Labor Law 2016

-I-
What are the requisites of a valid quitclaim? (5%)
-II-
Gregorio was hired as an insurance underwriter by the Guaranteed Insurance Corporation (Guaranteed).
He does not receive any salary but solely relies on commissions earned for every insurance policy
approved by the company. He hires and pays his own secretary but is provided free office space in the
office of the company. He is, however, required to meet a monthly quota of twenty (20) insurance
policies, otherwise, he may be terminated. He was made to agree to a Code of Conduct for underwriters
and is supervised by a Unit Manager.
[a] Is Gregorio an employee of Guaranteed? Explain. (2.5%)
[b] Suppose Gregorio is appointed as Unit Manager and assigned to supervise several
underwriters. He holds office in the company premises, receives an overriding commission on
the commissions of his underwriters, as well as a monthly allowance from the company, and is
supervised by a branch manager. He is governed by the Code of Conduct for Unit Managers. Is
he an employee of Guaranteed? Explain. (2.5%)
-III-
Inggo is a drama talent hired on a per drama "participation basis" by DJN Radio Company. He worked
from 8:00 a.m. until 5:00 p.m., six days a week, on a gross rate of P80.00 per script, earning an average of
P20,000.00 per month. Inggo filed a complaint before the Department of Labor and Employment (DOLE)
against DJN Radio for illegal deduction, non-payment of service incentive leave, and 13th month pay,
among others. On the basis of the complaint, the DOLE conducted a plant level inspection.
The DOLE Regional Director issued an order ruling that Inggo is an employee of DJN Radio, and that
Inggo is entitled to his monetary claims in the total amount of P30,000.00. DJN Radio elevated the case to
the Secretary of Labor who affirmed the order. The case was brought to the Court of Appeals. The radio
station contended that there is no employer-employee relationship because it was the drama directors
and producers who paid, supervised, and disciplined him. Moreover, it argued that the case falls under
the jurisdiction of the NLRC and not the DOLE because Inggo's claim exceeded P5,000.00.
[a] May DOLE make a prima facie determination of the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement powers? (2.5%)
[b] If the DOLE finds that there is an employee-employer relationship, does the case fall under
the jurisdiction of the Labor Arbiter considering that the claim of inggo is more than P5,000.00.
Explain. (2.5%)
-IV-
Hagibis Motors Corporation (Hagibis) has 500 regular employees in its car assembly plant. Due to the
Asian financial crisis, Hagibis experienced very low car sales resulting to huge financial losses. It
implemented several cost-cutting measures such as cost reduction on use of office supplies, employment
hiring freeze, prohibition on representation and travel expenses, separation of casuals and reduced work
week. As counsel of Hagibis, what are the measures the company . should undertake to implement a
valid retrenchment? Explain. (5%)
-V-
Asia Union (Union) is the certified bargaining agent of the rimk-and-file employees of Asia Pacific Hotel
(Hotel).
The Union submitted its Collective Bargaining Agreement (CBA) negotiation proposals to the Hotel. Due
to the bargaining deadlock, the Union, on December 20, 2014, filed a Notice of Strike with the National
Conciliation and Mediation Board (NCMB). Consequently, the Union conducted a Strike Vote on January
14, 2015, when it was approved.
The next day, waiters who are members of the Union came out of the Union office sporting closely
cropped hair or cleanly shaven heads. The next day, all the male Union members came to work sporting
the same hair style. The Hotel . prevented these workers from entering the premises, claiming that they
violated the company rule on Grooming Standards.
On January 16, 2015, the Union subsequently staged a picket outside the Hotel premises and prevented
other workers from entering the Hotel. . The Union members blocked the ingress and egress of customers
and employees to the Hotel premises, which caused the Hotel severe lack of manpower and forced the
Hotel to temporarily cease operations resulting to substantial losses.
On January 20, 2015, the Hotel issued notices to Union members, preventively suspending them and
charging them with the following offenses: (1) illegal picket; (2) violation of the company rule on
Grooming Standards; (3) illegal strike; and (4) commission of illegal acts during the illegal strike. The
Hotel later terminated the Union officials and members who participated in the strike. The Union denied
it engaged in an illegal strike and countered that the Hotel committed an unfair labor practice (ULP) and
a breach of the freedom of speech.
[a] Was the picketing legal? Was the mass action of the Union officials and members an illegal
strike? Explain. (2.5%)
[b] Rule on the allegations of ULP and violation of freedom of speech. Explain. (2.5%)
-VI-
Pedro, a bus driver of Biyahe sa Langit Transport, was involved in a collision with a car, damaging the
bus. The manager accused him of being responsible for the damage and was told to submit his written
explanation within 48 hours. Pedro submitted his explanation within the period. The day.after, Pedro
received a notice of termination stating that he is dismissed for reckless driving resulting to damage to
company property, effective immediately. Pedro asks you, as his counsel, if the company complied with
the procedural due process with respect to dismissal of employees.
[a] Explain the twin notice and hearing rule. (2.5%)
[b] Did the Biyahe sa Langit Transport comply with the prior procedural requirements for
dismissal? (2.5%)
-VII-
Forbes Country Club (Club) owns a golf course and has 250 rank-and-file employees who are members of
the Forbes Country Club Union (Union). The Club has a CBA with the Union and one of the stipulations
is a Union Security Clause, which reads: "All regular rank-and-file employees who are members of the
union shall keep their membership in good standing as a condition for their continued employment
during the lifetime of this agreement."
Peter, Paul and Mary were the Treasurer, Assistant Treasurer, and Budget Officer of the Union,
respectively. They were expelled by the Board of Directors of the Union for malversation. The Union then
demanded that the Club dismiss said officials pursuant to the Union Security Clause that required
maintenance of union membership. The Club required the three officials to show cause in writing why
they should not be dismissed. Later, the Club called the three Union officials for a conference regarding
the charges against them. After considering the evidence submitted by the parties and their written
explanations, the Club dismissed the erring officials. The dismissed officials sued the Club and the Union
for illegal dismissal because there was really no malversation based on the documents presented and
their dismissal from the Union was due to the fact that they were organizing another union.
[a] Is the dismissal of Peter, Paul and Mary by the Club valid? (2.5%)
[b] If the expulsion by the Union was found by the Labor Arbiter to be baseless, is the Club liable
to Peter, Paul and Mary? Explain. (2.5%)
-VIII-
Differentiate learnership from apprenticeship with respect to the period of training, type of work, salary
and qualifications. (5%)
-IX-
Zienna Corporation (Zienna) informed the Department of Labor and Employment Regional Director of
the end of its operations. To carry out the cessation, Zienna sent a Letter Request for Intervention to the
NLRC for permission and guidance in effecting payment of separation benefits for its fifty (50)
terminated employees.
Each of the terminated employees executed a Quitclaim and Release before Labor Arbiter Nocomora, to
whom the case was assigned. After the erstwhile employees received their separation pay, the Labor
Arbiter declared the labor dispute dismissed with prejudice on the ground of settlement. Thereafter,
Zienna sold all of its assets to Zandra Company (Zandra), which in tum hired its own employees.
Nelle, one of the fifty (50) terminated employees, filed a case for illegal dismissal against Zienna. She
argued that Zienna did not cease from operating since the corporation subsists as Zandra. Nelle pointed
out that aside from the two companies having essentially the same equipment, the managers and owners
of Zandra and Zienna are likewise one and the same.
For its part, Zienna countered that Nelle is barred from filing a complaint for illegal dismissal against the
corporation in view of her prior acceptance of separation pay.
Is Nelle correct in claiming that she was illegally dismissed? (5%)
-X-
Lazaro, an engineer, organized a union in Garantisado Construction Corporation (Garantisado) which
has 200 employees. He immediately filed a Petition for Certification Election, attaching thereto the
signatures of 70 employees. Garantisado vehemently opposed the petition, alleging that 25 signatories are
probationary employees, while 5 are supervisors. It submitted the contracts of the 25 probationary
employees and the job description of the supervisors. It argued that if 30 is deducted from 70, it gives a
balance of 40 valid signatures which is way below the minimum number of 50 signatories needed to meet
the alleged 25% requirement. If you are the Director of Labor Relations, will you approve the holding of a
Certification Election. Explain your answer. (5%)
-XI-
Dion is an Accounting Supervisor in a trading company. He has rendered exemplary service to the
company for 20 years. His co-employee and kumpadre, Mac, called him over the phone and requested
him to punch his (Mac's) daily time card as he (Mac) was caught in a monstrous traffic jam. Dion acceded
to Mac's request but was later caught by the Personnel Manager while punching. Mac's time card. The
company terminated the employment of Dion on the ground of misconduct. Is the dismissal valid and
just? Explain. (5%)
-XII-
Amaya was employed as a staff nurse by St. Francis Hospital (SFH) on July 8, 2014 on a probationary
status for six (6) months. Her probationary contract required, among others, strict compliance with SFH's
Code of Discipline.
On October 16, 2014, Dr. Ligaya, filed a Complaint with the SFH Board of Trustees against Amaya for
uttering slanderous remarks against the former. Attached to the complaint was a letter of Minda, mother
of a patient, who confirmed the following remarks against Dr. Ligaya:
"Bakit si Dr. Ligaya pa ang napili mong 'pedia' eh ang tandatanda na n'un? E makakalimutin na yun xx
x Alam mo ba, kahit wala namang diperensya yung baby, ipinapa-iso/ate nya?"
The SFH President asks you, being the hospital's counsel, which of these two (2) options is the legal and
proper way of terminating Amaya: a) terminate her for a just cause under Article 288 of the Labor Code
(Termination by Employer); or b) terminate her for violating her probationary contract. Explain. (5%)
-XIII-
Matibay Shoe and Repair Store, as added service to its customers, devoted a portion of its store to a shoe
shine stand. The shoe shine boys were tested for their skill before being allowed to work and given ID
cards. They were told to be present from the opening of the store up to closing time and were· required to
follow the company rules on cleanliness and decorum. They bought their own shoe shine boxes, polish,
and rags. The boys were paid by their customers for their services but the payment is coursed through
the store's cashier, who pays them before closing time. They were not supervised in their work by any
managerial employee of the store but for a valid complaint by a customer or for violation of any company
rule, they can be refused admission to the store. Were the boys employees of the store? Explain. (5%)
-XIV-
Tess, a seamstress at Marikit Clothing Factory, became pregnant. Because of morning sickness, she
frequently absented herself from work and often came to the factory only four (4) days a week. After two
(2) months, the personnel manager told her that her habitual absences rendered her practically useless to
the company and, thus, asked her to resign. She begged to be retained, citing her pregnancy as reason for
her absences. Tess asked for leave of absence but her request was denied. She went on leave nevertheless.
As a result, she was thus dismissed for going on leave without permission of management.
Tess filed a complaint for illegal dismissal. The company's defense: she was legally dismissed because of
her numerous absences without leave and not because of her pregnancy. On the other hand, Tess argues
that her dismissal was an act of discrimination, based as it was on her pregnancy which the company
treated as a disease. Whose position is meritorious-the company's or Tess'? Explain. (5%)
-XV-
Jim is the holder of a certificate of public convenience for a jeepney. He entered into a contract of lease
with Nick, whereby they agreed that the lease period is for one (1) year unless sooner terminated by Jim
for any of the causes laid down in the contract. The rental is thirty thousand pesos (P30,000.00) monthly.
All the expenses for the repair of the jeepney, together with expenses for diesel, oil and service, shall be
for the account of Nick. Nick is required to make a deposit of three (3) months to answer for the
restoration of the vehicle to its good operating condition when the contract ends. It is stipulated that Nick
is not an employee of Jim and he holds the latter free and harmless from all suits or claims which may
arise from the implementation of the contract. Nick has the right to use the jeepney at any hour of the day
provided it is operated on the approved line of operation.
After five (5) months of the lease and payment of the rentals, Nick became delinquent in the payment of
the rentals for two (2) months. Jim, as authorized by the contract, sent a letter of demand rescinding the
contract and asked for the arrearages. Nick responded by filing a complaint with the NLRC for illegal
dismissal, claiming that the contract is illegal and he was just forced by Jim to sign it so he can drive. He
claims he is really a driver of Jim on a boundary system and the reason he was removed is because he
failed to pay the complete daily boundary , of one thousand (P1,000.00) for 2 months due to the increase
in the number of tricycles.
[a] Jim files a motion to dismiss the NLRC case on the ground that the regular court has
