disciplinary cases, the employer would appear to be accuser, prosecutor, andjudge at
the same time since it is the employer who charges an employee for the commission of
an offense; he is also the person who directs the investigation to determine whether
the charge against the employee is true or not and he is the one who will judge if the
employee is to be penalized or not. But if the employee is given ample opportunity to
defend himself, he could not validly claim that he was deprived of his right to due
process of law.
Alternative Answer:
No. The employer is merely complying with the legal mandate to afford the
employee due process by giving him the right to be heard and the chance to answer
the charges against him and accordingly to defend himself before dismissal is
effected-.
2. 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.
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.
Answer:
To ensure the legitimate employment of Borja 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 do the
work that Anders is being asked 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, how to install and operate the
highly sophisticated and sensitive instruments from Sweden.
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.
Question No. 3:
1. What is a bonus? When is it demandable as a matter of right? Explain.
Answer:
A bonus is money given in addition to an employees usual compensation.
It may be given as a gratuity, as an act of liberality. But a bonus is demandable as
a matter of right if it is made a legal obligation by law or in a collective bargaining
agreement or in a contract of employment or by its having been given for such a long
time such that the receipt of a bonus has ripened into a right.

Alternative Answer:
A bonus is an amount granted and paid to an employee for his industry and
loyalty which contributed to the employer's success and realization of profit.
(1) Grant of bonus is a prerogative, not an obligation of the employer; and
(2) It is entirely dependent on the employer's capacity to pay.
Normally discretionary, it becomes part of the regular compensation by reason of
long and regular concession or when the bonus is included as among the benefits
granted in a CBA.
2.

Give at least five (5) instances when an illegally dismissed employee may not be
reinstated.
Answer:
Five (5) instances when an illegally dismissed employee may not be reinstated:
a)

When the position held by the illegally dismissed employee has been
abolished and there is no substantially equivalent position for said
employee;

b)

When the employer has ceased to operate;

c)

When the employee no longer wishes to be reinstated;

d)

When strained relations between the employer and the employee have
developed and

e)

When the employer has lost his trust and confidence in the employee
who is holding a position of trust and confidence.

In addition to the above, an illegally dismissed employee may not be reinstated:

a) When he is already entitled to retire at the time he is to be reinstated;
b)

When he is already dead;

c)

When reinstatement will not serve the interest of the parties; and

d)

When he has obtained regular and substantially equivalent employment

elsewhere.

Question No. 4:
Universal Milling Company (UNIVERSAL) and Maras Canteen (MARAS) executed
an agreement that UNIVERSAL employees patronizing MARAS could buy food on
credit and enjoy a 25% discount provided that they present their Identification Card
(ID) and wear their company uniform.
Nikko, an employee of UNIVERSAL, used the ID of Galo, a co-employee, in buying food
at MARAS. An alert employee of MARAS discovered the misrepresentation of Nikko
but not without engaging him Ln a heated argument. Nikko boxed MARAS employee
resulting in serious physical injuries to the latter. UNIVERSAL dismissed Nikko from
the company. Nikko sued UNIVERSAL for illegal dismissal.

As Labor Arbiter, how would you decide the case? Discuss fully.

Answer:
There is ground for disciplining Nikko. In presenting the ID of a co-employee to
buy food at Maras at a discount and engaging in a fist fight, these acts of Nikko
constitute misconduct. But it is not the kind of serious misconduct that could be the
basis of dismissal. It will be noted that the fight did not take place at the workplace.
Alternative Answer:
The facts are not clear whether the canteen is within the company premises. If it
is, then the act of Nikko in boxing Maras employee may be considered as a valid
ground for disciplinary action. However, in this case, the penalty of dismissal is not
commensurate to the misconduct allegedly committed.
Question No. 5:
Pablo Bagsakin, a law graduate who got tired of taking the bar examinations after
several unsuccessful attempts, joined the Investigation Division of Warak Transport
Company. From the very beginning Pablo never liked his manager because the latter
always made fun of the formers accident reports. When Pablos patience ran out he
walked up to his manager who was reviewing the investigators assignments and
workload and boxed him until the latter collapsed. The incident happened during
office hours at the Investigation Division in the presence of his co-employees. Pablo
was dismissed without any investigation and was no longer allowed to enter the
company premises.
The manager filed a complaint for damages against Pablo before the Pasig
Regional Trial Court (RTC). In turn
Pablo filed a case for illegal dismissal with the Labor Arbiter against the manager and
the transport company. Pablo asked for reinstatement without loss of seniority rights
with full back wages. Pablo also filed before the Pasig RTC a motion to dismiss the
damage suit against him alleging that the Labor Arbiter before whom the case for
illegal dismissal was pending had exclusive jurisdiction over both cases.
Resolve the motion to dismiss. Discuss fully.
Answer:
The motion to dismiss filed by Pablo before the Pasig RTC should be denied.
The damage suit filed by the manager against Pablo does not arise from
employer-employee relationship. While the case involves an employer and his
employee, it is not the employer- employee relationship between the two that gives
rise to the damage suit. Instead, it is based solely on an alleged tort which could give
rise to a damage suit under the Civil Code. Thus, the Labor Arbiter has no
jurisdiction over the damage suit.

Question No. 6:
Juan Dukha, a bill collector of Ladies Garments Company, was dismissed
because he did not remit his collections. He filed a case against his company for
illegal dismissal. During the hearing, the President of the Company admitted that
Juan was never formally investigated for his dishonesty; neither was he informed of
the nature of the charge against him. He was simply barred from entering company
premises by the security guards upon instruction of management.
Juan Dukha asks for immediate reinstatement with full back wages and without
loss of seniority rights.
1. Will the complaint of Juan Dukha for illegal dismissal prosper? Explain.
Answer:
Yes, there may be just cause for terminating Juan Dukha. But he was not
accorded the required due process of law.
Alternative Answer:
The complain of Juan Dukha for Illegal dismissal will prosper in the sense that
the complaint will be heard by a Labor Arbiter. His being barred from entering
company premises is tantamount to dismissal. In the hearings, the employer will have
the burden of proving that there is just cause for terminating Juan, possibly on the
basis of willful breach of trust. On the other hand, Juan will be given the opportunity
to prove that his failure to remit his collection is not because of dishonesty.
2. Assuming that he cannot be reinstated, what right can he immediately assert against
his employer? Explain.
Answer:
Assuming that Juan cannot be reinstated because there is Just cause for his
dismissal, he would nevertheless be entitled to an indemnity from his employer,
because he was denied due process of law by said employer.
Alternative Answer:
Juan can pursue the case of illegal dismissal before a Labor Arbiter where he will
assert the right to defend himself i.e., to explain his failure to remit his collections.
3. Suppose Juan Dukha proved during the hearing that he was robbed of his collections
and, consequently, the Labor Arbiter decided in his favor. In the meantime, the Ladies
Garments Company appealed to the National Labor Relations Commission (NLRC).
Pending appeal, what rights are available to Juan relative to the favorable
decision of the Labor Arbiter? Explain.
Answer:
Juan can ask for immediate reinstatement pending resolution of the appeal filed
by the company with the NLRC. At the option of his employer, he may be admitted
back to work or merely reinstated in the payroll.

Question No. 7:
A supervisors union filed a petition for certification election to determine the
exclusive bargaining representative of the supervisory employees of Farmers Bank.
Included in the list of supervisory employees attached to the petition are the
Department Managers. Branch Managers, Cashiers and Comptrollers. Farmers Bank
questioned this list arguing that Department Managers. Branch Managers, Cashiers
and Comptrollers inherently possess the powers enumerated in Art. 212, par. (m), of
the Labor Code, i.e., the power and prerogative to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees.
1. Is the contention of Farmers Bank correct? Discuss fully.
Answer:
The contention of the Farmers Bank is not correct, if, on examination of the
actual powers exercised by the Department Managers. Bank Managers, Cashiers and
Comptrollers, they are not vested with powers or prerogatives to lay down and execute
management policies or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees. If their powers are to carry out their duties and responsibilities
in accordance with the policies promulgated by the Board of Directors of the Bank, or
by external authorities, like the Central Bank then, they are not managerial but may
be supervisory personnel.
But this may be noted: The Bank officials mentioned in the case, have control,
custody and/or access to confidential matters. Thus, they are confidential employees
and in accordance with earlier Supreme Court decisions, as confidential employees,
the Branch Manager, Cashier, Controller are disqualified from joining or assisting the
supervisors union of the Bank.
Answer:
The contention of the Farmers Bank is partially correct. The Department
managers and Branch managers, if they In fact have the powers implied by their
titles, are managerial personnel. In accordance with the Labor Code, managerial
personnel are not eligible to join and form labor unions.
On the other hand, cashiers who are in charge of money received or expended,
and comptrollers who examine and supervise expenditures, are not managerial
personnel, and if they supervise personnel, they could be supervisors, and are
therefore to be Included in the bargaining unit of supervisors.

2. Is there any statutory basis for the petition of the union? Explain.
Answer:
There is statutory basis for the petition of the supervisors union. Under the
Labor Code, supervisors have the right to form and join unions, but only unions of
supervisory employees.
Question No. 8:
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.
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.
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.
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.
Answer:
If I were the Labor Arbiter. I will not sustain Roman.
It is true that it would be an unfair labor practice for an employer to discriminate
against his employee for the latters union activities.
But in the case, the Corporation is not discriminating against Roman because he
is a union official. When the Manager of Roman 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.
Alternative Answer:
a)

No. The existence-of an emergency situation is irrelevant to the charge of willful

disobedience; an opposite principle would allow a worker to shield himself under his
self-designed concept of non-emergency situation" to deliberately defy the directive of
the employer.
Roman was given adequate opportunity under the circumstances to answer the
charge. His explanation was taken into consideration in arriving at the decision to
dismiss him.

b) If it can be established that the true and basic motive for the employer's act is derived
from the employee's union affiliation or activities, the allegation by the employer of
another reason whatever its substance of validity, is unavailing. Thus, the dismissal
could be considered illegal.
Question No. 9:
1. Give the original and exclusive Jurisdiction of Labor Arbiters.
Answer:
Labor Arbiters have original and exclusive Jurisdiction over:
a)

unfair labor practices;

b)
c)

termination disputes;
cases accompanied with a claim for reinstatement, and Involving
wages, rates of pay, hours of work, and other terms and conditions of
employment;

d)

claims for actual, moral, exemplary and other forms of damages arising
from employer-employee relations;

e)

cases arising from any violation of Article 264 of the Labor Code,
including questions involving the legality of strikes and lockout; and

I) except claims of Employees Compensation, Social Security. Medicare

and maternity benefits, all other claims arising from employer-employee
relations including those persons in domestic or household service,
involving an amount exceeding five thousand pesos (P5.000.00)
regardless of whether accompanied with a claim for reinstatement.
2.

How are cases arising from the interpretation or > implementation of collective
bargaining agreements handled and disposed?
Answer:
Through the grievance machinery and if not resolved the grievance machinery,
through voluntary arbitration.

3. What is the jurisdiction of the National Labor Relations Commission?

Answer:
Jurisdiction of the NLRC:
a)

exclusive appellate jurisdiction over all cases decided by Labor Arbiter;

b)

exclusive appellate jurisdiction over all cases decided by Regional

Directors or hearing officers involving the recovery of wages and other
monetary claims and benefits arising from employer-erpployee relations
where the aggregate money claim of each employee or househelper does
not exceed five thousand pesos (P5.000.00);

c)

original jurisdiction to act as a compulsory arbitration body over labor

disputes certified to NLRC by the Secretary of Labor and Employment;

and
d)

power to issue a labor injunction.

Question No. 10:

1. Under the Labor Code, is the right of first preference a lien on the property of the
insolvent debtor in favor of the workers? Explain.
Answer:
The right of first preference in favor of workers is not a lien on the property of the
insolvent debtor. The preference could be exercised only in the event of bankruptcy or
liquidation of an employer's business.
Alternative Answer:
A preference does not attach to specific properties. Lien creates charges on a
particular property. The right of first preference as regards unpaid wages recognized
by the Labor Code does not constitute a lien on the property of the Insolvent debtor In
favor of the workers. It is but a preference of credit in their favor, a preference in
application.
The Labor Code does not purport to create a lien in favor of workers or employees
for unpaid wages either upon all of the properties or upon any particular property
owned by their employer.
2. Distinguish the mortgage created under the Civil Code from the right of first
preference created by the Labor Code as regards the unpaid wages of workers.
Explain.
Answer:
A mortgage directly subjects the property upon which it is imposed, whoever the
possessor may be. to the fulfillment of the obligation for which it was constituted.
It creates a real right which is enforceable against the whole world. It is therefore
a lien on an identified real property.
Mortgage credit is a special preferred credit under the Civil Code in the
classification of credits.
The preference given by the Labor Code when not attached to any specific
property, is an ordinary preferred credit.
Alternative Answer:
If the asset of an employer which has become bankrupt or has been liquidated
has been mortgaged, the proceeds of the sale of said mortgaged asset is first subject
to the lien of the person to whom the property is mortgaged. Said lien is superior to
the first preference enjoyed by the workers pursuant to the Labor Code.
Question No. 11:
1. What is the extent of an employers intervention in the compensation process and the
payment of benefits to employees under the State Insurance Fund? Explain.

Answer:
The new law establishes a State Insurance Fund built up by the contributions of
employers based on the salaries of their employees. The employer does not intervene
in the compensation process and it has no control over the payment of benefits.
Unlike under the Workmens Compensation Act. employers are no longer directly
liable for the income and medical and related benefits that are to be paid to covered
employees if they should suffer from work connected injury or sickness or death. The
payment of employees compensation is now from the State Insurance Fund which is
constituted from the contributions collected from employers.
2. Is it necessary for an employee to litigate in order to establish and enforce his right to
compensation? Explain.
Answer:
No. All that an employee does to claim employee's compensation, is to file a claim
for said benefits with the SSS (for those in the private sector) or GSIS (for those in the
public sector).
In the event that the claim is denied on the SSS/GSIS level, claimant may appeal
to the Employees Compensation Commission where he may prove the causal
connection between injury and nature of work.
Question No. 12:
ILECO is an electric cooperative which accepted fresh graduates from a vocational
school as lineman trainees for six (6) months after which they were hired as
probationary employees for another ten (10) months. Thereafter, they were made
regular employees. These employees then sought entitlement to salary increases
under the existing Collective Bargaining Agreement (CBA) which were given at the
time when they were not yet regular employees, hence, not yet members of the
employees union. ILECO denied their claims because they were not yet regular
members when the CBA took effect and therefore not entitled to wage adjustments
thereunder.
Resolve the issue. Discuss fully.
Answer:
In implementing a CBA that provides for salary increases to regular employees, it
is but logical that said salary increases should be given to employees only from the
time they are regular employees.
Given the facts mentioned in the question, the lineman trainees that ILECO hired
became regular employees six (6) months after they were hired. The Labor Code
provides that probationary employment shall not exceed six (6) months from the date
the employee started working. Double probation, which happened in the case in
question when the line man trainees were given an additional probationary period of
another ten (10) months, may be considered as a circumvention of the rule on
probationary employment.

Thus, because they were already regular employees after the first six (6) month
period, from said date, they are entitled to the CBA increases provided for regular
employee.
Alternative Answer:
They are not entitled to the wage adjustments under the CBA that were given when
they were not yet regular employees.
But, if, by virtue of their becoming regular employees, they are now part of the
appropriate collective bargaining unit defined by the CBA, their not being union
members is not a bar to their receipt of any wage adj ustments given under the CBA,
after they become regular employees.
Question No. 13:
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.
Answer:
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.
Question No. 14:
1. What are the objectives of the Secretary of Labor and Employment in certifying a
labor dispute to the NLRC for compulsory arbitration? Explain.
Answer:
The objectives of the Secretary of Labor and Employment in certifying a labor
dispute to the NLRC for compulsory arbitration is to prevent a work stoppage that
may adversely affect the national interest and to see to it that a labor dispute is
expeditiously settled.
2. Are the strikers in an illegal strike entitled to reinstatement under the Labor Code?
Explain.

Answer:
No. Union officers and members who commit illegal acts lose their employment
status. Any union officerwho knowingly participates in an illegal strike, and any
worker or union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his employment status. Participants (not
a union officer and did not commit any illegal act) may be entitled to reinstatement.
1. If the strike is declared illegal, will the strikers be entitled to their wages for the
duration for the strike? Explain.
Answer:
No. The applicable doctrine will be: No work, no pay, unless there is an agreement
to pay strike duration pay.
Question No. 15:
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 Visayan dialects, viz:
Ilongo, Cebuano and Waray. Lourdes. 23 years old was accepted as she possessed all
the qualifications. 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. Answer:
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:
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."
Question No. 16:
Big Foot Company of Paete, Laguna, has been in the business of manufacturing
wooden sandals for export since 5 November 1980. On 5 January 1994 it employed
an additional labor complement of thirty workers, two supervisors and two
department managers. On 5 February 1994 it hired five carpenters to fix the roof and
walls of its factory which were destroyed by typhoon Huanlng."
Who among the aforementioned persons are compulsorily covered by the Social

Security Law and when should they be considered effectively covered? Discuss fully.
Answer:
Assuming that all of them were not yet over sixty years of age, the additional
labor complement of thirty workers, two supervisors and two department managers
were compulsorily covered by the Social Security Law on 5 January 1994 when they
were employed. According to said law, workers are covered on the day of their
employment.
But the five carpenters which the company hired to fix the roof and walls of its
factory were not under the compulsory coverage of the Social Security Law because
said carpenters are casual employees. The Social Security Law provides that
employment purely casual and not for the purpose of occupation or the business of
the employer are not under its compulsory coverage.
Question No. 17:
Reconcile the compulsory nature of the closed shop provision in a Collective
Bargaining Agreement with the constitutional guarantee of freedom of association.
Discuss fully.
Answer:
Among the policies of the State In the field of labor relations is to promote trade
unionism and to foster the organization of a strong and united labor movement. Union
security clauses, like a closed shop agreement, is one way of implementing the
aforementioned labor relations policy. Implementing to some extent the concept of
freedom of association, an employee who is already a member of a union could not be
compelled to become a member of a bargaining union, even if there is a closed shop
agreement.
Alternative Answer:
It could be argued that a closed shop provision in a Collective Bargaining
Agreement, because it requires that a person should first be a member of the
bargaining union before he is employed, is violative of the right to freedom of
association, because said right subsumes not only a right to Join, but also a right not
to Join a union.
On the other hand, it could be argued that the exercise of the freedom of
association means that workers should Join unions. A closed shop agreement, as a
union security clause, encourages the joining of unions.

Question No. 1:
1) What is a labor-only" contract?

2) Distinguish the liabilities of an employer who engages the services of a bona fide
independent contractor" from one who engages a labor-only" contractor?
3) Distinguish between an award for back wages and an award for unpaid wages.
Answer:
1) 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)
2) 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 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.
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.
Alternative Answers:
a) An employer who engages the services of a bona fide independent contractor" is
solidarity liable with his contractor or sub-contractor only for non-payment or underpayment of wages and other labor standards provisions of the Labor Code, whereas
an employer who engages a labor-only" contractor is liable for all benefits, terms and
conditions of employment that it normally grants to its regular or direct employees.
b) An employer who deals with a bona-fide independent contractor shall be liable only
subsidiarity, if the contractor or sub-contractor fails to pay the wages to the workers
in accordance with the Labor Code.
Upon the other hand, an employer who deals with a labor-only" contractor shall
be primarily responsible to the workers in the same manner and extent as if the latter
were directly employed by him. (Arts 106-107, Labor Code)
3) An award for backwages is to compensate an employee who has been illegally
dismissed, for the wages, allowances and other benefits or their monetary equivalent,
which said employee did not receive from the time he was illegally dismissed up to the
time of his actual reinstatement.
On the other hand, an award for unpaid wages is for an employee who has

actually worked but has not been paid the wages he is entitled to receive for such
work done. (Arts. 279 and 97(f). Labor Code)
Alternative Answer:
An award of backwages is given to an employee who is unjustly dismissed. The
cause of action here is the unjust dismissal. On the other hand, an award of unpaid
wages is given to an employee who has not been paid his salaries or wages for
services actually rendered. The cause of action here is non-payment of wages or
salaries. (General Baptist Bible College vs. NLRC 219 SCRA 549).
Question No. 2:
1) Distinguish between the substantive and the proce - dural requirements for the
dismissal of an employee.
2) May a court order the reinstatement of a dismissed employee even if the prayer of the
complaint did not include such relief?
Answer:
1) This is the substantive requirement for the valid dismissal of an employee:
There should be a just cause for the termination of an employee or that the
termination is authorized by law.
m
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. (Arts. 279 and 277 (b). Labor Code)
1) So long as there is a finding that the employee was illegally dismissed, the court can
order the reinstatement of an employee even if the complaint does not include a prayer
for reinstatement, unless, of course, the employee has waived his right to
reinstatement; By law an employee who is unjustly dismissed is entitled to
reinstatement, among others.
The mere fact that the complaint did not pray for reinstatement will not prejudice
the employee, because technicalities of law and procedure are frowned upon in labor
proceedings. (General Baptist Bible College vs. NLRC, 219 SCRA 549).
Question No. 3:
1) Distinguish salary" from wages."
2} Are these subject to attachment and execution?
2) Distinguish the rights of managerial employees from members of a managerial staff.

Answer:
1) The term wages" applies to compensation for manual labor, skilled or unskilled, while
salary denotes a compensation for a higher degree of employment. (Goa vs. Court of

Appeals. 140 SCRA 304).

Alternative Answer:
Wages" are those paid to any employee as his remuneration or earnings payable
by an employer for work done or to be done, or for services rendered or to be
rendered.
On the other hand, salary" is used in the law that provides for a 13th-month
pay. In this law, basic salary includes all remuneration or earnings paid by an
employer to his employees for services rendered, but does not include allowances or
monetary benefits which are not considered or integrated as part of the regular or
basic salary. (Art. 97(f). Labor Code; Sec. 2(b), P.D. No. 851)
2)

Under Article 1708 of the Civil Code, only wages" are exempt from attachment or
execution. Salaries are not exempt from attachment or execution. (Goa vs. Court of
Appeals, 140 SCRA 304).

3)

Managerial employees have no collective bargaining rights because, they cannot join
or form any other labor organization while officers of a managerial staff are not
prohibited from joining, assisting or forming or arresting a supervisors union; hence,
they can bargain collectively. (Art. 245, Labor Code; National Sugar Refineries Corp.
vs. NLRC. 220 SCRA 452).
Alternative Answer:
Managerial employees, under Article 212(m) of the Labor Code are vested with
the prerogatives to lay down and execute management policies and/or to hire, fire,
transfer, promote, lay-off and discipline employees. They are not eligible for the right
to self-organization for purposes of collective bargaining.
Upon the other hand, members of managerial staff, under Article 82 of the Labor
Code, are not vested with the
above-cited prerogatives. They are not entitled to overtime pay and other benefits
under Book III, Title I of the Code.
Question No. 4:

1)

Can an employer legally oppose the inclusion of confidential employees in the

bargaining unit of rank-and-file employees?

2)

Would your answer be different if the confidential employees are sought to be

Included in the supervisory union?
Answer:

1) Yes. an employed can legally oppose the inclusion of confidential employees in the
bargaining unit of the rank-and-file. This issue has been settled in the case of Golden
Farms vs. Calleja, and reiterated in the case of Philips Industrial Dev. Inc. vs. NLRC.
Alternative Answers:
a) Yes, an employer can legally oppose the inclusion of the confidential employees in the
bargaining unit of rank-and-file employees because confidential employees are
Ineligible to form, assist or join a labor union.

By the nature of their functions, they assist and act in a confidential capacity to,
or have access to confidential matters of, persons who exercise managerial functions
in the field of labor relations, and the union might not be assured of their loyalty in
view of evident conflict of interest.
b)

An employer can legally oppose the inclusion of confidential employees in the

bargaining unit of rank -and- file employees because confidential employees are
considered part of management. (Philtranco vs. BLR, 174 SCRA 388).

2) The answer would be the same if confidential employees are sought to be included in
the supervisory union because confidential employees, being a part of management
would not qualify to Join, much less form a labor union. (Philtranco vs. BLR. 174
SCRA 388).
Alternative Answer:
My answer would remain the same, even If the confidential employees were
sought to be included in the supervisory union. Confidential employees would have
the same adverse impact on the bargaining unit of supervisors: Confidential
employees' access to highly sensitive information may become the source of undue
advantage by the union over the employer. [Philips Industrial Development Inc., vs.
National Labor Relations Commission, et.al., G.R. No. 88957, 25 June 1992)
Question No. 5:
Concepcion Textile Co. included the overtime pay, night-shift differential pay, and
the like in the computation of its employees' 13th-month pay. Subsequently, with the
promulgation of the decision of the Supreme Court in the case of San Miguel
Corporation vs. Inciong (103 SCRA 139) holding that these other monetary claims
should not be included in the computation of the 13th-month pay. Concepcion Textile
Co. sought to recover under the principle of solutio indebitiits overpayment of its
employees' 13th-month pay, by debiting against future 13th-month payments whatever excess amounts it had previously made.
1) Is the Companys action tenable?
2) With respect to the payment of the 13th-month pay after the San Miguel Corporation
ruling, what arrangement, if any, must the Company make in order to exclude from
the 13th-month pay all earnings and remunerations other than the basic pay.
Answer:
1) The Companys action is not tenable. The principle of solutio indebiti which is a civil
law concept Is not applicable in labor law. Thus, solutio indebiti is not applicable to
the instant case. (Davao Fruits Corporations vs. National Labor Relations
Commission, et at. 225 SCRA, 562)
Alternative Answers:
a) The Companys action would be tenable if payment was done by mistake, in which

case recovery can be done under the principle of solutio indebiti But if there was no
mistake, the Company's action would be untenable because it would violate Article
100 of the Labor Code which prohibits elimination or diminution of benefits.
b) No. The Companys action is not tenable. The grant by Concepcion Textile Co. of a
better formula, more favorable to the employee, constituted a valid offer by the
company as the offeror and the employees as the offeree. There having been a
meeting of the minds of the parties, the rights and obligations arising therefrom were
valid. Thus, any amount received by virtue thereof could not be recovered, much less
taken away unilaterally. The principle does not apply to the case at bar.
2) Alter the 1981 San Miguel ruling, the High Court decided the case of Philippine
Duplicators Inc. vs. NLRC, on 11 November 1993. Accordingly, management may
undertake to exclude sick leave, vacation leave, maternity leave, premium pay for
regular holiday, night differential pay and cost of living allowance. Sales commissions,
however, should be included based on the settled rule as earlier enunciated in Songco
vs. NLRC, 183 SCRA 610.
Question No. 6:
Atty. Oliza heads the legal department of Company X with the rank and title of
Vice-President. 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.
1) Will his case prosper?
2) Pending hearing, may Atty. Oliza ask the Secretary of Labor to suspend the effects of
the termination of the services of an employee and to order his temporary reinstatement?
Answer:
1) 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), Labor Code)
Alternative Answer:
Yes. The examinee submits that Atty. Ollza's case will prosper. Well-settled is the
rule that even managerial employees are entitled to the constitutional guarantee of
security of tenure. In the case at bar, there was a clear deprivation of Atty. Olizas
right to due process. The blanket accusation of incompetence" hardly qualifies as
compliance with the substantive requirements for an employees dismissal. The
written notice that his services were no longer needed also fall short of the procedural
requirements of notice and opportunity to be heard, the twin ingredients of due
process.
2)

The Labor Code gives the Secretary of Labor and Employment the power to suspend

the effects of a termination made by an employer pending resolution of a labor dispute

in the event of a prima facie finding by the Department of Labor and Employment
before whom such dispute is pending that the termination may cause serious labor
dispute or is in implementation of a mass lay-off.
The termination of Atty. Oliza does not cause a serious labor dispute considering
that he is a managerial employee. It is not in implementation of a mass lay-off. Thus,
pending hearing, the Secretary of Labor and Employment may not suspend the effects
of the termination and order his temporary reinstatement. (Art. 277(b))
Question No. 7;
The Secretary of Labor assumed jurisdiction over a strike under Art. 263(g) of the
Labor Code and issued a
retum-to-work order. The Union defied the retum-to-work order and continued the
strike. The Company proceeded to declare all those who participated in the strike as
having lost their employment status.
1) Was the Companys action valid?
2) Was the Company still duty bound to observe the requirements of due process before
declaring those who participated in the strike as having lost their employment
status?
Answer:
1) The Companys action is valid. Any declaration of a strike after the Secretary of Labor
has assumedjurisdiction over a labor dispute is considered an illegal act. and any
worker or union officer who knowingly participates in a strike defying a retum-towork order may consequently be declared to have lost his employment status and
forfeited his right to be readmitted, having abandoned his position, and so could be
validly replaced.
For the moment a worker defies a return-to-work order, he is deemed to have
abandoned his job, as it is already in itself knowingly participating in an illegal act,
otherwise the worker will simply refuse to return to his work and cause a standstill in
company operations while returning the position he refuses to discharge or allow
management to fill. (SL Scholasticas College vs. Hon. Ruben Torres, Secretary of
Labor, etal., G.R. No. 100158, 29 June 1992.)
2) Considering that the workers who defied the return-to-work order are deemed to have
abandoned their employment, the only obligation required of an employer is to serve
notices declaring them to have lost their employment status at the worker's last
known address. ( Sec. 2 Rule XIV, Book V, Rules Implementing the Labor Code)
Question No. 8:
Union A filed a Notice of Strike with the National Conciliation and Mediation
Board (NCMB) of the Department of Labor and Employment. Upon a motion to
dismiss by the Company on the ground that the acts complained of in the notice of
strike are non-strikeable the NCMB dismissed the Notice of Strike but continued to
mediate the issues contained therein to prevent the escalation of the dispute between
the parties. While the NCMB was conducting mediation proceedings, the Union
proceeded to conduct a strike vote as provided for under the Labor Code. After

observance of the procedural processes required under the Code, the Union declared
a strike.
1) Is the strike legal?
2)

Can the employer unilaterally declare those who participated in the strike as having
lost their employment status?

