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University of Santo Tomas

Faculty of Civil Law

Labor Law
Questions Asked
More Than Once
(QuAMTO 2016)

*QUAMTO is a compilation of past bar questions with answers as

suggested by UPLC and other distinct luminaries in the academe,
and updated by the UST Academics Committee to fit for the 2016
Bar Exams.

*Bar questions are arranged per topic and were selected based on
their occurrence on past bar examinations from 1990 to 2015.










LABOR LAW Arbiter holding that Article 4 applies only when the
doubt involves "implementation and interpretation"
FUNDAMENTAL PRINCIPLES AND POLICIES of the Labor Code provisions. The NLRC explained
that the doubt may not necessarily be resolved in
Q: How do the provisions of the law on labor relations favor of labor since this case involves the application
interrelate, if at all, with the provisions pertaining to of the Rules on Evidence, not the Labor Code. Is the
labor standards? (2003) NLRC correct? Reasons. (2009)

A: There are two classifications of labor legislations. They A: The NLRC is not correct. It is well settled doctrine that
are labor standards which provides for the minimum if doubts exist between the evidence presented by the
standards of terms and conditions of work; and labor employer and the employee, the scale of justice must be
relations which focuses on the regulation and tilted in favor of the latter. It is a time honored rule that
stabilization of the relationship between employers and in controversies between laborer and master, doubts
employees. Instead of being mutually exclusive, these necessarily arising from the evidence or in the
two classifications work together in forming the entire implementation of the agreement and writing should be
legal framework of Philippine labor laws. An example resolved in favor of labor.
wherein these two concepts are interrelated is during
collective bargaining. In instances of collective Article 212
bargaining, labor standards prescribe the minimum
terms and conditions of work; and as such, the employer Q: Who are the managerial, supervisory and rank
cannot negotiate for terms and conditions lower than and-file employees? (1996, 2003)
that of the prescribed minimum. On the other hand, labor
relations govern the employer-employee relationship by A: "MANAGERIAL EMPLOYEE" is one who is vested with
providing for Collective Bargaining Negotiations, which is powers or prerogatives to lay down and execute
an avenue for the parties to settle and compromise on management policies or to hire, transfer, suspend, layoff,
their differences. recall, discharge, assign or discipline employees.


of the employer, effectively recommend such managerial
Article XIII, Secs. 1, 2, 3, 13, 14 actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of
Q: What are the rights of an employer and an independent judgment.
employee? (1996)
All employees who are neither managerial nor
A: An employer is a person who employs the services of supervisory employees are considered RANK AND FILE
another and pays for their wages and salaries. As such, EMPLOYEES. (Art. 212(m), Labor Code).
Art. XIII, Sec. 3 of the Constitution provides and
guarantees them with the following rights: RECRUITMENT AND PLACEMENT

1. Reasonable return of investment RECRUITMENT OF LOCAL AND MIGRANT WORKERS

2. Expansion
3. Growth Q: Phil-Norksgard Company, Inc., a domestic
corporation engaged in the optics business, imported
On the other hand, an employee is a person who works from Sweden highly sophisticated and sensitive
under the employ of another in exchange of a valuable instruments for its laboratory. To install the
consideration in the form of wages, salaries, benefits, etc. instruments and operate them, the company intends
Art. XIII, Sec. 3 of the Constitution similarly provides and to employ Borja Anders, a Swedish technician
similarly guarantees them the following rights: sojourning as a tourist in the Philippines.

1. Security of tenure As lawyer of the company, what measures will you

2. Receive a living wage take to ensure the legitimate employment of Borja
3. Humane conditions of work Anders and at the same time protect Philippine labor.
4. Just share in the fruits of production Discuss fully. (1995)
5. Right to self-organization
6. Conduct collective bargaining or negotiation with A: As the lawyer of the said company, in order to ensure
management the legitimacy of hiring Borja Anders, I will consider the
7. Engage in peaceful concerted activities including requisites in hiring non-resident aliens which are
strike provided under Art. 40. Firstly, I would ensure that a
8. Participate in policy and decision making process determination of the non-availability of a person in the
Philippines who is competent, able and willing at the time
LABOR CODE of application to perform the services for which the alien
is desired is conducted. Subsequently, I would ascertain
Article 4 that an employment permit issued by the Department of
Labor is obtained by Borja Anders.
Q: Clarito, an employee of Juan, was dismissed for
allegedly stealing Juans wristwatch. In the illegal Illegal Recruitment (Sec. 5, R.A. No. 10022)
dismissal case instituted by Clarito, the Labor
Arbiter, citing Article 4 of the Labor Code, ruled in Q: A was approached for possible overseas
favor of Clarito upon finding Juans testimony deployment to Dubai by X, an interviewer of job
doubtful. On appeal, the NLRC reversed the Labor applicants for Alpha Personnel Services, Inc., an


QuAMTO for LABOR LAW (1991-2015)
overseas recruitment agency. X required A to submit employment was still pending with the Philippine
certain documents (passport, NBI clearance, medical Overseas Employment Administration (POEA).
certificate) and to pay P25,000 as processing fee. Nevertheless, she recruited Alma and her three
Upon payment of the said amount to the agency sisters, Ana, Joan, and Mavic, for employment as
cashier, A was advised to wait for his visa. After five housemates in Saudi Arabia. Maryrose represented
months, A visited the office of Alpha Personnel to the sisters that she had a license to recruit workers
Services, Inc. during which X told him that he could for overseas employment. Maryrose also demanded
no longer be deployed for employment abroad. A was and received P30,000.00 from each of them for her
informed by the Philippine Overseas Employment services. However, Maryrose's application for the
Administration (POEA) that while Alpha Personnel renewal of her license was denied, and consequently
Services, Inc. was a licensed agency, X was not failed to employ the four sisters in Saudi Arabia.
registered as its employee, contrary to POEA Rules
and Regulations. Under POEA Rules and Regulations, The sisters charged Maryrose with large scale illegal
the obligation to register personnel with the POEA recruitment. Testifying in her defense, Maryrose
belongs to the officers of a recruitment agency. declared that she acted in good faith because she
(2010) believed that her application for the renewal of her
license would be approved. Maryrose adduced in
a. May X be held criminally liable for illegal evidence the Affidavits of Desistance which the four
recruitment? Explain. private complainants had executed after the
prosecution rested its case. In the said affidavits, they
A: No. X performed his work with the knowledge that he acknowledge receipt of the refund by Maryrose of the
works for a licensed recruitment agency. He is in no total amount of P120,000.00 and indicated that they
position to know that the officers of said recruitment were no longer interested to pursue the case against
agency failed to register him as its personnel (People v. Maryrose. Resolve the case with reasons. (2005)
Chowdur, G.R. No. 129577-80, February 15, 2000). The
fault not being attributable to him, he may be considered A: Yes, the charges against Maryrose will prosper. First,
to have apparent authority to represent Alpha in her act of recruiting the sisters while her license was still
recruitment for overseas employment. pending renewal was in violation of the Migrant Workers
Act of 1995. Under this statute, illegal recruitment is
b. May the officers having control, management or committed by a non-license or non-holder of authority
direction of Alpha Personnel Services, Inc. be who offers or promises employment abroad in
held criminally liable for illegal recruitment? consideration of a fee. In the case at bar, Maryrose could
Explain. be considered as a non-licensee or non-holder of
authority for her license to recruit was still pending
A: Yes. Alpha, being a licensed recruitment agency, still renewal. Thus, for all intents and purposes, during the
has obligations to A for processing his papers for time that she recruited the sisters her license is to be
overseas employment. Under Section 6(m) of R.A. 8042, considered expired and non-existent for it is still subject
failure to reimburse expenses incurred by the worker in to the approval or denial of the proper government
connection with his documentation and processing for agency. The subsequent denial of her application to
purposes of deployment, in cases where the deployment renew is immaterial for what is important is the status of
does not actually take place without the workers fault, the license at the time the recruitment happened.
amounts to illegal recruitment. Nonetheless, the subsequent denial serves to bolster the
sisters claims that Maryrose was an illegal recruiter.
License v. Authority
Secondly, the sisters are correct in charging Maryrose
Q: A Recruitment and Placement Agency declared with large scale illegal recruitment. Art. 38 (b) provides
voluntary bankruptcy. Among its assets is its license that illegal recruitment is considered committed in large
to engage in business. Is the license of the bankrupt scale when it is committed against three or more persons
agency an asset which can be sold in public auction by either individually or collectively. In the case at bar, the
the liquidator? (1998) recruitment of Ana, Joan and Mavic fall within the second
circumstance for they were recruited as a group.
A: No. Art. 29 provides for the rules on the non-
transferability of license or authority. The said provision Lastly, the claims of Maryrose that she acted in good faith
states that no license or authority shall be used directly does not hold water for the Migrant Workers Act of 1995
or indirectly by any person other than the one in whose is a special penal law which is in the nature of a malum
favour it was issued or at any place other than that stated prohibitum. Under this nature, good faith is not a defense
in the license or authority, nor may such license or for what is penalized is the commission of the criminal act
authority be transferred, conveyed or assigned to any and not the intent of the offender. (People v. Saulo, G.R. No.
other person or entity. 125903, November 15, 2000).

Therefore, if the law prohibits transfer, conveyance or Illegal Recruitment as Economic Sabotage
assignment, then it can be inferred that it all the more
prohibits the sale of a license or authority as it is a Q: When is illegal recruitment considered a crime of
permanent transfer of the rights and privileges granted economic sabotage? Explain briefly. (2002, 2015)
to a specific individual under the license or authority.
A: Under Art. 38 (b), Illegal recruitment is considered as
Illegal Recruitment in Large Scale a crime of economic sabotage when it is committed by a
syndicate composed of three or more perpetrators or
Q: Maryrose Ganda's application for the renewal of when it is committed in large scale against three or more
her license to recruit workers for overseas persons individually or as a group.

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

Seamen Board, for violations of the provisions of the

Q: What qualifying circumstances will convert "illegal Labor Code and other Presidential Decrees, the Revised
recruitment" to "economic sabotage," thus subjecting Penal Code, the Anti-Dummy Law, General Orders and
its perpetrator or perpetrators to a penalty of life Letters of Instructions.
imprisonment and a fine of at least P500,000.00?
Please explain your answer briefly. (2005) Currently, we have the Human Security Act of 2007 which
penalizes individuals who engage in the acts of terrorism
A: An illegal recruitment is considered to have evolved either as principals, accomplices or accessories. In this
into economic sabotage when it is committed by a case the Act of XYZ clearly falls within the said law.
syndicate or committed in large scale. Illegal recruitment Therefore, in the interest of safeguarding the public from
is deemed to have been committed by a syndicate when acts of terrorism, it is but justified that DOLE had
the recruitment is carried out by a group of three or more cancelled its license.
persons conspiring and/or confederating with one
another in carrying out any act under Art. 38. On the Prohibited Activities
other hand, it is deemed committed in large scale if it is
committed against three or more persons individually or Q: Wonder Travel and Tours Agency (WTTA) is a
as a group. (Alcantara, 2009). well-known travel agency and an authorized sales
agent of the Philippine Air Lines. Since majority of its
Liabilities passengers are overseas workers, WTTA applied for
a license for recruitment and placement activities. It
Local Recruitment Agency stated in its application that its purpose is not for
profit but to help Filipinos find employment abroad.
Q: Is a corporation, seventy percent (70%) of the Should the application be approved? (2006)
authorized and voting capital of which is owned and
controlled by Filipino citizens, allowed to engage in A: No. The application should be disapproved. The law
the recruitment and placement of workers, locally or clearly states that travel agencies and sales agencies of
overseas? Explain briefly. (2002, 2015) airline companies are prohibited from engaging in the
business of recruitment and placement of workers for
A: No. The minimum requirement of authorized and overseas employment whether for profit or not. (Article
voting capital stock in a juridical entity to be able to 26, Labor Code).
engage in the recruitment of workers locally and
overseas is 75% as provided under Art. 27. In the present case, it is clear that WTTA is the authorized
sales agency of PAL; and thus falling within the
REGULATION AND ENFORCEMENT prohibition of Art. 26. Furthermore, its intention of
providing Filipinos with employment abroad will not
Suspension or Cancellation of License or Authority (Art. 35, hold water to approve its application no matter how
Labor Code) noble it is, because Art. 26 provides for an absolute
prohibition and does not place any merit on the intention
Q: Concerned Filipino contract workers in the Middle of the applicant.
East reported to the Department of Foreign Affairs
(DFA) that XYZ, a private recruitment and placement LABOR STANDARDS
agency, is covertly transporting extremists to
terrorist training camps abroad. Intelligence HOURS OF WORK
agencies of the government allegedly confirmed the
report. Coverage/Exclusions (Art. 82, Labor Code)

Upon being alerted by the DFA, the Department of Q: Gil Bates, a computer analyst and programmer of
Labor and Employment issued orders cancelling the Hard Drive Company, works eight hours a day for five
licenses of XYZ, and imposing an immediate travel days a week at the main office providing customers
ban on its recruits for the Middle East. XYZ appealed information technology assistance.
to the Office of the President to reverse and set aside
the DOLE orders, citing damages from loss of On Saturdays, however, the company requires him to
employment of its recruits, and violations of due keep his cellular phone open from 8:00 A.M. to 5:00
process including lack of notice and hearing by DOLE. P.M. so that the Management could contact him in
The DOLE in its answer claimed the existence of an case of heavy work load or emergency problems
emergency in the Middle East which required prompt needing his expertise. May said hours on Saturdays
measures to protect the life and limb of OFWs from a be considered compensable working hours while on
clear and present danger posed by the ongoing war call? If so, should said compensation be reported to
against terrorism. the Social Security System? (2004)

Should the DOLE orders be upheld or set aside? A: Said hours on Saturdays should be considered as
(2004) compensable working hours "while on call". In
accordance with the Rules and Regulations Implementing
A: Yes, the DOLE order must be upheld. Art. 35 bestows the Labor Code, an employee who is not required to leave
upon the Secretary of Labor the power to suspend or word at his home or with company officials as to where
cancel the license or authority or recruitment agencies to he may be reached is not working while on call. But in the
recruit employees for overseas employment for question, Gil Bates was required to keep his cell phone
violations of the rules and regulations issued by DOLE, open from 8:00 A.M. to 5:00 P.M. Therefore, Bates should
the Bureau of Employment Services, the Overseas be considered as working while on call, if he cannot use
Employment Development Board, and the National effectively and gainfully for his own purpose the time


QuAMTO for LABOR LAW (1991-2015)
from 8:00 A.M. to 5:00 P.M. on Saturdays when he is pay every month has no counterpart in Labor Law and is
required to keep his cellphone open. very generous.

ALTERNATIVE ANSWER: As for the provision in Danilo's contract of employment

that he shall receive time off with pay in lieu of overtime,
The said hours are not compensable. An employee who is this violates the provision of the Labor Code which states
kept within reach through a mobile telephone or other that undertime work on any particular day shall not be
contact device is not considered to be in work status. offset by overtime work on any other day. Permission
(Azucena, 2013) given to the employer to go on leave on some other day
of the week shall not exempt the employer from paying
The compensation actually received by Bates for working the additional compensation required by the Labor Code.
while on call on Saturdays should be reported to the
Social Security System because under the Social Security Q: Socorro is a clerk-typist in the Hospicio de San
Law, compensation means "all actual remuneration for Jose, a charitable institution dependent for its
employment." existence on contributions and donations from well
wishers. She renders work eleven (11) hours a day
Normal Hours of Work but has not been given overtime pay since her place
of work is a charitable institution. Is Socorro entitled
Compressed Work Week to overtime pay? Explain briefly. (2002)

Q: Under what conditions may a "compressed work A: Yes. Socorro is entitled to overtime compensation. She
week" schedule be legally authorized as an exception does not fall under any of the exceptions to the coverage
to the "eight-hour a day" requirement under the of Article 82 (Hours of Work). The Labor Code is equally
Labor Code? (2005) applicable to non-profit institutions. A covered employee
who works beyond eight (8) hours is entitled to overtime
A: "Compressed work week" is resorted to by the compensation.
employer to prevent serious losses due to causes beyond
his control, such as when there is a substantial slump in Q: A case against an employer company was filed
the demand for his goods or services or when there is lack charging it with having violated the prohibition
of raw materials (Explanatory Bulletin on the Reduction against offsetting undertime for overtime work on
of Workdays on Wages Issued by DOLE, July 23, 1985). another day. The complainants were able to show
The conditions for an allowable "compressed work week" that, pursuant to the Collective Bargaining
are the following: the workers agree to the temporary Agreement (CBA), employees of the union had been
change of work schedule and they do not suffer any loss required to work "overtime" on Saturday but were
of overtime pay, fringe benefits or their weekly or paid only at regular rates of pay on the thesis that
monthly take-home pay. (DOLE Explanatory Bulletin on they were not required to complete, and they did not
the Reduction of Workdays on Wages issued on July 23, in fact complete, the eight-hour work period daily
1985). from Monday through Friday. Given the
circumstances, the employer contended that the
Overtime Work, Overtime Pay employees were not entitled to overtime
compensation, i.e., with premium rates of pay. Decide
Q: Danilo Flores applied for the position of driver in the controversy. (2003)
the motor-pool of Gold Company, a multinational
corporation. Danilo was informed that he would A: Art. 88 of the Labor Code provides that undertime
frequently be working overtime as he would have to work on any particular day shall not be offset by overtime
drive for the company's executives even beyond the work on any other day. The CBA, the law between the
ordinary eight-hour work day. He was provided with parties and the Union has shown that the employees are
a contract of employment wherein he would be paid required to render overtime work on Saturdays, thus the
a monthly rate equivalent to 35 times his daily wage, contention of the employer is not tenable. The employer
regular sick and vacation leaves, 5 day-leave with pay cannot use the undertime incurred from Monday through
every month and time off with pay when the Friday to offset the overtime on Saturday. Hence, the
company's executives using the cars do not need employees are entitled to overtime compensation, i.e.
Danilo's service for more than eight hours a day, in premium rates of pay on Saturday.
lieu of overtime. Are the above provisions of the
contract of employment in conformity with, or Q: After working from 10 a.m. to 5 p.m. on a Thursday
violative of, the law? (1997) as one of 5,000 employees in a beer factory, A hurried
home to catch the early evening news and have
A: Except for the provision that Danilo shall have time off dinner with his family. At around 10 p.m. of the same
with pay when the company's executives using the cars day, the plant manager called and ordered A to fill in
do not need Danilo's service for more than eight hours a for C who missed the second shift. (2010)
day, in lieu of overtime, the provisions of the contract of
employment of Danilo are not violative of any labor law a. May A validly refuse the plant managers
because they instead improve upon the present directive? Explain.
provisions of pertinent labor laws.
A: Yes. A may validly refuse to fill in for C. A may not be
Thus, the monthly rate equivalent to 35 times the daily compelled to perform overtime work considering that
wage may be sufficient to include overtime pay. There is the plant managers directive is not for an emergency
no labor law requiring the payment of sick and vacation overtime work, as contemplated under Article 89 of the
leaves except the provision for a five-day service Labor Code.
incentive leave in the Labor Code. The 5-day-leave with

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

b. Assuming that A was made to work from 11 p.m. integral part of the school year and no teaching
on Thursday until 2 a.m. on Friday, may the service were actually rendered by her. In short, the
company argue that, since he was two hours late University invoked the principle of "no work, no pay".
in coming to work on Thursday morning, he Lita Cruz seeks your advice on whether or not she is
should only be paid for work rendered from 1 entitled to receive her ECOLA during semestral
a.m. to 2 a.m.? Explain? breaks. How would you respond to the query? (1997)

A: No. Undertime is not off-set by overtime. (Art. 88, A: I would respond by saying that her entitlement to
Labor Code). mandatory living allowances during semestral breaks
now depends on her existing CBA with the university. The
Q: LKG Garments Inc. makes baby clothes for export. law granting ECOLA had long been repealed as the
As part of its measures to meet its orders, LKG mandatory living allowances previously granted in the
requires its employees to work beyond eight (8) repealed PDs are already integrated by law in the basic
hours everyday, from Monday to Saturday. It pays its salary of employees.
employees an additional 35% of their regular hourly
wage for work rendered in excess of eight (8) hours Q: Are the principal officers of a corporation liable in
per day. Because of additional orders, LKG now their personal capacity for non-payment of unpaid
requires two (2) shifts of workers with both shifts wages and other monetary benefits due its
working beyond eight (8) hours but only up to a employees? (1997)
maximum of four (4) hours. Carding is an employee
who used to render up to six (6) hours of overtime A: As a general rule, the obligations incurred by the
work before the change in schedule. He complains principal officers and employees of a corporation are not
that the change adversely affected him because now theirs but the direct accountabilities of the corporation
he can only earn up to a maximum of four (4) hours' they represent. However, SOLIDARY LIABILITIES may at
worth of overtime pay. Does Carding have a cause of times be incurred but only when exceptional
action against the company? (2015) circumstances warrant such as, generally, in the
following cases, when directors and trustees or, in
A: No. A change in work schedule is a management appropriate cases, the officers of a corporation:
prerogative of LKG. Thus, Carding has no cause of action
against LKG if, as a result of its change to two (2) shifts, 1. Vote for or assent to patently unlawful acts of the
he now can only expect a maximum of four (4) hours corporation;
overtime work. Besides, Art. 87 of the Labor Code does 2. Act in bad faith or with gross negligence in directing
not guarantee Carding a certain number of hours of the corporate affairs;
overtime work. In Manila Jockey Employees Union v. 3. Are guilty of conflict of Interest to the prejudice of the
Manila Jockey Club (G.R. No. 167760, March 7, 2007), the corporation, its stockholders or members, and other
Supreme Court held that the basis of overtime claim is an persons. In labor cases, the Supreme Court has held
employees having been permitted to work. Otherwise, corporate directors and officers solidarily liable with
as in this case, such is not demandable. the corporation for the termination of employment of
employees done with malice or bad faith. (Sunio v.
Night Work (R.A. No. 10151), Night Shift Differential NLRC, G.R. No. L-57767, January 31, 1984; General
Bank and Trust Co. v. Court of Appeals, 135 SCRA 659).
Q: As a tireman in a gasoline station, open twenty-
four (24) hours a day with only five (5) employees, Q: The rank-and-file union staged a strike in the
Goma worked from 10:00 P.M. until 7:00 A.M. of the company premises which caused the disruption of
following day. He claims he is entitled to night shift business operations. The supervisors union of the
differential. Is he correct? Explain briefly. (2002) same company filed a money claim for unpaid
salaries for the duration of the strike, arguing that
A: No. Under Art 86 of the Labor Code, night shift the supervisors' failure to report for work was not
differential shall be paid to every employee for work attributable to them. The company contended that it
performed between 10:00 o'clock in the evening to six was equally faultless, for the strike was not the direct
o'clock in the morning. The Omnibus Rules Implementing consequence of any lockout or unfair labor practice.
the Labor Code (In Book III, Rule II dealing with night May the company be held liable for the salaries of the
shift differential) provides that the provisions on night supervisor? Decide (2008)
shift differential shall NOT apply to employees of "retail
and service establishments regularly employing not more A: No, I will apply the No work, No pay principle. The
than five (5) workers". Because of this provision, Goma is supervisors are not entitled to their money claim for
not entitled to night shift differential because the gasoline unpaid salaries, as they should not be compensated for
station where he works has only five employees. services skipped during the strike of the rank-and-file
union. The age-old rule governing the relation between
WAGES labor and capital, or management and employee of a fair
days wage for a fair days labor remains as the basic
Q: Lita Cruz, a full time professor in San Ildefonso factor in determining employees wages. (Aklan Electric
University, is paid on a regular monthly basis. Cruz Cooperative, Inc. v. NLRC, G.R. No.121439, January 25,
teaches for a period of ten months in a school year, 2000).
excluding the two months summer break.
Q: Benito is the owner of an eponymous clothing
During the semestral break, the University did not brand that is a top seller. He employs a number of
pay Lita Cruz her emergency Cost of Living allowance male and female models who wear Benito's clothes in
(ECOLA) although she received her regular salary promotional shoots and videos. His deal with the
since the semestral break was allegedly not an models is that Benito will pay them with 3 sets of free


QuAMTO for LABOR LAW (1991-2015)
clothes per week. Is this arrangement allowed? members turn over to the boat owner their cash
(2015) collections from cargo fees and passenger fares, less
the expenses for diesel fuel, food, landing fees and
A: No. The arrangement is not allowed. The models are spare parts. Fifty percent (50%) of the monthly
Benitos employees. As such, their services are required income or earnings derived from the operations of
to be paid only in legal tender, even when expressly the boats are given to the boatmen by way of
requested by the employee (Art. 102, Labor Code). Hence, compensation. Deducted from the individual shares
no lawful deal in this regard can be entered into by and of the boatmen are their cash advance and peso value
between Benito and his models.The three (3) sets of of their absences, if any.
clothes, regardless of value, are in kind; hence, the
formers compensation is not in the form prescribed by Are these boatmen entitled to overtime pay, holiday
law. pay, and 13th month pay? (2004)

ALTERNATIVE ANSWER: A: No. The boatmen are considered as workers who are
paid by results. More specifically, they are task workers
The models are not employees, therefore, Art. 102 of the who are paid not based on the number of units produced,
Labor Code do not apply. The payment does not have to but are paid based on the completion of their task, with
be in legal tender. appropriate deductions based on circumstances such as
road and traffic conditions. (Adriano Quintos, et al. v. D.D.
Wage v. Salary Transportation Co., NLRC Case No. RB-IV-20941, May 31,
1979). In the case at bar, the boatmens payment differs
Q: Distinguish "salary" from "wages." (1994) depending on conditions such as the increase or decrease
of the price of diesel, food expenses, landing fees and
A: In the case of GAA v. Court of Appeals (G.R. No. L-44169, spare parts.
Dec. 3, 1985), the Supreme Court had the opportunity to
distinguish salary and wages. According to the Supreme In connection, their payment although being direct
Court, the term wages refer to the compensation given in remunerations or compensation for their service cannot
consideration of manual labor, skilled or unskilled. On the be considered as wages for they do not partake the nature
other hand, salary denotes a compensation for a higher of wages as defined by the laws on labor. Instead, their
degree of employment. payment is considered as commissions; and as held by
the Supreme Court in the case of King of Kings Transport,
Q: Are salary subject to attachment and execution? Inc. et al. v. Mamac, (GR No. 166208, June 29, 2007),
(1994) workers who are paid by commission are not entitled to
the 13th month pay.
A: In GAA v. Court of Appeals (G.R. No. L-44169, Dec. 3,
1985), the Supreme Court ruled that by virtue of Art. 1708 Deductions from Wages
of the Civil Code, it is only wages, not salaries that are
exempted from attachment and execution. The said Q: An explosion in a mine site resulted in the death of
provision specifically states that, a laborers wage shall fifty (50) miners. At the time of the accident
not be subject to execution or attachment, except for
debts incurred for food, shelter, clothing and medical 1. The Mining Company has not yet paid the wages,
attendance. overtime, holiday and rest day compensation of
the deceased miners;
Note: The distinction between salary and wage in GAA v. 2. All the deceased miners owed the Miners
Court of Appeals (G.R. No. L-44169, Dec. 3, 1985) was for Cooperative Union sums of money;
the purpose of Article 1708 of the Civil Code which 3. The Mining Company was served by a sheriff
mandates that, the laborers wage shall not be subject to Writs of Garnishment of Wages of some of the
execution or attachment, except for debts incurred for deceased miners by virtue of final Judgments in
food, shelter, clothing and medical attendance. In labor several collection suits.
law, however, the distinction appears to be merely
semantics. That wage and salary are synonymous has After the accident, the wives, paramours, brothers,
been settled in Songco v. National Labor Relations sisters and parents of the deceased miners filed their
Commission (G.R. No. L-50999, March 23, 1990). Broadly, claims for unpaid wages, overtime, holiday and rest
the word salary means a recompense or consideration day compensation. The Company has acknowledged
made to a person for his pains or industry in another its obligations. However, it is in a quandary as to how
mans business. Whether it be derived from salarium, to adjudicate the conflicting claims; and whether it
or more fancifully from sal, the pay of the Roman can deduct from the monies due the miners their
soldier, it carries with it the fundamental idea of unpaid debts with the credit union.
compensation for services rendered. Indeed, there is
eminent authority for holding that the words wages and How will you advise the mining company on the
salary are in essence synonymous. (Equitable Banking following:
Corporation v. Sabac, G.R. No. 164772, June 8, 2006).
a. Can the Mining Company defer payment of the
Minimum Wage of Workers Paid by Results money claims until an appropriate court has
ruled on the conflicting claims?
Workers Paid by Results
A: No. Art. 105 (b) provides that where the worker has
Q: TRX, a local shipping firm, maintains a fleet of died, in which case the employer may pay the wages of
motorized boats plying the island barangays of AP, a the deceased worker to the heirs of the latter without the
coastal town. At days end the boat operators/crew necessity of intestate proceedings. The claimants if they

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luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

are all of age shall execute an affidavit attesting to their way above the minimum pay required by law. The
relationship to the deceased and the fact that they are his company counsel further points out that the
heirs, to the exclusion of all other persons. employees are aware that their food and lodging
form part of their salary, and have long accepted the
b. Can the Mining Company deduct from the amount arrangement. Is the company's position legally
due to each miner an amount equivalent to their correct? (2013)
debt and remit the same to the Credit Union?
(1998) A: No. The following requisites were not complied with:

A: No. As a general rule Art 113 provides that no a. Proof that such facilities are customarily furnished
employer, in his own behalf or in behalf of any person, by the trade.
shall make any deduction from the wages of his b. The provision of deductible facilities is voluntarily
employees. However, by way of exception, Art. 113 (b) accepted by the employee
provides that for union dues, in cases where the right of c. The facilities are charged at the fair and reasonable
the worker or his union to check-off has been recognized value. Mere availment is not sufcient to allow
by the employer or authorized in writing by the deduction from employees wages. (Mayon Hotel &
individual worker concerned. Restaurant v. Adana, G.R. No. 157634, May 16, 2005)

The case at bar falls within the general rule for there was Q: Pablo works as a driver at the National Tire
no showing that the dead miners had authorized their Company (NTC). He is a member of the Malayang
employer to deduct from their wages their unpaid union Samahan ng Manggagawa sa NTC, the exclusive rank-
dues. Moreover there can no longer be any authorization and-file collective bargaining representative in the
made for the only persons recognized by law who can company. The union has a CBA with NTC which
make the authorization are already dead. contains a union security and a check-off clause. The
union security clause contains a maintenance of
Q: A worked as a room boy in La Mallorca Hotel. He membership provision that requires all members of
sued for underpayment of wages before the NLRC, the bargaining unit to maintain their membership in
alleging that he was paid below the minimum wage. good standing with the union during the term of the
The employer denied any underpayment, arguing CBA under pain of dismissal. The check-off clause on
that based on long standing, unwritten policy, the the other hand authorizes the company to deduct
Hotel provided food and lodging to its housekeeping from union members' salaries defined amounts of
employees, the costs of which were partly shouldered union dues and other fees. Pablo refused to issue an
by it and the balance was charged to the employees. authorization to the company for the check-off of his
The employees corresponding share in the costs was dues, maintaining that he will personally remit his
thus deducted from their wages. The employer dues to the union. (2013)
concluded that such valid deduction naturally
resulted in the payment of wages below the a. Would the NTC management commit unfair
prescribed minimum. If you were the Labor Arbiter, labor practice if it desists from checking off
how would you rule? Explain. (2010) Pablo's union dues for lack of individual
authorization from Pablo?
A: I will rule in favor of A. Even if food and lodging were
provided and considered as facilities by the employer, the A: No. Check-offs in truth, impose an extra burden on the
employer could not deduct such facilities from its employer in the form of additional administrative and
workers wages without compliance with the law (Mayon bookkeeping costs. It is a burden assumed by
Hotel & Restaurant v. Adana, G.R. No. 157634, May 16, management at the instance of the union and for its
2005). In Mabeza v. NLRC (G.R. No. 118506, April 18, 1997), benet, in order to facilitate the collection of dues
the Supreme Court held that the employer simply cannot necessary for the latters life and sustenance. But the
deduct the value from the employees wage without obligation to pay union dues and agency fees obviously
satisfying the following: devolves not upon the employer, but the individual
employee. It is a personal obligation not demandable
a. Proof that such facilities are customarily furnished from the employer upon default or refusal of the
by the trade; employee to consent to a check-off. The only obligation of
b. The provision of deductible facilities is voluntarily the employer under a check-off is to effect the deductions
accepted in writing by the employee; and and remit the collections to the union. (Holy Cross of
c. The facilities are charged at fair and reasonable Dauan College v. Joaquin, G.R. No. 110007, October 18,
value. 1996).

Q: Gamma Company pays its regular employees b. Can the union charge Pablo with disloyalty for
P350.00 a day, and houses them in a dormitory inside refusing to allow the check off of his union dues
its factory compound in Manila. Gamma Company and, on this basis, ask the company to dismiss
also provides them with three full meals a day. In the him from employment?
course of a routine inspection, a Department of Labor
and Employment (DOLE) Inspector noted that the A: No. The check-off clause in the" CBA will not sufce.
workers' pay is below the prescribed minimum wage The law prohibits interference with the disposition of
of P426.00 plus P30.00 allowance, and thus required ones salary. The law requires individual written
Gamma Company to pay wage differentials. Gamma authorization to deduct union dues from Pablos
Company denies any liability, explaining that after salaries. For as long as he pays union dues, Pablo cannot
the market value of the company-provided board and be terminated from employment under the union
lodging are added to the employees' P350 cash daily security clause. As a matter of fact, ling a complaint
wage, the employees' effective daily rate would be against the union before the Department of Labor for


QuAMTO for LABOR LAW (1991-2015)
forcible deduction from salaries does not constitute acts Q: Can an employer and an employee enter into an
of disloyalty against the union. (Tolentino v. Angeles, 52 agreement reducing or increasing the minimum
O.G. 4262) percentage provided for night differential pay,
overtime pay, and premium pay? (2006)
Non-diminution of Benefits
A: No, if the agreement is with regards to reduction. Art.
Q: Little Hands Garment Company, an unorganized 100 provides for the prohibition against elimination or
manufacturer of children's apparel with around diminution of benefits. However, if the agreement seeks
1,000 workers, suffered losses for the first time in to increase the minimum percentage, it is allowed
history when its US and European customers shifted because there is nothing in the law which prohibits the
their huge orders to China and Bangladesh. The same. What is expressly prohibited under the law is only
management informed its employees that it could no reduction.
longer afford to provide transportation shuttle
services. Consequently, it announced that a normal Q: Far East Bank (FEB) is one of the leading banks in
fare would be charged depending on the distance the country. Its compensation and bonus packages
traveled by the workers availing of the service. are top of the industry. For the last 6 years, FEB had
been providing the following bonuses across-the-
Was the Little Hands Garments Company within its board to all its employees:
rights to withdraw this benefit which it had
unilaterally been providing to its employees? Select (a) 13th month pay;
the best answer(s) and briefly explain your reason(s) (b) 14th to 18th month pay;
therefor. (c) Christmas basket worth P6,000;
(d) Gift check worth P4,000; and
a. Yes, because it can withdraw a benefit that is (e) Productivity-based incentive ranging from a
unilaterally given 20% to 40% increase in gross monthly salary
b. Yes, because it is suffering losses for the very first for all employees who would receive an
time evaluation of "Excellent" for 3 straight
c. Yes, because this is a management prerogative quarters in the same year.
which is not due any legal or contractual
obligation Because of its poor performance over-all, FEB
d. No, because this amounts to a diminution of decided to cut back on the bonuses this year and
benefits which is prohibited by the Labor Code limited itself to the following:
e. No, because it is a fringe benefit that has already
ripened into a demandable right or entitlement (a) 13th month pay;
(2005) (b) 14th month pay;
(c) Christmas basket worth P4,000; and
A: Letter B. As a general rule, the Labor Code guarantees (d) Gift check worth :P2,000
that any benefit voluntarily given by an employer cannot
be withdrawn as it has become a part of the terms and Katrina, an employee of FEB, who had gotten a rating
conditions of work of the employees. Such can only be of "Excellent" for the last 3 quarters, was looking
withdrawn upon mutual agreement of the parties. In forward to the bonuses plus the productivity
order for this prohibition to apply, the employer must incentive bonus. After learning that FEB had modified
have given such benefit to his employees fully aware of the bonus scheme, she objected. Is Katrina's
the fact that the latter are not legally nor contractually objection justified? Explain. (2015)
entitled to such. The giving of such benefits must be
deliberate and for a long period of time. A: Katrinas objection is justified. Having enjoyed the
across-the-board bonuses, Katrina has earned a vested
However, by way of exception, the prohibition against right. Hence, none of them can be withheld or reduced. In
withdrawal of benefit will not apply if the payment of the the problem, the company has not proven its alleged
benefits had been made dependent upon the profitability losses to be substantial. Permitting reduction of pay at
of the employer's business. Under such circumstances, the slightest indication of losses is contrary to the policy
the employees cannot demand for the benefit to be of the State to afford full protection to labor and promote
continuously given because the giving of such benefit is full employment. (Linton Commercial Co. v. Hellera, G.R.
merely by reason of their employer's gratuity or act of No. 163147, October 10, 2007).
As to the withheld productivity-based bonuses, Katrina is
By virtue of such principles, the applicable rule in the case deemed to have earned them because of her excellent
shall be the exception. Little Hands is clearly within its performance ratings for three quarters. On this basis,
right to withdraw the free shuttle service because the they cannot be withheld without violating the Principle of
benefit is given merely out of its liberality thereby the Non-Diminution of Benefits.
employees are not legally nor contractually entitled to it.
The law recognizes that the withdrawal of the benefit by Moreover, it is evident from the facts of the case that what
reason of loss of profit is clearly within the employer's was withdrawn by FEB was a productivity bonus.
management prerogative. In addition, to require Little Protected by RA 6791 which mandates that the monetary
Hands to continue providing for such benefit would be value of the productivity improvement be shared with
tantamount to punishing it for its past generosity. the employees, the productivity-based incentive
scheme of FEB cannot just be withdrawn without the
consent of its affected employees.

