SUGGESTED ANSWERS TO THE 2017 BAR EXAMINATIONS LABOR AND SOCIAL

LEGISLATION: PART ONE

I
A.
What are the accepted tests to determine the existence of an employer-employee
relationship? (5%)
SUGGESTED ANSWER:
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 power 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)
NOTE: The foregoing answer in can be found in page 332 of the book entitled Principles
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 2016, 2014, 2012, 2011, 2010,
2008, 2002, 1996 and 1991 Bar Examinations.
B.
Applying the tests to determine the existence of an employer-employee relationship, is
a jeepney driver operating under the boundary system an employee of his jeepney
operator or a mere lessee of the jeepney? Explain your answer. (3%)
SUGGESTED ANSWER:
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 owners/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.
NOTE: The foregoing answer in can be found in pages 341-342 of the book entitled
Principles 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 2016, 2014, 2012, 2011,
2010, 2008, 2002, 1996 and 1991 Bar Examinations.
II.
Procopio was dismissed from employment for stealing his co-employee Raul’s watch.
Procopio filed a complaint for illegal dismissal. The Labor Arbiter ruled in Procopio’s
favor on the ground that Raul’s testimony was doubtful, and, therefore, the doubt
should be resolved in favor of Procopio. On appeal, the NLRC reversed the ruling
because Article 4 of the Labor Code – which states that all doubts in the interpretation
and implementation of the provisions of the Labor Code, including the implementing
rules and regulations, shall be resolved in favor of labor – applied only when the doubt
involved the “implementation and interpretation” of the Labor Code; hence, the doubt,
which involved the application of the rules on evidence, not the Labor Code, could not
necessarily be resolved in favor of Procopio. Was the reversal correct? Explain your
answer. (3%)
SUGGESTED ANSWER:
In Peñaflor v. Outdoor Clothing Manufacturing, G.R. No. 177114, January 21, 2010, the
Supreme Court explained the application of Article 4 of the Labor Code regarding doubts
on respondent’s evidence on the voluntariness of petitioner’s resignation. Thus, the
High Court said:
Another basic principle is that expressed in Article 4 of the Labor Code – that all doubts
in the interpretation and implementation of the Labor Code should be interpreted in
favor of the workingman. This principle has been extended by jurisprudence to cover
doubts in the evidence presented by the employer and the employee. (Fujitsu Computer
Products Corporation of the Philippines v. Court of Appeals, 494 Phil. 697 [2005]) As
shown above, Peñaflor has, at very least, shown serious doubts about the merits of the
company’s case, particularly in the appreciation of the clinching evidence on which the
NLRC and CA decisions were based. In such contest of evidence, the cited Article 4
compels us to rule in Peñaflor’s favor. Thus, we find that Peñaflor was constructively
dismissed given the hostile and discriminatory working environment he found himself
in, particularly evidenced by the escalating acts of unfairness against him that
culminated in the appointment of another HRD manager without any prior notice to him.
Where no less than the company’s chief corporate officer was against him, Peñaflor had
no alternative but to resign from his employment. (Unicorm Safety Glass, Inc. v. Basarte,
486 Phil. 493 [2004])
NOTE: The foregoing answer in can be found in page 30 of the book entitled Principles
and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T.
Duano. The topic on Article 4 regarding the application of Article 4 on doubts in the
evidence was asked last 2009 Bar Examination.
III.
A.
Andrew Manning Agency (AMA) recruited Feliciano for employment by Invictus Shipping,
its foreign principal. Meantime, AMA and Invictus Shipping terminated their agency
agreement. Upon his repatriation following his premature termination, Feliciano claimed
from AMA and Invictus Shipping the payment of his salaries and benefits for the
unserved portion of the contract. AMA denied liability on the ground that it no longer
had any agency agreement with Invictus Shipping. Is AMA correct? Explain your answer.
(3%)
SUGGESTED ANSWER:
AMA is not correct. Section 10 of Republic Act 10022 provides that the liability of the
principal/employer and the recruitment/placement agency for any and all claims shall
be joint and several. This provision shall be incorporated in the contract for overseas
employment and shall be a condition precedent for its approval. Such liabilities shall
continue during the entire period or duration of the employment contract and shall not
be affected by any substitution, amendment or modification made locally or in a foreign
country of the said contract.
NOTE: The foregoing answer in can be found in page 675 of the book entitled Principles
and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano.
B.
As a rule, direct hiring of migrant workers is not allowed. What are the exceptions?
Explain your answer. (2.5%)
SUGGESTED ANSWER:
Direct Hires — workers directly hired by employers for overseas employment as
authorized by the Secretary of Labor and Employment and processed by the POEA,
including:
1. Those hired by international organizations
2. Those hired members of the diplomatic corps.
3. Name hires or workers who are able to secure overseas employment opportunity with
an employer without the assistance or participation of any agency. [Labor Code, POEA
Rules] (Section 1(i), Rule II, Omnibus Rules and Regulations Implementing The Migrant
Workers and Overseas Filipinos Act of 1995 as amended by Republic Act No. 10022)
The direct hires are exceptions to the ban on direct-hiring under Article 18 of the Labor
Code.
NOTE: The foregoing answer in can be found in page 112 of the book entitled Principles
and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T.
Duano. The topic on direct hiring was asked last 2010 Bar Examination.
C.
Phil, a resident alien, sought employment in the Philippines. The employer, noticing that
Phil was a foreigner, demanded that eh first secures an employment permit from the
DOLE. Is the employer correct? Explain your answer. (2.5%)
SUGGESTED ANSWER:
The employer is not correct. According to Section 2, Department Order No. 97-09 Series
of 2009, issued on August 26, 2009 [Revised Rules for the Issuance of Employment
Permits to Foreign Nationals]one of the foreign nationals that are exempt from securing
an employment permit is a permanent permanent resident foreign nationals,
probationary or temporary visa holders. Moreover, the Labor Code speaks of non-
resident aliens that are required to obtain an alien employment permit.
NOTE: The foregoing answer can be found in pages 270 and 271 of the book entitled
Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty.
Voltaire T. Duano. The topic on alien employment permit has been time and again the
subject matter of bar questions, more specifically during the 2007 and 1995 Bar
Examinations.
IV
The Regional Tripartite and Productivity Board (RTWPB) for Region 3 issued a wage order
on November 2, 2017 fixing the minimum wages for all industries throughout Region 3.
(a) Is the wage order subject to the approval of the National Wages and Productivity
Commission before it takes effect? (2%)
SUGGESTED ANSWER:
No. the National Wages and Productivity Commission function is to review the Wage
Order issued by the Regional Tripartite and Productivity Board (RTWPB) (See Section 4,
Rule IV, NWPC GUIDELINES NO. 01 Series of 2007, dated June 19, 2007)
NOTE: The foregoing answer can be found in page 558 of the book entitled Principles
and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T.
Duano.
(b) The law mandates that no petition for wage increase shall be entertained within a
period of 12 months from the effectivity of the wage order. Under what circumstances
may the Kilusang Walang Takot, a federation of labor organizations that publicly and
openly assails the wage order as blatantly unjust, initiate the review of the wage
increases under the wage order without waiting for the end of the 12-month period?
Explain your answer. (3%)
SUGGESTED ANSWER:
If Kilusang Walang Takot feels aggrieved by the Wage Order issued by the Board it may
appeal such Order to the National Wages and Productivity Commission by filing a
verified appeal with the Board not later than ten (10) days from the date of publication
of the Order on the grounds of non-conformity with prescribed guidelines and/or
procedures, questions of law and grave abuse of discretion. (See Section 1, Rule IV, in
relation to Section 2 Rule V, NWPC GUIDELINES NO. 01 Series of 2007, dated June 19,
2007)
NOTE: The foregoing answer can be found in pages 559-560 of the book entitled
Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty.
Voltaire T. Duano.
V
A.
Percival was a mechanic of Pacific Airlines. He enjoyed a meal break of one hour.
However, during meal breaks, he was required to be on stand-by for emergency work.
During emergencies, he was made to forego his meals or to hurry up eating. He
demanded payment of overtime for work done during his meal periods. Is Percival
correct? Explain your answer. (3%)
SUGGESTED ANSWER:
Percival is correct. While as a rule the eight hour period does not include the meal break
however, in the case of Percival he was required to forego his meals or to hurry up
eating. The meal period should therefore be considered compensable hours of work and
