Labor Quamto 2016

University of Santo Tomas Faculty of Civil Law

Labor Law Questions Asked More Than Once (QuAMTO 2016) *QUAMTO is a compilation of past bar questions with answers as suggested by UPLC and other distinct luminaries in the academe, and updated by the UST Academics Committee to fit for the 2016 Bar Exams. *Bar questions are arranged per topic and were selected based on their occurrence on past bar examinations from 1990 to 2015.

ACADEMICS COMMITTEE KATRINA GRACE C. ONGOCO

MANAGING EDITOR

REUBEN BERNARD M. SORIANO ERINN MARIEL C. PEREZ MA. NINNA ROEM A. BONSOL

EXECUTIVE COMMITTEE

REUBEN BERNARD M. SORIANO JUAN PAOLO MAURINO R. OLLERO JOHN REE E. DOCTOR

LAYOUT AND DESIGN

QUAMTO COMMITTEE MEMBERS CALOS LEANDRO L. ARRIERO ELISE MARIE B. BERTOS GABRIELA LOUISE O.J. CANDELARIA WARREN RODANTE D. GUZMAN MARY GRACE D. LUNA LEAN JEFF M. MAGSOMBOL JUAN PAOLO MAURINO R. OLLERO ANN CAIRA C. SURIO MARY JANE D. VILARAY

ATTY. AL CONRAD B. ESPALDON ADVISER

FOR LABOR LAW (1991-2015)

LABOR LAW FUNDAMENTAL PRINCIPLES AND POLICIES Q: How do the provisions of the law on labor relations interrelate, if at all, with the provisions pertaining to labor standards? (2003)

Arbiter holding that Article 4 applies only when the doubt involves "implementation and interpretation" of the Labor Code provisions. The NLRC explained that the doubt may not necessarily be resolved in favor of labor since this case involves the application of the Rules on Evidence, not the Labor Code. Is the NLRC correct? Reasons. (2009)

A: There are two classifications of labor legislations. They are labor standards which provides for the minimum standards of terms and conditions of work; and labor relations which focuses on the regulation and stabilization of the relationship between employers and employees. Instead of being mutually exclusive, these two classifications work together in forming the entire legal framework of Philippine labor laws. An example wherein these two concepts are interrelated is during collective bargaining. In instances of collective bargaining, labor standards prescribe the minimum terms and conditions of work; and as such, the employer cannot negotiate for terms and conditions lower than that of the prescribed minimum. On the other hand, labor relations govern the employer-employee relationship by providing for Collective Bargaining Negotiations, which is an avenue for the parties to settle and compromise on their differences.

A: The NLRC is not correct. It is well settled doctrine that if doubts exist between the evidence presented by the employer and the employee, the scale of justice must be tilted in favor of the latter. It is a time honored rule that in controversies between laborer and master, doubts necessarily arising from the evidence or in the implementation of the agreement and writing should be resolved in favor of labor.

CONSTITUTIONAL PROVISIONS

SUPERVISORY EMPLOYEES are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment.

Article XIII, Secs. 1, 2, 3, 13, 14 Q: What are the rights of an employer and an employee? (1996) A: An employer is a person who employs the services of another and pays for their wages and salaries. As such, Art. XIII, Sec. 3 of the Constitution provides and guarantees them with the following rights: 1. 2. 3.

Reasonable return of investment Expansion Growth

On the other hand, an employee is a person who works under the employ of another in exchange of a valuable consideration in the form of wages, salaries, benefits, etc. Art. XIII, Sec. 3 of the Constitution similarly provides and similarly guarantees them the following rights: 1. 2. 3. 4. 5. 6. 7. 8.

Security of tenure Receive a living wage Humane conditions of work Just share in the fruits of production Right to self-organization Conduct collective bargaining or negotiation with management Engage in peaceful concerted activities including strike Participate in policy and decision making process LABOR CODE

Article 4 Q: Clarito, an employee of Juan, was dismissed for allegedly   stealing   Juan’s   wristwatch.   In   the   illegal   dismissal case instituted by Clarito, the Labor Arbiter, citing Article 4 of the Labor Code, ruled in favor   of   Clarito   upon   finding   Juan’s   testimony   doubtful. On appeal, the NLRC reversed the Labor UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Article 212 Q: Who are the managerial, supervisory and rank and-file employees? (1996, 2003) A: "MANAGERIAL EMPLOYEE" is one who is vested with powers or prerogatives to lay down and execute management policies or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees.

All employees who are neither managerial nor supervisory employees are considered RANK AND FILE EMPLOYEES. (Art. 212(m), Labor Code). RECRUITMENT AND PLACEMENT RECRUITMENT OF LOCAL AND MIGRANT WORKERS Q: Phil-Norksgard Company, Inc., a domestic corporation engaged in the optics business, imported from Sweden highly sophisticated and sensitive instruments for its laboratory. To install the instruments and operate them, the company intends to employ Borja Anders, a Swedish technician sojourning as a tourist in the Philippines. As lawyer of the company, what measures will you take to ensure the legitimate employment of Borja Anders and at the same time protect Philippine labor. Discuss fully. (1995) A: As the lawyer of the said company, in order to ensure the legitimacy of hiring Borja Anders, I will consider the requisites in hiring non-resident aliens which are provided under Art. 40. Firstly, I would ensure that a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired is conducted. Subsequently, I would ascertain that an employment permit issued by the Department of Labor is obtained by Borja Anders. Illegal Recruitment (Sec. 5, R.A. No. 10022) Q: A was approached for possible overseas deployment to Dubai by X, an interviewer of job applicants for Alpha Personnel Services, Inc., an

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QUAMTO

QuAMTO for LABOR LAW (1991-2015)

a.

May X be held criminally liable for illegal recruitment? Explain.

A: No. X performed his work with the knowledge that he works for a licensed recruitment agency. He is in no position to know that the officers of said recruitment agency failed to register him as its personnel (People v. Chowdur, G.R. No. 129577-80, February 15, 2000). The fault not being attributable to him, he may be considered to have apparent authority to represent Alpha in recruitment for overseas employment. b. May the officers having control, management or direction of Alpha Personnel Services, Inc. be held criminally liable for illegal recruitment? Explain. A: Yes. Alpha, being a licensed recruitment agency, still has obligations to A for processing his papers for overseas employment. Under Section 6(m) of R.A. 8042, failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does   not   actually   take   place  without   the  worker’s   fault,   amounts to illegal recruitment. License v. Authority Q: A Recruitment and Placement Agency declared voluntary bankruptcy. Among its assets is its license to engage in business. Is the license of the bankrupt agency an asset which can be sold in public auction by the liquidator? (1998) A: No. Art. 29 provides for the rules on the nontransferability of license or authority. The said provision states that no license or authority shall be used directly or indirectly by any person other than the one in whose favour it was issued or at any place other than that stated in the license or authority, nor may such license or authority be transferred, conveyed or assigned to any other person or entity. Therefore, if the law prohibits transfer, conveyance or assignment, then it can be inferred that it all the more prohibits the sale of a license or authority as it is a permanent transfer of the rights and privileges granted to a specific individual under the license or authority. Illegal Recruitment in Large Scale Q: Maryrose Ganda's application for the renewal of her license to recruit workers for overseas

employment was still pending with the Philippine Overseas Employment Administration (POEA). Nevertheless, she recruited Alma and her three sisters, Ana, Joan, and Mavic, for employment as housemates in Saudi Arabia. Maryrose represented to the sisters that she had a license to recruit workers for overseas employment. Maryrose also demanded and received P30,000.00 from each of them for her services. However, Maryrose's application for the renewal of her license was denied, and consequently failed to employ the four sisters in Saudi Arabia. The sisters charged Maryrose with large scale illegal recruitment. Testifying in her defense, Maryrose declared that she acted in good faith because she believed that her application for the renewal of her license would be approved. Maryrose adduced in evidence the Affidavits of Desistance which the four private complainants had executed after the prosecution rested its case. In the said affidavits, they acknowledge receipt of the refund by Maryrose of the total amount of P120,000.00 and indicated that they were no longer interested to pursue the case against Maryrose. Resolve the case with reasons. (2005) A: Yes, the charges against Maryrose will prosper. First, her act of recruiting the sisters while her license was still pending renewal  was  in  violation  of  the  Migrant  Workers’   Act of 1995. Under this statute, illegal recruitment is committed by a non-license or non-holder of authority who offers or promises employment abroad in consideration of a fee. In the case at bar, Maryrose could be considered as a non-licensee or non-holder of authority for her license to recruit was still pending renewal. Thus, for all intents and purposes, during the time that she recruited the sisters her license is to be considered expired and non-existent for it is still subject to the approval or denial of the proper government agency. The subsequent denial of her application to renew is immaterial for what is important is the status of the license at the time the recruitment happened. Nonetheless, the subsequent denial serves to bolster the sisters’  claims  that  Maryrose  was  an  illegal  recruiter. Secondly, the sisters are correct in charging Maryrose with large scale illegal recruitment. Art. 38 (b) provides that illegal recruitment is considered committed in large scale when it is committed against three or more persons either individually or collectively. In the case at bar, the recruitment of Ana, Joan and Mavic fall within the second circumstance for they were recruited as a group. Lastly, the claims of Maryrose that she acted in good faith does  not  hold  water  for  the  Migrant  Workers’  Act  of  1995   is a special penal law which is in the nature of a malum prohibitum. Under this nature, good faith is not a defense for what is penalized is the commission of the criminal act and not the intent of the offender. (People v. Saulo, G.R. No. 125903, November 15, 2000). Illegal Recruitment as Economic Sabotage Q: When is illegal recruitment considered a crime of economic sabotage? Explain briefly. (2002, 2015) A: Under Art. 38 (b), Illegal recruitment is considered as a crime of economic sabotage when it is committed by a syndicate composed of three or more perpetrators or when it is committed in large scale against three or more persons individually or as a group.