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luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

Wage Distortion/Rectification whether operating for profit or not. (See Article 91 of the
Labor Code).
Q: Define Wage Distortion. May a wage distortion,
alleged by the employees but rejected by the Q: This year, National Heroes Day (August 25) falls on
employer to be such, be a valid ground for staging a a Sunday. Sunday is the rest day of Bonifacio whose
strike? (1997, 2006, 2009) daily rate is P500.00.

A: (a) A WAGE DISTORTION is that brought about where a. If Bonifacio is required by his employer to work
an increase in the prescribed wage rates results in the on that day for eight (8) hours, how much should
elimination or severe contraction of intentional he be paid for his work? Explain.
quantitative differences in wage or salary rates between
and among employee groups in an establishment as to A: For working on his scheduled rest day, according to
effectively obliterate the distinctions embodied in such Art 93(a), Bonifacio should be paid P500.00 (his daily
wage rates based on skills, length of service and other rate) plus P150.00 (30% of his daily rate) = P650.00. This
logical bases of differentiation. amount of P650.00 should be multiplied by 2 = P1,300.00.
This is the amount that Bonifacio as employee working
(b) No, the existence of wage distortion is not a valid on his scheduled rest day which is also a regular holiday,
ground for a strike because Art. 124 of the Labor Code should receive. Art. 94(c) of the Labor Code provides that
provides for a specific method of procedure for an employee shall be paid a compensation equivalent to
correcting wage distortion. In Ilaw at Buklod ng twice his regular rate for work on any regular holiday.
Manggagawa vs. NLRC (G.R. No. 91980, June 27, 1991), the The "regular rate" of Bonifacio on May 1, 2002 is with an
Court said: It goes without saying that these joint or additional thirty percent because the day is also his
coordinated activities may be forbidden or restricted by scheduled rest day.
law or contract. For the particular instance of "distortions
of the wage structure within an establishment" resulting b. If he works for ten (10) hours on that day, how
from the application of any prescribed wage increase by much should he receive for his work? Explain.
virtue of a law or wage order. Section 3 of Republic Act (2002)
No. 6727 prescribes a specific, detailed and
comprehensive procedure for the correction thereof, A: P1,300.00 which is the amount that Bonifacio is to
thereby implicitly excluding strikes or lockouts or other receive for working on May 1, 2002 should be divided by
concerted activities as modes of settlement of the issue. 8 to determine his hourly rate of P162.50. This hourly
rate should be multiplied by 2 (the number of hours he
Q: How should a wage distortion be resolved (1) in worked overtime). Thus, the amount that Bonifacio is
case there is a collective bargaining agreement and entitled to receive for his overtime work on May 1, 2002
(2) in case there is none? Explain briefly. (2002, is P325.00.
A: Art. 126 provides for the resolution of wage
distortions. Coverage, Exclusions

In cases where there is a CBA, the law provides that any Q: Nemia earns P7.00 for every manicure she does in
dispute arising from wage distortions shall be resolved the barber shop of a friend which has nineteen (19)
through the grievance procedure under their CBA and, if employees. At times she takes home P175.00 a day
it remains unresolved, through voluntary arbitration. and at other times she earns nothing. She now claims
Unless otherwise agreed by the parties in writing, such holiday pay. Is Nemia entitled to this benefit? Explain
dispute shall be decided by the voluntary arbitrator or briefly (2002)
panel of voluntary arbitrators within 10 calendar days
from the time the said dispute was referred to voluntary A: No. Sec. 1, Rule IV, Book III of the IRR provides that the
arbitration. rule on holiday pay shall apply to all employees except:

On the other hand, in cases where there is no CBA, the law a. Those of government and any of the political
provides that the employers and employees shall subdivisions, including government owned and
endeavour to correct such distortions. Any dispute controlled corporations;
arising therefrom shall be settled through the NCMB, and b. Those of retail and service establishments regularly
if it remains unresolved after 10 calendar days of employing less than 10 workers;
conciliation, shall be referred to the appropriate branch c. Domestic helpers and persons in the personal service
of the NLRC. of another;
d. Managerial employees as defined in Book III of the
e. Field personnel and other employees whose time and
Weekly Rest Day performance is unsupervised by the employer
including those who are engaged on task or contract
Q: A Ladies Dormitory run or managed by a basis, purely commission basis or those who are paid
charitable non-profit organization claims that it is a fixed amount for performing work irrespective of
exempt from the coverage of the Weekly Rest Period the time consumed in the performance thereof.
provision of the Labor Code. Is the claim valid?
(1998) Nemia clearly falls under letter (e) of the exception for
she is paid purely on commission basis.
A: No. The claim is not valid. The provisions on weekly
rest periods in the Labor Code cover every employer,


QuAMTO for LABOR LAW (1991-2015)
Q: On orders of his superior, Efren, a high-speed b. Is Jovy entitled to maternity leave benefits?
sewing machine technician, worked on May 1, Labor (2005)
Day. If he worked eight (8) hours on that day, how
much should he receive if his daily rate is P400.00? A: Yes, Jovy's maternity benefit is personal to her and she
(2002) is entitled under the law to avail herself of the same for
the first four times of her deliver. (R.A. No. 8282)
A: Efren should receive P800.00. Art 92 of the Labor Code
provides that the employer may require an employee to Note: A female members maternity benefit does not
work on any regular holiday but such employee shall be depend on his marriage since she can avail of the same
paid a compensation equivalent to twice his regular rate. even if she is not legally married. The law merely used the
term female member without qualifying the same. (Sec.
LEAVES 14-A, Social Security Act of 1997).


Paternity Leave (R.A. No. 8187) Q: Concepcion Textile Co. included the overtime pay,
night-shift differential pay, and the like in the
Q: How many times may a male employee go on computation of its employees' 13th month pay.
Paternity Leave? Can he avail himself of this benefit Subsequently, with the promulgation of the decision
for example, 50 days after the first delivery by his of the Supreme Court in the case of San Miguel
wife? (2002) Corporation vs. Inciong (G.R. No. L-49774, February
24, 1981) holding that these other monetary claims
A: A male employee may go on Paternity Leave up to four should not be included in the computation of the 13th
(4) children. (Sec. 2, RA 8187) On the question of month pay, Concepcion Textile Co. sought to recover
whether or not he can avail himself of this benefit 50 days under the principle of solutio indebiti its overpayment
after the delivery of his wife, the answer is: Yes, he can of its employees' 13th month pay, by debiting against
because the Rules Implementing Paternity Leave Act says future 13th month payments whatever excess
that the availment should not be later than 60 days after amounts it had previously made.
the date of delivery.
a. Is the Company's action tenable?
Note: Delivery may include childbirth or miscarriage.
Abortion, however, was not mentioned in the law. A: No, the companys claim is not tenable. The principle
of solutio indebitii only arises where there is a mistake in
Q: Mans Weto had been an employee of Nopolt the payment. In the case at bar, when the company paid
Assurance Company for the last ten (10) years. His the employees, there was no mistake yet, for the mistake
wife of six (6) years died last year. They had four (4) in the payment that the company alleged occurred later
children. He then fell in love with Jovy, his on when the decision in the San Miguel case was
coemployee, and they got married. In October this promulgated. Therefore, it can be concluded that when
year, Weto's new wife is expected to give birth to her the payment was made, it was valid and due to the
first child. He has accordingly filed his application for employees for all intents and purposes.
paternity leave, conformably with the provisions of
the Paternity Leave Law which took effect in 1996. If the company would deduct the said overpayment, it
The HRD manager of the assurance firm denied his would be similar to a situation where an employee is
application, on the ground that Weto had already punished for an act that was valid when committed but
used up his entitlement under the law. Weto argued was subsequently invalidated.
that he has a new wife who will be giving birth for the
first time, therefore, his entitlement to paternity b. With respect to the payment of the 13th month
leave benefits would begin to run anew. pay after the San Miguel Corporation, ruling,
what arrangement, if any, must the Company
a. Whose contention is correct, Weto or the HRD make in order to exclude from the 13th month pay
manager? all earnings and remunerations other than the
basic pay. (1994)
A: The contention of Weto is correct. The law provides
that every married male is entitled to a paternity leave of A: After the 1981 San Miguel ruling, the High Court
seven (7) days for the first four (4) deliveries of the decided the case of Philippine Duplicators Inc. vs. NLRC, on
legitimate spouse with whom he is cohabiting. Jovy is 11 November 1993, Accordingly, management may
Weto's legitimate spouse with whom he is cohabiting. undertake to exclude sick leave, vacation leave, maternity
The fact that Jovy is his second wife and that Weto had 4 leave, premium pay for regular holiday, night differential
children with his first wife is beside the point. The pay and cost of living allowance. Sales commissions,
important fact is that this is the first child of Jovy with however, should be included based on the settled rule as
Weto. The law did not distinguish and we should earlier enunciated in Songco v. National Labor Relations
therefore not distinguish. The paternity leave was Commission (G.R. No. L-50999, March 23, 1990)
intended to enable the husband to effectively lend
support to his wife in her period of recovery and/or in the Q: What would be your advice to your client, a
nursing of the newly born child (Sec. 3, RA. No. 8187). To manufacturing company, who asks for your legal
deny Weto this benefit would be to defeat the rationale opinion on whether or not the 13th Month Pay Law
for the law. Moreover, the case of Weto is a gray area and (Presidential Decree No. 851) covers a casual
the doubt should be resolved in his favor. employee who is paid a daily wage? (1998)

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

A: I would advise him that a casual employee who is paid A: No. Since he is not entitled to 13th month pay and SIL,
a daily wage is entitled to 13th month pay for only those his retirement pay should be computed solely on the
employers who under Sec. 3 of the said decree are basis of his salary. (R&E Transport v. Latag G.R. No.
exempted from paying such. Sec. 3 of PD 851 provides 155214, February 13, 2004).
that the following employers are exempt from paying 13th

a. Distressed employers, such as (1) those which are Q: Robert Suarez is a salesman for Star
currently incurring substantial losses or (2) in the case of Pharmaceuticals, Star Pharmaceuticals has applied
non-profit institutions and organizations, where their with the Department of Labor and Employment for
income, whether from donations, contributions, grants clearance to terminate (by way of retrenchment) the
and other earnings from any source, has consistently services of Suarez due to financial losses. Robert
declined by more than forty (40%) percent of their Suarez, aside from his monthly salary, receives
normal income for the last two (2) years, subject to the commissions on the sales he makes. He also receives
provision of Section 7 of this issuance; allowances. The existing CBA between Star
b. The Government and any of its political subdivisions, Pharmaceuticals and the union, of which Robert
including government-owned and controlled Suarez is a member, states that any employee
corporations, except those corporations operating separated from employment for causes not due to the
essentially as private subsidiaries of the Government; fault of the employee shall receive from the company
c. Employers already paying their employees 13-month a retirement gratuity in an amount equivalent to one
pay or more in a calendar year of its equivalent at the time month's salary per year of service.
of this issuance;
d. Employers of household helpers and persons in the Robert Suarez contends that in computing his
personal service of another in relation to such workers; separation pay, his sales commission and his
and allowances should be included in the monthly salary.
e. Employers of those who are paid on purely Do you agree? (1997)
commission, boundary, or task basis, and those who are
paid a fixed amount for performing a specific work, A: It depends. If the sales commissions and his allowances
irrespective of the time consumed in the performance are deemed included in his salary, it should be included
thereof, except where the workers are paid on piece-rate in the computation of his separation fee. If they are not
basis in which case the employer shall be covered by this deemed part of his salary, they should not be included in
issuance insofar as such workers are concerned. the computation.

Clearly, the employer seeking the advice does not fall Q: Company A was engaged in the manufacture of
within any of the exceptions provided by law. goods using the by-products of coconut trees and
employed some fifty workers who lived in the
Q: Dennis was a taxi driver who was being paid on the coconut plantation in Quezon Province. The land
"boundary" system basis. He worked tirelessly for upon which A conducted its operation was subjected
Cabrera Transport Inc. for fourteen (14) years until to land reform under R.A. 6657 for distribution to the
he was eligible for retirement. He was entitled to tenants and residents of the land. Consequently, A
retirement benefits. During the entire duration of his had to close its operation and dismiss its workers.
service, Dennis was not given his 13th month pay or The union representing the employees demanded
his service incentive leave pay. (2012) that A pay the dismissed workers separation pay
under Art.283 of the Labor Code that requires, among
a. Is Dennis entitled to 13th month pay and service others, the payment of separation pay to employees
leave incentive pay? Explain. (2012) in cases of closing or cessation of operations of the
establishment or undertaking. Is the unions claim
A: No. A taxi driver paid under the boundary system is correct or not? Why (2001)
not entitled to a 13th month and a SIL pay. Hence, his
retirement pay should be computed solely on the basis of A: The unions claim is not correct. In the case of National
his salary. Specifically, Sec. 3(e) of the Rules and Federation of Labor v. NLRC (G.R. No. 127718, March 2,
regulations Implementing P.D. 851 excludes from the 2000), the Supreme Court ruled that where the closure of
obligation of 13th Month Pay Employers of those who are the establishment was due to the act of the government
paid on xxx boundary basis. On the other hand, Sec. 1(d), acquiring the land to the benefit of the employees by
Rule V, Book III of the Omnibus Rules provides that those making them agrarian lot beneficiaries, they are not
employees whose performance is unsupervised by the entitled to separation pay.
employer are not entitled to Service Incentive Leave. A
taxi driver under Boundary System in an unsupervised In the instant case, Company A was closed down
employee. because the land upon which A conducted its operation
was acquired by the DAR pursuant to the CARP. Since the
b. Since he was not given his 13th month pay and closure was due to the act of the government and not
service incentive leave pay, should Dennis be effected unilaterally and voluntarily by the respondent,
paid upon retirement, in addition to the salary the workers cannot claim separation pay.
equivalent to fifteen (15) days for every year of
service, the additional 2.5 days representing one- Q: Premiere Bank, a banking corporation, being the
twelfth (1/12) of the 13th month pay as well as creditor-mortgagee of XYZ & Co., a garment firm,
the five (5) days representing the service foreclosed the hypothecated assets of the latter.
incentive leave for a total of 22.5 days? Explain. Despite the foreclosure, XYZ & Co. continued its
business operations. A year later, the bank took

possession of the foreclosed property. The garment


QuAMTO for LABOR LAW (1991-2015)
firm's business operations ceased without a each year of his employment. Not satisfied, Ukol filed
declaration of bankruptcy. Jose Caspar, an employee action with the Arbitration Branch of the NLRC
of XYZ & Co., was dismissed from employment due to claiming that his retirement benefits were not
the cessation of business of the firm. He filed a computed properly. Is Ukol's claim meritorious?
complaint against XYZ & Co. and the bank. The Labor
Arbiter, after hearing, so found the company liable, as What are the components of his retirement benefits?
claimed by Jose Caspar, for separation pay. Premiere (2001)
Bank was additionally found subsidiarily liable upon
the thesis that the satisfaction of labor benefits due to A: Ukol's claim is meritorious. His retirement benefit is to
the employee is superior to the right of a mortgagee be computed in accordance with Article 287, which
of property. Was the Labor Arbiter correct in his reads: "In the absence of a retirement plan or agreement
decision? (2003) providing for retirement benefits of employees in the
establishment, an employee may retire and shall be
A: No. In the case of DBP v. NLRC et al., (G.R. Nos. 82763- entitled to retirement pay equivalent to at least one-half
64, March 19, 1990), the Supreme Court held that Art. 110 (1/2) month salary for every year of service, a fraction of
does not constitute a lien on the property of the insolvent at least six months being considered as one whole year.
debtor in favour of the workers. It is but a preference of The same Article then explains that the term one-half
credit in their favour, a preference in application. It is a (1/2) month salary means fifteen days plus one twelfth
method adopted to determine and specify the order in (1/12) of the 13th month pay and the cash equivalent of
which credits should be paid in the final distribution of not more than five (5) days of service incentive leaves.
the proceeds of the insolvents assets. Thus a mortgage The components of retirement pay are: (1) 15 days pay;
lien cannot be equated or placed under a preferred credit. (2) 1/12 of the 13th month pay. And; (3) cash equivalent
of not more than five (5) days of service incentive leave.
Q: Ricky Marvin had worked for more than ten (10)
Eligibility years in IGB Corporation. Under the terms of the
personnel policy on retirement, any employee who
Q: A Collective Bargaining Agreement (CBA) between had reached the age of 65 and completed at least ten
Company A and its employees provides for optimal (10) years of service would be compulsorily retired
retirement benefits for employees who have served and paid 30 days' pay for every year of service. Ricky
the company for over 25 years regardless of age, Marvin, whose immigrant visa to the USA had just
equivalent to one-and-one-half months pay per year been approved, celebrated his 60th birthday recently.
of service based on the employee's last pay. The CBA He decided to retire and move to California where the
further provides that "employees whose services are son who petitioned him had settled. The company
terminated, except for cause, shall receive said refused to grant him any retirement benefits on the
retirement benefits regardless of age or service ground that he had not yet attained the compulsory
record with the company or to the applicable retirement age of 65 years as required by its
separation pay provided by law whichever is higher." personnel policy; moreover, it did not have a policy
The Company, due to poor business conditions, on optional or early retirement. Taking up the
decided to cease operations and gave its employees cudgels for Ricky Marvin, the union raised the issue
the required one month's advance notice as well as in the grievance machinery as stipulated in the CBA.
notice to DOLE, with the further advice that each No settlement was arrived at, and the matter was
employee may claim his corresponding separation or referred to voluntary arbitration.
retirement benefits whichever is higher after
executing the required waiver and quitclaim. Dino If you were the Voluntary Arbitrator, how would you
Ramos and his co-employees who have all rendered decide? Briefly explain the reasons for your award.
more than 25 years of service received their (2005)
retirement benefits. Soon after, Ramos and others
similarly situated demanded for their separation A: I will decide the case in accordance with the
pay. The Company refused, claiming that under the Retirement Law. (R.A. No. 7641) Under the law, Ricky
CBA they cannot receive both benefits. Marvin is entitled to Optional Retirement at age 60 since
he has served the Company for at least 5 years, in fact 10
Who is correct, the employees or the Company? years already. He will also receive 22.5 days for every
(1994) year of service. (Capitol Wireless v. Confesor, G.R. No.
117174, November 13, 1996)
A: The employees are correct. In the absence of a
categorical provision in the Retirement Plan and the CBA Q: As rule, when is retirement due? (2007)
that an employee who receives separation pay is no
longer entitled to retirement benefits, the employee is A:
entitled to the payment of both benefits pursuant to the a. Optional retirement which may be availed of by an
social justice policy. (Conrado M. Aquino, et al v. National employee reaching the age of 60 years;
Labor Relations Commission, et al, G.R. No. 87653, b. Compulsory retirement which may be availed of by
February 11, 1992). the employee upon reaching the age of 65 years. In
both instances, the law imposes the minimum service
Q: Ukol was compulsorily retired by his employer, requirement of five years with the establishment.
Kurot Bottling Corporation, upon the former's
reaching 65 years of age, having rendered 30 years of Q: When is retirement due for underground miners?
service. Since there was no CBA, Ukol was paid his
retirement benefits computed 15 days' pay for every A: Pursuant to R.A. 8558, in the absence of a retirement

year of service, based on Ukol's highest salary during plan or other applicable agreement providing for

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retirement benefits of underground mine employees in Anti-Sexual Harassment Act (R.A. 7877)
the establishments, any such employee may retire upon
reaching the age of 50 years or more if he has served for Q: A Personnel Manager, while interviewing an
at least five years as underground mine employee or in attractive female applicant for employment, stared
underground mine of the establishment. directly at her for prolonged periods, albeit in a
friendly manner. After the interview, the manager
WOMEN WORKERS accompanied the applicant to the door, shook her
hand and patted her on the shoulder. He also asked
Provisions against Discrimination the applicant if he could invite her for dinner and
dancing at some future time. Did the Personnel
Q: Mam-manu Aviation Company (Mam-manu) is a Manager, by the above acts, commit sexual
new airline company recruiting flight attendants for harassment? Reason. (2000)
its domestic flights. It requires that the applicant be
single, not more than 24 years old, attractive, and A: Yes. The manager committed sexual harassment,
familiar with three (3) dialects, viz: llonggo, Cebuano specifically sexual harassment in a work related or
and Kapampangan. lngga, 23 years old, was accepted employment environment. Under Sec. 3 (a) of the Anti-
as she possesses all the qualifications. After passing Sexual Harassment Act of 1995, even if the act of the
the probationary period, lngga disclosed that she got manager is friendly, and the employment of the applicant
married when she was 18 years old but the marriage is not conditioned upon her agreement to go out with
was already in the process of being annulled on the him, the act of the manager will result in an intimidating,
ground that her husband was afflicted with a sexually hostile, or offensive environment for the female
transmissible disease at the time of the celebration of employee in the future.
their marriage. As a result of this revelation, lngga
was not hired as a regular flight attendant. Q: Can an individual, the sole proprietor of a business
Consequently, she filed a complaint against Mam- enterprise, be said to have violated the Anti-Sexual
manu alleging that the pre-employment Harassment Act of 1995 if he clearly discriminates
qualifications violate relevant provisions of the against women in the adoption of policy standards
Labor Code and are against public policy. Is the for employment and promotions in the enterprise?
contention of lngga tenable? Why? (1995, 2012) Explain. (2003)

A: Yes. Man-manus pre-employment requirement A: No. In order for the employer to commit sexual
cannot be justified as a bona fide occupational harassment under the Anti-Sexual Harassment Act of
qualification, where the particular requirements of the 1995, there must be a solicitation of sexual favor from the
job would justify it. The said requirement is not valid employee; and the refusal of the employee resulted to his
because it does not reflect an inherent quality that is discrimination by gender. However in this case, the
reasonably necessary for a satisfactory job performance. employer did not solicit any sexual favor. Instead, he had
(PT&T v. NLRC, G.R. No. 118978, May 23, 1997 citing 45A gone outright and discriminated the female employees.
Am. Jur. 2d, Job Discrimination, Section 506, p.486). At most, the employer would be liable for the violation of
the prohibition against discrimination against women as
Q: At any given time, approximately ninety percent provided under Art. 153.
(90%) of the production workforce of a
semiconductor company are females. Seventy-five Q: Pedrito Masculado, a college graduate from the
percent (75%) of the female workers are married province, tried his luck in the city and landed a job as
and of child-bearing years. It is imperative that the utility/maintenance man at the warehouse of a big
Company must operate with a minimum number of shopping mall. After working as a casual employee
absences to meet strict delivery schedules. In view of for six months, he signed a contract for probationary
the very high number of lost working hours due to employment for six months. Being well-built and
absences for family reasons and maternity leaves, the physically attractive, his supervisor, Mr. Hercules
Company adopted a policy that it will employ Barak, took special interest to befriend him. When
married women as production workers only if they his probationary period was about to expire, he was
are at least thirty-five (35) years of age. Is the policy surprised when one afternoon after working hours,
violative of any law? (1998) Mr. Barak followed him to the mens comfort room.
After seeing that no one else was around, Mr. Barak
A: No. Despite the prohibition against discrimination placed his arm over Pedritos shoulder and softly
against age, it cannot be said that the qualification said: You have great potential to become regular
imposed by the management falls within the said employee and I think I can give you a favorable
provision. There is no violation because the qualification recommendation. Can you come over to my condo
imposed is justified by the companys goal to meet the unit on Saturday evening so we can have a little
strict delivery schedules. The act of the management is a drink? Im alone, and Im sure you want to stay longer
valid exercise of management prerogative which must be with the company.
respected by law.
Is Mr. Barak liable for sexual harassment committed
In addition, simple logic would prove that in order for a in a work-related or employment environment?
policy to be declared discriminatory, the said policy must (2004)
be without basis, whimsical and capricious on the part of
the employer. In this case, the policy is clearly justified. A: Yes, Mr. Barak is liable for sexual harassment. Under
Sec. 3 (a.1) of the Anti-Sexual Harassment Act of 1995, a
work related sexual harassment can be committed when
the sexual favor is made as a condition for the hiring,

reemployment or continued employment of an employee


QuAMTO for LABOR LAW (1991-2015)
or in the granting of favorable compensation, terms and guardian shall provide the said minor child with the
conditions, promotions or privileges. prescribed primary and/or secondary education.

The case at bar clearly falls within Sec. 3 (a.1) of the Anti- The exception provided under RA 9231 is very clear. And
Sexual Harassment Act of 1995 because the invitation of since a school teacher is neither a parent nor a legal
Mr. Barak, most especially the phrase Im alone, and Im guardian; and the attendant circumstances of the case
sure you want to stay longer with the company.; taking does not fall within the circumstances exempted by law
into consideration on how most people use such term in because no one in the students family is employed by the
the ordinary course of living, is clearly insinuating a teacher, the defense of the teacher is not tenable on the
meeting that is sexual in nature. More importantly, the ground that it does not fall under the exceptions provided
favorable recommendation needed by Pedrito in order to for by law. Moreover, notwithstanding the Department
be promoted as a regular employee is conditioned upon Order of DOLE invoked by the teacher, the defense is still
his meeting with Mr. Barak in his condominium. untenable for mere department orders cannot prevail
over the clear wordings of the law; and department
EMPLOYMENT OF MINORS orders cannot go beyond the scope of the statute it seeks
(LABOR CODE AND R.A. NO. 7678, R.A. NO. 9231) to implement.

Q: You were asked by a paint manufacturing company Q: Discuss the statutory restrictions on the
regarding the possible employment as a mixer of a employment of minors? (2007)
person, aged seventeen (17), who shall be directly
under the care of the section supervisor. What advice A: Art. 140 of the Labor Code provides that employers
would you give? Explain briefly. (2002) shall not discriminate against any person in respect to
terms and conditions of employment on account of his
A: I would advise the company not to hire the 17-year old. age. The employer is duty-bound to submit a report to
Under Sec. 3, Rule XI, Book III of the Implementing Rules DOLE of all children under his employ, with a separate
and Regulations, any person of either sex, between 15 report on children found to be handicapped after a
and 18 years of age may be employed in any non- conduct of medical examination. Moreover, an employer
hazardous work. Under the same section, the IRR in any commercial, industrial, or agricultural
clarified that non-hazardous work would mean an establishment or enterprise is required to keep a register
undertaking or activity in which the employee is not of all children under his employ, indicating therein their
exposed to any risk which constitutes an imminent respective dates of birth; and a separate file on written
danger to his safety and health. consent of their respective parents/guardians, another
file for their education and medical certificates, and a
Applying the said legal principles to the case at bar, separate file for special work permits issued by the
although the law allows the hiring of minors between the Secretary of DOLE. For children employed as domestic,
ages of 15 and 18, it is subject to the condition that the the head of the family shall give the domestic an
nature of the work for which they were hired must not opportunity to complete at least elementary education.
post a threat to their health and safety. Therefore, under Other provisions are Art. 272, 278; Art. 107 of PD 603 and
the circumstances, it is not only unwise, but also illegal RA 6710.
for the company to hire the 17- year old because the
nature of the work of a paint mixer clearly posed a threat Q: A spinster school teacher took pity on one of her
to the health and safety of the child. Clearly, the company pupils, a robust and precocious 12-year old boy
cannot meet the condition imposed by law. whose poor family could barely afford the cost of his
schooling. She lives alone at her house near the
Q: A spinster school teacher took pity on one of her school after her housemaid left. In the afternoon, she
pupils, a robust and precocious 12-year old boy lets the boy do various chores as cleaning, fetching
whose poor family could barely afford the cost of his water and all kinds of errands after school hours. She
schooling. She lives alone at her house near the gives him rice and P30.00 before the boy goes home
school after her housemaid left. In the afternoon, she at 7:00 every night. The school principal learned
lets the boy do various chores as cleaning, fetching about it and charged her with violating the law which
water and all kinds of errands after school hours. She prohibits the employment of children below 15 years
gives him rice and P30.00 before the boy goes home of age. In her defense, the teacher stated that the
at 7:00 every night. The school principal learned work performed by her pupil is not hazardous, and
about it and charged her with violating the law which she invoked the exception provided in the
prohibits the employment of children below 15 years Department Order of DOLE for the engagement of
of age. In her defense, the teacher stated that the persons in domestic and household service. Is her
work performed by her pupil is not hazardous, and defense tenable? Reason. (2004, 2012, 2015)
she invoked the exception provided in the
Department Order of DOLE for the engagement of A: No, her defense is not tenable. Under Article 139 of the
persons in domestic and household service. Is her Labor Code on "minimum employable age", no child
defense tenable? Reason. (2004, 2012, 2015) below 15 years of age shall be employed except when he
works directly under the sole responsibility of his
A: No. Sec.12 (1) of RA 9231 provides that children below parents or guardian or where a childs employment or
15 years of age shall not be employed except when a child participation in public entertainment or information
works directly under the sole responsibility of his/her through cinema, theater, radio, television or other forms
parents or legal guardian and where only members of his of media is essential xxx. (Section 12, R.A. 7610, as
family are employed. Provided however, that his/her amended by R.A. 9231), the provisions of the alleged
employment neither endangers his/her normal Department Order of DOLE to the contrary
development. Provided further, that the parent or legal notwithstanding. A mere Department Order cannot

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

prevail over the express prohibitory provisions of the because she does not contract work in which the finished
Labor Code. product will be returned or repurchased by the bank.
Rather, she performs secretarial work which does not
HOUSEHELPERS produce several finished products to be sold or
(LABOR CODE AS AMENDED BY R.A. NO. 7655, AN distributed.

Q: Nova Banking Corporation has a resthouse and Definition

recreational facility in the highlands of Tagaytay City
for the use of its top executives and corporate clients. Q: A lady worker was born with a physical deformity,
The rest house staff includes a caretaker, two cooks specifically, hard of hearing, speech impaired, and
and a laundrywoman. All of them are reported to the color blind. However, these deficiencies do not
Social Security System as domestic or household impair her working ability.
employees of the rest house and recreational facility
and not of the bank. Can the bank legally consider the Can the employer classify the lady worker as a
caretaker, cooks and laundrywoman as domestic handicapped worker so that her daily wage will only
employees of the rest house and not of the bank? be seventy-five percent (75%) of the applicable daily
(2000) minimum wage? (1998)

A: No. In the case of Apex Mining Co., Inc. v. NLRC, et al. (GR A: No. The mere fact that a worker has a disability does
No. 94951, April 22, 1991), the Supreme Court ruled that not make her a handicapped worker if despite her
the legal definition of a domestic employee or a disability, she can still efficiently perform her work. She
househelp cannot be interpreted as to include must be considered as a qualified disabled worker who is
employees who are working in staff houses, or in this case entitled to the same treatment as qualified able-bodied
the rest house of Nova Banking Corporation, which is workers. (Alcantara, 2009).
primarily for the use of its top executives and corporate
clients. The rationale behind the ruling is that the Q: Ana Cruz has a low IQ. She has to be told at least
Supreme Court recognized that in order for an employee three times before she understands her daily work
to be regarded as a househelp, the criteria that must be assignment. However, her work output is at least
satisfied is the nature of his/her work which is for the equal to the output of the least efficient worker in her
personal comfort and enjoyment of the family of the work section. Is Ms. Cruz a handicapped worker?
employer in the home of the said employer. In this case, Explain. (2000)
while it may be true that the nature of the work of the
caretaker, 2 cooks and laundrywoman in a home and in a A: No. Low IQ or low efficiency does not make the worker
company rest house may be of similar in nature, the "handicapped" in the contemplation of law. Under Art. 78,
difference in their circumstances is that in the former a handicap means such physical or mental infirmity that
instance, they are actually serving the family while in the impairs capacity to work. The deficiency may also be due
latter case, whether it is a corporation or a single to age or injury.
proprietorship engaged in business or industry or any
other agricultural or similar pursuit, service is being Rights of Persons with Disability
rendered in the staff houses, in this case rest houses or
within the premises of the business of the employer for Q: For humanitarian reasons, a bank hired several
the benefit of the employer, other employees and clients. handicapped workers to count and sort out
In such instance, they are employees of the company or currencies. Their employment contract was for six
employer in the business concerned entitled to the (6) months. The bank terminated their employment
privileges of regular employees. on the ground that their contract has expired
prompting them to file with the Labor Arbiter a
EMPLOYMENT OF HOMEWORKERS complaint for illegal dismissal. Will their action
prosper? (2006, 2012)
Q: Mrs. Josie Juan is the confidential secretary of the
Chairman of the Board of the bank. She is presently A: No. Art. 80 provides that in cases of employing
on maternity leave. In an arrangement where the handicapped workers, an employment agreement must
Chairman of the Board can still have access to her be contracted. Art. 80 further provides that such
services, the bank allows her to work in her employment agreement shall contain the duration of the
residence during her leave. For this purpose, the employment period.
bank installed a fax machine in her residence, and In the case at bar, the action will not prosper for the bank
gave her a cellphone and a beeper. Is Mrs. Juan a cannot be held liable for illegal dismissal for the
homeworker under the law? Explain. (2000) handicapped employees themselves have agreed that
their term of employment will only be limited to 6
A: No. A homeworker under the law is defined as a person months.
who carries out a work for an employer at home. Under
this scheme, the employer may or may not furnish the Note: The contract signed by the workers is akin to a
materials needed for the completion of the task. probationary employment, during which the bank
Thereafter, the homeworker delivers the finished determined the employees fitness for the job. If the bank
product to the employer. renewed the contract after the lapse of the six-month
probationary period, the employees will then become
Applying the legal definition, it is clear that Mrs. Juan is regular employees since the task of counting and sorting

not a homeworker; instead, she is an officeworker bills is necessary and desirable to the business of the