3)

What recourse do these employees (declared by the employer to have lost their
employment status) have, if any?
Answer:

1)

No. The strike is not legal. The Labor Code provides that no labor organization shall
declare a strike without first having bargained collectively in accordance with its Title
VII of Book V, which in turn provides that during conciliation proceedings at the
NCMB. the parties are prohibited from doing any act that may disrupt or impede the
early settlement of the dispute. (Arts. 264(a), also 250(d); Labor Code)
Alternative Answer:

a)

The strike is not legal, considering that it was declared after the NCMB dismissed the
Notice of Strike.
Hence, it is as if, no notice of strike was filed. A strike declared without a notice of
strike is illegal; (GOP-CCP vs. CIR, 93 SCRA 118).

b) No. The strike is illegal. It is already settled in the case of PAL us. Secretary of Labor
(Drilon) that the pendency of a mediation proceedings is a bar to the staging of a
strike even if all the procedural requirements were complied with,
2)

The employer may unilaterally declare those who participated in the strike as having
lost their employment status but such unilateral declaration does not necessarily
mean that thereby the strikers are legally dismissed. The strikers could still file a case
of illegal dismissal and prove, if they can, that there was no just cause for their
dismissal.
Alternative Answer:

a) The employer cannot unilaterally declare those who participated in the illegal strike
as having lost their employment status. Only the union officers who knowingly
participated in the strike and workers who knowingly participated in the commission
of illegal acts, if any, may be declared to have lost their employment status. (Art. 264).
b) The employer has two options:
i)

It may declare the strikers as having lost their employment status

pursuant to Art. 264 of the Labor Code, or

ii)

It may file a case before the Labor Arbiter, under Art. 217. to have the
strike declared illegal and after that proceed to terminate the strikers.

3) They could file a case of illegal dismissal. The strikers who are union officers may
contend that the strike is not illegal. The strikers who are mere union members may
contend that they did not commit any illegal acts during the strike. (Art. 264, Labor
Code)

Alternative Answer:
a) The employees who were declared to have lost their employment status can file a
complaint for illegal dismissal with the NLRC. or seek the assistance of the NCMB for
conciliation/mediation.
b) The recourse of the workers whose employment status are declared to have been lost
is to file a case of illegal dismissal under Art. 217 of the Code, and to pray for the
suspension of the effects of termination under Article 277(b) of the said Code because
this involves a mass lay-off.
Question No. 9:
Company X, a transportation company, and Union Y were in the process of
negotiating a new Collective Bargaining Agreement (CBA) to replace the one which
expired on March 15, 1990. The negotiations reached an impasse on economic issues
on June 30, 1990. The Secretary of Labor assumed jurisdiction over the dispute and
certified the same to the NLRC for proper disposition. Proceedings before the NLRC
ended on November 30, 1990 and a decision was rendered on December 15, 1990.
The said decision made retroactive to March 15, 1990 the new CBA containing the
issues resolved by the NLRC, as well as those concluded and agreed upon by the
parties prior to their arriving at a deadlock in their negotiations. Company X
questioned the retroactivity of the CBA, alleging that the same contravenes Art. 253-A
of the Labor Code, which provides for the automatic retroactivity of the renewed CBA
only if the same is entered into within six (6) months from its expiry date, and, if not,
the parties must agree on the duration of retroactivity.
1) Is Company Xs position correct?
2) Would your answer be different if the assumption of jurisdiction by the Secretary of
Labor was at the request or instance of Company X?
Answer:
1) The Companys position is not correct. In the absence of a specific provision of law
prohibiting retroactivity of the effectivity of arbitral awards issued by the Secretary of
Labor, the same is deemed vested with plenary and discretionary powers to determine
the effectivity thereof. [St. Luke's Medical Center, Inc. vs. Hon. Ruben O. Torres, et al,
G.R. No; 99395. 29 June 1993, J. Melo. 222 SCRA 779)
2)

No. Regardless of which party sought the assumption by the Labor Secretary, the
effect would be the same. An assumption case gives the Labor Secretary the plenary
arbitration powers to rule on the issues presented for resolution, including the
retroactivity of the new CBA.
Question No. 10:
Bulacan Medical Hospital (BMH) entered into a Collective Bargaining Agreement
(CBA) with its Union, wherein it is expressly stipulated in the Management Prerogative

Clause that BMH shall, in the exercise of its management prerogatives, have the sole
and exclusive right to promulgate, amend and modify rules and regulations for the
employees within the bargaining unit. A year after the contract was signed, BMH
issued its Revised Rules and Regulations and furnished a copy thereof to the Union
for dissemination to all employees covered by the CBA. The Union wrote BMH
demanding that the Revised Rules and Regulations be first discussed with them
before its implementation. BMH refused. So. the Union filed an action for unfair labor
practice (ULP) against BMH.
1) Is the Union correct?
2)

Assuming that the CBA was signed or executed before the 1987 Constitution was
ratified, would your answer to the preceding question be different?
Answer:

1) The Union is correct. A provision in the collective bargaining agreement concerning

management prerogatives, may not be interpreted as cession of the employees right to
participate in the deliberation of matters which may affect their right and the
formulation of policies relative thereto, such as the formulation of a code of discipline.
A line must be drawn between management prerogatives regarding business
operations per se and those which affect the rights of the employees, and in treating
the latter, management should see to it that its employees are at least properly
informed of its decisions or modes of action.
The attainment of a harmonious labor-management relationship and the existing
state policy of enlightening workers concerning their rights as employees demand no
less than the observance of transparency in managerial moves affecting employees'
rights. (Philippine Airlines. Inc. vs. National Labor Relations Commission, et al, G.R.
No. 85985, 13 August 1993. J. Melo. 225 SCRA 258. 301.)
Alternative Answer:
a) The Union is correct. Workers have the right to participate in policy and decisionmaking processes affecting their rights, benefits and welfare. (Art. 255).
b) Yes. The Union is correct in asking for discussion of the revised rules prior to their
effectivity. The reason is Art. XIII. Sec. 3 of the 1987 Constitution, allowing workers
the right to participate 'in policy and decision-making on matters related to their
welfare and benefits.
The Union's remedy however should not be to file a ULP case but to initiate a
GRIEVANCE proceeding, and if unresolved, submit the matter to voluntary
arbitration.
2) The answer would be the same even if the CBA was signed or executed before the
ratification of the 1987 Constitution because it has always been the policy of the
State to promote the enlightenment of workers concerning their rights and obligations
as employees. (Art. 211; PAL vs. NLRC, GR 85985. August 13. 1993)
Question No. 11:
Aldrich Zamora, a welder, was hired on February 1972 by Asian Contractors

Corporation (ACC) for a project. He was made to sign a contract stipulating that his
services were being hired for the completion of the project, but not later than
December 30, 1972, whichever comes first.
After December 1972, Zamora, being a man of
different projects of ACC in various capacities, such
plumber. In all of these engagements. Zamora signed
contract except for the estimated completion dates of
hired.

many talents, was hired for

as carpenter, electrician and
a contract similar to his first
the project for which he was

What is Zamora's status with ACC? is he a contract worker, a project employee, a

temporary or a regular employee? State your reason.
Answer:
Zamora could be a project employee if his work is coterminous with the project
for which he was hired.
But in the case. Zamora was rehired after the completion of every project
throughout the period of his employment with the company which ranged for quite a
long time. Thus, he should be considered a regular employee. (Philippine National
Construction Corporation vs. National Labor Relations Commission, et aL, G.R No.
95816, 27 October 1972. J. Grlno-Aqu ino)
Alternative Answer:
a) Zamora is a regular employee because he was engaged to work in various projects of
ACC for a considerable length of time, on an activity that is usually necessary
desirable in the usual business or trade of ACC. (Mehitabel Furniture vs. NLRC, 220
SpRA 602)
b)

Zamora is a regular employee. Article 280 of the Labor Code declares with
unmistakable clarity: THE PROVISIONS OF WRITTEN AGREEMENT TO THE
CONTRARY NOTWITHSTANDING, xxx 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.
He is not a CONTRACT or TEMPORARY WORKER because even the provisions of
the simulated contracts were not followed when his Job was used continuously. He is
not a project employee, as the term is understood in Art. 280 or under Policy
Instruction No. 20.
Question No. 12:
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 As dismissal
with the grievance machinery as provided for in its Collective Bargaining Agreement
(CBA). At that point, negotiations for a new CBA was in progress. Hence, both the
Union and the Company had very little time to address As 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 As dismissal
on the fifth and the last step of the grievance machinery.

A filed an action for illegal dismissal with the Arbitration Branch of the NLRC on
November 25, 1983. The Company immediately filed a Motion to Dismiss on the
ground of prescription, invoking Article 290 of the Labor Code.
If you were the Labor Arbiter, how would you resolve the Companys Motion to
Dismiss?
Answer:
As the Labor Arbiter. I will deny the Motion to Dismiss. Where an employee was
dismissed and the matter of his dismissal was then referred to the grievance
machinery pursuant to the provision in the existing collective bargaining agreement,
and the grievance machinery had a final meeting after quite a long while thereafter,
the complaint for illegal dismissal was then filed, the action was not barred by laches,
as the pendency of the matter before the grievance machinery affected the ripeness of
the cause of action for illegal dismissal. [Radio Communications of the Philippines,
Inc. (RCPI), us. National Labor Relations Commission, et al. G.R No. 102958. 25 June
1993, J. Davide. Jr. 223 SCRA 656.
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 vs. Carnation. 145 SCRA 268)
Question No. 13:
Tina Aquino, a domestic helper in the household of Fidel Aldeguer, filed an action
in the Regional Office of the Department of Labor and Employment. (DOLE) for
recovery of unpaid wages amounting to P3.500.00 and PI.499.00 as moral damages.
Aquino claimed that the amount of P3, 500.00 is equivalent to the P500.00 a month
she failed to receive for the last seven months of her employment with Aldeguer. based
on their agreed P2.500.00 monthly salary. Aldeguer moved to have Aquinos complaint
dismissed, alleging that as a domestic helper Ms. Aquino should have first brought
the matter to the Lupong Barangay.
If you were the Regional Director, how would you resolve the matter?
Answer:
As Regional Director. I will assume jurisdiction.
The provisions of P.D. No. 1508 requiring the submission of disputes before the
Barangay Lupong Tagapayapa prior to their filing with the court or other government
offices are not applicable to labor cases.
Article 129 of the Labor Code empowers the Regional Director to hear and decide
any matter involving the recovery of wages and other monetary claims and benefits
owing to an employee or person employed in* domestic or household service, provided
that the money claim does not exceed P5.000.CX). (Montoya vs. Escayo, G.R Nos.
82211-12, March 21. 1989)
Question No. 14:

Coronet Records Phil. (CRP) manufactures audio/video record players, compact

discs, video discs, cassettes and the like. CRPs shareholdings is 40% foreign and
60% domestic. CRP signed a Collective Bargaining Agreement (CBA) with its rankand-file workers for three years starting from January 1, 1990 and ending on
December 31. 1993.
Before the expiration of the CBA. CRP decided to sell all its assets to Lyra Music
Corporation effective September 30. 1993. In this regard, notice was sent on August
30. 1993 to each employee advising them of the sale of the Company's assets to Lyra
Music Corporation and the closure of the companys operations effective September
30. 1993. CRP, likewise, requested that each employee receive his separation pay
equivalent to one-and-one-half (1 & 1/2) months pay per year of service, exclusive of
all unused leaves which were also converted to cash, and his 13th-month pay for
1993.
The employees received their respective separation pay under protest and
thereafter filed an action against CRP and Lyra Music Corporation for unfair labor
practice (ULP). The Arbiter ruled in favor of the workers and ordered Lyra Music
Corporation to absorb the former workers of CRP.
Was the Labor Arbiter correct in his decision?
Answer:
No. The Labor Arbiter is not correct. As held in the case of San Felipe Neri School
of Mandaluyong us. NLRC, when there is a legitimate sale of a companys assets, the
buyer in good faith cannot be legally compelled to absorb the employees of the seller in
good faith. In the case at bar, the employees of the CRP were validly terminated based
on Article 284. e.g. closure of operations and separation pay was paid at a rate much
higher than the law.
Furthermore, the case filed by the employees was UNFAIR LABOR PRACTICE. It
is highly irregular to order absorption of employees in a ULP case.
Question No. 15:
A Collective Bargaining Agreement (CRA) 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 employees 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." The Company, due to
poor business conditions, decided to cease operations and gave its employees the
required one months 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.
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?
Answer:
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 M. Aquino, et aL v. National Labor Relations Commission, et al., G.R
No. 87653, 11 February 1992)

Alternative Answer:
a)

The Company is correct. The CBA clearly provides that employees who are terminated
are entitled to retirement benefits or separation pay, whichever is higher. The CBA,
therefore, does not give the employees a right to both retirement pay and separation
pay. Hence, they cannot be entitled to both. The exclusion of one by the other is
deductible not only from the term or but also by the qualifying phrase whichever is
higher. This phrase would be immaterial if the employees were entitled to both.

b)

Dino and his co-employees were correct.

In the case of University of the East vs. NLRC, it was clarified that the retirement
benefits arising from the CBA is an Obligation Ex Contractu while separation pay
under Art. 284 is an Obligation Ex-Lege.
Thus, the Company should grant both benefits to those who were separated due
to CLOSURE and at the same time were qualified to retire. (Cipriano v. San Miguel,
24 SCRA 703)
Question No. 16:
In 1990, Vic Garcia was hired by the International Labor Organization (ILO)
Office in Manila as a bookkeeper for five years. On January 5, 1994, he was advised
that his services were being terminated for loss of confidence.
Garcia questioned his dismissal by ILO-Manila as arbitrary and without benefit
of due process.

If you were counsel for ILO, what defense/s should you put up?
If you were the Labor Arbiter, how would you decide the case?
Answer:
The defense that I will put up will be to claim that being an international agency, the
ILO enjoys immunity, namely functional independence and freedom from control of the
state in whose territory its office is located and is thus beyond the jurisdiction of the
Labor Arbiter. (SoutheastAslan Fisheries Development Center-Aqua Culture
Department, et aL vs. National Labor Relations Commission, et aL G.R No. 86773, 14
Februaiy 1992)
If I were the Labor Arbiter, I will grant the motion to dismiss.
The ILO being an international agency, the same is beyond the jurisdiction of the
Labor Arbiter and Immune from the legal writs and processes of the administrative
agencies of the country, where it is found, for the reason that the subjection of such an
organization to the authority of the local agencies would afford a convenient medium
through which the host government may interfere in its operations or even influence or
control its policies and decisions, and besides, such subjection to local Jurisdiction
would impair the capacity of such body to impartially discharge its responsibilities.
Question No. 17:
Nonoy Santos was employed as a middle management employee in Company A. In
the course of his employment he was told by his superiors of the possible merger
between Company A and Company B. Fearing that he might lose his Job upon the
merger of the two companies, he looked for and- found another job. Upon resignation he
was given separation pay equivalent to one months pay per year of service, although
technically speaking, he is not entitled thereto being a resigned employee. Mr. Santos
executed a quitclaim and Waiver upon receipt of his separation pay benefits
The merger between the two companies turned out to be a buy- out by the latter of
the former. At this point. Company As employees, save for a handful, were dismissed
upon payment of separation pays equ ivalent to three (3) months for every year of
service because of the Unions efforts on the workers behalf. Feeling aggrieved, Santos
subsequently charged Company A with discrimination, constructive dismissal.
underpayment, resignation/separation benefits and reinstatement.
The Labor Arbiter and NLRC sustained Company As position that Santos' quitclaim
is valid, and that as a manager he knew the import of what he was signing and,
therefore, estopped from claiming otherwise.
Are the Labor Arbiter and the NLRC correct?
Answer:
The Labor Arbiter and the NLRC are correct. Santos was not coerced into resigning.
He voluntarily resigned. Then, upon receipt of the separation pay that technically he
was not entitled to receive, he voluntarily executed a quitclaim and waiver. These facts
show beyond doubt that he is estopped from claiming he was a victim of discrimination.
(Enieda MontiLla vs. National Labor Relations Commission, et al, G.R. No. 71504. 17
December 1993, J. Nocon, 228 SCRA 538)
Alternative Answer:
Both the Labor Arbiter and NLRC are not correct. Santos resigned because of the
uncertainty as to the future of Company A. He was made to believe that the deal
between Company A and Company B was merely a merger, but it really was a projected

Question No. 18:

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 hotels public areas. Over the
protest of the Union, the Hotel contracted out the aforementioned job to the City
Service Janitorial Company, a bonafide 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?
Answer:
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 are. unless shown to be gross oppressive or
contrary to law, generally binding and valid on the parties and must be complied with
until finally revised or amended unilaterally or preferably through negotiation or by
competent authority. (San Miguel Corporation us. Reynaldo R. Ubaldo and
Emmanuel Noel A. Cruz, Chairman and Member respectively ojthe Voluntary
Arbitration Panel, et aL G.R. No. 92859, 1 February 1993. J. Campos. Jr.. 218
SCRA.293)
Alternative Answer:
a) The action of the Harbor View Hotel is legal and valid. Contracting out services or

functions being performed by union members is not illegal per se. In fact, it is the
prerogative of management to adopt cost-saving measures to ensure economy and
efficiency. Contracting out services or functions being performed by union members
becomes illegal only when it interferes with, restrains or coerces employees in the
exercise of their right to self-organization.

b) The action of Harbor View Hotel would, at first glance, appear to be an unfair labor

practice under Article 248(c), e.g., to contract out services or functions being
performed by union members if such will interfere with, restrain or coerce employees
in the exercise of their right to self-organization.
Considering, however, that in the case at bar. there is no showing that the
contracting out of services would violate the employees right to self-organization, it is
submitted that the hotels action is a valid exorcise of its management prerogatives
and the right to make business judgments in accordance with law.

Question No. 19:

In the Collective Bargaining Agreement (CBA) between Royal Films and its rankand-file Union (which is directly affiliated with MFF, a national federation), a provision
on the maintenance of membership expressly provides that the Union can demand
the dismissal of any member employee who commits acts of disloyalty to the Union as
provided for in its Constitution and By-Laws. The same provision contains an
undertaking by the Union (MFF) to hold Royal Films free from any and all claims of
any employee dismissed.
During the term of the CBA, MFF discovered that certain employee members
were initiating a move to disaffiliate from MFF and join a rival federation, FAMAS.
Forthwith, MFF sought the dismissal of its employee members initiating the
disaffiliation movement from MFF to FAMAS. Royal Films, relying on the provision of
the aforementioned CBA, complied with MFFs request and dismissed the employees
identified by MFF as disloyal to it.
1)

Will an action for illegal dismissal against .Royal Films and MFF prosper or not?

2)

What are the liabilities of Royal and MFF to the dismissed employees, if any?
Answer:

1) The action for illegal dismissal will prosper.

The right of a local union to disaffiliate from its mother federation is well-settled.
A local union, being a separate and voluntary association, is free to serve the interest
of all its members including the freedom to disaffiliate when circumstances warrant
this right is consistent with the constitutional guarantee of freedom of association.
Thus, the Act of initiating move to disaffiliate is not an act of disloyalty. [Tropical Hut
Employee's Union-CGW, et al. us. Tropical Hut Food Market, Inc., etai, G.R. Nos. L43495-99, January 20,
1990)
Alternative Answer:
The action for illegal dismissal will prosper. Disaffiliation cannot be considered an
act of disloyalty. The veiy essence of self-organization is for the workers to form a
group for the effective enhancement and protection of common interest. (PICEWO v.
People Industrial & Commercial Corp., 112 SCRA 440)
2)

MFF can be held liable to pay the backwages of the dismissed employees. Royal can
be held jointly and severally liable for backwages if it acted with undue haste in
dismissing the employees [Manila Cordage Co. u. CIR, 78 SCRA 398). In addition,
Royal can be ordered to reinstate the dismissed employees.
Question No. 20:
Samson Security Agency (SAMSON) undertook to provide 24 hours security
service to Jarillo Realty (JARILLO) in the latters construction operations. The
contract between SAMSON and JARILLO expressly stipulated that Samsons security
guards are its employees and not that of JARILLO. SAMSON undertook to hold
JARILLO free from any liability whatsoever resulting from injuries which its
(SAMSONs) guards may suffer or be exposed to suffer as guards of JARILLOs
construction operations.

To facilitate payment, JARILLO undertook to pay directly to the guards the agreed
wages, which are subsequently deducted from the monthly payments to SAMSON
under its contract with JARILLO. JARILLO, in turn, charges SAMSON for the
equipment supplied to the guards' such as uniforms, pistols and ammunition and
cost of training of guards JARILLO wants replaced.
During a storm, several scaffoldings of JARILLO fell and killed two (2) guards
whose families later sued JARILLO. JARILLO, in turn, impleaded SAMSON as thirdparty defendant before the Arbiter.
Decide who should be held liable.
Answer:
Liability lies against the State Insurance Fund administered by the SSS. This is
a*case of death in connection with the employees work.
Jarillo is deemed to be the employer of the guards in view of the direct payment
of wages to the guards. Thus, if there are benefits arising from employer-employee
relationship, Jarillo should be held answerable.
NOTE:
The law involved, namely the law on employees compensation and State
Insurance Fund was expressly excluded from this years bar examination in Labor
and Social Legislation.
Question No. 1:
In the general assembly meeting held on September 5, 1992, a BANK UNION with
a majority of its 1,500 rank- and-file members attending, ratified and confirmed the
decision of its UNION OFFICERS to engage the sendees of one ATTY. DAYOS to assist
them in the negotiation of a new 3-year Collective Bargaining Agreement (CBA). to
replace the expiring CBA. A contractual undertaking was signed by the UNION
OFFICERS providing for the payment of attorneys fees to ATTY. DAYOS in the
amount equivalent to ten (10%) percent of the total package benefits that may be
secured from the BANK. The BANK was authorized to deduct or check-off said
attorney's fees and to turn over the proceeds directly to ATTY. DAYOS.
After the conclusion and signing of the new CBA between the BANK UNION and
the BANK MANAGEMENT, many of the members of the BANK UNION who attended
the general assembly meeting on September 5. 1992. objected to the payment of
ATTY. DAYOS' attorney's fees for various reasons: (1) Some claimed that the UNION'S
contract to pay attorney's fees, negotiation fees or similar charges of any kind arising
from any CBA negotiations or conclusion of the CBA, imposed on the individual
members of the contracting UNION, was null and void; (2) Some also claimed that
they never attended the UNION'S general assembly meeting of September 5. 1992,
and even if they were present, then they would have opposed to the payment of
attorney's fees to ATTY. DAYOS; (3) others claimed that although they signed the
resolution authorizing the payment of the attorney's fees, they were withdrawing
such authorizations. On the other hand, the UNION OFFICERS insisted on paying

UNION'S counsel 10% attorney's fees alleging that its rank and file members in their
general assembly meeting held on September 5. 1992, authorized and ratified their
contractual undertaking to pay 10% to ATTY'. DAYOS for services rendered.
1) Discuss and justify the stand or position of the recalcitrant or opposition UNION

members.

2) Discuss and justify the stand or position of the UNION OFFICERS and ATTY. DAYOS.

Answer:
1)

The opposition Union members could contend that the Labor Code (in Art. 222(b)
categorically provides that no attorneys fees, negotiation fees or similar charges of any
kind arising from collective bargaining negotiations or conclusion of the Collective
Agreement shall be imposed on any individual member of the contracting union and
that any contract, agreement or arrangement of any sort to the contrary shall be null
and void.
Alternative Answer:
The opposition Union members could contend that the payment of attorneys fees
to Atty. Dayos equivalent to ten (10%) percent of the total package of benefits imposed
on the individual members of the contracting union is in the nature of a special
assessment that may not be levied upon members of a labor organization unless
authorized by a written resolution of a majority of all the members at a general
membership meeting called for the purpose. (Art. 241(n), Labor Code). Members can
withdraw their earlier authorization.
Re: the check-off for the attorneys fees, because the same is not for mandatory
activities, there could be no check-off without individual written authorization duly
signed by the employee. (Art. 241(0), Labor Code)

2)

The Union officers and Atty. Dayos could contend that after a majority of the
members of the Union ratified and confirmed at a general assembly meeting the decision of the Union officers to engage the services of Atty. Dayos to assist them in the
negotiation of a new CBA, and in implementation of such ratification and confirmation, the Union officers entered into a contract for the purpose with Atty. Dayos, the
contract was legal and after his rendition of services, the union can pay Atty. Dayos
his fees to be paid from the funds of the Union which was raised by special
assessment of Union members.

The Labor Code provides that attorney's fees may be charged against union funds
in an amount to be agreed upon by the parties. (Art. 222 (bl)
Question No. 2:
When the Collective Bargaining Agreement (CBA) negotiations between
COMPUTER WORKERS UNION and COMPUTER TECH CORPORATION resulted in a
deadlock, both parties agreed to submit their dispute to voluntary arbitration
stipulating, among other things, that the decision of the Voluntary Arbitrator shall be

final unappealable and executory" conformable with the provisions of Art. 262 of the
Labor Code.
The Voluntary Arbitrator rendered his decision or award worded as follows:
COMPUTER TECH CORP. to award a sum total package benefits to COMPUTER
WORKERS UNION in the amount of TWENTY MILLION (P20.000.000.00) PESOS for
the three-year period of the CBA, the distribution and availment per year to be
suggested by the UNION subject to the approval of the CORPORATION, seeing to it
that the decretal benefits shall first be satisfied above all others.
The UNION filed a Motion for Clarification" claiming that the package benefit
award of P20-million does not cover the decretal benefits granted by Wage Order No. 2
which was issued on the same day when the arbitration award was made. The
Arbitrator issued an order which modified the original award of P20-million and
sought to impose upon the CORPORATION an additional burden of decretal benefits
given by Wage Order No. 2. The CORPORATION assailed the Arbitrators modification
of the original award claiming that the modification of the original award was null
and void and without or in excess of the Arbitrators authority and brought the issue
to the Supreme Court by petition for certiorari
1)

Are decisions or awards of the Voluntary Arbitrators appealable? Discuss.

2)

Has the Voluntary Arbitrator the authority to modify his original award under the
above-narrated facts. Discuss.
Answer:

1) No. The decisions or awards of Voluntary Arbitrators are not appealable because,

according to Art.262-A of the Labor Code, they are final and executory' after ten (10)
calendar days from receipt of the copy of the award or decision by the parties.

But said award or decision could be brought to the Supreme Court on certiorari
on the ground that the Voluntary Arbitrator committed grave abuse of discretion
amounting to lack or excess of jurisdiction. The Supreme Court has taken
cognizance of petitions questioning decision of Voluntary Arbitrator where want of
jurisdiction, grave abuse of discretion, violation of due process, denial of substantial
justice and erroneous interpretation of the law were brought to its attention.
2) No. The Voluntary Arbitrator has no authority to modify his original award. Acting on

a Motion for Clarification, he could only clarify his award. It is in excess of his
jurisdiction to go beyond clarifying his award by radically modifying and in fact
increasing the original award.
Alternative Answers:

a) If his award has not yet become final and executory because it is still within the ten

(10) day period from receipt of the copy of award by the parties, the Voluntary
Arbitrator could still modify his original award in the way he did it because in the
facts of the case, a Wage Order was issued on the same day when the arbitration
award was made. In his award, the Voluntary Arbitrator made reference to decretal
benefits. He said: seeing to it that the decretal benefits shall first be satisfied above
all others. Thus, the Voluntary Arbitrator was just clarifying that the employer
should pay the decretal benefits granted by Wage Order No. 2 which was not dealt

with in the award of the Voluntary Arbitrator because the Wage Order was issued on
the same day the arbitration award was made.
b)

No. such authority has disappeared, upon rendition of an award which is final,
in appealable and executory by stipulation of the parties.

Enforcement of the Wage Order must be by legal process, through claims filed
before the Labor Arbiter.
Question No. 3:
Seventy (70) private security guards of TAPANG SECURITY AGENCY
CORPORATION, assigned to guard the mining area of DAVAO GOLD CORPORATION,
filed a complaint against both their direct employer. TAPANG SECURITY, and their
indirect employer. DAVAO GOLD, when they discovered they could not avail of the
benefits of the Social Security System law for the failure of respondents TAPANG or
DAVAO GOLD to remit its contributions to the System.
By way of answer to the complaint. TAPANG claims that there is no emploveremplovee relationship, since it has only two (2) office employees whose duties are to
monitor their assignment and hours of work and to pay the salaries under the agency
contract of the security guards from the funds remitted by DAVAO GOLD, keeping a
certain percentage of the amount for office expenses and supervisory fees, the true
and real employer being DAVAO GOLD. On the other hand, DAVAO GOLD maintains
that it has no employer-employee relationship with TAPANGs security guards
assigned to secure its mining area since it has no control over hiring/dismissal of its
guards. TAPANG is a duly licensed security agency and a bona fide independent
contractor.
1)

Who is deemed an employee" for purposes of coverage under the SSS law?