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

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overseas recruitment agency. X required A to submit certain documents (passport, NBI clearance, medical certificate) and to pay P25,000 as processing fee. Upon payment of the said amount to the agency cashier, A was advised to wait for his visa. After five months, A visited the office of Alpha Personnel Services, Inc. during which X told him that he could no longer be deployed for employment abroad. A was informed by the Philippine Overseas Employment Administration (POEA) that while Alpha Personnel Services, Inc. was a licensed agency, X was not registered as its employee, contrary to POEA Rules and Regulations. Under POEA Rules and Regulations, the obligation to register personnel with the POEA belongs to the officers of a recruitment agency. (2010)

FOR LABOR LAW (1991-2015)

Q: What qualifying circumstances will convert "illegal recruitment" to "economic sabotage," thus subjecting its perpetrator or perpetrators to a penalty of life imprisonment and a fine of at least P500,000.00? Please explain your answer briefly. (2005) A: An illegal recruitment is considered to have evolved into economic sabotage when it is committed by a syndicate or committed in large scale. Illegal recruitment is deemed to have been committed by a syndicate when the recruitment is carried out by a group of three or more persons conspiring and/or confederating with one another in carrying out any act under Art. 38. On the other hand, it is deemed committed in large scale if it is committed against three or more persons individually or as a group. (Alcantara, 2009). Liabilities Local Recruitment Agency Q: Is a corporation, seventy percent (70%) of the authorized and voting capital of which is owned and controlled by Filipino citizens, allowed to engage in the recruitment and placement of workers, locally or overseas? Explain briefly. (2002, 2015) A: No. The minimum requirement of authorized and voting capital stock in a juridical entity to be able to engage in the recruitment of workers locally and overseas is 75% as provided under Art. 27. REGULATION AND ENFORCEMENT Suspension or Cancellation of License or Authority (Art. 35, Labor Code) Q: Concerned Filipino contract workers in the Middle East reported to the Department of Foreign Affairs (DFA) that XYZ, a private recruitment and placement agency, is covertly transporting extremists to terrorist training camps abroad. Intelligence agencies of the government allegedly confirmed the report.

Seamen Board, for violations of the provisions of the Labor Code and other Presidential Decrees, the Revised Penal Code, the Anti-Dummy Law, General Orders and Letters of Instructions. Currently, we have the Human Security Act of 2007 which penalizes individuals who engage in the acts of terrorism either as principals, accomplices or accessories. In this case the Act of XYZ clearly falls within the said law. Therefore, in the interest of safeguarding the public from acts of terrorism, it is but justified that DOLE had cancelled its license. Prohibited Activities Q: Wonder Travel and Tours Agency (WTTA) is a well-known travel agency and an authorized sales agent of the Philippine Air Lines. Since majority of its passengers are overseas workers, WTTA applied for a license for recruitment and placement activities. It stated in its application that its purpose is not for profit but to help Filipinos find employment abroad. Should the application be approved? (2006) A: No. The application should be disapproved. The law clearly states that travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not. (Article 26, Labor Code). In the present case, it is clear that WTTA is the authorized sales agency of PAL; and thus falling within the prohibition of Art. 26. Furthermore, its intention of providing Filipinos with employment abroad will not hold water to approve its application no matter how noble it is, because Art. 26 provides for an absolute prohibition and does not place any merit on the intention of the applicant. LABOR STANDARDS HOURS OF WORK Coverage/Exclusions (Art. 82, Labor Code)

Upon being alerted by the DFA, the Department of Labor and Employment issued orders cancelling the licenses of XYZ, and imposing an immediate travel ban on its recruits for the Middle East. XYZ appealed to the Office of the President to reverse and set aside the DOLE orders, citing damages from loss of employment of its recruits, and violations of due process including lack of notice and hearing by DOLE. The DOLE in its answer claimed the existence of an emergency in the Middle East which required prompt measures to protect the life and limb of OFWs from a clear and present danger posed by the ongoing war against terrorism.

Q: Gil Bates, a computer analyst and programmer of Hard Drive Company, works eight hours a day for five days a week at the main office providing customers information technology assistance.

Should the DOLE orders be upheld or set aside? (2004)

A: Said hours on Saturdays should be considered as compensable working hours "while on call". In accordance with the Rules and Regulations Implementing the Labor Code, an employee who is not required to leave word at his home or with company officials as to where he may be reached is not working while on call. But in the question, Gil Bates was required to keep his cell phone open from 8:00 A.M. to 5:00 P.M. Therefore, Bates should be considered as working while on call, if he cannot use effectively and gainfully for his own purpose the time

A: Yes, the DOLE order must be upheld. Art. 35 bestows upon the Secretary of Labor the power to suspend or cancel the license or authority or recruitment agencies to recruit employees for overseas employment for violations of the rules and regulations issued by DOLE, the Bureau of Employment Services, the Overseas Employment Development Board, and the National UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

On Saturdays, however, the company requires him to keep his cellular phone open from 8:00 A.M. to 5:00 P.M. so that the Management could contact him in case of heavy work load or emergency problems needing his expertise. May said hours on Saturdays be  considered  compensable  working  hours  “while  on   call”?  If   so,   should   said   compensation   be   reported   to   the Social Security System? (2004)

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QUAMTO

QuAMTO for LABOR LAW (1991-2015) from 8:00 A.M. to 5:00 P.M. on Saturdays when he is required to keep his cellphone open.

pay every month has no counterpart in Labor Law and is very generous.

ALTERNATIVE ANSWER:

As for the provision in Danilo's contract of employment that he shall receive time off with pay in lieu of overtime, this violates the provision of the Labor Code which states that undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employer to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required by the Labor Code.

The compensation actually received by Bates for working while on call on Saturdays should be reported to the Social Security System because under the Social Security Law, compensation means "all actual remuneration for employment." Normal Hours of Work Compressed Work Week Q: Under what conditions may a "compressed work week" schedule be legally authorized as an exception to the "eight-hour a day" requirement under the Labor Code? (2005) A: "Compressed work week" is resorted to by the employer to prevent serious losses due to causes beyond his control, such as when there is a substantial slump in the demand for his goods or services or when there is lack of raw materials (Explanatory Bulletin on the Reduction of Workdays on Wages Issued by DOLE, July 23, 1985). The conditions for an allowable "compressed work week" are the following: the workers agree to the temporary change of work schedule and they do not suffer any loss of overtime pay, fringe benefits or their weekly or monthly take-home pay. (DOLE Explanatory Bulletin on the Reduction of Workdays on Wages issued on July 23, 1985). Overtime Work, Overtime Pay Q: Danilo Flores applied for the position of driver in the motor-pool of Gold Company, a multinational corporation. Danilo was informed that he would frequently be working overtime as he would have to drive for the company's executives even beyond the ordinary eight-hour work day. He was provided with a contract of employment wherein he would be paid a monthly rate equivalent to 35 times his daily wage, regular sick and vacation leaves, 5 day-leave with pay every month and time off with pay when the company's executives using the cars do not need Danilo's service for more than eight hours a day, in lieu of overtime. Are the above provisions of the contract of employment in conformity with, or violative of, the law? (1997) A: Except for the provision that Danilo shall have time off with pay when the company's executives using the cars do not need Danilo's service for more than eight hours a day, in lieu of overtime, the provisions of the contract of employment of Danilo are not violative of any labor law because they instead improve upon the present provisions of pertinent labor laws. Thus, the monthly rate equivalent to 35 times the daily wage may be sufficient to include overtime pay. There is no labor law requiring the payment of sick and vacation leaves except the provision for a five-day service incentive leave in the Labor Code. The 5-day-leave with