QuAMTO for LABOR LAW (1991-2015)
bank. (Bernardo et. al. v. NLRC and Far East Bank and employee of such establishment for purposes of labor
Trust Co. G.R. No. 122917, July 12, 1999). and social legislation. Thus, the said waitresses are
employees with the right to security of tenure and cannot
TERMINATION OF EMPLOYMENT be dismissed just because they filed a complaint against
the owner of the cocktail lounge. And as such waitresses,
EMPLOYER-EMPLOYEE RELATIONSHIP who are considered employees of the cocktail lounge,
they are at the very least entitled to receive the applicable
Q: Ruben Padilla entered into a written agreement minimum wage.
with Gomburza College to work for the latter in
exchange for the privilege of studying in said Four-fold Test
institution. Ruben's work was confined to keeping
clean the lavatory facilities of the school. One school Q: Asia Security & Investigation Agency (ASIA)
day, Ruben got into a fist fight with a classmate, Victor executed a one-year contract with the Baron Hotel
Monteverde, as a result of which the latter sustained (BARON) for the former to provide the latter with
a fractured arm. twenty (20) security guards to safeguard the persons
and belongings of hotel guests, among others. The
Victor Monteverde filed a civil case for damages security guards filled up Baron application form and
against Ruben Padilla, impleading Gomburza College submitted the executed forms directly to the Security
due to the latter's alleged liability as an employer of Department of Baron. The pay slips of the security
Ruben Padilla. guards bore Baron's logo and showed that Baron
deducted therefrom the amounts for SSS premiums,
Under the circumstances, could Gomburza College be medicare contributions and withholding taxes.
held liable by Victor Monteverde as an employer of Assignments of security guards, who should be on
Ruben Padilla? (1997) duty or on call, promotions, suspensions, dismissals
and award citations for meritorious services, were all
A: No. Under Sec. 14, Rule X, Book III of the Implementing done upon approval by Baron's chief security officer.
Rules and Regulations, there is no employer-employee After the expiration of the contract with Asia, Baron
relationship between students on the one hand, and did not renew the same and instead executed another
schools, colleges or universities on the other, where contract for security services with another agency.
students work for the latter in exchange for the privilege Asia placed the affected security guards on "floating
to study free of charge, provided the students are given status" on "no work no pay" basis. Having been
real opportunity, including such facilities as may be displaced from work, the Asia security guards filed a
reasonably necessary, to finish their chosen course under case against the Baron Hotel for illegal dismissal,
such agreement. overtime pay, minimum wage differentials, vacation
leave and sick leave benefits, and 13th month pay.
Therefore, there being no employer-employee
relationship between Gomburza College and Ruben Baron Hotel denied liability alleging that Asia is the
Padilla, the former cannot be impleaded by Victor employer of the security guards and therefore, their
Monteverde in his complaint. complaint for illegal dismissal and payment of money
claims should be directed against Asia. Nevertheless,
Q: Complainants had worked five (5) years as Baron filed a Third Party Complaint against Asia.
waitresses in a cocktail lounge owned by the
respondent. They did not receive any salary directly a. Is there an employer-employee relationship
from the respondent but shared in all service charges between the Baron Hotel, on one hand, and the
collected for food and drinks to the extent of 75%. Asia security guards, on the other hand? Explain
With respondent's prior permission, they could sit briefly.
with and entertain guest inside the establishment b. Assuming that ASIA is the employer, is the act of
and appropriate for themselves the tips given by ASIA in placing the security guards on "floating
guests. After five (5) years, the complainants status" lawful? Why? (1999)
individual shares in the collected service charges
dipped to below minimum wage level as a A:
consequence of the lounge's marked business a. Yes. As a general rule, in cases of job contracting, the
decline. Thereupon, complainants asked respondent employees of the job contracting agency remain as its
to increase their share in the collected service employees and are not transferred under the wings
charges to 85% or the minimum wage level, of the principal. However, this case proves to be more
whichever is higher. Respondent terminated the of the exception rather than the general rule. Taking
services of the complainants who countered by filing into consideration the attending circumstances that
a consolidated complaint for unlawful dismissal, with it is BARON which pays the wages as evident in the
prayer for 85% of the collected services or the security guards pay slips which bears the logo of
minimum wage for the appropriate periods, BARON, that it is BARON which deducts the SSS
whichever is higher. Decide. (2008) premiums and medicare contributions, that it is
BARON which determines the assignment,
A: The waitresses were employees of the owner of the promotions and suspension of the said security
cocktail lounge. Article 138 of the Labor Code provides: guards, it is clear that BARON is their employer and
Any woman who is permitted or suffered to work, with not ASIA. This is due to the fact that it is BARON
or without compensation, in any night club, cocktail which fulfills the requisites for the existence of an
lounge, massage clinic, bar or similar establishment, employer-employee relationship which are as
under the effective control or supervision of the follows: 1) the selection and management of
employer for a substantial period of time as determined employees; 2) the payment of wages; 3) the power of

by the Secretary of Labor, shall be considered as an

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luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

dismissal; and 4) the employers power to control the because in so far as Teofilo Lacson is concerned, it is only
employees conduct. LBM which controls, directs and pays for his
employment. Moreover, in the case of Concept Builders v.
Therefore, under the circumstances as well as the NLRC (G.R. No. 108734, May 29, 1996), the Supreme Court
general rule and the exception provided by law, it ruled that as a fundamental principle of Corporation Law,
appears that BARON had hired the security guards as corporations are considered to have a separate and
its employees. distinct entity from its stock holders and from other
corporations which it may be connected to.
b. Yes. Art. 286 recognizes the so called floating status
of an employee. Under such status, the employer- In conclusion, Lastimoso Construction Inc. and RL Realty
employee relationship is not terminated, rather it is & Development must not be burdened with the fault of
suspended for reasons such as suspension of LBM in the ground that the sister companies had no
business operations or the fulfillment by the control over the employment of Teofilo Lacson and the
employee of a military or civic duty. Art. 286 also decision to dismiss him was purely made on the part of
mandates that the floating status of an employee LBM.
shall not exceed 6 months. If the floating status
exceeds the allowable period, the employee is Q: Metro Grocery Inc. arranged with Mr. Juan Dado, a
deemed to have been illegally dismissed. (Valdez v. Barangay Chairman, to provide the grocery with
NLRC et al., G.R. No. 125028, February 9, 1998). workers who will work as cashiers, bag boys, shelf
counter helpers and sanitation workers. The grocery
Therefore, ASIA, for reasons that there are no jobs will pay Mr. Dado an amount equivalent to the direct
available for the security guards, may lawfully place and hidden costs of the wages of each worker
them under floating status for a period not exceeding assigned, plus ten percent (10%) to cover the
6 months and shall reinstate them thereafter. Only administrative costs related to their arrangement.
when the floating status exceeds 6 months without Mr. Dado, in turn, will pay directly the workers their
reinstatement will ASIA be liable for illegal dismissal. wages. As far as the workers are concerned, Mr. Dado
is their employer. A group of concerned workers
Q: Teofilo Lacson was one of more than one hundred consulted you if Mr. Dado is really under the law their
(100) employees who were terminated from employer.
employment due to the closure of LBM Construction
Corporation (LBM). LBM was a sister company of a. How will you analyze the problem in order to
Lastimoso Construction, Inc. and RL Realty & formulate your answer?
Development Corporation. All three (3) entities b. What is the legal significance, if any, of the
formed what came to be known as the Lastimoso question of the concerned workers as to who is
Group of Companies. The three (3) corporations were their employer? (2000)
owned and controlled by members of the Lastimoso
Family; their incorporators and directors all A:
belonged to the Lastimoso family. The three (3) a. I will use the four-fold test in analyzing the situation.
corporations were engaged in the same line of Under this test, in order to determine the existence of
business, under one management, and used the same an employer-employee relationship, the following
equipment including manpower services. elements must be present: (1) the manner of
selection and engagement; (2) the payment of wages;
Teofilo Lacson and his co-employees filed a (3) the presence or absence of the power of dismissal
complaint with the Labor Arbiter against LBM, RL and (4) the presence or absence of the power to
Realty and Lastimoso Construction to hold them control. (Abante, Jr. v. Ladmadrid Bearing and Parts
jointly and severally liable for backwages and Corporation et al., GR No. 159890, May 28, 2004).
separation pay. Lastimoso Construction, Inc. and RL
Realty & Development Corporation interposed a In the case at bar, it is clear that the grocery store is
Motion to Dismiss contending that they are Juridical the employer because it pays to Mr. Dado of the
entitles with distinct and separate personalities from hidden costs and other administrative costs related
LBM Construction Corporation and therefore, they to the arrangement of the workers. This means that,
cannot be held jointly and severally liable for the although the manner of selection and engagement of
money claims of workers who are not their the employees were in the hands of Mr. Dado, such is
employees. Rule on the Motion to Dismiss. Should it not within his full control for the funds needed for the
be granted or denied? Why? (1999) selection and engagement were given by the grocery
store. Secondly, it is the grocery store who pays their
A: The Motion to Dismiss must be granted. In determining wages via the payment it gave to Mr. Dado for hidden
the existence of an employer-employee relationship, the costs. Lastly, it is clear that it is the grocery store who
following elements must be taken into consideration: 1) has complete control over the workers conduct and
the selection and engagement of the employee; 2) the it also had the power to dismiss them. Mr. Dado was
payment of wages; 3) the power of dismissal; and 4) the only there to furnish the grocery store with its
employers power to control the employees conduct. needed employees.

Applying the said elements in the case at bar, there is no b. The legal significance of the above stated problem
doubt that it is LBM alone which is the employer of would arise in cases where the employees were
Teofilo Lacson because it is only LBM which exercises the illegally dismissed. Since the employee arrangement
abovementioned requisites. The fact that LBM and its is that of a Labor Only Contracting, it is prohibited by
sister companies Lastimoso Construction Inc. and RL law. Under Sec. 6 of DO 18-02 Series of 2002, labor
Realty & Development are inter-related in terms of only contracting has been expressly declared

management, equipment and manpower is of no moment prohibited by law. It is defined as an arrangement


QuAMTO for LABOR LAW (1991-2015)
where the contractor or subcontractor merely
recruits, supplies or places workers to perform a job, A: The contractual stipulation that there is no employer-
work or service for a principal, and that the employee relationship between PizCorp and the RSC
contractor or subcontractor does not have members is not binding on labor officials because what
substantial capital or investment and that he does determines the existence or non-existence of employer-
not exercise the power of control over the employee relationship is the actual factual situation
contractual employee. between PizCorp and RSC members and not what is
stipulated in the contract.
Moreover, the determination of the real employer of
the workers would result to the determination as to b. Based on the test/s for employer-employee
who is responsible for providing the workers with relationship, determine the issue of who is the
mandatory legal privileges and benefits that employer of the RSC members.
contractual employees are entitled to. Furthermore,
in cases of illegal dismissal, the employees will know A: Using the control test, the employer of the RSC
who between Mr. Dado and the grocery store are members is Piz Corp. According to the facts, the RSC
they going to file charges against. members are supposed to make their deliveries in
accordance with PizCorp directives and orders. In
Q:"X" is a bona fide service contractor providing addition, the PizCorp can directly impose disciplinary
manpower services to various companies, possessing sanction, including the power to dismiss the RSC
the necessary capital and equipment needed to members.
effectively carry out its commitments. "Y" is an
employee of "X" and assigned to work as a janitor in c. Assume that RSC has a paid-up capitalization of
Company "Z". In the course of Y's assignment, Z's P1,000.000.00. Is RSC engaged in "labor only"
supervisors and employees would give verbal contracting, permissible job contracting or
instructions to Y as to how and where to perform his simply, recruitment?
work. X pays Y salary. Subsequently, Y's services
were terminated by X. Y sued Z for Illegal dismissal. A: Even if the RSC has paid up capitalization of
May Y's case against Z prosper? Why? (2001). P1,000,000.00, it is not engaged in labor-only
contracting, or permissible job contracting. It is engaged
A: No, the charges of Y will not prosper because Z is not simply in recruiting. RSC merely provides PizCorp the
his employer. It is X who is his employer even though he formers motorcycle-owning members to deliver the
renders his services in the offices of Z. X is the product of PizCorp in accordance with PizCorps
independent contractor of Z. directives and orders.

Applying the four-fold tests in determining who the Q: Assume that in the previous problem, Mario, an
employer of Y is, the following elements must be present: RSC member disgusted with the non-payment of his
(1) the selection and engagement of the employee; (2) the night shift differential and overtime pay, filed a
payment of wages; (3) the power of dismissal and (4) the complaint with the DOLE Regional Office against RSC
employers power to control the employees conduct. and PizCorp. After inspection, it was found that
indeed Mario was not getting his correct differential
In the present case, it is clear that the following elements and overtime pay and that he was declared an SSS
are present in the relationship between X and Y. The fact member (so that no premiums for SSS membership
that Zs supervisors give verbal orders to Y during the were never remitted). On this basis, the Regional
performance of his service which may denote control Director issued a compliance order holding PizCorp
over his conduct, it is insufficient to overthrow the other and RSC solidarily liable for the payment of the
3 elements present in the relationship of X and Y namely, correct differential and overtime pay and ordering
(1) that it was X who selected and engaged in the PizCorp to report Mario for membership with SSS and
employment of Y; (2) that it was X who paid Ys salaries remit overdue SSS premiums. Who has the obligation
and (3) that it was X who had the power to dismiss X. to report the RSC members for membership with the
SSS, with the concomitant obligation to remit SSS
Q: The Pizza Corporation (PizCorp) and Ready Supply premiums? Why?
Cooperative (RSC) entered into a "service
agreement" where RSC in consideration of service A: Ordinarily, if RSC is engaged in permissible job
fees to be paid by PizCorp's will exclusively supply contracting, it would be RSC who would be the employer
PizCorp with a group of RSC motorcycle-owning and, therefore, would have the obligation to report its
cooperative members who will hence forth perform employees to the SSS and remit its premiums.
PizCorp's pizza delivery service. RSC assumes under
the agreement --- full obligation for the payment of However, since RSC is only a labor-only contractor and,
the salaries and other statutory monetary benefits of therefore considered merely as agent of PizCorp, the
its members deployed to PizCorp. The parties also latter as the real employer has the legal obligation to
stipulated that there shall be no employer-employee report the RSC members as its employees for
relationship between PizCorp and the RSC members. membership with the SSS and remit its premiums.
However, if PizCorp is materially prejudiced by any
act of the delivery impose disciplinary sanctions on, Q: Don Luis, a widower, lived alone in a house with a
including the power to dismiss, the erring RSC large garden. One day, he noticed that the plants in
member/s. (2008) his garden needed trimming. He remembered that
Lando, a 17-year old out-of-school youth, had
a. Is the contractual stipulation that there is no contacted him in church the other day looking for
employer-employee relationship binding on labor work. He contacted Lando who immediately attended

officials? Why? Explain fully.

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

to Don Luiss garden a nd finished the job in three compulsory upon all employees not over sixty (60) years
days. of age and their employers.

a. Is there an employer-employee relationship ANOTHER SUGGESTED ANSWER:

between Don Luis and Lando?
If Ador is a purely casual employee:
A: Yes. All the elements of employer-employee
relationship are present, viz: No. Casual employees are not subject to compulsory
1. The selection and engagement of the employee; coverage of the SSS by express provision of law. (Section
2. The power of dismissal; 8(5) (3), RA 1611, as amended).
3. The payment of wages;
4. The power to control the employees conduct. Kinds of Employment

There was also no showing that Lando has his own tools, Probationary
or equipment so as to qualify him as an independent
contractor. Q: What limitations, if any, do the law and
jurisprudence impose on an employer's right to
ALTERNATIVE ANSWER: terminate the services of a probationary employee?
None. Lando is an independent contractor for Don Luis (2001)
does not exercise control over Landos means and
method in tending to the formers garden. A: The Labor Code [in Art. 281) provides that the services
of an employee who has been engaged on a probationary
b. Does Don Luis need to register Lando with the basis may be terminated for a just cause or when he fails
Social Security System (SSS)? (2014) to qualify as a regular employee in accordance with
reasonable standards made known by the employer to
A: Yes. Coverage in the SSS shall be compulsory upon all the employee at the time of his engagement. If the
employees not over sixty (60) years of age. probationary employee is being terminated for just
cause, he must, of course, be given due process before his
No. Lando is not an employee of Don Luis. What the
parties have is a contract for a piece of work which, while Regular
allowed by Article 1713 of the Civil Code, does not make
Lando an employee under the Labor Code and Social Q: A Construction Group hired Engineer "A" as a
Security Act. Project Engineer in 1987. He was assigned to five (5)
successive separate projects. All five (5) Contracts of
Q: Ador is a student working on his master's degree Employment he signed specified the name of the
in horticulture. To make ends meet, he takes on jobs project, its duration, and the temporary-project
to come up with flower arrangements for friends. His nature of the engagement of his services. Upon
neighbor, Nico, is about to get married to Lucia and completion of the fifth [5th) project in August 1998,
needs a floral arranger. Ador offers his services and his services were terminated. He worked for a total of
Nico agrees. They shake hands on it, agreeing that ten (10) years (1987-1998) in the five (5) separate
Nico will pay Ador P20,000.00 for his services but projects. Six months after his separation, the Group
that Ador will take care of everything. As Ador sets won a bid for a large construction project. The Group
about to decorate the venue, Nico changes all of did not engage the services of Engineer "A" as a
Ador's plans and ends up designing the Project Engineer for this new project; instead, it
arrangements himself with Ador simply executing engaged the services of Engineer "B". Engineer "A"
Nico's instructions. (2015) claims that by virtue of the nature of his functions,
i.e., Engineer in a Construction Group, and his long
a. Is there an employer-employee relationship years of service he had rendered to the Group, he is a
between Nico and Ador? regular employee and not a project engineer at the
time he was first hired. Furthermore, the hiring of
A: Yes. With Adors simply executing Nicos instruction, Engineer "B" showed that there is a continuing need
Nico, who now has control over Adors work, has become for his services.
the employer of Ador. In Royale Homes Marketing Corp. v.
Fidel Alcantara (G.R. No. 195190, July 28, 2014) the Is the claim of Engineer "A" correct? (1998)
Supreme Court held that control is the most important
determinant of employer-employee relationship. A: The claim of Engineer "A" that he is a regular employee
and not a project employee is not correct. The Labor Code

There is no employer-employee relationship. The case at Art. 280. Regular and Casual Employment. -
hand pertains to a civil law arrangement. There is no An employment shall be deemed to be regular
business undertaken by Nico; what the parties have is a where the employee has been engaged to
contract for a specific service. perform activities which are usually necessary
or desirable in the usual business or trade of
b. Will Nico need to register Ador with the Social the employer, except, where the employment
Security System (SSS)? has been fixed for a specific project or
undertaking the time of the engagement of the
A: Yes, as under Section 9 of the Social Security Law (Art. employee.

1611 as amended), coverage in the SSS shall be


QuAMTO for LABOR LAW (1991-2015)
In all the five (5) successive contracts of employment of his usual hours in the past five (5) years. Thus, he
Engineer "A" the name of the project, its duration, and the filed a complaint for the allowances that were not
temporary project nature of the engagement of his paid to him, and for retirement benefits for his
services are clearly stated: hence, Engineer "A" falls additional five (5) working years, based either on the
within the exemption of Art. 280. The Supreme Court in company's Retirement Plan or the Retirement Pay
Manansag v. NLRC, (218 SCRA 722 [1993]) has ruled as Law, whichever is applicable. (2013)
a. After Albert's retirement at age 65, should he be
The fact that the petitioners worked for several projects considered a regular employee entitled to all his
of private respondent company is no basis to consider previous salaries and benefits when the company
them as regular employees. By the very nature of their allowed him to continue working?
employer's business, they will always remain project
employees regardless of the number of projects in which A: He would be considered a contractual employee, not a
they have worked (De Ocampo v NLRC, 186 SCRA 361 regular employee. His salaries and benets will be in
[1990]). Project employees are not considered regular accordance with the stipulations of the contract he signed
employees, their services, being needed only when there with the company. The present case is similar to a case
are projects to be undertaken. The rationale for this rule, decided by the Supreme Court (Januaria Rivera v. United
is that if a project has already been completed, it would Laboratories, G.R. No. 155639, April 22, 2009) where the
be unjust to require the employer to maintain them in the Court held that the company, in employing a retired
payroll while they are doing absolutely nothing except employee whose knowledge, experience and expertise
waiting for another project. the company recognized, as an employee or as a
consultant, is not an illegality; on the contrary, it is a
Q: Kitchie Tempo was one of approximately 500 recognized practice in this country.
production operators at HITEC Semiconductors, Inc.,
and export-oriented enterprise whose business b. Is he entitled to additional retirement benefits
depended on orders for computer chips from for the additional service he rendered after age
overseas. She was hired as a contractual employee 65?
four years ago. Her contracts would be for a duration
of five (5) months at a time, usually after a one-month A: No. He cannot be compulsorily retired twice in the
interval. Her re-hiring was contingent on her same company.
performance for the immediately preceding contract.
Six months after the expiration of her last contract, Q: Linda was employed by Sectarian University (SU)
Kitchie went to HITEC's personnel department to to cook for the members of the religious order who
inquire why she was not yet being recalled for teach and live inside the campus. While performing
another temporary contract. She was told that her her assigned task, Linda accidentally burned herself.
performance during her last stint was "below Because of the extent of her injuries, she went on
average." Since there was no union to represent her, medical leave. Meanwhile, SU engaged a replacement
Kitchie seeks your advice as a labor lawyer about her cook. Linda filed a complaint for illegal dismissal, but
chances of getting her job back. her employer contended that Linda was not a regular
employee but a domestic househelp. Decide. (2014)
What will your advice be? (2005)
A: The employers argument that Linda was not a regular
A: The repeated rehiring and the continuing need of employee has no merit. The definition of domestic
Kitchie's services for 4 years are sufficient evidence of the servant or househelper contemplates one who is
necessity and indispensability of her services to HITEC's employed in the employers home to minister exclusively
business or trade (Magsalin v. National Organization for to the personal comfort and enjoyment of the employers
Working Men, et al., G.R. No. 148492, May 9, 2003). Where family. The Supreme Court already held that the mere fact
a person thus engaged has been performing the job for at that the househelper is working in relation to or in
least one year, even if the performance is not continuous connection with its business warrants the conclusion that
or is merely intermittent, the law deems the employment such househelper or domestic servant is and should be
as regular with respect to such activity and while such considered as a regular employee (Apex Mining Co., v.
activity exists (Paguio v. NLRC, G.R. No. 147816, May 9, NLRC, G.R. No. 94951, April 22, 1991). Here, Linda was
2003). Hence, Kitchie is considered a regular employee of hired not to minister to the personal comfort and
HITEC and as such, she cannot be terminated except for enjoyment of her employers family but to attend to other
cause and only after due process. employees who teach and live inside the campus.

Q: After thirty (30) years of service, Beta Company ALTERNATIVE ANSWER:

compulsorily retired Albert at age 65 pursuant to the The complaint for illegal dismissal should be dismissed.
company's Retirement Plan. Albert was duly paid his There was no showing that in hiring a replacement cook,
full retirement benefits of one (1) month pay for SU severed its employer-employee relationship with
every year of service under the Plan. Thereafter, out Linda. In illegal dismissal cases, an employee must first
of compassion, the company allowed Albert to establish, by substantial evidence, the fact of dismissal
continue working and paid him his old monthly before shifting to the employer the burden of proving the
salary rate, but without the allowances that he used validity of such dismissal (Grand Asian Shipping Lines,
to enjoy. After five (5) years under this arrangement, Inc., Eduardo P. Francisco and William How v. Wilfred
the company finally severed all employment Galvez, G.R. No. 178184, January 29, 2014). Here
relations with Albert; he was declared fully retired in Lindas dismissal was not clearly established.
a fitting ceremony but the company did not give him
any further retirement benefits. Albert thought this Q: Don Don is hired as a contractual employee of

treatment unfair as he had rendered full service at CALLHELP, a call center. His contract is expressly for

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

a term of 4 months. Don Don is hired for 3 straight that the contract of project employment clearly specifies
contracts of 4 months each but at 2-week intervals the project and the duration thereof. (Palomares v. NLRC,
between contracts. After the third contract ended, G.R. No. 120064, August 15, 1997).
Don Don is told that he will no longer be given
another contract because of "poor performance." Q: Tomas and Cruz have been employed for the last
Don Don files a suit for "regularization" and for illegal 22 years in various capacities on board the ships of
dismissal, claiming that he is a regular employee of BARKO Shipping Company. Their employment was
CALLHELP and that he was dismissed without cause. made through a local manning company. They have
You are the Labor Arbiter. How would you decide the signed several ten (10) month employment contracts
case? (2005, 2015) with BARKO Shipping. The NLRC ruled that they were
contractual employees and that their employment
A: As Labor Arbiter, I will decide the case in favor of Don was terminated each time their contracts expired. Is
Don. Given the nature of Don Dons work, which consists the ruling of the NLRC correct?
of activities usually or desirable in the usual business of
CALLHELP, Don Don should be considered a regular Explain your answer fully. (2002)
employee. Where a person thus engaged has been
performing the job for at least one year, even if the A: Yes. A contract of employment for a definite period
performance is not continuous or is merely intermittent, terminates by its own terms at the end of such period.
the law deems the employment as regular with respect to Since Tomas and Cruz signed ten (10)-month contracts,
such activity and whiles such activity exists (Paguio v. their employment terminates by its own terms at the end
NLRC, G.R. No. 147816, May 9, 2003). of each ten (10)-month period. The decisive determinant
in the term of employment should not be the activities
CALLHELPs termination of service in the guise of poor that the employee is called upon to perform but the day
performance is not valid. Hence, Don Don is considered certain agreed upon by the parties for the
a regular employee of CALLHELP and as such, he cannot commencement and termination of their employment
be terminated except for cause and only after due relation (not the character of his duties as being "usually
process. necessary or desirable in the usual business of the
employer"). Stipulation in the employment contracts
Project Employment providing for "term employment" or "fixed period
employment" are valid when the period are agreed upon
Q: Design Consultants, Inc. was engaged by the PNCC knowingly and voluntarily by the parties without force,
to supervise the construction of the South duress or improper pressure exerted on the employee;
Expressway Extension. Design Consultants, Inc. hired and when such stipulations were not designed to
Omar as a driver for two (2) years. After his two-year circumvent the laws on security of tenure (Brent School v.
contract expired, he was extended another contract Zamora, G.R. No. L-48494, February 5, 1990). Moreover, in
for nine (9) months. These contracts were entered Brent School v. Zamora, supra, the Supreme Court stated
into during the various stages and before the that Art. 280 of the Labor Code does not apply to overseas
completion of the extension project. Omar claims that employment. In Pablo Coyoca v. NLRC (G.R. No. 113658,
because of these repeated contracts, he is now a March 31, 1995), the Supreme Court also held that a
regular employee of Design Consultants. Inc. seafarer is not a regular employee and Filipino seamen
are governed by the rules and regulations governing
Is he correct? Explain briefly. (2002) overseas employment and the said rules do not provide
for separation or termination pay.
A: Yes. The principal test for determining whether a
particular employee is a "project employee" as From the foregoing cases, it is clear that seafarers are
distinguished from a "regular employee" is whether or considered contractual employees. They cannot be
not the "PROJECT EMPLOYEE" was assigned to carry out considered as regular employees under Art 280 of the
a "specific project or undertaking," the duration and Labor Code. Their employment is governed by the
scope of which were specified at the time the employee contracts they sign every time they are rehired and their
was engaged for the projects. In the problem given, there employment is terminated when the contract expires.
is no showing that Omar was informed that he was to be Their employment is contractually fixed for a certain
assigned to a "specific project or undertaking." Neither period of time. They fall under the exception of Art 280
has it been established that he was informed of the whose employment has been fixed for a specific project
duration and scope of such project or undertaking at the or undertaking the completion or termination of which
time of his engagement (Philex Mining Corp. v. NLRC, G.R. has been determined at the time of engagement of the
No. 125132, August 10, 1999). Moreover, the re-hiring of employee or where the work or services to be performed
Omar is sufficient evidence of the necessity or the is seasonal in nature and the employment is for the
indispensability of his services to the company's business duration of the season. We need not depart from the
(Aurora Land Projects Corp v. NLRC, G.R. No. 114733, rulings of this court in the two aforementioned cases
January 2, 1997) Hence, Omar is correct in claiming that which indeed constitute stare decisis with respect to the
he is a regular employee of Design Consultants, Inc. employment status of seafarers. (Douglas Millares v.
NLRC, et. al, G.R. No. 110524, March 14, 2000) Therefore,
ALTERNATIVE ANSWER: Tomas and Cruz are contractual employees. The ruling of
Omar is not correct Omar is a project employee as defined the NLRC is correct.
by Art. 280 of Labor Code. He was hired for a specific
project with fixed periods of employment, specifically: Q: A, a driver for a bus company, sued his employer
two (2) years for the first contract, and nine (9) months for nonpayment of commutable service incentive
for the second contract. A project employee who is hired leave credits upon his resignation after five years of
for a specific project only is not a regular employee employment. The bus company argued that A was not

notwithstanding an extension of the project provided entitled to service incentive leave since he was


QuAMTO for LABOR LAW (1991-2015)
considered a field personnel and was paid on Bino v. Cuenca et al., G.R. No. 150478, April 15, 2005).
commission basis and that, in any event, his claim had Converting A to a mere houseboy at the house of the
prescribed. If you were the Labor Arbiter, how would plantation owner amounts to an act of severing his
you rule? Explain. (2010) employment relations as its plantation worker (Angeles v.
A: I will grant the prayer of A. Payment on commission
basis alone does not prove that A is a field personnel. Casual
There must be proof that A is left to perform his work
unsupervised by his employer. Otherwise, he is not a field Q: A carpenter is employed by a private university in
personnel, thus entitled to commutable service incentive Manila. Is the carpenter a regular or a casual
leave (SIL) credits (Auto Bus v. Bautista, G.R. No. 156367, employee? Discuss fully. (2007)
May 16, 2005). His action has not yet prescribed. In Auto
Bus v. Bautista, the Supreme Court recognized that SIL is A: If the employment of the carpenter is sporadic and
a unique labor standard benefit, because it is brief in nature or occasional, his employment is casual
commutable. An employee may claim his accrued SIL especially because the work he is performing is not in the
throughout the years of his service with the company usual course of the schools trade or business. However,
upon his resignation, retirement, or termination. if the carpenter has rendered services for at least one
Therefore, when A resigned after five years, he has now year, whether continuous or broken, he becomes a
the right to claim ALL his SIL benefits and his right of regular employee by operation of law, with respect to the
action accrued at the time when the employer refused to activity in which he is employed and his employment
pay him with his rightful SIL benefits. (Art. 291, Labor shall continue while such activity exists. (Art. 280; See
Code). also Philippine Geothermal, Inc. vs NLRC, G.R. Nos. 82643-
67, August 30, 1990).
Q: Lina has been working as a steward with a Miami,
U.S.A-based Loyal Cruise Lines for the past 15 years. Fixed-term
She was recruited by a local manning agency,
Macapagal Shipping, and was made to sign a 10- Q: Mariano Martillo was a mason employed by the
month employment contract every time she left for ABC Construction Company. Every time that ABC had
Miami. Macapagal Shipping paid for Linas round-trip a project, it would enter into an employment contract
travel expenses from Manila to Miami. Because of a with Martillo for a fixed period that coincided with
food poisoning incident which happened during her the need for his services, usually for a duration of
last cruise assignment, Lina was not re-hired. Lina three to six months. Since the last project involved
claims she has been illegally terminated and seeks the construction of a 40-storey building, Martillo was
separation pay. If you were the Labor Arbiter contracted for 14 months. During this period, ABC
handling the case, how will you decide? (2014) granted wage increases to its regular employees,
composed mostly of engineers and rank-and-file
A: I will dismiss Linas complaint. Lina is a contractual construction workers as a result of the just concluded
employee and the length of her employment is CBA negotiations, feeling aggrieved and
determined by the contracts she entered into. Here, her discriminated against, Martillo and other similarly-
employment was terminated at the time of the expiration situated project workers demanded that increases be
of the contract. (Millares, v. NLRC, G.R. No. 110524, extended to them, inasmuch as they should now be
July 29, 2002). considered regular employees and members of the
bargaining unit. Briefly explain your answers. If you
Seasonal were ABC's legal counsel, how would you respond to
this demand? (2005)
Q: A was hired to work in a sugar plantation
performing such tasks as weeding, cutting and A: If I were ABC's legal counsel, I will argue that the
loading canes, planting cane points, fertilizing and project workers are not regular employees but fixed-
cleaning the drainage. Because his daily presence in term employees. Stipulation in employment contracts
the field was not required, A also worked as a providing for term employment or fixed period were
houseboy at the house of the plantation owner. For agreed upon knowingly and voluntarily by the parties
the next planting season, the owner decided not to without force, duress or improper pressure, being
hire A as a plantation worker but as a houseboy brought to bear upon the employee and absent any other
instead. Furious, A filed a case for illegal dismissal circumstances vitiating his consent, or where it
against the plantation owner. Decide with reason. satisfactorily appears that the employer and employee
(2010) dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the
A: A is a regular seasonal employee. Therefore, he cannot former over the latter. (Pangilinan v. General Milling
be dismissed without just or valid cause. The primary Corp., G.R. No. 149329, July 12, 2004).
standard for determining regular employment is the
reasonable connection between the particular activity Q: Lina and 20 other sales ladies filed a complaint for
performed by the employee in relation to the usual trade illegal dismissal, contending that they are SDS
or business of the employer (Pier 8 Arrastre & Stevedoring regular employees as they performed activities
Services, Inc., v. Jeff B. Boclot, G.R. No. 173849, usually necessary or desirable in the usual business
September 28, 2007). Considering that A, as plantation or trade of SDS and thus, their constitutional right to
worker, performs work that is necessary and desirable to security of tenure was violated when they were
the usual business of the plantation owner, he is dismissed without valid, just or authorized cause.
therefore a regular seasonal employee and is entitled to SDS, in defense, argued that Lina, et al. agreed prior
reinstatement upon onset of the next season unless he to engagement to a fixed-period employment and

was hired for the duration of only one season (Hacienda

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

thus waived their right to full-term tenure. Decide the observance of procedural due process prescribed under
dispute. (2008) said law. (Magsalin, et. Al. v. NOWNM, G.R. No. 14892, May
9, 2003).
A: I would rule in favor of Lina et. al. In Pure Foods
Corporation v. NLRC (G.R. No. 122653, December 12, 1997), JOB CONTRACTING
the scheme of the employer in hiring workers on a
uniformly fixed contract basis of 5 months and replacing Articles 106 to 109 of the Labor Code
them upon the expiration of their contracts with other
workers with the same employment status was found to Q: Distinguish the liabilities of an employer who
have been designed to prevent casual employees from engages the services of a bonafide "independent
attaining the status of a regular employee. contractor" from one who engages a "labor-only"
contractor? (1994)
I will resolve the illegal dismissal case in favor of SDS. In A: An employer who engages the services of a bona fide
Brent case, the Supreme Court en banc held that while independent contractor is jointly and severally liable
fixed term employment has already been repealed by the with the said independent contractor in the event that it
various amendments to the Labor Code, the Civil Code fails to pay the recruited workers of their wages in
still allows fixed term employment. Such kind of accordance with the law, as provided under Art. 106.
employment is valid as long as it is established that:
Similarly, under the same above stated provision, an
1. The fixed period of employment was knowingly and employer who engages into a labor only contracting, shall
voluntarily agreed upon by the parties, without any be fully responsible for the employees in the same
force, duress or improper pressure being brought to manner and extent as if he is the one who directly
bear upon the employee and absent any other employed or recruited them; as the labor-only contractor
circumstance vitiating his consent; and is considered by law as merely an agent of the employer.
2. The employer and employee dealt with each other on
more or less equal terms with no moral dominance Q: Pandoy, an electronics technician, worked within
on the latter. the premises of Perfect Triangle, an auto accessory
shop. He filed a complaint for illegal dismissal,
Since it is admitted, that Lina, agreed, prior to their overtime pay and other benefits against Perfect
engagement, to the fixed term employment, and it Triangle, which refused to pay his claims on the
appearing that their consent was not vitiated, and ground that Pandoy was not its employee but was an
considering further that it has not been argued that the independent contractor. It was common practice for
parties dealt with each other on less equal terms, it then shops like Perfect Triangle to collect the service fees
follows that Lina fixed term employment is valid. from customers and pay the same to the independent
No illegal dismissal can take place upon expiration of contractors at the end of each week. The auto shop
such fixed term employment. explained that Pandoy was like a partner who
worked within its premises, using parts provided by
Q: Lucy was one of approximately 500 call center the shop, but otherwise Pandoy was free to render
agents at Hambergis, Inc. She was hired as a service in the other auto shops. On the other hand,
contractual employee four years ago. Her contracts Pandoy insisted that he still was entitled to the
would be for a duration of five (5) months at a time, benefits because he was loyal to Perfect Triangle, it
usually after a one month interval. Her re-hiring was being a fact that he did not perform work for anyone
contingent on her performance for the immediately else. Is Pandoy correct? Explain briefly. (2002)
preceding contract. Six (6) months after the
expiration of her last contract, Lucy went to A: Pandoy is incorrect. An independent contractor is
Hambergis personnel department to inquire why she defined as one who exercises independent employment
was not being recalled to work. She was told that her and contracts to do a piece of work according to his own
performance during her last contract was below methods and without being subject to the control of his
average. Lucy seeks your legal advice about her employer except as to the result of the work.
chances of getting her job back. What will your advice
be? (2014) In this case, the fact that Pandoy works within the
premises of Perfect Triangles shop is not tantamount to
A: Lucy cannot get her job back. She is a fixed-term his employment as a worker of Perfect Triangle. The
employee and as such, her employment terminates upon common practice for auto accessory shops like the
the expiration of her contract. (Rowell Industrial Perfect Triangle in engaging the services of Pandoy and
Corporation v. Court of Appeals, G.R. No. 167714, March 7, allowing him to conduct his work in accordance to his
2007). own methods and in permitting him to contract other
services outside Perfect Triangle falls squarely within the
ALTERNATIVE ANSWER: definition of an independent contractor. Therefore, not
I will advice Lucy that she can get her job back if she files being an employee, his claim will not stand as he is not
a case for illegal dismissal where, as a general rule, the legally entitled to the remedies accorded by law only to
twin reliefs of backwages and reinstatement are employees, no matter how loyal he is to Perfect Triangle.
available. In the instant case, Lucy is a regular employee
because the employment contract for five (5) months at a Q: Sta. Monica Plywood Corporation entered into a
time, for four (4) years are obviously intended to contract with Arnold for the milling of lumber as well
circumvent an employees security of tenure and are as the hauling of waste wood products. The company
therefore void. As a regular employee, Lucy may only be provided the equipment and tools because Arnold
dismissed from service based on just and authorized had neither tools and equipment nor capital for the

causes enumerated under the Labor Code, and after job. Arnold, on the other hand, hired his friends,