a work beyond eight hours. Percival is therefore entitled to overtime time.
NOTE: The foregoing answer can be found in page 371 of the book entitled Principles
and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T.
Duano.
B.
Distinguish a learner from an apprentice. (4%)
SUGGESTED ANSWER:
As to the agreement
In Apprenticeship, the agreement entered by the parties is known as Apprenticeship
Agreement. (Articles 58 [d], Labor Code); In learnership, the agreement entered by the
parties is known as Learnership Agreement (Article 75, Labor Code);
As to the period of agreement
In 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); 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);
As to obligations to hire
In apprenticeship, the enterprise is not obliged to hire the apprentice after the
apprenticeship period; (Articles 61, Labor Code, 3.10, TESDA Circular No. 16, Series of
2004); In learnership, the enterprise is obliged to hire the learner after the learnership
period (Article 75 (d), Labor Code, 3.10, TESDA Circular No. 16, Series of 2004);
As to pre-termination of the agreement
In apprenticeship, upon pre-termination of the agreement there is no regular
employment by operation of law; (Articles 57-72, Labor Code); In learnership, a learner
allowed or suffered to work during the first two (2) months shall be deemed regular
employees if training is terminated by the employer before the end of the stipulated
period through no fault of the learners (Article 75 (d), Labor Code);
As to the person hired
In apprenticeship, the persons hired as trainees is known as apprentice; (Articles 58 [a],
Labor Code, 2, TESDA Circular No. 16, Series of 2004); In learnership, the persons hired
as trainees is known as learner (Articles 73, Labor Code, 2, TESDA Circular No. 16,
Series of 2004);
As to the supplement on theoretical instructions
In apprenticeship, the training on the job is with compulsory related theoretical
instructions; (Article 58 [a], Labor Code, Section 4 [j], R.A. 7796, and 2, TESDA Circular
No. 16, Series of 2004); In learnership, the practical training on the job may or may not
be supplemented by related theoretical instructions; (2, TESDA Circular No. 16, Series of
2004);
As to the reasons for hiring
In apprenticeship, the law did not provide any reasons where an apprentice may be
hired (Articles 59-72, Labor Code); In learnership, the law provides the following reasons
for hiring (1) when no experienced workers are available; (2) the employment of
learners is necessary to prevent curtailment of employment opportunities; and (3) the
employment does not create unfair competition in terms of labor costs or impair or
lower working standards (Article 74, Labor Code);
As to qualifications
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); In learnership, the law did not provide
such qualifications. However, reasons or justifications for hiring are provided by law
(Articles 74, Labor Code);
As to what occupations hired
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). 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).
NOTE: The foregoing answer 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 topic on the distinctions between apprentice and learner has
been the subject matter of bar questions during the 2016 and 2012 Bar Examinations.
C.
Are there differences between a househelper and a homeworker? Explain your answer?
Domestic worker or “Kasambahay” refers to any person engaged in domestic work
within an employment relationship such as, but not limited to, the following: general
househelp, nursemaid or “yaya”, cook, gardener, or laundry person while (b) “Industrial
Homeworker” means a worker who is engaged in industrial homework.
NOTE: The foregoing answer can be found in pages 676 and 712 of the book entitled
Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty.
Voltaire T. Duano.
VI.
A.
One Pacific Airline’s policies was to hire only single applicants as flight attendants, and
considered as automatically resigned the flight attendants at the moment they got
married. Is the policy valid? Explain your answer. (2.5%)
SUGGESTED ANSWER:
The policy is not valid. The policy is a violation of the Labor Code’s prohibition on
stipulation against marriage under Article 134. The requirement that a company policy
must be reasonable under the circumstances to qualify as a valid exercise of
management prerogative was also at issue in the 1997 case of Philippine Telegraph and
Telephone Company v. NLRC, G.R. No. 118978, May 23, 1997. In said case, the
employee was dismissed in violation of petitioner’s policy of disqualifying from work any
woman worker who contracts marriage. The Supreme held that the company policy
violates the right against discrimination afforded all women workers under Article 136
(now 134) of the Labor Code.
NOTE: The foregoing answer can be found in pages 623 and 627 of the book entitled
Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty.
Voltaire T. Duano. The topic on stipulation against marriage has been time and again the
subject matter of bar questions, more specifically during the 2012, 2010, 1997 and
1995 Bar Examinations.
B.
Tarcisio was employed as operations manager and received a monthly salary of
P25,000.00 through his payroll account with DB Bank. He obtained a loan from Roberto
to purchase a car. Tarcisio failed to pay Roberto when the loan fell due. Roberto sued to
collect, and moved to garnish Tarcisio’s payroll account. The latter vigorously objected
and argued that slaries were exempt from garnishment. Is Tarcisio correct? Explain your
answer. (3%)
SUGGESTED ANSWER:
Tarciso is not correct. In Gaa v. Court of Appeals, G.R. No. L-44169 December 3, 1985,
the Supreme Court ruled that Article 1708 used the word "wages" and not "salary" in
relation to "laborer" when it declared what are to be exempted from attachment and
execution. The monthly salary of Tarcisio is therefore subject to garnishment.
NOTE: The foregoing answer can be found in page 450 of the book entitled Principles
and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T.
Duano. The topic on the distinction between salary and wage has been the subject
matter of bar questions during the 1994 Bar Examination.
VII
Dr. Crisostomo entered into a retainer agreement with AB Hotel and Resort whereby he
would provide medical services to the guests and employees of AB Hoteland Resort,
which, in turn, would provide the clinic premises and medical supplies. He received a
monthly retainer fee of P60,000.00, plus a 70% share in the service charges from AB
Hoteland Resort’s guests availing themselves of the clinic’s services. The clinic
employed nurses and allied staff, whose salaries, SSS contributions and other benefits
he undertook to pay. AB Hotel and Resort issued directives giving instructions to him on
the replenishment of emergency kits and forbidding the clinic staff from receiving cash
payments from guests. In time, the nurses and the clinic staff claimed entitlement to
rights as regular employees of AB Hotelnad Resort, but the latter refused on the ground
that Dr. Crisostomo, who was their employer, was an independent contractor. Rule, with
reasons. (4%)
SUGGESTED ANSWER:
The test of independent contractorship was applied in the case of Polyfoam-RGC
International Corporation v. Concepcion, G.R. No. 172349, June 13, 2012. Thus, the High
Court ruled:
The test of independent contractorship is “whether one claiming to be an independent
contractor has contracted to do the work according to his own methods and without
being subject to the control of the employer, except only as to the results of the work.”
(San Miguel Corporation v. Aballa, G.R. No. 149011, June 28, 2005, 461 SCRA 392, 421)
In San Miguel Corporation v. Semillano, G.R. No. 164257, July 5, 2010, 623 SCRA 114 the
Court laid down the criteria in determining the existence of an independent and
permissible contractor relationship, to wit:
“x x x [W]hether or not the contractor is carrying on an independent business; the
nature and extent of the work; the skill required; the term and duration of the
relationship; the right to assign the performance of a specified piece of work; the control
and supervision of the work to another; the employer’s power with respect to the hiring,
firing and payment of the contractor’s workers; the control of the premises; the duty to
supply the premises, tools, appliances, materials, and labor; and the mode, manner and
terms of payment.” (San Miguel Corporation v. Semillano, supra, at p. 124; Sasan, Sr. v.
National Labor Relations Commission 4th Division, supra at p. 691)
Applying the above-test, the nurses are employees of Dr. Crisostomo. The facts had
clearly stated that Dr. Crisostomo was the one paying the salaries of the nurses and
even reported them for SSS coverage. The element of payment of wages is present.
NOTE: The foregoing answer can be found in page 497 of the book entitled Principles
and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T.
Duano. The topic on the distinction between salary and wage has been the subject
matter of bar questions during the 1994 Bar Examination. The problem can also be
resolved by characterizing the relationship of Dr. Crisostomo and AB Hoteland Resort as
to whether it is a legitimate contracting or labor-only contracting. The topic on
contracting/subcontracting has been time and again the subject matter of bar
questions, more specifically during the 2016, 2014, 2013, 2012, 2011, 2009, 2004,
2002, 2001, 2000, 1997 and 1994 Bar Examinations.