Q: Socorro is a clerk-typist in the Hospicio de San Jose, a charitable institution dependent for its existence on contributions and donations from well wishers. She renders work eleven (11) hours a day but has not been given overtime pay since her place of work is a charitable institution. Is Socorro entitled to overtime pay? Explain briefly. (2002) A: Yes. Socorro is entitled to overtime compensation. She does not fall under any of the exceptions to the coverage of Article 82 (Hours of Work). The Labor Code is equally applicable to non-profit institutions. A covered employee who works beyond eight (8) hours is entitled to overtime compensation. Q: A case against an employer company was filed charging it with having violated the prohibition against offsetting undertime for overtime work on another day. The complainants were able to show that, pursuant to the Collective Bargaining Agreement (CBA), employees of the union had been required to work "overtime" on Saturday but were paid only at regular rates of pay on the thesis that they were not required to complete, and they did not in fact complete, the eight-hour work period daily from Monday through Friday. Given the circumstances, the employer contended that the employees were not entitled to overtime compensation, i.e., with premium rates of pay. Decide the controversy. (2003) A: Art. 88 of the Labor Code provides that undertime work on any particular day shall not be offset by overtime work on any other day. The CBA, the law between the parties and the Union has shown that the employees are required to render overtime work on Saturdays, thus the contention of the employer is not tenable. The employer cannot use the undertime incurred from Monday through Friday to offset the overtime on Saturday. Hence, the employees are entitled to overtime compensation, i.e. premium rates of pay on Saturday. Q: After working from 10 a.m. to 5 p.m. on a Thursday as one of 5,000 employees in a beer factory, A hurried home to catch the early evening news and have dinner with his family. At around 10 p.m. of the same day, the plant manager called and ordered A to fill in for C who missed the second shift. (2010) a.

May   A   validly   refuse   the   plant   manager’s   directive? Explain.

A: Yes. A may validly refuse to fill in for C. A may not be compelled to perform overtime work considering that the   plant   manager’s   directive   is   not   for   an   emergency   overtime work, as contemplated under Article 89 of the Labor Code.

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

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The said hours are not compensable. An employee who is kept  “within  reach”  through  a  mobile  telephone  or  other   contact device is not considered to be in work status. (Azucena, 2013)

FOR LABOR LAW (1991-2015)

b. Assuming that A was made to work from 11 p.m. on Thursday until 2 a.m. on Friday, may the company argue that, since he was two hours late in coming to work on Thursday morning, he should only be paid for work rendered from 1 a.m. to 2 a.m.? Explain?

integral part of the school year and no teaching service were actually rendered by her. In short, the University invoked the principle of "no work, no pay". Lita Cruz seeks your advice on whether or not she is entitled to receive her ECOLA during semestral breaks. How would you respond to the query? (1997)

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

A: I would respond by saying that her entitlement to mandatory living allowances during semestral breaks now depends on her existing CBA with the university. The law granting ECOLA had long been repealed as the mandatory living allowances previously granted in the repealed  PD’s  are  already  integrated  by  law   in  the  basic   salary of employees.

Q: LKG Garments Inc. makes baby clothes for export. As part of its measures to meet its orders, LKG requires its employees to work beyond eight (8) hours everyday, from Monday to Saturday. It pays its employees an additional 35% of their regular hourly wage for work rendered in excess of eight (8) hours per day. Because of additional orders, LKG now requires two (2) shifts of workers with both shifts working beyond eight (8) hours but only up to a maximum of four (4) hours. Carding is an employee who used to render up to six (6) hours of overtime work before the change in schedule. He complains that the change adversely affected him because now he can only earn up to a maximum of four (4) hours' worth of overtime pay. Does Carding have a cause of action against the company? (2015) A: No. A change in work schedule is a management prerogative of LKG. Thus, Carding has no cause of action against LKG if, as a result of its change to two (2) shifts, he now can only expect a maximum of four (4) hours overtime work. Besides, Art. 87 of the Labor Code does not guarantee Carding a certain number of hours of overtime work. In Manila   Jockey   Employees’   Union   v.   Manila Jockey Club (G.R. No. 167760, March 7, 2007), the Supreme Court held that the basis of overtime claim is an employee’s  having  been  “permitted  to  work”.  Otherwise,   as in this case, such is not demandable. Night Work (R.A. No. 10151), Night Shift Differential Q: As a tireman in a gasoline station, open twentyfour (24) hours a day with only five (5) employees, Goma worked from 10:00 P.M. until 7:00 A.M. of the following day. He claims he is entitled to night shift differential. Is he correct? Explain briefly. (2002) A: No. Under Art 86 of the Labor Code, night shift differential shall be paid to every employee for work performed between 10:00 o'clock in the evening to six o'clock in the morning. The Omnibus Rules Implementing the Labor Code (In Book III, Rule II dealing with night shift differential) provides that the provisions on night shift differential shall NOT apply to employees of "retail and service establishments regularly employing not more than five (5) workers". Because of this provision, Goma is not entitled to night shift differential because the gasoline station where he works has only five employees. WAGES Q: Lita Cruz, a full time professor in San Ildefonso University, is paid on a regular monthly basis. Cruz teaches for a period of ten months in a school year, excluding the two months summer break. During the semestral break, the University did not pay Lita Cruz her emergency Cost of Living allowance (ECOLA) although she received her regular salary since the semestral break was allegedly not an UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Q: Are the principal officers of a corporation liable in their personal capacity for non-payment of unpaid wages and other monetary benefits due its employees? (1997) A: As a general rule, the obligations incurred by the principal officers and employees of a corporation are not theirs but the direct accountabilities of the corporation they represent. However, SOLIDARY LIABILITIES may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases, when directors and trustees or, in appropriate cases, the officers of a corporation: 1. 2. 3.

Vote for or assent to patently unlawful acts of the corporation; Act in bad faith or with gross negligence in directing the corporate affairs; Are guilty of conflict of Interest to the prejudice of the corporation, its stockholders or members, and other persons. In labor cases, the Supreme Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of employees done with malice or bad faith. (Sunio v. NLRC, G.R. No. L-57767, January 31, 1984; General Bank and Trust Co. v. Court of Appeals, 135 SCRA 659).

Q: The rank-and-file union staged a strike in the company premises which caused the disruption of business operations. The supervisors union of the same company filed a money claim for unpaid salaries for the duration of the strike, arguing that the supervisors' failure to report for work was not attributable to them. The company contended that it was equally faultless, for the strike was not the direct consequence of any lockout or unfair labor practice. May the company be held liable for the salaries of the supervisor? Decide (2008) A: No,  I  will  apply  the  “No  work,  No  pay”  principle.  The   supervisors are not entitled to their money claim for unpaid salaries, as they should not be compensated for services skipped during the strike of the rank-and-file union. The age-old rule governing the relation between labor  and  capital,  or  management  and  employee  of  a  “fair   day’s   wage   for   a   fair   day’s   labor”   remains   as   the   basic   factor  in  determining  employees’  wages.   (Aklan Electric Cooperative, Inc. v. NLRC, G.R. No.121439, January 25, 2000). Q: Benito is the owner of an eponymous clothing brand that is a top seller. He employs a number of male and female models who wear Benito's clothes in promotional shoots and videos. His deal with the models is that Benito will pay them with 3 sets of free

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QuAMTO for LABOR LAW (1991-2015)

A: No. The arrangement is not allowed. The models are Benito’s  employees.  As  such,  their  services  are  required   to be paid only in legal tender, even when expressly requested by the employee (Art. 102, Labor Code). Hence, no lawful deal in this regard can be entered into by and between Benito and his models.The three (3) sets of clothes, regardless of value, are in kind; hence, the former’s  compensation  is  not  in  the  form  prescribed  by   law. ALTERNATIVE ANSWER: The models are not employees, therefore, Art. 102 of the Labor Code do not apply. The payment does not have to be in legal tender. Wage v. Salary Q: Distinguish "salary" from "wages." (1994) A: In the case of GAA v. Court of Appeals (G.R. No. L-44169, Dec. 3, 1985), the Supreme Court had the opportunity to distinguish salary and wages. According to the Supreme Court, the term wages refer to the compensation given in consideration of manual labor, skilled or unskilled. On the other hand, salary denotes a compensation for a higher degree of employment. Q: Are salary subject to attachment and execution? (1994) A: In GAA v. Court of Appeals (G.R. No. L-44169, Dec. 3, 1985), the Supreme Court ruled that by virtue of Art. 1708 of the Civil Code, it is only wages, not salaries that are exempted from attachment and execution. The said provision   specifically   states   that,   a   laborer’s   wage   shall   not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. Note: The distinction between salary and wage in GAA v. Court of Appeals (G.R. No. L-44169, Dec. 3, 1985) was for the purpose of Article 1708 of the Civil Code which mandates  that,  “the  laborer’s  wage  shall  not  be  subject  to   execution or attachment, except for debts incurred for food,  shelter,  clothing  and  medical  attendance.”    In  labor   law, however, the distinction appears to be merely semantics. That wage and salary are synonymous has been settled in Songco v. National Labor Relations Commission (G.R. No. L-50999, March 23, 1990). Broadly, the   word   “salary”   means   a   recompense   or   consideration   made to a person for his pains or industry in another man’s  business.    Whether  it  be  derived  from  “salarium,”   or   more   fancifully   from   “sal,”   the pay of the Roman soldier, it carries with it the fundamental idea of compensation for services rendered. Indeed, there is eminent  authority  for  holding  that  the  words  “wages”  and   “salary”   are  in   essence   synonymous.   (Equitable Banking Corporation v. Sabac, G.R. No. 164772, June 8, 2006). Minimum Wage of Workers Paid by Results Workers Paid by Results Q: TRX, a local shipping firm, maintains a fleet of motorized boats plying the island barangays of AP, a coastal   town.   At   day’s   end   the   boat   operators/crew  