jurisdiction since the agreement is a lease contract. Rule on the motion and explain. (2.5%)
[b] Assuming that Nick is an employee of Jim, was Nick validly dismissed?
-XVI-
In a case for illegal dismissal and non-payment of benefits, with prayer for Damages·, Apollo was
awarded the following: 1) P200,000.00 as back.wages; 2) P80,000.00 as unpaid wages; 3) P20,000.00 as
unpaid holiday pay; 4) PS,000.00 as unpaid service incentive leave pay; 5) P50,000.00 as moral damages;
and 6) P10,000.00 as exemplary damages. Attorney's fees of ten percent (10%) of all the amounts covered
by items 1 to 6 inclusive, plus interests of 6% per annum from the date the same were unlawfully
withheld, were also awarded.
[a] Robbie, the employer, contests the award of attorney fees amounting to 10% on all the
amounts adjudged on the ground that Article 111 of the Labor Code authorizes only 10% "of the
amount of wages recovered". Rule on the issue and explain. (2.5%)
[b] Robbie likewise questions the imposition of interests on the amounts in question because it
was not claimed by Apollo, and the Civil Code provision on interests does not apply to a labor
case. Rule on the issue and explain. (2.5%)
-XVII-
Baldo, a farm worker on pakyaw basis, had been working on Dencio's land by harvesting abaca and
coconut, processing copra, and clearing weeds from year to year starting January 1993 up to his death in
2007. He worked continuously in the sense that it was done for more than one harvesting season.
[a] Was Dencio required to report Baldo for compulsory social security coverage under the SSS
law? Explain. (2.5%)
[b] What are the liabilities of the employer who fails to report his employee for social security
coverage? Explain. (2.5%)
-XVIII-
Empire Brands (Empire) contracted the services of Style Corporation (Style) for the marketing and
promotion of its clothing line. Under the contract, Style provided Empire with Trade Merchandising
Representatives (TMRs) whose services began on September 15, 2004 and ended on June 6, 2007, when
Empire terminated the promotions contract with Style.
Empire then entered into an agreement for manpower supply with Wave Human Resources (Wave).
Wave owns its condo office, owns equipment for the use by the TMRs, and has assets amounting to
Pl,000,000.00. Wave provided the supervisors who supervised the TMRs, who, in tum, received orders
from the Marketing Director of Empire. In their agreement, the parties stipulated that Wave shall be liable
for the wages and salaries of its employees or workers, including benefits, and protection due them, as
well as remittance to the proper government entities of all withholding taxes, Social Security Service, and
Philhealth premiums, in accordance with relevant laws.
As the TMRs wanted to continue working at Empire, they submitted job applications as TMRs with
Wave. Consequently, Wave hired them for a term of five (5) months, or from June 7, 2007 to November 6,
2007, specifically to promote Empire's products.
When the TMRs' 5-month contracts with Wave were about to expire, they sought renewal thereof, but
were refused. Their contracts with Wave were no longer renewed as Empire hired another agency. This
prompted them to file complaints for illegal dismissal, regularization, non-payment of service incentive
leave and 13th month pay against Empire and Wave.
[a] Are the TMRs employees of Empire? (2.5%)
[b] Were the TMRs illegally dismissed by Wave? (2.5%)
-XIX-
Filmore Corporation was ordered to pay P49 million to its employees by the Labor Arbiter. It interposed
an appeal by filing a Notice of Appeal and paid the corresponding appeal fee. However, instead of filing
the required appeal bond equivalent to the total amount of the monetary award, Filmore filed a Motion to
Reduce the Appeal Bond to P4,000,000.00 but submitted a surety bond in the amount of P4.9 million.
Filmore cited financial difficulties as justification for its inability to post the appeal bond in full owing to
the shutdown of its operations. It submitted its audited financial statements showing a loss of P40 million
in the previous year. To show its good faith, Filmore also filed its Memorandum of Appeal.
The NLRC dismissed the appeal for non-perfection on the ground that · posting of an appeal bond
equivalent to the monetary award is indispensable for the perfection of the appeal and the reduction of
the appeal bond, absent any showing of meritorious ground to justify the same, is not warranted. Is the
dismissal of the appeal correct? Explain. (5%)
-XX-
Mario Brothers, plumbing works contractor, entered into an agreement with Axis Business Corporation
(Axis) for the plumbing works of its building under construction. Mario Brothers engaged the services of
Tristan, Arthur, and Jojo as plumber, pipe fitter, and threader, respectively. These workers have worked
for Mario Brothers in numerous construction projects in the past but because of their long relationship,
they were never asked to sign contracts for each project. No reports to government agencies were made
regarding their work in the company.
During the implementation of the works contract, Axis suffered financial difficulties and was not able to
pay Mario Brothers its past billings. As a result, the three (3) employees were not paid their salaries for
two (2) months and their 13th month pay. Because Axis cannot pay, Mario Brothers cancelled the contract
and laid off Tristan, Arthur, and Jojo. The 3 employees sued Mario Brothers and Axis for illegal dismissal,
unpaid wages, and benefits.
[a] Mario Brothers claims the 3 workers are project employees. It explains that the agreement is, if
the works contract is cancelled due to the fault of the client, the period of employment is
automatically terminated. Is the contractor correct? Explain. (2.5%)
[b] Can Axis be made solidarily liable with Mario Brothers to pay the unpaid wages and 13th
month pay of Tristan, Arthur, and Jojo? Explain. (2.5%)
HERE IS THE COMPLETE SUGGESTED ANSWERS TO THE 2016 BAR EXAMINATIONS IN LABOR
LAW. ALL ANSWERS WERE BASED ON THE AUTHORITIES CITED IN THE BOOKS (PRINCIPLES
AND CASES, LABOR STANDARDS AND SOCIAL LEGISLATION, FIRST EDITION 2015 AND
PRINCIPLES AND CASES, LABOR RELATIONS FIRST EDITION 2016) AUTHORED BY THIS WRITER:
-I-
What are the requisites of a valid quitclaim? (5%)
SUGGESTED ANSWER:
Goodrich Manufacturing Corporation v. Ativo, G.R. No. 188002, February 1, 2010, discussed the rule on
the validity of quitclaims in this manner:
It is true that the law looks with disfavor on quitclaims and releases by employees who have been
inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal
responsibilities and frustrate just claims of employees. (Sime Darby Pilipinas, Inc. v. Arguilla, G.R. No.
143542, June 8, 2006, 490 SCRA 183, 200) In certain cases, however, the Supreme Court has given effect to
quitclaims executed by employees if the employer is able to prove the following requisites, to wit: (1) the
employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the
parties; (3) the consideration of the quitclaim is credible and reasonable; and (4) the contract is not
contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with
a right recognized by law. (Id. at 201)
The pronouncement of the Supreme Court in Periquet v. National Labor Relations Commission, G.R. No.
91298, June 22, 1990, 186 SCRA 724, on this matter cannot be more explicit:
Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its
face, that the law will step in to annul the questionable transaction. But where it is shown that the person
making the waiver did so voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid
and binding undertaking. (Id. at 730-731)
NOTE: The foregoing answer can be found in page 189 of the book entitled Princples and Cases Labor
Relations, First Edition 2016, by Atty. Voltaire T. Duano. Questions involving the same subejct matter
were given during the 2010, 1999 and 1994 Bar Examinations
-II-
Gregorio was hired as an insurance underwriter by the Guaranteed Insurance Corporation (Guaranteed).
He does not receive any salary but solely relies on commissions earned for everyinsurance policy
approved by the company. He hires and pays his own secretary but is provided free office space in the
office of the company. He is, however, required to meet a monthly quota of twenty (20) insurance
policies, otherwise, he may be terminated. He was made to agree to a Code of Conduct for underwriters
and is supervised by a Unit Manager.
[a] Is Gregorio an employee of Guaranteed? Explain. (2.5%)
SUGGESTED ANSWER:
Yes, as an insurance underwriter Gregorio is an employee of Guaranteed.
The four elements of an employment relationship are: (a) the selection and engagement of the employee;
(b) the payment of wages; (c) the power of dismissal; and (d) the employer’s pow-er to control the
employee’s conduct. (Lakas sa Industriya ng Kapatirang Haligi ng Alyansa-Pinagbuklod ng
Manggagawang Promo ng Burlingame v. Burlingame Corporation, G.R. No. 162833, June 15, 2007, 524
SCRA 690, 695, citing Sy v. Court of Appeals, 398 SCRA 301, 307-308 (2003); Pacific Consultants
International Asia, Inc. v. Schonfeld, G.R. No. 166920, February 19, 2007, 516 SCRA 209, 228)
The four elements are clear on the facts of the case. Gregorio was hired as an insurance underwirter, he
was paid his compensation on a commission basis, he can be terminated for failure to achieve the quota
and he is under the control of a Unit Manger.
COMMENT: Take note that the problem statedt thatGregorio was hired as an insurance underwriter and
not as its agent. An insurance underwriters are employed by insurance companies to help price life
insurance, health insurance, commercial liability insurance and homeowners insurance, among others.
Evaluating an insurer's risk prior to the policy period and at renewal is a vital function of an underwriter.
(www.investopedia.com/terms/i/insurance-underwriter.asp visited last November 12, 2016). If he was
hired as an insurance agent then the answer would be different. There would be no employer-employee
relationship. This is becasue according to jurisprudence ( see Insular Life Assurance Co., Ltd. v. NLRC
(4th Division) G.R. No. 119930, March 12, 1998, 287 SCRA 476 and Great Pacific Life Assurance
Corporation v. NLRC, G.R. Nos. 80750-51, July 23, 1990, 187 SCRA 694.) the guidelines indicative of labor
law "control" do not merely relate to the mutually desirable result intended by the contractual
relationship; they must have the nature of dictating the means and methods to be employed in attaining
the result. Tested by this norm, insurance company's instructions regarding the objectives and sales
targets, in connection with the training and engagement of other agents, are among the directives that the
principal may impose on the agent to achieve the assigned tasks. They are targeted results that an
insurance company wishes to attain through its agents. Even an insurance company's codes of conduct,
likewise, do not necessarily intrude into the insurance agents' means and manner of conducting their
sales. Codes of conduct are norms or standards of behavior rather than employer directives into how
specific tasks are to be done. These codes, as well as insurance industry rules and regulations, are not per
se indicative of labor law control under our jurisprudence.
[b] Suppose Gregorio is appointed as Unit Manager and assigned to supervise several underwriters. He
holds office in the company premises, receives and overriding commission on the commissions of his
underwriters, as well as a monthly allowance from the company, and is supervised by a branch manager.
He is governed by the Code of Conduct for Unit Managers. Is he an employee of Guaranteed? Explain.
(2.5%)
SUGGESTED ANSWER:
Yes, as Unit Manger Gregorio is an employee of Guaranteed.
The four elements are clear on the facts of the case. Gregorio was hired as a Unit Manger, he was paid his
compensation on a commission basis and he is under the control of a branch manager.
NOTE: The foregoing answers in a and b can be found in page 332 of the book entitled Princples and
Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on
employer-employee relation has been time and again the subject matter of bar questions, more
specifically during the 2014, 2012, 2011, 2010, 2008, 2002, 1996 and 1991 Bar Examinations.
-III-
Inggo is a drama talent hired on a per drama "participation basis" by DJN Radio Company. He worked
from 8:00 a.m until 5:00p.m., six days a week. On a gross rate of P80.00 per script, earning an average of
P20,000.00 per month. Inggo filed a complaint before the Department of Labor and Employment (DOLE)
against DJN Radio for illegal deduction, non-payment of service incentive leave, and 13th month pay,
among others. On the basis of the compalint, the DOLE conducted a plant level inspection.
The DOLE Regional Director issued an order rulling that Inggo is an employee of DJN Radio, and that
Inggo is entitled to his monetary claims in the total amount of P30,000.00. DJN Radio elevated the case to
the secretary of Labor who affirmed the order. The case was brought to the Court of Appeals. The radio
station contended that there is no employer-employee relationship because it was the drama directors
and producers who paid, supervised, and disciplined him. Moreover, it argued that the case falls under
the jurisdiction of the NLRC and not the DOLE because Inggo's claim exceeded P5,000.00.
[a] May DOLE make a prima facie determination of the existence of an employer-employee relationship
in the exercise of its visitorial and enforcement powers? (2.5%)
SUGGESTED ANSWER:
Yes, the DOLE can make a prima facie determination of the existence of an employer-employee rela-
tionship in the exercise of its visitorial and enforcement powers.
In People’s Broadcasting Service (Bombo Radyo Phils., Inc.) v. The Secretary of the De-partment of Labor
and Employment, the Regional Director, DOLE Region VII, and Jandeleon Juezan, G.R. No. 179652,
March 6, 2012, the question now arises, may the DOLE make a de-termination of whether or not an
employer-employee relationship exists, and if so, to what ex-tent?
The first portion of the question must be answered in the affirmative.
xxx.
No limitation in the law was placed upon the power of the DOLE to determine the ex-istence of an
employer-employee relationship. No procedure was laid down where the DOLE would only make a
preliminary finding, that the power was primarily held by the NLRC.
xxx
The determination of the existence of an employer-employee relationship by the DOLE must be