SUGGESTED ANSWERS TO THE 2017 BAR EXAMINATIONS IN LABOR AND SOCIAL

LEGISLATION: PART TWO:
VIII
Marciano was hired as Chief Engineer on board the vessel M/V Australia. His
contract of employment was for nine months. After nine months, he was re-hired.
He was hired a third time after another nine months. He now claims entitlement
to the benefits of a regular employee based on his performed tasks usually
necessary and desirable to the employer’s business for a continuous period of
more than one year. Is Marciano’s claim tenable? Explain.
SUGGESTED ANSWER:
Marciano’s claim is not tenable. The Supreme Court squarely passed upon the
issue in Millares v. NLRC, G.R. No. 110524, July 29, 2002, where one of the issues
raised was whether seafarers are regular or contractual employees whose
employment are terminated every time their contracts of employment expire. The
Supreme Court explained:
[I]t is clear that seafarers are considered contractual employees. They can not
be considered as regular employees under Article 280 of the Labor Code. Their
employment is governed by the contracts they sign everytime they are rehired
and their employment is terminated when the contract expires. Their
employment is contractually fixed for a certain period of time. They fall under the
exception of Article 280 whose employment has been fixed for a specific project
or undertaking the completion or termination of which has been determined at
the time of engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the
season. We need not depart from the rulings of the Court in the two
aforementioned cases which indeed constitute stare decisis with respect to the
employment status of seafarers.
NOTE: The foregoing answer can be found in page 739 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on the seafarers has been time and again the subject matter of
bar questions, more specifically during the 2014 and 2002 Bar Examinations.
IX
Section 255 (245) of the Labor Code recognizes three categories of employees ,
namely: managerial, supervisory, and rank-and-file.
(a) Give the characteristics of each category of employees, and state whether
the employees in each category may organized and form unions. Explain your
answer. (5%)
SUGGESTED ANSWER:
Under Article 255 [245] of the Labor Code the following are provided:
Managerial employees are not eligible to join, assist or form any labor
organization.
Supervisory employees shall not be eligible for membership in the collective
bargaining unit of the rank-and-file employees but may join, assist or form
separate collective bargaining units and/or legitimate labor organizations of their
own.
The rank-and-file union and the supervisors’ union operating within the same
establishment may join the same federation or national union.
(b) May confidential employees who assist managerial employees, and who act in
a confidential capacity or have access to confidential matters being handled by
persons exercising managerial functions in the field of labor relations form, or
assist, or join labor unions? Explain your answer? (2.5%)
SUGGESTED ANSWER:
No. In Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery,
Inc., G.R. No. 162025, August 3, 2010, the High Court explained, who are those
confidential employees covered by the prohibition to join, form and assist any
labor organization under Article 245 [now 255] of the Labor Code, as follows:
Confidential employees are defined as those who (1) assist or act in a
confidential capacity, (2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations. The two (2) criteria are
cumulative, and both must be met if an employee is to be considered a
confidential employee that is, the confidential relationship must exist between
the employee and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations. The exclusion from bargaining units of
employees who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective sought to
be accomplished by the confidential employee rule. (San Miguel Corp.
Supervisors and Exempt Employees Union v. Laguesma, G.R. No. 110399, August
15, 1997, 277 SCRA 370, 374-375, citing Westinghouse Electric Corp. v. NLRB
(CA6) 398 F2d 669 (1968), Ladish Co., 178 NLRB 90 (1969) and B.F. Goodrich Co.,
115 NLRB 722 [1956])
NOTE: The foregoing answer can be found in page 273 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on the confidential employees covered by the prohibition has
been time and again the subject matter of bar questions, more specifically
during the 2014, 2011, 2009, 2002 and 1999 Bar Examinations.
X.
A.
The labor sector has been loudly agitating for the end of labor-only contracting,
as distinguished from job contracting. Explain these two kinds of labor
contracting, give the effect of a finding that one is a labor-only contractor.
Explain your answers. (4%)
SUGGESTED ANSWER:
The Supreme Court in Polyfoam-RGC International Corporation vs. Concepcion,
G.R. No. 172349, June 13, 2012 citing Sasan, Sr. v. National Labor Relations
Commission 4th Division, G.R. No. 176240, October 17, 2008, 569 SCRA 670
distinguished permissible job contracting or subcontracting from “labor-only”
contracting, to wit:
“Permissible job contracting or subcontracting refers to an arrangement whereby
a principal agrees to put out or farm out to a contractor or subcontractor the
performance or completion of a specific job, work or service within a definite or
predetermined period, regardless of whether such job, work or service is to be
performed or completed within or outside the premises of the principal. A person
is considered engaged in legitimate job contracting or subcontracting if the
following conditions concur:
(a) The contractor or subcontractor carries on a distinct and independent
business and undertakes to perform the job, work or service on its own account
and under its own responsibility according to its own manner and method, and
free from the control and direction of the principal in all matters connected with
the performance of the work except as to the results thereof;
(b) The contractor or subcontractor has substantial capital or investment; and
(c) The agreement between the principal and contractor or subcontractor
assures the contractual employees entitlement to all labor and occupational
safety and health standards, free exercise of the right to self-organization,
security of tenure, and social and welfare benefits.
In contrast, labor-only contracting, a prohibited act, is an arrangement where the
contractor or subcontractor merely recruits, supplies or places workers to
perform a job, work or service for a principal. In labor-only contracting, the
following elements are present:
(a) The contractor or subcontractor does not have substantial capital or
investment to actually perform the job, work or service under its own account
and responsibility; and
(b) The employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the main
business of the principal.” (Sasan, Sr. v. National Labor Relations Commission 4th
Division, supra, at pp. 689-690. [Citations omitted])
In PCI Automation Center, Inc. v. NLRC, G.R. No. 115920, January 29, 1996, the
effect of a finding that one is a labor-only contractor was ruled as follows:
In legitimate job contracting, no employer-employee relationship exists between
the employees of the job contractor and the principal employer. Even then, the
principal employer becomes jointly and severally liable with the job contractor
for the payment of the employees’ wages whenever the contractor fails to pay
the same. In such case, the law creates an employer-employee relationship
between the principal employer and the job contractor’s employees for a limited
purpose, that is, to ensure that the employees are paid their wages. Other than
the payment of wages, the principal employer is not responsible for any claim
made by the employees. (Philippine Bank of Communications vs. NLRC, 146 SCRA
347 [1986])
On the other hand, in labor-only contracting, an employer-employee relationship
is created by law between the principal employer and the employees of the labor-
only contractor. In this case, the labor-only contractor is considered merely an
agent of the principal employer. The principal employer is responsible to the
employees of the labor-only contractor as if such employees had been directly
employed by the principal employer. The principal employer therefore becomes
solidarily liable with the labor-only contractor for all the rightful claims of the
