2008 BAR EXAMINATION

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 decision-making 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 decision-making 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 or
interpretation of the CBA after exhaustion of the grievance procedure
ii. all unresolved grievances arising from the implementation or
interpretation of company personnel policies;
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 five-

month 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 fixed-
period 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).

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
employer-employee 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 3rd 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 Union v. Philippine Global

Communication (495 SCA 214[2006]), ruled:

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 non-
payment 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.

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]).