QuAMTO for LABOR LAW (1991-2015)
relatives and neighbors for the job. Their wages were Q: Antonio Antuquin, a security guard, was caught
paid by Sta. Monica Plywood Corp. to Arnold, based sleeping on the job while on duty at the Yosi Cigarette
on their production or the number of workers and Factory. As a result, he was dismissed from
the time used in certain areas of work. All work employment by the Wagan Security Agency, an
activities and schedules were fixed by the company. independent contractor. At the time of his dismissal,
Antonio had been serving as a watchman in the
a. Is Arnold a job contractor? Explain briefly. factory for many years, often at stretches of up to 12
hours, even on Sundays and holidays, without
A: No. In the leading case of Baguio v. NLRC, (G.R. No. overtime, nighttime and rest day benefits. He
79004, October 4, 1991), the Supreme Court had the thereafter filed a complaint for illegal dismissal and
occasion to state the circumstances leading to the non-payment of benefits against Yosi Cigarette
existence of a job contracting arrangement. Job Factory, which he claimed was his actual and direct
contracting exists when (1) the contractor carries on an employer.
independent business and undertakes the contract work
on his own account under his own responsibility As the Labor Arbiter assigned to hear the case, how
according to his own manner and method, free from the would you correctly resolve the following:
control and direction of his employer or principal in all
matters connected with the performance of the work a. Antonios charge of illegal dismissal.
except as to the results thereof; and (2) the contractor has b. Antonios claim for overtime and other benefits.
substantial capital or investment in the form of tools, (2005)
equipment, machineries, work premises, and other
materials which are necessary in the conduct of his A:
business. a. This is a case involving permissible job contracting.
Antonios charge of illegal dismissal against Yosi
In the present case, it is obvious that Arnold is not a job Cigarette Factory will not prosper. Wagan Security
contractor for he does not have the either the substantial Agency, an independent contractor, is Antonios
capital or the control over the employees. direct employer. Yosi is only Antonios indirect
employer. By force of law, there is in reality no
b. Who is liable for the claims of the workers hired employer-employee relationship between Yosi and
by Arnold? Explain briefly. (2002) Antonio. (Baguio v. NLRC, G.R.Nos.79004-08, October
A: In this case, it shall be Sta. Monica Plywood who is b. Antonios claim for overtime and other benefits
liable for the claims of the workers as it is the real should be paid by Yosi Cigarette Factory. The Labor
employer of the latter; and not Arnold as he is a labor- Code provides that in the event that the contractor or
only contractor who merely deals with the furnishing of subcontractor fails to pay the wages of his
manpower to Sta. Monica. employees, the employer shall be jointly and
severally liable to the extent of the work performed
Q: Clean Manpower Inc. (CMI) had provided janitorial under the contract in the same manner and extent
services to the National Economic Development that he is liable to employees directly employed by
Authority (NEDA) since April 1988. Its service his contractor or subcontractor for any violation of
contract was renewed every three months. However, any provision of the Labor Code.
in the bidding held on July 1992, CMI was disqualified
and excluded. In 1993, six janitors of CMI formerly Q: Star Crafts is a lantern maker based in Pampanga.
assigned at NEDA filed a complaint for underpayment It supplies Christmas lanterns to stores in Luzon,
of wages. Both CMI and NEDA were impleaded as Metro Manila, and parts of Visayas, with the months
respondents for failure to comply with NCR Wage of August to November being the busiest months. Its
Orders Nos. 01 and 02, which took effect on factory employs a workforce of 2,000 workers who
November 1, 1990 and January 2, 1992, respectively. make different lanterns daily for the whole year.
Because of increased demand, Star Crafts entered
Should NEDA, a government agency subject to into a contractual arrangement with People Plus, a
budgetary constraints, be held liable solidarily with service contractor, to supply the former with 100
CMI for the payment of salary differentials due the workers for only 4 months, August to November, at a
complainants? Cite the legal basis of your answer. rate different from what they pay their regular
(2004, 2014) employees. The contract with People Plus stipulates
that all equipment and raw materials will be supplied
A: Yes, NEDA should be impleaded as a defendant. Art. by Star Crafts with the express condition that the
106 provides that in the event that the contractor or workers cannot take any of the designs home and
subcontractor fails to pay the wages the wages of his must complete their tasks within the premises of Star
employees, the employer shall be jointly and severally Crafts. Is there an employer-employee relationship
liable with his contractor or subcontractor to such between Star Crafts and the 100 workers from People
employees to the extent of the work performed under the Plus? Explain. (2015)
contract, in the same manner and extent that he is liable
to the employees directly employed by him. A: Yes. People Plus is a labor-only-contractor because it
is not substantially capitalized. Neither does it carry on
The fact that NEDA is a government agency is of no an independent business in which it uses its own
moment. In U.S.A v. Ruiz (G.R. No. L-35645, May 22, 1985), investment in the form of tools, equipment, machineries
the Supreme Court ruled that the State may be sued if the or work premises. Hence, it is just an agent or recruiter of
contract it entered into is pursuant to its proprietary workers who perform work directly related to the trade
function. of Star Crafts. Since both the essential element and the

conforming element of labor-only contracting are

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

present, Star Crafts becomes the employer of the supplies prescribed weight, and enrolled him in several
worker. weight reduction programs. He consistently failed to
meet his target. He was given a 6-month grace period,
As principal, Star Crafts will always be an employer in after which he still failed to meet the weight limit. FSC
relation to the workers supplied by its contractor. Its thus sent him a Notice of Administrative Charge for
status as employer is either direct or indirect depending violation of company standards on weight
on whether the contractor is legitimate or not. Thus even requirements. He stated in his answer that, for
if People Plus were a legitimate contractor, still Star medical reasons, he cannot have a rapid weight loss.
Crafts will be treated as a statutory employer for A clarificatory hearing was held where Santos fully
purposes of paying the workers unpaid wages and explained his predicament. The explanation did not
benefits. satisfy FSA and so it decided to terminate Santos's
service for violation of company standards. Santos
Department Order No. 18-A filed a complaint for illegal dismissal, arguing that
the company's weight requirement policy is
Q: What is a "labor-only" contract? (1994) unreasonable and that his case is not a disciplinary
but a medical issue (as one gets older, the natural
A: A labor-only contract shall refer to an arrangement tendency is to grow heavier). FSA defended its policy
where the contractor or subcontractor merely recruits, as a valid exercise of management prerogative and
supplies or places workers to perform a job, work or from the point of view of passenger safety and
service for a principal, and any of the following elements extraordinary diligence required by law of common
are present: (a) the contractor or subcontractor does not carriers; it also posited that Santos failure to achieve
have substantial capital or investment which relates to his ideal weight constituted gross and habitual
the job, work or service to be performed and the neglect of duty, as well as willful disobedience to
employees recruited, supplied or placed by such lawful orders of the employer. The Labor Arbiter
contractor or subcontractor are performing activities found the dismissal illegal for there was neither gross
which are directly related to the main business of the nor habitual neglect of duty nor willful disobedience.
principal; or (b) the contractor does not exercise the right Is the Labor Arbiter correct? Why or why not? Explain
to control over the performance of the work of the fully. (2008)
contractual employee. This form of arrangement is
expressly prohibited by law. (Sec. 5 DOLE DO 18-02 A: The Labor Arbiter is not correct in finding the
SERIES OF 2002). dismissal of Santos illegal. Pepe Santos, right at the
commencement of his employment at FSA as flight
DISMISSAL FROM EMPLOYMENT steward, knew that he must maintain, given his height
and body frame, a weight of 130 to 170 pounds as stated
Q: Gabriela Liwanag has been working as a in the FSAs Cabin Crew Administrative Manual. This
bookkeeper at Great Foods, Inc. which operates a prerequisite is an exercise of management prerogative.
chain of high-end restaurants throughout the When Santos became a flight steward at FSA, he accepted
country, since 1970 when it was still a small eatery at his employment with this pre-requisite which is not
Binondo. In the early part of the year 2003, Gabriela, violative of any law but is instead positively based on
who was already 50 years old, reported for work passenger safety and extraordinary diligence required by
after a week-long vacation in her province. It was the law of common carrier. Thus, the termination of Santos
height of the SARS (Severe Acute Respiratory was for a valid reason. He was no longer complying with
Syndrome) scare, and management learned that the a pre-requisite which was in his contract of employment
first confirmed SARS death case in the Philippines, a from the very beginning.
balikbayan nurse from Canada, is a townmate of
Gabriela. Immediately, a memorandum was issued by Q: Flight attendant A, five feet and six inches tall,
management terminating the services of Gabriela on weighing 170 pounds ended up weighing 220 pounds
the ground that she is a probable carrier of SARS in two years. Pursuant to the long standing Cabin and
virus and that her continued employment is Crew Administration Manual of the employer airline
prejudicial to the health of her co-employees. Is the that set a 147-pound limit for As height, management
action taken by the employer justified? (2004) sent A a notice to shape up or ship out within 60
days. At the end of the 60-day period, A reduced her
A: The employers act of terminating the employment of weight to 205 pounds. The company finally served
Gabriela is not justified. There is no showing that said her a Notice of Administration Charge for violation of
employee is sick with SARS, or that she associated or had company standards on weight requirements. Should
contact with the deceased nurse. They are merely A be dismissed? Explain. (2010)
townmates. Furthermore, there is no certification by a
competent authority that the disease is of such a nature A: No. While the weight standards for cabin crew may be
or such a stage that it cannot be cured within a period of valid company policy in light of its nature as a common
six months even with proper medical treatment. carrier, the airline company is now estopped from
(Implementing Rules, Book VI, Rule 1, Sec. 8, Labor Code). enforcing the Manual as a ground for dismissal against A.
It hired A despite her weight of 170 pounds, in
Q: Pepe Santos was an international flight steward of contravention of the same Manual it now invoked. The
Flysafe Airlines. Under FSA's Cabin Crew Labor Code gives to an airline the power to determine
Administration Manual, Santos must maintain, given appropriate minimum age and other standards for
his height and body frame, a weight of 150 to 170 requirement or termination in special occupation such as
pounds. After 5 years as a flight steward, Santos those of flight attendants and the like. Weight standards
began struggling with his weight; he weighed 200 for cabin crew are a reasonable imposition by reason of
lbs., 30 pounds over the prescribed maximum weight. flight safety (Yrasuegi v. PAL, G.R. No. 168081, October 17,

The Airline gave him a one-year period to attain the 2008). However, A had already been employed for two (2)


QuAMTO for LABOR LAW (1991-2015)
years before the airline company imposed on her this now flies a complaint for illegal dismissal, arguing
weight regulation, an incident which the airline company that his acts did not constitute serious misconduct
did not raise, thus it cannot now render her amiss of her that would justify his dismissal. Decide. (1996)
A: The dismissal is not justified because the serious
Just Causes misconduct committed by the employee is not in
connection with his work. Art. 282(a) of the Labor Code
Q: Nonoy Santos was employed as a middle provides that an employer may terminate an
management employee in Company A. In the course employment for serious misconduct or willful
of his employment he was told by his superiors of the disobedience by the employee of the lawful orders of his
possible merger between Company A and Company B. employer or representative in connection with his work.
Fearing that he might lose his Job upon the merger of In order to constitute a "just cause" for dismissal,
the two companies, he looked for and found another however, the act complained of must be related to the
job. Upon resignation he was given separation pay performance of the duties of the employee such as would
equivalent to one month's pay per year of service, show him to be thereby unfit to continue working for the
although technically speaking, he is not entitled employer."
thereto being a resigned employee. Mr. Santos
executed a quitclaim and Waiver upon receipt of his Q: Jose and Erica, former sweethearts, both worked
separation pay benefits. The merger between the two as sales representatives for Magna, a multinational
companies turned out to be a buy-out by the latter of firm engaged in the manufacture and sale of
the former. At this point, Company A's employees, pharmaceutical products. Although the couple had
save for a handful, were dismissed upon payment of already broken off their relationship, Jose continued
separation pays equivalent to three (3) months for to have special feelings for Erica. One afternoon, Jose
every year of service because of the Union's efforts on chanced upon Erica riding in the car of Paolo, a co-
the workers' behalf. Feeling aggrieved, Santos employee and Erica's ardent suitor; the two were on
subsequently charged Company A with their way back to the office from a sales call on Silver
discrimination, constructive dismissal, Drug, a major drug retailer. In a fit of extreme
underpayment, resignation, separation benefits and jealousy, Jose rammed Paolo's car, causing severe
reinstatement. The Labor Arbiter and NLRC injuries to Paolo and Erica. Jose's flare up also caused
sustained Company A's position that Santos' heavy damage to the two company-owned cars they
quitclaim is valid, and that as a manager he knew the were driving. (2013)
import of what he was signing and, therefore,
estopped from claiming otherwise. a. As lawyer for Magna, advise the company on
whether just and valid grounds exist to dismiss
Are the Labor Arbiter and the NLRC correct? (1994, Jose.
A: Jose can be dismissed for serious misconduct,
A: The Labor Arbiter and the NLRC are correct. Santos violation of company rules and regulations, and
was not coerced into resigning. He voluntarily resigned. commission of a crime against the employers
Then, upon receipt of the separation pay that technically representatives. Article 282 of the Labor Code provides
he was not entitled to receive, he voluntarily executed a that an employer may terminate an employment for any
quitclaim and waiver. These facts show beyond doubt serious misconduct or willful disobedience by the
that he is estopped from claiming he was a victim of employee of the lawful orders of his employer or his
discrimination. (Enieda Monttua vs. National Labor representatives in connection with his work. Misconduct,
Relations Commission, et al, G.R No, 71504, December 17, involves the transgression of some established and
1993). denite rule of action, forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not
Q: Sergio, an employee of Encantado Philippines, Inc. mere error in judgment
(EPI), was at the company canteen when Corazon, a
canteen helper, questioned him for his use of For misconduct to be serious and therefore a valid
somebody elses identification card (ID). Sergio ground for dismissal, it must be of grave and aggravated
flared up and shouted at Corazon Wala kang character and not merely trivial or unimportant; and
pakialam! Kung gusto mo, itapon ko tong mga connected with the work of the employee.
pagkain ninyo! When Sergio noticed that some
people where staring at him rather menacingly, he b. Assuming this time that Magna dismissed Jose
left the canteen but returned a few minutes later to from employment for cause and you are the
remark challengingly Sino ba ang nagagalit Sergio lawyer of Jose, how would you argue the position
then began smashing some food items that were on that Jose's dismissal was illegal?
display for sale in the canteen, after which he slapped
Corazon which caused her to fall and suffer A: The offense committed by Jose did not relate to the
contusions. The incident prompted Corazon to file a performance of his duties. For misconduct or improper
written complaint with Gustavo, the personnel behavior to be a just cause for dismissal, it (a) must be
manager of EPI, against Sergio. Gustavo required serious; (b) must relate to the performance of the
Sergio to explain in writing why no disciplinary employees duties; and (c) must show that the employee
action should be taken against him. In his written has become unfit to continue working for the employer.
explanation Sergio admitted his misconduct but tried On the basis of the foregoing guidelines, it can be
to explain it away by saying that he was under the concluded that Paolo was not guilty of serious
influence of liquor at the time of the incident. Gustavo misconduct. Paolo was not performing ofcial work at the
thereafter issued a letter of termination from the time of the incident (Lagrosas v. Bristol Myers Squibb, GR.

employment of Sergio for serious misconduct. Sergio No. 168637/ 170684, September 12, 2008). Additionally,

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

there was no compliance with the rudimentary Q: Domingo, a bus conductor of San Juan
requirements of due process. Transportation Company, intentionally did not issue
a ticket to a female passenger, Kim, his long-time
Q: International Motors Corporation (IMC) crush. As a result, Domingo was dismissed from
undertook a reorganization of the company and employment for fraud or willful breach of trust.
right-sizing of its personnel complement due to the Domingo contests his dismissal, claiming that he is
current financial crisis. The affected employees were not a confidential employee and, therefore, cannot be
given the option to resign with corresponding dismissed from the service for breach of trust. Is
generous benefits attending such option. The said Domingo correct? Reasons. (2009)
employees opted to resign on account of these
negotiated benefits; and after receipt of which, they A: Domingo as bus conductor holds a position wherein he
executed quitclaims in favor of IMC. Immediately was reposed with the employers trust and confidence. In
thereafter, the employees voluntarily resigned for Bristol Myers Squibb (Phils.) v. Baban (G.R. No. 167449,
valuable consideration and that, in any case, they December 17, 2008), the Court establishes a second class
have executed quitclaims in favor of the company. of positions of trust that involve rank-and-file employees,
The employees, however, claimed that they were who, in the normal and routine exercise of their
forced to resign, and that they executed the functions, regularly handle significant amounts of money.
quitclaims only because of dire necessity. A bus conductor falls under such second class of persons.
This does not mean, however, that Domingo should be
Is the company guilty of Illegal dismissal? Why? dismissed. In Etcuban v. Sulpicio Lines (G.R. No. 148410,
(1999) January 17, 2005), the Court held that where the amount
involved is miniscule, an employee may not be dismissed
A: No. The company is not guilty of illegal dismissal since for loss of trust and confidence.
the facts clearly indicate that the "employees were given
the option to resign with corresponding generous Q: Daisy, the branch manager of Tropical Footwear
benefits attending such option" and that these employees Inc.. was dismissed for serious misconduct. She filed
"opted for resignation on account of these negotiated a complaint for illegal dismissal and damages. The
benefits". Nothing in the facts indicate that their consent Labor Arbiter sustained Daisy's dismissal but
to the waiver of benefits under the Labor Code was awarded her separation pay based on social justice
vitiated by fraud, violence, undue influence or any other and as an act of compassion considering her 10-year
vice or defect. service with the company.

Q: During their probationary employment, eight (8) Was the award of the separation pay proper? Explain.
employees were berated and insulted by their (1996)
supervisor. In protest, they walked out. The
supervisor shouted at them to go home and never to A: No, the award of separation pay is not proper because
report back to work. Later, the personnel manager the employee was terminated for serious misconduct and
required them to explain why they should not be payment of separation pay will be to reward an employee
dismissed from employment for abandonment and for a wrong doing. In Philippine Long Distance Telephone
failure to qualify for the positions applied for. They Co., vs NLRC, (G.R. No. 80609, August 23, 1988) the Court
filed a complaint for illegal dismissal against their held that henceforth separation pay shall be allowed as a
employer. measure of social justice only in those instances where
the employee is validly dismissed for causes other than
As a Labor Arbiter, how will you resolve the case? serious misconduct or those reflecting his moral
(2006) character. The policy of social justice is not intended to
countenance wrongdoing. Compassion for the poor is an
A: As a Labor Arbiter I will resolve the case in favor of the imperative of every human society but only when the
eight (8) probationary employees due to the following recipient is not a rascal claiming an undeserved privilege.
considerations: Those who invoke social justice may do so only if their
hands are clean and their motives blameless. A contrary
a. Probationary employees also enjoy security of rule would have the effect of rewarding rather than
tenure (Biboso v. Victoria Milling, G.R. No. L- 44360, punishing the erring employee for his offense.
March 31, 1977).
b. In all cases involving employees on probationary ALTERNATIVE ANSWER:
status, the employer shall make known to the The award of the separation pay was not proper.
employee at the time he is hired, the standards by According to the Labor Code, SEPARATION PAY is to be
which he will qualify for the positions applied for. paid to an employee whose employment is terminated
c. The filing of the complaint for illegal dismissal due to the installation of labor saving devices,
effectively negates the employer's theory of redundancy, retrenchment to prevent losses or the
abandonment (Rizada v. NLRC, G.R. No. 96982, closing or cessation of operation of the establishment or
September 21, 1999). undertaking. When an employer terminates the services
d. The order to go home and not to return to work of an employee who has been found to be suffering from
constitutes dismissal from employment. any disease, the employee is also to be paid separation
e. The eight (8) probationary employees were pay.
terminated without just cause and without due
process. But on the basis of equity, the Supreme Court has ruled
that an employee whose employment has been
In view of the foregoing, I will order reinstatement to terminated for just cause may nevertheless, or
their former positions without loss of seniority rights humanitarian reasons, be granted financial assistance in

with full backwages, plus damages and attorney fees. the form of separation pay. However, the Supreme Court


QuAMTO for LABOR LAW (1991-2015)
also ruled that a terminated employee is not deserving of he was guilty of wilful disobedience to do what
said financial assistance if her termination is due to management asked him to do. This is a just cause for his
serious misconduct. In this case, Daisy was dismissed termination.
because of serious misconduct. Thus, she should not be
paid separation pay. Q: Oscar Pimentel was an agent supervisor, rising
from the ranks, in a corporation engaged in real
Q: "A" worked for company "B" as a rank and file estate. In order to promote the business, the
employee until April 1990 when A's services were company issued a memorandum to all agent
terminated due to loss of confidence in A. However, supervisors requiring them to submit a feasibility
before effecting A's dismissal, B accorded A due study within their respective areas of operation. All
process including full opportunity to answer the agent supervisors complied except Oscar. Reminded
charges against him in the course of the investigation. by the company to comply with the memorandum,
Was B justified in dismissing A after the Oscar explained that being a dropout in school and
investigation? Why? (2001) uneducated, he would be unable to submit the
required study. The company found the explanation
A: "B" is justified in dismissing "A" for loss of confidence unacceptable and terminated his employment.
after according him the right to procedural due process. Aggrieved, Oscar filed a complaint for illegal
However, the following guidelines must be observed, as dismissal against the company.
ruled in Nokom vs. NLRC, (G.R. No. 140034, July 18, 2000):
Decide the case. (2003)
1. Loss of confidence should not be simulated;
2. It should not be used as subterfuge for causes which A: For failure to comply with the memorandum to submit
are improper, illegal or unjustified; a feasibility study on his area of operation, Oscar cannot
3. It may not be arbitrarily asserted in the face of be terminated (presumably for insubordination or willful
overwhelming evidence to the contrary; and disobedience) because the same envisages the
4. It must be genuine, not a mere after thought to justify concurrence of at least two requisites: (1) the employee's
their action assailed conduct must have been wilful or intentional, the
wilfulness being characterized by a wrongful and
Q: Roman had been a driver of Double-Ten perverse attitude; and (2) the order violated must have
Corporation for ten (10) years. As early as his fifth been reasonable, or lawful, made known to the employee
year in the service he was already commended as a and must pertain to the duties which he had been
Model Employee and given a salary increase. On his engaged to discharge. In the case at bar, at least two
seventh year, he became a steward of his labor union. requisites are absent, namely: (1) Oscar did not wilfully
Since then he became disputatious and obstinate and disobey the memorandum with a perverse attitude; and
his performance fell below par. One day his manager (2) the directive to make a feasibility study did not
told him to pick up some documents from a certain pertain to his duties. Hence, the termination from
bank which were needed to close a business employment of Oscar Pimentel is not lawful.
transaction. Roman did not obey. He said he had an
important personal engagement. Moreover, he did Q: Mariet Demetrio was a clerk-typist in the Office of
not want to drive a vehicle that was not air- the President of a multi-national corporation. One
conditioned. When his immediate supervisor asked day she was berated by the President of the company,
him in the afternoon to drive an air-conditioned car, the latter shouting invectives at her in the presence
Roman again refused. He said he did not want to drive of employees and visitors for a minor infraction she
as he wanted to leave the office early. Roman was committed. Mariet was reduced to tears out of shame
asked to explain. After hearing his explanation, and felt so bitter about the incident that she filed a
Roman was dismissed for wilful disobedience. civil case for damages against the company president
Roman filed a case for illegal dismissal against the before the regular courts. Soon thereafter, Mariet
Double-Ten Corporation with prayer for received a memorandum transferring her to the
reinstatement and full back wages without loss of Office of the General Manager without demotion in
seniority rights, plus moral and exemplary damages rank or diminution in pay. Mariet refused to transfer.
and attorney's fees. Roman contended that since With respect to the civil suit for damages, the
there was no emergency situation and there were company lawyer filed a Motion to Dismiss for lack of
other drivers available, his refusal to drive for the jurisdiction considering the existence of an
manager, and later for his supervisor, was not employer-employee relationship and therefore, it is
serious enough to warrant his dismissal. On the other claimed that the case should have been filed before
hand, he claimed that he was being punished because the Labor Arbiter. Will Mariet Demetrio's refusal to
of his activities as a steward of his union. If you were transfer constitute the offense of insubordination?
the Labor Arbiter, would you sustain Roman? Discuss Explain briefly. (1999)
fully. (1995)
A: Mariet Demetrio's transfer constitutes the offense of
A: If I were the Labor Arbiter, I will not sustain Roman. It insubordination. The transfer is a lawful order of the
is true that it would be an unfair labor practice for an employer. It is the employer's prerogative, based on its
employer to discriminate against his employee for the assessment and perception of its employees'
latter's union activities. But in the present case, the qualifications, aptitudes, and competence, to move its
corporation is not discriminating against Roman because employees around in the various areas of its business
he is a union official. When the Manager of Roman told operations in order to ascertain where they will function
him to pick up some documents from a certain bank, this with maximum benefit to the company. An employee's
was a lawful order and when Roman did not obey the right to security of tenure does not give him such a vested
order, he was disobedient; and when he disobeyed a right in his position as would deprive the company of its

similar request made later in the afternoon of same day, prerogative to change his assignment or transfer him

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

where he will be most useful. When his transfer is not a. As counsel for the corporation, what steps will
unreasonable, nor inconvenient, nor prejudicial to him, you take prior to its closure?
and it does not involve a demotion in rank or a diminution
of his salaries, benefits, and other privileges, the A: As counsel for the corporation, I shall advise the latter
employee may not refuse to obey the order of transfer. to serve a written notice of termination on the workers
(Philippine Japan Active Carbon Corp. v. NLRC, G.R. No. and the Department of Labor and Employment at least
83239, March 8, 1989). one month before the intended date thereof as provided
under Article 283 of the Labor Code.
Q: Lionel, an American citizen whose parents
migrated to the U.S. from the Philippines, was hired b. Are the employees entitled to separation pay?
by JP Morgan in New York as a call center specialist. (2006, 2012)
Hearing about the phenomenal growth of the call
center industry in his parents native land, Lionel A: No. In the case of JAKA Foods v. Pacot, (G.R. No. 151378,
sought and was granted a transfer as a call center March 28, 2005), adopting the declaration of the Supreme
manager for JP Morgans operations in Taguig City. Court in the case of Reahs Corporation v. NLRC (G.R. No.
Lionels employment contract did not specify a 117473, April 15, 1997), states that: when the closure of
period for his stay in the Philippines. After three business or cessation of operations is due to serious
years of working in the Philippines, Lionel was business losses or financial reverses; duly proved, in
advised that he was being recalled to New York and which case, the right of affected employees to separation
being promoted to the position of director of pay is lost for obvious reasons.
international call center operations. However,
because of certain "family reasons," Lionel advised Q: Soon after the Asian meltdown began in October
the company of his preference to stay in the 1997, ABC Realty and Management Corporation
Philippines. He was dismissed by the company. undertook a downsizing program and terminated
Lionel now seeks your legal advice on: (2014) nearly a third of its regular workforce. The affected
employees questioned their termination arguing that
a. Whether he has a cause of action the action was precipitate in that ABC had not proved
that it sustained any losses. Is the claim of the
A: Lionel has a cause of action; he was illegally dismissed. employees correct? Explain your answer, (2001)
Dismissal due to an employees refusal of a promotion is
not within the sphere of management prerogative. There A: The claim of the employees may or may not be correct.
is no law that compels an employee to accept promotion. When the Corporation undertook its downsizing
(Dosch v. NLRC, G.R. No. L-51182, July 5, 1983). program, it may have terminated its employees on either
one of the two grounds, namely, redundancy or
b. Whether he can file a case in the Philippines retrenchment.

A: Yes. Since this is a case of illegal dismissal, the Labor For redundancy, there is no requirement of losses,
Arbiters have jurisdiction over the same (Art. 217 (a) (2), whereas in retrenchment, substantial losses, actual or
Labor Code). Under the 2011 NLRC Rules of Procedure, all anticipated, is a requirement. In Atlantic Gulf and Pacific
cases which Labor Arbiters have authority to hear and Company v. NLRC, (G.R. No. 127516, May 28, 1999), the
decide, may be filed in the Regional Arbitration branch Supreme Court ruled: it is necessary to distinguish
having jurisdiction over the workplace of the redundancy from retrenchmentRedundancy exists
complainant or petitioner. (Rule IV, Section 1). when the services of an employee are in excess of what is
required by an enterprise. Retrenchment on the other
c. What are his chances of winning hand, is resorted to primarily to avoid or minimize
business losses.
A: He has a big chance of winning. An employee cannot be
promoted without his consent, even if the same is merely Q: What conditions must prevail and what
a result of a transfer, and an employees refusal to accept requirements if any, must an employer comply with
promotion cannot be considered as insubordination or to justify/effect a valid redundancy program? (2001)
wilful disobedience of a lawful order of the employer. In
this case, JP Morgan cannot dismiss Lionel due to the A: In the case of Asian Alcohol Corporation v. NLRC, (G.R.
latters refusal to accept the promotion. (Norkis Trading No. 131108 March 25, 1999), the Supreme Court stated
Co., Inc. v. Gnilo, G.R. No. 159730, February 11, 2008). that redundancy exists when the service capability of the
work is in excess of what is reasonably needed to meet
ALTERNATIVE ANSWER: the demands on the enterprise. A redundant position is
His chances of winning is NIL because the objection to the one rendered superfluous by any number of factors, such
transfer was grounded solely on personal family as over hiring of workers, decreased volume of business
reasons that will be caused to him because of the dropping of a particular line previously manufactured by
transfer. (OSS Security v. NLRC, G.R. No. 112752, February the company or phasing out of a service activity
9, 2000); Phil. Industrial Security Agency Corp. v. Dapitan, previously undertaken by the business. Under these
G.R. No. 127421, December 8, 1999). conditions, the employer has no legal obligation to keep
in its payroll more employees than are necessary for the
Authorized Causes operation of its business.

Q: ABC Tomato Corporation, owned and managed by For the implementation of a redundancy program to be
three (3) elderly brothers and two (2) sisters, has valid, the employer must comply with the following
been in business for 40 years. Due to serious business requisites:
losses and financial reverses during the last five (5)

years, they decided to close the business.


QuAMTO for LABOR LAW (1991-2015)
1. Written notice served on both the employees as status (i.e., whether they are temporary, casual,
and the Department of Labor and Employment at regular or managerial employees), efficiency,
least one month prior to the intended date of senority, physical fitness, age, and financial hardship
retrenchment; for certain workers.
2. Payment of separation pay equivalent to at least
one month pay or at least one month pay for Q: Is the seniority rule or last in first out policy to be
every year of service whichever is higher; strictly followed in effecting a retrenchment or
3. Good faith in abolishing the redundant positions redundancy program? (2001)
4. Fair and reasonable criteria in ascertaining what
positions are to be declared redundant and A: The Supreme Court stated that with regard the policy
accordingly abolished. of first in, last out in choosing which positions to declare
as redundant or whom to retrench to prevent further
Q: Can redundancy exist where the same is due to the business losses, there is no law that mandates such a
companys failure to properly forecast its manpower policy. The reason is simple enough. A host of relevant
requirements? (2000) factors come into play in determining cost efficient
measures and in choosing the employees who will be
A: Yes. Redundancy exists when a position has become an retained or separated to save the company from closing
excess or superfluous which, in turn, may be caused by shop. In determining these issues, management plays a
reorganization, closure of a section or department, or pre-eminent role. The characterization of positions as
adoption of labor-saving arrangements. Poor forecasting redundant is an exercise of business judgment on the part
does not invalidate redundancy. Forecasting after all is of the employer. It will be upheld as long as it passes the
not fail-free (Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249, test of arbitrariness.
February 7, 1991). Further, it may be the outcome of a
number of factors such as overhiring of workers, Due Process
decreased volume of business, or dropping of a particular
product line or service activity previously manufactured Twin-notice Requirement
or undertaken by the enterprise.
Hearing; Meaning of Opportunity to be Heard
Q: Can redundancy exist where the work performed
by twelve (12) workers can be performed as Q: Distinguish between the substantive and the
efficiently by ten (10) workers by increasing the procedural requirements for the dismissal of an
speed of a machine without detriment to the health employee. (1994)
and safety of the workers? (2000)
A: The substantive requirement for the valid dismissal of
A: Yes. Redundancy can exist where work efficiency has an employee means that there should be a just cause for
been improved mechanically thus resulting in excessive the termination of an employee or that the termination is
or superfluous manpower. (Wiltshire File Co., Inc. v. NLRC, authorized by law. The procedural requirement is that
G.R. No. 82249, February 7, 1991). the employers should furnish the employee whose
employment is sought to be terminated a written notice
Q: What conditions must prevail and what containing a statement of the causes for termination and
requirements, if any, must an employer comply with the employer should afford the employee to be
to justify/effect a valid retrenchment program? terminated ample opportunity to be heard and to defend
(2001) himself with the assistance of his representative if he so
desires. (Arts. 279 and 277 (b), Labor Code).
A: In the case of Danzas Intercontinental, Inc. v. Daguman
(G.R. No. 154368, April 15, 2005), the Supreme Court Q: Inday was employed by Herrera Home
stated that the requirements for a valid retrenchment Improvements, Inc. (Herrera Home) as interior
must be proved by clear and convincing evidence: decorator. During the first year of her employment,
she did not report for work for one month. Hence, her
a. that the retrenchment is reasonably necessary and employer dismissed her from the service. She filed
likely to prevent business losses which, if already with the Labor Arbiter a complaint for illegal
incurred, are not merely de minimis, but substantial, dismissal alleging she did not abandon her work and
serious, actual and real or if only expected, are that in terminating her employment, Herrera Home
reasonably imminent as perceived objectively and in deprived her of her right to due process. She thus
good faith by the employer; prayed that she be reinstated to her position. Inday
b. that the employer served written notice both to the hired you as her counsel. In preparing the position
employees and to the Department of Labor and paper to be submitted to the Labor Arbiter, explain
Employment at least one month prior to the intended the standards of due process which should have been
date of retrenchment; observed by Herrera Home in terminating your
c. that the employer pays the retrenched employees clients employment. (2006, 2009)
separation pay equivalent to one month pay for
every year of service, whichever is higher; A: The Labor Code provides the following procedure to
d. that the employer exercises its prerogative to be observed in terminating the services of an employee
retrench employees in good faith for the based on just causes as defined in Art. 282 of the Code:
advancement of its interest and not to defeat or
circumvent the employees right to security of a. A written notice must be served on the employee
tenure; specifying grounds for termination and giving him an
e. That the employer used fair and reasonable opportunity to answer;
criteria in ascertaining who would be dismissed and

who would be retained among the employees, such

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

b. The employee shall be given ample opportunity to Nonetheless, the employers failure to comply with the
defend himself, with or without the assistance of procedure prescribed by law in terminating the services
counsel; and of the employee warrants the payment of nominal
c. A written notice of termination indicating the damages of Php 30,000, in accordance with the Supreme
grounds to justify his termination. (Agabon v. NLRC, Courts ruling in the case of Agabon v. NLRC (G.R. No.
G.R.No. 158693, November 17, 2004). 158693, November 17, 2004).