employees. (Philippine Bank of Communications vs. NLRC, 146 SCRA 347 [1986])
Thus, in legitimate job contracting, the principal employer is considered only an
indirect employer, (Article 107, Labor Code, as amended) while in labor-only
contracting, the principal employer is considered the direct employer of the
employees. (last paragraph of Article 106, Labor Code, as amended)
In short, the legitimate job contractor provides services while the labor-only
contractor provides only manpower. The legitimate job contractor undertakes to
perform a specific job for the principal employer while the labor-only contractor
merely provides the personnel to work for the principal employer.
NOTE: The foregoing answer can be found in pages 507508 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on job-contracting and labor-only contracting has been time
and again the subject matter of bar questions, more specifically during the 2014,
2013, 2012, 2011, 2009, 2004, 2002, 2001, 2000, 1997 and 1994 Bar Examinations.
B.
What are the grounds for validly terminating the services of an employee based
on a just cause? (5%)
SUGGESTED ANSWER:
An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing. (Art. 297 [282], Labor Code)
NOTE: The foregoing answer can be found in pages 899-890 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on the just cause for termination has been time and again the
subject matter of bar questions, more specifically during the 2015, 2014, 2013,
2012, 2011, 2009, 2008, 2006, 2003, 2001, 1995, 1996, 1995, 1999 Bar
Examinations.
C.
Give the procedure to be observed for validly terminating the services of an
employee based on a just cause? (4%)
SUGGESTED ANSWER:
As defined in Article 297 of the Labor Code, as amended, the requirement of two
written notices served on the employee shall observe the following:
(a) The first written notice should contain:
1. The specific causes or grounds for termination as provided for under Article
297 of the Labor Code, as amended, and company policies, if any;
2. Detailed narration of the facts and circumstances that will serve as basis for
the charge against the employee. A general description of the charge will not
suffice; and
3. A directive that the employee is given opportunity to submit a written
explanation within a reasonable period.
“Reasonable period” should be construed as a period of at least five (5) calendar
days from receipt of the notice to give the employee an opportunity to study the
accusation, consult or be represented by a lawyer or union officer, gather data
and evidence, and decide on the defenses against the complaint. (Unilever v.
Rivera, G.R. No. 201701, June 3, 2013; Section 12, DOLE Department Order 18-A)
(b) After serving the first notice, the employer should afford the employee ample
opportunity to be heard and to defend himself/herself with the assistance of
his/her representative if he/she so desires, as provided in Article 299 (b) of the
Labor Code, as amended.
“Ample opportunity to be heard” means any meaningful opportunity (verbal or
written) given to the employee to answer the charges against him/her and submit
evidence in support of his/her defense, whether in a hearing, conference or some
other fair, just and reasonable way. A formal hearing or conference becomes
mandatory only when requested by the employee in writing or substantial
evidentiary disputes exist or a company rule or practice requires it, or when
similar circumstances justify it. (Perez v. PT&T, G.R. No. 152048, April 7, 2009,
Section 12, DOLE Department Order 18-A)
(c) After determining that termination of employment is justified, the employer
shall serve the employee a written notice of termination indicating that: (1) all
circumstances involving the charge against the employee have been considered;
and (2) the grounds have been established to justify the severance of their
employment.
The foregoing notices shall be served personally to the employee or to the
employee’s last known address. (Section 5, 5.1, Rule I-A, D.O. No. 147-15, Series
of 2015)
NOTE: The foregoing answer can be found in pages 899-890 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on the procedural due process has been time and again the
subject matter of bar questions, more specifically during the 2012, 2009, 2006,
1999 and 1998 Bar Examinations.
XI
A.
The modes of determining the exclusive bargaining agent of the employees in a
business are: (a) voluntary recognition; (b) certification election; and (c) consent
election. Explain how they differ from one another. (4%)
SUGGESTED ANSWER:
Voluntary Recognition refers to the process by which a legitimate labor union is
recognized by the employer as the exclusive bargaining representative or agent
in a bargaining unit, reported with the Regional Office in accordance with Rule
VII, Section 2 of these Rules. Certification Election” or Consent Election refers to
the process of determining through secret ballot the sole and exclusive
representative of the employees in an appropriate bargaining unit for purposes of
collective bargaining or negotiation. A certification election is ordered by the
Department, while a consent election is voluntarily agreed upon by the parties,
with or without the intervention by the Department. (Rule I, Section 1, Book V,
Rules to Implement the Labor Code)
NOTE: The foregoing answer can be found in pages 21 and 22 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on the representation issue has been time and again the
subject matter of bar questions, more specifically during the 2006, 2004, and
2000 Bar Examinations.
B.
Marcel was the Vice President for Finance and Administration and a member of
the Board of Directors of Mercedes Corporation. He brought a complaint for
illegal suspension and illegal dismissal against Mercedes Corporation, which
moved to dismiss the complaint on the ground that the complaint pertained to
the jurisdiction of the RTC due to the controversy being intracorporate based on
his positions in the corporation. Marcel countered that he had only been removed
as Vice President for Finance and Administration, not as a member of the Board
of Directors. He also argued that his position was not listed as among the
corporate offices in Mercedes Corporation’s by-law. Is the argument of Marcel
correct? Explain your answer. (2.5%)
SUGGESTED ANSWER:
Marcel’s contention is correct. It is settled in Matling Industrial and Commercial
Corporation v. Coros, G.R. No. 157802, 13 October 2010, cited in Marc II
Marketing Inc. v. Joson, G.R. No. 171993, December 12, 2011, where it held, thus:
Conformably with Section 25, a position must be expressly mentioned in the [b]y-
[l]aws in order to be considered as a corporate office. Thus, the creation of an
office pursuant to or under a [b]y-[l]aw enabling provision is not enough to make
a position a corporate office. [In] Guerrea v. Lezama [citation omitted] the first
ruling on the matter, held that the only officers of a corporation were those given
that character either by the Corporation Code or by the [b]y-[l]aws; the rest of
the corporate officers could be considered only as employees or subordinate
officials.
xxx
It is relevant to state in this connection that the SEC, the primary agency
administering the Corporation Code, adopted a similar interpretation of Section
25 of the Corporation Code in its Opinion dated November 25, 1993 [citation
omitted], to wit:
Thus, pursuant to the above provision (Section 25 of the Corporation Code),
whoever are the corporate officers enumerated in the by-laws are the exclusive
Officers of the corporation and the Board has no power to create other Offices
without amending first the corporate [b]y-laws. However, the Board may create
appointive positions other than the positions of corporate Officers, but the
persons occupying such positions are not considered as corporate officers
within the meaning of Section 25 of the Corporation Code and are not
empowered to exercise the functions of the corporate Officers, except those
functions lawfully delegated to them. Their functions and duties are to be
determined by the Board of Directors/Trustees. (Matling Industrial and
Commercial Corporation v. Coros, supra at 26-27) [Emphasis supplied.]
With the given circumstances and in conformity with Matling Industrial and
Commercial Corporation v. Coros, Marcel was not a corporate officer of
Mercedes Corporation because his position as Vice President for Finance and