members turn over to the boat owner their cash collections from cargo fees and passenger fares, less the expenses for diesel fuel, food, landing fees and spare parts. Fifty percent (50%) of the monthly income or earnings derived from the operations of the boats are given to the boatmen by way of compensation. Deducted from the individual shares of the boatmen are their cash advance and peso value of their absences, if any. Are these boatmen entitled to overtime pay, holiday pay, and 13th month pay? (2004) A: No. The boatmen are considered as workers who are paid by results. More specifically, they are task workers who are paid not based on the number of units produced, but are paid based on the completion of their task, with appropriate deductions based on circumstances such as road and traffic conditions. (Adriano Quintos, et al. v. D.D. Transportation Co., NLRC Case No. RB-IV-20941, May 31, 1979).  In  the  case   at  bar,  the  boatmen’s  payment  differs   depending on conditions such as the increase or decrease of the price of diesel, food expenses, landing fees and spare parts. In connection, their payment although being direct remunerations or compensation for their service cannot be considered as wages for they do not partake the nature of wages as defined by the laws on labor. Instead, their payment is considered as commissions; and as held by the Supreme Court in the case of King of Kings Transport, Inc. et al. v. Mamac, (GR No. 166208, June 29, 2007), workers who are paid by commission are not entitled to the 13th month pay. Deductions from Wages Q: An explosion in a mine site resulted in the death of fifty (50) miners. At the time of the accident 1. The Mining Company has not yet paid the wages, overtime, holiday and rest day compensation of the deceased miners; 2. All the deceased miners owed the Miners Cooperative Union sums of money; 3. The Mining Company was served by a sheriff Writs of Garnishment of Wages of some of the deceased miners by virtue of final Judgments in several collection suits. After the accident, the wives, paramours, brothers, sisters and parents of the deceased miners filed their claims for unpaid wages, overtime, holiday and rest day compensation. The Company has acknowledged its obligations. However, it is in a quandary as to how to adjudicate the conflicting claims; and whether it can deduct from the monies due the miners their unpaid debts with the credit union. How will you advise the mining company on the following: a.

Can the Mining Company defer payment of the money claims until an appropriate court has ruled on the conflicting claims?

A: No. Art. 105 (b) provides that where the worker has died, in which case the employer may pay the wages of the deceased worker to the heirs of the latter without the necessity of intestate proceedings. The claimants if they

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

6

clothes per week. Is this arrangement allowed? (2015)

FOR LABOR LAW (1991-2015)

are all of age shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs, to the exclusion of all other persons. b. Can the Mining Company deduct from the amount due to each miner an amount equivalent to their debt and remit the same to the Credit Union? (1998)

way above the minimum pay required by law. The company counsel further points out that the employees are aware that their food and lodging form part of their salary, and have long accepted the arrangement. Is the company's position legally correct? (2013) A: No. The following requisites were not complied with:

A: No. As a general rule Art 113 provides that no employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees. However, by way of exception, Art. 113 (b) provides that for union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned.

a.

The case at bar falls within the general rule for there was no showing that the dead miners had authorized their employer to deduct from their wages their unpaid union dues. Moreover there can no longer be any authorization made for the only persons recognized by law who can make the authorization are already dead.

Q: Pablo works as a driver at the National Tire Company (NTC). He is a member of the Malayang Samahan ng Manggagawa sa NTC, the exclusive rankand-file collective bargaining representative in the company. The union has a CBA with NTC which contains a union security and a check-off clause. The union security clause contains a maintenance of membership provision that requires all members of the bargaining unit to maintain their membership in good standing with the union during the term of the CBA under pain of dismissal. The check-off clause on the other hand authorizes the company to deduct from union members' salaries defined amounts of union dues and other fees. Pablo refused to issue an authorization to the company for the check-off of his dues, maintaining that he will personally remit his dues to the union. (2013)

Q: A worked as a room boy in La Mallorca Hotel. He sued for underpayment of wages before the NLRC, alleging that he was paid below the minimum wage. The employer denied any underpayment, arguing that based on long standing, unwritten policy, the Hotel provided food and lodging to its housekeeping employees, the costs of which were partly shouldered by it and the balance was charged to the employees. The  employees’  corresponding  share  in  the  costs  was   thus deducted from their wages. The employer concluded that such valid deduction naturally resulted in the payment of wages below the prescribed minimum. If you were the Labor Arbiter, how would you rule? Explain. (2010) A: I will rule in favor of A. Even if food and lodging were provided and considered as facilities by the employer, the employer could not deduct such facilities from its workers’  wages  without  compliance  with  the  law  (Mayon Hotel & Restaurant v. Adana, G.R. No. 157634, May 16, 2005). In Mabeza v. NLRC (G.R. No. 118506, April 18, 1997), the Supreme Court held that the employer simply cannot deduct   the   value   from   the   employee’s   wage   without   satisfying the following: a. b. c.

Proof that such facilities are customarily furnished by the trade; The provision of deductible facilities is voluntarily accepted in writing by the employee; and The facilities are charged at fair and reasonable value.

Q: Gamma Company pays its regular employees P350.00 a day, and houses them in a dormitory inside its factory compound in Manila. Gamma Company also provides them with three full meals a day. In the course of a routine inspection, a Department of Labor and Employment (DOLE) Inspector noted that the workers' pay is below the prescribed minimum wage of P426.00 plus P30.00 allowance, and thus required Gamma Company to pay wage differentials. Gamma Company denies any liability, explaining that after the market value of the company-provided board and lodging are added to the employees' P350 cash daily wage, the employees' effective daily rate would be UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

b. c.

a.

Proof that such facilities are customarily furnished by the trade. The provision of deductible facilities is voluntarily accepted by the employee The facilities are charged at the fair and reasonable value.   Mere   availment   is   not   sufficient   to   allow   deduction   from   employees’   wages.   (Mayon Hotel & Restaurant v. Adana, G.R. No. 157634, May 16, 2005)

Would the NTC management commit unfair labor practice if it desists from checking off Pablo's union dues for lack of individual authorization from Pablo?

A: No. Check-offs in truth, impose an extra burden on the employer in the form of additional administrative and bookkeeping costs. It is a burden assumed by management at the instance of the union and for its benefit,   in   order   to   facilitate   the   collection   of   dues   necessary for the latter‘s   life   and   sustenance.   But   the   obligation to pay union dues and agency fees obviously devolves not upon the employer, but the individual employee. It is a personal obligation not demandable from the employer upon default or refusal of the employee to consent to a check-off. The only obligation of the employer under a check-off is to effect the deductions and remit the collections to the union. (Holy Cross of Dauan College v. Joaquin, G.R. No. 110007, October 18, 1996). b. Can the union charge Pablo with disloyalty for refusing to allow the check off of his union dues and, on this basis, ask the company to dismiss him from employment? A: No.   The  “check-off   clause  in  the"  CBA   will  not  suffice.   The law prohibits interference with the disposition of one’s   salary.   The   law   requires   “individual   written   authorization”   to   deduct   union   dues   from   Pablo’s   salaries. For as long as he pays union dues, Pablo cannot be terminated from employment under the union security   clause.   As   a   matter   of   fact,   filing   a   complaint   against the union before the Department of Labor for

TEAM BAROPS ACADEMICS COMMITTEE 2016

7

QUAMTO

QuAMTO for LABOR LAW (1991-2015) forcible deduction from salaries does not constitute acts of disloyalty against the union. (Tolentino v. Angeles, 52 O.G. 4262) Non-diminution of Benefits Q: Little Hands Garment Company, an unorganized manufacturer of children's apparel with around 1,000 workers, suffered losses for the first time in history when its US and European customers shifted their huge orders to China and Bangladesh. The management informed its employees that it could no longer afford to provide transportation shuttle services. Consequently, it announced that a normal fare would be charged depending on the distance traveled by the workers availing of the service. Was the Little Hands Garments Company within its rights to withdraw this benefit which it had unilaterally been providing to its employees? Select the best answer(s) and briefly explain your reason(s) therefor. Yes, because it can withdraw a benefit that is unilaterally given b. Yes, because it is suffering losses for the very first time c. Yes, because this is a management prerogative which is not due any legal or contractual obligation d. No, because this amounts to a diminution of benefits which is prohibited by the Labor Code e. No, because it is a fringe benefit that has already ripened into a demandable right or entitlement (2005) a.