Q: Joseph Vitriolo (JV), a cashier of Seaside Sunshine Q: Rico has a temper and, in his work as Division
Supermart (SSS), was found after an audit, to have Manager of Matatag Insurance, frequently loses his
cash shortages on his monetary accountability temper with his staff. One day, he physically assaults
covering a period of about five months in the total his staff member by slapping him. The staff member
amount of P48,000.00. SSS served upon JV the sues him for physical injuries. Matatag Insurance
written charge against him via a memorandum order decides to terminate Rico, after notice and hearing,
of preventive suspension, giving JV 24 hours to on the ground of loss of trust and confidence. Rico
submit his explanation. As soon as JV submitted his claims that he is entitled to the presumption of
written explanation within the given period, the innocence because he has not yet been convicted.
same was deemed unsatisfactory by the company and
JV was peremptorily dismissed without any hearing. Comment on Matatag's action in relation to Rico's
The day following his termination from employment. argument. (2015)
JV filed a case of illegal dismissal against SSS. During
the hearing before the Labor Arbiter SSS proved by A: Matatg Insurance does not have to await the result of
substantial evidence JV's misappropriation of the criminal case before exercising its prerogative to
company funds and various infractions detrimental dismiss. Dismissal is not affected by a criminal case.
to the business of the company. JV, however, Under the Three-fold Liability Rule, a single act may
contended that his dismissal was illegal because the result in three liabilities, two of which are criminal and
company did not comply with the requirements of administrative. To establish them, the evidence of the
due process. crime must amount to proof beyond reasonable doubt;
whereas, the evidence of the ground for dismissal is
Did SSS comply with the requirements of procedural substantial evidence only. In this regard, the company has
due process in the dismissal from employment of JV? some basis already for withholding the trust it has
Explain briefly (1999) reposed on its manager. Hence, Ricos conviction need
not precede the employees dismissal.
A: In connection with the right to due process in the
termination of an employee, the Labor Code (in Article RELIEFS FOR ILLEGAL DISMISSAL
277[b]) requires that the employer furnish the worker
whose employment is sought to be terminated a written Q: What damages can an illegally dismissed employee
notice containing a statement of the causes for collect from his employer? (2001)
termination and shall afford ample opportunity to be
heard and to defend himself with the assistance of his A: An illegally dismissed employee may collect from his
representative if he so desires. SSS did not comply with employer ACTUAL and COMPENSATORY damages,
the above described requirements for due process. The MORAL damages and EXEMPLARY damages, as well as
memorandum order was for the preventive suspension attorneys fees as damages.
of JV, not a notice for his termination.
Q: Eduardo Santiago, a project worker, was being
Q: Luisa was hired as a secretary by Asian assigned by his employer, Bagsak Builders, to Laoag,
Development Bank (ADB) in Manila. Luisas first boss Ilocos Norte. Santiago refused to comply with the
was a Japanese national whom she got along with. But transfer claiming that it, in effect, constituted a
after two years, the latter was replaced by an constructive dismissal because it would take him
arrogant Indian national who did not believe her away from his family and his usual work assignments
work output was in accordance with international in Metro Manila. The Labor Arbiter found that there
standards. One day, Luisa submitted a draft report was no constructive dismissal but ordered the
filled with typographical errors to her boss. The payment of separation pay due to strained relations
latter scolded her, but Luisa verbally fought back. The between Santiago and Bagsak Builders plus
Indian boss decided to terminate her services right attorney's fees equivalent to ten percent (10%) of the
then and there. Luisa filed a case for illegal dismissal value of Santiago's separation pay.
with the Labor Arbiter claiming arbitrariness and
denial of due process. If you were the Labor Arbiter, a. Is the award of attorney's fees valid? State the
how would you decide the case? (2014) reasons for your answer.

A: I will dismiss the case. ADB enjoys immunity from suit. A: Yes. What Art. 111 (b) prohibits is the demand or
(DFA v. NLRC, G.R. No. 113191, September 18, 1996). acceptance by any person in a judicial or administrative
proceedings for the recovery of wages, attorneys fees
ALTERNATIVE ANSWER: which exceed 10% of the amount of wages recovered.
I will decide in favor of Luisa, by granting nominal
damages. To clarify, however, Luisas dismissal is not Since in this case, the amount of attorneys fees is exactly
illegal, for it has been held that failure to observe equivalent to the 10% of the separation fee recovered, the
prescribed standards of work, or to fulfill reasonable award is valid.
work assignments due to inefficiency, as in this case, may
constitute as a just cause for dismissal (Iluminada Buiser,
31 v. Leogardo, Jr., G.R. No. L-63316, July 31, 1984).


QuAMTO for LABOR LAW (1991-2015)
b. Could the labor arbiter have validly awarded when the position or any substantial equivalent thereof
moral and exemplary damages to Santiago no longer exists; (b) when reinstatement has been
instead of attorney's fees? Why? (2001) rendered moot and academic by supervening events,
such as insolvency of the employer as declared by the
A: No. In the case of Lirag Textile Mills, Inc. et al. v. Court court or closure of the business; (c) the existence of
of Appeals, et al., (GR No. L-30786, April 14, 1975), the strained relations between the employer and the illegally
Supreme Court held that when the termination of the dismissed employee, provided the matter is raised before
services of an employee is attended by fraud or bad faith the Labor Arbiter.
on the part of the employer as when the latter knowingly
made false allegations of a supposed valid cause when In the event that reinstatement is no longer feasible, or if
none existed, moral and exemplary damages may be the employee chooses not to be reinstated, the employer
awarded in favour of the former. shall pay him separation pay in lieu of reinstatement.

In this case, there was no showing that there was a bad Pending Appeal (Article 223, Labor Code)
faith on the part of the employer. In fact, the bad faith and
false allegations were on the part of the employee when Q: Alexander, a security guard of Jaguar Security
he refused to obey the transfer mandated by his employer Agency (JSA), could not be given any assignment
solely on the shallow basis that he will be away from his because no client would accept him. He had a face
family. only a mother could love. After six (6) months of
being on "floating" status, Alexander sued JSA for
Reinstatement constructive dismissal. The Labor Arbiter upheld
Alexanders claim of constructive dismissal and
Q: In the illegal dismissal case filed by Sharon Cometa ordered JSA to immediately reinstate Alexander. JSA
against Up & Down Company, the labor Arbiter appealed the decision to the NLRC. Alexander sought
rendered a decision directing her immediate immediate enforcement of the reinstatement order
reinstatement and payment of full backwages. The while the appeal was pending. JSA hires you as
Company appealed to the NLRC. Following her lawyer, and seeks your advice on the following:
lawyer's advice that the reinstatement aspect of the (2009)
decision is immediately executory, Sharon went to
the HRD Office of the Company and demanded a. Because JSA has no client who would accept
immediate reinstatement. When the Company Alexander, can it still be compelled to reinstate
refused, her lawyer, Atty. Maximiano Anunciacion, him pending appeal even if it has posted an
filed a motion to cite the employer in contempt. appeal bond?
Acting on the motion, the NLRC ordered the payroll
reinstatement of Sharon Cometa. A: Yes, JSA can be compelled to reinstate Alexander,
pending appeal of the decision of the Labor Arbiter to the
a. Can the company or any of its officials be cited for NLRC, even if JSA post a bond.
contempt for refusing to reinstate Sharon
Cometa? Why? Art. 223. Appeal. xxx In any event, the decision
of the Labor Arbiter reinstating a dismissed or
A: Yes. The company or any of its officials can be cited for separated employee, insofar as the
contempt. It is noted that in his decision, the Labor reinstatement aspect is concerned shall be
Arbiter specifically directed the immediate immediately executory, even pending appeal
reinstatement of Sharon Cometa. This directive under the and the posting of a bond.
Labor Code (Article 223) is immediately executory, even
pending appeal. (Pioneer Texturizing Corporation v. NLRC, b. Can the order of reinstatement be immediately
G.R. No. 118651, October 16, 1997). enforced in the absence of a motion for the
issuance of a writ of execution?
b. May the NLRC order the payroll reinstatement of
Sharon Cometa? Why? (1999) A: Yes. In Pioneer Texturizing Corp. v. NLRC (G.R. No.
118651, October 16, 1997), the Court held that an award
A: The NLRC may NOT order the payroll reinstatement of or order of reinstatement is self-executory and does not
Sharon Cometa. The Labor Code (Article 223) provides require a writ of execution to implement and enforce it.
that in the immediate reinstatement of a dismissed To require the application for and issuance of a writ of
employee, the employee shall be admitted back to work execution as prerequisite for the execution of a
under the same terms and conditions prevailing prior to reinstatement award would certainly betray and run
the employee's dismissal or, at the option of the counter to the very object and intent of Article 223 of the
employer, merely reinstate the employee in the payroll. Labor Code on the immediate execution of a
Thus, the reinstatement of the employee in the payroll is reinstatement order.
at the option of the employer and not of the NLRC or the
Labor Arbiter who have the power only to direct c. If the order of reinstatement is being enforced,
reinstatement. what should JSA do in order to prevent
Q: Discuss briefly the instances when non-
compliance by the employer with a reinstatement A: The employer cannot prevent reinstatement but may,
order of an illegally dismissed employee is allowed. however, opt for reinstatement of the employee in the
(2007) payroll of the company without requiring him to report
back to his work. (Zamboanga City Water District v. Buat,
A: Despite a reinstatement order, an employer may not G.R. No. 104389, May 27, 1994).

reinstate an employee in the following instances: (a)

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

PLEASE NOTE: In connection with security guards, equivalent, which said employee did not receive from the
Department Order No.14 series of 2001 provides that if time he was illegally dismissed up to the time of his actual
there is lack of assignment, then the security guard is reinstatement (Article 279).
entitled to separation pay.
On the other hand, an award for unpaid wages is for an
Separation Pay in Lieu of Reinstatement employee who has actually worked but has not been paid
the wages he is entitled to receive for such work done.
Q: Lyric Theater Corp. issued a memorandum
prohibiting all ticket sellers from encashing any Computation
check from their cash collections and requiring them
instead to turn over all cash collections to the Q: An employee was ordered reinstated with
management at the end of the day. In violation of this backwages. Is he entitled to the benefits and
memorandum, Melody, a ticket seller, encashed five increases granted during the period for his lay-off?
(5) checks from her cash collection. Subsequently the Explain briefly. (2002)
checks were dishonored when deposited in the
account of Lyric Theater. For this action, Melody was A: Yes, an employee who is ordered reinstated with
placed under a 20-day suspension and directed to backwages is entitled to the benefits and increases
explain why she should not be dismissed for violation granted during the period of his lay-off. The Supreme
of the company's memorandum. In her explanation, Court has ruled: Backwages are granted for earnings a
she admitted having encashed the checks without the worker lost due to his illegal dismissal and an employer
company's permission. While the investigation was is obliged to pay an illegally dismissed employee the
pending, Melody filed a complaint against Lyric whole amount of salaries plus all other benefits and
Theater for backwages and separation pay. The bonuses and general increases to which the latter should
Labor Arbiter ordered Lyric Theater to pay Melody have been normally entitled had he not been dismissed.
P115,420.79 representing separation pay and (Sigma Personnel Services v. NLRC, G.R. No. 108284, June
backwages. The NLRC affirmed the ruling of the Labor 30, 1993).
Arbiter. Is the ruling of the NLRC correct? Explain
briefly. (2002) Q: What economic components constitute backwages
for a rank and file employee? Are these components
A: The ruling of the NLRC affirming the Labor Arbiter's equally applicable to a managerial employee? (2001)
decision ordering Lyric Theater to pay P115,420.79
representing separation pay and backwages is wrong. A: The Labor Code (Art. 279) provides that an employee
The Labor Arbiter's decision is wrong because: who is unjustly dismissed from work is entitled to
reinstatement and also to his full backwages, inclusive of
a. It is premature. There was still no termination. All allowances, and to this other benefits or their monetary
that was done by the employer (Lyric Theater) was equivalent computed from the time his compensation
to place the employee (Melody) under a 20-day was withheld from him up to his actual reinstatement. An
suspension, meanwhile directing her to explain why employee is entitled to all the above benefit regardless of
she should not be dismissed for violation of whether he is a rank-and-file employee or a managerial
company's memoranda. employee.
b. The order for Lyric Theater to pay separation pay has
no factual basis. Separation pay is to be paid to an However, backwages may also include the 13th month pay
employee who is terminated due to the installation of which is paid to rank and file employees, as well as
labor saving devices, redundancy, retrenchment to benefits arising from a CBA given only to employees in
prevent losses or the closing or cessation of the bargaining unit. Managerial employees cannot be
operation of the establishment undertaking. None of given the same since they are ineligible to join a labor
these events has taken place. Neither is separation organization. Likewise, transportation and emergency
pay here in lieu of reinstatement applicable because allowances, vacation or service incentive leaves and sick
there is just cause if Melody is terminated under the leaves must also be taken into account. (St. Louis College
circumstances. of Tuguegarao v. NLRC, G.R.No. 74214, August 31,
c. The order for Lyric Theater to pay backwages has no 1989).
factual basis either because there is just cause if she
will be terminated after investigation. In this case, Q: A was hired by company B in January 1980
there is wilful disobedience by the employee of the until A was illegally dismissed on April 30, 1990 as
lawful orders of her employer in connection with her found by a Labor Arbiter who ordered reinstatement
work. She did not just violate the lawful order of the and full backwages from April 30, 1990 until
employer. She violated it five times. Melody did not reinstatement. The arbiters decision was
give any justifiable reason for violating the promulgated on April 29, 1995. B appealed claiming,
company's memorandum prohibiting the among others, that the award for damage was
encashment of checks. (Jo Cinema Corp. v. Avellana, excessive in that it went beyond three-year rule set
G.R. No. 32837, June 28, 2001). forth in Mercury Drug v. CIR (56 SCRA 696). Is Bs
contention tenable? Why? (2001)
A: Bs contention is not tenable. Where the illegal
Q: Distinguish between an award for back wages and dismissal was effected after the effectivity on March 1,
an award for unpaid wages. (1994) 1989 of Republic Act No.6715 amending among others
Article 279, the Mercury Drug Formula should no longer
A: An award for backwages is to compensate an employee be applied. Instead, Article 279 now provides that an
who has been illegally dismissed, for the wages, employee who is unjustly dismissed from work shall be

allowances and other benefits or their monetary entitled to reinstatement without loss of seniority rights


QuAMTO for LABOR LAW (1991-2015)
and other privileges and to his full backwages, inclusive CONSTRUCTIVE DISMISSAL
of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation Q: Mansueto was hired by the Philippine Packing
was withheld from him up to the time of his actual Company (PPC) sometime in 1960 as an hourly paid
reinstatement. research field worker at its pineapple plantation in
Bukidnon. In 1970, he was transferred to the general
In the case at bar, A was illegally dismissed after the crops plantation in Misamis Oriental. Mansueto was
effectivity of R.A. 6715; hence, the Mercury Drug Formula promoted to the position of a monthly paid regular
will no longer apply. A shall receive full backwages supervisor four years after.
computed from the time his compensation was withheld
from him up to the time of his actual reinstatement. Subsequently, research activity in Misamis Oriental
was phased out to March of 1982 for having become
Note: The Mercury Drug Doctrine entitles the illegally unnecessary. Mansueto thereafter, received a
dismissed employee to only three years backwages written memorandum from the PPC, reassigning him
without deduction or qualification to obviate the need to the Bukidnon plantation effective April 1, 1982,
for further proceedings in the course of execution. This with assurance that his position of supervisor was
was amended by R.A.6715 (Sec 34) which took effect on still there for him to hold. Mansueto tried to persuade
March 21 1989. the PPC management to reconsider his transfer and if
this was not possible, to at least consider his position
Q: A, an employee of Company B was found to have as redundant so that he could be entitled to
been illegally dismissed and was ordered to be severance pay. PPC did not accept Mansuetos
reinstated and paid backwages from the time of proposal.
dismissal until actual reinstatement. The case was
elevated all the way to the Supreme Court. By the When Mansueto continuously failed to report for
time the Supreme Courts decision became final and work at the Bukidnon plantation, PPC terminated his
executory, B had closed down and was in the process employment by reason of his refusal to accept his
of winding up. Nonetheless, B paid A his backwages new assignment. Mansueto claims that his
and separation pay. A complained that Bs reassignment is tantamount to an illegal constructive
computation was erroneous in that As allowances dismissal. Do you agree with Mansueto? Explain.
was not included. Is A correct in his claim? For what (1996)
reasons? (2001)
A: There is no constructive dismissal by the mere act of
A: A is correct. Article 279 provides that an employee transferring an employee. The employees contention
who is unjustly dismissed from work shall be entitled to cannot be sustained simply because a transfer causes
reinstatement without loss of seniority rights and other inconvenience. There is no constructive dismissal where,
privileges and to his full backwages, inclusive of as in Philippine Japan Active Carbon Corp. v. NLRC (G.R. No.
allowances, and to his other benefits or their monetary 83239, March 8, 1989), the Court ruled that the
equivalent computed from the time his compensation constructive dismissal means quitting because continued
was withheld from him up to the time of his actual employment is rendered impossible, unreasonable or
reinstatement. Clearly, based from the foregoing unlikable; as an offer involving demotion in rank and a
provision, A is entitled to his allowances. diminution in pay.

PREVENTIVE SUSPENSION The transfer will not substantially alter the terms and
conditions of employment of the Supervisor. The right to
Q: Karina Santos is a famous news anchor appearing transfer an employee is part of the employers managerial
nightly in the country's most watched newscast. She function.
is surprised, after one newscast, to receive a notice of
hearing before the station's Vice-President for Furthermore, the Court ruled that an employee has no
Human Resources and calls the VP immediately to vested right to a position, and in justifiable cases
ask what was wrong. Karina is told over the phone employment may be terminated.
that one of her crew filed a complaint against her for
verbal abuse and that management is duty bound to An employers right to security of tenure does not give
investigate and give her a chance to air her side. him such a vested right to his position as would deprive
Karina objects and denies that she had ever verbally the company of its prerogative to change his assignment
assaulted her crew. The VP then informed her that or transfer him where he will be most useful. When his
pending the investigation she will be placed on a 30- transfer is not unreasonable, not inconvenient, nor
day preventive suspension without pay and that she prejudicial to him, and it does not involve a demotion in
will not be allowed to appear in the newscast during rank or a diminution of his salaries, benefits, and other
this time. privileges, the employee may not complain that it
amounts to a constructive dismissal.
Is the preventive suspension of Karina valid?
Discuss the reasons for your answer. (2015) MANAGEMENT PREROGATIVE

A: No. The preventive suspension of Katrina is not valid. DISCIPLINE

The employer may place an employee under preventive
suspension if his/her continued employment would pose Q: An exclusive school for girls, run by a religious
a serious and imminent threat to the life or property of order, has a policy of not employing unwed mothers,
the employer or of his/her co-employees. These women with live-in partners, and lesbians.
requirements are not present here.

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

a. Is the policy violative of any provision of the A: I will advise Din Din to sue her boss and the
Labor Code on employment of women? supermarket for illegal dismissal. Din Din cannot be
compelled to accept the promotion. Her unsatisfactory
A: No. There was no violation of the provisions of the evaluations as well as her boss insistence that she should
Labor Code against discrimination. Management agree to the intended transfer to Visayas are badges of an
prerogative is the right of an employer to regulate all abuse of management prerogative. In Pfizer Inc. v. Velasco
aspects of employment such as hiring, work assignments, (G.R. No. 177467, March 9, 2011), the Supreme Court held
work methods, tools and equipment to be used and the that the managerial prerogative to transfer personnel
process and procedures to be followed in performance of must be exercised without abuse of discretion, bearing in
work, etc. However, it must be noted that such right is not mind the basic elements of justice and fair play. Hence,
absolute and may be limited by special laws. Din Dins dismissal is illegal.

In the case at bar, the school had validly executed its right GRANT OF BONUS
to management prerogative. As an educational
institution, its very nature calls for the adoption of Q: What is a bonus? When is it demandable as a
measures that would enable it to enhance and develop its matter of right? Explain. (1995)
laudable objectives. In fact, the policy adopted by the
school is in consonance with the constitutional precept of A: A bonus is an amount granted and paid to an employee
incorporating ethical and moral values in schools. for his industry and loyalty which contributed to the
success of the employers business and made possible the
Furthermore, what the Labor Code prohibits is the realization of profits. A bonus becomes a matter of right
discrimination of employees on the basis of their gender. when it is included by the employer as a part of the
The questioned policy is clearly not the discrimination employees salary, wage or compensation. (Alcantara,
prohibited under Art. 135 of the Labor Code because the 2009).
school is still hiring women as teachers, however, by
virtue of their management prerogative, they added an Q: The projected bonus for the employees of Suerte
additional qualification that their employees must have Co. was 50% of their monthly compensation.
an outstanding moral and ethical values. Unfortunately, due to the slump in the business, the
president reduced the bonus to 5% of their
b. The same school dismissed two female faculty compensation. Can the company unilaterally reduce
members on account of pregnancy out of the amount of bonus? Explain briefly. (2002)
wedlock. Did the school violate any provision of
the Labor Code on employment of women? A: Yes. A bonus as a general rule is given on account of the
(2000) employers gratuity or an act of his liberality in which the
recipient is under no legal right to demand such.
A: No. The Labor Code was not violated because the However, by way of exception, a bonus becomes a matter
school clearly acted within its right to dismiss the two of right when the employer had made it a part of the wage
faculty members who got pregnant out of wedlock, or salary or compensation of the employee. (Alcantara,
because tolerating such immoral conduct would be in 2009).
contradiction to the school's laudable mission. The
dismissal of employees in order to ensure its adherence In the case at bar, there is no showing that the
to the Constitutional precept is an exercise of management had constituted the bonus as a part of the
management prerogative allowed by the law. salary, wages or compensation of the employees. Thus,
the case falls under the general rule where the employees
Pursuant to such Constitutional precept, and by virtue of cannot demand the payment of a 50% bonus as a matter
its nature of as an institution that caters only to female of right.
students, it is the school's right and responsibility to hire
and maintain the employment of educators that would Q: Lito was anticipating the bonus he would receive
serve as good role models to their students not only in for 2013. Aside from the 13th month pay, the
terms of academic competency, but also in terms of the company has been awarding him and his other co-
moral standards, values and dignity of a woman. employees a two to three months bonus for the last
10 years. However, because of poor over-all sales
TRANSFER OF EMPLOYEES performance for the year, the company unilaterally
decided to pay only a one month bonus in 2013. Is
Q: Din Din is a single mother with one child. She is Litos employer legally allowed to reduce the bonus?
employed as a sales executive at a prominent (2014)
supermarket. She and her child live in Quezon City
and her residence and workplace are a 15-minute A: Yes. A bonus is an act of generosity granted by an
drive apart. One day, Din Din is informed by her boss enlightened employer to spur the employee to greater
that she is being promoted to a managerial position efforts for the success of the business and realization of
but she is now being transferred to the Visayas. Din bigger profits. The granting of bonus is a management
Din does not want to uproot her family and refuses prerogative, something given in addition to what is
the offer. Her boss is so humiliated by Din Din's ordinarily received by or strictly due to the recipient.
refusal of the offer that she gives Din Din successive Thus, a bonus is not a demandable and enforceable
unsatisfactory evaluations that result in Din Din obligation, except when it is made part of the wage, salary
being removed from the supermarket. or compensation of the employees, a matter which is not
in the facts of the case. (American Wire and Cable Daily
Din Din approaches you, as counsel, for legal advice. Rated Employees Union v. American Wire and Cable Co.,
What would you advise her? (2015) Inc. and the Court of Appeals, G.R. No. 15509, April 29,



QuAMTO for LABOR LAW (1991-2015)
ALTERNATIVE ANSWER: sector as covered by their own respective systems. (Art.
No. Having enjoyed for the last 10 years, the granting of 168, Labor Code).
the bonus has ripened into a company practice or policy
which can no longer be peremptorily withdrawn. Art. 100 Q: Is it necessary for an employee to litigate in order
of the Labor Code prohibits the diminution of or to establish and enforce his right to compensation?
elimination by the employer of the employees existing Explain. (1995)
A: No. All that an employee has to do in order to claim
SOCIAL WELFARE LEGISLATION (P.D. 626) employee's compensation is to file a claim for said
benefits with the SSS (for those in the private sector) or
Q: State the respective coverage of: GSIS (for those in the public sector).
a. Social Security Law
b. Revised Government Service Insurance Act In the event that the claim is denied on the SSS/GSIS level,
c. Employees Compensation Act. (1997) claimant may appeal to the Employees Compensation
Commission where he may prove the causal connection
A: between injury and nature of work.
Social Security Law:
Coverage of SSS includes (Sec. 9 and 9-A, Social Security Q: What is the extent of an employer's intervention in
Act of 1997): the compensation process and the payment of
a. Employees not over sixty years of age and their benefits to employees under the State Insurance
employers Fund? Explain. (1995)
b. Domestic Helpers provided their monthly income
shall not be less than P 1,000 A: The new law establishes a State Insurance Fund built
c. Self-employed persons as provided by law and as up by the contributions of employers based on the
determined by the Commission salaries of their employees (Art. 183, Labor Code). The
d. Spouse that is fully devoted to management of employer does not intervene in the compensation
household and family affairs, on voluntary basis process and it has no control over the payment of
e. Fiilipinos recruited by foreign-based employers benefits. The payment of employees compensation is
abroad, on voluntary basis now from the State Insurance Fund which is constituted
from the contributions collected from employers. (Art.
Note: Under R.A. 10361 (Kasambahay Law), domestic 173, Labor Code).
helpers who have rendered at least 1 month of service
regardless of the amount of their salary shall be covered SOCIAL SECURITY LAW
by the SSS. Premium payments or contributions shall be (R.A. 8282)
shouldered by the employer. However, if the domestic
worker is receiving a wage of Five thousand pesos Coverage
(P5,000.00) and above per month, the domestic worker
shall pay the proportionate share in the premium Q: Luisa is an unwed mother with 3 children from
payments or contributions, as provided by law. (Sec. 30, different fathers. In 2004, she became a member of
R.A. 10361). the Social Security System (SSS). That same year, she
suffered a miscarriage of a baby out of wedlock from
Revised GSIS the father of her third child. She wants to claim
Membership in the Government Service Insurance maternity benefits under the SSS Act. Is she entitled
System (Art. 3, R.A. 8291) shall be compulsory for all to claim? (2000, 2007, 2010, 2015)
employees receiving compensation who have not
reached the compulsory retirement age, irrespective of A: Yes. Provided, Luisa has reported to her employer her
employment status, except members of the AFP, PNP, and pregnancy and date of expected delivery and paid at least
contractuals that have no employer-employee three monthly contributions during the 12-month period
relationship with the agencies that they serve. immediately preceding her miscarriage then she is
entitled to maternity benefits up to four deliveries. As to
Employees included are any person receiving the fact that she got pregnant outside wedlock, as in her
compensation while in the service of employers, which past three pregnancies, this will not bar her claim
includes the national government, its political because the SS is non-discriminatory.
subdivisions, branches, agencies or instrumentalities
including GOCCs and financial institutions with original Note: The law merely says a female employee. It does
charters, constitutional commissions and judiciary, not qualify the term to mean legally married woman. (Sec.
whether by election or appointment irrespective of status 14-A, Social Security Act of 1997).
of appointment, including barangay and sanggunian
officials. (Sec. 2 (c) and (d); Sec. 3, Government Service Q: Carol de la Cruz is the secretary of the proprietor
Insurance System Act of 1997). of an auto dealership in Quezon City. She resides in
Caloocan City. Her office hours start at 8 a.m. and end
Employees Compensation Act at 5 p.m. On July 30, 2008, at 7 a.m. while waiting for
Coverage in the State Insurance Fund (Art. 168, Labor public transport at Rizal Avenue Extension as has
Code) shall be compulsory upon all employers and their been her routine, she was sideswiped by a speeding
employees not over sixty (60) years of age; Provided, that taxicab resulting in her death. The father of Carol
an employee who is over (60) years of age and paying filed a claim for employee's compensation with the
contributions to qualify for the retirement or life Social Security System. Will the claim prosper? Why?
insurance benefit administered by the System shall be (2008)
subject to compulsory coverage. The employer or

employee may either belong to the public or private

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

A: Yes, the claim will prosper. In a line of cases, it has been a voluntary basis. The compulsory coverage of the self-
held that an injury sustained by the employee while on employed person shall take effect upon his registration
his way to or from his place of work, and which is with the SSS. (Sec. 9-10, Social Security Act of 1997)
otherwise compensable, is deemed to have arisen out of
and in the course of his employment. (Lentejas v. Q: The Collective Bargaining Agreement of the Golden
Employees Compensation Commission, G.R. No. 89168, Corporation Inc. and the Golden Corporation
May 14, 1991) Workers Union provides a package of welfare
benefits far superior in comparison with those
Carol died while going to her place of work. As held in the provided for in the Social Security Act of 1997. The
case of Alano v. Employees Compensation Commission welfare plan of the company is funded solely by the
(G.R. No. L-48594, March 16, 1988) she was at the place employer with no contributions from the employees.
where job necessarily required her to be if she was to Admittedly, it is the best welfare plan in the
reach her place of work on time. There was nothing Philippines. The company and the union jointly filed
private or personal about Carol being at the place of the a petition with the Social Security System for
accident. She was there because her employment exemption from coverage. Will the petition for
required her to be there. exemption from coverage prosper? Reason. (2000)

Q: Big Foot Company of Paete, Laguna, has been in the A: No, because coverage under the SSS is compulsory
business of manufacturing wooden sandals for where employer-employee relations exist. However, if
export since 5 November 1980. On 5 January 1994 it the private plan is superior to that of the SSS, the plan
employed an additional labor complement of thirty may be integrated with the SSS plan. Still, it is integration
workers, two supervisors and two department and not exemption from SSS law. (Sec. 9(a), Social Security
managers. On 5 February 1994 it hired five Act of 1997).
carpenters to fix the roof and walls of its factory
which were destroyed by typhoon "Huaning." Who Note: Coverage is compulsory upon all employees over
among the aforementioned persons are compulsorily sixty years of age and their employers. (Sec. 9(a), Social
covered by the Social Security Law and when should Security Act of 1997).
they be considered effectively covered? Discuss fully.
(1995) Q: The owners of FALCON Factory, a company
engaged in the assembling of automotive
A: Assuming that all of them were not yet over sixty years components, decided to have their building
of age, the additional labor complement of thirty workers, renovated. Fifty (50) persons, composed of
two supervisors and two department managers were engineers, architects and other construction
compulsorily covered by the Social Security Law on 5 workers, were hired by the company for this purpose.
January 1994, when they were employed (Sec. 9(a), Social The work was estimated to be completed in three (3)
Security Act of 1997). According to said law, workers are years. The employees contended that since the work
covered on the day of their employment (Sec. 10, Social would be completed after more than one (1) year,
Security Act of 1997). But the five carpenters whom the they should be subject to compulsory coverage under
company hired to fix the roof and walls of its factory were the Social Security Law. Do you agree with their
not under the compulsory coverage of the Social Security contention? Explain your answer fully. (2002)
Law because said carpenters are casual employees. The
Social Security Law provides that employment purely A: No. The Social Security Act of 1997 provides that
casual and not for the purpose of occupation or the employment of purely casual, those which are not for the
business of the employer are not under its compulsory purpose of occupation or business of the employer, are
coverage (Sec. 8(j), Social Security Act of 1997). exempted from compulsory coverage (Sec. 8(j), Social
Security Act of 1997). The 50 persons that were engaged
Q: Marvin Patrimonio is a caddy rendering caddying by the company to renovate their factory are only casual
services for the members and guests of the Barili Golf employees because their work is not in connection with
& Country Club. As such caddy, he is subject to Barili the purpose of the company which is assembling
golfs rules and regulations governing Caddies automotive components. As such, they are merely casual
regarding conduct, dress, language, etc. However, he employees who are not under the compulsory coverage
does not have to observe any working hours, he is of the SSS.
free to leave anytime he pleases; and he can stay
away for as long as he likes. Nonetheless, if he is Exclusions from Coverage
found remiss in the observance of club rules, he can
be disciplined by being barred from the premises of Q: Pablo was a farm-hand in a plantation owned by
Barili Golf. Is Marvin within the compulsory coverage ABC & Co., working approximately 6 days a week for
of the Social Security System? Why? (1999) a good 15 years. Upon Pablo's death, his widow filed
a claim for burial grant and pension benefits with the
A: Yes. Although Marvin is not an employee of the golf Social Security System (SSS). The claim was denied on
club there being no employer-employee, since he is not the ground that Pablo had not been a registered
under the orders of the club as regards employment, he member-employee.
is still within the compulsory coverage of the SSS being a
self-employed person. Social Security Act of 1997 Pablo's widow filed a petition before the SSS asking
provides that self-employed persons are within the that ABC & Co. be directed to pay the premium
compulsory coverage of the law. (Sec. 9-A, Social Security contributions of Pablo and that his name be reported
Act of 1997). for SSS coverage. ABC & Co. countered that Pablo was
hired to plow, harrow and burrow, using his own
Note: Self-employed persons whose income is not carabao and other implements and following his own

derived from employment may be covered by the SSS on


QuAMTO for LABOR LAW (1991-2015)
schedule of work hours, without any supervision subsequently deducted from the monthly payments
from the company. to SAMSON under its contract with JARILLO. JARILLO,
in turn, charges SAMSON for the equipment supplied
If proven, would this factual setting advanced by ABC to the guards such as uniforms, pistols and
& Co. be a valid defense against the petition? (2003) ammunition and cost of training of guards JARILLO
wants replaced. During a storm, several scaffoldings
A: Yes. ABC & Co. has a valid defense. If all the allegations of JARILLO fell and killed two (2) guards whose
are proven, it will be shown that Pablo was an families later sued JARILLO. JARILLO, in turn,
independent contractor who does not fall under the impleaded SAMSON as third-party defendant before
compulsory coverage of SSS. As defined by law, an the Arbiter. Decide who should be held liable. (1994)
independent contractor is one who exercises
independent employment and contracts to do a piece of A: Liability lies against the State Insurance Fund
work according to his own methods and without being administered by the SSS. This is a case of death in
subject to the control of his employer except as to the connection with the employees' work. Jarillo is deemed
result of the work. (Phil. Mfg. Co. v. Geronimo, GR No. L- to be the employer of the guards in view of the direct
6969, November 29, 1954). payment of wages to the guards. Thus, if there are
benefits arising from employer-employee relationship,
As shown by the facts of the case, Pablo had control over Jarillo should be held answerable.
the method, equipment and schedule of the work that he
had contracted to perform. Evidently, he is an Note: Employer as defined under the chapter on State
independent contractor. Insurance Fund in the Labor code defines employer as
any person, natural or juridical, employing the services
Therefore, not falling under the category of an employee, of the employee (Sec. 167 (f), Labor code).
ABC & Co. cannot be directed to pay Pablos premium
contribution upon his death. Pablo however may be GSIS LAW
covered by a different SSS coverage as a self-employed (R.A. 8291)
person on a voluntary basis.
Exclusion from Coverage
Q: Odeck, a policeman, was on leave for a month.
Q: In 1960, Juan hired Pablo to drive for the former's While resting in their house, he heard two of his
lumber company. In 1970, Pablo got sick and was neighbors fighting with each other. Odeck rushed to
temporarily laid-off. In 1972, Pablo recovered and the scene intending to pacify the protagonists.
resumed working for the same lumber company, now However, he was shot to death by one of the
run by Juan's wife since Juan had already passed protagonists. Zhop, a housemaid, was Odeck's
away. In 1996, Pablo retired. When Pablo applied for surviving spouse whom he had abandoned for
retirement benefits with the SSS that same year, he another woman years back. When she learned of
discovered that the lumber company never enrolled Odeck's death, Zhop filed a claim with the GSIS for
him as an employee, much less remitted his death benefits. However, her claim was denied
contributions that were deducted from his salary. because: (a) when Odeck was killed, he was on leave;
The lumber company agreed to pay for Pablo's and (b) she was not the dependent spouse of Odeck
contributions plus penalties but maintained that when he died.
most of Pablo's claims had already prescribed under
Art, 1150 of the Civil Code. (Art. 1150 provides "The Resolve with reasons whether GSIS is correct in
time for prescription of all kinds of actions, when denying the claim. (2005)
there is no special provision which ordains
otherwise, shall be counted from the day they may be A: Yes, because under the law, a dependent is one who is a
brought."). Is the Lumber company's contention legitimate spouse living with the employee (Art. 167 [i],
correct? Why? (2001) Labor Code). In the problem given, Zhop had been
abandoned by Odeck who was then living already with
A: The lumber company's contention is not correct. The another woman at the time of his death. Moreover, Odeck
Social Security Law of 1997 provides that the right to was on leave when he was killed. The 24-hour duty rule
institute the necessary action against an employer may does not apply when the policeman is on vacation leave.
be commenced within twenty (20) years from the time (Employees Compensation Commission v. CA, G.R. No.
the delinquency is known or the assessment is made by 121545, November 14, 1996). Taking together
the SSS, or from the time the benefit accrues, as the case jurisprudence and the pertinent guidelines of the ECC with
may be. (Sec. 22(b), Social Security Act of 1997). respect to claim for death benefits, namely:

Q: Samson Security Agency [SAMSON) undertook to a. That the employee must be at the place where his
provide 24 hours security service to Jarillo Realty work requires him to be;
(JARILLO) in the latter's construction operations. The b. That the employee must have been performing his
contract between SAMSON and JARILLO expressly official functions; and
stipulated that Samson's security guards are its c. That the injury is sustained elsewhere, the employee
employees and not that of JARILLO. SAMSON must have been executing an order for the employer.
undertook to hold JARILLO free from any liability
whatsoever resulting from injuries which its It is not difficult to understand then why Zhops claim was
(SAMSON's) guards may suffer or be exposed to suffer denied by the GSIS (Tancinco v. GSIS, G.R. No. 132916,
as guards of JARILLO's construction operations. To November 16, 2001). In the present case, Odeck was resting
facilitate payment. JARILLO undertook to pay directly at his house when the incident happened; thus, he was not

to the guards the agreed wages, which are at a place where his work requires him to be. Although at

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

the time of his death Odeck was performing a police immediately brought to a clinic for emergency
function, it cannot be said that his death treatment but was pronounced dead on arrival. The
occurredelsewhere other than the place where he was death certificate showed that he died of cardiac
supposed to be because he was executing an order for his arrest due to accidental electrocution. Pepay
employer. Palaypay (Pitoy Mondero's common-law wife for
more than twenty years) and a Pitoy Mordero Jr. (his
Q: Luis, a PNP officer, was off duty and resting at home only son) filed a claim for death benefits with the
when he heard a scuffle outside his house. He saw two Government Service Insurance System (GSIS), which
of his neighbors fighting and he rushed out to pacify was denied on the ground that Pitoy Mordero's death
them. One of the neighbors shot Luis by mistake, did not arise out of and in the course of employment
which resulted in Luis's death. Marian, Luis's widow, and therefore not compensable because the accident
filed a claim with the GSIS seeking death benefits. The occurred in his house and not in the school premises.
GSIS denied the claim on the ground that the death of
Luis was not service-related as he was off duty when Is Pepay Palaypay entitled to file a claim for death
the incident happened. Is the GSIS correct? (2015) benefits with the GSIS? Why? (1999)

A: No. The GSIS is not correct. Luis, a policeman, just like A: The beneficiaries of a member of the GSIS are entitled
a soldier, is covered by the 24-Hour Duty Rule. He is to the benefits arising from the death of said member.
deemed on round-the clock-duty unless on official leave, Death benefits are called survivorship benefits under the
in which case his death outside performance of official GSIS Law. Pepay Palaypay is not entitled to receive
peace-keeping mission will bar death claim. In this case, survivorship benefits since she is not a beneficiary being
Luis was not on official leave and he died in the a common-law wife and not a legal dependent spouse.
performance of a peace-keeping mission. Therefore, his (Sec. 2(g), GSIS Act of 1997).
death is compensable.
Is the cause of death of Pitoy Mordero (cardiac arrest
Q: Atty. CLM, a dedicated and efficient public official, due to accidental electrocution in his house)
was the top executive of a government owned and compensable? Why?
controlled corporation (GOCC). While inspecting an
ongoing project in a remote village in Mindanao, she A: Yes. To be compensable under the GSIS Law, the death
suffered a stroke and since then had been confined to need not be work connected.
a wheelchair. At the time she stopped working
because of her illness in line of duty, Atty. CLM was Note: As long as the decedent-member was a) in service;
only sixty years old but she had been an active b) rendered 3 years of service and at least paid 36 monthly
member of the GSIS for thirty years without any contributions within the five-year period immediately
break in her service record. What benefits could she preceding his death; or c) paid a total of at least 180
claim from the GSIS? Cite at least five benefits. (2004) monthly contributions prior to his death.