Administration was not specifically mentioned in the roster of corporate officers
in its corporate by-laws.
NOTE: The foregoing answer can be found in page 46 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on the on whether an position is a corporate officer has been
time and again the subject matter of bar questions, more specifically during the
2015, 2014, 2011 and 1996 Bar Examinations.
C.
State the jurisdiction of the Voluntary Arbitrator, or Panel of Voluntary Arbitrators
in labor disputes? (4%)
SUGGESTED ANSWER:
The voluntary arbitrator or panel of voluntary arbitrators shall have exclusive and
original jurisdiction to hear and decide all unresolved grievances arising from:
1. The implementation or interpretation of the collective bargaining agreements;
(Article 274 [261], Labor Code, Section 4, Rule XIX, Book V, Omnibus Rules
Implementing the Labor Code)
2. The interpretation or enforcement of company personnel policies which
remain unresolved after exhaustion of the grievance procedure; (Article 274
[261], Labor Code, Section 4, Rule XIX, Book V, Omnibus Rules Implementing the
Labor Code)
3. Wage distortion issues arising from the application of any wage orders in
organized establishments; (par. 4, Article 124, Labor Code, Section 4, Rule XIX,
Book V, Omnibus Rules Implementing the Labor Code)
4. The interpretation and implementation of the productivity incentive programs
under RA 6971.
5. Upon agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks. (Article 275.
[262], Labor Code, Section 4, Rule XIX, Book V, Omnibus Rules Implementing the
Labor Code)
6. Violations of a Collective Bargaining Agreement, except those which are gross
in character, shall no longer be treated as unfair labor practice and shall be
resolved as grievances under the Collective Bargaining Agreement; (Article 274.
[261], Labor Code)
NOTE: The foregoing answer can be found in page 442 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on jurisdiction of the voluntary arbitrators or panel of voluntary
arbitrators has been time and again the subject matter of bar questions, more
specifically during the 2008, 2001, 1997 and 1995 Bar Examinations.
XII
A.
Juanito initiated a case for illegal dismissal against Mandarin Company. The
Labor Arbiter decided in his favor, and ordered his immediate reinstatement with
full backwages and without loss of seniority and other benefits. Mandarin
Company did not like to allow him back in its premises to prevent him from
influencing his co-workers to move against the interest of the company; hence, it
directed his payroll reinstatement and paid his full backwages and other benefits
even as it appealed to the NLRC.
A few months later, the NLRC reversed the ruling of the Labor Arbiter and
declared that Juanito’s dismissal was valid. The reversal ultimately became final.
May Mandarin Company recover the backwages and other benefits paid to
Juanito pursuant to the decision of the Labor Arbiter in view of the reversal by
the NLRC? Rule, with reasons. (2.5%)
SUGGESTED ANSWER:
Mandarin Company cannot recover the backwages and other benefits paid to
Juanito pursuant to the decision of the Labor Arbiter despite the reversal by the
NLRC. The refund doctrine has already been reversed in Garcia v. Philippine
Airlines, Inc., G. R. No. 164856, July 20, 2009, where the Supreme Court then
stressed that as opposed to the abovementioned Genuino v. National Labor
Relations Commission, G.R. Nos. 142732-33 & 142753-54, December 4, 2007, 539
SCRA 342 the social justice principles of labor law outweigh or render
inapplicable the civil law doctrine of unjust enrichment.
NOTE: The foregoing answer can be found in pages 636-638 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on refund doctrine was asked for the first time for this year’s
bar examinations.
B.
Gene is a married regular employee of Matibay Corporation. The employee and
Matibay Corporation had an existing CBA that provided for funeral or
bereavement aid of P15,000.00 in case of the death of a legal dependent of a
regular employee. His widowed mother, who had been living with him and his
family for many years, died; hence, he claimed the funeral aid. Matibay
Corporation denied the claim on the basis that she had not been his legal
dependents as the term legal dependent was defined by the Social Security Law.
(a) Who may be the legal dependents of Gene under the Social Security Law?
(2.5%)
SUGGESTED ANSWER:
Section 8 (e) of the Social Security Law provides that the dependents shall be
the following:
(1) The legal spouse entitled by law to receive support from the member;
(2) The legitimate, legitimated or legally adopted, and illegitimate child who is
unmarried, not gainfully employed, and has not reached twenty-one (21) years of
age, or if over twenty-one (21) years of age, he is congenitally or while still a
minor has been permanently incapacitated and incapable of self-support,
physically or mentally; and
(3) The parent who is receiving regular support from the member.
NOTE: The foregoing answer can be found in page 862 of the book entitled
Principles and Cases Labor Standards and Social Legislation, First Edition 2015,
by Atty. Voltaire T. Duano. The topic on dependents has been time and again the
subject matter of bar questions, more specifically during the 2014 and 2002 Bar
Examinations.
(b) Is Gene entitled to the funeral aid for the death of his widowed mother?
Explain your answer. (2%)
SUGGESTED ANSWER:
Gene is entitled to the funeral aid for the death of his widowed mother under
CBA. This is because the said CBA clearly provided for funeral or bereavement
aid of P15,000.00 in case of the death of a legal dependent of a regular
employee. But in so far as the SSS law is concerned, the only way that Gene can
recover is that if he will qualify as the primary beneficiary of his widowed mother
provided he has the restrictions on the definition of dependent children.
NOTE: The foregoing answer can be found in pages 862-864 of the book entitled
Principles and Cases Labor Standards and Social Legislation, First Edition 2015,
by Atty. Voltaire T. Duano in so far as the definition of beneficiary in relation to
dependents are concerned.
C.
Rosa was granted vacation leave by her employer to spend three weeks in Africa
with her family. Prior to her departure, the General Manager of the company
requested her to visit the plant of the company in Zimbabwe in order to derive
best manufacturing practices useful to the company. She accepted the request
because the errand would be important to the company and Zimbabwe was
anyway in her itinerary. It appears that she contracted a serious disease during
the trip. Upon her return, she filed a claim for compensation, insisting that she
had contracted the disease while serving the interest of her employer.
Under the Labor Code, the sickness or death of an employee, to be compensable,
must have resulted from an illness either definitely, accepted as an occupational
disease by the Employee’s Compensation Commission, or caused by employment
subject to proof that the risk of contracting the same is increased by working
conditions.
Is the serious disease Rosa contracted during her trip to Africa compensable?
Explain your answer. (2.5%)
SUGGESTED ANSWER:
In Government Service Insurance System vs. Besitan, G.R. No. 178901, November
23, 2011, explained the concept of increased theory as follows:
Corollarily, for the sickness or resulting disability or death to be compensable,
the claimant must prove either (1) that the employee’s sickness was the result of
an occupational disease listed under Annex “A” of the Amended Rules on
Employees’ Compensation, or (2) that the risk of contracting the disease was
increased by his working conditions.
Certainty is not required only probability
Under the increased risk theory, there must be a reasonable proof that the
employee’s working condition increased his risk of contracting the disease, or
that there is a connection between his work and the cause of the disease.
(Castor-Garupa v. Employees’ Compensation Commission, G.R. No. 158268, April
12, 2006, 487 SCRA 171, 180) Only a reasonable proof of work-connection, not
direct causal relation, however, is required to establish compensability of a non-
occupational disease. (Government Service Insurance System v. Cordero, G.R.
Nos. 171378 & 171388, March 17, 2009, 581 SCRA 633, 640) Probability, and not