respected. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be
rendered nugatory if the alleged employer could, by the simple expedient of disputing the employer-
employee relationship, force the referral of the matter to the NLRC. The Court issued the declaration that
at least a prima facie showing of the absence of an employer-employee relationship be made to oust the
DOLE of jurisdiction. But it is precisely the DOLE that will be faced with that evidence, and it is the
DOLE that will weigh it, to see if the same does successfully refute the existence of an employer-
employee relationship.
If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance
of the matter, to the exclusion of the NLRC. The DOLE would have no jurisdiction only if the employer-
employee relationship has already been terminated, or it appears, upon review, that no employer-
employee relationship existed in the first place.
xxx
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully em-powered to make a
determination as to the existence of an employer-employee relationship in the exercise of its visitorial and
enforcement power, subject to judicial review, not review by the NLRC.
NOTE: The foregoing answers in a and b can be found in page 590 of the book entitled Principles and
Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. This was the
very first time that the said question was asked in the bar examination in so far as the power to determine
the existence of er-ee relationship by the DOLE in so far as the 1990 to 2015 Bar Examinations are
concerned.
[b] if the DOLE finds that there is an employee-employer relationship, does the case fall under the
jurisdiction of the LaborArbiter considering that the claim of Inggo is more then P5,000.00. Explain.
(2.5%)
SUGGESTED ANSWER:
No, the case will not fall under the jurisdiction of the LaborArbiter even if the claim of Inggo is more then
P5,000.00.
In Balladares v. Peak Ventures Corporation, G.R. No. 161794, June 16, 2009, the Supreme Court, in
explaining the visitorial and enforcement powers of the DOLE Regional Director to order and enforce
compliance with labor standard laws even where the individual claim exceeds P5,000.00, said:
It should be noted that petitioners’ complaint involved underpayment of wages and other benefits. In
order to verify the allegations in the complaint, DOLE conducted an inspection, which yielded proof of
violations of labor standards. By the nature of the complaint and from the result of the inspection, the
authority of the DOLE, under Article 128, came into play regardless of the monetary value of the claims
involved. The extent of this authority and the powers flowing therefrom are defined and set forth in
Article 128 of the Labor Code, as amended by R.A. No. 7730, (Cirineo Bowling Plaza, Inc. v. Sensing, G.R.
No. January 14, 2005, 448 SCRA 175, 186) xxx.
This Court has held in a plethora of cases (Bay Haven, Inc. v. Abuan, G.R. No. 160859, July 30, 2008, 560
SCRA 457; V.L. Enterprises v. Court of Appeals, supra; EJR Crafts Corporation v. Court of Appeals, G.R.
No. 154101, March 10, 2006, 484 SCRA 340; Cirineo Bowling Plaza, Inc. v. Sensing, supra; Batong Buhay
Gold Mines, Inc. v. Dela Serna, G.R. No. 86963, August 6, 1999, 312 SCRA 22) that reliance on the
Servando ruling is no longer tenable in view of the enactment of R.A. No. 7730, amending Article 128 (b)
of the Labor Code. The Secretary of Labor or his duly authorized representatives is now empowered to
hear and decide, in a summary proceeding, any matter involving the recovery of any amount of wages
and other monetary claims arising out of employer-employee relations at the time of the inspection, even
if the amount of the money claim exceeds P5,000.00. In Ex-Bataan Veterans Security Agency, Inc. v.
Laguesma, G.R. No. 152396, November 20, 2007, 537 SCRA 651, 652 the Court elucidated:
In Allied Investigation Bureau, Inc. v. Sec. of Labor, we ruled that:

While it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter has jurisdiction to
hear and decide cases where the aggregate money claims of each employee exceeds P5,000.00, said
provisions of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of
Labor or his duly authorized representatives. Rather, said powers are defined and set forth in Article 128
of the Labor Code (as amended by R.A. No. 7730) x x x
The aforequoted provision explicitly excludes from its coverage Articles 129 and 217 of the Labor Code
by the phrase “(N)otwithstanding the provisions of Articles 129 and 217 of this Code to the contrary x x
x” thereby retaining and further strengthening the power of the Secretary of Labor or his duly authorized
representatives to issue compliance orders to give effect to the labor standards provisions of said Code
and other labor legislation based on the findings of labor employment and enforcement officer or
industrial safety engineer made in the course of inspection.
NOTE: The foregoing answers in a and b can be found in page 587 of the book entitled Princples and
Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. Questions
involving the same subejct matter were asked during the 2012, 2009, and 1991 Bar Examinations.
-IV-
Hagibis Motors Corporation (Hagibis) has 500 regular employees in its car assembly plant. Due to the
Asian financial crisis, Hagibis experienced very low car sales resulting to huge financial losses. It
implemented several cost-cutting measures such as cost reduction on use of office supplies, employment
hiring freeze, prohibition on representation and travel expenses, separation of casuals and reduced work
week. As counsel of Hagibis, what are the measures the company should undertake to implement a valid
retrenchment? Explain. (5%)
SUGGESTED ANSWER:
The measures the company should undertake to implement a valid retrenchment are as follows:
In Pepsi-cola Products, Philippines, Inc. vs. Molon, G.R. No. 175002, February 18, 2013, the Supreme
Court ruled:
“Essentially, the prerogative of an employer to retrench its employees must be exer-cised only as a last
resort, considering that it will lead to the loss of the employees’ live-lihood. It is justified only when all
other less drastic means have been tried and found insufficient or inadequate. (Supra note 46, at 144,
citing Guerrero v. NLRC, 329 Phil. 1069, 1076 (1996); and Somerville Stainless Steel Corporation v. NLRC,
350 Phil. 859, 870 [1998]) Corollary thereto, the employer must prove the requirements for a valid
retrenchment by clear and convincing evidence; otherwise, said ground for termination would be
susceptible to abuse by scheming employers who might be merely feigning losses or reverses in their
business ventures in order to ease out employees. (Id) These re-quirements are:
(1) That retrenchment is reasonably necessary and likely to prevent business losses which, if already
incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objec-tively and in good faith by the employer;
(2) That the employer served written notice both to the employees and to the De-partment of Labor and
Employment at least one month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or
at least one-half (½) month pay for every year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in good faith for the advancement
of its interest and not to defeat or circumvent the employees’ right to security of tenure; and
(5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who
would be retained among the employees, such as status, ef-ficiency, seniority, physical fitness, age, and
financial hardship for certain work-ers. (Id. at 144-145, citing Asian Alcohol Corporation v. NLRC, 364
Phil. 912, 926-927 [1999])
NOTE: The foregoing answer can be found in page 848 of the book entitled Princples and Cases Labor
Relations, First Edition 2016, by Atty. Voltaire T. Duano. Questions involving the same subejct matter
were asked during the 2012, 2011, 2006, 2003 and 2001 Bar Examinations
-V-
Asia Union (Union) is the certified bargaining agent of the rank-and-file employees of Asia Pacific Hotel
(Hotel).
The Union submitted its Collective Bargaining Aggreement (CBA) negotiation proposals to the hotel. Due
to the bargaining deadlock, the Union, on December 20, 2014, filed a Notice of Strike with the National
Conciliation and Mediation Board (NCMB). Consequently, the Union conducted a Strike Vote on January
14, 2015, when it was approved.
The next day, waiters who are members of the Union came out of the Union office sporting closely
cropped hair or cleanly shaven heads. The next day, all the male Union members came to work sporting
the same hair style. The Hotel prevented these workers from entering the premises, claiming that they
violated the company rule on Grooming Standards.
On January 16, 2015, the Union subsequently staged a picked outside the Hotel premises and prevented
other workers from entering the Hotel. The Union members blocked the ingress and egress of customers
and emplyees to the Hotel premises, which caused the Hotel severe lack of manpower and forced the
Hotel to temporarily cease operations resulting to substantial losses.
On January 20, 2015, the Hotel issued notices to Union members, preventively suspending them and
charging them with the following offenses: (1) illegal picket; (2) violation of the company rule on
Grooming Standards; (3) illegal strike; and (4) commission of illegal acts during the illegal strike. The
Hotel later terminated the Union officials and members who participated in the strike. The Union denied
it engaged in an illegal strike and countered that the Hotel committed an unfair labor practice (ULP) and
a breach of the freedom of speech.
[a] Was the the picketing legal? Was the mass action of the Union officials and members an illegal strike?
Explain. (2.5%)
SUGGESTED ANSWER:
The picketing is not legal.