2)

Under the above facts whose duty is it to bring the security guards for compulsory
coverage pursuant to the SSS law? Discuss.
Answer:
1) A person is deemed an employee" for purposes of coverage under the Social
Security Law if such person performs services for an employer in which either or both
mental and physical efforts are used and who received compensation for such
services, where there is an employer-employee relationship. Also, a self-employed person is both an employee and employer at the same time. (Sec. 8(d). Social Security
Law)
. It is the duty of Tapang Security Agency Coip. to bring the security guards for
compulsory coverage pursuant to the SSS law. Said law expressly provides that
employees of bona fide independent contractors shall not be deemed employees of the
employer engaging the services of said contractors. (Sec. 8(j), Social Security Law)
Alternative Answers:

a)

The Social Security Law defines an employer as one who uses the services of another
person who is under his orders as regards the employment. Under the facts of the
case, it is very clear that it is Davao Gold that has control of the security guards. The
security guards are under the orders of Davao Gold as regards their employment,
meaning how they perform their work. It could be said that Tapang Security Agency
Corp. was acting only like a labor-only contractor and thus, was just an agent of

Davao Gold who is the real employer. (Sec. 8(e), Social Security Law and Art. 106,
Labor Code)
b)

If a company enters into a contract of services with a security agency whereby the
latter htred security guards to work with the said company, then that company
becomes the indirect employer of the guards hired by said security agency. The
company and the security agency become jointly and severally liable to the security
guards. Hence, it is the duty, of both the direct and indirect employer to bring the
security guards for compulsory coverage pursuant to the SSS law.
Question No 4:
The Bantay-Salakay Security Agency (BSSA) employed ten security guards and
assigned them to Surot Theater which contracted BSSA for its security needs.
On November 3. 1988, the ten (10) security guards of BSSA addressed to the
Office of the President, a letter- complaint against their employer for non-compliance
with R.A. 6640 providing for an increase in the statutory minimum wage and salary
rates of employees and workers in the private sector. The letter was endorsed to the
Secretary of Labor who, in turn, referred the matter to the Regional Director of
Makunat City in Region XII where the ten (10) security guards reside and where their
employer conducts business. The Office of the Regional Director conducted an
investigation and called for a hearing with all the parties present. Therefrom, the
Regional Director found that there were indeed violations committed by BSSA against
the ten (10) security guards, such as underpayment of wages, non-integration of cost
of living allowance, underpayment of 13th-month pay and underpayment of five (5)
days incentive pay BSSA and Surot Theater were directed to comply with the labor
standards and ordered BSSA and Surot Theater to pay jointly and severally to the ten
(10) security guards their respective claim of P 10,000.00 each or an aggregate
amount of PI00,000.00. BSSA and Surot Theater filed a Petition for Certiorari before
the Supreme Court seeking to annul the decision of the Regional Director on the
ground of grave abuse of discretion in assuming jurisdiction over the case. Will the
Petition for Certiorari prosper? Decide with reason.
Answer:
It is to be noted that the Regional Director assumed jurisdiction before the
effectivity of Rep. Act No. 6715 (which is March 21, 1989). Thus, applying Art. 128 of
the Labor Code, the petition for certiorari will not prosper.
Under said article of the Labor Code, the Secretary of Labor or his duly
authorized representatives - and Regional Directors are duly authorized
representatives - have visitorial and enforcement powers. Thus, a Regional Director
not only has visitorial powers, i.e., to visit the premises of an employer and examine
his records, he also has enforcement powers, i.e. based on the findings of labor
regulation officers or industrial safety engineers made in the course of inspection. A
Regional Director has the power to order and administer, after due notice and hearing
compliance with the labor standards, provisions of the Labor Code. Thus, he could
issue writs of execution to the appropriate authority for the enforcement of his orders,
except in cases where the employer contests the findings of the labor regulation officer
and raises issues which cannot be resolved without considering evidentiary matters
that are not verifiable in the normal course of inspection.

Therefore, pursuant to Art. 128 of the Labor Code, the Regional Director was
only exercising his visitorial and enforcement powers in the case of BSSA and Surot
Theater. Thus, he has jurisdiction to do what he did.
In a dissenting opinion. Chief Justice Narvasa said that even after the effectivity
of Rep. Act No. 6715, the Regional Director has jurisdiction to act on claims exceeding P5.000.00.
The petition for certiorari will prosper under Rep. Act No. 6715. its provision
limiting the power of Regional Directors to money claims not exceeding P5,000.00 per
employee, the Regional Director no longer has the power to act on money claims
exceeding P5.000.00 per employee, even if the same power i exercised pursuant to
his visitorial and enforcement power under the Labor Code (Art. 128) where the
P5.000 limitation is not found.
Note:
Chief Justice Narvasa dissents from the above majority view of the Supreme
Court.)
Question No. 5:
Mr. Esto Pido is employed as a medical representative of Taypa Laboratories. By
nature of his work, he was allowed to avail of the companys car loan policy whereby
the company advanced the purchase price of the car to be paid back by the employee
through monthly deductions from his salary with the company retaining the
ownership of the motor vehicle until it shall have been fully paid.
Six months after the availment by Mr. Esto Pido of Taypa Laboratories car loan
policy, he was dismissed from the service for having participated in an illegal strike.
In the Notice of Dismissal sent to him by his employer, he had been directed to either
return the car to the company or settle the remaining balance of the cost of the car.
Esto Pido filed an action against Taypa Laboratories for illegal dismisssal before the
Arbitration branch of the National Labor Relations Commission (NLRC). The Labor
Arbiter, however, upheld the legality of his dismissal hence he appealed his case
before the NLRC.
In the meantime. Taypa Laboratories filed before the Regional Trial Court a civil
suit to recover possession of the car which Esto Pido refused to return and/or settle
the remaining balance. The RTC thereafter directed the Deputy Sheriff to take into
his custody the motor vehicle from Esto Pido.
To counter the order of the RTC, Esto Pido sought a temporary restraining order
in the NLRC to stop the Taypa Laboratories from collecting their monthly
amortization pending final resolution of his appeal in the illegal dismissal case.
According to him, had he not been dismissed he would not have defaulted in his
amortization. NLRC granted the relief prayed for by Esto Pido by restraining Taypa
Laboratories from collecting the monthly amortization pending resolution by the
NLRC of the illegal dismissal case. Taypa Laboratories filed a Petition for Certiorari
alleging that NLRC gravely abused its discretion in issuing the temporary restraining

order. NLRC argues that it has the power to issue an injunction based on Art. 218 of
the Labor Code. Decide the controversy with reason.
Answer:
NLRC has no power to issue the injunction.
The powers of NLRC enumerated in Art. 218 of the Labor Code are powers that it
could exercise only in connection with labor disputes.
The case involving the contract on the car loan entered into by Taypa
Laboratories and Esto Pido is not a labor dispute. It is properly under the exclusive
jurisdiction of the RTC. Thus, the NLRC has no power to issue the temporary
restraining order that it issued.
Question No. 6:
In cases involving monetary award, why does the law require an employer to post
a cash or surety bond as an indispensable condition for the perfection of an appeal?
Answer:
An appeal stays the execution of a decision or award. Such decision or award
could be in the form of a monetary award made in favor of an employee. Thus, an
appeal will mean that a monetary award will not be executed. To ensure that an
appealed monetary award will be paid to the employee once such monetary award is
affirmed and has become final and executory, the Labor Code requires that the
appeal by an employer may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the NLRC in the
amount equivalent to the monetary award in the judgment appealed from. (Art. 223,
Labor Code)
Question No. 7:
Julie is a branch manager of Bangko Bangkarute National, rising from the ranks
through her 21 years of employment. On November 25. 1992, she filed an application
for a total 60 days leave of absence; 15 days with pay (regular annual vacation leave),
starting December 1 to 15. and 45 days without pay (personal leave), starting
December 16 to January 30. which she submitted to the Vice President for Branch
Banking Department, for approval. Unfortunately, the Vice President for the Branch
Banking Department, disapproved her request for personal leave without pay of 45
days, citing as reason the anticipated heavy work load brought about by the onset of
the Christmas season. Nonetheless, he approved her regular annual leave with pay of
15 days. Realizing that the leave granted her (15 days) is not sufficient she filed a
motion for reconsideration only by way of formality since she is bent on taking a leave
for 60 days, irrespective of whether the bank management allows her personal leave
without pay for 45 days. Without waiting for the decision of the Vice President for
branch banking division, which denied her Motion for Reconsideration. Julie
proceeded to take her leave commencing on Dec. 1, 1992.

Having exhausted her 60 days leave of absence, she reported back for work but
was presented a letter dated Dec. 16, 1992, from the Vice President for Branch Banking Division, informing her of her termination effective December 16. 1992. She filed
a case for illegal dismissal and prayed for reinstatement and damages against Bangko
Bangkarute National.
1) Is the severance of Julies employment for a just cause? Explain.
2) Is she entitled to reinstatement? Why?
3)

Are damages recoverable from Bangko Bangkarute National?

Answer:

1) The severance of Julies employment is for a Just cause. She is guilty of willful

disobedience of the lawful order of her employer, or her representative in connection

with her work.
As a branch manager of the Bank, Julie is a high official, who should be a good
example to the employees on how lawful orders of the employer are to be observed and
obeyed.
The refusal of the Bank to grant her request for personal leave without pay for 45
days was not whimsical or arbitrary. There was reason for the refusal, that is, the
anticipated heavy workload brought about by the onset of the Christmas season.
There was willful disobedience on the part of Julie. Her filing a motion for
reconsideration was only by way of formality, since she was bent on taking a leave for
60 days irrespective of whether the Bank management allows her personal leave
without pay for 45 days.
Alternative Answers:

a) There is basis for the Bank to terminate the services of Julie on the ground of its loss

of confidence in her.

As a branch manager of the Bank, Julie should show concern that the
anticipated workload brought about by the onset of the Christmas season is
satisfactorily dealt with by the Bank.
Yet, inspite of Julie being told about this problem, she was still bent on taking a
leave for 60 days irrespective of whether the Bank allows her personal leave without
pay for 45 days.
b) Basically, the problem is entitlement to personal leave of 45 days on the part of the

employee.

If she is entitled by reason of company regulations or company practice, the

employer being a bank, the denial may have been arbitrary and is invalid.
If so, her dismissal is without a just cause, for avail- ment of a right cannot be a
ground for discipline.
She would therefore be entitled to reinstatement.

However, no damages should be due from the bank, unless it is clear that it had
ratified the action taken by the bank, vice-president.. He should shoulder the damages instead.
On the other hand, if the claim of personal leave is entirely without legal basis,
then the employee was AWOL for 45 days which is serious misconduct, hence, a just
cause for dismissal.
Even then, in the light of her long service plus a valid justification for personal
leave (such as urgent medical treatment abroad), the dismissal would be for
insufficient cause and would be too harsh, hence, she would be entitled to
reinstatement without back wages.
2)

She is not entitled to reinstatement because her dismissal was legal, it being for Just
cause.
Alternative Answers:

a)

She would be entitled to reinstatement since her dismissal is considered too harsh a
penalty for the offense she committed.

b)

Julie is not entitled to reinstatement. The strained relations" rule applies in this
case. Julie, a branch manager of the bank, occupies a highly responsible and
confidential position, which requires a consistent level of confidence.

3)

She cannot claim damages from the Bank. There is no basis for a claim for damages.
It may be noted
that she was not given the required due process by the Bank before her dismissal.
She Is therefore entitled to an indemnity of PI.000.
Question No. 8:
Borloloy & Co. is engaged in the construction business which hired the services
of Ispongklong as mason and Agaton as carpenter in 1977. Everytime their services
are needed, Ispongklong and Agaton are issued notices of employment by Borloloy &
Co. in the following tenor:
This is to infonn you that you have been hired at Lahar Bldg., as mason and
carpenter respectively at a monthly salary/daily or hourly of PI2.40. Your employment shall be deemed automatically terminated either at the completion of the project
or upon the completion of the work requiring your respective services to start May 12,
1977.
ACCEPTED:
Such an arrangement continued wherein both Agaton and Ispongklong became
members of a work pool from where Borloloy & Co. draws manpower to work on various projects. After each project they have been assigned to is completed, Borloloy &
Co. reported the names of Ispongklong and Agaton to the Social Security System for
registration.
In 1987 (or after ten years of service) they received a notice from Borloloy & Co.
informing them that their services are no longer needed. Ispongklong and Agaton
immediately filed a case for illegal dismissal alleging that they are regular and
permanent workers of Borloloy & Co. having worked for it for ten (10) years hence

prayed for reinstatement and backwages. Borloloy & Co. on the other hand, claims
that Agaton and Ispongklong are project employees whereby their employment is
automatically terminated either at the completion of the phase of work requiring
their respective service as stated in their respective Notice of Employment the
sample test of which is
quoted above. If you are the Labor Arbiter assigned to the case, how will you decide
the controversy?
Answer:
As Labor Arbiter, I will promulgate a decision finding the dismissal of Agaton and
Ispongklong illegal.
Ispongklong and Agaton ceased to be project employees when they became
members of a workpool from where their employer draws manpower to work on
various projects. Thus, as regular employees, they can be terminated only if there is
just cause or otherwise authorized by law. (Art. 280, Labor Code)
Question No. 9:

What is the requirement in order that a compromise agreement involving labor

standards cases be considered duly executed?
Answer:
For a compromise agreement involving labor standards cases to be considered
duly executed, such compromise agreement should be voluntarily agreed upon by the
parties with the assistance of the Bureau of Labor Relations or the regional office of
the Department of Labor and Employment. (Art. 227, Labor Code)
Question No. 10:
Mer Alco is a staff engineer of Vetsin Factory. Inc., since September 1980. In
1982, Batas Pambansa 73. otherwise known as The Omnibus Energy Conservation
Law, was passed, requiring establishments such as Vetsin Factory Inc. to appoint an
employee as its Energy Manager whose duties consist of evaluating energy conservation activities of the company, submitting energy consumption reports to the
Department of Energy and coordinating with the said department concerning utility
efficiency of the establishment. Pursuant to the requirement of the Omnibus Energy'
Conservation Law, Mer Alco was appointed by Vetsin Factory Inc. as Energy Manager.
Except for the above duties enjoined by law to be performed by the Energy Manager
Mer Alco is practically doing the same responsibilities attached to the position of a
staff engineer. For three (3) years, Mer Alco performed the role of an Energy Manager
receiving the same salary as that received by him when he was still a Staff Engineer.
In 1986, Mer Alco filed a complaint before the National Labor Relations Commission
for underpayment of salary for three (3) years claiming that his promotion from Staff
Engineer to Energy Manager necessarily entitled him to a corresponding salary
increase even though B.P. Big. 73 (Omnibus Energy Conservation Law) did not
provide for the salary or increase in salary of the employee to be appointed as Energy
Manager. Mer Alco invoked the principle that doubts in the interpretation and
implementation of Labor Laws should be resolved in favor of labor.
The Labor Arbiter sustained Engineer Mer Alcos position and ordered Vetsin
Factory Inc. to increase his salary commensurate to the position he was appointed
and promoted to.

Write a dissenting opinion on the decision of the Labor Arbiter upholding Mer
Alcos position that his salary should be correspondingly raised by reason of his
promotion as well as in sustaining the applicability of the principle that
interpretation and implementation of Labor Laws should be resolved in favor of labor.
Answer:
I dissent. The decision of the Labor Arbiter ordering Vetsin Factory Inc. to
increase the salary of Mer Alco commensurate to the position he was appointed and
promoted to has no basis whatsoever.
There is no provision in B.P. Big. 73 making it the legal obligation of an employer
to increase the salary of his employee once the latter is made an Energy Manager
pursuant to B.P. Big. 73.
The determination of the salary of an employee Is managements prerogative, in
the case of Vetsin Factory. Inc., the employer has not decided to give an increase to
Mer Alco. The employer cannot be compelled to make such decision.
As to the application of the principle that doubts in the interpretation and
Implementation of Labor Laws should be resolved in favor of labor, the principle
cannot be invoked. There is no labor law that needs to be interpreted. Except when a
law like a Minimum Wage Law fixes what minimum wages are to be paid by
employers, or on all law like the Salary Standardization Law for government
employees which fixes the compensation of the employees occupying certain positions.
It is the employer who unilaterally determines what the compensation to give to his
employees.
Alternative Answer:
The Labor Arbiter's decision for increase in the salary of Mer Alco is w it hdut
legal basis. Labor Arbiters have no power of compulsory arbitration, only authority to
adjudicate claims of workers which are founded upon contract, or upon awards, or
upon provisions of law granting specific benefits.
The principle relied upon applies only to the interpretation of a law, contract or
other legal acts mandating payment of benefits. In this case, the claim to an increase
has no basis in law, in contract or in company practice.
Question No. 11:
Pedro Sisid is a seaman who was employed in 1990 by Kuhol Ocean Transport. In
May 1993, he was discharged and correspondingly paid vacation pay, terminal pay
and overtime pay for the number of hours he actually rendered service in excess of
his eight (8) working hours a day. Pedro Sisid, however, is dissatisfied with his
overtime pay contending that he is on board the vessel 24 hours a day. or even
beyond his eight (8) working hours which circumstance renders him on call whenever
his service is needed. Therefore, he insists that he be paid 16 hours a day by way of
overtime. Is the contention of seaman Pedro Sisid tenable? Why?
Answer:
No. The contention of seaman Sisid is not tenable.
The fact that he is on board the vessel 24 hours a day does not mean that
beyond his eight working hours, he could be also considered as working because he
is on call, and thus, is entitled to overtime pay.

Because he is a seaman, this circumstance means he is on board his vessel

while at sea. But he is not thereby on call as to be entitled to overtime pay because
when it is not his working time, he can. if he chooses to do so, use said non-working
time effectively and gainfully for his own purpose.
Alternative Answer:
No, there being a record of actual overtime services rendered. An estimated
period of overtime is valid as a basis for payment of overtime, only in a case where
overtime services are actually being rendered regularly but no record of the hours
were kept.
Question No. 12:
How much attorney's fees may a lawyer assess a culpable party in cases of unlawful
withholding of wages?
Answer;
In cases of unlawful withholding of wages, the culpable party may be assessed
attorney's fees equivalent to ten percent (10%) of the amount of wages recovered.
(Art. Ill, Labor Cocie)
Question No 13:
What matters may be taken up by the National Labor Relations Commission
(NLRC) En Bancf?
Answer:
The NLRC shall sit en banc only for purposes of promulgating rules and
regulations governing the hearing and disposition of cases before any of its divisions
and regional branches and formulating policies affecting its administration and
operations. (/Art. 213, Labor Code)
Question No. 14:
Johnny Torres is an employee of M.C.U, hospital having worked therein as janitor
for 12 years. Sometime in March 1993, he was suspected of conniving with some
medical students in the theft of laboratory equipment for which reason, the
management of M.C.U Hospital ordered his employment terminated for loss of
confidence. Johnny Torres filed before the Arbitration Branch of the NLRC a case of
illegal dismissal against the hospital. After hearing, the Labor Arbiter cleared Johnny
Torres of any involvement in the theft and rendered a decision declaring the order of
dismissal illegal thereby ordering the hospital to reinstate Johnny Torres to his former
position and to pay him full backwages, which he would have received were it not for
the illegal dismissal.
MCU Hospital filed a Motion for Reconsideration alleging that the Labor Arbiter
gravely abused his discretion in ordering a reinstatement which is no longer possible
under the strained relations" principle, a hostility that developed between the parties
as a result of the litigation. Is the legal argument poised by MCU Hospital tenable?

Answer:
The legal argument poised by MCU Hospital is not tenable.
An employer cannot use strained relations" as a valid reason for not reinstating
an employee who has been illegally dismissed, if such strained relations arose from a
worker filing a case of illegal dismissal against his employer. When he filed the case,
the employee was only asserting his constitutional right to security of tenure.
Alternative Answer:
The principle of strained relations" does not apply on this case, Johnny Torres a
janitor, does not occupy a confidential or responsible position. The rule cannot be
applied universally. Otherwise, reinstatement can never be possible simply because
some hostility is engendered between the parties as a result of litigation.
Question No. 15:
In what manner do the labor laws show its solicitous compassionate policy
towards the working man? Explain your answer.
Answer:

Labor laws show solicitous compassionate policy towards the working man by
providing that all doubts in the implementation and interpretation of labor laws including its implementing rules and regulations shall be resolved in favor of labor.
Thus, among others, the Constitution recognizes that workers are entitled to security
of tenure, humane conditions of work and a living wage. Labor laws should be
liberally interpreted to ensure that the above rights are given to workers. Many times,
an employee commits an offense that is a valid ground for disciplinary action but law
and jurisprudence do not automatically provide for the termination of the guilty
employee because termination may be too harsh a penalty, his employment may,
more often than not be the sole source of his means of livelihood. (Art. 4, Labor Code;
Art. XIII. Sec. 3. Constitution)
Question No. 16:
Which takes precedence in conflicts arising between employerss MANAGEMENT
PREROGATIVE and the employees right to security of tenure? Why?
Answer:
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 employees right to security of tenure. (Art. 279. Labor Code: Art. XIII,
Sec. 3. Constitution)
Question No. 17:

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. Xs services, extended, with Xs 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.
Mr. X filed a case for illegal dismissal contending that he was already regular at the
time of his dismissal pursuant to Art. 281 of the Labor Code, the particular portion of
which provides:
xxx. An employee who is allowed to work after a probationary period shall be
considered a regular employee."
therefore, he could not have been lawfully dismissed for failure to meet company
standards as a probationary worker. Decide with reason.
Answer;
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.
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 lo give him an opportunity to
improve his performance. (Art. 281. Ubor Code)
Question No. 18:
What is the purpose of a certification election?
Answer:
The purpose of a certification election is to determine the labor organization
which shall be the exclusive bargaining agent of the employees of an appropriate collective bargaining unit. A certification election may also determine whether or not the
employees wish to have a collective bargaining representative because in a certification election, employees can vole for no union." Preliminarily. through a certification
election, the members of an appropriate collective bargaining unit may also be
authoritatively determined. (Arts. 255. 256, 257. Labor Code)

Question No. 19:

Jose and Pedro were utility workers employed by Yellow Farms. Inc. On 13
January 1984, they were picked up by the company's guards in connection with the
theft of polyethylene bags belonging to the company. They were detained at the
Baybay Municipal Jail. Initial investigation of the police yielded no prima facie case
against them, resulting in their release. However, after further investigation. an
amended complaint was formally filed against them and two others, charging them
with theft before the Municipal Court. The Company terminated Jose and Pedro due
to loss of confidence. Consequently, the two filed a complaint of illegal dismissal on
the ground that their dismissal based on the criminal complaint did not justify their
termination. Is the filing of the criminal complaint against Jose and Pedro sufficient
ground for their termination? What is the quantum of proof necessary to terminate
an employee for loss of confidence? What if the criminal complaint was dismissed on
the ground of reasonable doubt?
Answer:
The mere filing of the criminal complaint against Jose and Pedro would not be
sufficient ground for their termination. because while it is true that the criminal complaint could be properly filed only if there was a prima facie case against said
employees, this fact does not in turn automatically mean that there is already
substantial evidence to prove that there is Just cause for their termination.
The quantum of evidence necessary to terminate an employee for loss of
confidence is that of substantial evidence.
Even if the criminal complaint was dismissed on the ground of reasonable doubt.
Jose and Pedro could still be dismissed as long as there is substantial evidence to
prove that they have committed acts that could be an objective basis for loss of
confidence.
Alternative Answer:
Yes, the filing of a criminal complaint is sufficient ground, since such complaint
is founded upon prima facie evidence of their guilt of theft.
In dismissal for loss of confidence, it is sufficient if there is substantial evidence
to believe that the employee is guilty of theft. This standard is equivalent to a prima
facie finding of guilt in criminal procedure.
Mere dismissal on the ground that proof beyond reasonable doubt was adduced,
will not entitle the employees to reinstatement. In criminal law the higher standard
will not necessarily negative the existence of the lower standard of proof of substantial
evidence of guilt.
Question No. 20:
Jerome Marcelo was hired as a 4th Engineer by Masipag Shipping Services. Inc.
for and in behalf of Captains Maritime Co.. Ltd.. to work aboard the M/V White Cloud
for a period of one year. Marcelo reported for duty abroad the vessel on July 13. 1987.
On January 16. 1988 at about 3:00 p.m. while the vessel was docked alongside Pier
39. San Francisco. U.S.A.. Marcelo aiTived and boarded the ship from shore visibly

drunk. He went to the mess hall and took a fire axe and challenged those eating
therein.
He was pacified by his shipmates who led him to his cabin. However, later he
went out of his cabin and proceeded to the mess hall. He became violent. He smashed
and threw a cup at the head of an oiler Renato Pobre. Pobre touched his head and
noticed blood. This infuriated Pobre which led to a fight between the two. After the
shipmates broke the fight, Marcelo was taken to the hospital where he passed away
on January 17, 1988. Pobre was arrested by the American authorities and jailed in
San Francisco. On October 26, 1988, the wife of Marcelo filed a complaint against
Masipag and Captains with POEA for payment of death benefits, burial expenses,
unpaid salaries on board and overtime pay with damages. Are Masipag and Captains
liable for the death benefits of seaman Marcelo?
Answer:
Masipag and Captains are not liable for the death benefits of seamen Marcelo
because his death was brought about by his willful intention to injure or kill another.
Question No. 1
Republic Drug Co. has 1,000 employees, including 50 managerial personnel, 90
supervisors and 150 sale representatives. The regular workday in the Company is
from 8:00 a.m. to 5:00 p.m. The sales representatives register their presence with the
timekeeper at 8:00 A.M. every day before they go to their respective sales territories.
They are paid a basic salary plus commission. Sixty of the sales representatives are
members of the Republic Salesmen Union which sent to the Company a set of
bargaining proposals, including a demand for payment of overtime pay of the sales
representatives for working beyond 5:00 P.M. everyday. The Company refused to
consider the bargaining proposals and rejected the demand for overtime pay for the
reason that the sales representatives are not entitled thereto. The Union filed an
unfair labor practice case against the Company for refusal to bargain, and after
complying with the legal requirements declared a strike.
a) Was the Company legally justified in rejecting the Unions demand for overtime pay?

Reason.

Suggested Answer:
The Company was legally justified.
Under the Labor Code, (in Article 82). field personnel" are among those classes of
workers who are not entitled to overtime pay, and the phrase field personnel includes
sales representatives who. like other field personnel, are non- agricultural employee
who regularly perform their duties away from the principal place of business or
branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.

Alternative Answer:
If the demand for overtime pay is in the nature of a proposal made in the collective
bargaining table and the only reason for rejecting such demand is that the sales
representatives are not entitled thereto, this is not a legal justification for rejecting
outright the Union's demand for overtime pay.
It is true that under the Labor Code, field personnel - and this phrase includes
sales representatives - are not entitled to overtime pay.
But it is precisely as regards benefits that are not rights under the law that
collective bargaining is used by Labor to secure these benefits that are over and above
what the law gives.
On the other hand, the rejection by the Company of the Unions demand for
overtime pay is not per se illegal. The Labor Code provides that the duty to bargain
collectively does not compel any party to agree to a proposal or to make any
concession. (Article 252, Labor Code).
b) Was the Company guilty of unfair labor practice? Was the Unions strike legal?

Reasons.

Suggested Answer:
The Company is not guilty of unfair labor practice.
The Republic Salesmen Union has a members only 60 of the 150 sales
representatives. This fact could mean that the Union is not the majority union that is
the collective bargaining representative of the sales representatives. (Article 255.
Labor Code)
Because the Union is not the collective bargaining representative, the Company
did not commit an unfair labor practice when it refused to bargain with said union.
The duty of the employer to bargain collectively arises only as regards the bargaining
representative of the employees. (Article 252, Labor Code) Because the refusal to
bargain under the above described circumstances is not an unfair labor practice, the
Union's strike was not legal.
Alternative Answer:
If the sales representatives constitute an appropriate collective bargaining unit
in the Company, and the Republic Salesman Union (SBU) was recognized or certified
as the collective bargaining representative in said bargaining unit, inspite of the fact
that only 60 of the 150 sales representative are members of SBU. (because SBU is
nevertheless designated or selected by a majority of the sales representatives) then,
the Company is guilty of unfair labor practice when it refused, at the very least, j ust
to consider the bargaining proposals of the Union. The refusal to at least just consider
the bargaining proposals of the Union constitutes a refusal to bargain collectively;
thus, it is an unfair labor practice.

The strike, then, of the Union is legal because an unfair labor practice strike is
legal.
Question No. 2:
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
detennine 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.
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.
a) As lawyer for CTC what action should you take?

Suggested Answer:
As lawyer of CTC, I will first file with the Secretary ol 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.
b) Was the assumption of the labor dispute by the Secretary of Labor and Employment

valid?

Suggested Answer:
It is valid. Under the Labor Code, (in Article 263 (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 industiy indispensible to the national interest.
c) Was the Secretarys order granting monetary benefits. declaring the strike of CWU

legal and restraining the CTC from penalizing CWU members valid? Reasons.
Suggested Answer:

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. (Article 217. Labor Code. Philippine Airlines, Inc. vs. Secretanj of Labor and

Employment et al., 193 SCRA 223) but in International Pharmaceuticals vs.