certainty, is the yardstick in compensation proceedings; thus, any doubt should
be interpreted in favor of the employees for whom social legislations, like PD No.
626, were enacted. (Government Service Insurance System v. Corrales, G.R. No.
166261, June 27, 2008, 556 SCRA 230, 243-244)
Applying the above ruling, Rosa must present a reasonable proof that her
working condition increased his risk of contracting the disease, or that there is a
connection between his work and the cause of the disease otherwise the same
is not compensable.
NOTE: The foregoing answer can be found in page 766 of the book entitled
Principles and Cases Labor Standards and Social Legislation, First Edition 2015,
by Atty. Voltaire T. Duano. The topic on compensation proceedings has been time
and again the subject matter of bar questions, more specifically during the 2012,
2005 and 1996 Bar Examinations.
.
XIII
A.
Given that the liability for an illegal strike is individual, not collective, state when
the participating union officers and members may be terminated from
employment because of the illegal strike. Explain your answer. (4%)
SUGGESTED ANSWER:
The following are the effects of participation in an illegal strike and commission
of illegal acts during strike:
1. Any union officer who knowingly participates in an illegal strike; and
2. Any worker or union officer who knowingly participates in the commission of
illegal acts during a strike may be declared to have lost his employment status;
(Third paragraph, Article 279 (a) [264 (a)], Labor Code)
NOTE: The foregoing answer can be found in page 520 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on the effects of participation in illegal strike has been time
and again the subject matter of bar questions, more specifically during the 2015,
2014, 2012, 2010, 2008, 2007, 2006, 1997, 1995 and 1994 Bar Examinations.
B.
A sympathetic strike is stoppage of work to make common cause with other
strikers in another establishment or business. Is the sympathetic strike valid?
Explain your answer. (1%)
SUGGESTED ANSWER:
The illegal stoppage of work by way of sympathetic strike has been settled in the
case of Biflex Phils. Labor Union (NAFLU) v. Filflex Industrial and Manufacturing
Cororation, G.R. No. 155679, 19 December 2006, where it was ruled that
stoppage of work due to welga ng bayan is in the nature of a general strike, an
extended sympathy strike. It affects numerous employers including those who do
not have a dispute with their employees regarding their terms and conditions of
employment.Employees who have no labor dispute with their employer but who,
on a day they are scheduled to work, refuse to work and instead join a welga ng
bayan commit an illegal work stoppage. Even if petitioners joining the welga ng
bayan were considered merely as an exercise of their freedom of expression,
freedom of assembly or freedom to petition the government for redress of
grievances, the exercise of such rights is not absolute. For the protection of
other significant state interests such as the right of enterprises to reasonable
returns on investments, and to expansion and growth enshrined in the 1987
Constitution must also be considered, otherwise, oppression or self-destruction
of capital in order to promote the interests of labor would be sanctioned. And it
would give imprimatur to workers joining demonstrations/rallies even before
affording the employer an opportunity to make the necessary arrangements to
counteract the implications of the work stoppage on the business, and ignore the
novel principle of shared responsibility between workers and employers aimed at
fostering industrial peace. There being no showing that petitioners notified
respondents of their intention, or that they were allowed by respondents, to join
the welga ng bayan on October 24, 1990, their work stoppage is beyond legal
protection.
NOTE: The foregoing answer can be found in page 506 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on sympathetic strike has been the subject matter of bar
questions during the 2004 Bar Examinations.
C.
Due to business recession, Ballistic Company retrenched a part of its workforce.
Opposing the retrenchment, some of the affected employees staged a strike.
Eventually, the retrenchment was found to be justified, and the strike was
declared illegal; hence, the leaders of the strike, including the retrenched
employees, were declared to have lost their employment status.
Are the striking retrenched employees still entitled to separation pay under Sec.
298 (283) of the Labor Code despite the illegality of their strike? Explain your
answer. (2%)
SUGGESTED ANSWER:
The strikers including the union officers should be paid their separation pay by
virtue of retrenchment notwithstanding the illegal strike was declared illegal.
The issue on entitlement to separation pay due to authorized cause and the
ground for termination due to knowingly participating in illegal strike are distinct
and different.
XIV
Pursuant to his power under Sec. 278(g) (263(g)) of the Labor Code, the Secretary
of Labor assumed jurisdiction over the 3-day old strike in Armor Steel Plates,
Inc., one of the country’s bigger manufacturers of steel plates, and ordered all
the striking employees to return to work. The striking employees ignored the
order to return to work.
(a) What conditions may justify the Secretary of Labor to assume jurisdiction?
(2.5%)
SUGGESTED ANSWER:
Pursuant to Article 263 (g) [now 278 (g)], when a labor dispute causes or is likely
to cause a strike or lockout in an industry indispensable to the national interest,
the Secretary of Labor and Employment may assume jurisdiction over the dispute
and decide it or certify the same to the National Labor Relations Commission
(NLRC) for compulsory arbitration. (Section 1, Operational Guidelines of
Department Order No. 40-G-03, Series of 2010, dated February 24, 2011)
For a valid exercise of the assumption of jurisdiction authority, any of the
following conditions must be present:
a. Both parties have requested the Secretary of Labor and Employment to
assume jurisdiction over the labor dispute; or
b. After a conference called by the Office of the Secretary of Labor and
Employment on the propriety of the issuance of the Assumption or Certification
Order, motu proprio or upon a request or petition by either party to the labor
dispute. In the said conference. the parties shall also be encouraged to amicably
settle the dispute. (Section 2, Operational Guidelines of Department Order No.
40-G-03, Series of 2010, dated February 24, 2011)
NOTE: The foregoing answer can be found in pages 468-487 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on the assumption of jurisdiction has been time and again the
subject matter of bar questions, more specifically during the 2012, 2004 and
1996 Bar Examinations.
(b) What are the consequences of the assumption of jurisdiction by the Secretary
of Labor, and of the disobedience to the return to work? Explain your answer.
(2.5%)
The consequences of assumption of jurisdiction are as follows:
a. If a strike or lockout has not taken place, the parties are enjoined to conduct
any untoward action that may lead to a strike or lockout.
b. if a strike or lockout has already taken place, all striking and locked out
workers shall, within twenty-four (24) hours from receipt of an Assumption or
Certification Order, immediately return to work and the employer shall
immediately resume operations and readmit all workers under the same terms
and conditions prevailing before the strike.
c. At any point in time, the parties are not prevented from submitting the dispute
to Voluntary Arbitration with the Secretary of Labor and Employment or his/her
duly authorized representative as Voluntary Arbitrator or Panel of Voluntary
Arbitrators. (Section 3, Operational Guidelines of Department Order No. 40-G-03,
Series of 2010, dated February 24, 2011)
While the consequence of disobedience to the return to work has been ruled in
the case of Manila Hotel Employees Association v. Manila Hotel Corporation, G.R.
No. 154591, March 5, 2007. In holding that defiance of the assumption order or a
return-to work order by a striking employee, whether a union officer or a member,
is an illegal act and, therefore, a valid ground for loss of employment status. The
High Court explained:
The law explicitly prohibits such acts.
ART. 263. STRIKES, PICKETING, AND LOCKOUTS
x x x x (omitted)
ART. 264. PROHIBITED ACTIVITIES
(a) x x x x
(omitted)