The Supreme Court in Phimco Industries, Inc. v. Phimco Industries Labor Association (PILA), G.R. No.
170830, August 11, 2010, discussed the protected picketing as follows:
While the right of employees to publicize their dispute falls within the protection of freedom of
expression (CONSTITUTION, Art. III, Sec. 4; Gonzales v. Commission on Elections, 137 Phil. 471 (1969);
The Insular Life Assurance Co., Ltd. Employees Association-NATU v. The Insular Life Assurance Co.,
Ltd., 147 Phil. 194 (1971); Zaldivar v. Sandiganbayan, 243 Phil. 988 (1988); ABS-CBN Broadcasting
Corporation v. Commission on Elections, 380 Phil. 780 (2000); Chavez v. Secretary Gonzalez, G.R. No.
168337, February 15, 2008, 545 SCRA 441; Schenck v. United States, 249 U.S. 47 (1919); Near v. Minnesota,
283 U.S. 697 (1931); New York Times v. United States, 403 U.S. 713 [1971]) and the right to peaceably
assemble to air grievances, (CONSTITUTION, Art. III, Sec. 4; Philippine Blooming Mills Employees
Association v. Philippine Blooming Mills, 151-A Phil. 656 (1973); J.B.L. Reyes v. Mayor Bagatsing, 210
Phil. 457 (1983); De la Cruz v. Court of Appeals, 364 Phil. 786 (1999); Acosta v. Court of Appeals, 389 Phil.
829 (2000); Bayan v. Ermita, G.R. No. 169838, April 25, 2006, 488 SCRA 1) these rights are by no means
absolute. Protected picketing does not extend to blocking ingress to and egress from the company
premises. (48 Am. Jur. 2d, Sec. 3562, p. 623, citing I.T.O. Corp. of Baltimore (1981) 255 NLRB 1050, 107
BNA LRRM 1035, 1980-81 CCH NLRB, par. 18055. See also 48 Am. Jur. 2d, Sec. 739, p. 456, citing Ark C 5-
71-214) That the picket was moving, was peaceful and was not attended by actual violence may not free it
from taints of illegality if the picket effectively blocked entry to and exit from the company premises.
NOTE: The foregoing answer can be found in page 508 of the book entitled Principles and Cases Labor
Relations, First Edition 2016, by Atty. Voltaire T. Duano. Question involving the same subject matter was
asked in the 2000 Bar Examination.
On t he other hand, the mass action also constitute an illegal strike.
In Toyota Motors Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission,
G.R. Nos. 158786 & 158789, October 19, 2007, the Supreme Court explained when is a strike illegal as
follows:
Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal strike, viz:
(1) [when it] is contrary to a specific prohibition of law, such as strike by employees performing
governmental functions; or
(2) [when it] violates a specific requirement of law [,such as Article 263 of the Labor Code on the
requisites of a valid strike]; or
(3) [when it] is declared for an unlawful purpose, such as inducing the employer to commit an unfair
labor practice against non-union employees; or
(4) [when it] employs unlawful means in the pursuit of its objective, such as a widespread terrorism
of non-strikers [for example, prohibited acts under Art. 264(e) of the Labor Code]; or
(5) [when it] is declared in violation of an existing injunction[, such as injunction, prohibition, or
order issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or
(6) [when it] is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration
clause. (II C.A. Azucena, Jr., The Labor Code 528 (6th ed., 2007); citing I Teller, 314-317)
With the foregoing parameters as guide and the following grounds as basis, we hold that the Union is
liable for conducting an illegal strike for the following reasons:
First, the Union's violation of the Hotel's Grooming Standards was clearly a deliberate and concerted
action to undermine the authority of and to embarrass the Hotel and was, there-fore, not a protected
action. xxx.
In view of the Union's collaborative effort to violate the Hotel's Grooming Standards, it succeeded in
forcing the Hotel to choose between allowing its inappropriately hair styled employees to continue
working, to the detriment of its reputation, or to refuse them work, even if it had to cease operations in
affected departments or service units, which in either way would disrupt the operations of the Hotel. This
Court is of the opinion, therefore, that the act of the Union was not merely an expression of their
grievance or displeasure but, indeed, a calibrated and calculated act designed to inflict serious damage to
the Hotel's finances or its reputation. Thus, we hold that the Union's concerted violation of the Hotel's
Grooming Standards which resulted in the temporary cessation and disruption of the Hotel's operations
is an unprotected act and should be considered as an illegal strike.
Fourth, the Union failed to observe the mandatory 30-day cooling-off period and the seven-day strike
ban. (NATIONAL UNION OF WORKERS IN THE HOTEL RESTAURANT AND ALLIED INDUSTRIES
(NUWHRAIN-APL-IUF) DUSIT HOTEL NIKKO CHAPTERv. Court of Appeals, G.R. No. 163942,
November 11, 2008/ G.R. No. 166295, November 11, 2008 it was ruled that:
NOTE: The foregoing answer can be found in pages 535-536 of the book entitled Principles and Cases
Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The question on picketing was asked in
the 2000 Bar Examination while the subject matter involving the procedural requirements for a valid
strike were asked in the 2014, 2007, 2004, 2001 and 1994 Bar Examinations.
[b] Rule on the allegations of ULP and violation of freedom of speech. Explain. (2.5%)
The Hotel did not commit any ULP. This is because they did not interfere, restrain or coerce the Union
from exercising their right to self-organization or committed any of the acts enumerated under the Labor
Code that constitute ULP. Further, the Union cannot use freedom of expression to validate the
commission of prohibited acts during a strike. While the right of employees to publicize their dispute falls
within the protection of freedom of expression these rights are by no means absolute. Protected picketing
does not extend to blocking ingress to and egress from the company premises. (Phimco Industries, Inc. v.
Phimco Industries Labor Association (PILA), G.R. No. 170830, August 11, 2010). Well-settled is the rule
that even if the strike were to be declared valid because its objective or purpose is lawful, the strike may
still be declared invalid where the means employed are illegal. (Association of Independent Unions in the
Philippines (AIUP) v. National Labor Relations Commission, 364 Phil. 697, 707 [1999]) Among such limits
are the prohibited activities under Article 264 of the Labor Code.
NOTE: The foregoing answer can be found in pages 508 and 531 of the book entitled Principles and Cases
Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. Question involving the same subject
matter was asked in the 2000 Bar Examination.
-VI-
Pedro, a bus driver of Biyahe sa Langit Transport, was involved in a collision with a car, damaging the
bus. The manager accused him of being responsible for the damage and was told to submit his written
explanation within 48 hours. Pedro submitted his explanation within the period. The day after, Pedro
received a notice of termination stating that he is dismissed for reckless driving resulting to damage to
company preperty, effective immediately. Pedro asks you, as his counsel, if the company complied with
the procedural due process with respect to dismissal of employees.
[a] explain the twin notice and hearing rule. (2.5%)
SUGGESTED ANSWER:
The twin notice and hearing rule as interpreted in King of Kings Transport, Inc. v. Mamac, G.R. No.
166208, June 29, 2007, where the Supreme Court laid down the manner by which the procedural due
process can be satisfied:
To clarify, the following should be considered in terminating the services of employees:
(1) The first written notice to be served on the employees should contain the specific causes or grounds
for termination against them, and a directive that the employees are given the opportunity to submit their
written explanation within a reasonable period. ”Reasonable opportunity” under the Omnibus Rules
means every kind of assistance that management must accord to the employees to enable them to prepare
adequately for their defense. This should be construed as a period of at least five (5) calendar days from
receipt of the notice to give the employees an opportunity to study the accusation against them, consult a
union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the
complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and
defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as
basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the
notice should specifically mention which company rules, if any, are violated and/or which among the
grounds under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference
wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the
charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence
presented against them by the management. During the hearing or conference, the employees are given
the chance to defend themselves personally, with the assistance of a representative or counsel of their
choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an
amicable settlement.
(3) After determining that termination of employment is justified, the employers shall serve the
employees a written notice of termination indicating that: (1) all circumstances involving the charge
against the employees have been considered; and (2) grounds have been established to justify the
severance of their employment.
[b] Did the Biyahe sa Langit Transport comply with the prior procedural requirements for dismissal?
(2.5%)
Biyahe sa Langit Transport did not comply with the procedural requirements for dismissal.
In King of Kings Transport, Inc. v. Mamac, G.R. No. 166208, June 29, 2007, the Supreme Court explained
that the opportunity to submit the written explanation should be within a reasonable period and
”Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management
must accord to the employees to enable them to prepare adequately for their defense. This should be
construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an
opportunity to study the accusation against them, consult a union official or lawyer, gather data and
evidence, and decide on the defenses they will raise against the complaint.
Applying the above doctrinal rule, Pedro was not given the reasonable opportunity to explain as he was
only given 48 hours to submit his explanation.
NOTE: The foregoing answers can be found in page 584 of the book entitled Principles and Cases Labor
Relations, First Edition 2016, by Atty. Voltaire T. Duano. Questions involving the same subject matter
This question was during the 2012, 2009, 2006, 2004, 1999 and 1998 Bar Examinations.
-VII-
Forbes Country Club (Club) owns a golf course and has 250 rank-and-file employees who are members of
the Forbes Country Club Union(Union). The Club has a CBA with the Union and one of the stipulations
is a Union Security Clause, which reads: "All regular rank-and-file employees who are members of the
union shall keep their membership in good standings as a condition for their continued employment
during the lifetime of this agreement."
Peter, Paul and Mary were the Treasurer, Assistant Treasurer , and Budget Officer of the Union,
respectively. They were expelled by the Board of Directors of the Union for malversation. The Union then
demanded that the Club dismiss said officials pursuant to the Union Security Clause that required
maintenance of union membership. The Club required the three officials to show cause in writing why
they should not be dismissed. Later, the Club called the Three Union officials for a conference regarding