Secretary of oj Labor, 205 SCRA 65, (Jan. 9, 1992), the Supreme Court that the
Secretary of Labor, when he assumes jurisdiction under Article 263(g) of the Labor
Code could.deal with all the incident of the labor dispute including the issue as to
whether or not a strike is legal.
The Secretary's Order granting monetary benefits is valid. When the Secretary
assumed jurisdiction over the labor disputes, he assumed such jurisdiction for
compulsory arbitration, meaning, he could thereby determine the monetary
benefits that CTC and CWU cannot agree about.
Question No. 3:
Jose Pescador had been employed by the Forward Security Agency since 1988
and was assigned to Freedom Enterprises, Inc. with which the agency has a
service contract. On June 30, 1992, he resigned from the agency and subsequently
filed a complaint with the Labor Arbiter against the agency and the company
(Freedom Enterprises) for money claims arising oat of his employment. The agency
admitted its liability for said claims. The Company moved to dismiss Pescador's
complaint, contending that Pescador was not an employee of the Company and
that the agency, pursuant to the sendee contract, was exclusively and solely liable
for Pescador's claims.
Rule on the companys motion to dismiss.
Suggested Answer:
The company's motion to dismiss is without merit.
The assignment of Pescador to Freedom Enterprises, Inc. made the latter the
indirect employer of Pescador. As such indirect employer, under the Labor Code,
the company is jointly and severally liable with the Forward Security Agency to the
extent of the work performed by Pescador for the Freedom Enterprises, Inc. (Article
107, Labor Code).
But because of the service contract entered into by the agency and the
company whereby the agency agreed that it shall be exclusively and solely liable for
the claims of j _ Pescador as an employee of the agency, the Company can sue the
agency for whatever the company, as indirect employer i tliay pay Pescador.
Question No. 4:
The Confederation of Free Workers (CFW), a national labor federation, has an
existing collective bargaining agreement with Tanawan Leather Company covering
the Companys rank-and-file employees who are direct members of CFW. The
supervisors of the Company organized themselves into a union which they affiliated
to CFW. CFW filed a petition in behalf of the supervisors for certification election.
The Company opposed the petition asserting that CFW cannot represent the

supervisors for collective bargaining purposes because it also represents the rankand-file employees.
You are the Med-Arbiter. Will you order the holding of a certification election?
Reasons.
Suggested Answer:
I will not order the holding of a certification election if the supervisors of the
Company have been included by the existing CBA in the bargaining unit of the
Companys rank- and-file employees before the effectivity of Republic Act No. 6715
where the supervisors may remain, in accordance with i he pertinent Rules and
Regulations implementing the Labor Code.
But if the supervisors are not included by the existing CBA in the bargaining
unit of the Company's rank and file employees. I will order a certification election.
But the Union that I will allow in the ballot of the certification election will not be
CFW. the national federation which has a direct members the Company s rank and
file employees. On the ballot of the certification election will instead be the local
Union organized by the supervisors. The Labor Code provides that supervisory
employees shall not be eligible for membership in a labor organization of the rank
and file employees but may form 01 join a separate labor organization of their own.
Thus. CFW of which the Company's rank and file employees are members, cannot be
the Union to represent the supervisors in collective bargaining. [Atlas Lithographic
Services, Inc. us. Laguesma. et al., 205 SCRA 12)
Question No. 5:
A food processing company (the Company) engaged the services of duly licensed
independent contractors in connection with the operation of its business. The
contractors deployed workers in the Company. The contractors workers joined ABC
the union of rank-and-file employees of the Company, and later demanded that they
be made regular employees because they are performing functions necessary and
desirable in the usual business of the Company. The Company questioned the
contractors' workers joining ABC and rejected their demand for regularization. ABC
filed a notice of strike with the Department of Labor and Employment. In a petition
filed with the Regional Trial Court, the Company asked the court to enjoin ABC and
the contractors workers from declaring a strike, asserting that the workers are not
employees of the Company and that there is no labor dispute between the workers
and the Company as its agreement is only with the contractors.
As trial judge, will you issue an injunction against ABC and the workers?
Explain.
Suggested Answer:
As trial judge. I will not issue an injunction against ABC and the workers.
The acts of ABC and the workers, namely, the workers joining ABC said workers
demanding that they be made regular employees, ABC filing a notice of strike with
the Department of Labor and Employment, all these acts brought about a labor
dispute which is not within the jurisdiction of the Regional Trial Court.
The fact that the Company is asserting that the workers are not employees of the
Company does not make the case between the Company, on one hand, and ABC and
the workers, on the other hand, not a labor dispute. The truth cr falsity of the

assertion of the Company is a matter that is within a Labor Arbiter, not a Regional
Trial Court. to decide. (San Miguel Corp. Employees Union-PTGWO-vs. Bersamina,
186 SCRA 496)
If an injunction is proper, it is the National. Labor Relations Commission that
can enjoin ABC and the workers from doing any unlawful act.
The Labor Code (in Article 254) is very clear: No temporary or permanent
injunction or restraining order involving or growing out of a labor dispute shall be
enjoined by any court or other entity except by the NLRC under Articles 218 and
under 264.
Question No. 6:
The Independence Bank of the Philippines (IBP) is the mortgage creditor of San
Juan Trading Company (SJTC). For failure of SJTC to pay its obligations, IBP
foreclosed the formers mortgaged properties and in the bidding acquired the
properties as the highest bidder. SJTCs workers, whose claims for separation pay,
unpaid wages and other benefits could not be satisfied, filed an action against IBP to
enforce their claims, contending that they enjoyed preference in respect of separation
pay, wages and other benefits due them prior to the cessation of SJTC's operations.
Will the action of the workers against IBP prosper? Explain.
Suggested Answer:
The action of the workers against IBP will not prosper. It is true that the Labor Code
provides:
In the event of bankruptcy or liquidation of an employer's business, his
workers shall enjoy first preference as regards their wages and other monetary
claims, any provisions of law to the contrary notwithstanding. Such unpaid wages
and monetary claim shall be paid in full before claims of the government and other
creditors may be paid. But, here, the mortgaged property is no longer owned by
SJTC. The first preference of the workers can only be enforced against the judgement
debtor, meaning SJTC, and not against IBC who now owns the mortgaged property
which has been foreclosed. (Development Dank of the Philippines vs. Minister of
Labor and Employment, et al.. G.R. No. 75801, March 20.
1991)
Question No. 7:
Pedro Tiongco was a salesman for ten years of Lakas Appliance Company (LAC).
Due to business reverses, the Company laid off Tiongco and three other salesmen and
offered them separation pay based on their monthly basic salary of P5,700.00. The
three salesmen accepted their separation pay and signed individual quitclaims
stating, among others, that they have no more claims or causes of action whatsoever
against LAC. The quitclaims were duly notarized. Tiongco refused to accept his
separation pay and instead, demanded that the said pay should be computed on the
basis of his monthly basic salary and his sales commissions. Upon LACs rejection of
Tiongcos demand. Tiongco filed the appropriate complaint with the Labor Arbiter.
a) As Labor Arbiter, how will you resolve Tiongcos complaint? Reasons.

Suggested Answer:
As Labor Arbiter. I will grant (he demand (hat Tiongco be paid his separation
pay computed on (lie basis of his monthly basic salary and his sales commissions.

The sales commissions under the Labor Code is part of the wage that the salesmen
are entitled to receive for services rendered. Wages may be fixed or ascertained on a
time, task, piece or commission basis. (Article 97. Labor Code. Songeo. el al.. vs.
NLRC. G.R. No. 50999, March 23, 1990)
b) If Tiongco obtains a favorable decision will the three other salesmen be entitled to

separation pay differential? Reasons.

Suggested Answer:

No. If the acceptance of their separation pay by the t hree other salesmen and
their signing individual quitclaims that stated that they have no more claims or
causes of actions whatsoever against LAC (where the quitclaims were even duly
notarized) is voluntarily, they can no longer'ask for a recomputation of their
separation pay according to the favorable decision secured by Tiongco.
The salesmen signed quitclaim that are not contrary to law morals or public
policy. Not all quitclaims are invalid as against public policy if they are voluntarily
entered into and represents a reasonable settlement. (Periquel v. NLRC, 186 SCRA
724)
Question No. 8:
Julius Lagat, a truck driver, was hired by Merdeka Trucking Company which is
engaged in the business of hauling farm produce, fertilizer and other cargo for an
agribusiness company on a non-seasonal and continuing basis. Lagats contract
stipulated that it was effective for six months from date of execution, renewable for
the same period. Upon expiration of the renewed contract. Lagat was advised by
Merdeka that his services were terminated. Lagat filed a complaint for illegal dismissal
against Merdeka which contended that Lagat had no cause of action as his employment was for a definite and specific period.
You are the Labor Arbiter. Decide with reasons.
Suggested Answer:
As Labor Arbiter, I will decide in favor of Lagat. From the circumstances of the
case, it is apparent, that the six month period was imposed to preclude the employee
from acquiring security of tenure. The contract that Merdeka had with Lagat can be
considered as circumventing the law that gives to a worker the right to security of
tenure, considering that Lagat was a truck driver in a business that was not seasonal
and was on a continuing basis. If the work was seasonal, then he would have been
legally employed for a specific period, namely, per season. (Cielo vs. NLRC. 193 SCRA
410)
This should also be noted. Lagats contract was a renewed contract. This means
that at the veiy least, he was already employed for six months after which the contract
was renewed. So, if the first six months period was considered a probationary period,
Lagat has now worked after the probationary period. Thus, he is now a regular
employee and clearly with the right to security of tenure. (Article 281. Labor Code)
Question No. 9:
The Amalgamated Workers of the Philippines (AWP) was certified on July 1, 1992
as bargaining representative of the rank-and-file employees of Company X". The
employees are members of a local Company affiliated with AWP. On September 1.

1992, X received a letter from the local union stating that it had disaffiliated from
AWP. The employees had disauthorized AWP as their bargaining representative and it
(local union) will negotiate a bargaining contract with X" When AWP sent its
bargaining proposals to X" on September 5, 1992, X" informed AWP that it could not
consider the proposals because the local union had disaffiliated from AWP and the
employees had disauthorized it to act as their representative. AWP filed an unfair
labor practice case against X for refusaldo bargain. X" invoked good faith as a
defense.
Will AWP's complaint prosper? Why?
Suggested Answer:
AWPs complaint will prosper. AWP was certified on July 1, 1992 as bargaining
representative of the rank and file employees of Company "X". Under the one-year
rule, meaning that provided in the Rules and Regulations implementing the Labor
Code (Book V. Rule V, Sec. 3) which states that no certification election may be filed
within one year from the date of issuance of a final certification election result, there
could be no change of the collective bargaining representative within one year from
the date of its certification as such representative. Thus, the local union which
disaffiliated with AWP cannot take over from AWP the latter's status as collective
bargaining representative. (Balmar Farms, Inc. vs. NLRC. et al.. G.R. No. 73504.
October 15. 1991)
It would be a different matter if the local union, as an affiliate of AWP. was
certified as the collective bargaining representative. Then. AWP cannot insist that it be
the collective bargaining representative after the local union disaffiliated from AWP.
From the beginning, it is the local union that was the collective bargaining
representative and not AWP. (Tropical Hut Employees Union-CGW, et al.. vs. Tropical
Hut Food Market, Inc.. et al. G.R. L-43495-99, January' 30. 1990)
Question No. 10:
Prior to 1987, Longchamp Manufacturing Corporation (LMC) established an
employees retirement plan which was funded solely by it. In 1987, LMC and the
Liberty Labor Union (LLU) signed a collective bargaining agreement (CBA) which
incorporated the retirement plan. In 1991, LLU submitted proposals for the renewal
of the CBA, including improvement of and increase in benefits under the plan. LMC
informed-LLU that the proposal regarding the plan was non-negotiable and not a
proper subject of bargaining because it was non-contributory and established by
LMC long before LLU was organized. The deadlock on the matter was one of the
issues certified to the National Labor Relations Commission (NLRC) for compulsory
arbitration.
How should the NLRC resolve the deadlock? Reasons.
Suggested Answer:

The NLRC should resolve the issues raised by the Union when it submitted
proposals for the renewal of the CBA, including improvement and increase in benefits
in the employees retirement plan. Just because the employees' retirement plan is
non-contributory and was established by the corporation long before the Union was
organized does not make the plan non-negotiable and not a proper subject of
bargaining. It is a proper subject of bargaining, the retirement plan being clearly part
of the terms and conditions of employment of the employees. In recognition of this,
the plan was in fact incorporated in the CBA that was being renegotiated. (Nestle
Philippines, Inc. vs. NLRC. G.R. No. 91231, February 4, 1991)

Question No. 11:

Freibourg Electronics Corporation which employs 400 rank-and-file employees, 80
supervisors and 20 managerial personnel, negotiated a collective bargaining
agreement with the Modemo Labor Union (MLU), the bargaining representative of the
rank-and-file employees. Because of deadlocked negotiations. MLU after complying
with the legal requirements declared a strike and picketed the Company's gates. The
picketers obstructed the free ingress into the engrees from the premises. Fearing that
it might not meet its commitments to European and American buyers, the Company
appealed to the MLU to allow entry of personnel who were willing to work. MLU
rejected the appeal. On the tenth day of the strike, a squad of policemen escorted the
managerial and supervisory personnel and 100 rank-and-file employees entering the
Company's premises to work. During the entry, 20 supervisors and 50 rank-and-file
employees were beaten by the picketers.
The MLU charged the Company and the policemen with violation of the anti-scab
law under the Labor Code. The Company, for its part, filed a petition to declare the
strike and picketing illegal.
As the Labor Arbiter, resolve MLU's charge and the Company's petition with
reasons.
Suggested Answers:
The charge made by MLU that the Company and the policemen violated the. antiscab law under the Labor Code has no basis. The Code provides that no public
official or employee, including officers and personnel of the New Armed Forces of the
Philippines and the Integrated National Police, or armed personnel, shall bring in,
introduce or escort in any manner any individual who seeks to replace strikers in
entering or leaving the premises of a strike area, or work in place of strikers. (Article
264(d), Labor Code)
The Company of the policemen did not violate the above provision of the Labor
Code when a squad of policemen escorted the managerial and supervisory personnel
and 100 rank-and-file employees in entering the Companys premises to work
because the above personnel and employees are old employees, not new employees
who will replace the strikers.
The Companys petition to declare the strike and picketing illegal has basis. The
picketers committed an unlawful act when they obstructed the free ingress into and
egress from the Company premises. The beating up by the picketers of 20 supervisors
and 50 rank and file employees is also the basis for making the strike illegal.
Alternative Answer:

The Labor Code, (in Article 264(d). provides that "the police force shall keep out
of the picket lines unless actual violence or other criminal acts occur therein. In the
case in the question, when a squad of policemen escorted the personnel and employs
in entering the Company's premises to work, the policemen violated the above
provision of the Labor Code by crossing the picket lines, when as yet there was no
actual violence, other criminal acts were not occurring.
Question No. 12:
The Company has a renewed collective bargaining agreement (CBA) with the
Union, which covers the bargaining unit of rank-and-file employees, including twenty
(20) security guards and has a term of five years effective January
1. 1992. In 1991. the Company had consultation meetings with the Union on the

abolition of the security guard section and the engagement of the sendees of an
independent security agency. On July 16. 1992, the Company abolished the security
guard section, contracted the services of Edsa Security Agency, and advised the
Union that the guards will be transfered to other positions in the Company with increase in pay and transfer bonus. The Union objected to the abolition as it was in
violation of the CBA. The Company asserted that its action was an exercise of its
management prerogatives after consultations with the Union in 1991 and intended to
promote efficiency and economy. After satisfying all requirements, the Union declared
a strike. There is a provision in the CBA recognizing in general terms management
prerogatives.

a) Did the Company violate the CBA? Explain.

Suggested Answer:
The Company violated the CBA. It is noted that in the CBA, the bargaining unit
covered not only the rank and file employees. It also covered 20 security guards.
Yet, the Company was abolishing the security guard sector where these security
guards belonged. It may be noted that an employer commits an unfair labor practice
if it contracts and 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. (Article 248(c), Labor Code)
It is true that in 1991, there were consultation meetings with the Union on the
abolition of the security guard section and the engagement of the services of an
independent security agency.
But yet, after these consultation meetings, the CBA that was entered into
included the 20 security guards in the bargaining unit of the CBA. There was
thereby, an agreement to retain said security guards.
Alternative Answer:

The Company did not violate the CBA. When it abolished the security guard
section and engaged the sendees of an independent security agency, the Company
was merely exercising its management prerogatives. It is an unfair labor practice for
an employer to contract services or functions being performed by union members, but
only when such interferes with, restrains or coerces employees in the exercise of their
rights to self-organization. Here, the Company exercised its prerogative Management
ever in consultation with the Union and its objective was to promote efficiency and
economy.
b) Was the Union's strike legal? Explain.

Suggested Answer:
c)

If the Company is guilty of unfair labor practice, then the strike of the Union
has legal basis and thus is legal.

Alternative Answer:
d) If the Company is not guilty of unfair labor practice, then, the strike of the

Union is illegal, because there will be no legal ground for the strike.

Question No. 13:

George Clinton, an American, was hired as marketing assistant by Perot Drug
Company in its main office in Cleveland. Ohio. Because of his good performance.
Clinton was appointed manager of the Companys branch in Manila. After two years
in Manila, Clinton was advised of his promotion and transfer to Cleveland as director
for international marketing. Because of his refusal to be promoted and transferred
for family reasons", Clinton was dismissed by the Company. Clinton sought your
advice. As his counsel, answer the following:
a)

What Clinton's cause of action, if any, against Perot Drug Company?

Suggested Answer:
The course of action of Clinton against Perot Drug Company is that of illegal
dismissal. When the Company dismissed him for his refusal to be promoted and
transferred for family reason", he could claim he was being dismissed without just
cause.

b)

If he has a cause of action, where will you file the appropriate petition in the U.S.
or in the Philippines?
Suggested Answer:
1 will file the case of illegal dismissal in the Philippines where Clinton was
working when he was dismissed. The Company can be sued in the Philippines
because it is doing business in the country by having a branch in Manila.

c) Will your petition, if you decide to file one, proper? Answer with reasons.

Suggested Answer:
The petition will prosper. The refusal of Clinton to be promoted and transferred
to Cleveland is not just cause. His refusing a promotion - his refusing to receive the
gift that the Company was offering, namely, his promotion - cannot be considered as
wilful disobedience of a lawful order of his employer. Thus, there is not just cause for
the dismissal of Clinton
Question No. 14:
A manufacturing company operates on a 6-day workweek. It employs 200 workers
whose regular workday is 8 hours. On May 1. 1990, the company and Union M", the
employees; bargaining agent, agreed that the workday be 7 hours from Monday to
Wednesday and 9 hours from Thursday to Saturday. The agreement was ratified by all
the employees. In 1991 Union M" lost is majority status and Union P" was certified
as bargaining representative. Union P" filed a claim against the Company for unpaid
overtime pay of the 200 employees from May 1. 1990 when they started working 9
hours per day. 3 days a week. Invoking the 1990 agreement, the Company moved to
dismiss the claim of Union P"
Decide with reasons.
Suggested Answer:
The claim of Union P" is valid. The Labor Code is very clear: Undertime work on
any particular day shall not be offset by overtime work on any other day. (Article 88,
Labor Code)
The right arising from the above provision, meaning, entitlement to overtime pay
for one hour for working 9 hours per day. 3 days a week. (Article 87, Labor Code)
cannot be considered as waived by a CBA even if the CBA is ratified by the employees
concerned. The waiver in this instance is against the law, morals, and public policy.
The law must prevail over the CBA.
Question No. 15:
The constituency of the bargaining unit in Complex Electronics Corporation
consisted of 800 employees. Four unions - A, B, C. and D - vied to represent the
employees for collective bargaining purposes. In a certification election ordered by the
Med-Arbiter, 700 employees voted. Union A obtained 200 votes; Union B, 150 votes,
Union C, 70 votes; and Union D, 30 votes. 250 employees voted "no union.
a) Was there a valid election? Why?

Suggested Answer:
Yes, There was a valid election. The Labor Code requires that for a certification
election to be valid, at least a majority of all eligible voters in the unit must have cast
their votes. (Article 256, Labor Code) Here, the number of eligible voters was 800.
Seven hundred (700) or more than a majority voted. Thus, the election was valid.
b) Which union should be certified as bargaining representative of tire employees? Why?
Suggested Answer:
No union could be certified as bargaining representative of employees. To be
certified, a labor union should receive a majority of valid votes cast of at least a

majority of the 800 votes cast which should be 401 votes. (Article 256, Labor Code)
The union obtaining the highest number of votes is Union A. It obtained only 200
votes, short of the majority by 201 votes.
c) Should a new election be conducted with all the four unions participating? Reasons.

Suggested Answer:
A new election should be conducted, but the Labor Code provides that it should
be an election not at all the four unions who participated in the election but a run-off
election where only the labor unions receiving the two highest number of votes will
participate. This run-off election can be held because in the earlier election, the total
number of votes for all the contending unions was at least fifty percent (50%) of the
number of votes cast. Here. 450 votes or more than a majority of the 800 votes cast,
were votes for all contending unions. (Article 256, Labor Code)
d) Suppose in the election. Union A obtained 300 votes. Union B, 30 votes. Union C.

10 votes and Union D, no votes and 360 voted no union. Should Union A be certified
as bargaining representative? Reasons.

Suggested Answer:
e)

Here, the total number of votes cast was 700 votes. Union A can not be certified as
bargaining representative. It did not get the majority of the valid votes cast, namely
351 votes. Union A got only 300 votes.
Question No. 16:
Eduardo Serangco. an SSS member for 20 years, died on May 1, 1992. The
records of the SSS show that Serangco designated as his beneficiaries Marietta Uy.
wife; Gloria Serangco. daughter, bom June 30. 1979; and Jose Serangco, son, bom
July 16, 1981. On May 10. 1992, the SSS granted Marietta Uy funeral benefits. On
May 16, 1992. Josefa Costa filed a claim for death benefits alleging that she was
married to the late Eduardo Serangco on October 15, 1982 and depended upon him
for support. She attached to her claim, copy of a marriage contract duly certified and
sealed by the civil registrar of Pasig, Rizal. Marietta Uy opposed Josefa Costas claim,
contending that she and her children, Gloria and Jose Serangco, are entitled to death
benefits because they were the primary beneficiaries designated by the deceased
Serangco.
To whom shall the SSS award death benefits? Why?
The primary beneficiaries of a deceased employee are the dependent spouse until
he/she remarries and
dependent children
On the other hand, a dependent spouse is the legitimate spouse dependent for
support upon the employee and dependent children are legitimate, legitimated or
legally adopted children, who are unmarried, not gainfully employed and not over
twenty one years of age, or over twenty one years of age, provided that they are
congenitally incapacitated and incapable of self-support. (Article 8(e), (k). Social
Security Law)

Considering the above provisions of the Social Security Law, Gloria and Jose
Serangco are dependent children because they are still not over twenty one years of
age assuming that they are also unmarried and are not gainfully employed.
The legitimate wife of the deceased employee is Marietta Uy and not Josefa Costa.
The marriage of the deceased employee to Costa is bigamous. Thus, Marietta is
primary beneficiary together with her children Gloria and Jose. As such primary
beneficiaries, the SSS should award to them the death benefits arising from the death
of Eduardo Serangco.
Question No. 1 (A):
What is the foundation of the agrarian reform program under the 1987
Constitution? Who are the direct beneficiaries of the program?
Answers:
The 1987 Constitution enunciates in Article II as one of the state policies that
(t)he State shall promote comprehensive rural development and agrarian reform."
In Article XII of the Constitution, in dealing with the national economy and
patrimony, it is also stated that (t)he State shall promote industrialization and full
employment based on sound agricultural development and agrarian reform, x x x"
Then in Article XIII of the Constitution, in dealing with social justice and human
rights, there is this provision, among others: 'The State shall, by law, undertake an
agrarian reform program founded on the right of farmers and regular farm-workers,
who are landless, to own directly or collectively the lands they till or in the case of
other farmworkers, to receive a just share of the fruits thereof. To this end. the State
shall encourage and undertake the just distribution of all agricultural lands, subject
to such priorities and reasonable retention limits as the Congress may prescribe,
taking into account ecological, developmental, or equity considerations, and subject
to the payment of just compensation. In determining the retention limits, the State
shall respect the right of small landowners. The State shall further provide incentives
for voluntary landsharing."
Taken togetner, the above provisions could be considered as the foundation of the
agrarian reform program.
Under the Comprehensive Agrarian Reform Law, the lands covered by the
Comprehensive Agrarian Refonn Program shall be distributed as much as possible to
landless residents of the same barangay. or in the absence thereof, landless residents
of the same municipality in the following order of priority:
a)
b)
c)
d)
e)
f)
g)

agricultural lessees and share tenants:

regular farworkers;
seasonal farmworkers;
other farmworkers;
actual tillers or occupants of public lands;
collectives or cooperatives of the above beneficiaries; and
others directly working on the land.

The children of landowners, who are qualified to be awardees of not more than
three (3) hectares, shall be given preference in the distribution of the land of their
parents. Actual tenant-tillers in the landholding shall not be ejected or removed
therefrom.
Beneficiaries under Presidential Decree No. 27 who have culpubly sold, disposed
of, or abandoned their land are disqualified to become beneficiaries under the CARP.
A basic qualification of a beneficiary shall be his willingness, aptitude, and ability
to cultivate and make the land as productive as possible. The DAR shall adopt a
system of monitoring the record or performance of each beneficiary, so that any
beneficiary guilty of negligence or misuse of the land or any support extended to him
shall forfeit his right to continue as such beneficiary. The DAR shall submit periodic
reports on the performance of the beneficiaries to the CARP.
If, due to the landowners retention rights or to the number of tenants, lessees, or
workers on the land, there is not enough land to accommodate any or some of them,
they may be granted ownership of other lands available for distribution under the
CARL, at the option of the beneficiaries.
Farmers already in place and those not accommodated in the distribution of
privately-owned lands will be given preferential rights in the distribution of lands
from the public domain.
Question No. 1 (B):
Distinguish Just compensation under the Comprehensive Agrarian Reform Law of
1988 from just compensation under the Bill of Rights? How it is determined under the
former?
Answers:
In the Bill of Rights, it is provided that private property shall not be taken for
public use without just compensation.
In the provisions of the 1987 Constitution on agrarian reform, it is provided that
in the just distribution of all agricultural lands, the same shall be subject, among
others, to the payment of just compensation.
The concepts of just compensation in the Bill of Rights and in agrarian reform are
similar in the sense that in both situations, the person who is deprived of his property
should be given the fair and full equivalent value of the property that is taken from
him. In both situations, ultimately, it is the courts which may determine ultimately
just compensation.
Under the CARL, however, the Land Bank of the Philippines shall compensate the
landowner in such amount as may agreed upon by the landowner and the
Department of Agrarian Reform and the Land Bank of the Philippines.
Also, under the CARL, compensation could be in cash and in government
financial instruments like Land Bank of the Philippines bonds. At the option of the
landowner, the compensation may be in shares of stock in government owned and
controlled corporations, or in tax credits. The Comprehensive Agrarian Reform Law
provides that in deter- mining just compensation, the cost of acquisition of the land,
the current value of like properties, its nature, actual use of income, the sworn

valuation by the owner, the tax declarations, and the assessment made by
government assessors shall be considered. The social and economic benefits
contributed by the farmers and the farmworkers and by the Government to the
property as well as the non-payment of taxes or loans secured from any government
financing Institution on the said land shall be considered as additional factors to
determine its valuation.
Question No. 1 (C):
Don Emilio owns fifty-seven (57) hectares of land, fifty (50) hectares of which are
planted to citrus trees and seven (7) hectares are devoled to rice. Taking into account
the Comprehensive Agrarian Reform Law, how many hectares of his property may Don
Emilio retain? May he choose the area to be retained by him?
Answers:
Under Section 6. RA 6657, Don Emilio may retain only five (5) hectares for
himself. But children of landowners who on June 15. 1988 are actually tilling the
land or is directly managing it may retain three (3) hectares for each child.
However, those ricelands retained under P.D. No. 27 before R.A. 6657 took effect
shall retain the said land of seven (7) hectares under the said Presidential Decree
which continues to be in force and in effect.
As for the fifty (50) hectares of his land devoted to citrus trees, such being a
commercial farm as a fruit farm, the same shall be subject to immediate compulsory
acquisition and distribution only after ten (10) years from the effectivity of the CARL
in 1988.
Don Emilio may choose the area to be retained by him. The CARL provides that
the right to choose the area to be retained, which shall be compact or contiguous,
shall pertain to the landowner. In case the area selected for retention by the
landowner is tenanted, the tenant shall have the option to choose whether to remain
therein or be a beneficiary in the same or another agricultural land with similar or
comparable features. In case the tenant chooses to remain in the retained area, he
shall be considered a leaseholder and shall lose his right to be a beneficiary under
this Act. In cas( the tenant chooses to be a beneficiary in another agricultural land,
he loses his right as a leaseholder to the land retained by the landowner. The tenant
must exercise this option within a period of one (1) year from the time the landowner
manifests his choice of the area for retention.
Question No. 2:
Juan Sipay was elected councilor of the municipality of San Felipe. On the
second year of his term, he left his legitimate wife. Josefa Asuwa, and their three
minor, unmarried and unemployed children and lived with a common-law wife, Maria
Makupad, with whom he had two minor, unmarried and unemployed children.
Immediately after he completed his term. Juan was appointed cashier in the office of
the municipal treasurer of San Felipe. He was dishonorably discharged from the
service upon being convicted of malversation of public funds. A year later, he died.
Who are entitled to the GSIS survivorship benefits?

Answer:
None. When Sipay was dishonorably discharged from the service, having been
convicted of malversation of public funds, he automatically forfeited his right to the
benefits that he or his beneficiaries could have been entitled to received from the
GSIS. Thus, Sipays death did not give rise to any right to survivorship benefits.
Question No. 3:
Pedro Tortilla and his employer were covered by the Social Security System.
Tortilla was legally married to Orpha de la Cruz, a plain housewife with whom he had
two minor, unmarried and unemployed children. But for two years, he had been
living with his common-law sife, Dora Tea, with whom he had two minor, unmarried
and unemployed children. His jobless father stayed with him. In his SSS record, he
designated as beneficiary his best friend, a 20- year-old student who was totally
dependent on him for support. In a car accident. Tortilla. Orpha de la Cruz and their
two children died.
Who are entitled to the death benefits?
Answer:
The Social Security Law defines beneficiaries as the dependent spouse until he
remarries and dependent children, who shall be primary beneficiaries. In their
absence, the dependent parents and, subject to the restrictions imposed on
dependant children, the legitimate descendants and illegitimate children who shall be
the secondary beneficiaries. In the absence of any of the foregoing, any other person
designated by the covered employee as secondary beneficiary."
Applying the above provision, when Tortilla died, he died with the persons who
are his primary beneficiaries.
Thus, Tortilla's secondary beneficiaris namely, his dependent jobless father and
illegitimate children, who were minor, unmarried and unemployed are entitled to
death benefits under the Social Security Law.
Under the law, the common law wife is not among those who could be a
beneficiary, either as primary or secondary beneficiary;
As for the 20-year old student who was Tortilla's best friend, because he was
designated by Tortilla as beneficiary, he could have been entitled to death benefits, in
the absence of either primary and secondary beneficiaries, which is not the case,
however, in the question given.