A: Letter B. As a general rule, the Labor Code guarantees that any benefit voluntarily given by an employer cannot be withdrawn as it has become a part of the terms and conditions of work of the employees. Such can only be withdrawn upon mutual agreement of the parties. In order for this prohibition to apply, the employer must have given such benefit to his employees fully aware of the fact that the latter are not legally nor contractually entitled to such. The giving of such benefits must be deliberate and for a long period of time. However, by way of exception, the prohibition against withdrawal of benefit will not apply if the payment of the benefits had been made dependent upon the profitability of the employer's business. Under such circumstances, the employees cannot demand for the benefit to be continuously given because the giving of such benefit is merely by reason of their employer's gratuity or act of liberality.

A: No, if the agreement is with regards to reduction. Art. 100 provides for the prohibition against elimination or diminution of benefits. However, if the agreement seeks to increase the minimum percentage, it is allowed because there is nothing in the law which prohibits the same. What is expressly prohibited under the law is only reduction. Q: Far East Bank (FEB) is one of the leading banks in the country. Its compensation and bonus packages are top of the industry. For the last 6 years, FEB had been providing the following bonuses across-theboard to all its employees: (a) (b) (c) (d) (e)

13th month pay; 14th to 18th month pay; Christmas basket worth P6,000; Gift check worth P4,000; and Productivity-based incentive ranging from a 20% to 40% increase in gross monthly salary for all employees who would receive an evaluation of "Excellent" for 3 straight quarters in the same year.

Because of its poor performance over-all, FEB decided to cut back on the bonuses this year and limited itself to the following: (a) (b) (c) (d)

13th month pay; 14th month pay; Christmas basket worth P4,000; and Gift check worth :P2,000

Katrina, an employee of FEB, who had gotten a rating of "Excellent" for the last 3 quarters, was looking forward to the bonuses plus the productivity incentive bonus. After learning that FEB had modified the bonus scheme, she objected. Is Katrina's objection justified? Explain. (2015) A: Katrina’s   objection   is   justified.   Having   enjoyed   the   across-the-board bonuses, Katrina has earned a vested right. Hence, none of them can be withheld or reduced. In the problem, the company has not proven its alleged losses to be substantial. Permitting reduction of pay at the slightest indication of losses is contrary to the policy of the State to afford full protection to labor and promote full employment. (Linton Commercial Co. v. Hellera, G.R. No. 163147, October 10, 2007). As to the withheld productivity-based bonuses, Katrina is deemed to have earned them because of her excellent performance ratings for three quarters. On this basis, they cannot be withheld without violating the Principle of Non-Diminution of Benefits. Moreover, it is evident from the facts of the case that what was withdrawn by FEB was a productivity bonus. Protected by RA 6791 which mandates that the monetary value of the productivity improvement be shared with the   employees,   the   “productivity-based   incentive”   scheme of FEB cannot just be withdrawn without the consent of its affected employees.

8

By virtue of such principles, the applicable rule in the case shall be the exception. Little Hands is clearly within its right to withdraw the free shuttle service because the benefit is given merely out of its liberality thereby the employees are not legally nor contractually entitled to it. The law recognizes that the withdrawal of the benefit by reason of loss of profit is clearly within the employer's management prerogative. In addition, to require Little Hands to continue providing for such benefit would be tantamount to punishing it for its past generosity.

Q: Can an employer and an employee enter into an agreement reducing or increasing the minimum percentage provided for night differential pay, overtime pay, and premium pay? (2006)

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

QUAMTO

FOR LABOR LAW (1991-2015)

Wage Distortion/Rectification Q: Define Wage Distortion. May a wage distortion, alleged by the employees but rejected by the employer to be such, be a valid ground for staging a strike? (1997, 2006, 2009) A: (a) A WAGE DISTORTION is that brought about where an increase in the prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage rates based on skills, length of service and other logical bases of differentiation. (b) No, the existence of wage distortion is not a valid ground for a strike because Art. 124 of the Labor Code provides for a specific method of procedure for correcting wage distortion. In Ilaw at Buklod ng Manggagawa vs. NLRC (G.R. No. 91980, June 27, 1991), the Court said: It goes without saying that these joint or coordinated activities may be forbidden or restricted by law or contract. For the particular instance of "distortions of the wage structure within an establishment" resulting from the application of any prescribed wage increase by virtue of a law or wage order. Section 3 of Republic Act No. 6727 prescribes a specific, detailed and comprehensive procedure for the correction thereof, thereby implicitly excluding strikes or lockouts or other concerted activities as modes of settlement of the issue. Q: How should a wage distortion be resolved (1) in case there is a collective bargaining agreement and (2) in case there is none? Explain briefly. (2002, 2009) A: Art. 126 provides for the resolution of wage distortions.

whether operating for profit or not. (See Article 91 of the Labor Code). Q: This year, National Heroes Day (August 25) falls on a Sunday. Sunday is the rest day of Bonifacio whose daily rate is P500.00. a.

If Bonifacio is required by his employer to work on that day for eight (8) hours, how much should he be paid for his work? Explain.

A: For working on his scheduled rest day, according to Art 93(a), Bonifacio should be paid P500.00 (his daily rate) plus P150.00 (30% of his daily rate) = P650.00. This amount of P650.00 should be multiplied by 2 = P1,300.00. This is the amount that Bonifacio as employee working on his scheduled rest day which is also a regular holiday, should receive. Art. 94(c) of the Labor Code provides that an employee shall be paid a compensation equivalent to twice his regular rate for work on any regular holiday. The "regular rate" of Bonifacio on May 1, 2002 is with an additional thirty percent because the day is also his scheduled rest day. b. If he works for ten (10) hours on that day, how much should he receive for his work? Explain. (2002) A: P1,300.00 which is the amount that Bonifacio is to receive for working on May 1, 2002 should be divided by 8 to determine his hourly rate of P162.50. This hourly rate should be multiplied by 2 (the number of hours he worked overtime). Thus, the amount that Bonifacio is entitled to receive for his overtime work on May 1, 2002 is P325.00. HOLIDAY PAY/PREMIUM PAY Coverage, Exclusions

In cases where there is a CBA, the law provides that any dispute arising from wage distortions shall be resolved through the grievance procedure under their CBA and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute shall be decided by the voluntary arbitrator or panel of voluntary arbitrators within 10 calendar days from the time the said dispute was referred to voluntary arbitration.

Q: Nemia earns P7.00 for every manicure she does in the barber shop of a friend which has nineteen (19) employees. At times she takes home P175.00 a day and at other times she earns nothing. She now claims holiday pay. Is Nemia entitled to this benefit? Explain briefly (2002)

On the other hand, in cases where there is no CBA, the law provides that the employers and employees shall endeavour to correct such distortions. Any dispute arising therefrom shall be settled through the NCMB, and if it remains unresolved after 10 calendar days of conciliation, shall be referred to the appropriate branch of the NLRC.

a.

Weekly Rest Day Q: A Ladies Dormitory run or managed by a charitable non-profit organization claims that it is exempt from the coverage of the Weekly Rest Period provision of the Labor Code. Is the claim valid? (1998) A: No. The claim is not valid. The provisions on weekly rest periods in the Labor Code cover every employer, UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

b. c. d. e.

Those of government and any of the political subdivisions, including government owned and controlled corporations; Those of retail and service establishments regularly employing less than 10 workers; Domestic helpers and persons in the personal service of another; Managerial employees as defined in Book III of the Code; Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

Nemia clearly falls under letter (e) of the exception for she is paid purely on commission basis.

9

REST PERIODS

A: No. Sec. 1, Rule IV, Book III of the IRR provides that the rule on holiday pay shall apply to all employees except:

TEAM BAROPS ACADEMICS COMMITTEE 2016

QuAMTO for LABOR LAW (1991-2015) Q: On orders of his superior, Efren, a high-speed sewing machine technician, worked on May 1, Labor Day. If he worked eight (8) hours on that day, how much should he receive if his daily rate is P400.00? (2002) A: Efren should receive P800.00. Art 92 of the Labor Code provides that the employer may require an employee to work on any regular holiday but such employee shall be paid a compensation equivalent to twice his regular rate. LEAVES

b. Is Jovy entitled to maternity leave benefits? (2005) A: Yes, Jovy's maternity benefit is personal to her and she is entitled under the law to avail herself of the same for the first four times of her deliver. (R.A. No. 8282) Note: A   female   member’s   maternity   benefit   does   not   depend on his marriage since she can avail of the same even if she is not legally married. The law merely used the term  “female  member”  without  qualifying  the  same.  (Sec. 14-A, Social Security Act of 1997).