1. Separation Benefit (Sec. 11-12, GSIS Act of 1997) (R.A. NO. 7699)
2. Retirement Benefits (Sec. 13-14, GSIS Act of 1997)
3. Permanent Disability Benefits (Sec. 15-17, GSIS Act of Q: How are the "portability" provisions of Republic
1997) Act No. 7699 beneficial or advantageous to SSS and
4. Temporary Disability Benefits (Sec. 18-19, GSIS Act of GSIS members in terms of their creditable
1997) employment services in the private sector or the
5. Survivorship Benefits (Sec. 20-22, GSIS Act of 1997) government, as the case may be, for purposes of
6. Funeral Benefits (Sec. 23, GSIS Act of 1997) death, disability or retirement? Please explain your
7. Life Insurance Benefits (Sec.24-27, GSIS Act of 1997) answer briefly. (2005)

Beneficiaries A: Portability provisions of R.A. No. 7699 shall benefit a

covered worker who transfers employment from one
Q: Pitoy Mondero was employed as a public school sector to another or is employed in both sectors, whose
teacher at the Marinduque High School from July 1, creditable services or contributions in both systems
1983 until his untimely demise on May 27, 1997. On credited to his service or contribution record in each of
April 27, 1997, a memorandum was issued by the the system and shall be totalized for purposes of old-age,
school principal, which reads: "You are hereby disability, survivorship and other benefits (Sec. 3, R.A. No.
designated to prepare the MODEL DAM project, 7699). In the event the employees transfer from the
which will be the official entry of our school in the private sector to the public sector, or vice-versa, their
forthcoming Division Search for Outstanding creditable employment services and contributions are
Improvised Secondary Science Equipment for carried over and transferred as well.
Teachers to be held in Manila on June 4, 1997. You are
hereby instructed to complete this MODEL DAM on or Q: Luisito has been working with Lima Land for 20
before the scheduled date of the contest." Mondero years. Wanting to work in the public sector, Luisito
complied with his superior's instruction and applied with and was offered a job at Livecor. Before
constructed an improvised electric microdam, which accepting the offer, he wanted to consult you whether
he took home to enable him to finish it before the the payments that he and Lima Land had made to the
deadline. On May 27, 1997, while working on the Social Security System (SSS) can be transferred or
MODEL DAM Project in his house, he came to contact credited to the Government Service Insurance

with a live wire and was electrocuted. He was System (GSIS). What would you advice? (2014)


QuAMTO for LABOR LAW (1991-2015)

A: Yes. Under R.A. 7699, otherwise known as the A: There is no substantial difference of the right of self-
Portiability Law, one may combine his years of service in organization between workers in the private sector and
the private sector represented by his contributions to the those in the public sector. In the public sector, Executive
Social Security System (SSS) with his government service Order No. 180, the purpose of self-organization is stated
and contributions to the GSIS. The contributions shall be as "for the furtherance and protection of their interest."
totalized for the purposes of old-age, disability, In the private sector, Art. 243 of the Labor Code states
survivorship and other benefits in case the covered "for the purpose of collective bargaining", and "for the
member does not qualify for such benefits in either or purpose of enhancing and defending their interests and
both Systems without totalization. for their mutual aid and protection." Furthermore, no
less than the Constitution itself guarantees that ALL
EMPLOYEES COMPENSATION workers have the right to self-organization. (Sec. 3, Article

Q: Victor was hired by a local manning agency as a Q: Do workers have a right not to join a labor
seafarer cook on board a luxury vessel for an eight- organization?
month cruise. While on board, Victor complained of
chronic coughing, intermittent fever, and joint pains. A: Yes. The constitutional right to self-organization has
He was advised by the ship's doctor to take complete two aspects, the right to join or form labor organizations
bed rest but was not given any other medication. His and the right not to join said organization (Victoriano v.
condition persisted but the degree varied from day to Elizalde Rope Workers Union, G.R. No. L-25246, September
day. At the end of the cruise, Victor went home to 12, 1974). Moreover, if they are members of a religious
Iloilo and there had himself examined. The group whose doctrine forbids union membership, their
examination revealed that he had tuberculosis. right not to be compelled to become union members has
(2015) been upheld. However, if the worker is not a "religious
objector" and there is a union security clause, he may be
a. Victor sued for medical reimbursement, damages required to join the union if he belongs to the bargaining
and attorney's fees, claiming that tuberculosis unit. (Reyes v. Trajano, G.R. No. 84433, June 2, 1992).
was a compensable illness. Do you agree with
Victor? Why or why not? Q: Do the following workers have the right to self-
organization? Reasons/basis:
A: TB is listed under Sec. 32-A of the POEA-SEC as a work- a. Employees of non-stock, non-profit
related disease. It was also either contracted or organizations?
aggravated during the effectivity of Victors contract. b. Alien employees? (2000)
Having shown its manifestations on board, Victor should
have been medically repatriated for further examination A:
and treatment in the Philippines. This obligation was a. Even employees of non-stock non-profit
entirely omitted in bad faith by the company when it organizations have the right to self-organization.
waited for his contract to expire on him before signing This is explicitly provided for in Art. 243 of the Labor
him off. On this basis, Victor is entitled to medical Code. A possible exception, however, are employee-
reimbursement, damages and attorneys fees. members of non-stock, non-profit cooperatives.
b. ALIEN EMPLOYEES with valid work permits may
b. Due to his prolonged illness, Victor was unable to exercise the right to self-organization on the basis of
work for more than 120 days. Will this entitle him parity or reciprocity, that is, if Filipino workers in the
to claim total permanent disability benefits? aliens' country are given the same right. (Art. 269,
Labor Code).
A: No. Victors TB is work-related and it developed on
board, thereby satisfying the twin requisites of Q: Mang Bally, owner of a shoe repair shop with only
compensability. However, despite his knowledge of his nine (9) workers in his establishment, received
medical condition, he failed to report to his manning proposals for collective bargaining from the Bally
agent within three days from his arrival as required by Shoe Union. Mang Bally refused to bargain with the
Sec. 20-B (3) of the POEA-SEC. Since he already felt the workers for several reasons. First, his shoe business
manifestations of TB before his sign-off, he should have is just a service establishment. Second, his workers
submitted to post-employment medical examination are paid on a piecework basis (i.e., per shoe repaired)
(Jebsen Maritime Inc. v. Enrique Undag, G.R. No. 191491, and not on a time basis. Third, he has less than ten
December 14, 2011). The effect of his omission is (10) employees in the establishment. Which reason
forfeiture by him of disability benefits (Coastal Safeway or reasons is/are tenable? Explain briefly. (2002)
Marine Services, Inc. v. Elmer t. Esguerra, G.R. No. 185352,
August 10, 2011). In effect, the 120-day rule has no A: None. First, Mang Bally's shoe business is a
application at all. commercial enterprise, albeit a service establishment.
Second, the mere fact that the workers are paid on a
LABOR RELATIONS LAW piece-rate basis does not negate their status as regular
employees. Payment by piece is just a method of
RIGHT TO SELF-ORGANIZATION compensation and does not define the essence of the
relation. (Lambo v. NLRC, G.R. No. 111042, October 26,
Who may Unionize for the Purpose of Collective Bargaining 1999). Third, the employees' right to self organization is
not delimited by their number. The right to self-
Q: How does the government employees right to self- organization covers all persons employed in commercial,
organization differ from that of the employees in the industrial and agricultural enterprises and in religious,

private sector? (1996)

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charitable, medical, or educational institutions whether Cashiers and Comptrollers. Farmers Bank
operating for profit or not. (Art. 243, Labor Code). questioned this list arguing that Department
Managers, Branch Managers, Cashiers and
Q: At what particular point does a labor organization Comptrollers inherently possess the powers
acquire a legal personality? enumerated in Art. 212, par. (m), of the Labor Code,
i.e., the power and prerogative to lay down and
a. On the date the agreement to organize the union execute management policies and/or to hire,
is signed by the majority of all its members; or transfer, suspend, lay-off, recall, discharge, assign or
b. On the date the application for registration is discipline employees.
duly filed with the Department of Labor; or
c. On the date appearing on the Certificate of a. Is the contention of Farmers Bank correct?
Registration; or Discuss fully.
d. On the date the Certificate of Registration is b. Is there any statutory basis for the petition of the
actually issued; or union? Explain. (1995)
e. None of the above. Choose the correct answer.
(2003) A:
a. The contention of the Farmers Bank is not correct, if,
A: on examination of the actual powers exercised by the
d.) On the date the Certificate of Registration is actually Department Managers, Bank Managers, Cashiers and
issued. Any applicant labor organization, association or Comptrollers, they are not vested with powers or
group of unions or workers shall acquire legal prerogatives to lay down and execute management
personality and shall be entitled to the rights and policies or to hire, transfer, suspend, lay-off, recall,
privileges granted by law to legitimate labor discharge, assign or discipline employees. If their
organizations upon issuance of the certificate of powers are to carry out their duties and
registration. (Art. 234, Labor Code). responsibilities in accordance with the policies
promulgated by the Board of Directors of the Bank,
Q: "Puwersa", a labor federation after having won in or by external authorities, like the Central Bank, then,
a certification election held in the company premises, they are not managerial but may be supervisory
sent a letter to respondent company reminding it of personnel. It is the nature of an employees functions
its obligation to recognize the local union. and not the nomenclature or title given to his job
Respondent company replied that though it is willing, which determines whether he has a managerial
the rank-and-file employees had already lost interest status (Azucena, 2013).
in joining the local union as they had dissolved it. b. There is statutory basis for the petition of the
"Puwersa" argued that since it won in a certification supervisors' union. Under the Labor Code,
election, it can validly perform its function as a supervisors have the right to form and join unions,
bargaining agent and represent the rank-and-file but only unions of supervisory employees.
employees despite the union's dissolution. Is the
argument of "Puwersa" tenable? Decide with Q: Solar Plexus Bar and Night Club allowed by
reasons. (2008) tolerance fifty (50) Guest Relations Officers (GRO) to
work without compensation in its establishment
A: A new provision, Article 239-A is inserted into the under the direct supervision of its Manager from 8:00
Labor Code by RA 9481, as follows: p.m. to 4:00 a.m. everyday, including Sundays and
holidays. The GROs, however, are free to ply their
Art. 239-A. Voluntary Cancellation of trade elsewhere at anytime but once they enter the
Registration. The registration of a legitimate premises of the night club, they are required to stay
labor organization may be cancelled by the up to closing time. The GROs earned their keep
organization itself. Provided that at least two- exclusively from commissions for food and drinks,
thirds of its general membership votes, in a and tips from generous customers. In time, the GROs
meeting duly called for that purpose to dissolve formed the Solar Ugnayan ng mga Kababaihang
the organization. Provided, further, that an Inaapi (SUKI); a labor union duly registered with
application to cancel registration is thereafter DOLE. Subsequently, SUKI filed a petition for
submitted by the board of the organization, certification election in order to be recognized as the
attested to by the president thereof. exclusive bargaining agent of its members. Solar
Plexus opposed the petition for certification election
If indeed the local union was dissolved in accordance on the singular ground of absence of employer-
with the above provision of the law, the argument of employee relationship between the GROs on one
Puwersa is not tenable. This is because Puwersa only hand and the night club on the other hand. May the
had the status of an agent, while the local union remained GROs form SUKI as a labor organization for purposes
the basic unit of the association. (Liberty Cotton Mills of collective bargaining? Explain briefly. (1999)
Workers Union v. Liberty Cotton Mills, Inc., G.R. No. L-
33987, September 4, 1975.; cited in Filipino Pipe and A: Yes. Despite the work conditions agreed upon by the
Foundry Corp. v. NLRC, G.R. No. 115180, November 16, owner of Solar Plexus and the GROs, Art. 138 of the Labor
1999). Code mandates that women who work in certain
workplaces such as night clubs, beer houses, cocktail
Q: A supervisor's union filed a petition for lounges, massage clinics or bars, who are under the
certification election to determine the exclusive effective control or supervision of an employer shall be
bargaining representative of the supervisory considered as employees of such establishments, for
employees of Farmers Bank. Included in the list of purposes of labor and social legislation.

supervisory employees attached to the petition are

the Department Managers, Branch Managers,


QuAMTO for LABOR LAW (1991-2015)
In the case at bar, SUKI, may form a labor organization for Brewery v. Asia Brewery, Inc., G.R. No. 162025, August 3,
purposes of collective bargaining because in the eyes of 2010).
the law they are employees of Solar Plexus; and as
employees, the right to self-organization is granted by Q: Do employees of a cooperative have a right to form
law. a union? Explain briefly. (2002)

Q: Philhealth is a government-owned and controlled A: Employees who are members of a cooperative cannot
corporation employing thousands of Filipinos. form a union because, as members, they are owners and
Because of the desire of the employees of Philhealth owners cannot bargain with themselves. However,
to obtain better terms and conditions of employment employees who are not members of the cooperative can
from the government, they formed the Philhealth form a union. (San Jose Electric Service Cooperative v.
Employees Association (PEA) and demanded Ministry of Labor, G.R. No. 77231, May 31, 1989)
Philhealth to enter into negotiations with PEA
regarding terms and conditions of employment Note: Irrespective of the degree of their participation in
which are not fixed by law. the actual management of the cooperative, all members
thereof cannot form, assist or join a labor organization for
a. Are the employees of Philhealth allowed to self- the purpose of collective bargaining. (Benguet Electric
organize and form PEA and thereafter demand Cooperative, Inc. v. Ferrer-Calleja, G.R. No. 79025,
Philhealth to enter into negotiations with PEA for December 29, 1989).
better terms and conditions of employment?
Q: A, B, C and D (treasurer, accountant, elementary
A: Yes. Employees of Philhealth are allowed to self- department Principal, and secretary of the Director,
organize under Section 8, Article III and Section 3, Article respectively), regular employees of a private
XIII of the Constitution which recognize the rights of all educational institution, were administratively
workers to self-organization. They cannot demand, charged for their participation in a picket held in
however, for better terms and conditions of employment front of the campus after office hours. Several faculty
for the same are fixed by law (Art. 244, Labor Code), members, non-academic staff and students joined the
besides, their salaries are standardized by Congress. (Art. peaceful prayer rally organized by disgruntled
276, Labor Code). employees to protest certain alleged abuses of the
incumbent School Director. Subsequently, the rank-
b. In case of unresolved grievances, can PEA resort and-file employees succeeded in forming the first and
to strikes, walkouts, and other temporary work only union of the School. During the investigation, the
stoppages to pressure the government to accede administration discovered that two (2) days prior to
to their demands? (2014) the rally, A, B, C and D attended the meeting of the
Schools employees association which planned the
A: No. Although the right to organize implies the right to protest activity. Two well-known organizers/leaders
strike, law may withhold said right. E.O. 180 is that law of a national labor federation were also present. A, B,
which withholds from government employees the right C and D were dismissed by the School on the ground
to strike. Hence, they cannot resort to strikes and similar of violating the Labor Code which prohibits
concerted activities to compel concessions from the managerial employees to join, assist or form any
government. labor organization. Is the contention of the School
tenable? Is the dismissal of A, B, C and D valid?
Who Cannot Form, Join or Assist Labor Organizations Explain. (2004)

Q: Malou is the Executive Secretary of the Senior Vice- A: The dismissal of A, B, C and D on the ground that they
president of a bank while Ana is the Legal Secretary violated the Labor Code provision which states that
of the bank's lawyer. They and other executive managerial employees "are not eligible to join, assist or
secretaries would like to join the union of rank and form any labor organization" is not valid. The Labor Code
file employees of the bank. Are they eligible to join does not provide for any sanction for the aforesaid acts.
the union? Why? Explain briefly. (2002) These acts could not be considered as just cause for the
termination of employment, either.
A: No. They are confidential employees who, by the
nature of their functions, assist and act in confidential ALTERNATIVE ANSWER:
capacity to or have access to confidential matters of A: The dismissal of the managerial employees is invalid.
person who exercise managerial functions in the field of The dismissal of the management employees because of
labor relations. As such the ineligibility of managerial union activities, no matter how erroneous or tenuous
employees to form or join labor unions equally applies to may be the basis of the exercise, is a violation of the
them. (Philips Industrial Development v. NLRC, G.R. No. constitutional and statutory guaranteed rights of self-
88957, June 25, 1992). organization, and an act of unfair labor practice. (Sec. 3,
Art. XIII, Constitution; Art. 243, Labor Code. See also Art.
Note: Confidential employees are those who (1) assist or 248 (a), Labor Code).
act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management Q: On what ground or grounds may a union member
policies in the field of labor relations. The two criteria are be expelled from the organization? (2002)
cumulative, and both must be met if an employee is to be
considered a confidential employee that is, the A: Union members may be expelled from the labor
confidential relationship must exist between the organization only on valid grounds provided for in the
employee and his supervisor, and the supervisor must Union Constitution, By-Laws, or conditions for union
handle the prescribed responsibilities relating to labor membership. Example of valid reasons for expulsion: a)

relations. (Tunay na Pagkakaisa ng Manggagawa sa Asia Refusal to pay union dues and special assessments; b)

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luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

Disloyalty to the union; and c) Violation of the

constitution and by-laws of the union. Q: What is the rule on the "equity of the incumbent"?
Q: Samahan ng mga Manggagawa sa Companya ng
Tabaco (SMCT) filed a Petition for Certification A: The Equity of the Incumbent Rule has it that all existing
Election among the supervisory employees of the federations or national unions, possessing all
Tabaco Manufacturing Company (Tabaco) before the qualifications of an LLO and none of the grounds for CR
NCR Regional Office of the Department of Labor and cancellation, shall continue to maintain their existing
Employment. It alleged, among other things, that it is affiliates regardless of their location or industry to which
a legitimate labor organization, a duly chartered they belong. In case of dissociation, affiliates are not
local of NAFLU; that Tabaco is an organized required to observe the one union-one industry rule.
establishment; and that no certification election has
been conducted within one year prior to the filing of Who Cannot Form, Join or Assist Labor Organizations
its petition for certification election.
Q: Which of the following groups does not enjoy the
The Petition filed by SMCT showed that out of its 50 right to self-organization?
members, 15 were rank-and-filers and two (2) were (A) those who work in a non-profit charitable
managers. institution
(B) those who are paid on a piece-rate basis
Tabaco filed a Motion to Dismiss on the ground that (C) those who work in a corporation with less than 10
SMCT union is composed of supervisory and rank- employees
and-file employees and, therefore, cannot act as (D) those who work as legal secretaries. (2014)
bargaining agent for the proposed unit. SMCT filed an
opposition to the said Motion alleging that the A: D. Those who works as legal secretaries (Tunay na
infirmity, if any, in the membership of the union can Pagkakaisa v. Asia Brewery, G.R. No. 162025, August 3,
be remedied in the pre-election conference thru the 2010).
exclusion-inclusion proceedings wherein those
employees who are occupying rank-and-file Q: George is an American who is working as a
positions will be excluded from the list of eligible consultant for a local IT company. The company has a
voters. union and George wants to support the union. How
far can George go in terms of his support for the
a. Should the Motion to Dismiss filed by the Tabaco union? (2015)
be granted or denied? Explain.
A: George, as a general rule, is prohibited by Art. 270(a)
A: of the Labor Code from giving any donation, grant or
The Motion to Dismiss filed by Tabaco should be granted. other form of assistance, in cash or in kind, directly or
According to the Labor Code (in Article 245), supervisory indirectly to the Union. He can give a support only upon
employees shall not be eligible for membership in a labor prior permission from the Secretary of Labor relative to
organization of rank and file employees but may join or Trade Union activities as defined in said law.
form separate labor organizations of their own.
George, in addition to his alien employment permit, must
Because of the above-mentioned provision of the Labor first prove that the country whereof he is a national
Code, a labor organization composed of both rank-and- recognizes the right of Filipinos working therein to
file and supervisory employees is no labor organization organize. Under these conditions, he is allowed to
at all. It cannot, for any guise or purpose, be a legitimate support the existing union by joining it as to its increase
labor organization. Not being a legitimate labor its membership.
organization, it cannot possess the requisite personality
to file a petition for certification election. (See Toyota Bargaining Unit
Motor Philippines Corp. vs. Toyota Motor Philippines Corp.
Labor Union, G.R. No. 121084, February 19, 1997). Test to Determine the Constituency of an Appropriate
Bargaining Unit
b. Can the two (2) Managers be part of the
bargaining unit? Why? (1999) Q: The Ang Sarap Kainan Workers Union appointed
Juan Javier, a law student, as bargaining
A: No, the two (2) Managers cannot be part of the representative. Mr. Javier is neither an employee of
bargaining unit composed of supervisory employees. A Ang Sarap Kainan Company nor a member of the
bargaining unit must effect a grouping of employees who union. Is the appointment of Mr. Javier as a
have substantial, mutual interests in wages, hours, bargaining representative in accord with law?
working conditions and other subjects of collective Explain. (2000)
bargaining. (San Miguel Corp. Supervisors and Exempt
Employees Union v. Laguesma, G.R. No. 110399, August 15, A: Yes, the law does not require that the bargaining
1997). representative be an employee of the company nor an
officer or member of the union. (Art 212 (j), Labor Code).
The Labor Code (in Article 245) provides that managerial
employees are not eligible to join, assist or form any labor Certification Election
organization. The above provision shows that managerial
employees do not have the same interests as the In an organized establishment
supervisory employees which compose the bargaining
unit where SMCT wishes to be the exclusive collective Q: Can the Bureau of Labor Relations certify a union

bargaining representative. as the exclusive bargaining representative after


QuAMTO for LABOR LAW (1991-2015)
showing proof of majority representation thru union a. Does the company have the standing to file the
membership cards without conducting an election? motion to dismiss? Explain.
A: No, the company has no standing to file the Motion to
A: The Bureau of Labor Relations CANNOT certify a union Dismiss as the employer has no right to interfere in a
as the exclusive collective bargaining representative after purely union matter or concern (Philippine Fruits and
showing proof of majority representation thru union Vegetable Industries, Inc. vs Torres, G.R. No. 92391, July 3,
membership cards without conducting a certification 1992). The Court would wish to stress once more the rule
election. The Labor Code provides only for a certification which it has consistently pronounced in many earlier
election as the mode for determining the exclusive cases that a certification election is the sole concern of the
collective bargaining representative if there is a question workers and the employer is regarded as nothing more
of representation in an appropriate bargaining unit. (Arts. than a bystander with no right to interfere at all in the
256, 257 and 258). election.

Note: Direct certification originally allowed under Art. b. If you were the Med-Arbiter, how would you
257 of the Labor Code has been discontinued as a method resolve the petition?
of selecting the exclusive bargaining agent of the workers.
This amendment affirms the superiority of the A: As the MED-ARBITER, I will order the holding of the
certification election over the direct certification which is certification election. The fact that there is already a
no longer available now under the change in said certified collective bargaining representative of the rank
provision. (Central Negros Electric Cooperative, Inc. v. and file employees of the Company is not a bar to the
Secretary of Labor, G.R. No. 94045, September 13, 1991). holding of a certification election for the determination of
the collective bargaining representative of the
Q: UNIDAD, a labor organization claiming to supervisory employees. But I will exclude those
represent the majority of the rank and file workers of employees found to be managerial from participating in
BAGSAK Toyo Manufacturing Corp. (BMTC), filed a the certification election.
petition for certification election during the freedom
period obtaining in said corporation. Despite the c. What is the proper remedy of an employer to
opposition thereto by SIGAW Federation on the ensure that the employees are qualified to hold a
ground that UNIDAD was not possessed with all the certification election? (1996)
attributes of a duly registered union, the Med-Arbiter
issued an Order calling for a certification election on A: The employer has no remedy. The petition for
July 25, 2001. This Order was promulgated and certification election was initiated by the Union; hence,
served on the parties on July 12, 2001. On July 14, the employer is a total stranger or a bystander in the
2001, UNIDAD submitted and served the required election process (Philippine Fruits and Vegetable
documents for its registration as an independent Industries, Inc. v. Torres, G.R. No. 92391, July 3, 1992). To
union, which documents were approved by the DOLE allow an employer to assert a remedy is an act of
on July 15, 2001. During the elections, UNIDAD won interference in a matter which is purely a concern of the
over SIGAW. SIGAW questioned UNIDAD's victory on Union.
the ground that UNIDAD was not a duly registered
union when it filed the petition for a certification Note: The Labor Code expressly provides the role of the
election. Shall SIGAWs case prosper or not? Why? employer as a mere bystander in cases of certification
(2001). election. Whether the petition for certification election is
filed by an employer or a legitimate labor organization,
A: No, SIGAW's case will not prosper. The application of the employer shall not be considered a party thereto with
technicalities of procedural requirements in certification a concomitant right to oppose the petition. The
election disputes will serve no lawful objective or employers participation is limited to: 1) being notified or
purpose. It is a statutory policy that no obstacles should informed of petitions or such nature and 2) submitting
be placed on the holding of a certification election the list of employees during the pre-election conference
(Samahang ng Manggagawa sa Pacific Plastic vs. should the Med-Arbiter act favorably on the petition (Art.
Laguesma, G.R. No. 111245, January 31, 1997) and that the 258-A, Labor Code).
law is indisputably partial to the holding of a certification
election (Western Agusan vs. Trajano, G.R. No. 75724, May Q: There are instances when a certification election is
6, 1991). At any rate, UNIDAD completed all the mandatory. What is the rationale for such a legal
requirements for union registration on July 14, 2001, and mandate? (2003)
legitimate union status was accorded on July 15, 2000, or
at least ten (10) days before the scheduled date for A: According to the Labor Code, in any establishment
holding the Certification Election. where there is no certified bargaining agent, a
certification election shall automatically be conducted by
Q: PT & T Supervisory Employees Union filed a the Med-Arbiter upon the filing of a petition by a
petition for the holding of a certification election legitimate labor organization. In the above-described
among the supervisory employees of the PT & T situation, a certification election is made mandatory
Company. The company moved to dismiss the because if there is no certified bargaining agent as
petition on the ground that Union members were determined by a certification election, there could be no
performing managerial functions and were not collective bargaining in the said unorganized
merely supervisory employees. The company also establishment. (Art. 257, Labor Code).
alleged that a certified bargaining unit existed among
its rank and file employees which barred the filing of Q: In what instance may a petition for certification
the petition. election be filed outside the freedom period of a

current collective bargaining agreement? (1999)

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luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

(Article 256, now Article 266, of the Labor Code). In the

A: As a general rule, in an establishment where there is in instant case, 500 out of 600 rank-and-file employees
force and effect a CBA, a petition for certification election voted.
may be filed only during the freedom period of such CBA.
c. Should union A be declared the winner?
But to have the above-mentioned effect, the CBA should
have been filed and registered with the Department of A: No. The Labor Code provides that the Labor Union
Labor and Employment. (See Article 231, 253-A and 256). receiving majority of the valid votes cast shall be certified
as the exclusive bargaining agent of all the workers in the
Thus, a CBA that has not been filed and registered with unit (Article 256, now Article 266, of the Labor Code). Here,
the Department of Labor and Employment cannot be a the number of the valid votes cast is 490; thus the
bar to a certification election and such election can be winning union should receive at least 246 votes. Union A
held outside of the freedom period of such CBA. only received 200 votes.

Q: Are probationary employees entitled to vote in a d. Suppose the election is declared invalid, which of
certification election? Why? (1999) the contending unions should represent the
rank-and-file employees?
A: In a certification election, all rank-and-file employees
in the appropriate bargaining unit are entitled to vote. A: None of them should represent the rank-and-file
This principle is clearly stated in Article 255 of the Labor employees. (Article 255, now Article 256 of the Labor
Code which states that the "labor organization Code).
designated or selected by the majority of the employees
in such unit shall be the exclusive representative of the e. Suppose that in the election, the unions obtained
employees in such unit for the purpose of collective the following votes: A-250; B-150; C-50; 40 voted
bargaining." Collective bargaining covers all aspects of no union; and 10 were segregated votes. Should
the employment relation and the resultant CBA Union A be certified as the bargaining
negotiated by the certified union binds all employees in representative?
the bargaining unit. Hence, all rank-and-file employees,
probationary or permanent, have a substantial interest in A: Yes. The Labor Code provides that the Labor Union
the selection of the bargaining representative. The Code receiving majority of the valid votes cast shall be certified
makes no distinction as to their employment status as as the exclusive bargaining agent of all the workers in the
basis for eligibility to vote in the petition for certification unit (Article 256, now Article 266, of the Labor Code). Here,
election. The law refers to "all" the employees in the the number of valid votes cast is 490. Thus the winning
bargaining unit. All they need to be eligible to vote is to union should receive at least 246 votes; Union A received
belong to the "bargaining unit". (Airtime Specialists, Inc. v. 250 votes.
Ferrer-Calleja, G.R. No. 80612-16, December 29, 1989).
Q: Samahang East Gate Enterprises (SEGE) is a labor
Q: Liwayway Glass had 600 rank-and-file employees. organization composed of the rank-and-file
Three rival unions A, B, and C participated in the employees of East Gate Enterprises (EGE), the leading
certification elections ordered by the Med-Arbiter. manufacturer of all types of gloves and aprons.
500 employees voted. The unions obtained the
following votes: A 200; B 150; C 50; 90 employees EGE was later requested by SEGE to bargain
voted no union; and 10 were segregated votes. Out collectively for better terms and conditions of
of the segregated votes, four (4) were cast by employment of all the rank-and-file employees of
probationary employees and six (6) were cast by EGE. Consequently, EGE filed a petition for
dismissed employees whose respective cases are still certification election before the Bureau of Labor
on appeal. (2014) Relations (BLR).

a. Should the votes of the probationary and During the proceedings, EGE insisted that it should
dismissed employees be counted in the total participate in the certification process. EGE reasoned
votes cast for the purpose of determining the that since it was the one who filed the petition and
winning labor union? considering that the employees concerned were its
own rank-and-file employees, it should be allowed to
A: Yes. Rule IX, Section 5 of DOLE Department Order 40- take an active part in the certification process.
03 provides that all employees who are members of the
appropriate bargaining unit sought to be represented by Is the contention of EGE proper? Explain. (2014)
the petitioner at the time of the issuance of the order
granting the conduct of a certification election shall be A: No. Under Article 258-A of the Labor Code, an
eligible to vote. An employee who has been dismissed employer is a mere bystander in certification elections,
from work but has contested the legality of the dismissal whether the certification for election is filed by said
in a forum of appropriate jurisdiction at the time of the employer or a legitimate labor organization. The
issuance of the order for the conduct of certification employer shall not be considered as a party thereto with
election shall be considered a qualified voter, unless a concomitant right to oppose the petition for
his/her dismissal was declared valid in a final judgment certification election.
at the time of the conduct of the certification election.
Affiliation and Disaffiliation of the Local Union from the
b. Was there a valid election? Mother Union

A: Yes. To have a valid election, at least a majority of all Q: In the Collective Bargaining Agreement (CBA)

eligible voters in the unit must have cast their votes between Royal Films and its rank-and-file Union


QuAMTO for LABOR LAW (1991-2015)
(which is directly affiliated with MFF, a national Officers, G.R. No. 106518, March 11, 1999) (Art. 241(n) and
federation), a provision on the maintenance of (o), Labor Code) In the problem given, none of the above
membership expressly provides that the Union can requisites were complied with by the union. Hence,
demand the dismissal of any member employee who Rogelio can object to the deduction made by the union for
commits acts of disloyalty to the Union as provided being invalid.
for in its Constitution and By-Laws. The same
provision contains an undertaking by the Union Note: Substantial compliance of the requirements is not
(MFF) to hold Royal Films free from any and all claims enough in view of the fact that the special assessment will
of any employee dismissed. During the term of the diminish the compensation of union members. (Palacol v.
CBA, MFF discovered that certain employee members Ferrer-Calleja, G.R. No. 85333, February 26, 1990).
were initiating a move to disaffiliate from MFF and
join a rival federation, FAMAS. Forthwith, MFF sought Q: Atty. Facundo Veloso was retained by Welga Labor
the dismissal of its employee members initiating the Union to represent it in the collective bargaining
disaffiliation movement from MFF to FAMAS. Royal negotiations. It was agreed that Atty. Veloso would be
Films, relying on the provision of the aforementioned paid in the sum of P20,000.00 as attorney's fees for
CBA, complied with MFFs request and dismissed the his assistance in the CBA negotiations. After the
employees identified by MFF as disloyal to it. conclusion of the negotiations Welga Labor Union
collected from its individual members the sum of
a. Will an action for Illegal dismissal against Royal P100.00 each to pay for Atty. Veloso's fees and
Films and MFF prosper or not? another sum of Pl00.00 each for services rendered by
the union officers. Several members of the Welga
A: The action for illegal dismissal will prosper. The right Labor Union approached you to seek advice on the
of a local union to disaffiliate from its mother federation following matters.
is well-settled. A local union, being a separate and
voluntary association, is free to serve the interest of all its a. Whether or not the collection of the amount
members including the freedom to disaffiliate when assessed on the individual members to answer
circumstances warrant this right is consistent with the for the attorney's fees was valid?
constitutional guarantee of freedom of association. Thus,
the act of initiating the move to disaffiliate is not an act of A: The assessment for attorneys fees is not valid. The
disloyalty. (Tropical Hut. Employee's Union-CGW, et al. vs. Labor Code prohibits the payment of attorneys fees
Tropical Hut Food Market, Inc., et. al, G.R. Nos. L-3495-99, when it is effected through forced contributions from the
January 20, 1990). workers from their own funds as distinguished from the
union funds (Art. 222(b), Labor Code). The obligation to
Note: Disaffiliation cannot be considered an act of pay the attorneys fees belongs to the union and cannot
disloyalty. The very essence of self-organization is for the be shunted to the workers as their direct responsibility.
workers to form a group for the effective enhancement (Bank of the Philippine Islands Employees Union vs. NLRC,
and protection of common interest. (PICEWO v. People G.R. Nos. 69746-47, March 31, 1989).
Industrial & Commercial Corp.,G.R. No. L-37687, March 15,
1982). b. Whether or not the assessment of Pl00.00 from
the individual members of the Welga Labor
b. What are the liabilities of Royal and MFF to the Union for services rendered by the union officers
dismissed employees, if any? (1994) in the CBA negotiations was valid? (1997)

A: MFF can be held liable to pay the backwages of the A: The assessment for negotiation fees is not valid. The
dismissed employees. Royal can be held jointly and Labor Code prohibits negotiation fees and other similar
severally liable for backwages if it acted with undue haste charges of any kind arising from any collective bargaining
in dismissing the employees (Manila Cordage Co. v. CIR, negotiations to be imposed on any individual member of
G.R. No. L-27079, August 31, 1977). In addition, Royal can the contracting union. (Art. 222(b), Labor Code)
be ordered to reinstate the dismissed employees.
Note: Special assessments may be allowed like attorneys
Union Dues and Special Assessments fees and negotiation fees provided that there be strict
compliance with the requisites of a valid special
Requirements for Validity assessment. (Art. 241 (n) and (o), Labor Code).