Question No. 4:

Don Jose, a widower, owns a big house with a large garden. One day, his
househelper and gardener left after they were scolded. For days, Don Jose, who lives
alone in compound to look for someone who could water the plants in the garden and
clean the house. He chanced upon Mang Kiko on the street and asked him to water
the plants and clean the house. Without asking any question. Mang Kiko attended to
the plants in the garden and cleaned the house. He finished the work in two days.
a) Is there an employer-employee relationship between Don Jose and Mang Kiko?

Answer:
There is an employer-employee relationship between Don Jose and Mang Kiko
because Mang Kiko, assuming payment of compensation, was rendering services for
Don Jose and was under the orders of Don Jose as regards employment.
b) Are they compulsorily covered by the Social Security System?

Answer:
No. In their employer-employee relationship. Don Jose and Mang Kiko are not
compulsory covered by the Social Security System because Mang Kiko is rendering
domestic sendees in a private home which is one of the kinds of employment excluded
from the compulsory coverage of the Social Security System.
As the lawyer of Mr. Excelente, state the nature of your action or complaint to be
filed against the
university, the proper body or court before which it maybe filed, the laws to be invoked,
and the facts or
evidence to be adduced Answer:
As lawyer of Mr. Excelente. I will file a complaint questioning the legality of his
dismissal.
I will file the complaint with the Labor Arbiter in the Regional Arbitration Branch
of the NLRC having jurisdiction over the place where Mr. Excelente works.
I will invoke the provisions of the Labor Code which are found in its Book VI that
guarantee the right of workers to security of tenure.
I will adduce facts or evidence that will disprove the allegations of the University
President that have been given as reasons for dismissing Mr. Excelente. The fact that
he had served the University for twenty five years, was well known in his field and has
received many awards should disprove the allegation of gross incompetence. I will
content that the alteration over teaching loads of professors is not tantamount to
insubordination and dereliction of duty.
a) May the University President be impleaded as corespondent? If so. what will be the

nature of his liability?

Answers:
The University President may not be impleaded if his acts in connection with the
termination of Mr. Excelente were official.
But he may be pleaded if he acted without or in excess of his authority or was
motivated by personal ill will towards Mr. Excelente. If he is thus impleaded, the
University President shall be personally liable for the payment of backwages and
damages, if any that Mr. Excelente will be entitled to receive if it is found that he has
been unjustly dismissed.
Question No. 6:
The Septuagint Company, Inc., through its general manager, dismissed Juan
Suntok, a rank-and-file employee, on the ground of loss of confidence. The company
served on his the notice of termination effective on the date of receipt, which was 8
September 1986. Taken aback by his sudden dismissal, Juan confronted the general
manager and hit him on the face with a cast of iron pipe. The company filed a
complaint against him for less serious physical injuries. On 1 September 1990, a week
after he was acquitted by the court which tried the criminal case. Juan filed a
complaint for illegal dismissal, seeking reinstatement and payment of backwages.
a) On the basis of the facts given, was the dismissal of Juan valid?
Answer:
The dismissal of Juan was not valid. The ground for his dismissal is mere
allegation of loss of confidence." Such allegation is not sufficient unless there are
facts that provide the objective basis of loss of confidence. It should also be noted that
Juan was not given any opportunity to be heard and to defend himself.
(b) If the Labor Arbiter finds that the dismissal was illegal for being without just
cause, what relief/s may be granted to Juan?
Answer:
Juan is entitled to these reliefs, namely reinstatement without loss of seniority
and other privileges and full backwages, inclusive of allowances, and to other benefits
or their monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.
b) If the Labor Arbiter finds that there was just cause for the termination of Juan's

employment, but that the requirement of notice and hearing was not complied with,
what relief/s may be granted to Juan?
Answer:
The relief to be granted to Juan is indemnity if the amount of PI.000.00.

c) Was the complaint for illegal dismissal filed within the reglementary period?

Answers:
It was filed within the reglementaiy period. Juan filed his complaint for illegal
dismissal within four (4) years from the date of his dismissal which is the prescriptive
period for filing cases of illegal dismissal. An action for illegal dismissal prescribes in
four years under the Civil Code, It being an action predicated upon an injury to the
rights of the plaintiff."
Question No. 7:
Linder what circumstances or instances may an employee who is found to have
been illegally dismissed and, therefore, entitled to reinstatement, be nevertheless. NOT
ordered reinstated but merely awarded (a) separation pay in lieu of reinstatement and
(b) backwages? At what rate would the separation pay be? What would be the
maximum limit for the backwages?
Answers:
In a number of Supreme Court decision, it has been ruled that an employee who
is found to have been illegally dismissed shall be awarded separation pay in lieu of
reinstatement If reinstatement is no longer viable in view of the strained relations
between the employee and his employer. In a case, the Supreme Court also ruled that
since reinstatement was no longer feasible in view of the advanced age of the
employees who were illegally dismissed, they should instead received separation pay.
The rate of separation pay is one month salary for every year of service. The
Supreme Court has also ruled that in the computation of separation pay account
must be taken not only of the basis salary of the employee but also his allowances.
In decisions applying the law before Rep. Act No. 6715, the Supreme Court ruled
that the maximum limit for backwages shall be three years.
The law has been changed by Rep. Act No. 6715. Back wages are now to be computed
from the time the compensation of the employee was withheld from him up to the time
of his actual reinstatement. Thus, in applying the amendment Introduced by Rep. Act
No. 6715, this means that backwages will now be paid for the entire period up to the
actual reinstatement of the employees, even if the period is over three years.
Question No. 8:
In a letter to the Regional Director of Region VII of the Department of Labor and
Employment, employee Ricardo Malalang claims that his employer, the Visayan Sea
Products Corp., has not compensated him for various legal benefits, including
overtime pay. holiday pay. 13th month pay and other monetary benefits totaling
P6.000.00.
Despite the fact that the amount claimed exceeds
Regional Director exercise jurisdiction over the case? Why?

Answer:

P5.000 how may the

The power of the Regional Director over money claims may arise under either
Article 128 or Article 129 of the Labor Code.
Under Article 129, for the Regional Director to exercise Jurisdiction, the
aggregate money claims of an employee should not exceed P5.000.00.
Under Article 128, as the duly authorized representative of the Secretary of
Labor, the Regional Director has the power to order and administer, after due notice
and hearing, compliance with the labor standards provisions of the Labor Code and
other labor legislation based on the findings of labor regulation officers made in the
course of inspection and 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 regulation officer and raises issues which cannot be resolved
without considering evidentiaiy matters that are not verifiable in the normal course
of inspection.
Article 128 applies where the relationship of employer- emoloyee relationship still
exists.
Question No. 9:
Mariano, Dondon and Pongpong were members of the United Labor Organization,
a duly registered local union. During a meeting, the union expelled them for
disloyalty. They were not notified of the specific accusations against them or given any
opportunity to refute the charges in any hearing or investigation. The union
immediately informed their employer, the XYZ CORPORATION, of their expulsion from
the union and recommended their dismissal in accordance with the closed-shop
agreement in the CBA.
a) May the XYZ CORPORATION look into the facts of the expulsion before affecting

termination of their employment?

Answer:

Yes, XYZ Corporation may look - in fact, it should look - into the facts of the
expulsion before effecting termination of their employment.
The Labor Code expressly provides that the employer should not only furnish the
worker whose employment is sought to be terminated a written notice containing a
statement of the causes for termination. The employee should also be afforded the
opportunity to be heard and to defend himself.
b) If the corporation decided to investigate the circumstances of the expulsion and found

out that the union acted arbitrarily in expelling them from its ranks, may it refuse to
terminate their employment?
Answer:

The employer may refuse to terminate the employment of Mariano, Dondon and
Pongpong. The closed-shop agreement in the CBA can be the basis for terminating an
employee only if the employees have been validly expelled from union membership.
Question No. 10:
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?

Answers:
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. They were. 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 these specific offenses:
They already charged fees even if they have not yet obtained employment for the
applicant
Question No. 11:
Kilos Union filed a petition for certification election among the 100 rank-and-file
employees of Steel Company. Opposing the petition, the company claimed that thirty
(30) of the employees are contractual employees having been supplied by the Sikat
Employment Agency and should, therefore, be bared from taking part in the election.
The Union countered that the Sikat Employment Agency is a labor-only contractor
which merely served as agent in recruiting for the company the 30 employees.

a) Granting that the 30 employees are contractual employees supplied by the Sikat

Employment Agency for the company, may they be allowed to take part in the
certification election?

Answer:
The contractual employees may or may not be allowed to take part in the
certification election.
If they are included in the bargaining unit, then, they should be allowed to take
part in the certification election. If not. then they cannot take part in the certification
election.
Whether or not they belong to the bargaining unit depends on whether they have
community or mutuality of interests with the other employees in the bargaining unit.
There are two (2) other suggested answers.

Another Answer:
If the Sikat Employment Agency is a labor-only contractor, the thirty (30)
contractual employees that it supplied to Steel Company are also employees of the
Steel
Company and could thus be considered as belonging to the bargaining unit of the rank
and file employees of the Company. Thus, they could take prior to the certification
election
Another Answer:
Assuming that the Sikat Employment Agency is a labor- only contractor, making
the thirty (30) contractual employees that it supplied to Steel Company employees of
the Company. This fact, will not automatically mean that they can take part in the
certification election because the contractual employees may still be considered as not
belonging to the bargaining unit of the rank and file employees of the Company. The
contractual employees may not have the needed community or mutuality of interest
that will make them belong to the bargaining unit of the other rank and file employees
of the company.
b) What facts must be proved to show that the Sikat Employment Agency is engaged in

labor-only contracting? What is the consequence of such a showing?

Answer:

Sikat Employment Agency is engaged in labor-only contracting if it does not have

substantial capital or investments. in the form of tools, equipment, machineries, work

premises, among others, and the workers recruited or placed by Sikat Employment
Agency are performing activities which are directly related to the principal business of
the employer, namely. Steel Company.
If Sikat Employment Agency is only a labor-only contractor. it shall be considered
as an agent of the Steel Company. Said company shall be responsible to the so- called
contractual workers in the same manner and extent as if said workers are directly
employed by the Steel Company.
Question No. 12:
The Malipol Labor Union submitted to the management of the Malilito Co.. Inc. a
set of proposals for a collective bargaining agreement. A few days later, the
Kapuspalad Labor Union forwarded its own proposals, claiming to represent the
majority of the rank-and-file employees in the company. The company refused to
bargain with either Malipol Labor Union or Kapuspalad Labor Union.
Malipol Labor Union then filed a complaint for unfair labor practice, charging
that the Kapuspalad Labor Union is a company union. The company then filed with
the Med- Arbiter a petition for certification election.
a) Was the companys refusal to bargain with either Malipol Labor Union or the

Kapuspalad Labor Union an unfair labor practice?

Answer:
The refusal of the Company to bargain with either Malipol Labor Union or the
Kapuspalad Labor Union is not an unfair labor practice. The refusal is justified. The
Company is not certain as to which of the two labor unions is the union representing
the majority of the employees of the employer belonging to the appropriate collective
bargaining unit. It is the duty of the employer to bargain collectively only with the
labor union which is the representative of the employees, which in turn the labor
union designated or selected by the majority of the employees in an appropriate
collective bargaining unit.
b) Was the companys petition for certification election proper? Will it prosper?

Answers:
Th e company's petition for certification election is proper. Under the Labor Code,
an employer may file a petition for certification election when there is a demand for
collective bargaining.
But the petition may not immediately prosper.
Malipol Labor Union has charged that Kapuspalad Labor Union is a company
union. This charge brings about a prejudicial question which should first be resolved,
before the certification election may be held. A company union cannot be certified as a
bargaining representative.
Question No. 13:

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. 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.
a) Was the certification of the dispute for compulsory arbitration proper?

Answers:
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.
b) Were the temporary reassignment and payroll reinstatement valid?

Answer:
No. The temporary re-assignment and payroll rein- statement are not valid. According
to the Labor Code, when the Secretary of Labor assumes 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.
Another Answer:
The temporary re-assignment and payroll reinstatement are valid, if they are
made in good faith, and are not for the purpose of discouraging membership in the
union. It is the prerogative of the management to assign its employees to where the
management believes their services could be best utilized. As for the payroll
reinstatement, it is valid if there is a valid reason to prevent the workers placed or
payroll reinstatement from actually returning to work, like a valid fear that they will
sabotage equipment in the company,
c) During the strike, may the striking union picket the company's outside outlets

although they are not company- owned but independent dealers?

Answer:
Peaceful picketing conducted by employees in a strike area during any labor
controversy is given protection by the Labor Code.
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.
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.
Question No. 14:
Was there a valid strike?
Answer:
The strike is not valid.
It is true that the Labor Code provides that if an employer violates a collective
bargaining agreement, the said employer commits an unfair labor practice act, which
in turn is a legal ground for a strike.
But Rep. Act No. 6715 amended the Labor Code by providing that violations of a
collective bargaining agreement. except those which are gross in character shall no
longer be treated as unfair labor practice and shall be resolved as grievances under
the collective bargaining agreement. The violation involved in the question is not a
gross violation because there is no flagrant and/or malicious refusal to comply with
the economic provisions of such agreement which is how the Code defines a gross
violation of a collective bargaining agreement.
Question No. 15:
The Manila Industrial Corp. has fifty (50) contract workers supplied by the
National Employment Agency. They joined the Novato Labor Union, the sole and
exclusive bargaining representative of the rank-and-file workers in the company. In
turn, the union demanded that the company consider the fifty new union members as
regular employees accordance with the Labor Code. When the company refused to
make their employment regular, the union, after complying with the requirements,
staged a strike. The Secretary of Labor and Employment assumed Jurisdiction of the
case.

Assuming that there is no employer-employee relationship between the company

and the fifty contract workers, is there a labor dispute between them that properly
falls under the jurisdiction of the Secretary of Labor and Employment?
Answer:
Yes. There is a labor dispute that could properly fall under the jurisdiction of the
Secretary of Labor and Employment assuming that Manila Industrial Corp. is an
industry indispensable to the national interest, since the dispute between the
corporation and the contract workers is a labor dispute, even if there is no employeremployee relationship between the corporation and the contract workers.
Under the Labor Code, a labor dispute includes any controversy or matter
concerning terms and conditions of employment or the association or representation
of persons in negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether the disputants stand in the
proximate relation of employer and employee."
From the above definition, it is noted that there is a labor dispute regardless of
whether the disputants stand in proximate relation of employer and employee.
The demand of the union that the company regularize the employment of the
contract worker is a controversy concerning terms and conditions of employment.
Question No. 16:
Ping Gabo is the Chief Engineer of the National Publishing Corp. with a monthly
salary of P3.000.00. He works over eight (8) hours daily from Monday to Saturday. In
May. June and July 1991, he rendered, each month, ten (10) hours beyond his regular
work schedule.
Is he entitled to overtime pay and holiday pay? Why?
Answer:
The entitlement of Gabo to overtime pay and holiday pay is dependent on whether
he is a managerial employee or not. If he Is a managerial employee, he is not entitled
to overtime pay and holiday pay. The Labor Code provides that the provisions that
grant overtime pay and holiday pay shall not apply, among others, to managerial
employees.
A managerial employee is defined by the Code as referring to those whose primaiy
duty consists of the management of the establishment in which they are employed or
of a department or subdivision thereof, and to other officers or members of the
managerial staff.
Gabo, as Chief Engineer, appears to be a managerial employee. On the other
hand, his monthly pay is rather low for a managerial employee. Despite his title, his
duty may not consist of a management of department or of a subdivision thereof.

Question No. 1:
A was dismissed from the service by his employer for theft of goods owned by the
company. He was also prosecuted for theft before the Regional Trial Court of Pasay
City. Meanwhile, A filed a complaint for illegal dismissal against the employer before
the labor arbiter. The trial court subsequently acquitted A and ordered his
reinstatement with backwages from the time of his separation to the date of his actual
reinstatement.
(1) Is the decision of the court correct? State your reasons.
(2) Even with such acquittal, may the labor arbiter still proceed to resolve the complaint

for illegal dismissal filed by A? State your reasons.

Answers;

(1) The decision of the court is not entirely correct.

It is within the jurisdiction of the Regional Trial Court to acquit A. As a regular

court, the RTC has jurisdiction over criminal cases. But it is outside of the
jurisdiction of the RTC to order the reinstatement of A with backwages. A termination
dispute, which could give rise to a decision for the reinstatement of an illegally
dismissed employee and the payment of his backwages is outside the jurisdiction of
the RTC. It is within the original and exclusive jurisdiction of labor arbiters. (Art. 217,
Labor Code).
(2) Even with As acquittal, the labor arbiier should still proceed to resolve the complaint

for illegal dismissal filed by A. An action for illegal dismissal is entirely separate and
distinct from a criminal action. (Pepsi Cola Bottling Company of the Philippines vs.
Guanzon, G.R. No. 81162, April 19. 1989).
In many decisions, the Supreme Court has ruled that the acquittal of an
employee in a criminal case does not mean that there could be no basis for legally
dismissing the employee for. say. willful breach of trust, which is a just cause for
termination. Conviction in a criminal case requires proof beyond reasonable doubt. In
a termination dispute, it is enough that there is substantial evidence to prove that
there has been willful breach of trust.
Question No. 2:

(1) Y Corporation suffered business reverses and it was forced to cease operations and

dismiss all its employees. Said employees filed a complaint with the National Labor
Relations Commission fob illegal dismissal and payment of separation pay. Decide
with reasons.

(2)

Suppose it was found by the labor arbiter that the corporation did not suffer
business losses. It was also found that the corporation went on with its operations.
May an illegally dismissed employee be ordered reinstated despite his strained
relationship with the corporation? What may be awarded to the employee? Explain
your answers.
Answers:

(1) When Y Corporation dismissed all its employees because it ceased operations, the

dismissal was legal. Cessation of operations of. an establishment or undertaking is

one of the authorized causes for the termination of employees. (Art. 283. Labor Code).
But considering the facts of the case in question, the employer is not under legal
obligation to pay separation pay since the cessation of operations was due to business
reverses. Nevertheless, the employer should serve a written notice on the workers at
least one (1) month before the intended date of the cessation of operation.
A POINT TO CONSIDER: The bar examinee may state that there shall be payment of
separation pay only if the cessation of operation is due to serious business losses or
financial reverses. The question did not describe the business reverses as serious. So.
the bar examinee may state that there should be payment of separation pay.
(1) There are some Supreme Court decisions ruling that even if there is no legal basis for

the termination of an employee, he may not be reinstated because of strained

relationship between the employer and the employee. Instead. he should be given
separation pay. (an example of these cases is Hernandez vs. National Labor Relations
Commission, G.R. No. 84302, Aug. 10. 1989. where the Supreme Court said:
Inasmuch as the charge against petitioner has not been substantiated, the
inevitable result is that this Court must declare the dismissal as unwarranted and.
therefore, illegal. Considering, however, that the relationship between petitioner and
private respondent has been severely strained by reason of their respective
imputation of bad faith against each other, this Court believes that to order
reinstatement at this juncture will no longer serve any prudent purpose.")
Under the facts of the case given in the question, however, it is respectfully
submitted that the above ruling of the Supreme Court should not apply. In the case,
the employer acted in bad faith. He claimed business losses. It was found that there
were no such business losses. He said he will cease operations. Instead, he actually
went on with the operations. On the basis of these proofs of bad faith, the employer
should reinstate the illegally dismissed employee pursuant to the Labor Code which
specifically provides for the reinstatement of an unjustly dismissed employee.
A POINT TO CONSIDER: A bar examinee may state that there is need to prove
serious business losses or financial reverses so that thereby, there may be authorized
cause for termination. (Camara Shoes v. Kapisanan ng Manggagawa sa Camara
Shoes. G.R. No. 63208-09, May 5. 1989)
Question No. 3:
An employee filed a complaint against his employer before the National Labor
Relations Commission (NLRC). The labor arbiter decided the case in favor of the
employee. The employer received a copy of the decision on April 10. 1984. April 20
being a Good Friday and the following Saturday having been declared a non-working
public holiday by the President, the employer filed his appeal with the NLRC from
the said decision on April 23. 1984.

(1) Was the appeal filed on time? Explain your reason.

(2)

Assuming the decision of the labor arbiter is affirmed by the NLRC. what is the
recourse of the employer? State the nature of the action, the court which has jurisdic tion over the action, and the period within which the same must be filed.
Answers:

(1)

The appeal was filed on time. The Supreme Court has ruled that in the counting of

the ten day period within which to file an appeal, if the tenth day is a holiday, then the
appeal may be filed on the day after said holiday. But if the day after said holiday is
also a non-working public holiday as in the case in the question, then the appeal
cannot be filed because government offices are closed. The appeal could then be filed
on the day after such non-working public holiday. But again, in the case, this day is a
Sunday when government offices are also closed. Thus, the filing on the following
Monday. April 23. is still within the ten-day period. (Pacana v. National Labor
Relations Commission, et al.. G.R. No. 83513. April 18. 1989)
(2)

According to the Labor Code (in Art. 223). in the exercise of its appellate jurisdiction
over decisions of labor arbiters, a decision of the National Labor Relations Commission
is final and executory after ten (10) calendar days from receipt thereof by the parties.
In view of the above provision, the employer in the case in the question who is
aggrieved by the decision of the NLRC should file a petition for certiorari with the
Supreme Court under Rule 65 of the Rules of Court within a reasonable period from
receipt of the decision which is the subject of the petition for certiorari usually within
30 days. (Pacana, op.cit)
Question No. 4:
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.
Answer:
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.
Alternative Answer:
If the regular contributions are pursuant to a CBA provision, there is no unfair
labor practice. If not pursuant to a CBA violation, the assistance may constitute an
unfair labor practice.
Another Alternative Answer:
If Art. 248(d) is strictly applied, the giving of money by the employer to the
recreation fund of the labor union is an unfair labor practice because said Article
considers as an unfair labor practice the giving of financial or other support to it
(meaning a union) or to its organizers or officers. The Article does not provide for a
situation where such giving is not an unfair labor practice.

Question No. 5:
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. 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.
(a) Is there a valid certification election? Why?
(b)

You are called upon to decide the case. Which labor union will you certify as the
collective bargaining representative of the employees of the company? Why?
Answers:

(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.

The Labor Code provides (in Art. 256) that to have a valid certification election, at
least a majority of all eligible voters in the bargaining unit must have cast their 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.
(b) As med-arbiter called upon to decide the case, I will not certify any labor union as the
collective bargaining representative of the company, because none of the labor unions
who participated in the certification election garnered a majority of the valid votes
cast. According to the Labor Code (in Art. 256), the labor union receiving the majority
of the valid votes cast shall be certified as the exclusive bargaining agency of all the
workers in the unit. The valid votes cast in the certification election total 880 votes
(900 votes cast minus 20 invalid votes. 15 of which were spoiled ballots and 5 blank
ballots). No labor union garnered at least 441 votes which is the majority of 880 votes.
Question No. 6:
Juan Santos is a regular employee of Far East Development Company. During
office hours he quarelled with a coemployee. Santos was holding a knife and when
his supervisor Olivia Garcia tried to pacify him. he chased her instead with the knife
but he was held back by cooler heads. On the ground of gross misconduct and
insubordination, he was dismissed from the service. He filed a complaint for illegal
dismissal with the labor arbiter. The labor arbiter required Santos and his employer
to file their position papers. On the basis of the position papers submitted, the labor
arbiter found that the dismissal was for lawful cause and thus, the complaint was
dismissed. On appeal to the National Labor Relations Commission, the said decision
was reversed on the ground that Santos was not afforded due process by his
employer before he was dismissed. Hence, he was ordered reinstated with backwages

from the date of his separation to the date of his reinstatement without qualification
or deduction.
The employer elevated the case lo the Supreme Court. He argued that even if
there was no due process in the dismissal of Santos, at the hearing before the labor
arbiter, it was found that the dismissal was for a just cause and therefore Santos
was not entitled to reinstatement. Santos, on the other hand, challenged the
proceedings before the labor arbiter on the ground that no hearing was conducted
and that the decision was reached only on the basis of position papers submitted
and hence, in violation of due process.
(1)

Is the employer's contention valid? Explain.

(2)

Is the contention of Santos correct? Explain.

Answers:

(1) The employer's contention is valid. It is true that under the facts of the case in the

question, the employer failed to give due process to Santos before the latter was
dismissed since the employer did not give Santos the required written notice of his
termination and the reason or reasons for his termination. The employer did not give
Santos the required opportunity to defend himself.

But on the basis of the position papers submitted, the labor arbiter found that
the dismissal was lawful cause since Santos was indeed guilty of serious misconduct
and willful disobedience which are just causes for termination.
The fact that Santos was not afford due process by the employer does not mean
that thereby the employer cannot dismiss Santos, if there is just cause for his
termination.
(2) In Wenph.il Corporation v. National Labor Relations Commission et al, G.A. No.

80587, Feb. 8, 1989, the Supreme Court said: "By the same token, the conclusion of
the public respondent NLRC on appeal that private respondent was not afforded due
process before he was dismissed is binding on this Court. Indeed, it is well taken and
supported by the records. However, it can not justify a ruling that private respondent
should be reinstated with back wages as the public respondent NLRC so decreed.
Although belatedly, private respondent was afforded due process before the labor
arbiter wherein the just cause of his dismissal had been established. With such
finding, it would be arbitrary and unfair to order his reinstatement with back wages."

(2) The contention of Santos is not correct. The Labor Codes provides (in Art. 221) that in

any proceeding before the National Labor Relations Commission or any labor arbiter,
the rules of evidence prevailing in courts oflaw or equity shall not be controlling and
that it is in the spirit and intention of the Code that the Commission and the labor
arbiters shall use every and all reasonable means to ascertain the fact in each case
speedily, and objectively, without regard to technicalities of law on procedure, all in
the interest of due process.
Considering the above provision in the Labor Code, in many decisions, the
Supreme Court has held that it is proper for a labor arbiter to decide a case on the
basis of the position papers submitted by the parties. (Example: Robusta Agro Marine
Products Inc. u. Corobalem. G.R. No.80500, July 5. 1989).

Alternative Answers:

(1) The employer's contention is valid if a just cause was found by the labor arbiter on

the merits on the basis of admission in the pleadings, meaning the position papers.

(2) The contention of Santos is not correct if the pleadings meaning the position papers

did not tender any issue of fact. Such issue could be the subject of a hearing and
presentation of evidence. If the pleadings tendered an issue of fact, then a hearing
would be required by due process.

Question No. 7:
The PMG Stevedoring Company is a relatively new firm engaged in the
stevedoring business in the port of Cebu City. The company has 278 regular and
permanent employees, engaged in the loading and unloading of foreign and domestic
vessels docking at the said port. The Company also employs 55 supervisory
personnel.
The AH Labor Organization filed a verified petition with the company stating,
inter alia, that it is a legitimate labor organization representing majority of the
employees, and that there is no bargaining agent in the unit. The union asked for
recognition as the bargaining agent of all the employees of the company.
The company replied that while it is not anti-union, it cannot, under
circumstances, accede to the union demand on the ground that the petition is
supported by the written consent of at least twenty-five percent (25%) of ail
employees and also because the company-wide unit sought to be represented by
union is not an appropriate collective bargaining unit.

the
not
the
the

After hearing, the med-arbiter ordered a certification election in the companywide unit. Not satisfied therewith, the company elevated the order to the Secretary of
Labor and Employment.
If you were the Secretary of Labor and Employment, how will you decide this
case? Give your reasons.
Answer:
As Secretary of Labor and Employment. I will affirm the order for a certification
election made by the Med Arbiter.
But I will amend the order. Instead of a certification election in a company wide
unit, I will order a certification election only for a bargaining unit composed of rank
and file employees, or only for a bargaining unit composed of supervisory employees,
in whichever bargaining unit are found the members of the petitioning labor
organization.
The order for a certification election is proper even if the petition for certification
election filed by AH Labor Organization is not supported by at least 25% of the
employees of the appropriate collective bargaining unit. The petition for certification
election is filed in an unorganized establishment there being, as yet. no bargaining
agent in PMG Stevedoring Company. A petition for certification election in an
unorganized establishment does not require the consent of at least 25% of all the
employees in the bargaining unit (Art. 257. Labor Code). This is a requirement only
for petitions filed in an organized establishment. (Art. 256, Labor Code)

But the bargaining unit cannot be company wide. Rep. Act No. 6715, in
reaffirming the right of supervisory employees to form a union, provides that they
can only be members of unions whose members are all supervisory employees. This
restriction means that, unlike the situation before Rep. Act No. 6715. supervisory
employees and rank and file employees could no longer belong to one union. Thus, as
a result, a bargaining unit could no longer be composed of rank and file employees
and supervisor employees.
A POINT TO CONSIDER: A bar examinee may. however, assume that the reference to
the bargaining unit being a company wide unit means either a company wide unit of
all rank and file employees or a company wide unit of all supervisory employees.
Alternative Answer:
As Secretary, I would affirm the order of the med- arbiter. There is no bar to the
election, and the employees are entitled to a speedy determination of their bargaining
representative so that they could exercise their right to bargain collectively.
Question No. 8:
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 As contributions to the System. In
the course of his employment, A met a serious accident requiring his hospitalization.
(1) 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.