the charges against them. After considering the dismissed the erring officials. The dismissed officials sued
the Club and the Union for illegal dismissal because there was really no malversation based on the
documents presented and their dismissal form the Union was due to the fact that they were organizing
another union.
[a] Is the dismissal of Peter, Paul and Mary by the Club valid? (2.5%)
The dismissal of Peter, Paul and Mary by the Club is not valid.
In PICOP Resources, Incorporated (PRI) v. Dequila, G.R. No. 172666, December 7, 2011, it was held: When
an employer exercises its power to terminate an employee by enforcing the union security clause, it needs
to determine and prove the following: (1) the union security clause is applicable; (2) the union is
requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel the employee from the union. Further in Bank of
the Philippines Islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank,
G.R. No. 164301, October 19, 2011, it was explained that in termination of employment by virtue of a
union security clause embodied in a CBA due process must be observed:
We have also previously held that the fundamental guarantee of security of tenure and due process
dictates that no worker shall be dismissed except for a just and authorized cause provided by law and
after due process is observed. (Cosep v. National Labor Relations Commission, 353 Phil. 148, 157 (1998);
Archbuild Masters and Construction, Inc. v. National Labor Relations Commission, 321 Phil. 869, 877
[1995]) Even as we now recognize the right to continuous, unbroken employment of workers who are
absorbed into a new company pursuant to a merger, it is but logical that their employment may be
terminated for any causes provided for under the law or in jurisprudence without violating their right to
security of tenure. As Justice Carpio discussed in his dissenting opinion, it is well-settled that termination
of employment by virtue of a union security clause embodied in a CBA is recognized in our jurisdiction.
(Justice Carpios Dissenting Opinion, Bank of the Philippine Islands v. BPI Employees Union-Davao
Chapter-Federation of Unions in BPI Unibank, supra note 3 at 667, citing Alabang Country Club, Inc. v.
National Labor Relations Commission, G.R. No. 170287, February 14, 2008, 545 SCRA 351, 361) In Del
Monte Philippines, Inc. v. Saldivar, G.R. No. 158620, October 11, 2006, 504 SCRA 192 we explained the
rationale for this policy in this wise:
Article 279 of the Labor Code ordains that “in cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by [Title I, Book Six of
the Labor Code].” Admittedly, the enforcement of a closed-shop or union security provision in the CBA
as a ground for termination finds no extension within any of the provisions under Title I, Book Six of the
Labor Code. Yet jurisprudence has consistently recognized, thus: “It is State policy to promote unionism
to enable workers to negotiate with management on an even playing field and with more persuasiveness
than if they were to individually and separately bargain with the employer. For this reason, the law has
allowed stipulations for ‘union shop’ and ‘closed shop’ as means of encouraging workers to join and
support the union of their choice in the protection of their rights and interests vis-a-vis the employer.”
(Id. at 203-204) (Emphasis supplied.)
Although it is accepted that non-compliance with a union security clause is a valid ground for an
employee’s dismissal, jurisprudence dictates that such a dismissal must still be done in accordance with
due process. This much we decreed in General Milling Corporation v. Casio, G.R. No. 149552, March 10,
2010, 615 SCRA 13 to wit:
The Court reiterated in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos that:
While respondent company may validly dismiss the employees expelled by the union for disloyalty
under the union security clause of the collective bargaining agreement upon the recommendation by the
union, this dismissal should not be done hastily and summarily thereby eroding the employees’ right to
due process, self-organization and security of tenure. The enforcement of union security clauses is
authorized by law provided such enforcement is not characterized by arbitrariness, and always with due
process. Even on the assumption that the federation had valid grounds to expel the union officers, due
process requires that these union officers be accorded a separate hearing by respondent company.
The twin requirements of notice and hearing constitute the essential elements of procedural due process.
The law requires the employer to furnish the employee sought to be dismissed with two written notices
before termination of employment can be legally effected: (1) a written notice apprising the employee of
the particular acts or omissions for which his dismissal is sought in order to afford him an opportunity to
be heard and to defend himself with the assistance of counsel, if he desires, and (2) a subsequent notice
informing the employee of the employer’s decision to dismiss him. This procedure is mandatory and its
absence taints the dismissal with illegality.
In the given facts, the Club cannot dispense with the requirements of termination before dismissing Peter,
Paul and Mary even when said dismissal is pursuant to the union security clause provision in the CBA.
The rights of an employee to be informed of the charges against him and to reasonable opportunity to
present their side in a controversy with either the company or his own union are not wiped away by a
union security clause or a union shop clause in a collective bargaining agreement.
NOTE: The foregoing answer can be found in pages 873-874 of the book entitled Principles and Cases
Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. Questions involving the same subject
matter were asked in the 2012 and 2004 Bar Examinations.
[b] If the expulsion by the Union was found by the Labor Arbiter to be baseless, is the Club liable to Peter,
Paul and Mary? Explain. (2.5%)
In that case, the Club is liable to Peter, Paul and Mary. This is because the Union and Club violated the
right to security of tenure of the said union officers under the Constitution and the Labor Code.
Relations, First Edition 2016, by Atty. Voltaire T. Duano.
-VIII-
Differentiate learnership from apprenticeship with respect to the period of training, type of work, salary
and qualifications. (5%)
Learnership and Apprenticeship are distinguished as follows:
As to the period of training
In learnership, the agreement period shall not be more than three (3) months; (Article 75 (c), Labor Code,
3.10, TESDA Circular No. 16, Series of 2004) while Apprenticeship, the agreement shall not be less than
four (4) months and not more than six (6) months; (Articles 58 [c] in relation to Article 61 and 3.10,
TESDA Circular No. 16, Series of 2004);
As to the type of work
In learnership, the occupations involves are semi-skilled and other industrial occupations which are non-
apprenticeable and learnable occupations must be approved by TESDA (Articles 73, Labor Code and 3.3,
TESDA Circular No. 16, Series of 2004) while in apprenticeship, the occupations involves “highly
technical industries” which means trade, business, enterprise, industry, or other activity, which is
engaged in the application of advanced technology and apprenticeable occupations must be approved by
TESDA; (Articles 60, Labor Code and 3.3, TESDA Circular No. 16, Series of 2004).
As to salary
In both, the learners and apprentices are entitled to receive a wage equivalent to 75 percent of the
prevailing minimum wage and other benefits including overtime pay. (see 3.8. TESDA Circular No. 16,
Series of 2004; Articles 61 and 75 [c], Labor Code) Unless the the elarner is employed iun piece or
incentive –rate jobs during the training period shall be paid in full for the work done. (Article 76, Labor
Code)
As to qualifications
In learnership, the law did not provide such qualifications. However, reasons or justifications for hiring
are provided by law (Articles 74, Labor Code) while in apprenticeship, the qualifications are (a) At least
fifteen (15) years of age; (b) Possess vocational aptitude and capacity for appropriate tests; and (c) Possess
the ability to comprehend and follow oral and written instructions and no justifications or reasons given
by law for hiring; (Articles 59, Labor Code).
NOTE: The foregoing answers in a and b can be found in pages 313-314 of the book entitled Principles
and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The
relevant questions regarding learnership and apprenticeship were asked during the 2012 and 2011 Bar
Examinations.
-IX-
Zienna Corporation (Zienna) informed the Department of Labor and Employment Regional Director of
the end of its operations. To carry out the cessation, Zienna sent a Letter of Request for Intervention to the
NLRC for permission and guidance in effecting payment of separation benefits for its fifty (50)
terminated employees.
Each of the terminated employees executed a Quitclaim and Release before Labor Arbiter Nocomora, to
whom the case was assigned. After the erstwhile employees received their separation pay, the Labor
Arbiter declared the Labor dispute dismissed with prejudice on the ground of settlement. Thereafter,
Zienna sold all of its assets to Zandra Company (Zandra) which in turn hired its own employees.
Nelle, one of the fifty (50) terminated employees, filed a case for illegal dismissal against Zienna. She
argued that Zienna did not cease from operating since the corporation subsists as Zandra. Nelle ponted
out that aside from the two companies having essentially the same equipment, the managers and owners
of the Zandra and Zienna are likewise one and the same.
For its part, Zienna countered the Nelle is barred from filing a complaint for illegal dismissal against the
corporation in view of her prior acceptance of separation pay.
Is Nelle correct in claiming that she was illegally dismissed? (5%)
The legality or illegality of Nelle’s termination will depend on whether the transfer of ownership of the
business is made in good faith or bad faith.
In Penafrancia Tours and Travel Transport, Inc. v. Sarmiento, G.R. No. 178397, October 20, 2010, the
Supreme Court explained the effect of change of business ownership in bad faith as follows: On this
ground, petitioner terminated the employment of respondents. However, what petitioner apparently
made was a transfer of ownership. It is true that, as invoked by petitioner, in Manlimos, et al. v. NLRC, et
al., 312 Phil. 178, 190 (1995) we held that a change of ownership in a business concern is not proscribed by
law. Lest petitioner forget, however, we also held therein that the sale or disposition must be motivated
by good faith as a condition for exemption from liability. (Id. at 191) Thus, where the charge of ownership
is done in bad faith, or is used to defeat the rights of labor, the successor-employer is deemed to have
absorbed the employees and is held liable for the transgressions of his or her predecessor. (Philippine
Airlines, Inc. v. NLRC, 358 Phil. 919, 938 [1998])
Applying the above doctrinal rule, if the transfer of ownership of the business from Zienna to Zandra is
made in good faith then there can be no illegal dismissal to speak of. However, if made in bad faith or is
used to defeat the rights of Nelle, the successor-employer is deemed to have absorbed Nelle and is held
liable for the transgressions of Zienna.
Relations, First Edition 2016, by Atty. Voltaire T. Duano.
-X-
Lazaro, an engineer, organized a union in Garantisado Construction Corporation (Garantisado) which