Q: The union deducted P20.00 from Rogelio's wages Q: What requisites must a Union comply with before
for January. Upon inquiry he learned that it was for it can validly impose special assessments against its
death aid benefits and that the deduction was made members for incidental expenses, attorney's fees,
pursuant to a board resolution of the directors of the representation expenses and the like? (2001)
union. Can Rogelio object to the deduction? Explain
briefly. (2002) A: In order that the special assessment may be upheld as
valid, the following requisites must be compiled with: (1)
A: Yes. In order that the special assessment (death aid Authorization by a written resolution of the majority of
benefit) may be upheld as valid, the following requisites all the members at the general membership meeting duly
must be compiled with: (1) Authorization by a written called for the purpose; (2) Secretary's record of the
resolution of the majority of all the members at the meeting; and (3) Individual written authorization for the
general membership meeting duly called for the purpose; check-off duly signed by the employee concerned. (ABS-
(2) Secretary's record of the meeting; and (3) Individual CBN Supervisors Employees Union Members v. ABS-CBN
written authorization for the check-off duly signed by the Broadcasting Corp, and Union Officers, G.R. No. 106518,
employee concerned. (ABS-CBN Supervisors Employees March 11, 1999 ) (Art. 241(n) and (o), Labor Code).

Union Members v. ABS-CBN Broadcasting Corp, and Union

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luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

RIGHT TO COLLECTIVE BARGAINING subsequently assumed jurisdiction over the labor

Duty to Bargain Collectively
a. Will the representation issue that has arisen
When there is CBA involving the national union PAFLU, to which the
duly registered local union JEU is affiliated, bar
Q: What jurisdictional pre-conditions must be collective bargaining negotiation with J & J?
present to set in motion the mechanics of a collective Explain briefly.
bargaining? (1996)
A: The representation issue that has arisen involving the
A: To set in motion the mechanics of collective national union PAFLU should not bar collective
bargaining, these jurisdictional pre-conditions must be bargaining negotiation with J and J. It is the local union
present, namely: JEU that has the right to bargain with the employer J and
J, and not the national union PAFLU.
1. The employees in a bargaining unit should form a labor
organization; It is immaterial whether the representation issue within
PAFLU has been resolved with finality or not. Said
2. The labor organization should be a legitimate labor squabble could not possibly serve as a bar to any
organization; collective bargaining since PAFLU is not the real party-in-
interest to the talks; rather, the negotiations are confined
3. As such legitimate labor organization, it should be to the corporation and the local union JEU. Only the
recognized or certified as the collective bargaining collective bargaining agent, the local union JEU, possesses
representative of the employees of the bargaining unit; the legal standing to negotiate with the corporation. A
and duly registered local union affiliated with a national
union or federation does not lose its legal personality or
4. The labor organization as the collective bargaining independence. (Adamson and Adamson, Inc. v. The Court
representative should request the employer to bargain of Industrial Relations and Adamson and Adamson
collectively. (See Arts. 243, 234, 255 and 250 of the Labor Supervising Union (FFW), G.R. No. L-35120, January 30,
Code). 1984).

Q: What is an appropriate bargaining unit for b. Can the Secretary of Labor decide the labor
purposes of collective bargaining? (1999) dispute by awarding the JEU CBA Proposals as the
Collective Bargaining Agreement of the parties?
A: An APPROPRIATE BARGAINING UNIT is a group of Explain briefly. (1999)
employees of a given employer comprised of all or less
than all of the entire body of employees, which the A: Yes, the Secretary of Labor can decide the labor dispute
collective interest of all the employees, consistent with by awarding the JEU CBA proposals as the Collective
the interest of the employer, indicated to be the best Bargaining Agreement between the parties because
suited to serve reciprocal rights and duties of the parties when the Secretary of Labor (under Art. 263 [g]) assumes
under the collective bargaining provisions of the law. (See jurisdiction over a labor dispute causing or likely to cause
University of the Philippines v. Ferrer-Calleja, G.R. No. a strike or lockout in an industry indispensable to the
96189, July 14, 1992). national interest, the Secretary of Labor exercises the
power of compulsory arbitration over the labor dispute,
Collective Bargaining Agreement (CBA) meaning, that as an exception to the general rule, the
Secretary of Labor now has the power to set or fix wages,
Mandatory Provisions of CBA rates of pay, hours of work or terms and conditions of
employment by determining what should be the CBA of
Q: Jenson & Jenson (J & J) is a domestic corporation the parties. (See Divine Word University v. Secretary of
engaged in the manufacturing of consumer products. Labor, G.R. No. 91915, September 11, 1992)
Its rank-and-file workers organized the Jenson
Employees Union (JEU), a duly registered local union ALTERNATIVE ANSWER:
affiliated with PAFLU, a national union. After having What is involved in the case is a corporation engaged in
been certified as the exclusive bargaining agent of the the manufacturing of consumer products. If the consumer
appropriate bargaining unit, JEU-PAFLU submitted products that are being manufactured are not such that a
its proposals for a Collective Bargaining Agreement strike against the company cannot be considered a strike
with the company. in an industry indispensable for the national interest,
then the assumption of jurisdiction by the Secretary of
In the meantime, a power struggle occurred within Labor is not proper. Therefore, he cannot legally exercise
the national union PAFLU between its National the powers of compulsory arbitration in the labor
President, Manny Pakyao, and its National Secretary dispute.
General, Gabriel Miro. The representation issue
within PAFLU is pending resolution before the Office Grievance Procedure
of the Secretary of Labor.
Voluntary Arbitration
By reason of this intra-union dispute within PAFLU, J
& J obstinately and consistently refused to offer any Q: XYZ Company and Mr. AB, a terminated employee
counterproposal and to bargain collectively with JEU- who also happens to be the President of XYZ
PAFLU until the representation issue within PAFLU Employees Union, agree in writing to submit Mr. AB's
shall have been resolved with finality. JEU-PAFLU illegal dismissal case to voluntary arbitration. Is this

filed a Notice of Strike. The Secretary of Labor agreement a valid one? (2015)


QuAMTO for LABOR LAW (1991-2015)
The disadvantages of compulsory arbitration are:
A: The agreement is valid because the preferred mode of
settling labor disputes is through voluntary modes, like a. State interference with the affairs of labor and
voluntary arbitration. The agreement is consistent with management is maximized, disregarding the inter-
Sec. 3, Art. XIII of the Constitution. Moreover, Art. 262 of party nature of relationship; and
the Labor Code authorize a voluntary arbitrator to hear b. The system of appeals entails a longer process.
and decide by agreement of the parties, all other labor
disputes. Duration

Q: XYZ Company and XYZ Employees Union (XYZEU) For Economic Provisions
reach a deadlock in their negotiation for a new
collective bargaining agreement (CBA). XYZEU files a Q: Company "A" and Union "B" negotiated the last two
notice of strike; XYZ Company proposes to XYZEU years of their five-year CBA on April 1, 1990 to expire
that the deadlock be submitted instead to voluntary on March 31, 1992. Considering the amicable
arbitration. If you are counsel for XYZEU, what advice relations between the parties, neither one moved for
would you give the union as to the: the extension or termination of the agreement.
1. propriety of the request of XYZ Company, and
2. the relative advantages/disadvantages between Sometime in 1995, some disgruntled employees filed
voluntary arbitration and compulsory a complaint demanding that they be paid the annual
arbitration? (2015) salary increases and other related annual increases
specified in the CBA of April 1990, citing the
A: provision in Art. 253 of the Labor Code which
1. As counsel, I will advise the union to accede to the requires the parties to "xxx keep the status quo and
request of the company. Besides being the to continue in full force and effect the terms and
constitutionally preferred mode of dispute conditions of the existing agreement during the 60
settlement, voluntary arbitration is less adversarial day period and/or until a new agreement is reached
and more expeditious. by the parties". A, however, maintained that the
annual salary increases and related benefits
2. The advantages of voluntary arbitration are: specifically provided for in the CBA were, pursuant to
contract and law, effective only for the term specified
a. The parties dispute is heard and resolved by a therein, namely, until March 31, 1992 only. Who is
person whom both parties have chosen as their correct? State the reason(s) for your answer. (2001)
judge; hence likely to be impartial.
b. If both parties are willing to submit their dispute, A: The disgruntled employees are correct in their claim
the decision is final and binding on them in that the expired CBA remains in full force and effect until
general by reason of their submission a new CBA is signed in accordance with Article 253 of the
agreement; and Labor Code. The SC ruled in New Pacific Timber and
c. In the event of a challenge, the decision is Supply Co, Inc. vs. NLRC (GR No. 124224, March 17, 2000):
elevated to the CA and then to the SC, i.e., less one
layer of appeal because the NLRC is out of the "Article 253 of the Labor Code explicitly provided that
way. until a new Collective Bargaining Agreement has been
executed by and between the parties, they are duly bound
The disadvantages of voluntary arbitration are: to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement.
a. In case of appeal by the employer to the CA, the The law does not provide for any exception or
monetary award will not be secured with an qualification as to which of the economic provisions of
appeal bond which Rule 43 of the Rules of Court the existing agreement are to retain force and effect,
does not require; and therefore, it must be understood as encompassing all the
b. In case of enforcement of judgment, the terms and conditions in the said agreement."
Voluntary Arbitrator has no sheriff to enforce it.
Freedom Period
The advantages of compulsory arbitration are:
Q: What is the "automatic renewal clause" in a
a. Subject to pre-litigation mediation, a case can be collective bargaining agreement? (1999, 2008)
initiated through the filing of a verified
complaint by a union member, unlike in A: The "AUTOMATIC RENEWAL CLAUSE" in a CBA refers
voluntary arbitration where the Voluntary to that provision of the Labor Code (Article 253) which
Arbitrator acquires jurisdiction primarily states that "It shall be the duty of both parties (to a CBA)
through a submission agreement. In a case to keep the status quo and to continue in full force and
where the company is unwilling, the EBR (and effect the terms and conditions of the existing agreement
only the EBR) may serve a notice to arbitrate; during the 60-day (freedom) period and/or until a new
hence, a union member may be left out in the agreement is reached by the parties."
process if the EBR does not serve that notice;
b. A monetary award is secured with the Union Security
employers appeal bond; and
c. There is a system of restitution in compulsory Union Security Clauses; Closed Shop, Union Shop,
arbitration. Maintenance of membership shop, etc.

Q: In a certification election conducted by the


Department of Labor, Associated Workers

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

Organization in Laguna (AWOL) headed by Cesar Union of the Philippines v. San Miguel Brewery, Inc., G.R.
Montanyo, won over Pangkat ng mga Manggagawa sa No. L-18170, August 31,1963).
Laguna (PML), headed by Eddie Gracia. Hence, AWOL
was certified as the exclusive bargaining agent of the b. Should the company comply with the union's
rank-and-file employees of the Laguna demand of terminating the members of the
Transportation Company (LTC). religious sect? (2005)

Shortly, thereafter, a Collective Bargaining A: No. The right to join includes the right not to join by
Agreement was concluded by LTC and AWOL which reason of religious beliefs. Members of said religious sect
provided for a closed shop. Consequently, AWOL, cannot be compelled or coerced to join the labor union
demanded that Eddie Gracia and all the PML even when the union has a closed shop agreement with
members be required to become members of AWOL the employer; that in spite of any closed shop agreement,
as a condition for their continued employment members of said religious sect cannot be refused
otherwise, they shall be dismissed pursuant to the employment or be dismissed from their jobs on the sole
closed shop provision of the CBA. The union security ground that they are not members of the collective
clause of the CBA also provided for the dismissal of bargaining union. (Victoriano v. Elizalde Rope Workers'
employees who have not maintained their Union, G.R. No. L-25246, September 12,1974).
membership in the union. For one reason or another,
Francis Magallona, a member of AWOL, was expelled Q: Reconcile the compulsory nature of the closed
from the union membership for acts inimical to the shop provision in a Collective Bargaining Agreement
interest of the union. Upon receipt of the notice that with the constitutional guarantee of freedom of
Francis Magallona failed to maintain his membership association. Discuss fully. (1995)
in good standing with AWOL, LTC summarily
dismissed him from employment. A: Among the policies of the State in the field of labor
relations is to promote trade unionism and to foster the
a. Can Eddie Gracia and all the PML members be organization of a strong and united labor movement.
required to become members of the AWOL UNION SECURITY CLAUSES, like a closed shop
pursuant to the closed shop provision of the CBA? agreement, is one way of implementing the
Why? aforementioned labor relations policy. Implementing to
some extent the concept of freedom of association, an
A: Eddie Gracia and all the PML members cannot be employee who is already a member of a union could not
required to become members of AWOL pursuant to the be compelled to become a member of a bargaining union,
closed shop provision of the CBA. According to the Labor even if there is a closed shop agreement.
Code (Article 248(e)), a closed shop provision cannot be
applied to those employees who are already members of Explain the impact of the union security clause to the
another union at the time of the signing of the CBA. employees right to security of tenure. (2009)

b. Is the termination from employment of Francis A: A valid union security clause when enforced or
Magallona by LTC lawful? Why? (1999) implemented for cause, after according the worker his
substantive and procedural due process rights (Alabang
A: Pursuant to the closed shop provision of the CBA Country Club, Inc. v. NLRC, G.R. No. 170287, February 14,
entered into by AWOL with LTC, membership in AWOL 2008) does not violate the employees right to security of
has become a condition of employment in LTC. As long as tenure. Art. 248(e) of the Labor Code allows union
the expulsion of Francis Magallona from AWOL was done security clauses and a failure to comply with the same as
in accordance with applicable provisions of law and with a valid ground to terminate employment. Union security
the Constitution and By-laws of the AWOL, then it was clauses are designed to strengthen unions and valid law
lawful for LTC to terminate Magallona. policy.

Q: A group of employees in XYZ Factory belonging to Unfair Labor Practice in Collective Bargaining
a religious sect, in conformity with the teachings and
dictates of their religion, refused to join the labor Refusal to Bargain
union in the factory. The labor union was able to
negotiate a substantial wage increase in its collective Q: The Kilusang Kabisig, a newly-formed labor union
bargaining agreement with management. A provision claiming to represent a majority of the workers in the
therein stated that the wage increase would be paid Microchip Corporation, proceeded to present a list of
to the members of the union only in view of a "closed demands to the management for purposes of
shop" union security clause in the new agreement. collective bargaining. The Microchips Corporation, a
The members of the sect protested and demanded multinational corporation engaged in the production
that the wage increase be extended to them. The of computer chips for export, declined to talk with the
officers of the union countered by demanding their union leaders, alleging that they had not as yet
termination from the company pursuant to the presented any proof of majority status.
"closed shop" provision in the just-concluded CBA.
The Kilusang Kabisig then chained Microchip
a. Is the CBA provision valid? Corporation with unfair labor practice, and declared
a "wildcat" strike wherein means of ingress and
A: No, the CBA provision is not valid. The benefits of a CBA egress were blocked and remote and isolated acts of
are extendible to all employees regardless of their destruction and violence were committed.
membership in the union because to withhold the same
from non-union members would be to discriminate

against them. (National Brewery & Allied Industries Labor


QuAMTO for LABOR LAW (1991-2015)
Was the company guilty of an unfair labor practice (o) of this Code shall not apply to the non-members
when it refused to negotiate with the Kilusang of the recognized collective bargaining agent;
Kabisig? (1997) f. To dismiss, discharge, or otherwise prejudice or
discriminate against an employee for having given or
A: No, the company is not guilty of unfair labor practice being about to give testimony under this Code;
on two grounds. Firstly, although Art. 248 (g) states that g. To violate the duty to bargain collectively as
the refusal to bargain collectively as prescribed under the prescribed by this Code;
Labor Code is considered as an unfair labor practice, it h. To pay negotiation or attorney's fees to the union or
shall only apply in cases where the petitioning union its officers or agents as part of the settlement of any
which was refused is a legitimate labor organization or issue in collective bargaining or any other dispute; or
selected by the majority of the workforce. It is clearly i. To violate a collective bargaining agreement.
inapplicable in the case at bar for there is no proof, aside
from its mere verbal claim, that Kilusang Kabisig holds Art. 249. Provides that it shall be unfair labor practice for
the majority status. Secondly, it cannot be concluded that a labor organization, its officers, agents or
the act of Microchip Corporation of asking for evidence of representatives:
majority status is a refusal to bargain collectively. Its act
is clearly a security measure ensuring that it would a. To restrain or coerce employees in the exercise of
negotiate with the proper bargaining unit. A company their right to self-organization. However, a labor
cannot be faulted for ensuring that its time and effort in organization shall have the right to prescribe its own
negotiating would not be wasted. rules with respect to the acquisition or retention of
Unfair Labor Practice (ULP) b. To cause or attempt to cause an employer to
discriminate against an employee, including
Nature of ULP discrimination against an employee with respect to
whom membership in such organization has been
Q: Define unfair labor practice denied or to terminate an employee on any ground
other than the usual terms and conditions under
A: Art. 247 provides that unfair labor practices violate the which membership or continuation of membership is
constitutional right of workers and employees to self- made available to other members;
organization, are inimical to the legitimate interests of c. To violate the duty, or refuse to bargain collectively
both labor and management, including their right to with the employer, provided it is the representative
bargain collectively and otherwise deal with each other of the employees;
in an atmosphere of freedom and mutual respect, disrupt d. To cause or attempt to cause an employer to pay or
industrial peace and hinder the promotion of healthy and deliver or agree to pay or deliver any money or other
stable labor-management relations. things of value, in the nature of an exaction, for
services which are not performed or not to be
Q: Give three (3) examples of unfair labor practices performed, including the demand for fee for union
on the part of the employer and three (3) examples of negotiations;
unfair labor practices on the part of the labor union. e. To ask for or accept negotiation or attorneys fees
(1996) from employers as part of the settlement of any issue
in collective bargaining or any other dispute; or
A: Art. 248 provides that it shall be unlawful for an f. To violate a collective bargaining agreement.
employer to commit any of the following unfair labor
practices: Q: The Collective Bargaining Agreement (CBA)
between Libra Films and its union, Libra Films
a. To interfere with, restrain or coerce employees in the Employees' Union (LFEU), contains the following
exercise of their right to self-organization; standard clauses:
b. To require as a condition for employment that a
person or an employee shall not join a labor 1. Maintenance of membership;
organization or shall withdraw from one to which he 2. Check off for union dues and agency fees; and
belongs; 3. No strike, no lock-out.
c. To contract out services or functions being
performed by union members when such will While Libra Films and LFEU are in re-negotiations for
interfere with, restrain or coerce employees in the an extension of the CBA, LFEU discovers that some of
exercise of their right to self-organization; its members have resigned from the union, citing
d. To initiate, dominate, assist or otherwise interfere their constitutional right to organize (which includes
with the formation or administration of any labor the right NOT to organize). LFEU demands that Libra
organization, including the giving of financial or Films institute administrative proceedings to
other support to it or its organizers or supporters; terminate those union members who resigned in
e. To discriminate with regard to wages, hours of work, violation of the CBA's maintenance of membership
and other terms and conditions of employment in clause. Libra Films refuses, citing its obligation to
order to encourage or discourage membership in any remain a neutral party. As a result, LFEU declares a
labor organization. Nothing in this Code or in any strike and after filing a notice of strike and taking a
other law shall stop the parties from requiring strike vote, goes on strike. The union claims that
membership in a recognized collective bargaining Libra Films grossly violated the terms of the CBA and
agent as a condition for employment, except those engaged in unfair labor practice. (2015)
employees who are already members of another
union at the time of the signing of the collective a. Are LFEU's claims correct? Explain.
bargaining agreement. Provided, that the individual

authorization required under Article 241, paragraph

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

A: LFEUs claim that Libra Films committed ULP based on association would press for their demands. Most of
its violation of the CBA is not correct. For violation of a its members have worked in the mill for 10 to 15
CBA to constitute ULP, the violation must be violation of years with no improvement in working conditions
its economic provisions. Moreover, said violation must be and monetary benefits. The leaders of the workers
gross and flagrant. Based on the allegation of the union, association approached you and asked: what legal
what was violated was the maintenance of membership steps could they take to protect their security of
clause which was a political or representational tenure? What advice could you give them? (2004)
provision; hence no ULP was committed. (BPI Employees
Union-Davao City v. BPI, 702 SCRA 42). A: Every man has a natural right to the fruits of his labors.
One who has been employed and has to put into
b. Distinguish between a "closed shop" clause and employment time and effort must be protected.
a "maintenance of membership" clause. (Alcantara, 2009).

A: In a closed shop clause, all employees are required to I would advice them to register the workers association
be members of the union at the time of hiring. They too to DOLE and then sue the owner-manager for unfair labor
must remain members of good standing during the practice.
period of employment as a condition of continued
employment. Maintenance of membership clause, on the Registration is the condition sine qua non for the
other hand, requires all employees who are union acquisition of its legal personality. Its acquisition of legal
members at the time of execution of the CBA to maintain personality is important for it is the doorway for it to
their membership of good standing, as a condition of avail of the privileges granted by law to legitimate labor
continued employment. organizations (Phil. Association of Free Labor Unions
(PAFLU) et al., v. The Secretary of Labor et al., GR No. L-
c. Distinguish between "union dues" and "agency 22228, February 27, 1969). In connection, one of the
fees." rights and privileges granted by law to legitimate labor
organizations is the capacity to sue in its registered name
A: Union dues are union funds paid by union members, (Art. 242 [e]) Therefore, once the registration process of
normally through check-off by the employer on the basis the workers association has been completed, it may now
of an individual written authorization duly signed by the sue the owner-manager for unfair labor practice and
employees pursuant to Art. 241 (o) of the Labor Code. protect not only the right of the workers to security of
Agency fee, on the other hand, is a reasonable fee tenure but also other rights.
equivalent to the dues and other fees paid by members of
the recognized collective bargaining agent. Art. 248 (e) of Q: Is the commission of an unfair labor practice by an
the Labor Code mandates that only non-union members employer subject to criminal prosecution? Please
who accept the benefits under the CBA may be assessed explain your answer briefly. (2005)
agency fees. Their check-off authorization is not required.
A: Yes. Art. 247 states that unfair labor practices are not
ULP of Employers only violations of civil rights of both labor and
management but are also criminal offenses against the
Q: Company "A" contracts out its clerical and State which shall be subject to prosecution and
janitorial services. In the negotiations of its CBA, the punishment as herein provided. Consequently, in order
union insisted that, henceforth, the company may no to strengthen the provisions under the Labor Code, BP 70
longer engage in contracting out these types of was a special law enacted which further grounded the
services, which services the union claims to be change in concept that considered unfair labor practices
necessary in the company's business, without prior as criminal offenses.
consultation. Is the union's stand valid or not? For
what reason(s)? (2001) Under the explanatory note of the said special law, the
reason behind the change in concept was propelled by
A: No, the unions stand is not valid. The act of the the observation that the mere administrative nature of
employer to contract out services is an exercise of their unfair labor practices has brought more harm than good.
management prerogative, a right that is recognized by Emboldened by the laws liberality, nay, inadequacy,
law. It is not an act of unfair labor practice for Art. 248 (c) irresponsible, sometimes vindictive employers, many of
clearly states that in order for the act of contracting out them aliens, ride high brazenly committing such unfair
of services by the employer to constitute unfair labor labor practices. Legitimate unions and labor
practice, it must interfere with, restrain or coerce organizations, most especially the weak and newly
employees in the exercise of their right to self- organized, easily get busted with impunity, harassed or
organization. In the case at bar, there being no resulting discriminated against, and terms and conditions of
restriction to the right to self-organization of the union, employment retrogressing to sub-standard level instead
their claim of unfair labor practice cannot stand. of improving all on account of the lack of effective
deterrents to and penal sanctions against pernicious
Q: Around 100 workers of a mill in a coconut practice. Add to this depressing spectacle the sight of
plantation organized themselves for the purpose of many labor leaders and active members getting arrested,
promoting their common interest and welfare. The detained or languishing in jails for violations of the ban
workers association prepared a petition for on strikes, picketing or unlawful assembly, or for having
increasing the daily pay of its members in compliance brought the law into their own hands, while you grope in
with minimum wage rates for their sector in the frustration looking for a single instance where an
region, and for granting benefits to which they are unscrupulous employer has suffered the same fate for
entitled under the law. However, the workers having illegally locked out his establishment resulting in
became restless and anxious after the owner- countless workers losing jobs and their only means of

manager threatened them with mass lay-off if the livelihood.


QuAMTO for LABOR LAW (1991-2015)
Q: Harbor View Hotel has an existing Collective (G.R. No. 184517, October 8, 2013), which reversed
Bargaining Agreement (CBA) with the union of rank- Manlimos v. NLRC (G.R. No. 113337, March 2, 1995),
and-file employees consisting, among others, of pointed out that in asset sales, the rule is that the seller in
bartenders, waiters, roomboys, housemen and good faith is authorized to dismiss the affected
stewards. During the lifetime of the CBA, Harbor View employees, but is liable for the payment of separation pay
Hotel, for reasons of economy and efficiency, decided under the law. The buyer in good faith, on the other hand,
to abolish the position of housemen and stewards is not obliged to absorb the employees affected by the
who do the cleaning of the hotel's public areas. Over sale, nor is it liable for the payment of their claims. In
the protest of the Union, the Hotel contracted out the contrast with asset sales, in which the assets of the selling
aforementioned job to the City Service Janitorial corporation are transferred to another entity, the
Company, independent contractor which has a transaction in stock sales takes place at the shareholder
substantial capital in the form of janitorial tools, level. Because the corporation possesses a personality
equipment, machineries and competent manpower. separate and distinct from that of its shareholders, a shift
Is the action of the Harbor View Hotel legal and valid? in the composition of its shareholders will not affect its
(1994) existence and continuity.

A: Labor laws are designed to afford full protection to Hence the corporation continues to be the employer and
labor, and one of the avenues to which it upholds its continues to be liable for the payment of their just claims.
constitutional mandate is through Art. 248 which Absent a just or authorized cause, the corporation or its
provided the instances that constitute unfair labor new majority shareholders are not entitled to lawfully
practices. One specific provision in point is Art. 248 (c) dismiss corporate employees.
which prohibits employers to contract out services in
relation to tasks performed by union members, which b. What is the "successor employer" doctrine?
would interfere or restrain the employees right to self
organization. A: The successor-employer doctrine refers to a sale or
transfer in ownership of an entity that has been done in
However, Art. 248 (c) only applies if there was bad faith or to defeat the rights of labor. In such a case, it
interference or restraint to the employees' right to self- is as if there have been no changes in employer-employee
organization; and in the case at bar, there has been no relationship between the seller and its employees. The
clear indication of any violation. In fact, the action of the buyer becomes a successor-employer and is obliged to
employer was a valid exercise of management absorb the displaced employees.
prerogative, because the law recognizes that for reasons
of economy and efficiency, an employer may validly ULP of Labor Organizations
exercise measures to keep his business in existence
provided that there will be no violation of any of the Q: A labor union lawyer opined that a labor
rights of employees protected by the laws. organization is a private and voluntary organization;
hence, a union can deny membership to any and all
Q: Blank Garments, Inc. (BLANK), a clothing applicants. Is the opinion of counsel in accord with
manufacturer, employs more than 200 employees in law? (1998)
its manufacturing business. Because of its high
overhead, BLANK decided to sell its manufacturing A: NO, the opinion of counsel is not in accord with law.
business to Bleach Garments, Inc. (BLEACH) lock, The Labor Code provides that a labor organization has
stock and barrel which included goodwill, the right to prescribe its own rules for the acquisition or
equipment, and personnel. After taking on BLANK's retention of membership, but it is an unfair labor practice
business, BLEACH reduces the workforce by not act for a labor organization to restrain or coerce
hiring half the workers specifically the ones with employees in the exercise of their right to self-
seniority. BLANK and BLEACH are still discerned to organization. Thus, a labor organization cannot
be sister companies with identical incorporators. discriminate against any employee by denying such
The laid-off employees sue both BLANK and BLEACH employee membership in the labor organization on any
for unlawful termination. (2015) ground other than the usual terms and conditions under
which membership or continuation of union membership
a. How would you decide this case? is made available to other members. (Article 249 (a) and
(b), Labor Code).
A: In transfer of ownership, the buyer corporation, as a
general rule, is not duty-bound to absorb the employees Note: However, although the rule is that union has the
of the selling corporation. The buyer corporation right to determine its membership and to prescribe
becomes liable to the displaced employees only if the conditions, it must be qualified in cases of union security
change of ownership is done in bad faith or is used to clause wherein a labor union holding monopoly in the
defeat the rights of labor. In such a case, the successor- supply of labor, either in a given locality, or as regards a
employer is duty-bound to absorb the displaced particular employer by reason of a closed-shop or similar
employees (Peafrancia Tours and Travel Transport, Inc., agreements. (Salunga v. CIR, G.R. No. L-22456, September
v. Sarmiento, G.R. No. 178397, Oct. 20, 2010). 27, 1967).

Since the facts of the case do not show any bad RIGHT TO PEACEFUL CONCERTED ACTIVITES
fa544554ith in BLANKs sale to BLEACH, BLEACH,
consequently, is not obliged to absorb the displaced Q: What is the rationale for the State regulation of
employees of BLANK. strike activity and what are the interests involved
that the State must balance and reconcile? Cite two
The case at hand involves sales of assets as differentiated (2) examples on how the law regulates the use of the

from sales of stocks. The ruling in SME Bank v. De Guzman strike as a form of concerted activity. (2000)

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

A: The first rationale is the constitutional provision that Q: If due to the prolonged strike, ROSE Corporation
the right to strike is to be exercised "in accordance with hired replacements, can it refuse to admit the
law". Another rationale is the Civil Code provision that replaced strikers? (2006)
the relations between employer and employee are
imbued with public interest and are subject to the A: No. While present law recognizes the right of the
provisions of special law. A third rationale is the police employer to continue his business in the course of an
power of the state. The interests to be balanced are the economic strike, it assures the right of the strikers to
rights of the workers, as primary socio-economic force, to return to their former positions at the expense of the
protection of the law, to security of tenure, to concerted replacements. Art. 264(a) of the Labor Code provides that
activities, etc. These should be balanced with the right of mere participation of a worker in a lawful strike shall not
the employer to reasonable return on investment and to constitute sufficient ground for termination of his
expansion and growth. General welfare or the general employment, even if a replacement had been hired by the
peace and progress of society should also be considered. employer during such lawful strike. (PT&T v. NLRC, G.R.
This is why assumption of jurisdiction and certification to No. 109281, December 7, 1995; Diwa ng Pagkakaisa v.
NLRC are allowed in "national interest" cases. (Art. 263, Filtex International Corporation, G.R. Nos. L-23960 & L-
Labor Code; Raw at Buklod ng Manggagawa v. NLRC, G.R. 23961, February 26, 1968).
No. 91980, June 27, 1991; Lapanday Workers Union v.
NLRC, G.R. Nos. 95494-97, September 7,1995) Forms of Concerted Activities

EXAMPLES: (1) procedural requirements should be Q: Distinguish clearly but briefly between: Sympathy
observed, namely, filing of notice of strike, observance of strike and general strike. (2004)
cooling-off period, taking of strike note, and report of the
strike vote; (2) use of violence, intimidation or coercion A: In both a sympathy strike and in a general strike, there
and blockade of ingress-egress are not allowed. (Art 263 is a stoppage of work by the concerted action of
(b)(c)(f)(g), Labor Code). employees. In both kinds of strike, the strike is not the
result of a labor or industrial dispute.
Q: Because of alleged unfair labor practices by the
management of GFI System, a government owned and As the name implies, workers go on a SYMPATHY STRIKE
controlled financial corporation, its employees to show their sympathy for certain workers who are on
walked out from their jobs and refused to return to strike. On the other hand, in a GENERAL STRIKE, workers
work until the management would grant their union in the country or in a region, province, or city or
official recognition and start negotiations with them. municipality go on a strike to publicly protest a certain
The leaders of the walk-out were dismissed, and the policy or action taken by the government. Thus, for
other participants were suspended for sixty days. In instance, a general strike may be declared by workers to
arguing their case before the Civil Service publicly protest the stand of President Arroyo that she is
Commission, they cited the principle of social justice against an increase of the minimum wage at this time.
for workers and the right to self-organization and
collective action, including the right to strike. They Q: Eaglestar Company required a 24-hour operation
claimed that the Constitution shielded them from any and embodied this requirement in the employment
penalty because their walk-out was a concerted contracts of its employees. The employees agreed to
action pursuant to their rights guaranteed by the work on Sundays and Holidays if their work schedule
basic law. Is the position taken by the walk-out required them to do so for which they would be paid
leaders and participants legally correct? Reason additional compensation as provided by law. Last
briefly. (2004) March 2000, the union filed a notice of strike. Upon
Eaglestar's petition, the Secretary of Labor certified
A: No. It is a settled rule that employees in the public the labor dispute to the NLRC for compulsory
sector may not engage in strikes. While the Constitution arbitration. On April 20, 2000 (Maundy Thursday),
recognizes the right of government employees to while conciliation meetings were pending, the union
organize, they are prohibited from staging strikes, officers and members who were supposed to be on
demonstrations, mass leaves, walk-outs and other forms duty did not report for work. Neither did they report
of mass action to the stoppage and detriment of public for work on April 21 (Good Friday) and on April 22
services. (Bangalisan v. CA, G.R. No. 124678 July 31, 1997). (Black Saturday), disrupting the factory's operations
and causing it huge losses. The union denied it had
The right to strike is not constitutional; it is statutory gone on a strike because the days when its officers
because the Constitution provides that the right should and members were absent from work were legal
be "in accordance with law". And there is as yet no law holidays. Is the contention of the union correct?
giving government employees the right to strike. Explain briefly. (2000)

Note: Assuming that what we have is a chartered A: The contention of the union is NOT correct. In the case,
government-owned and controlled corporation, they it is clear that the employees agreed to work on Sundays
cannot, under EO 180 and related jurisprudence, stage and Holidays if their work schedule required them to do
such walk-out which is basically a case of strike. Even if so for which they would be paid additional compensation
GFI was organized under the corporation law, still no as provided by law. The above-mentioned agreement that
such walk-out is allowed without the employees' the employees voluntarily entered into is valid. It is not
complying with the requirements of a valid strike, among contrary to law. It is provided in the agreement that if
which is that said strike or walkout should be validly they will work Sundays or Holidays they will be paid
grounded on a (a) deadlock in collective bargaining, or additional compensation as provided by law. Neither is
(b) unfair labor practice, either of which is not present the agreement contrary to morals, good customs, public
here. order or public policy. Thus, when the workers did not

report for work when by agreement they were supposed


QuAMTO for LABOR LAW (1991-2015)
to be on duty, there was a temporary stoppage of work by bargaining unit concerned, obtained by secret ballot
the concerted action of the employees as a result of an in meetings or referenda called for that purpose.
industrial or labor dispute because they were on strike. 4. In every case, the union or the employer shall furnish
(See Interphil Laboratories Employees Union-FFW v. the Department of Labor the results of the voting at
Interphil Laboratories Inc., GR No. 142824, December 19, least seven days before the intended strike or
2001). lockout, subject to the cooling-off period herein
Q: The day following the workers' voluntary return to 5. No labor organization or employer shall declare a
work, the Company Production Manager discovered strike without first having bargained collectively or
an unusual and sharp drop in workers' output. It was without first having filed the notice required in the
evidently clear that the workers are engaged in a preceding Article or without the necessary strike or
work slowdown activity. Is the work slowdown a lockout vote first having been obtained and reported
valid form of strike activity? (1998) to the Department of Labor.
6. No strike shall be declared after assumption of
A: A WORK SLOWDOWN is not a valid form of strike jurisdiction by the President or the Department of
activity. If workers are to strike, there should be Labor or after certification or submission of the
temporary stoppage of work by the concerted action of dispute to compulsory or voluntary arbitration or
employees as a result of an industrial or labor dispute during the pendency of cases involving the same
(See Article 2l2(o) of the Labor Code). The Supreme Court grounds for the strike or lockout.
in Ilaw at Buklod ng Manggagawa v. NLRC (G.R. No. 91980, 7. In a strike, no person engaged in picketing should
June 27, 1991) ruled that the Court is in substantial commit any act of violence, coercion or intimidation
agreement with the petitioner's concept of a slowdown as or obstruct the free ingress to or egress from the
a "strike on the installment plan", as a wilful reduction in employers premises for lawful purposes, or obstruct
the rate of work by concerted action of workers for the public thoroughfares.
purpose of restricting the output of the employer, in
relation to a labor dispute, as an activity by which Q: Union A filed a Notice of Strike with the National
workers, without a complete stoppage of work retard Conciliation and Mediation Board (NCMB) of the
production or their performance of their duties. The Department of Labor and Employment. Upon a
Court also agrees that such slowdown is generally motion to dismiss by the Company on the ground that
condemned as inherently illicit and unjustifiable, because the acts complained of in the notice of strike are non-
while the employees "continue to work and remain at strikeable. The NCMB dismissed the Notice of Strike
their positions, and accept wages paid to them", they at but continued to mediate the issues contained
the same time select what part of their allotted tasks they therein to prevent the escalation of the dispute
care to perform of their own volition or refuse openly, or between the parties. While the NCMB was conducting
secretly, to the employers damage, to do other work; in mediation proceedings, the Union proceeded to
other words, they work on their own terms. conduct a strike vote as provided for under the Labor
Likewise, a slowdown is not a valid form of concerted Code. After observance of the procedural processes
activity, absent a labor dispute between the parties. The required under the Code, the Union declared a strike.
Labor Code reads - Art. 212 xxx Co) "Strike" means any
temporary stoppage of work by the concerted action of a. Is the strike legal?
employees as a result of an industrial or labor dispute.
A: No. The strike is not legal. The Labor Code provides
Who May Declare a Strike or Lockout? that no labor organization shall declare a strike without
first having bargained collectively in accordance with its
Requisites for a Valid Strike Title VII of Book V, which in turn provides that during
conciliation proceedings at the NCMB, the parties are
Q: Discuss the legal requirements of a valid strike. prohibited from doing any act that may disrupt or impede
(2007) the early settlement of the dispute. (Arts. 264(a), also
250(d); Labor Code).
1. No labor union may strike on grounds involving b. Can the employer unilaterally declare those who
inter-union and intra-union dispute. participated in the strike as having lost their
2. In case of bargaining deadlocks, the duly certified or employment status?
recognized bargaining agent may file a notice of
strike or the employer may file a notice of lockout A: The employer may unilaterally declare those who
with the Ministry at least 30 days before the intended participated in the strike as having lost their employment
date thereof. In cases of unfair labor practice, the status but such unilateral declaration does not
period of notice shall be 15 days and in the absence necessarily mean that thereby the strikers are legally
of a duly certified or recognized bargaining agent, the dismissed. The strikers could still file a case of illegal
notice of strike may be filed by any legitimate labor dismissal and prove, if they can, that there was no just
organization on behalf of its members. However, in cause for their dismissal.
case of dismissal from employment of union officers
duly elected in accordance with the union c. What recourse do these employees (declared by
constitution and by-laws, which may constitute the employer to have lost their employment
union busting, where the existence of the union is status) have, if any? (1994)
threatened, the 15-day cooling-off period shall not
apply and the union may take action immediately. A: They could file a case of illegal dismissal. The strikers
3. A decision to declare a strike must be approved by a who are union officers may contend that the strike is not
majority of the total union membership in the illegal. The strikers who are mere union members may

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

contend that they did not commit any illegal acts during Sukothai that while AILU may not exhaust the 15-day
the strike. (Art, 264, Labor Code). cooling-off period in case of dismissal from employment
of its officers who were duly elected in accordance with
The procedural requirements of a valid strike the Union constitution and by-laws and the dismissal
include: constitutes union busting and a threat to AILUs
a. A claim of either unfair labor practice or existence, still, Art. 263 (f) requires that a strike vote be
deadlock in collective bargaining undertaken through a secret ballot and approved by a
b. Notice of strike filed at least 15 days before a ULP- majority of the total union membership in the bargaining
grounded strike or at least 30 days prior to the unit. Devoid of a notice of strike and a strike vote, AILUs
deadlock in a bargaining grounded strike strike is therefore illegal.
c. Majority of the union membership must have
voted to stage the strike with notice thereon b. Was the Secretary of Labor correct in declining to
furnished to the National Conciliation and assume jurisdiction over the dispute?
Mediation Board (NCMB) at least 24 hours before
the strike vote is taken A: The refusal of the Secretary to assume jurisdiction is
d. Strike vote results must be furnished to the NCMB valid. Par.(g) of Art. 263 (old) of the Labor Code leave it
at least seven (7) days before the intended strike. to his sound discretion to determine if national interest is
(2014) involved. Assumption power is full and complete. It is
also plenary and discretionary (Philtranco Service
A: b. notice of strike filed at least 15 days before a ULP- Enterprises, Inc. v. Philtranco Workers Union-AGLO, G.R.
grounded strike or at least 30 days prior to the deadlock No. 180962, February 26, 2014). Thus, if in his opinion
in a bargaining grounded strike. (Article 263 (c), Labor national interest is not involved, then the company
Code). cannot insist that he assume jurisdiction.