Maternity Leave Paternity Leave (R.A. No. 8187) Q: How many times may a male employee go on Paternity Leave? Can he avail himself of this benefit for example, 50 days after the first delivery by his wife? (2002) A: A male employee may go on Paternity Leave up to four (4) children. (Sec. 2, RA 8187) On the question of whether or not he can avail himself of this benefit 50 days after the delivery of his wife, the answer is: Yes, he can because the Rules Implementing Paternity Leave Act says that the availment should not be later than 60 days after the date of delivery. Note: Delivery may include childbirth or miscarriage. Abortion, however, was not mentioned in the law. Q: Mans Weto had been an employee of Nopolt Assurance Company for the last ten (10) years. His wife of six (6) years died last year. They had four (4) children. He then fell in love with Jovy, his coemployee, and they got married. In October this year, Weto's new wife is expected to give birth to her first child. He has accordingly filed his application for paternity leave, conformably with the provisions of the Paternity Leave Law which took effect in 1996. The HRD manager of the assurance firm denied his application, on the ground that Weto had already used up his entitlement under the law. Weto argued that he has a new wife who will be giving birth for the first time, therefore, his entitlement to paternity leave benefits would begin to run anew. a.

Whose contention is correct, Weto or the HRD manager?

Q: Concepcion Textile Co. included the overtime pay, night-shift differential pay, and the like in the computation of its employees' 13th month pay. Subsequently, with the promulgation of the decision of the Supreme Court in the case of San Miguel Corporation vs. Inciong (G.R. No. L-49774, February 24, 1981) holding that these other monetary claims should not be included in the computation of the 13th month pay, Concepcion Textile Co. sought to recover under the principle of solutio indebiti its overpayment of its employees' 13th month pay, by debiting against future 13th month payments whatever excess amounts it had previously made. a.

Is the Company's action tenable?

A: No,  the  company’s  claim  is  not  tenable.  The  principle   of solutio indebitii only arises where there is a mistake in the payment. In the case at bar, when the company paid the employees, there was no mistake yet, for the mistake in the payment that the company alleged occurred later on when the decision in the San Miguel case was promulgated. Therefore, it can be concluded that when the payment was made, it was valid and due to the employees for all intents and purposes. If the company would deduct the said overpayment, it would be similar to a situation where an employee is punished for an act that was valid when committed but was subsequently invalidated. b. With respect to the payment of the 13th month pay after the San Miguel Corporation, ruling, what arrangement, if any, must the Company make in order to exclude from the 13th month pay all earnings and remunerations other than the basic pay. (1994) A: After the 1981 San Miguel ruling, the High Court decided the case of Philippine Duplicators Inc. vs. NLRC, on 11 November 1993, Accordingly, management may undertake to exclude sick leave, vacation leave, maternity leave, premium pay for regular holiday, night differential pay and cost of living allowance. Sales commissions, however, should be included based on the settled rule as earlier enunciated in Songco v. National Labor Relations Commission (G.R. No. L-50999, March 23, 1990) Q: What would be your advice to your client, a manufacturing company, who asks for your legal opinion on whether or not the 13th Month Pay Law (Presidential Decree No. 851) covers a casual employee who is paid a daily wage? (1998)

10

A: The contention of Weto is correct. The law provides that every married male is entitled to a paternity leave of seven (7) days for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting. Jovy is Weto's legitimate spouse with whom he is cohabiting. The fact that Jovy is his second wife and that Weto had 4 children with his first wife is beside the point. The important fact is that this is the first child of Jovy with Weto. The law did not distinguish and we should therefore not distinguish. The paternity leave was intended to enable the husband to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly born child (Sec. 3, RA. No. 8187). To deny Weto this benefit would be to defeat the rationale for the law. Moreover, the case of Weto is a gray area and the doubt should be resolved in his favor.

THIRTEENTH MONTH PAY

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

FOR LABOR LAW (1991-2015)

A: I would advise him that a casual employee who is paid a daily wage is entitled to 13th month pay for only those employers who under Sec. 3 of the said decree are exempted from paying such. Sec. 3 of PD 851 provides that the following employers are exempt from paying 13th month pay:

A: No. Since he is not entitled to 13th month pay and SIL, his retirement pay should be computed solely on the basis of his salary. (R&E Transport v. Latag G.R. No. 155214, February 13, 2004).

a. Distressed employers, such as (1) those which are currently incurring substantial losses or (2) in the case of non-profit institutions and organizations, where their income, whether from donations, contributions, grants and other earnings from any source, has consistently declined by more than forty (40%) percent of their normal income for the last two (2) years, subject to the provision of Section 7 of this issuance; b. The Government and any of its political subdivisions, including government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the Government; c. Employers already paying their employees 13-month pay or more in a calendar year of its equivalent at the time of this issuance; d. Employers of household helpers and persons in the personal service of another in relation to such workers; and e. Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall be covered by this issuance insofar as such workers are concerned.

Q: Robert Suarez is a salesman for Star Pharmaceuticals, Star Pharmaceuticals has applied with the Department of Labor and Employment for clearance to terminate (by way of retrenchment) the services of Suarez due to financial losses. Robert Suarez, aside from his monthly salary, receives commissions on the sales he makes. He also receives allowances. The existing CBA between Star Pharmaceuticals and the union, of which Robert Suarez is a member, states that any employee separated from employment for causes not due to the fault of the employee shall receive from the company a retirement gratuity in an amount equivalent to one month's salary per year of service.

Clearly, the employer seeking the advice does not fall within any of the exceptions provided by law.

Q:   Company   “A”   was   engaged   in   the   manufacture   of   goods using the by-products of coconut trees and employed some fifty workers who lived in the coconut plantation in Quezon Province. The land upon which A conducted its operation was subjected to land reform under R.A. 6657 for distribution to the tenants and residents of the land. Consequently, A had to close its operation and dismiss its workers. The union representing the employees demanded that A pay the dismissed workers separation pay under Art.283 of the Labor Code that requires, among others, the payment of separation pay to employees in  cases  of  “closing  or  cessation  of  operations  of  the   establishment   or   undertaking.”   Is   the   union’s   claim   correct or not? Why (2001)

Q: Dennis was a taxi driver who was being paid on the "boundary" system basis. He worked tirelessly for Cabrera Transport Inc. for fourteen (14) years until he was eligible for retirement. He was entitled to retirement benefits. During the entire duration of his service, Dennis was not given his 13th month pay or his service incentive leave pay. (2012) a.

Is Dennis entitled to 13th month pay and service leave incentive pay? Explain. (2012)

A: No.  A  taxi  driver   paid  under  the  “boundary  system”  is   not entitled to a 13th month and a SIL pay. Hence, his retirement pay should be computed solely on the basis of his salary. Specifically, Sec. 3(e) of the Rules and regulations Implementing P.D. 851 excludes from the obligation of 13th Month  Pay  “Employers  of  those  who  are   paid on xxx boundary basis. On the other hand, Sec. 1(d), Rule V, Book III of the Omnibus Rules provides that those “employees   whose   performance   is   unsupervised   by   the   employer”  are  not  entitled  to  Service  Incentive  Leave.  A   taxi  driver  under  Boundary  System  in  an  “unsupervised”   employee. b. Since he was not given his 13th month pay and service incentive leave pay, should Dennis be paid upon retirement, in addition to the salary equivalent to fifteen (15) days for every year of service, the additional 2.5 days representing onetwelfth (1/12) of the 13th month pay as well as the five (5) days representing the service incentive leave for a total of 22.5 days? Explain.

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

SEPARATION PAY

Robert Suarez contends that in computing his separation pay, his sales commission and his allowances should be included in the monthly salary. Do you agree? (1997) A: It depends. If the sales commissions and his allowances are deemed included in his salary, it should be included in the computation of his separation fee. If they are not deemed part of his salary, they should not be included in the computation.