has 200 employees. He immediately filed a Petition for Certification Election, attaching thereto the
signatures of 70 employees. Garantisado vehemently opposed the petition, alleging that 25 signatories are
probationary employees, while 5 are supervisors. It submitted the contracts of the 25 probationary
employees and the job description of the supervisors. It argued that if the 30 is deducted from the 70, it
gives a balance of 40 valid signatures which is way below the minimum number of 50 signatories needed
to meet the alleged 25% requirement. If you are the Director of Labor Relations, will you approve the
holding of a Certification Election. Explain your answer. (5%)
SUGGESTED ANSWER:
I will approve the holding of a Certification Election. This is because under the Labor Code, the conduct
of a Certification Election is automatic whether the establishment is an unorganized or organized.
If it is unorganized there is no need for the petition to be supported by the written consent of at least 25%
of all employees in the bargaining unit. However, in organized establishment by established
jurisprudence the written consent of at least 25% of all employees in the bargaining unit may not be
strictly enforced. Thus, the conduct of the Certification Election can still be approved.
NOTE: The foregoing answer is based on Articles 268 [256] and 269 [257] discussed in pages 422-427 of
the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. See
also California Manufacturing Corporation v. Laguesma, G. R. No. 97020, June 8, 1992. As an alternative
answer, it can be argued that the one who has the authority to approve is the Med Arbiter of the BLR or
Regional Office and not the Director of the Labor Relations. Since it is the Med-Arbiter who is the officer
required to hear representation cases there is jurisdictional issue in the given case.
-XI-
Dion is an Accounting Supervisor in a trading company. He has rendered exemplary service to the
company for 20 years. His co-employee and kumpadre, Mac, called him over the phone and requested
him to punch his (Mac's) daily time card as he (Mac) was caught in a monstrous traffic jam. Dion accede
to Mac's request but was later caught by the Personnel Manager while punching Mac's card. The
company terminated the employment of Dion on the ground of misconduct. Is the dismissal valid and
just? Explain. (5%)
SUGGESTED ANSWER:
The dismissal is not valid and just.
The elements of misconduct are not present.
In Philippine Aeolus Automotive United Corporation v. NLRC, G.R. No. 124617, April 28, 2000: The
Supreme Court ruled: “in a litany of decisions on serious misconduct warranting dismissal of an
employee, has ruled that for misconduct or improper behavior to be a just cause for dismissal (a) it must
be serious; (b) must relate to the performance of the employee’s duties; and, (c) must show that the
employee has become unfit to continue working for the employer. (Molato v. NLRC, G.R. No. 113085, 2
January, 1997, 266 SCRA 42, Aris Philippine Inc. v. NLRC, G.R. No. 97817, 10 November 1994, 238 SCRA
59)
The act of Dion in acceding to Mac’s request may be considered, from a lay man’s perspective, as a
serious misconduct. However, in order to consider it a serious misconduct that would justify dismissal
under the law, it must have been done in relation to the performance of his duties as would show him to
be unfit to continue working for his employer. The act complained of, under the circumstances they were
done, did not in any way pertain to his duties as an Accounting Supervisor.
Relations, First Edition 2016, by Atty. Voltaire T. Duano. However, as an alternative answer it can be
argued that the dismissal is valid and just on the grounds of fraud or commission of a crime (falsification
or tampering the time card) or analogous causes. The questions involving serious misconduct were asked
during the 2013,2012, 1996 and 1995 Bar Examinations.
-XII-
Amaya was employed as a staff nurse by St. Francis Hospital (SFH) on July 8, 2014 on a probationary
status of six (6) months. Her probationary contract required, among others, strict compliance with SFH's
Code of Discipline.
On October 16, 2014, Dr. Ligaya, filed a Complaint with the SFH Board of Trustees against Amaya for
utteing slanderous remarks against the former. Attached to the complaint was a letter of Minda, mother
oa a patient, who confirmed the following remarks against Dr. Ligaya:
"Bakit si Dr. Ligaya pa ang napili mong pedia eh ang tanda-tanda na n'un? E makakalimutan mo na yun
x x x alam mo ba, kahit wala namang diperensya yung baby, ipinapa-isolate nya?"
The SFH President asks you, being the hospital's counsel, which of these two (2) options is the legal and
proper way of terminating Amaya: a) terminate her for a just cause under Article 288 of the Labor Code
(Termination by Employer); or b) terminate her for violating her probationary contract. Explain. (5%)
SUGGESTED ANSWERS:
In Univac Development, Inc. v. Soriano, G.R. No. 182072, June 19, 2013, the limitations on the power of
the employer to terminate a probationary employee was discussed as follows:
Indeed, the power of the employer to terminate a probationary employee is subject to three limitations,
namely: (1) it must be exercised in accordance with the specific requirements of the contract; (2) the
dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent
the contract or the law; and (3) there must be no unlawful discrimination in the dismissal. (Id. at 387,
citing Dusit Hotel Nikko v. Gatbonton, G.R. No. 161654, May 5, 2006, 489 SCRA 671)
Applying the above doctrinal rule, I will recommend the two options.
Relations, First Edition 2016, by Atty. Voltaire T. Duano. Question involving the same subject matter was
asked during the 2001Bar Examination.
-XIII-
Matibay Shoe and Repair Store, as added service to its customers, devoted a portion of its store to a shoe
shine stand. The shoe shine boys were tested for their skill before allowed to work and given ID cards.
They were told to be present from the opening of the store up to closing time and were required to follow
the company rules on cleanliness and decorum. They bought their own shoe shine boxes, polish, and
rags. The boys were paid by their customers for their services but the payment is coursed through the
stores's cashier, who pays them before closing time. They were not supervised in their work by any
managerial employee of the store but for a valid complaint by a customer of for violation of any company
rule, they can be refused admission to the store. Were the boys employees of the store? Explain. (5%)
SUGGESTED ANSWER:
Yes, the boys are employees of the store.
The four elements are clear on the facts of the case. The boys were hired by the store as added service to
its customers, they were paid for their services by the store cashier and they were under the control of the
store’s any managerial employee.
Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on employer-
employee relation has been time and again the subject matter of bar questions, more specifically during
the 2014, 2012, 2011, 2010, 2008, 2002, 1996 and 1991 Bar Examinations.
-XIV-
Tess, a seamstress at Marikit Clothing Factory, became pregnant. Because of morning sickness, she
frequently absented herself from work and often came to the factory only four (4) days a week. After two
(2) months, the personnel manager told her that her habitual absences rendered her practically useless to
the company and, thus, asked for to resign. She begged to be retained, citing her pregnancy as reason for
her absences. Tess asked for leave of absence but her request was denied. She went on leave nevertheless.
As a result, she was thus dismissed for going on leave without permission of management.
Tess filed a complaint for illegal dismissal. The company's defense: she was legally dismissed because of
her numerous absences without leave and not because of her pregnancy. On the other hand, Tess argues
that her dismissal was an act of discrimination, based as it was on her pregnancy which the company
treated as a disease. Whose petition is meritorious - the company's or tess'? Explain. (5%)
SUGGESTED ANSWER:
Tess‘ position is meritorious.
Obviously, Tess was terminated on account of her pregnancy.
In Del Monte Philippines, Inc. v. Velasco, G.R. No. 153477, March 6, 2007, the essential question is
whether the employment of respondent had been validly terminated on the ground of excessive absences
without permission. Corollary to this is the question of whether the petitioner discharged the respondent
on account of pregnancy, a prohibited act. In resolving the essential question and the issue corollary to it,
the High Court ruled in this manner:
xxx
The Court agrees with the CA in concluding that respondents sickness was pregnancy-related and,
therefore, the petitioner cannot terminate respondents services because in doing so, petitioner will, in
effect, be violating the Labor Code which prohibits an employer to discharge an employee on account of
the latters pregnancy.
Article 137 of the Labor Code provides:
Art. 137. Prohibited acts. It shall be unlawful for any employer:
xxx
(2) To discharge such woman on account of her pregnancy, while on leave or in confinement due to her
pregnancy; or
xxx
xxx
The Court is convinced that the petitioner terminated the services of respondent on account of her
pregnancy which justified her absences and, thus, committed a prohibited act rendering the dismissal
illegal.
Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. It is the first time that this
question was asked in the bar examination in so far as the bar examinations from 1990 to 2015 are
concerned.
-XV-
Jim is the holder of a certificate of public convenience for a jeepney. He entered into a contract of lease
with Nick, whereby they agreed that the lease period is for one (1) year unless sooner terminated by Jim
for any of the cause laid down in the contract. The rental is thirty thousand pesos (P30,000.00) monthly.
All the expenses for the repair of the jeepney, together with expenses for diesel, oil and service, shall be
for the account of Nick. Nick is required to make a deposit of three (3) months to answer for the
restoration of the vehicle to its good operating condition when the contract ends. It is stipulated that Nick
is not an employee of Jim and he holds the latter free and harmless from all suits or claims which may
arise from the implementation of the contract. Nick has the right to use the jeepney at any hour of the day
provided it is operated on the approved line of operation.
After five (5) months of the lease and payment of the rentals, Nick became delinquent in the payment of
the rentals for two (2) months. Jim, as authorized by the contract, sent a letter of demand rescinding the
contract and asked for arrearages. Nick responded by filling a complaint with the NLRC for illegal
dismissal, claiming that the contract is illegal and he was just forced by Jim to sign it so he can drive. He
claims he is really a driver if Jim on a boundary system and the reason he was removed is because he
failed to pay the complete daily boundary of one thousand (P1,000.00) for two (2) months due to the
increase in the number of tricycles.
[a] Jim files a motion to dismiss the NLRC case on the ground that the regular court has jurisdiction since
the agreement is a lease contract. Rule on the motion and explain. (2.5%)
SUGGESTED ANSWER:
I will grant the motion to dismiss on the ground of lack of jurisdiction over the subject matter.
In Sorreda v. Cambridge Electronics Corporation, G.R. No. 172927, February 11, 2010 it was ruled that
there should be employer-employee relation for the Labor Arbiter to exercise jurisdiction. Thus, the High
Court said:
In Pioneer Concrete Philippines, Inc. v. Todaro, G.R. No. 154830, 8 June 2007, 524 SCRA 153, 163, the
Court reiterated that where no employer-employee relationship exists between the parties, and the Labor
Code or any labor statute or collective bargaining agreement is not needed to resolve any issue raised by
them, it is the Regional Trial Court which has jurisdiction.
In Uy v. Bueno, G.R. No. 159119, March 14, 2006 held: This requirement of em-ployer-employer
relationship is jurisdictional for the provisions of the Labor Code, spe-cifically Book VI thereof, on Post-
Employment, to apply. Since the employer-employee relationship between petitioner Uy and respondent
Bueno was not established, the labor arbiter never acquired jurisdiction over petitioner Uy. The case of
Domondon v. National Labor Relations Commission, G.R. No. 154376, September 30, 2005, also discussed
the jurisdictional provisions of Article 217 [now 224] as follows:
In all these instances, the matrix is the existence of an employer-employee re-lationship. In the case at bar,
there is no dispute that petitioner is an employee of the respondents. In Baez v. Valdevilla, 331 SCRA 584
(2000) we held:
x x x Presently, and as amended by R.A. 6715, the jurisdiction of La-bor Arbiters and the NLRC in Article
217 is comprehensive enough to in-clude claims for all forms of damages arising from the employer-
employee relations.
Whereas this Court in a number of occasions had applied the jurisdic-tional provisions of Article 217 to
claims of damages filed by employees, (Citing Poloton-Tuvera v. Dayrit, 160 SCRA 423 (1988); Dizon v.
Court of Appeals, 210 SCRA 107 (1992); Pepsi-Cola Bottling Company of the Philippines v. Martinez, 198
Phil. 296) we hold that by the designating clause arising from the employer-employee relations Article
217 should apply with equal force to the claim of an employer for actual damages against its dismissed
employee, where the basis for the claim arises from or is necessarily connected with the fact of
termination, and should be entered as a counterclaim in the illegal dismissal case.
The facts of the case is clear that the contract entered into between Jim and Nick is a lease of chattel and
not a relationship between jeepney owners/operators on one hand and jeepney drivers on the other
under the boundary system.
In a number of cases decided by the Supreme Court, (National Labor Union vs. Dinglasan, 98 Phil. 649,
652 (1996); Magboo vs. Bernardo, 7 SCRA 952, 954 (1963); Lantaco, Sr. vs. Llamas, 108 SCRA 502, 514
[1981]), it was ruled that the relationship between jeepney own-ers/operators on one hand and jeepney
drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. It
was explained that in the lease of chattels, the lessor loses complete control over the chattel leased
although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the
damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercise
supervision and control over the latter. The management of the business is in the owner’s hands. The
owner as holder of the certificate of public convenience must see to it that the driver follows the route
prescribed by the franchising authority and the rules promulgated as regards its operation. Now, the fact
that the drivers do not receive fixed wages but get only that in excess of the so-called “boundary” they
pay to the owner/operator is not sufficient to withdraw the relationship between them from that of
employer and employee. The above doctrine was applied by analogy to the relationships be-tween bus
owner/operator and bus conductor, (Doce vs. Workmen’s Compensation Commis-sion, 104 Phil. 946, 948
[1958]) auto-calesa owner/operator and driver, (Citizens’ League of Freeworkers vs. Abbas, 18 SCRA 71,
73 [1966]) and recently between taxi owners/
operators and taxi drivers. (Martinez vs. NLRC, 272 SCRA 793, 800 [1997])
NOTE: The foregoing answer can be found in pages 34-35 of the book entitled Princples and Cases Labor
Relations, First Edition 2016 and pages 341-342 of the book entitled Principles and Cases Labor Standards
and Social Legislation, First Edition 2015, by Atty. Voltaire T. Dua-no. This question has been the subject
matter of the 1999 and 1995 Bar Examinations
[b] Assuming that Nick is an employee of Jim, was Nick validly dismissed?
SUGGESTED ANSWER:
Yes, Nick can be validly dismissed on the ground of his failure to pay the complete daily boundary of one
thousand (P1,000.00) for two (2) months. The said acts and omissions can be classified as analogous
causes beause it is suscept