ALTERNATIVE ANSWER: c. Was LB justified in terminating all those who

c. majority of the union membership must have voted to were members of AILU on the two grounds cited?
stage the strike with notice thereon furnished to the
National Conciliation and Mediation Board (NCMB) at A: If dismissal is based on illegal strike:
least 24 hours before the strike vote is taken. (Article 263 The company has to file a complaint for illegal strike first.
(f), Labor Code). Once the strike is declared by final judgment to be illegal,
it can dismiss the union officers. As to members, their
d. strike vote results must be furnished to the NCMB at dismissal must be based on their having committed
least seven (7) days before the intended strike. (Article illegalities on the occasion of their illegal strike. Since the
263 (f), Labor Code). company prematurely and indiscriminately dismissed
the AILU members then their dismissal is illegal.
Q: The Alliance of Independent Labor Unions (AILU)
is a legitimate labor federation which represents a If dismissal is based on the unlawful acts of
majority of the appropriate bargaining unit at the barricading to lock the AILU members:
Lumens Brewery (LB). While negotiations were
ongoing for a renewal of the collective bargaining Yes. Article 264 (a) of the Labor Code authorizes the
agreement (CBA), LB handed down a decision in a employer to declare the loss of employment status of
disciplinary case that was pending which resulted in ANY WORKER or union officer who knowingly
the termination of the AILU's treasurer and two other participates in the commission of illegal cts during a
members for cause. AILU protested the decision, strike.
claiming that LB acted in bad faith and asked that LB
reconsider. LB refused to reconsider. AILU then Requisites for a Valid Lockout
walked out of the negotiation and declared a strike
without a notice of strike or a strike vote. AILU Q: Fifty percent (50%) of the employees of Grandeur
members locked in the LB management panel by Company went on strike after negotiations for a
barricading the doors and possible exits (including collective bargaining agreement ended in a deadlock.
windows and fire escapes). LB requested the DOLE to Grandeur Company, being a public utility,
assume jurisdiction over the dispute and to certify it immediately petitioned the Secretary of Labor and
for compulsory arbitration. Employment to assume jurisdiction and certify the
case to the NLRC. On the fourth day of the strike and
The Secretary of Labor declined to assume before the DOLE Secretary could assume jurisdiction
jurisdiction, finding that the dispute was not one that or certify the case to the NLRC, the strikers
involved national interest. LB then proceeds to communicated in writing their offer to return to
terminate all of the members of the bargaining agent work. Grandeur Company refused to accept the offer
on the ground that it was unlawful to: (1) barricade of the strikers because it realized that they were not
the management panel in the building, and (2) at all capable of paralyzing the operations of the
participate in an illegal strike. (2015) company. The strikers accused Grandeur Company of
illegal lockout.
a. Was AILU justified in declaring a strike without a
strike vote and a notice of strike? Why or why Has Grandeur Company committed the act charged
not? by refusing to accept the offer of the strikers to return
to work? Discuss fully. (1995)
A: No. Firstly, a Notice of Strike is always required by Art.
263 (c) of the Labor Code before a strike may be staged A: There is no law that prohibits strikers to decide not to
be it grounded on bargaining deadlock or Unfair Labor continue with a strike that they have started. Thus, the

Practice. Secondly, the Supreme Court already held in company committed an illegal lockout in refusing to


QuAMTO for LABOR LAW (1991-2015)
accept the offer of the strikers to return to work. Under proposals and counter-proposals on one another.
the set of facts in the question, the Company did not give The parties, however, failed to discuss the merits of
the required notice to lockout, much less did it observe their proposals and counter-proposals in any formal
the necessary waiting period, nor did it take a needed negotiation meeting because their talks already
vote on the lockout. Thus, the lockout is illegal. bogged down on the negotiation ground rules, i.e., on
the question of how they would conduct their
Assumption of Jurisdiction by the DOLE Secretary or negotiations, particularly on whether to consider
Certification of the Labor Dispute to the NLRC for retirement as a negotiable issue.
Compulsory Arbitration
Because of the continued impasse, the union went on
Q: Company X, a transportation company, and Union strike. The Secretary of Labor and Employment
Y were in the process of negotiating a new Collective immediately assumed jurisdiction over the dispute
Bargaining Agreement (CBA) to replace the one to avert widespread electric power interruption in
which expired on March 15. 1990. The negotiations the country. After extensive discussions and the filing
reached an impasse on economic issues on June 30, of position papers (before the National Conciliation
1990. The Secretary of Labor assumed Jurisdiction and Mediation Board and before the Secretary
over the dispute and certified the same to the NLRC himself) on the validity of the union's strike and on
for proper disposition. the wage and other economic issues (including the
retirement issue), the DOLE Secretary ruled on the
Proceedings before the NLRC ended on November 30, validity of the strike and on the disputed CBA issues,
1990 and a decision was rendered on December 15, and ordered the parties to execute a CBA based on his
1990, The said decision made retroactive to March rulings. Did the Secretary of Labor exceed his
15, 1990 the new CBA containing the issues resolved jurisdiction when he proceeded to rule on the
by the NLRC, as well as those concluded and agreed parties' CBA positions even though the parties did not
upon by the parties prior to their arriving at a fully negotiate on their own? (2013)
deadlock in their negotiations. Company X
questioned the retroactivity of the CBA alleging that A: No. The power of the Secretary of Labor under Article
the same contravenes Art. 253-A of the Labor Code, 263(g) is plenary. He can rule on all issues, questions or
which provides for the automatic retroactivity of the controversies arising from the labor dispute, including
renewed CBA only if the same is entered into within the legality of the strike, even those over which the Labor
six (6) months from its expiry date, and, if not, the Arbiter has exclusive jurisdiction. (Bagong Pagkakaisa ng
parties must agree on the duration of retroactivity. mga Manggagawa sa Triumph International v. Secretary,
G.R. Nos. 167401 and 167407, July 5, 2010)
a. Is Company X's position correct?
Nature of Assumption Order or Certification Order
A: The Company's position is not correct. In the absence
of a specific provision of law prohibiting retroactivity of Q: A deadlock in the negotiations for the collective
the effectivity of arbitral awards issued by the Secretary bargaining agreement between X College and the
of Labor, the same is deemed vested with plenary and Union prompted the latter, after duly notifying the
discretionary powers to determine the effectivity thereof. DOLE, to declare a strike on November 5 which totally
(St Luke's Medical Center, Inc. vs. Hon. Ruben O. Torres, et. paralyzed the operations of the school. The Labor
al,-G.R. No. 99395, 29 June 1993) Secretary immediately assumed Jurisdiction over the
dispute and issued on the same day (November 5) a
b. Would your answer be different if the return to work order. Upon receipt of the order, the
assumption of jurisdiction by the Secretary of striking union officers and members on November 7
Labor was at the request or instance of Company filed a motion for reconsideration thereof
X? (1994) questioning the Labor Secretary's assumption of
jurisdiction, and continued with the strike during the
A: No. Regardless of which party sought the assumption pendency of their motion.
by the Labor Secretary, the effect would be the same. An
assumption case gives the Labor Secretary the plenary On November 30, the Labor Secretary denied
arbitration powers to rule on the issues presented for reconsideration of his return to work order and
resolution, including the retroactivity of the new CBA. further noting the striker's failure to immediately
return to work terminated their employment. In
Q: What are the objectives of the Secretary of Labor assailing the Labor Secretary's decision, the Union
and Employment in certifying a labor dispute to the contends that:
NLRC for compulsory arbitration? Explain. (1995)
1. The Labor Secretary erroneously assumed
A: The objectives of the Secretary of Labor and jurisdiction over the dispute since X College
Employment in certifying a labor dispute to the NLRC for could not be considered an industry
compulsory arbitration is to prevent a work stoppage indispensable to national interest;
that may adversely affect the national interest and to see 2. The strikers were under no obligation to
to it that a labor dispute is expeditiously settled. immediately comply with the November 5 return
to work order because of their then pending
Q: Philippine Electric Company is engaged in electric motion for reconsideration of such order: and
power generation and distribution. It is a unionized 3. the strike being legal, the employment of the
company with Kilusang Makatao as the union striking Union officers and members cannot be
representing its rank-and-file employees. During the terminated. Rule on these contention. Explain.
negotiations for their expired collective bargaining (1996)

agreement (CBA), the parties duly served their

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

A: Illegal Strike
1. The Supreme Court has already ruled that
educational institutions are considered as an Liability of Union Officers
industry indispensable to the national interest,
considering the grave adverse effects that their Q: Magdalo, a labor union in Oakwood, a furniture
closure entails on their students and teachers. manufacturing firm, after failing in its negotiations
with Oakwood filed with the Department of Labor
2. The striking workers must immediately comply with and Employment (DOLE) a notice of strike. The DOLE
a Return to Work Order even pending their motion summoned Magdalo and Oakwood for conciliation
for reconsideration. Compliance is a duty imposed by hearings to resolve the deadlock. Unable to agree
law, and a Return to Work Order is immediately despite efforts of the DOLE, Magdalo called a strike
executory in character. The nature of a Return to participated in by its officers and union members
Work Order was characterized by the Supreme Court including Cesar Trinio, a rank-and-file employee,
in Sarmiento v. Tuico, (G.R. No. 72571-73, June 27, who led the "walk out." Oakwood filed a petition to
1988) as: declare illegal the strike which Magdalo staged
without observing the seven-day ban under the
It is also important to emphasize that the return to Labor Code. Oakwood claimed that the strike being
work order not so much confers a right as it imposes illegal, all those who participated therein, including
a duty. It must be discharged as a duty even against Cesar Trinio, could be dismissed as, in fact, they were
the workers' will. Returning to work in this situation so dismissed by Oakwood. Decide the case. (2003)
is not a matter of option or voluntariness but of
obligation. A: When Oakwood dismissed all the officers and
members of the union who participated in the strike
In Baguio Colleges Foundation v. NLRC, (G.R. No. which was declared illegal because it was staged without
98043, May 26, 1993) the Court ruled that observing the seven-day ban under the Labor Code,
assumption and certification orders are executory in Oakwood illegally dismissed the union members,
character and are to be strictly complied with by the including Cesar Trinio. The Labor Code provides that a
parties even during the pendency of any petition union officer who knowingly participates in an illegal
questioning their validity. strike loses his employment status. Thus, the union
officers were legally dismissed. But for a union member
3. The continuing strike is illegal because it is in to lose his employment status, he should have committed
defiance of a return to work order of the Secretary of illegal acts during the strike, like acts of violence, coercion
Labor and Employment, hence, termination of or intimidation or obstruction of ingress to or egress from
employment of all those who participated whether the employer's premises for lawful purposes or
officer or member, is legal. In Sta. Scholasticas obstruction of public thoroughfares. The union members,
College v. Torres, (G.R. No. 100158, June 29, 1992), including Cesar Trino, did not commit any of these acts.
the Court ruled: Any worker or union officer who Thus, it would be illegal to dismiss them.
knowingly participates in a strikedefying a return to
work order may consequently, be declared to have Q: A division manager of a company taunted a union
lost his employment status in accordance with Art. officer two days after the union submitted to the
246 of the Labor Code. Department of Labor and Employment (DOLE) the
result of the strike vote. The division manager said:
Q: In a labor dispute, the Secretary of Labor issued an
"Assumption Order". Give the legal implications of The union threat of an unfair labor practice strike is
such an order. (2003) phony or a bluff. Not even ten percent (10%) of your
members will join the strike." To prove union
A: Under Art. 263(g) of the Labor Code, such assumption member support for the strike, the union officer
shall have the effect of automatically enjoining the immediately instructed its members to cease
intended or impending strike or lockout as specified in working and walk out. Two hours after the walkout,
the assumption order. If one had already taken place at the workers voluntarily returned to work.
the time of assumption, all striking or lockout employees
shall immediately return to work and the employer shall a. Was the walkout a strike? And if so, was it a valid
immediately resume operations and re-admit all workers activity?
under the same terms and conditions prevailing before b. Can the union officer who led the short walkout,
the strike or lockout. but who likewise voluntarily led the workers
back to work, be disciplined by the employer?
The Secretary of Labor and Employment may seek the (2000)
assistance of law enforcement agencies to ensure
compliance with this provision as well as with such A:
orders as he may issue to enforce the same. a. Yes, it was a strike because there was a work
stoppage by concerted action and there is an existing
The mere issuance of an assumption order by the labor dispute. It was not a valid activity because the
Secretary of Labor automatically carries with it a return- requisites for a valid strike were not observed, (Art.
to-work order, even if the directive to return to work is 212, (o), (l) Labor Code).
not expressly stated in the assumption order. Those who b. Yes, the employer may discipline the union officer.
violate the foregoing shall be subject to disciplinary An illegal strike is a cause for the union officer to be
action or even criminal prosecution. Under Art. 264 of the declared to have lost his employment status. [Art 263
Labor Code, no strike or lockout shall be declared after (c), (d),(e), (f); Art 264 (a), Labor Code].
the assumption of jurisdiction by the Secretary.


QuAMTO for LABOR LAW (1991-2015)
Liability of Ordinary Workers Corporation hired replacements for the workers who
went on strike. Thereafter, the strikers decided to
Q: Assuming the company admits all the strikers, can resume their employment. Can Mella Corporation be
it later on dismiss those employees who committed obliged to reinstate the returning workers to their
illegal acts? (2006) previous positions? (1997)

A: No, when the company admits all the strikers, it is A: Yes. Mella Corporation can be obligated to reinstate
deemed to have waived the issue and condoned the the returning workers to their previous positions.
strikers who committed illegal acts. (Citizen's Labor Workers who go on strike do not lose their employment
Union v. Standard Vacuum Oil Co., G.R. No. L-7478, May 6, status except when, while on strike, they knowingly
1955; TASLI-ALU v. CA, G.R. No. 145428, July 7, 2004). participated in the commission of illegal acts. The Labor
Code expressly provides: Mere participation of a worker
Q: As a result of a bargaining deadlock between Lazo in a lawful strike should not constitute sufficient ground
Corporation and Lazo Employees Union, the latter for termination of his employment, even if a replacement
staged a strike. During the strike, several employees had been hired by the employer during such lawful strike.
committed illegal acts. Eventually, its members
informed the company of their intention to return to PROCEDURE AND JURISDICTION
work. (2006, 2014)
a. Can Lazo Corporation refuse to admit the
strikers? Jurisdiction

A: No. The commission of illegal acts during a strike does Q: Company A and Union B had a 3-year CBA that
not automatically bring about the loss of employment expired on June 12, 1990. Negotiations proved futile
status. Due process must be observed by the employer so the unresolved issues were referred to an Arbiter
before any dismissal can be made. (Stamford Marketing who rendered a decision on March 15, 1992
Corp. v. Julian, G.R. No. 145496, February 24, 2004). retroactive to December 14, 1990. Is the Arbiter's
decision providing for retroactivity tenable or not?
b. Assuming the company admits the strikers, can it Why? (2001)
later on dismiss those employees who committed
illegal acts? A: The referral of the unresolved issues of the collective
bargaining negotiations to an Arbiter is not within the
A: No. The employer may be considered as having waived jurisdiction of the Arbiter. But assuming that the
its right to dismiss employees who committed illegal acts unresolved issues in the collective bargaining
during the strike. (Reformist Union of R.B. Liner v. NLRC, negotiations were properly referred to the Arbiter
G.R. No. 120482, January 27, 1997). pursuant to the provision of the Labor Code (Art. 262)
that states that a Voluntary Arbitrator may hear and
c. If due to the prolonged strike, Lazo Corporation decide any labor dispute, including bargaining deadlocks,
hired replacements, can it refuse to admit the the Arbiter's decision providing for retroactivity is
replaced strikers? tenable. Exercising his compulsory arbitration power, the
Arbiter could decide the issue of retroactivity in any way
A: No. Sec. 3 Art. XIII of the Constitution guarantees which is not contrary to law, morals, good customs, public
workers the right to strike in accordance with law. With order or public policy. But in the case Manila Electric Co
Art. 212 (o) defining strike as any temporary stoppage vs. Secretary of Labor Leonardo Quisumbing (G.R. No.
of work as a result of an industrial or labor dispute, it is 127598, February 22, 2000), the Supreme Court said that
the prerogative of strikers to cut short or prolong a strike. an arbitral award shall retroact to the first day after the
By striking, the employees have not abandoned their six-month period following the expiration of the last day
employment. Rather, they have only ceased temporarily of the CBA that was being re-negotiated.
from rendering work. The striking employees have not
lost their right to go back to their positions, because the Q: Mario comes from a family of coffee bean growers.
declaration of a strike is not a renunciation of their Deciding to incorporate his fledgling coffee venture,
employment, much less their employer-employee he invites his best friend, Carlo, to join him. Carlo is
relationship. hesitant because he does not have money to invest
but Mario suggests a scheme where Carlo can be the
ALTERNATIVE ANSWER: Chief Marketing Agent of the company, earning a
No. As a general rule, replacements take their salary and commissions. Carlo agrees and the
employment as conditional, i.e., subject to the rights of venture is formed. After one year, the business is so
strikers to return to work. successful that they were able to declare dividends.
Mario is so happy with Carlo's work that he assigns
However, since this is an economic strike, the strikers are 100 shares of stock to Carlo as part of the latter's
entitled to reinstatement only in case Lazo Corporation bonus.
has not yet hired permanent replacements. (Consolidated
Labor Association v. Marsman & Co., G.R. No. L-17038, July Much later on, it is discovered that Carlo had engaged
31, 1964). in unethical conduct which caused embarrassment to
the company. Mario is forced to terminate Carlo but
Liability of Employer he does so without giving Carlo the opportunity to
Q: A strike was staged in Mella Corporation because
of a deadlock in CBA negotiations over certain Carlo filed a case against Mario and the company for

economic provisions. During the strike, Mella illegal dismissal. Mario objected on the ground that

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

the Labor Arbiter had no jurisdiction over the case as workers for overseas deployment
it would properly be considered as an intra- including claims for actual, moral,
corporate controversy cognizable by the RTC. exemplary and other forms of damage.
Further, Mario claimed that because Carlo's
dismissal was a corporate act, he cannot be held 2. Exclusive Appellate Jurisdiction
personally liable. a. All cases decided by the Labor Arbiters (Sec.
217(b), Labor Code)
a. As the Labor Arbiter assigned to this case, how b. Cases decided by the Regional Offices of DOLE in
would you resolve the jurisdiction question. the exercise of its adjudicatory function. (Art.
(2015) 129, Labor Code).

A: The Labor Arbiter has jurisdiction over Carlos illegal Q: Company "A", within the reglementary period,
dismissal complaint as he was hired by Mario on a salary appealed the decision of a Labor Arbiter directing the
and commission basis. In Grepalife v. Judico (G.R. No. reinstatement of an employee and awarding
73887, December 21, 1989) it was held that a worker who backwages. However, A's cash bond was filed beyond
is paid on a salary plus commission basis is an employee. the ten day period. Should the NLRC entertain the
While regular courts have jurisdiction over Marios appeal? Why? (2001).
corporate act of severing ties with Carlo, the Labor
Arbiter, pursuant to Art. 217 A-(2) of the Labor Code, has A: No, the NLRC should not entertain the appeal, as the
jurisdiction over Carlos illegal dismissal complaint. same was not perfected for failure to file a bond. The
latest rules of NLRC provide that a mere notice of appeal
ALTERNATIVE ANSWER: without complying with the other requisites provided for
Carlo is party to a joint-venture. Hence, he is not related by law, like the bond, shall not stop the running of the
to Mario as an employee. As a business organization, the period for perfecting an appeal. Since Company As bond
affairs of that joint-venture are not governed by Labor was not filed on time, the appeal was not deemed
Law, except in relation to its employees. Any issue arising perfected and as such NLRC has no jurisdiction to
from that affair, therefore, must be brought to the RTC. entertain the appeal. (Sec. 4(b), Rule 6, 2011 NLRC Rules
Thus, the NLRC has no jurisdiction because the matter did Of Procedure).
not arise from employer-employee relationship and the
issue between the disputants is not resolvable solely Q: Company "A" and Union "B" could not resolve their
through the application of Labor Law. negotiations for a new CBA. After conciliation
proceedings before the NCMB proved futile, B went
b. What is the rule on personal liability of corporate on strike. Violence during the strike prompted A to
officers for a corporate act declared to be file charges against striker-members of B for their
unlawful? (2015) illegal acts. The Secretary of Labor assumed
jurisdiction, referred the strike to the NLRC and
A: Corporate officers are not, as a general rule, personally issued a return-to-work order. The NLRC directed the
liable for the corporate acts they performed in behalf of parties to submit their respective position papers
the corporation they represent. They are, however, and documentary evidence. At the Initial hearing
personally liable for their corporate acts if they acted before the NLRC, the parties agreed to submit the
with malice or bad faith (Girly Ico v. Systems Technology case for resolution after the submission of the
Institute, Inc., G.R. No. 185100, July 9, 2014). position papers and evidence. Subsequently, the
NLRC issued an arbitral award resolving the disputed
NATIONAL LABOR RELATIONS COMMISSION (NLRC) provisions of the CBA and ordered the dismissal of
certain strikers for having knowingly committed
Jurisdiction Illegal acts during the strike. The dismissed
employees elevated their dismissal to the Court of
Q: What is the jurisdiction of the National Labor Appeals claiming that they were deprived of their
Relations Commission? (1995) right to due process and that the affidavits submitted
by A were self-serving and of no probative value.
A: Should the appeal prosper? State the reason(s) for
1. Exclusive Original Jurisdiction your answer clearly. (2001).
a. Certified labor disputes causing or likely to cause
a strike or lockout in an industry indispensable A: The appeal should not prosper. The Supreme Court, in
to national interest, certified to it by the many cases, has ruled that decisions made by the NLRC
Secretary of Labor or the President for may be based on position papers. In the question, it is
compulsory arbitration stated that the parties agreed to submit the case for
b. Injunction in ordinary labor disputes to enjoin or resolution after the submission of position papers and
restrain any actual or threatened commission of evidence. Given this fact, the striker-members of B cannot
any or all prohibited or unlawful acts or to now complain that they were denied due process. They
require the performance of a particular act in any are in estoppel. After voluntarily submitting a case and
labor dispute which, if not restrained or encountering an adverse decision on the merits, it is too
performed forthwith may cause grave or late for the loser to question the jurisdiction or power of
irreparable damage to any party the court. A party cannot adopt a posture of double
c. Injunction in strikes or lockouts under Art. 264 dealing. (Marquez vs. Secretary of Labor, G.R. No. 80685,
of the Labor Code March 16, 1989).
d. Contempt cases
e. Claims arising out of an employer- Note: In the determination of whether or not the
employee relationship or by virtue of quantum of proof was satisfied by a party contending for

any law or contract involving Filipino a particular proposition, the procedure by which issues


QuAMTO for LABOR LAW (1991-2015)
are resolved based only on position papers, affidavits or as a compulsory arbitration body over labor disputes
documentary evidence, if agreed upon by the parties, may certified to it by the Regional Directors. (Article 129,
be availed of by the arbiter and it is not violative of the Labor Code). (2014)
due process clause. The affidavits may take the place of
their direct testimony. (Coca-Cola Bottlers Philippines, Inc. Q: Philippine News Network (PNN) engages the
vs. NLRC, G.R. No. 78787, December 18, 1989). services of Anya, a prominent news anchor from a
rival station, National News Network (NNN). NNN
Q: "A", an employee, sued company "B" for unfair objects to the transfer of Anya claiming that she is
labor practice, Illegal dismissal and damages as a barred from working in a competing company for a
consequence thereof. The Arbiter granted A's prayer period of three years from the expiration of her
for reinstatement, backwages, and included an contract. Anya proceeds to sign with PNN which then
award for attorney's fees. On appeal to the NLRC, the asks her to anchor their nightly newscast. NNN sues
Commission affirmed the Arbiter's decision but Anya and PNN before the National Labor Relations
deleted the award for attorney's fees since fees were Commission (NLRC), asking for a labor injunction.
not claimed in A's complaint. Anya and PNN object claiming that it is a matter
cognizable by a regular court and not the NLRC.
a. Who was correct, the Arbiter or the NLRC? Why?
b. Would your answer be different if the attorney's a. Is NNN's remedy correct? Why or why not?
fees awarded by the Arbiter was over fifteen (2015)
percent of the total award? Why? (2001)
A: The NLRC has no jurisdiction. As to PNN, there is no
A: employer-employee relationship between itself and
NNN; hence, the NLRC cannot hear and resolve their
a. Yes, the NLRC was correct in deleting the award for dispute (Reasonable Causal Connection Rule). As to Anya,
attorneys fees. The awarding of attorneys fees, as the injunctive power of the NLRC is ancillary in nature;
declared in the policy of the law, was more of an hence, it requires a principal case, which is absent.
exception than the general rule. It is necessary for the Besides, the dispute between her and PNN is not
NLRC to make express findings of fact and law that resolvable solely through the application of Labor Code,
would bring the case within the exception and justify other labor statutes, CBA or employment contract.
the grant of such award. The matter of attorneys fees (Reference to Labor Law Rule)
cannot be touched upon only in the dispositive
portion of the decision. The text itself must state the b. What are the grounds for a labor injunction to
reasons why the attorneys fees are being awarded. issue? (2015)
(Valiant Machinery & Metal Corp. et al., v. NLRC, G.R.
No. 105877, January 25, 1996). A: The NLRC may issue an injunctive writ to enjoin an
illegal activity under Art. 264 (old) of the Labor Code; as
Therefore, attorneys fees cannot be awarded in this an ancillary remedy to avoid irreparable injury to the
case for the reason that the law requires the rights of a party in an ordinary labor dispute pursuant to
awarding to have a basis; and the fact that the award Rule X, 2011 NLRC Rules of Procedure, as amended; and
given was neither mentioned in the prayer nor in the to correct the Labor Arbiters grave abuse of discretion
entire body of the petition filed, such circumstance pursuant to Rule XII of the 2011 NLRC Rules of
deprives the NLRC of a basis and much needed Procedure, as amended.
evidence upon which the reason for the award is to
be hinged. Moreover, for labor injunction to issue, it must be proven
under Art. 218(e) Labor Code:
b. Yes. Art. 111 expressly prohibits that in cases of
unlawful witholding of wage, the culpable party may i. That the prohibited or unlawful acts have been
be assessed attorneys fees equivalent to 10% of the threatened and will be committed and will be
amount of wages recovered. Moreover, it shall be continued unless restrained;
unlawful for any person to demand or accept, in any ii. That substantial and irreparable injury to the
judicial or administrative proceedings for the complainants property will follow;
recovery of wages, attorneys fees which exceeded iii. That greater injury will be inflicted upon
10% of the amount of wages recovered. complainant by the denial of relief than will be
In the case at bar, not only was the award of inflicted upon defendants by the granting of relief;
attorneys fees not prayed for, but the amount iv. That complainant has no adequate remedy at law;
awarded was clearly in excess of what is allowed by and
law. Therefore, the NLRC was justified in deleting the v. That public officers charged with the duty to protect
said award. complainants property are unable or unwilling to
furnish adequate protection.
However, assuming arguendo that the award for
attorneys fees was prayed for, but is still in excess of c. Distinguish the jurisdiction of a Labor Arbiter
the amount allowed by law, the NLRC must not from that of the NLRC. (2015)
completely delete the award. Rather, in the interest
of justice, and as recognition of the amount of time A: As to jurisdiction, the Labor Arbiter can hear and
and effort invested by the winning partys counsel, resolve cases under Art. 217 (old) of the Labor Code,
the award must only be lowered and placed within money claims under Sec. 7 of R.A. 10022; and referred
the amount bracket allowed by law. wage distortion disputes in unorganized establishments,
as well as the enforcement of compromise agreements
The jurisdiction of the National Labor Relations pursuant to the 2011 NLRC Rules of Procedure, as

Commission does not include original jurisdiction to act amended. On the other hand, the NLRC reviews decisions

*QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct
luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams.

rendered by the LA; decisions or orders rendered by the Department of Labor and Employment (DOLE). What
RD under Art. 129 of the Labor Code; and conducts permit, if any, can the DOLE issue so that AB can
compulsory arbitration in certified cases. assume as Vice-President in the telecommunications
company? Discuss fully. (1995, 2007)
As to the power to issue a labor injunction, the NLRC can
issue an injunctive writ. On the other hand, the Labor A: Art. 40 of the Labor Code states that Any alien seeking
Arbiter cannot issue an injunctive writ. admission to the Philippines for employment purposes
and any domestic or foreign employer who desires to
BUREAU OF LABOR RELATIONS MED-ARBITERS engage an alien for employment in the Philippines shall
obtain an employment permit from the Department of
Jurisdiction (original and appellate) Labor. The employment permit may be issued to a non-
resident alien or to the applicant employer after a
Q: Some disgruntled members of Bantay Labor Union determination of the non-availability of a person in the
filed with the Regional Office of the DOLE a written Philippines who is competent, able and willing at the time
complaint against their union officers for of application to perform the services for which the alien
mismanagement of union funds. The Regional is desired. Thus, AB should be issued the above-
Director did not rule in the complainants' favor. Not mentioned employment permit so that AB can assume as
satisfied, the complainants elevated the Regional Vice President of the Telecommunication Company.
Director's decision to the NLRC. The union officers
moved to dismiss on the ground of lack of DOLE SECRETARY
Jurisdiction. Are the union officers correct? Why?
(2001). Visitorial and Enforcement Powers

A: Yes. NLRC has no jurisdiction over the appealed ruling Q: Under what conditions may the Secretary of Labor
since the appellate authority over decisions of the or his duly authorized representative inquire into
Regional director involving examination of union the financial activities or legitimate labor
accounts is expressly conferred upon the Bureau of Labor organizations? (2001).
Relations of DOLE by the Rule of Procedure on Mediation
Arbitration. (Barles vs. Bitonio, G.R. No. 120270, June 16, A: The Labor Code authorizes the Secretary of Labor and
1999). Employment or his duly authorized representative to
inquire into the financial activities of any labor
NATIONAL CONCILIATION AND MEDIATION BOARD organization on the basis of a complaint under oath,
supported by 20% of the membership in order to
DOLE REGIONAL DIRECTORS determine compliance or noncompliance with the law
and to aid in the prosecution of any violation thereof. (Art.
Jurisdiction 274, Labor Code).

Q: Lina and 20 other sales ladies filed a complaint for Power to Suspend/Effects of Termination
illegal dismissal, contending that they are SDS
regular employees as they performed activities Assumption of Jurisdiction
usually necessary or desirable in the usual business
or trade of SDS and thus, their constitutional right to Q: Lina and 20 other sales ladies filed a complaint for
security of tenure was violated when they were illegal dismissal, contending that they are SDS
dismissed without valid, just or authorized cause. regular employees as they performed activities
SDS, in defense, argued that Lina, et al. agreed - prior usually necessary or desirable in the usual business
to engagement - to a fixed period employment and or trade of SDS and thus, their constitutional right to
thus waived their right to full-term tenure. (2008) security of tenure was violated when they were
dismissed without valid, just or authorized cause.
a. Assume that no fixed-term worker complained, SDS, in defense, argued that Lina, et al. Agreed - prior
yet in a routine inspection a labor inspector of to engagement - to a fixed period employment and
the Regional Office of the Labor Code's security thus waived their right to a full-term tenure. (2008)
of tenure provisions and recommended to the
Regional Director the issuance a compliance a. The owner of SDS considered the hunger strike
order. The Regional Director adopted the staged by Lina, et al., an eyesore and disruptive of
recommendation and issued a compliance SDS business. He wrote the Secretary of Labor a
order. Is the compliance order valid? Explain letter asking him to assume jurisdiction over the
your answer. (2008) dispute and enjoin the hunger "strike". What
answer will you give if you were the Secretary of
A: No, the Compliance Order is not valid. The Regional Labor? (2008)
Director only exercises both visitorial and enforcement
powers over labor standard cases, and empowered to A: I will deny the letter-request of SDS because its
adjudicate uncontested money claims of persons still business is not indispensable to the national interest.
employed. Although the Secretary of Labor has a wide latitude of
discretion in deciding whether or not to assume
The Regional Director has no jurisdiction to rule on SDSs jurisdiction over a labor dispute or certify the same to the
5-month term policy. NLRC for compulsory arbitration, SDSs business is
clearly not one which is indispensable to national
Q: AB, a non-resident American, seeks entry to the interest. Moreover, the grounds relied upon by SDS, to
country to work as Vice-President of a local wit: eyesore and disruptive of its business, betrays the

telecommunications company. You are with the weakness of the case.