(2) Suppose that he died because of the accident, are his heirs entitled to death benefits

under the System? Explain your answer.

Answer:

(1) A is entitled to receive benefits from the Social Security System even if his employer

did not remit As 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.
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).

(2) The heirs are not entitled, but his primary beneficiaries or in the absence of primary

beneficiaries, his secondary beneficiaries are entitled.

Question No. 9:

Pablo, a janitor, was dismissed by VCA Company for refusing to withdraw his
membership in a militant labor union. Thereafter, Pablo filed a case against VCA
Company for illegal dismissal and unfair labor practice before the labor arbiter.
While the labor case was pending, Pablo was able to gain employment as office
secretary of the Madasalin Life Insurance Company. He obtained a higher position in
the said insurance company and is now receiving a substantially higher salary than
the salary he drew under his previous employment.

After due hearing, the labor arbiter rendered a decision finding Pablo to have
been illegally dismissed and ordering his reinstatement with full backwages.
(1) Is the ruling of the labor arbiter correct? Explain your answer.
(2) Before the labor arbiter rendered his decision in Pablo s case, there was going to be a

certification election in VCA Company. Is Pablo considered an employee of VCA

Company for purposes of voting in the certification election? Explain your answer.
Answers:

(1) The ruling of the labor arbiter is correct. There was no legal cause for the termination

of Pablo. The act of VCA Company in dismissing him for refusing to withdraw his
membership in a union is an unfair labor practice.
The Labor Code provides (in Art. 279) that an employee who is illegally dismissed
is entitled to reinstatement with full backwages. There is no further provision in the
Labor Code stating that the employee who is illegally dismissed shall not be entitled to
reinstatement and full backwages if the employee has found another employment. Of
course, given the facts of the case in the question, Pablo may not wish to take
advantage of the order for his reinstatement.
(2)

(1)

(2)

But for the purpose of the certification election that will be held in VCA
Company, Pablo cannot be considered an employee of the Company for
purposes of voting in the election. This is because, under the Labor Code (In
Art. 212), a person is no longer considered an employee if his work has ceased
as a result of or in connection with any correct labor disputes or because of any
unfair labor practice and he has obtained another substantially equivalent and
regular employment. In the facts of the case, Pablo has already obtained such
kind of employment.

Alternative Answers:
On the finding of illegal dismissal, the labor arbiter is correct. On the award of
affirmative relief, the award may lack basis. The employee having found more than
equivalent employment, he has ceased to be an employee under the provisions of Book
V of the Code.
Yes, because he retains his employee status during the pendency of the case. The
term "employee is defined as including those whose work has ceased as a result of
unfair labor practice. There was unfair labor practice in his dismissal, because it was
due to his union membership.
Question No. 10:
The Smarly Food Company is engaged in the restaurant and catering business.
Having invested a substantial amount of money to establish its business, the
company decided to avoid its legal responsibilities in connection with the selection of
employees, their social security and other labor relations problems. To this end, the
company engaged the services of Jack Perez, doing business under the name of San
Jacinto Manpower Agency, to supply it with cooks, waiters, waitresses, dishwashers,
and other workers. Jack Perez does not have a separate regular business office. He
operates his business from his own house. Under this economic arrangement, Jack
Perez pays the wages of the workers assigned to the company directly and reports said
workers to the Social Security System as his own employees. He charges the Smarty
Food Company a monthly fee depending on the number of workers serving the
company. After two years, all the workers assigned by Jack Perez to the company
Joined the United Restaurant Workers Union. Soon thereafter, the labor union sought
recognition from the Smarty Food Company and requested for collective bargaining
negotiations. Thereupon, the company terminated its service contract with the San
Jacinto Manpower Agency and prevented the latter's workers from entering the

company premises. To keep its business going, the Smarly Food Company secured its
manpower needs from another service agency. The labor union then filed a complaint
for unfair labor practice under Article 248(a) of the Labor Code against the Smarty
Food Company.
Has the Smarty Food Company succeeded in avoiding its labor relations
obligations to the workers of San Jacinto Manpower Agency? Is the company guilty of
unfair labor practice? Give your reasons.
Answer:
Smarty Food Company has not succeeded in avoiding its labor relations
obligation to the workers of San Jacinto Manpower Agency. Under the facts of the
case in the question, the cooks, waiters, waitresses, dishwashers and other workers
supplied by San Jacinto Manpower Agency are employees of Smarty Food* Company
and not of the Agency because said workers are performing activities which are
directly related to the principal business of Smarty Food Company which is engaged
in the restaurant and catering business. It is also noted that the Agency does not
have substantial capital or investment in the form of tools, equipment machineries
and work premises. It does not have a separate regular business office and merely
operates its business from the house of the owner/operator of the Agency. Thus,
under the above circumstances, under the Labor Code (Art. 106) the Agency is
engaged in "labor only" contracting arid should therefore be considered merely as an
agent of the employer, meaning Smarty Food Company.
Because of the fact that Smarty Food Company is the employer of the cooks,
waiters, waitresses, dishwashers and other workers, the Company was guilty of unfair
labor practice when it terminated their services by terminating its service contract
with the Agency. The Company thereby discriminated against its workers to
discourage membership in any labor organization which is an unfair labor practice.
The Company also committed an unfair labor practice when it violated its duty to
bargain collectively by refusing to meet with the United Workers Restaurant Workers
Union which was organized by the workers of the Company.
Question No. 1
Yellow Bus Company has an existing collective bargaining agreement (CBA) with
Union X. During the 60-day freedom period, Union A filed a petition for certification election claiming a majority of the rank and file employees of the company had
joined it. Pending the hearing of the petition, the company and Union X renegotiated
and signed a new CBA which is admittedly better than the previous one. In view of
this supervening event, the med-arbiter dismissed the petition of Union "A for being
moot and academic. Is the dismissal of the petition correct? Can the company and
Union X claim the benefit of the contract bar rule?
Answer:
The dismissal of the petition is not correct. The Company and Union X cannot
claim the benefit of the contract bar rule.
The Labor Code (in Art. 256) provides: In organized establishments, when a
verified petition questioning the majority status of the incumbent bargaining agent is
filed before the Department of Labor and Employment within the sixty-day period
before the expiration of the collective bargaining agreement, the Med-Arbiter shall
automatically order an election by secret ballot when the verified petition is supported
by the written consent of at least twenty-five (25%) percent of all the employees in the

bargaining unit to ascertain the will of the employees in the appropriate bargaining
unit.
Assuming that the petition of Union A was supported by at least 25% of the
employees in the bargaining unit, the Med-Arbiter should have automatically ordered
a certification election since the petition was duly filed during the freedom period.
But how about the supervening event, i.e. a new CBA has been signed? The Rules
implementing the Labor Code provides (in Book V, Rule V, Sec. 4) that the
representation case shall not x x x be adversely affected by a collective agreement
submitted before or during the last 60 days of a subsisting agreement or during the
pendency of a representation case.
Question No. 2:
On May 24, 1989, the UKM urged its member-unions to join a Welga ng Bayan
in support of its efforts to pressure Congress to increase the daily minimum wage.
Union X is a member of the UKM and represents all the rank and file employees of
the Puritan Mining Company. Following the call for a nationwide strike, Union X
staged a strike and put up a picket the following day. As a result, the companys
operations were paralyzed although company officials and supervisory employees
were allowed ingress and egress to and from the company premises. The picket was
likewise peaceful. On May 28, 1989, the UKM leadership announced the end of the
Welga ng Bayan. Union X immediately lifted its picket and its members went back
to work. The company soughtyour legal advice on the legality of the strike and the
liability, if any, of the union officers and the participating members. What is your
opinion? Explain.
Answer:
The strike was illegal. For a strike to be legal, it should either be an economic
strike, i.e., caused by a bargaining deadlock or an unfair labor practice strike, i.e.,
caused by the commission of an unfair labor practice by an employer.----The strike of Union X was neither an economic strike or an unfair labor strike.
Thus, it was an illegal strike.
Because it was an illegal strike, any union officer who knowingly participated in it
may be declared to have lost his employment status, meaning such union officer could
be legally terminated.
As for the union members who participated in the strike, the facts show that no
illegal acts were committed. They allowed ingress and egress to and from the company
premises. The picket was peaceful. The mere participation of the union members,
without their committing illegal acts, does not constitute sufficient ground for the
termination of their employment.
Alternative Answer:
The strike is legal and the union officers and participating union members incur

no liability for calling and participating in the strike respectively. Applying the rule in
Philippine Blooming Mills to the effect that the workers only personally assembled to
influence the decision making process of the government which is a constitutionally
guaranteed right.
Note: Credit should be given to answer that focus on the procedural requirement
for a strike to be legal, i.e. strike vote, notice, cooling off period.
Question No. 3:
Unions A and B are competing with one another to organize the employees of
Ocean Supermart. Inc. It was an uncertain contest until the President of Ocean
Supermart issued a written statement expressing the hope that the employees
refrain from joining a union but in the event they should decide to do so, stating his
preference for Union A. In the certification election Union B lost. Is there an unfair
labor practice? Reasons.
Answer:
Ocean Supermart was guilty of unfair labor practice. The Labor Code (in Art.
248) provides that it is unfair labor practice for an employer To interfere with,
restrain or coerce employees in the exercise of their right to self-organization and for
an employer to initiate, dominate, assist or otherwise interfere in the formation or
administration of any labor organization, including the giving of financial or other
support to it or its organizations or supporters.
In the question given, Ocean Supermart issued a written statement expressing
the hope that the employees refrain from joining a union. It also express a preference
for Union A. These statements could be considered interference with the exercise by
employees by the right to self-organize. Giving support to a particular union is an act
of company unionism therefore, was an unfair labor practice.
Question No. 4:
(a) Distinguish and/or explain the following terms:
1. direct certification;
2. certification election;
3. consent election.
(b) Where there is only one union claiming to be the bargaining representative, is
it proper to grant direct certification to said union?
Answer:

(a)
1. There is direct certification if a Med-Arbiter certifies that a certain Union is
the exclusive collective bargaining representative of the employees of an appropriate
bargaining unit without the holding of a certification election, but merely on the basis
of evidence presented in support of the Unions claim that it is the choice of the
majority of the employees. Such evidence may consist of affidavits made by a clear
majority of the employees stating that they are members of and are supporting the
Union petitioning for direct certification to be their exclusive collective bargaining
representation.
2. A certification election is an election ordered by Med-Arbiter for the purpose of
determining the sole and exclusive bargaining agent of the employees in an
appropriate bargaining unit.
3. A consent election is an election agreed upon by the parties to determine the issue of
majority representation of all the workers of an appropriate collective bargaining
unit.
(b) It is proper to grant direct certification to said Union, but in addition to its
being the only union claiming to be the bargaining representative, it should submit
evidence that it is the choice of a majority of the employees in an appropriate
bargaining unit, as the bargaining representative. The Labor Code (in Art. 255)
provides that the labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be the exclusive
representative of the employees in such unit for the purpose of collective bargaining.
Alternative Answer:
It may not be proper to grant direct certification in view of the decision in the
case of Colgate-Palmolive where the Supreme Court said:
The constitutional mandate that the State shall assure the rights of the
workers to self-organization, collective bargaining, security of tenure and just
and humane conditions of work, should be achieved under a system of law
such as the aforementioned provisions of the pertinent statutes. When an
overzealous official by-passes the law on the pretext of retaining a laudable
objective, the intendment or purpose of the law will lose its meaning as the law
itself is disregarded. When the Minister of Labor directly certifies the union, he
in fact disregards this procedure and its legal recruitment. There is failure to
determine with legal certainty whether the Union enjoyed majority
representation.
The holding of a certification election at the proper time is not necessarily a
mere formality where there is a compelling legal reason not to directly and
unilaterally certify a union whose legitimacy is precisely the object of litigation
in a pending cancellation case filed by a group of employees who also claim
majority status.

Even in a case where a union has filed a petition for certification elections,
the mere fact that no opposition is made does not warrant a direct certification. More so in a case when the required proof is not presented in an
appropriate proceeding and the basis of the direct certification is the unions
mere allegation in its position paper that it has 87 out of 117 regular
employees. In other words, the Minister may not merely rely on the self-serving
assertion of a union that it enjoys the support of the majority of the
employees, without subjecting such assertion to the test of competing claims.
Colgate Palmolive Philippines, Inc. v. Bias Ople, G.R. 73681, 30 June 88,
Second Division, Paras, J.
Question No. 5:
In a certification election, three (3) unions participated. The election results were
as follows: Union A got 100 votes; Union B got 80 votes; Union C got 120 votes.
The NOUNION got 150 votes. The aggregate number of votes cast was 450; the total
number of eligible voters was likewise 450.
(a) Which union, if any, should be certified?
(b) If a run-off election is necessary, which union(s) or choices should appear in the
ballot? Explain your answer.
Answer:

(a) No union should be certified. No union got a majority of the valid votes cast, which is
224 votes [Vi of 450 plus 1). The Labor Code (in Art. 256) provides that a union, to be
certified as the exclusive bargaining agent of the workers in a bargaining unit, should
receive a majority of the valid votes cast. '
(b) Since no union was certified, a run-off election should be held between Union A
which got 100 votes and Union C which got 120 votes. They are unions who got the
two highest number of votes. The Labor Code (in Art. 256) provides that when an
election which provides three or more choices results in no choice receiving a majority
of valid vote cast, a run-off election shall be conducted between the labor union
having the two highest number of votes.
Alternative Answer:
NO-UNION which got 150 votes and Union C which got 120 votes were the
choices which got the two highest number of votes. Thus, the run-off election should
be between the NO-UNION and Union C. The provision in Republic. Act No. 6715 the
limits a run-off election to labor unions excluding thereby the NO-UNION choice is
unconstitutional. It violates the workers right to self-organization which also includes
the right not to join a labor union.

Question No. 6:
Union X is the majority union of the rank and file employees at Slipper Mart
Company. It amended its by-laws to include among the obligations of its members to
refuse to work with non-union members. Slipper Mart wants the amendment to be
declared null and void considering that not all its rank and file employees belong to
Union X and its enforcement will cause work stoppage in the company. Give your
opinion on the validity of the amendment.
Answer:
The provision of the by-laws of the union that made it among the obligations of its
members to refuse to work with non-union members cannot be implemented at the
Slipper Mart Company.
It is managements prerogative to determine who shall work together in a
company.
Alternative Answer:
The act is an unfair labor practice on the part of the union because it could have
the effect of compelling the employer to compel its employees to join Union X, thus,
in effeet restraining or coercing employees in the execise of their right to selforganization.
Question No. 7:
What is tripartism? What is the binding effect of an agreement entered into in a
tripartite conference?
Answer:
Tripartism in labor relations is the policy of the State enunciated in the Labor
Code (in Art. 275) which is implemented by consulting with representatives of workers
and employers in the consideration and adoption of voluntary codes of principles
designed to promote industrial peace ba.sed on social justice or to align labor
movement relations with priorities in economic and social development.
The codes of principles adopted at tripatite conferences are voluntary. They do not
have a legal binding effect on workers and employers. But because these codes are
considered and adopted by representatives of workers and employers, they are likely
to be complied with voluntarily by workers and employers.

Alternative Answer:
It should not bind unions and employers organizations who were not represented
in the tripartite conference because they were not parties or signatories to any
agreement arrived at in the conference.
Question No. 8:
Confederation X is a recognized labor federation with nationwide affiliates and
branches. It has its own set of national officers who hold office at its principal office
in Makati. The Confederation employs 80 rank and file employees with 10
supervisors, or a total of 90 employees. The 90 employees organized a union which
demanded recognition and bargaining rights as the employees representative.
Confederation X refused to recognize the union. Is the position of the confederation
tenable? Explain.
Answer:
If the reason of Confederation X for refusing to recognize the union is that, as a
labor organization, its employees cannot organize a union, this reason is not tenable.
The Labor Code includes a labor organization as an .employer, if the labor
organization acts as an employer. In the question, Confederation X is acting as an
employer to 80 rank and file employees and 10 supervisors.
If the reason of Confederation X for refusing to recognize the union is that the
10 supervisors could not be members of a union that has rank and file employees, the
reason is tenable. The Rules implementing the Labor Code provides (in Book V, Rule
II, Sec. 1) that supervisory employees shall not be eligible for membership in a labor
organization for rank and file employees. But to remedy this problem, the employer
can demand that the supervisors should not be p4rt of the suggested appropriate
bargaining unit.
Question No. 9:
Corporation X is engaged in a collective bargaining negotiation with the Union
of its employees. With respect to the demand for profit-sharing the corporation
patiently but consistently alleged that it cannot accept the said demand. The
corporation and the union several times to arrive at the proper resolution of the issue
but the corporation would not yield. Finally, the union filed an unfair labor practice
case accusing the corporation of bargaining in bad faith and refusing to accede to its
demand of profit-sharing. Decide.

Answer:

Corporation X is not guilty of unfair labor practice.

The question gives as facts that the corporation and the union met several
times to arrive at the proper resolution of the issue as to whether or not there shall be
profit sharing at the corporation. In these meetings, the corporation patiently but
consistently stated that it cannot accept the demand for profit sharing. By these acts,
the corporation bargained in good faith; it was showing that it sincerely desired to
reach an agreement with the union. Its not yielding to the demand for profit sharing is
not an unfair labor practice because the Labor Code (in Art. 252) expressly provide
that the duty to bargain collectively does not compel any party to agree to a proposal
or to make any concession.
Question No. 10:
Juan and Pedro were regular employees of Rose Manufacturing Company for 20
years. On May 31, 1984, both were dismissed by the company for dishonesty and
fraud. They sued for reinstatement and backwages. The labor arbiter ordered the
reinstatement of Juan and Pedro and the payment of their backwages. During the
pendency of its appeal to the National Labor Relations Commission (NLRC). The
company undertook a reorganization of its various departments where, among others,
the positions of Juan and Pedro were eliminated as redundant. On April 30, 1989, the
NLRC affirmed the labor arbiters award and ordered the reinstatement of Juan and
Pedro and payment of backwages covering five years. You are asked by the company to
question the ruling of the NLRC before the Supreme Court. What would be your main
arguments?
Answer:
I will question the ruling of the NLRC before the Supreme Court with the
following as my main arguments:
1.

The order to reinstate Juan and Pedro is no longer correct because of the
supervening event, namely, the reorganization at the company that included, among
others, the elimination of the positions of Juan and Pedro which were considered
redundant. Redundancy is an authorized cause for the termination of employment.
(Art. 283, Labor Code).

2. The award of backwages covering five years is not correct. The Supreme Court has
been consistently applying the so-clled Mercury Drug ruling that limits the
backwages to a three year period.
Alternative Answer:
I will charge the NLRC and the Labor Arbiter with abuse of discretion
amounting to lack of jurisdiction for ordering the reinstatement and the payment of
back wages to them. Assuming that the dishonesty and fraud of Juan and Pedro have
been established as facts, their dismissal is for just cause.

Question No. 11:

A is an audit clerk in the Seafront Financing Company. One day he had an
argument with his immediate superior after the latter accused him of having failed to
record and check a certain transaction a week earlier which resulted in the loss of
P100, 000. The argument led to a fist- fight with both protagonists sustaining serious
injuries that required hospitalization. One and a half months later, A returned to
work but was immediately given by the same superior a dismissal letter on the ground
of loss of confidence, grave misconduct and fighting with his superior. A later sued
the company for illegal dismissal. He also claimed for reinstatement and backwages.
Decide.
Answer:
There may be just cause for the termination of the employment of A. After all, he
is guilty of a serious misconduct if he fought his superior after the latter accused him
of having failed to record and check a transaction which resulted in a loss of P100,000
for the company. This is also a factual basis for loss of confidence since it is a willful
breach of trust by the employee of the trust reposed in him by his employer. The
foregoing is a just cause for the termination of employment.
However, the Company should first give A the ample opportunity to be heard and
defend himself with the assistance of his representatives if he so desires in
accordance with company rules and regulations promulgated pursuant to the
guidelines set by the DOLE.
Unless the Company gives to A the ample opportunity to be heard and to defend
himself, its termination of A will be illegal, and A will be entitled to reinstatement
and backwages.
Question No. 12:
Hercules Drug Company operates a chain of drugstores around the country. In
additional to several hundreds of clerical and other rank and file employees, the
company also employs 200 salesmen who decided to form their own exclusive union.
Meanwhile, the sales manager of the company had scheduled the transfer of several
salesmen from Manila to Cebu City as part of the rotation system. The transfer was
supposed to be made on November 2, 1988. On October 10, 1988, the sales manager
learned of the formation of the union. He later ordered the immediate transfer of 20
salesmen to Cebu City. Among those ordered transferred were the union president
and union secretary. Both refused to be transferred and as a result thereof the

company dismissed them for gross insubordination. The union held strike the
following day. Was the dismissal of these union officers legal? How about the strike?
Answer:
a) The dismissal of the union officers was not legal. It is true that the sales manager of
the Company had scheduled the transfer of several salesmen from Manila to Cebu
City as part of a rotation system of the Company. But it should be noted: The Sales
Manager ordered the immediate transfer of 20 salesmen when he learned of the
formation of the union. He no longer waited for the November 2, 1988 date he had
earlier scheduled for the transfer. It is noted that among those ordered transferred
were the Union President and the Union Treasurer, key officials of the union. The
immediate transfer ordered when the sales manager was informed of the formation of
the union was an unfair labor practice. It was an act of discrimination directed
against union officials, an act of union busting since the union has just been formed.
b) The strike was a legal strike because it was caused by an unfair labor practice of an
employer. In fact, what the employer did could be considered as constituting union
busting where the existence of the union is threatened. In which case, the Labor
Code provides (in Art. 263) that the 15-day cooling-of period shall not apply and the
union may take action immediately.
In any case, the union must take the necessary strike vote and submit the strike
vote results to the Department of Labor and Employment in accordance with law.
Question No. 13:
Club Paris is an entertainment entity that operates a night club along Roxas
Boulevard. The club provides food and drinks which are served by women who are
dressed like Playboy Bunnies. In the employment contract of each woman, the
following provisions appear:
Compensation -

All tips, commission and other forms of payment received

from customers minus 10%;

Hours of Work -

6 PM to 3 AM, daily, including Sundays and holidays;

Other conditions - Must remain single; marriage or pregnancy is valid cause

for dismissal.
Maria Bituin applied and was hired by the Club. She signed the employment
contract containing the aforesaid provisions. Six months later, she asked for
maternity leave with pay. Instead of granting her maternity leave, the management of
the Club fired her. Bituin sued the Club for illegal dismissal, backwages, overtime pay
and holiday pay. Decide.

Answer:
First of all, it should be stated: Bituin is an employee of Club Paris: According to
the Labor Code (in Art. 138) 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.
Bituin was illegally dismissed. Pregnancy is not a just cause for the termination of
employment. In fact, the Labor Code provides that it shall be unlawful for an employer
to discharge a woman employee on account of her pregnancy.
She is entitled to backwages. The compensation given to Bituin was all'tips,
commission and other forms of payment from customers minus 10%. These cannot
be considered compensation, at most, they could be considered as service charges
which Bituin can keep. She is, thus, entitled to be paid at least the minimum wage.
Since her working hours are from 6 PM to 3 AM, she works 9 hours a day. She is
entitled to overtime pay, and also from 10 PM, to a night shift differential.
She is also entitled to premium pay since she works 7 days a week, and thus,
works on her weekly rest day, and also on regular holidays. For the latter, she should
be paid at 200% of her basic rate.
Alternative Answer:
Bituin is not an employee because a Playboy Bunny is not under the effective
control and supervision of the owner of the club. There being no employee-employer
relationship, she is therefore not entitled to the rights and benefits of an employee.
Question No. 14:
(a) What, if any, is the maximum term of a collective bargaining agreement under R.A.
6715?
Company America and the union entered into a five (5) year collective bargaining
agreement (CBA). Three (3) years thereafter, the Company received a demand letter
from the union for renegotiation of the terms and conditions of the CBA on the
ground that the cost of living and prices of the essential commodities have gone up by
30% since the CBA was concluded.

1. Was the five-year term of the CBA legal?

2. Is the Company obligated to renegotiate the CBA as demanded by the union? If your
reply is in the affirmative, state the extent of the Companys obligations.
3. What are the remedies available to the Union in the event the Company refuses to
renegotiate the CBA? Does it include the right to strike?

Answer:
According to Republic Act No. 6715 (Article 253-A, of the Labor Code, as
amended), the maximum term of a collective bargaining agreement is 5 years, but
except as to the representation aspect, all other provisions of the agreement shall be
renegotiated not later than three (3) years after its execution.
(a) 1. The five year term of CBA is legal. This is provided for in Rep. Act No. 6715.
2. The company is obligated to renegotiate the CBA as demanded by the union. Rep. Act.
No. 6715 provides that all the provisions of a CBA shall be renegotiated not later than
three (3) years after its execution except the representation aspect of the CBA.
3. The refusal of the company to renegotiate not later than three (3) years after the
execution of the CBA is a refusal to bargain collectively and is, therefore, an unfair
labor practice. Thus, a case of unfair labor practice may be filed against the employer
with a Labor Arbiter.
The Union may go on an unfair labor practice strike considering that the
employer is guilty of an unfair labor practice if it refuses to renegotiate the CBA within
three (3) years after its execution.
Question No. 15:
Sapatilya Company, a manufacturer of wooden shoes started its operations on
January 1, 1989. As of June 15, 1989, the company had in its payroll a general
manager, an assistant general manager, three supervisors and forty rank and file
employees, all of whom started with the company on January 1, 1989. On July 1,
1989, the company also had ten casual employees who had been with the company
since February 16, 1989 and twelve contractual employees whose contracts of
employment with the company is for the period from August 1, 1989 to September 30,
1989,. Who among the aforementioned employees are under coverage of the Social
Security Law? When did their coverage under the said law take effect?
Answer:
All of the foregoing employees are covered by the Social Security Law, except the
ten (10) casual employees. The coverage of the Social Security System is very
comprehensive; it covers all employees not over sixty years of age except, among
others those whose employment is purely casual and not for the purpose of
occupation or business of the employer. But the casual employees in the question

may not even be casual under the Social Security Law because they have been with
the company since February 16, 1989. How could they be with the Company that
long if their employment is not for the purpose of occupation or business of the
employer?
The coverage of the Social Security Law takes effect on the day of the
employment of the employee.
Question No. 16:
What do you understand by the improved offer balloting?
Answer:
A strike may be an economic strike, namely, it is a strike caused by a deadlock at
the bargaining table. A deadlock may arise because the offer of the employer, e.g., its
offer of a 20% across-the-board increase in wages and salaries, was not accepted by
the Union who wanted a 50% increase.
After considering the matter, the employer may improve its offer, e.g. it offers a
35% increase.
This improved offer of the employer may be submitted to the union members on
or before the 30th day of the strike. The secret balloting that will determine whether a
majority of the union members accept the improved offer of the employer is the socalled 'improved offer balloting."
In case it is a lockout, and not a strike, what may be the subject matter of a
secret balloting, this lime among the members of the Board of Directors of the
employer, may be the reduced offer of the union, i.e., instead of asking for 50% across
the board increase in wages and salaries, it may reduce its demand to 25 % .
Question No. 17:
XYZ Company filed a petition for bankruptcy before a Regional Trial Court.
Among the list of creditors are the Philippine National Bank (PNB), various suppliers,
the Bureau of Internal Revenue (BIR) for payment of back taxes and the Union in
representation of the employees for unpaid wages, leaves and bonuses.
(a) With regards to the other creditors, particularly the PNB and BIR, what is the
standing of the employees claims?

(b) Would it make any difference if there is no judicial declaration of bankruptcy?

Answer:
In Republic v. Peralta, the claims of the 'Government, like the taxes that should be paid
to the BIR, should first be paid before the money claims of the workers. But if, the
question is now resolved under Rep. Act No. 6715, it is now provided that unpaid
wages and monetary claims (of workers) shall be paid in full before the claims of the
Government and the other creditors may be paid.
(a) If there is no judicial declaration of bankruptcy, the claim of the Union in
representation of the employees for unpaid wages, leaves and bonuses will be given
preference after there is a finding by a Labor Arbiter, hearing the case as a money
claim, that an employer is bankrupt.
1988 BAR EXAMINATION
Question No. 1:
(a) Which Articles of the 1987 Philippine Constitution contain provisions affecting
labor?
(b) Which laws of the Republic of the Philippines give substance to the rights of
workers?
Answer:
(a) The provisions on labor in the 1987 Constitution are the following:
1.

The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare. Art. 11, Sec. 18.
2. The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for purposes not contrary to law
shall not be abridged. Art. Ill, Sec. 8.
3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all. Art. XIII, Sec. 3.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right
to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in
policy and decision-making processes affecting their rights and benefits as may
be provided by law.
The State shall promote the principle of shared responsibility between workers

and employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns on investments, and to expansion and
growth. (Art. XIII, Sec. 3)
4. The State shall protect working woman 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.
In addition to the above provisions, there are also provisions in the Constitution
mandating the promotion of full employment (Art. II, Sec. 9 and Art. XII, Sec. 1) and
of social justice (Art. X, Sec. 10) which all promote the welfare of labor. Art. XV on the
Family also has a provision on the right of the family to a living wage and income.
(Sec. 2(3))
(b) The laws that give substance to the right of workers
are:
1. Labor Code of the Philippines
2. Laws that deal with minimum wages like Rep. Act. No. 6640 and the law that
deals with the 13th month pay
i. e., Pres. Decree No. 851
3. Social Security Laws like the Social Security Law, the Revised Government
Service Insurance Act and the Revised Medical Care Act also the law on PAGIBIG.
4. Laws that deal with government employees, like the Civil Service Decree, and the
provisions in the Administrative Code that give benefits to government employees
like maternity leave and other leave benefits.
Question No. 2:

On January 3, 1988, Sea Breeze Restaurant, Inc. (SBRI) hired Juan Reyes as a
probationary kitchen helper. He received and cleaned food ingredients delivered by
suppliers and stored them in freezers, cleaned kitchenware and utensils, and kept the
kitchen tidy. On July 1, 1988, he was sent to the companys doctor for a complete
medical examination. Thereafter, he continued working. On July 8, 1988, the doctor
submitted his report finding Juan to have minimal pulmonary tuberculosis (TB).
The manager consults you as the labor adviser of the company, and asks if

Juans employment can be terminated as his presence was a hazard to the health of
other workers and customers of the restaurant.
(a) Within the time frame of the problem, was there any change in Juans employment
status?
(b) When did the change occur?