More to the point, the Court has consistently ruled in a long line of cases
spanning several decades that once the SOLE assumes jurisdiction over a labor
dispute, such jurisdiction should not be interfered with by the application of the
coercive processes of a strike or lockout. Defiance of the assumption order or a
return-to work order by a striking employee, whether a union officer or a member,
is an illegal act and, therefore, a valid ground for loss of employment status.
(Grand Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel,
Restaurant and Allied Industries (GLOWHRAIN), G.R. No. 153664, 18 July 2003,
406 SCRA 688, 710; Telefunken Semiconductors Employees Union-FFW v. Court of
Appeals, G.R. Nos. 143013-14, 18 December 2000, 348 SCRA 565, 582; Federation
of Free Workers v. Inciong, G.R. No. 49983, 20 April 1982, 208 SCRA 157, 165)
NOTE: The foregoing answer can be found in page 501 of the book entitled
Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T.
Duano. The topic on the assumption of jurisdiction has been time and again the
subject matter of bar questions, more specifically during the 2012, 2004 and
1996 Bar Examinations.
 1. WAGE DISTORTION ORDER
 Under Art.124 of the Labor Code, the law recognizes the validity of negotiated wage increase to correct wage
distortions.
The process for correction of Wage Distortion of organized establishments and unorganized establishments?