A: The  union’s  claim  is  not  correct.  In  the  case  of  National Federation of Labor v. NLRC (G.R. No. 127718, March 2, 2000), the Supreme Court ruled that where the closure of the establishment was due to the act of the government acquiring the land to the benefit of the employees by making them agrarian lot beneficiaries, they are not entitled to separation pay. In   the   instant   case,   Company   “A”   was   closed   down   because the land upon which A conducted its operation was acquired by the DAR pursuant to the CARP. Since the closure was due to the act of the government and not effected unilaterally and voluntarily by the respondent, the workers cannot claim separation pay. Q: Premiere Bank, a banking corporation, being the creditor-mortgagee of XYZ & Co., a garment firm, foreclosed the hypothecated assets of the latter. Despite the foreclosure, XYZ & Co. continued its business operations. A year later, the bank took possession of the foreclosed property. The garment

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A: No. In the case of DBP v. NLRC et al., (G.R. Nos. 8276364, March 19, 1990), the Supreme Court held that Art. 110 does not constitute a lien on the property of the insolvent debtor in favour of the workers. It is but a preference of credit in their favour, a preference in application. It is a method adopted to determine and specify the order in which credits should be paid in the final distribution of the  proceeds  of   the  insolvent’s  assets.  Thus  a  mortgage   lien cannot be equated or placed under a preferred credit. RETIREMENT PAY Eligibility Q: A Collective Bargaining Agreement (CBA) between Company A and its employees provides for optimal retirement benefits for employees who have served the company for over 25 years regardless of age, equivalent to one-and-one-half months pay per year of service based on the employee's last pay. The CBA further provides that "employees whose services are terminated, except for cause, shall receive said retirement benefits regardless of age or service record with the company or to the applicable separation pay provided by law whichever is higher." The Company, due to poor business conditions, decided to cease operations and gave its employees the required one month's advance notice as well as notice to DOLE, with the further advice that each employee may claim his corresponding separation or retirement benefits whichever is higher after executing the required waiver and quitclaim. Dino Ramos and his co-employees who have all rendered more than 25 years of service received their retirement benefits. Soon after, Ramos and others similarly situated demanded for their separation pay. The Company refused, claiming that under the CBA they cannot receive both benefits. Who is correct, the employees or the Company? (1994) A: The employees are correct. In the absence of a categorical provision in the Retirement Plan and the CBA that an employee who receives separation pay is no longer entitled to retirement benefits, the employee is entitled to the payment of both benefits pursuant to the social justice policy. (Conrado M. Aquino, et al v. National Labor Relations Commission, et al, G.R. No. 87653, February 11, 1992). Q: Ukol was compulsorily retired by his employer, Kurot Bottling Corporation, upon the former's reaching 65 years of age, having rendered 30 years of service. Since there was no CBA, Ukol was paid his retirement benefits computed 15 days' pay for every year of service, based on Ukol's highest salary during

each year of his employment. Not satisfied, Ukol filed action with the Arbitration Branch of the NLRC claiming that his retirement benefits were not computed properly. Is Ukol's claim meritorious? What are the components of his retirement benefits? (2001) A: Ukol's claim is meritorious. His retirement benefit is to be computed in accordance with Article 287, which reads: "In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six months being considered as one whole year. The same Article then explains that the term one-half (1/2) month salary means fifteen days plus one twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. The components of retirement pay are: (1) 15 days pay; (2) 1/12 of the 13th month pay. And; (3) cash equivalent of not more than five (5) days of service incentive leave. Q: Ricky Marvin had worked for more than ten (10) years in IGB Corporation. Under the terms of the personnel policy on retirement, any employee who had reached the age of 65 and completed at least ten (10) years of service would be compulsorily retired and paid 30 days' pay for every year of service. Ricky Marvin, whose immigrant visa to the USA had just been approved, celebrated his 60th birthday recently. He decided to retire and move to California where the son who petitioned him had settled. The company refused to grant him any retirement benefits on the ground that he had not yet attained the compulsory retirement age of 65 years as required by its personnel policy; moreover, it did not have a policy on optional or early retirement. Taking up the cudgels for Ricky Marvin, the union raised the issue in the grievance machinery as stipulated in the CBA. No settlement was arrived at, and the matter was referred to voluntary arbitration. If you were the Voluntary Arbitrator, how would you decide? Briefly explain the reasons for your award. (2005) A: I will decide the case in accordance with the Retirement Law. (R.A. No. 7641) Under the law, Ricky Marvin is entitled to Optional Retirement at age 60 since he has served the Company for at least 5 years, in fact 10 years already. He will also receive 22.5 days for every year of service. (Capitol Wireless v. Confesor, G.R. No. 117174, November 13, 1996) Q: As rule, when is retirement due? (2007) A: a. Optional retirement – which may be availed of by an employee reaching the age of 60 years; b. Compulsory retirement – which may be availed of by the employee upon reaching the age of 65 years. In both instances, the law imposes the minimum service requirement of five years with the establishment. Q: When is retirement due for underground miners? A: Pursuant to R.A. 8558, in the absence of a retirement plan or other applicable agreement providing for

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

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firm's business operations ceased without a declaration of bankruptcy. Jose Caspar, an employee of XYZ & Co., was dismissed from employment due to the cessation of business of the firm. He filed a complaint against XYZ & Co. and the bank. The Labor Arbiter, after hearing, so found the company liable, as claimed by Jose Caspar, for separation pay. Premiere Bank was additionally found subsidiarily liable upon the thesis that the satisfaction of labor benefits due to the employee is superior to the right of a mortgagee of property. Was the Labor Arbiter correct in his decision? (2003)

FOR LABOR LAW (1991-2015)

retirement benefits of underground mine employees in the establishments, any such employee may retire upon reaching the age of 50 years or more if he has served for at least five years as underground mine employee or in underground mine of the establishment. WOMEN WORKERS Provisions against Discrimination Q: Mam-manu Aviation Company (Mam-manu) is a new airline company recruiting flight attendants for its domestic flights. It requires that the applicant be single, not more than 24 years old, attractive, and familiar with three (3) dialects, viz: llonggo, Cebuano and Kapampangan. lngga, 23 years old, was accepted as she possesses all the qualifications. After passing the probationary period, lngga disclosed that she got married when she was 18 years old but the marriage was already in the process of being annulled on the ground that her husband was afflicted with a sexually transmissible disease at the time of the celebration of their marriage. As a result of this revelation, lngga was not hired as a regular flight attendant. Consequently, she filed a complaint against Mammanu alleging that the pre-employment qualifications violate relevant provisions of the Labor Code and are against public policy. Is the contention of lngga tenable? Why? (1995, 2012) A: Yes. Man-manu’s   pre-employment requirement cannot be justified as a “bona   fide occupational qualification”,   where the particular requirements of the job would justify it. The said requirement is not valid because it does not reflect an inherent quality that is reasonably necessary for a satisfactory job performance. (PT&T v. NLRC, G.R. No. 118978, May 23, 1997 citing 45A Am. Jur. 2d, Job Discrimination, Section 506, p.486). Q: At any given time, approximately ninety percent (90%) of the production workforce of a semiconductor company are females. Seventy-five percent (75%) of the female workers are married and of child-bearing years. It is imperative that the Company must operate with a minimum number of absences to meet strict delivery schedules. In view of the very high number of lost working hours due to absences for family reasons and maternity leaves, the Company adopted a policy that it will employ married women as production workers only if they are at least thirty-five (35) years of age. Is the policy violative of any law? (1998) A: No. Despite the prohibition against discrimination against age, it cannot be said that the qualification imposed by the management falls within the said provision. There is no violation because the qualification imposed   is   justified   by   the   company’s   goal   to meet the strict delivery schedules. The act of the management is a valid exercise of management prerogative which must be respected by law. In addition, simple logic would prove that in order for a policy to be declared discriminatory, the said policy must be without basis, whimsical and capricious on the part of the employer. In this case, the policy is clearly justified.

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Anti-Sexual Harassment Act (R.A. 7877) Q: A Personnel Manager, while interviewing an attractive female applicant for employment, stared directly at her for prolonged periods, albeit in a friendly manner. After the interview, the manager accompanied the applicant to the door, shook her hand and patted her on the shoulder. He also asked the applicant if he could invite her for dinner and dancing at some future time. Did the Personnel Manager, by the above acts, commit sexual harassment? Reason. (2000) A: Yes. The manager committed sexual harassment, specifically sexual harassment in a work related or employment environment. Under Sec. 3 (a) of the AntiSexual Harassment Act of 1995, even if the act of the manager is friendly, and the employment of the applicant is not conditioned upon her agreement to go out with him, the act of the manager will result in an intimidating, hostile, or offensive environment for the female employee in the future. Q: Can an individual, the sole proprietor of a business enterprise, be said to have violated the Anti-Sexual Harassment Act of 1995 if he clearly discriminates against women in the adoption of policy standards for employment and promotions in the enterprise? Explain. (2003) A: No. In order for the employer to commit sexual harassment under the Anti-Sexual Harassment Act of 1995, there must be a solicitation of sexual favor from the employee; and the refusal of the employee resulted to his discrimination by gender. However in this case, the employer did not solicit any sexual favor. Instead, he had gone outright and discriminated the female employees. At most, the employer would be liable for the violation of the prohibition against discrimination against women as provided under Art. 153. Q: Pedrito Masculado, a college graduate from the province, tried his luck in the city and landed a job as utility/maintenance man at the warehouse of a big shopping mall. After working as a casual employee for six months, he signed a contract for probationary employment for six months. Being well-built and physically attractive, his supervisor, Mr. Hercules Barak, took special interest to befriend him. When his probationary period was about to expire, he was surprised when one afternoon after working hours, Mr.  Barak  followed  him  to  the  men’s  comfort  room.   After seeing that no one else was around, Mr. Barak placed   his   arm   over   Pedrito’s   shoulder   and   softly said:   “You   have   great   potential   to   become   regular   employee and I think I can give you a favorable recommendation. Can you come over to my condo unit on Saturday evening so we can have a little drink?  I’m  alone,  and  I’m  sure  you  want  to  stay  longer   with  the  company.” Is Mr. Barak liable for sexual harassment committed in a work-related or employment environment? (2004) A: Yes, Mr. Barak is liable for sexual harassment. Under Sec. 3 (a.1) of the Anti-Sexual Harassment Act of 1995, a work related sexual harassment can be committed when the sexual favor is made as a condition for the hiring, reemployment or continued employment of an employee

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QuAMTO for LABOR LAW (1991-2015) or in the granting of favorable compensation, terms and conditions, promotions or privileges.

guardian shall provide the said minor child with the prescribed primary and/or secondary education.