(c) Why did it occur?

(d) Can the company still terminate Juan as a probationer?

(e) Under what conditions may Juan be terminated considering his health? Explain.
(f) Based on your analysis of the factual and legal situation, what course of action would
you advise the company to take?
Answer:
(a) There was a change in the employment status of Juan, from probationary to regular
employment.
(b) July 4,1988, after his six-month probationary period.
(c) The Labor Code (Art. 281) provides that an employee who is allowed to work after a
probationary period shall be considered a regular employee.
(d) The company can terminate Juan, but no longer as a probationary employee, but as a
regular employee since his six (6) month probationary period has expired.
(e) Juan may be terminated considering the fact that he has minimal pulmonary
tuberculosis. The Labor Code (Art. 284) provides that an employer may terminate the
services of an employee who has been found to be suffering from any disease and
whose continued employment is prohibited by law or is prejudicial to his health as
well his co-employees.
(f)
Based on my analysis outlined above, I will advise the Company to dismiss the
employee but pursuant to the Rules and Regulations implementing the Labor Code,
the Company should not terminate the employment of its employee on the ground of
his disease unless there is a certification by a competent public health authority that
the disease is of such nature or at such a stage that it cannot be cured within a
period of six (6) months even with proper medical treatment.
Question No. 3:
Julian Ramos started with Philippine Mines, Inc. as a laborer in 1965. He rose to
become a shift supervisor. Company rules and regulations governing employee
conduct within its mine compound and the residential area and barracks for workers
provide that the commission of a third offense in any year, even if the first two were
merely punished with warning, reprimand, or suspension, would result in dismissal.

By June 10, 1987, Julian had been warned once and reprimanded once. On July
15, 1987, Julian quarreled with a company guard in the mines residential area.
Investigated by the personnel manager, Julian admitted the offense. He was
dismissed on July 17, 1987 for violating company rules and regulations and gross
misconduct. He filed a case for illegal dismissal with backwages on July 22, 1987.
The parties stipulated on the above facts before the Labor Arbiter and submitted the
case for decision.
(a) You are the Labor Arbiter. Decide the case.
(b) If instead of quarreling with a guard, he was caught taking scrap lumber from the
premises of the mine and taking it home for fuel, would your answer be the same?
Explain

Answer:
(a) I will decide the case, ruling that the dismissal is illegal, if the quarrel which Julian
had with a company guard was just a small quarrel, say, just an exchange of words,
after which Julian and the company guard parted as friends. It would be too harsh; it
could be violation of the security of tenure of an employee, especially in this case, of
an employee who has been with the Company for over 20 years, to punish him with
dismissal just because he has committed a third offense within a year. It should also
be noted that the quarrel was in the miners residential area and not in the working
area of the miners. This third offense rules of the company, rules and regulations
should not be literally implemented. It is serious misconduct that is a just cause for
termination. Thus, if the quarrel was a serious one: it was Julian who provoked the
quarrel; he inflicted physical injuries on the security guard, then the quarrel could
be just cause for termination.
(b) I would rule that the act of Julian taking scrap lumber from the premises of the Mine
and taking it home for fuel will be a just cause for terminating him. It is noted that
Julian is a shift supervisor. He should be a model for other employee. Thus, I will
consider his act of taking home scrap lumber as serious misconduct.
Question No. 4:
This problem is related to problem V. Please bear the essential facts in mind as
they apply to both numbers.
Porfirio, Estela, Crisostomo, Marita, and Jose Ramirez were brothers and sisters. All
were stockholders, directors, and officers of the Pagaspas Marketing Co., Inc.
*(PMCI). PMCI sold office machines and supplies. It employed 20 sales persons, 10
delivery men, 20 service personnel, and 10 administrative employees. On December
10, 1987, 45 rank and file workers of the company formed and registered a labor
union. They sent a letter to Pagaspas demanding recognition as bargaining agent of
all workers, enclosing check off authorization forms of the union members, and a set
of economic demands. PMCI refused to recognize the union. The union president
went to you, as labor adviser of the federation which they were planning to affiliate

with.
(a) He wants your opinion on what the union may lawfully do to compel management to
come to the bargaining table at that point. What will your advice be?
(b) The union president tells you that they prefer to go on strike. He wants to know the
legal requirements that the union must comply with so the strike will be legal. What
advice will you give?
Answer:
(a) I will advise the union president to file a petition for certification so that after being
certified as the collective bargaining representative, the union could go back to PMCI
and ask it to bargain collectively with the Union. If PMCI persists in its refusal to
bargain collectively, I will advise the Union to file a case of unfair labor practice
against PMCI since a refusal to bargain collectively is a ULP.
(b) I will tell the Union president that these are the requisites that should be complied
with if a strike is to be legal:
(1) The union should file a notice of strike with the Bureau of Labor Relations
(assuming PMCI is in Metro Manila). A copy of the notice should also be served
upon PMCI. The Union should not actually go on strike until after 30 days (if the
strikes is because of a deadlock) or 15 days (if the strike is because of the ULP
committed by PMCI, i.e., its refusal to bargain collectively) after filing a notice of
strike.
Question No. 5:

After complying with the legal requirements for a lawful strike, the union filed a
notice of strike. Conciliation produced no agreement. The workers struck and
picketed the companys stores for 3 months with no results. During the strike, the
Ramirezes formed a new corporation, Maharlika Distributors, Inc. It leased a new
store site, bought stocks from PMCI, and hired the 15 workers who did not join the
strike and 6 new workers. Later without filing an application to close PMCI, it ceased
operations.
The union filed a case for unfair labor practice, demanded the reinstatement of all
workers with backwages and sued PMCI and the members of the Ramirez family as
individual respondents for damages. The Ramirezes moved to dismiss the case
against them as PMCI was a corporate entity, so their inclusion as respondents in
their personal capacities violated the theory of independent corporate personality
since there was no basis for piercing the corporate veil.
If you were Counsel for the union, what arguments would you use in your
Opposition to the Motion to Dismiss?
Answer:

The Ramirezes could be held personally liable because as members of the same
family, they were organizing another corporation to evade the liability that PMCI will
have by virtue of its commission of a ULP, i.e. refusing to bargain collectively with the
union which was the bargaining representatives of the employees. The act of
Ramirezes is evidence of bad faith on their part which in turn is a justification for
piercing the corporate veil to prevent injustice. (A.C. Ransom Case).
Question No. 6:
On May 2, 1988, General Finance Corp. (GFC) was placed under SEC
rehabilitation receivership as it was illiquid. Its 100 employees were kept on the
payroll until May 15, 1988, when 75 of them were placed on leave without pay by the
receiver. GFCs management met with its Board and stockholders to review a
rehabilitation plan so GFC could resume operations emphasizing collection efforts,
investors and creditors agreed to reschedule payments to them as GFC was solvent.
With these agreements, the management filed a rehabilitation plan with the receiver,
who endorsed it to the SEC. Under the plan, GFC would retain all its workers and
resume its operations as soon as it achieved adequate liquidity. Because of the plan,
the union asked that all its members be paid salaries during the time that they were
laid off and GFC was preparing to re-open, whether or not they were at work. The
company agree, endorsed the request to the receiver who recommended its payment to
the SEC. The SEC approved the request. On August 1, 1988, the receiver paid all
union members salaries from May 16, 1988 up to July 31, 1988 whether or not they
had worked during the period.
(a) Hearing of this, the non-union members consulted with you on whether they, being
also on lay-off, could ask for their salaries for the period. What is your opinion?
(b) Is the receiver the employer of GFCs workers in this case?
(c)
To collect the back salaries of the non-union members, on whom shall you
make demand?
(d) If your demand is declined, where will you file the case on behalf of the non-union
members?

Answer:
(a) The non-union members could ask for their salaries for the period that union
members were paid their salaries. The non-union members should not be
discriminated against because such will be an unfair labor practice; it is a form of
discrimination in regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in a labor organization,
which is an unfair labor practice according to the Labor Code (in Art. 248).
(b) The receiver could be considered the employer of GFCs workers. According to the
Labor Code (in Art. 212(c) an employer includes any person acting in the interest of
an employer, directly or indirectly. The receiver here is acting in the interest of GFC.
(c) I can file a case for the back salaries of the nonunion members either against GFC or
the receiver or better still, against both, because GFC or the receiver, could be

considered here as employer.

(d) I will file the case before the Labor Arbiter. The case here is a money claim of workers
based on the nonpayment or underpayment of wages which is one of the cases under
the original and exclusive jurisdiction of Labor Arbiters, pursuant to the Labor Code
(Art. 212).
Alternative Answer
I will file the case before the SEC which has jurisdiction over the case since it is
against a corporation under receivership.
Question No. 7:

The facts in this problem and in VIII are related. Please keep them in mind
when you analyze these two numbers.
Damian Damaso was one of 75 machinists of City Re- builders Machine Shop
(CRMS). He had worked as a lathe operator there since February 15, 1975. Lathe men
process metal to fine tolerances of thousandths of an inch. If tolerances are not met,
work is re-done at great cost. Defective work released to customers cause breakdown
on equipment in which they are used. Juan worked an average of 300 days per year at
a daily wage of 1*100.00 plus the COLA mandated by law. If there are no rejects on
what he processes, he got a15 bonus for each item done right. In the last 2.months,
10% of his output either needed re-work or were rejected. He claimed his lathe was
defective. However, the second shift man using the same machine produced work
meeting standards. Damian did not earn any bonuses, and received a written
warning. Feeling oppressed, he went to the Kamao ng Manggagawa, a registered labor
federation to ask for advice on the mechanics of organizing a union, and worker rights
and duties when they organize.
You are a labor organization adviser of Kamao.
(a) He asks how CRMS can be unionized.
(b) Outline to Damian the steps in forming a legitimate labor union.
Damian wants to know
(a)
(b)
(c)

If he can join the Kamao as a member;

What his obligations would be if he is accepted; and
If as a member, he can ask management to recognize Kamao as
bargaining of CRMS workers.
What will you tell Damian?

Answer:

I will tell Damian the following:

(a) CRMS can be unionized by the machinists organizing a union and having this union
registered with the Bureau of Labor Relations or affiliated with a registered labor
organization so that the union could be a legitimate labor organization which has
rights under the Labor Code (Art. 242) including the right to act as the representative
of its members for the purpose of collective bargaining.
(b) The steps in forming a legitimate labor union are:
1. Workers form a union by adopting a Constitution and by-laws and later on
electing the officers provided for in the Constitution.
2. The union which is organized should be registered or affiliated with a
registered union so that it will be legitimate labor organization, acquires a legal
personality and shall be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate of registration
based on the following requirements:
(a) Fifty pesos (1*50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the
workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of
all the employees in the bargaining unit where it seeks to operate.
(d) If the applicant union has been in existence for one or more years, copies of
its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification, and the list of the members who
participated in it.
(f) Damian can join Kamao, if he wishes to join the labor federation. There is no legal
obstacle against a worker directly joining a labor federation, if the labor federations
Constitution and By-Laws provide in such direct membership.
The obligations of Damian as a member of Kamao depend on what obligation the
Constitution and By-law's impose on its members which usually includes the
payment of union dues.
Kamao can be recognized as the bargaining agent of CRMS workers if Kamao is
designated or selected as such bargaining agent by the majority the bargaining unit
composed of the CRMS workers. But it is not Damian who can ask management to
recognize Kamao as bargaining agent; it should be Kamao.
Question No. 8:
A supervisor of the CRMS saw Damian leave Kamaos headquarters. Sensing that
Damian would organize a union, he reported what he saw to management. Damian
did not know he was seen. Management acted on the report. The next day, his
foreman found Damians work of unacceptable quality and below output standards.
He was given a second warning. The following day, work exceeding allowed tolerances
were again found. He was suspended for a week and thus, was unable to start

organizing a union. When he came back, his work was again found deficient and 50%
was rejected and condemned as waste. He was given a 15-day notice of termination
on August 1, 1988, to take effect on August 16, 1988 and paid for 15 days of
accumulated leave; banned from entering company premises effective immediately;
and given termination pay equal to 12 days wages per year of service, computed on
his daily wage for 13 years. He reported what had happened to Kamao. The matter
was referred to you again for assistance.
(a)
Damian wants to know if he was unlawfully terminated. Explain.
(b) Damian asks you if he had been given all his terminal entitlements.
Answer:
(a) Damian was unlawfully terminated. There could be just cause for his termination if
his work are of unacceptable quality and below output standards which could be
considered as gross and habitual neglect of duties which is a just cause for
termination. But the facts show that CRMS was intent on terminating Damian not
because of his poor performance but because he was organizing a union. Thus, the
act of CRMS is an unfair labor practice. The dismissal is illegal.
(b) If there is just cause for the termination of Damian, CRMS has no obligation to pay
him any terminal entitlement, like termination pay. But, he should be paid whatever
rights may have accrued, like, in this case, the pay to 15 days of accumulated leave.
If there is no just cause for the termination of Damian, he has the right to
reinstatement without loss of seniority rights and to his backwages computed from
the time his compensation was withheld from him up to the time of his reinstatement
(Art. 279).
Question No. 9:
Zapato Custom-made Shoes, Inc. (ZaCSI) made shoes to customer specification and
repaired them. As a service to customers, a shoe shine stand was operated on its
premises. There were 10 shoe shine boys at the stand. They owned their shoe shine
boxes with cleaning agent polish, brushes, and rags. Walk-in customers willing to wait
were led by the shoe shine boys to a seat at the stand where he waited while the boy
shined the shoes. After the shoes were cleaned, the boy asked the customer to pay to
the receptionist. Customers not willing to wait left the shoes with the stands
receptionist who gave a receipt with the price for the service and pick-up date and
time indicated. The boys were free to get shoes to be shined from the receptionist
when there were no waiting walk-ins. For each pair shined, the boys got markers corresponding to the price for their service. ZaCSIs staff did not interfere with, nor
supervise, how the boys went about their tasks. At days end, the markers held by
each boy were tallied and paid for. The boys signed a receipt to acknowledge full
payment for work done.

A labor federation organized ZaCSI and filed a petition for a consent election. The
boys, sympathizing with the workers, joined the union. At the pre-election conference,
the lawyer for ZaCSI moved to exclude the boys as voters.
(a) As Med-Arbiter handling the case, rule on the objection.
(b) Would your ruling be different if in this case, ZaCSI provided the boys with the shoe
shine boxes and their contents? Explain.
Answer:
(a) As Med-arbiter, I will rule that the shoe shine boys should be excluded as voters in
the consent election. The shoe shine boy are not employees of ZaCSI and thus could
not be considered as employees belonging to bargaining unit who will designate or
select a bargaining representative. They are not empoloyees of ZACSI because
according to the given facts, they are not under the control of ZaCSI which is an
essential element for the existence of employer-employee relationship. In the
statement of facts, it is said that ZaCSIs staff did not interfere with, nor supervise
how the boys went about their task.
(b) My ruling will not be different even if ZaCSI provided the boys with the shoe shine
boxes and their contents. ZaCSI, by this act, is not yet exercising control over them. It
is the existence or non-existence of control that is determinative of the existence of
employer-employee relationship.
Question No. 10:
Mr. Aristedes Epol was elected as President, Chief Executive Officer, and Board
Chairman of Transnational Insurance Corp. on May 31, 1988. At that time, he owned
51% of the companys voting stock. Under the By-Laws of the company he had a oneyear term of office from June 1, 1988 to June 1, 1989. On July 15, 1988, Mr. Ramos
agreed with the other stockholders to re-organize the composition of officers by
having the Board declare all positions of officers vacant, elect a new set of officers,
with himself as President and Chief Executive. Mr. Epol would be re-elected only to
the ceremonial post of Board Chairman, Mr. Epol got a Notice of Special Meeting of
the Board to elect a new set of corporate officers. He consults you as lawyer.
He asks if he is covered by the Labor Code and Constitutional guarantees of
security of tenure of workers. He theorizes that since he was elected for a fixed oneyear term, he enjoys tenure for the term.
(a) What is you view? Reasons.
Mr. Epol, despite your opinion, observes that the Constitutional issue was not
raised in those cases. He is adamant that you seek recourse to prevent his removal as
President and Chief Executive Officer before his term expires.
(b) Where will you file the case?

Answer:
(a) Mr. Epol is not covered by the Labor Code and Constitutional guarantees of security
of tenure or workers. He is not an employee. He is a corporate officer and his tenure
is subject to the Constitution and by-laws of the corporation and of the Corporation
Code.
I will file the case before the Securities and Exchange Commission which has
jurisdiction over the case. Whether or not Mr. Ramos and the other stockholders
legally re-organized out Mr. Epol is an intra-corporate dispute. Since it is an intracorporate dispute which is involved, it is the SEC which has jurisdiction.
Question No. 11:
Manila Laundry is a mechanized operation. It relies on washing machines,
driers, and mechanical ironing/pressing machines for sheets. In the period of
extensive brown-outs, its machines could not be used regularly. The Secretary of
Commerce and Industry proposed a Voluntary Loss Control Plan so that firms with
high electric power needs could schedule one shut-down day per week so that the
available energy could be better alloted to reduce the uncertainties of when brownouts would occur and interrupt work in process. Manila Laundry joined the plan and
set one shutdown day each week. Its union protested and demanded that they be
paid their basic wage for the shut-down day. The company declined and a case was
filed for non-payment of wages.
(a) The case is assigned to you as Labor Arbiter.
Decide.
(b) If the cause of the one day shut-down each week had been due to the very frequent
break-down of equipment would your decision be the same? Explain.
(c) Explain.

Answer:
If the contract of employment of the workers provides that the workers are to
be paid on a daily basis, and there is no provision in the contract that they are
guaranteed to work for a certain number of days per week, the fact that Manila
Laundry joined a plan that scheduled one shut-down day per week does not mean
that Manila Laundry is under legal obligation to pay the daily wage of the workers for
the one shut-down day that they do not work. There is no law that imposes this
obligation on an employer. The general rule is: no work, no pay. The Rules and
Regulations implementing the Labor Code provide that the time during which an

employer is inactive by reason of interruptions in his work beyond his control shall be
considered time worked either if the imminence of the resumption of work requires
the employees presence at the place of work or if the interval is too brief to be utilized
effectively and gainfully in the employees own interest. This Rule can not be applied
here because there is adequate notice about the one shut down day.
(a) My decision will be the same as in (a) above. The applicable rule will still be No work
No pay.
Question No. 12:
The Manila Shipyard Co., Inc., (MSC) repaired, modified, or built 16 wooden
and metal ships per year. Starting with 10 employees in 1935, its work force grew to
250 by 1940 and except for the period of World War 11 UP t0 1946, averaged that
number until 1985. Newly hired workers only had basic job stills as carpenters,
welders, metal workers, plumbers, or engine mechanics. To keep workers whose job
skills are developed over the years-loyal, and to avoid the costs of training new hires,
in 1950 MSC announced an unfunded retirement and pension plan for regular
workers. Copies of the plan were given to all regular employees when it was started,
and to those who became regular employees latter. The plan gave employees an
optional, illness, and mandatory retirement benefit. Benefits varies by age and service
length. The plan was non-contributory on the part of employees. Since 1955, MSC
paid pension plan benefits to qualified workers who applied for them.
In 1970, a union was organized in MSC. After a consent election with a
majority' of votes for the union, it was recognized. A collective bargaining agreement
was signed. The CBA gave a termination allowance to workers who are separated from
MSCs service, except those terminated for cause under MSCs rules and regulations.
The termination allowance benefit was granted if workers were terminated and was
graduated in amount based on length of service.
After the Labor Code came into effect in 1974, MSCs retirement and termination
compensation practices did not change.
The 1974 CBA and later ones, up to the 1981, were ratified by the workers and
registered with the Bureau of Labor Relations, Ministry of Labor and Employment.
Workers who retired after the first CBA went into effect got termination allowance
benefits in addition to pension plan benefits.
(a)

From the given facts, and applying the provisions of the Labor Code and
jurisprudence (Up to December 1987), what terminal benefits are available to MSC
workers now?
(b) What are wage supplements under the Labor Code?
(c) Are the pension plan and termination allowance benefits wage supplements? Explain
your answer.
(d) Can MSC workers claim the terminal benefits you enumerated above cumulatively?

Why?
Answer:
(a) The terminal benefits available to MSC workers are the pension plan benefits that
began to be paid in 1950 plus the termination allowance benefits granted under CBA.
(b) Wage supplements are those benefits given to employees by their employer, in
addition to the basic, cash wage, for work done or to be done, or for services rendered
or to be rendered.
(c) In a way, pension plan and termination allowance could be considered as wage
supplements. While they are not specifically given for work done or to be done or for
services rendered or to be rendered, since they are given only when a worker retires or
otherwise ends his service, pension plan and termination benefits could also be
consider as being paid for past work or service rendered.
(d) Yes because as to the pension plan, they should be paid pursuant to the Labor Code.
(Art. 100) which provides that nothing in this book shall be construed to eliminate or
in any way diminish supplements on other employees benefits being enjoyed at the
time of promulgation of this Code. As for the termination allowance benefits, they
should be paid because they are pursuant to a CBA.
Question No. 13:
Ngipin Toothpaste Co., Inc. manufactured and sold toothpaste in the market.' It
considered labor contracting as a cost reduction move. The plan was for the company
to continue manufacturing the toothpaste in its facilities up to the stage where it was
already packed in labelled plastic tubes and capped. These would then be taken to the
homes of women in a militant squatter area near the plant. The women would be given
the filled tubes and flat, die-cut cardboard pieces with indented folds printed with the
label. These flats cost P0.30 per piece. The women would form the boxes, apply paste
to one side so it would hold together as a box, and then put the filled tubes into it.
Management thought it was a good idea as it would give employment and help bring
the women into the money economy. The job was not hard to learn. The women would
do all the work at home in their free time.
The companys personnel staff took up the concept with the leader of the squatter
womens group who agreed it was a good idea. They showed her how the job was to be
done. She learned the work immediately. She said that the women would be willing to
accept the home work, but they would insist on being paid in accord with the law. She
also told the companys representatives that to help reduce their headaches in the
operation, she was willing to be their main contractor and she would sub-contract the
work to her neighbors. She also said that she wants that the housewives whom she
engages be allowed to use the labor of the children in their homes to increase the
number of the boxes that they can assemble, and the tubes that they can box.
Management was concerned about boxes that would be very dirty as these would

be spoils. They had no idea what sort of legal problems they should resolve, and
compensation arrangements they must make with the women or the lady volunteering
to be the main contractor, so they consulted you as a lawyer.
Management asks for your advice on the following matters:
(a) Would the women who are engaged to form the boxes and pack toothpaste tubes into
them be considered employees of the company? Reasons.
(b) Can the woman workers use their children regardless of age, to help them perform
their tasks? Reasons.
(c) May the company deduct spoilage costs ofT0.30 per very dirty box and the value of
tubes lost or not accounted for it is provided for in the contract for piece work?
Answer:
(a) The more specific name of the women here could be industrial homeworkers. In
here, the workers receives articles or materials to be processed or fabricated in or
about a house and thereafter, these articles and materials are returned after they
processed or fabricated. (Art. 153). As such industrial homeworkers, they are not
employee because their so-called employer does not have control over those they (the
industrial homeworkers) will do their work. But the Labor Code (Art. 154) provides
that regulations or orders should be issued to assure the minimum terms and
conditions of employment applicable to industrial homeworkers.
(b) If the child here works directly under the sole responsibility of his parent or
guardians, and their employment does not in any way interfere with their schooling,
they could work regardless of their young age.
(c) The Labor Code (in Art. 114) provides that no employer shall require his worker to
make deposits from which deductions shall be made for the reimbursement of loss or
damage to tools, materials or equipment supplied by the employer, except where the
employer is engaged in such trades, occupation or business where the practice of
making deduction or requiring deposits is a recognized one or is necessary or
desirable as determined by the Secretary of Labor in appropriate rules and
regulations. Thus, if the Secretary of Labor has adopted the necessary rules and
regulations mentioned above, the deduction for spoilage will be legal.
Question No. 14:
The facts in this problem will have a bearing on the solution of problem XV.
Please keep the essential facts in mind.
Pascual Pasacao was employed as a plumber by the Colossal Construction Corp.
in 1965. He was then single. When he was registered with the SSS, he designated his

father Juan and his mother Maria, who were over 60 and dependent on him for
support, as his beneficiaries. Colossal religiously remitted all employee and company
contributions required by the SSS law.
He married Damiana de Juan in 1967, and also declared her as beneficiary.
Even if he was married, and because he was making a lot of money on overtime, he
continued supporting his parents. A son, Pedrito, was born to the couple in 1968, and
a daughter, Marita, in 1970. He declared both to the SSS as his beneficiaries. In
1975, he was promoted as foreman to a project in Mountain Province. He stayed there
for 2 years and during that time, he had a relationship with Juliana Abay, by whom
he had a child, Pascualito in 1976. He signed Pascualito's birth certificate.
Unknown to him, Damiana had an affair while he was away and bore a
daughter, Ariadne, in 1977. She represented to his employer that Ariadne was her
child by Pascual and the personnel clerk of the company reported the child to the
SSS as another beneficiary. When Pascual returned to Manila, he found out about
Ariadne, and sent Damiana away from the conjugal home with the child. She left
and lived with Ariadne s natural father. However, Pascual did not file legal
separation proceedings against Damiana.
Pascual did not know about the registration of Ariadne as an SSS beneficiary. He
then brought Juliana to his home in Manila with their child, Pascualito. She was
mother to all his children.
In 1979 the then Ministry of Labor issued regulations on Occupation Health and
Safety requiring construction workers to bear safety helmets on an approved design,
while they worked in job sites. Colossal issued safety helmets imported from the
United States to all its workers, including foreman. These helmets were guaranteed to
resist impacts and absorb shocks for at least 5 years if constantly exposed to
sunlight. Under company rules all workers on job sites must wear their safety
helmets continuously. Pascual, being macho, would put on his helmet only when
executives of the company were on the job site, or when labor inspectors would check
compliance with labor rules. In 1987, Pascual was supervising the raising of a pallet
filled with PVC pipes to the 12th floor of the building they were working on.
A Colossal project engineer was around so Pascual had put on his 8-year old
safety helmet. However, Pascual did not close the chin strap to secure the helmet to
his head. A cable snapped and whiplashed. It missed the engineer by inches and
smashed into Pascual's helmet. The helmet cracked but the cable did riot touch
Pascual's head. However, because of the impact, Pascual lost his balance and fell to
the ground. The helmet flew off and he hit his head on the pavement. As a result of
the injuries that he sustained, he was paralyzed. While the attending physicians said
that there was hope for his eventual recovery if he could follow a program of therapy,

there was no certainty when that would be. Since Pascual was a valued employee, the
company wanted to do all it could for him and his family.
You are counsel of the company. The President of the firm, who has briefed you
on the situation in Pascuals family, asks you to help the personnel clerk file a claim
for Pascuals benefits so it could augment the disability pay that the company was
paying him. In filling out the form, you find a blank for beneficiaries.
(a) Whom should you write down as beneficiaries? Why?
(b) To what benefits would Pascual be entitled? Explain your answer.
(c) Under what conditions may the SSS suspend the grant of these benefits to Pascual?
Answer:
(a) The disability suffered by Pascual is work-connected. Thus the applicable law are the
provisions in the Labor Code on employees compensation and the State Insurance
Fund. (Arts. 166-208) In one of these provisions (Art. 167(8)) beneficiaries means
the dependent spouse until he/she remarries and dependent children, (legitimate,
legitimated, or legally adopted or acknowledged child) who are primary beneficiaries.
In their absence, the dependent parents and subject to the restriction imposed on
dependent children, the illegitimate children and legitimate descendants, who are
secondary beneficiaries.
Applying the above definition, Damiana, the legal spouse of Pascual could have
been a primary beneficiary but since she is not living with Pascual, Damiana is not a
dependent spouse.
Pedrito and Marita are primary beneficiary as dependent children if they are not
yet over 21 years of age but they are unmarried and not gainfully employed.
Pascualito, the illegitimate son, is a secondary beneficiary. Also secondary
beneficiaries are the dependent parents
Juan and Maria.
(b) He would be entitled to permanent total disability benefit in the form of employees
compensation. His paralysis of at least two limbs is considered permanent total
disability (Art. 192(3)), and it is employees compensation that will be given because
the disability is work-connected. It arose out of and in the course of employment. But
he could not be entitled to this benefit if he has been notoriously neglected. There
could be basis for notorious negligence. As a foreman he should be a model to his coemployee. He should follow very well about wearing a helmet while at work.
(c) The grant of permanent total disability may be suspended if Pascual is again
gainfully employed, or recovers from his permanent total disability or fails to present

himself for examination at least once a year upon notice by the SSS.
Question No. 15:
(a) If Pascual were covered by GSIS, who would be his dependents?
(b) Who are Pascuals (a) primary, and (b) secondary beneficiaries under PD No. 1146,
the Revised GSIS Act of 1977?
Answer:
(a) His dependent would be the legitimate children (Pedrito and Marita) and the
illegitimate child (Pascualito) who are not yet 21 years of age, if they are
unmarried, or not gainfully employed, and the legitimate parents (Juan and
Maria) who are wholly dependent upon Pascual for support.
Damiana, the legal spouse is not a dependent because she is not living with
the Pascual and could therefore be considered as not dependent for support
on Pascual
(b) The primary and secondary beneficiaries listed for Pascual under SSS, will
be the same beneficiaries of Pascual, if he is covered by GSIS, except that
Pascualito, the illegitimate child, will be a primary beneficiary and not just
secondary beneficiary.