Organized Establishment Unorganized Establishments

(with union)
The Employer and the union shall negotiate to
correct distortion.
Any dispute shall be resolved through a
grievance procedure under the CBA.
If it remains unresolved, it shall be dealt with
through voluntary arbitration.
The dispute will be resolved within 10 days from
the time the dispute was referred to voluntary
arbitration.
(without union)
The Employer and the workers shall
endeavor to correct the distortion.
Any dispute shall be settled through the
NCMB.
If it remains unresolved within 10 days it
shall be referred to the NLRC.
The National Labor Relation Commission
(NLRC) shall conduct continuous hearings
and decide the dispute within 20 days
from the time the same was referred.

2. LIABILITY OF PRINCIPAL IN JC & LOC?

Q: When is there “job contracting”?

 Liability of the Principal to Job Contractor will only arise if and when Contractor actually pays employees the
adjudged liabilities. Payment of such will entitled the solidary debtors to seek reimbursement for the share which
corresponds to each debtors.

 Question whether the contractor may claim reimbursement from the principal

A: Specifically, there is “job contracting” where:

 The contractor carries on an independent business and undertakes the contract work on his own account under his
own responsibility according to his own manner and method, free from the control and direction of his employer or
principal in all matters connected with the performance of the work except as to the results thereof; and
 The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and
other materials which are necessary in the conduct of his business.

Q: When is there “labor‐only” contracting?

A: A person is deemed to be engaged in “labor‐only” contracting where:

 The person supplying workers to an employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others; and
 The workers recruited and placed by such person are performing activities which are directly related to the principal
business of such employer.

Labor only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies
or places workers to perform a job, work or service, and any of the following elements are present
a) lack of substantial capital or investment and performance of activities directly related or usually necessary or
desirable to the principal’s main business; OR
b) the contractor does not exercise control over the performance of the employees.

3. POEA,DOLE, OWWA POEA jurisdiction

a. In one case decided by the SC (people vs. diaz), It was ruled that the power to suspend or cancel any license or
authority to recruit employees for overseas employment is concurrently vested with the POEA and the Secretary of
Labor.
b. No, Art.26 provides that Travel agencies and sales agencies of Airline companies are prohibited from engaging in the
business of recruitment and placement of workers for overseas workers whether for profit or not.
c. Repatriation of workers are responsibility of Foreign Employer and the Agency, If not done by the above, then DFA
for Illegal Workers and OWWA/POEA for documented/legal workers
d. NLRC has jurisdiction over money claims against employer

4. 8‐5: 160 / 8 x 260% x 8hrs = 416.00

5‐10: 52 x 130% x 5hrs = 338.00
10‐11: 52 x 130% x 110% x 1hr = 74.36
TOTAL 828.36
5. ATTY FEES:
 Art. 111 (a) In cases of unlawful withholding of wages the culpable party may be assesses Attorney’s fees equivalent
to 10% of the amount of wages recovered. (Such atty.fee cannot exceed 10%. But outside of that, as between the
lawyer and the client the atty.fee may exceed 10% on the bbasis of quantum meruit, meaning “as much as he
deserves)
 It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the
recovery of the wages, atty.fees, which exceed 10% of the amount of the wages recovered

6. Art. 113 WAGE DEDUCTION: No employer, in his own behalf or in behalf of any person, shall make any deduction from
wages of his employees, except;
DEDUCTIONS AUHORIZED BY LAW:
 Deductions for value of meals and other facilities
 Insurance of employee with his consent
 Union dues
 Indebtedness to the employer, due and demandable
 In court awards, wages may be subject to execution or attachment. But only for debts incurred for food, shelter,
clothing , and medical attendance
 Withholding taxes
 SD of a member for legally established cooperative
 SSS, Medicare, & Pag‐IBIG contributions

7. Art. 13 provides that RECRUITMENT & PLACEMENT refers to any act of

 Canvassing, Enlisting, Transporting, Contracting, Hiring, Utilizing & Procuring works, and includes
 Contract services, Referrals, Advertising for employment, locally or abroad, whether for profit or not
Any such activity done by any person without required license from Bureau of Local Employment or the POEA is
punishable as Illegal Recruitment

8. SOLE authorized RD to conduct investigation

 YES, compliance order is proper. Art 128 (b) SOLE or his duly authorized representative shall have the power to
issue compliance orders to give effect to the labor standards provisions of this code and other labor legislations
 Appealable to SLE, In case compliance order is issued by Regional Office)
 The SOLE

9.