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-I-

What are the requisites of a valid quitclaim? (5%)

[a] Is Gregorio an employee of Guaranteed? Explain. (2.5%)

[a] Explain the twin notice and hearing rule. (2.5%)

Is Nelle correct in claiming that she was illegally dismissed? (5%)

[a] Are the TMRs employees of Empire? (2.5%)

[b] Were the TMRs illegally dismissed by Wave? (2.5%)

What are the requisites of a valid quitclaim? (5%)

[a] Is Gregorio an employee of Guaranteed? Explain. (2.5%)

Yes, as an insurance underwriter Gregorio is an employee of Guaranteed.

Yes, as Unit Manger Gregorio is an employee of Guaranteed.

The first portion of the question must be answered in the affirmative.

The determination of the existence of an employer-employee relationship by the DOLE must be

In Allied Investigation Bureau, Inc. v. Sec. of Labor, we ruled that:

The picketing is not legal.

On t he other hand, the mass action also constitute an illegal strike.

[a] explain the twin notice and hearing rule. (2.5%)

To clarify, the following should be considered in terminating the services of employees:

Learnership and Apprenticeship are distinguished as follows:

As to the period of training

As to the type of work

Is Nelle correct in claiming that she was illegally dismissed? (5%)

Lazaro, an engineer, organized a union in Garantisado Construction Corporation (Garantisado) which

The dismissal is not valid and just.

The elements of misconduct are not present.

Yes, the boys are employees of the store.

Tess‘ position is meritorious.

Obviously, Tess was terminated on account of her pregnancy.

Article 137 of the Labor Code provides:

Art. 137. Prohibited acts. It shall be unlawful for any employer:

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