1987 BAR EXAMINATION

Question No. 1:
Rosa Cartagena, a 14-year-old orphan, was hired as a domestic helper by Elvira
Pacheco, a friend of Rosas aunt, who could no longer support her. The aunt and
Elvira agreed that Rosa would serve the Pachecos for three years, with the clear
understanding that the Pachecos would see her through high school.
The Pachecos never sent Rosa to high school. After two years of unfulfilled
promises for her education, Rosa went back to her aunt, who confronted Elvira about
her breach of their agreement. The aunt demanded that Rosa be paid the cash
equivalent of the three years of high school education that Rosa was denied. Elvira
contended that Rosa quit before the end of the fixed employment period and,
therefore, is not entitled to anything. The aunt filed a complaint against the Pachecos.
If you were the labor arbiter, how would you decide the case?

Answer:

As the Labor Arbiter, assuming Rosas aunt as her guardian, I will hold that
Rosas quitting was justifiable and that the Pachecos should pay the cash equivalent
of at least two (2) years of high school education.
Rosas quitting is justifiable. The Labor Code (in Art. 142) provides that the
original contract of domestic service shall not last for more than two (2) years. The
original contract of Rosa with the Pachecos was fixed for three (3) years. Thus, this
contract should be considered as only for two (2) years. Rosa, therefore, may not be
considered as terminating the contract before the expiration of its term. She left after
two (2) years.
She also left for a justifiable reason. Her employers were not complying with what
they agreed they shall do under the contract, namely, to see her through high school.
Under the Labor Code (in Art. 146), it is the legal obligation of the employer to
give to his househelper who is under the age of eighteen (18) years (Rosa is fourteen
(14) years old) an opportunity for at least elementary education. Further, the Code (in
the same Art.) provides that the cost of such education shall be part of the
househelpers compensation, unless there is a stipulation to the contrary.
But what Rosa here is claiming is the cost of high school and not just elementary
education. There is no law prohibiting the employer from obligating himself to give
more than just elementary education, which the employer did in the case. Thus, the
employer should comply with what he agreed to do under the contract he entered into.
Question No. 2:
The Overseas Construction Company, a domestic corporation with a recruitment
license, hired two thousand Filipino workers and assigned them to its construction
project in Kuwait. They were given free housing, work clothing and food.
The master employment contract approved for them by the Philippine Overseas
Employment Administration (POEA) stipulated that they were to work at the overseas
jobsite for twelve (12) hours per day and that they were accordingly to be paid wages
higher than the POEA-approved schedule of pay rates. The individual employment
contracts also contained the same stipulations. And during the predeparture briefings
at the companys Mandaluyong plant site, the workers were told about these
stipulations. By actual computation, the wages paid at the overseas jobsite were at
least twenty-five percent (25%) more than the POEA-approved rates. Moreover, the
record shows that the workers did not always render the full twelve (12) hours of work
stipulated in the employment contract.
Back home after completing their one-year overseas assignment, the workers
engaged your services as their lawyer to prosecute a complaint with the POEA for
recovery of unpaid overtime work. What would your advice be?

Answer:
Before I will give advise, I will first find the answer to this basic question: Were
the workers actually paid for their overtime work when they received wages that were
at least twenty-five percent (25%) more than the POEA-approved rates?
The answer is No if the 25% added to the POEA- approved rate (which we assume
is a rate for a day of eight (8) hours work) is only 25% of such POEA-approved daily
wage rate. This is because what should be paid to the workers for the four (4) hours
that they work overtime in their twelve (12) hour day (a 12-hour work day is 4 hours
in excess of an 8-hour work day) should be 50% more of such POEA- approved rate.
The four (4) hours of work is 50% of the normal weight (8) hours of work a day plus
25% of such additional 50% for purposes of paying the overtime rate.
There is also the night differential pay to take into account because a 12-hour
shift will include working hours from 10:00 p.m. to 6:00 a.m. If the higher-than-the
POEA- approved rate is computed as indicated above, I will advise the workers not to
sue for they have already been paid for their overtime work.
If the higher-than-the-POEA-approved rates is not, however, computed as
indicated above, the fact that the POEA-approved the contracts and that the
workers agreed to the rates they receive will not be a bar to a complaint for unpaid
overtime pay, the right to which cannot be waived.
Another Suggested Answer:
The rate approved by the POEA has built-in overtime pay. Thus, there is no
basis for the claim for overtime pay.
Question No. 3:
Lydia Cancio was on her sixth and last month as a probationary employee of
the Banco Seguridad when she was confirmed to be pregnant. Being unmarried
and wanting to become a regular employee, she initially kept her pregnancy a secret
from her employer. She was subsequently appointed a regular employee on the first
month of her pregnancy.
Because of morning sickness, however, Lydia frequently absented herself from
work. After two more months, the personnel manager told her that her habitual
absences had become so intolerable that she would have to go. Replying that her
absences were caused by her pregnancy, Lydia asked for a leave of absence, which
was denied. She nevertheless went on leave and was dismissed for going on leave
without prior permission.
Lydia filed a complaint for illegal dismissal, praying that she be reinstated. The

Bank contested the complaint on the ground that she was not dismissed because of
her pregnancy but because of her absence without leave.
Decide.
Answer:
The dismissal is illegal. The Labor Code (in Art. 137(2) very clearly provides: It
shall be unlawful for any employer to discharge (a) woman (employee) on account of
her pregnancy, or while on leave or in confinement due to her pregnancy.
Of course, in the case, the woman employee asked for leave of absence because
of her pregnancy but this request was denied and she went on leave anyway.
The employer should have granted her request for leave, the request being made
because of her pregnancy.
Dismissal after she went on leave without prior permission is too harsh a
punishment for the pregnant woman who was absent without leave.
Question No. 4:
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.
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.
(a) Should the law firm schedule a restday for the employees, including you?
(b) Is the law firm required to grant to its employees holiday pay and service incentive
leave?
Explain fully.
Answer:
(a) There is no need under the Labor Code to schedule a restday. 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 days. The
Saturdays and Sundays when the employees are not required to work more than

satisfy the required weekly rest day.

(b) The law firm has only nine (9) employees including its three (3) associate attorneys.
The six partners are not employees.
Thus, it is a service establishment employing less than ten (10) workers. The
Labor Code (in Art. 94 for holiday pay and Art. 95 for service incentive leaves) exempts
service establishments regularly employing less than ten (10) workers from the
application of its provisions on holiday pay and on service incentive leaves.
Question No. 5:
All the 30 employees of Aliw Trading, Inc., are monthly salaried, and have been
such since L974, when the Labor Code of the Philippines took effect. Whenever they
would work overtime, the accounting department would compute the daily equivalent
of the employees monthly salary by using 301 days as divisor. However, for
deductions due to absences not otherwise covered by the 15-day vacation leave policy
of the company, the divisor used is 313 days. The workweek is Monday to Saturday.
In 1985, the employees filed a complaint for nonpayment of holiday pay and
service incentive leave after years of unsuccessfully trying to convince Aliw Trading
management to grant holiday pay and the five-day service incentive leave. In the past,
whenever a demand for payment of holiday pay was presented by the employees,
management would invariably deny liability but on the other hand would give a
nominal salary adjustment.
(a) If you were counsel for Aliw Trading, what defenses would you raise?
(b) If you were the labor arbiter hearing the case, how would you resolve the issues?
Answer:
(a) As counsel for Aliw Trading, I will contend: As regards holiday pay, when the
Company uses 313 as the divisor in computing the daily equivalent of an employees
monthly salary, (in computing deductions due to absences not covered by its 15-day
vacation leave policy) the Company thereby considers that only the 52 weekly rest
days (which are Sundays) are the only days not considered as paid; and that the
regular holidays are therefore considered as paid even if they are unworked days. So,
there is no need to again pay holiday pay.
As to the 5-day service incentive leave, I will contend that the Labor Code (in Art.
95(b) provides that the provision on service incentive leaves shall not apply to those
already enjoying the benefit, namely, those enjoying vacation leaves with pay at leave
five (5) days.
The Company here has a 15-day vacation policy and should, therefore, be already
deemed as giving the 5-day service incentive leave.

(b) As the Labor Arbiter, I will rule that the Company is liable to pay holiday pay. We will
base this ruling on the ground that the Company uses 301 as a divisor in computing
the daily equivalent of an employee's monthly salary (in computing overtime pay).
Thus, the Company considers both the 52 weekly rest days and 12 holidays as unpaid
days. Thus, the Company should pay holiday pay.
As for the service incentive leave, I will rule that with its 15-day vacation leave
policy, the Company, pursuant to the Labor Code, (in Art. 94(b) is already giving the
5-day service incentive leave to its employees.
Question No. 6:
Jun de Gracia, a second year law student and personnel assistant in the Peoples
Bank and Trust Company, never liked his superior, the personnel manager, who was
always putting him down. When his patience ran out, he walked up to his boss
during office hours and slugged him to unconsciousness. He was dismissed. The
personnel manager filed a complaint for damages against de Gracia with the Regional
Trial Court of Quezon City. In retaliation, de Gracia filed a complaint for illegal
dismissal with the Department of Labor and Employment.
The counsel of de Gracia then filed a motion to dismiss the damage suit, alleging
that the labor arbiter before whom the illegal dismissal case is pending has exclusive
jurisdiction over the case for damages.
Decide.
Answer:
The Motion to Dismiss the complaint for damages against De Gracia filed with
the Regional Trial Court should not be granted. The fact that there is a complaint for
illegal dismissal with a Labor Arbiter filed by De Gracia is not ground for dismissal of
the damage suit filed with the Regional Trial Court.
The two cases can be considered distinct from each other.
The case before the Regional Trial Court is based on the slugging by De Gracia of
his superior, the personnel manager who filed the damage suit. This, therefore, is a
case based on the Civil Code, not on the Labor Code, and is thus, within the
jurisdiction of the regular courts.
On the other hand, the complaint of illegal dismissal in within the jurisdiction of
the Labor Arbiter. The Labor Arbiter could have included in the exercise of his
jurisdiction also the damages arising from the manner in which the employer
dismissed an employee. But it may be noted: The damage suit here arises from what

the employee did to the personnel manager, not what the employer did to the employee. This is an added reason why the damage suit filed by the personnel manager
against De Gracia is properly within the jurisdiction of the Regional Trial Court.
Another Suggested Answer:
The case arose from employer-employee relations and is therefore under the
original and exclusive jurisdiction of the Labor Arbiter.
Another Suggested Answer:
To avoid multiplicity of suits, the case which arose from employer-employee
relations should be heard by the Labor Arbiter who has jurisdiction of the case.
Question No. 7:
In accordance with the provisions of the collective bargaining agreement, the
Republic Labor Union (RLU) submitted to the Zenith Drug Company a union board
resolution authorizing the deduction from the wage of each of the unions two
thousand members a special assessment in the sum of twenty pesos to help pay for
the expenses of the RLU president during his observation tour of New Zealand

When the company honored the authorization and implemented the deductions,
more than a thousand of the employees complained and sought your assistance.
What legal advice would you give and what action would you take on behalf of the
employees?
Answer:
I will advise the complaining employees that they should file a complaint against
the Company for making the illegal deductions of P20.00 from their wages.
According to the Labor Code (in Art. 113) of the legal deductions that an
employer may make from the wages of his employees are: (a) In cases where the
worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off
has been recognized by the employer or authorized in writing by the individual
worker concerned; and (c) In cases where the employer is authorized by law or
regulations issued by the Secretary of Labor.
The deductions made by the employer are not for union dues.

Another Suggested Answer:

I will advise the complaining employees that they should file a complaint against
the members of the union board of directors for violating the rights and conditions of
membership in a labor organization by levying a special assessment without its being
authorized by a written resolution of majority of all union members at a general
membership meeting called for the purpose. (Art. 241 (2).
Question No. 8:
After years of harmonious employer-employee relations, the Moonbeam Textile Mfg.
Co. had its first union, the mili tant Kapisanan Ng Mga Unyonista (KMU). A
certification election was a certainty. The aggressiveness of the solicitation drive by
the KMU was to be matched by the intensity of the companys neutralization efforts.
The company developed a multipronged neutralization plan. This called for
department managers and supervisors to talk to their subordinates, individually and
in groups, telling them about the companys employee-oriented policies and about
the burdens of membership in a militant union. There would be posters on the plant
walls and on prominent places on the plant premises warning of the dangers of communism and accusing KMU of being a communist front. Other posters would contain
such teasers as GO KMU AND LOSE YOUR FREEDOM, MOONBEAM FILLS YOUR
POCKETS, KMU EMPTIES IT, A VOTE FOR KMU IS A VOTE FOR
UNEMPLOYMENT. After two weeks of this kind of campaign, the company would
announce the payment of the traditional annual across-the-board wage increases
but advanced by two months, while the year-end bonus would be increased by 50%
over last years.
The company sought your advice about its neutralization plan. As company
lawyer, what advice will you give about the legality of the neutralization plan. Explain
briefly.
Answer:
I will advise the Company mat its neutralization plan and its implementation by
the Company is an unfair labor practice. The Company is there interfering with,
restraining or coercing its employees in the exercise of their right to self-organization,
which is an unfair labor practice under the Labor Code (in its Art. 248(a).
The right to self-organization does not only mean the right to form, join or assist
labor organizations. It also includes the right of employees to choose the labor
organization which is to represent them for purposes of collective bargaining and for
mutual aid and protection.
In its neutralization plan, especially in its economic inducements, e.g. advance
payment of wage increases and increased bonus, the Company is interfering with,

restraining or coercing its employees of their right to choose in a certification election

who shall be the collective bargaining representative of its employees. This is clearly
an unfair labor practice.
Question No. 9:
The Bisig Ng Mga Manggagawa (BMM) and the Visayan Oil Mfg. Co. are parties to
a collective bargaining agreement containing a union security provision which
stipulates that all employees within the bargaining unit shall join the UNION within
30 days from the signing of the agreement. On the date the agreement was signed,
and in fact even before the signing, the minority group of employees in the bargaining
unit were members of the Kapisanan Ng Mga Unyonista (KMU).
When the KMU members failed to join the BMM within the stipulated period of
thirty days, BMM demanded the termination of their employment. The company
acceded to the demand and dismissed the KMU members. The KMU filed a complaint
for unfair labor practice, alleging that the dismissals and the application of the
union-security clause were contrary to law.
Decide.
Answer:
When the Company acceded to the demand of BMM and dismissed the KMU
members, an unfair labor practice was committed.

A union security provision which stipulates that all employees within the bargaining
unit shall join the UNION (meaning BMM which is the collective bargaining
representative) within 30 days from the signing of the agreement is not violation of
the Labor Code. It is authorized by the Code (in Art. 248(e) which provides that
nothing in this Code or any other law shall stop the parties (to a CBA) from requiring
membership in a recognized collective bargaining agent as a condition for
employment. This is known as a union security clause.
This provision, however, also further provides that a union security clause
cannot be applied to those employees who are already members of another union at
the time of the signing of the collective bargaining agreement.
The union security clause cannot, therefore, be applied to KMU members who
were members of KMU on the date the CBA was signed, and in fact, even before the
signing.
Question No. 10:

Ten sessions after the start of contract negotiations, the panel representatives of
Island Bank & Trust Company and the Island Bank Employees Association (IBEA)
tacitly recognized a deadlock had been reached. That was when the TBEA members
started their daily noise barrage.
At a signal, usually a whistle blown by a union member in every floor of the 15storey offices of the bank, cacophony of sounds could be heard reverberating
throughout the building as union members rang small bells they brought with them,
hit metal pans and waste cans, or simply clapped their hands and shouted. This
exercise would last about five minutes. Depositors at the banks lobby would get
annoyed and leave; visitors at the other offices expressed irritation and complained
to management.
The bank wrote the IBEA that the noise barrage violated the current collective
bargaining agreements waiver of and prohibition against picketing and interruptions
in operations during the term of the agreement. The IBEA replied that picketing is a
protected concerted activity and that the agreement has expired since negotiations
for a renewal had been in progress.
The bank consulted you as its retained counsel. What would your legal advice be
and what legal action, if any, would you recommend?
Answer:
As retained counsel, I will advise the bank to file a ULP charge against IBEA.
The IBEA, by its noise barrage is committing interruption in operations
during the term of the CBA.
The CBA which prohibits such interruptions is still in force and in effect in spite
of the fact that it has expired. According to the Labor Code (in Art. 253) it shall be
the duty of both parties to keep the status quo and to continue in full force and effect
the terms and conditions of the existing agreement during the 60-day period prior to
the expiration date of the CBA during which the parties could negotiate a new CBA
and/or until a new CBA is reached by the parties. Thus, a CBA is violated when the
IBEA undertakes its noise barrage which are interruptions of operations
prohibited by the CBA. Such violation is a ULP.
IBEA is not engaged in picketing in its noice barrage? Picketing means giving
publicity to the existence of, or the facts involved in a labor dispute, whether by
advertising, speaking, patrolling or by any method not involving fraud or violation. A
noise barrage, therefore, cannot be considered picketing as a protected concerted
activity.
Question No. 11:

Southseas Garments Corporation suspended its operations and laid off its 500
workers in December 1, 1986, after it received word that the contracts being
negotiated abroad did not materialize and the current work being done had been
finished.
On May 2, 1987, the company resumed operations. Most of the workers reported
for work after having been given notice to report. Clara Libunao, a sewing machine
operator, did not receive any notice but learned of the resumption of work from a
fellow worker. On May 16, 1987, she notified the company that she would like to
resume work. The company refused to accept her back, presumably because she was
already 60 years old.
Clara filed a complaint for illegal dismissal.
Decide.
Answer:
Clara was illegally dismissed. In the case, the suspension of operations of the
Corporation was for a period not exceeding six (6) months. It was actually only for five
(5) months. Thus, in accordance with the Labor Code (in Art. 286), there was no
termination of employment. In such a case, the employer shall reinstate to his former
position without loss of seniority rights any employee who indicates his desire to
resume his work not later than one (1) month from the resumption of operations of
his employer. Clara notifed the Corporation that she would like to resume work on
May 16 or within one (1) month from the resumption of the operations of the
Corporation on May 2.
Another Suggested Answer:
Clara cannot complain that she has been illegally dismissed, if the refusal of the
company to accept her back is because she was already 60 years old.
Implementing the Labor Code, the Rule? and Regulation provides that in the absence
of a CBA or other applicable agreement concerning terms and conditions of employment which provides for a retirement age at an older age, an employee may be retired
upon reaching the age of sixty (60) years.
Thus, the company may consider her retired after she- became 60 years old.
Therefore, there is no illegal dismissal.
Question No. 12:
Rolando Cordero, messenger of Fast Tract Company for the past ten years, was
investigated administratively for taking a snack in Cubao before delivering an

important document to a customer. The customer at first complained about the

delay but later forgave Cordero in a handwritten note to him by the customer's
manager.
Claiming that Fast Track, known nation-wide for its rapid delivery services, was
placed in an embarrassing position by Corderos conduct, the company insisted on
his dismissal in disregard of counsels advice. The personnel manager, however,
succeeded in getting Cordero to sign a release and quitclaim and to accept
separation pay.
Cordero filed a complaint for unfair labor practice against Fast Track. His
convincing evidence was a revelation: it showed that everything that he was blamed
for was a pretext to dismiss him because it was he who started the organization of
the Fast Track Employees Union among the hundred or so messengers of the
company. The company argued that the release and quitclaim as well as acceptance
of separation pay barred Corderos cause of action.
Decide.
Answer:
The Company is guilty of unfair labor practice if it is a fact that Cordero was
dismissed, not because at one time, he first took a snack and was therefore delayed
in delivering a document to a customer. It is noted: the customer forgave him and
told the Company about his being forgiven.
Thus, it is, therefore, evident that the above incident was only a pretext, that
indeed the real reason was because Cordero started to organize a union among his
fellow messengers of the Company.
The dismissal is clearly a ULP. According to the Labor Code (in Art. 248(a) it is
unlawful for an employer to discriminate in regard to wages, hours or work and other
terms and conditions of employment in order to encourage or discourage
membership in any labor organizations.
The fact that Cordero signed a release and quitclaim and accepted separation
pay does not bar Corderos cause of action. Employees sometimes sign releases and
quitclaim and accept separation pay. They urgently need the money that the
separation pay represents their daily expenses. They should not, therefore, be
considered as waiving their right to complain against unfair labor practice committed
by their employers.
Question No. 13:

Buster Sison, a 55-year old employee of Telecom Facilities, Inc., wanted to retire.
He talked to the personnel manager, who agreed. The necessary papers were drawn
up, and Sison was paid retirement benefits equivalent to 75% of his last basic
monthly salary for every year of service. Sison enjoyed post-retirement life for more
than three years, until his retirement benefits were exhausted. Expecting to get more
from Telecom, Sison filed a complaint for recovery of separation pay under the Labor
Code.
Decide.
Answer:
Sison is not entitled to separation pay under the Labor Code. The Labor Code (in
Arts. 283 ad 284) provides the instances when the employer is to pay separation pay,
namely, when he terminates the employment of an employee because of the
installation of labor saving devices, redundancy, retrenchment to prevent losses or the
closing or cessation of operation not due to serious business losses, or when an
employee has been found to be suffering from any disease and his continued
employment is prohibited by law or is prejudicial to his health as well as the health of
his co-employees.
Sisons termination was not brought by any of the above authorized causes. He
voluntarily retired, and he accepted what was paid him by the Company which paid
retirement benefits not because it was under legal obligation to do so, there being no
CBA or any agreement providing for such payment.
Because of all the above, he is not entitled to separation pay.
If he waited so that he retired at age 60, he could have taken advantage of a
provision in the Rules and Regulations for the payment of termination pay equivalent
to at least one-half month salary for every year of service, but this is even less than
75% he received when he retired at age 55.
Question No. 14:
Josimar Bignay was hired on August 28, 1986, as a six- month probationary
secretary of Marila Trading Company. Five months after, the personnel officer
notified Josimar that her performance fell below standards and would have to be
released upon the expiration of the probationary period of her employment. She
promised to do better, which she confirmed in writing, asking that her probationary
status be extended by three more months. The company acceded.
At the end of the three-month extended probationary employment, Josimar
claimed that she had attained regular status after six months of employment
pursuant to the Labor Code. What would you advise the company if it consulted you?

Answer:
I will give the advice that Josimar has not become a regular employee. After her
probationary period, such employment could be terminated because her
performances fell below the standards of the Company.
It is true that the Labor Code (in Art. 281) provides that probationary
employment shall not exceed six months unless it is covered by an apprenticeship
agreement stipulating a longer period, or according to decisional law, on the basis of
the agreement of the employer and the employee.
It is further provided in the Labor Code (in the above cited Art.) that an employee
who is allowed to work after a probationary period shall be considered a regular
employee.
In the case, at the end of the six (6) months period, the probation employment of
Josimar could have been terminated because his performances fell below standards.
But, acting favorably on her promise in writing that she will do better, her
probationary period was extended by the Company for three more months. The
Company should not be made to suffer for its generous act. When Josimar failed to
live up to her promise that she will do better, the act of the Company terminating her
employment because her performance was still below standard is valid.
Question No. 15:
Ricardo Diestro is an accounting clerk in Aqua Sport Trading Company, receiving
three thousand pesos a month as basic salary. In addition, he gets a free lunch
valued at thirty pesos per day and free uniforms. Diestro frequently worked overtime,
for which the payroll clerk computed for him his extra overtime pay on the basis of
his basic monthly salary.
When Diestro failed to receive a pay increase, he started questioning the basis for
computing his overtime pay. He argued that the cost of the free lunch and the value of
his t*shirts should be included. His claims having been denied, he filed a complaint
with the Regional Office of the Department of Labor.
Decide.
Answer:
Diestro is not entitled to have his overtime pay computed not only on the basis of
his basic salary but also on the basis of the cost of the free lunch and the value of the
T-shirts given by the Company added to the basic salary.

The Labor Code (in Art. 90) provides that for purposes of computing overtime and
other additional remuneration, the regular wage of an employee shall include the
cash wage only, without deduction on account of facilities provided by the employer.
The value of the free lunch and the t-shirts is not cash wages.
Question No. 16:
Philippine Daily News prints and publishes The Daily News, copies of which are
circulated through dealers in Metro Manila. These dealers, who are single proprietors
exclusively distributing The Daily News but handling competing dailies for a fixed
amount per copy sold, engage the services of newsboys. These newboys are given a
specified number of copies to sell every day within a six hour period in the morning.
After this period, the newsboys are free to sell other newspapers or go to school or
engage in other activities. Each newsboy is paid fifty centavos for every copy sold.
As counsel for Philippine Daily News, would you advise your client to report the
dealers and the newsboys as its employees pursuant to the Social Security Act?
Answer:
The System should not have denied the application for sickness benefits under
the Social Security Act.
The Act (in Sec. 14(b) provides that sickness benefits shall begin to be paid only
after all sick leaves of absence with full pay to the credit of the employee shall have
been exhausted.
In the case, such sick leaves with full pay to the credit of the employee were
exhausted when the 10-day company sick leaves were exhausted.
The remaining five days of the 15-day sick leave under the CBA were to be
accumulated and convertible into cash when employment is terminated for any cause
although the accumulated sick leaves maybe used upon prior application with and
approval of the Company. These conditions means that the 5-day sick leaves cannot
be automatically used. Thus, it could not be first exhausted before the payment of
sickness benefits under the Social Security Act.
Question No. 18:
Mona Lim, married employee of Realty Corporation, is paid a basic salary and in
addition, a monthly living allowance separate from the statutory cost of living
allowance. She receives quarterly bonuses, which are purely discretionary grants by
the management; and, as part of company policy, gets reimbursements for all
transportation expenses she incurs in connection with her sales duties. Her daily
meal allowance is a fixed amount regardless of place of assignment.

The company has been reporting Monas basic monthly salary as her
compensation, which is less than one thousand pesos. When the SSS learned that
Mona was receiving other forms of income, it assessed the company for everything
paid or granted to the employee as part of her compensation.
If you were consulted by the company, what advice would you give your client?
Answer:
We will advise Realty Corporation that pursuant to Exec. Order No. 102,
compensation is now defined as including all actual remuneration for employment,
including the mandated cost of living allowance, as well as the cash value of any
remuneration paid in any medium other than cash, except that part of remuneration
in excess of three thousand pesos received during the month.
Given the above very comprehensive definition of compensation, the SSS
correctly assessed the company for everything it paid to the employee as part of
compensation, including not only the basic salary, but also the monthly living
allowance, the statutory cost of living allowance, quarterly bonuses and daily meal
allowance which is a fixed amount regardless of place of assignment.
But the reimbursement for all transportation expenses incurred by the employee
in connection with her sales duties is not part of compensation.
Question No. 19:
Leonardo Marasigan started working for Madrid Development Corporation in
August 1984 when it was being organized and had no fixed offices. The company did
not ask for his Social Security registration number, nor did it report him to the SSS.
He died a year later, and his widow filed a claim for death benefits with the Social
Security System. While following up the claim, the widow discovered that it was only
in November 1985 when he was reported by his employer to the Social Security
System and the premiums covering the entire period from August 1984 were
remitted.
Leonardos widow came to you for assistance. What would your legal advice be?
Answer:
I will advise Leonardos widow that as the primary beneficiary, she is entitled to
receive the death benefits from the Social Security System.
Leonardo may have died in August 1985, and it was only in November 1985 when
he was reported by his employer to the System. But premiums covering the entire
period from August 1984 when remitted. Besides, according to the Social Security Act

(in Sec. 24), the fact that the SSS has not previously received a report about an
employee from his employer or a contribution paid in his name by his employer, is not
fatal to his right to benefits.
Leonardo had 12 monthly contributions in the 12 months that he was covered by
the System before he died. He, therefore, has not paid at least thirty six (36) monthly
contributions prior to the semester of death which under the Social Security Act (Sec.
B) would have entitled the widow as primary beneficiary to a monthly pension.
Nevertheless, according to the same provision of the Act, the widow, as primary
beneficiary, is entitled to a lump sum benefit equivalent to thirty five times the
monthly pension.
Question No. 20:
Gregorio Reposo, a 59-year-old government employee and member of the
Government Service Insurance System could not wait for his retirement benefits and
thought of enjoying them in advance of his retirement at age 60 by borrowing 80% of
the retirement benefits from a friendly money lender, assigning to him the entire
amount of his expected benefits. He obtained the approval of the assignment from the
GSIS.
Reposo spent the proceeds on a business venture that failed. A supplier sued
Reposo for unpaid materials and attempted to proceed against his retirement benefits.
Reposo seeks your assistance in an effort to shield his retirement benefits. What
legal advice would you give?
Answer:
I will advise him that because he had assigned the entire amount of his expected
benefits to a money lender from whom he borrowed money representing 80% of his
retirement benefits, and had obtained the approval of the assignment from GSIS, said
benefits are now duly assigned to said lender.
The Revised Government Service Insurance Act (in Sec. 33) provides that the
benefits granted by the Act shall not be subject, among others, to attachment,
garnishment, levy or other processes. This, however, shall not apply to obligations of
the member to the System, or to the employer, or when the benefits granted herein are
assigned by the member with the authority of the System.
But as the above provision of the Act states, the retirement benefit is not subject to
attachment, garnishment, levy or other processes that the supplier may ask for.