The case at bar clearly falls within Sec. 3 (a.1) of the AntiSexual Harassment Act of 1995 because the invitation of Mr.  Barak,  most  especially  the  phrase  “I’m  alone,  and  I’m   sure   you   want   to   stay   longer   with   the   company.”;   taking   into consideration on how most people use such term in the ordinary course of living, is clearly insinuating a meeting that is sexual in nature. More importantly, the favorable recommendation needed by Pedrito in order to be promoted as a regular employee is conditioned upon his meeting with Mr. Barak in his condominium.

The exception provided under RA 9231 is very clear. And since a school teacher is neither a parent nor a legal guardian; and the attendant circumstances of the case does not fall within the circumstances exempted by law because  no  one  in  the  student’s  family  is  employed  by  the   teacher, the defense of the teacher is not tenable on the ground that it does not fall under the exceptions provided for by law. Moreover, notwithstanding the Department Order of DOLE invoked by the teacher, the defense is still untenable for mere department orders cannot prevail over the clear wordings of the law; and department orders cannot go beyond the scope of the statute it seeks to implement.

Q: You were asked by a paint manufacturing company regarding the possible employment as a mixer of a person, aged seventeen (17), who shall be directly under the care of the section supervisor. What advice would you give? Explain briefly. (2002) A: I would advise the company not to hire the 17-year old. Under Sec. 3, Rule XI, Book III of the Implementing Rules and Regulations, any person of either sex, between 15 and 18 years of age may be employed in any nonhazardous work. Under the same section, the IRR clarified that non-hazardous work would mean an undertaking or activity in which the employee is not exposed to any risk which constitutes an imminent danger to his safety and health. Applying the said legal principles to the case at bar, although the law allows the hiring of minors between the ages of 15 and 18, it is subject to the condition that the nature of the work for which they were hired must not post a threat to their health and safety. Therefore, under the circumstances, it is not only unwise, but also illegal for the company to hire the 17- year old because the nature of the work of a paint mixer clearly posed a threat to the health and safety of the child. Clearly, the company cannot meet the condition imposed by law. Q: A spinster school teacher took pity on one of her pupils, a robust and precocious 12-year old boy whose poor family could barely afford the cost of his schooling. She lives alone at her house near the school after her housemaid left. In the afternoon, she lets the boy do various chores as cleaning, fetching water and all kinds of errands after school hours. She gives him rice and P30.00 before the boy goes home at 7:00 every night. The school principal learned about it and charged her with violating the law which prohibits the employment of children below 15 years of age. In her defense, the teacher stated that the work performed by her pupil is not hazardous, and she invoked the exception provided in the Department Order of DOLE for the engagement of persons in domestic and household service. Is her defense tenable? Reason. (2004, 2012, 2015) A: No. Sec.12 (1) of RA 9231 provides that children below 15 years of age shall not be employed except when a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his family are employed. Provided however, that his/her employment neither endangers his/her normal development. Provided further, that the parent or legal

Q: Discuss the statutory restrictions on the employment of minors? (2007) A: Art. 140 of the Labor Code provides that employers shall not discriminate against any person in respect to terms and conditions of employment on account of his age. The employer is duty-bound to submit a report to DOLE of all children under his employ, with a separate report on children found to be handicapped after a conduct of medical examination. Moreover, an employer in any commercial, industrial, or agricultural establishment or enterprise is required to keep a register of all children under his employ, indicating therein their respective dates of birth; and a separate file on written consent of their respective parents/guardians, another file for their education and medical certificates, and a separate file for special work permits issued by the Secretary of DOLE. For children employed as domestic, the head of the family shall give the domestic an opportunity to complete at least elementary education. Other provisions are Art. 272, 278; Art. 107 of PD 603 and RA 6710. Q: A spinster school teacher took pity on one of her pupils, a robust and precocious 12-year old boy whose poor family could barely afford the cost of his schooling. She lives alone at her house near the school after her housemaid left. In the afternoon, she lets the boy do various chores as cleaning, fetching water and all kinds of errands after school hours. She gives him rice and P30.00 before the boy goes home at 7:00 every night. The school principal learned about it and charged her with violating the law which prohibits the employment of children below 15 years of age. In her defense, the teacher stated that the work performed by her pupil is not hazardous, and she invoked the exception provided in the Department Order of DOLE for the engagement of persons in domestic and household service. Is her defense tenable? Reason. (2004, 2012, 2015) A: No, her defense is not tenable. Under Article 139 of the Labor Code on "minimum employable age", no child below 15 years of age shall be employed except when he works directly under the sole responsibility of his parents or guardian or   where   a   child’s   employment or participation in public entertainment or information through cinema, theater, radio, television or other forms of   media   is   essential   xxx.”     (Section 12, R.A. 7610, as amended by R.A. 9231), the provisions of the alleged Department Order of DOLE to the contrary notwithstanding. A mere Department Order cannot

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

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EMPLOYMENT OF MINORS (LABOR CODE AND R.A. NO. 7678, R.A. NO. 9231)

FOR LABOR LAW (1991-2015)

prevail over the express prohibitory provisions of the Labor Code. HOUSEHELPERS (LABOR CODE AS AMENDED BY R.A. NO. 7655, AN ACT INCREASING THE MINIMUM WAGE OF HOUSEHELPERS; SEE ALSO – HOUSEHOLD SERVICE UNDER THE CIVIL CODE)

because she does not contract work in which the finished product will be returned or repurchased by the bank. Rather, she performs secretarial work which does not produce several finished products to be sold or distributed. PERSONS WITH DISABILITY (R.A. NO. 7277, AS AMENDED BY R.A. NO. 9442)

Q: Nova Banking Corporation has a resthouse and recreational facility in the highlands of Tagaytay City for the use of its top executives and corporate clients. The rest house staff includes a caretaker, two cooks and a laundrywoman. All of them are reported to the Social Security System as domestic or household employees of the rest house and recreational facility and not of the bank. Can the bank legally consider the caretaker, cooks and laundrywoman as domestic employees of the rest house and not of the bank? (2000)

Definition

A: No. In the case of Apex Mining Co., Inc. v. NLRC, et al. (GR No. 94951, April 22, 1991), the Supreme Court ruled that the   legal   definition   of   a   “domestic   employee”   or   a   “househelp”   cannot   be   interpreted   as to include employees who are working in staff houses, or in this case the rest house of Nova Banking Corporation, which is primarily for the use of its top executives and corporate clients. The rationale behind the ruling is that the Supreme Court recognized that in order for an employee to be regarded as a househelp, the criteria that must be satisfied is the nature of his/her work which is for the personal comfort and enjoyment of the family of the employer in the home of the said employer. In this case, while it may be true that the nature of the work of the caretaker, 2 cooks and laundrywoman in a home and in a company rest house may be of similar in nature, the difference in their circumstances is that in the former instance, they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staff houses, in this case rest houses or within the premises of the business of the employer for the benefit of the employer, other employees and clients. In such instance, they are employees of the company or employer in the business concerned entitled to the privileges of regular employees.

A: No. The mere fact that a worker has a disability does not make her a handicapped worker if despite her disability, she can still efficiently perform her work. She must be considered as a qualified disabled worker who is entitled to the same treatment as qualified able-bodied workers. (Alcantara, 2009).

EMPLOYMENT OF HOMEWORKERS Q: Mrs. Josie Juan is the confidential secretary of the Chairman of the Board of the bank. She is presently on maternity leave. In an arrangement where the Chairman of the Board can still have access to her services, the bank allows her to work in her residence during her leave. For this purpose, the bank installed a fax machine in her residence, and gave her a cellphone and a beeper. Is Mrs. Juan a homeworker under the law? Explain. (2000) A: No. A homeworker under the law is defined as a person who carries out a work for an employer at home. Under this scheme, the employer may or may not furnish the materials needed for the completion of the task. Thereafter, the homeworker delivers the finished product to the employer. Applying the legal definition, it is clear that Mrs. Juan is not a homeworker; instead, she is an officeworker UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Q: A lady worker was born with a physical deformity, specifically, hard of hearing, speech impaired, and color blind. However, these deficiencies do not impair her working ability. Can the employer classify the lady worker as a handicapped worker so that her daily wage will only be seventy-five percent (75%) of the applicable daily minimum wage? (1998)

Q: Ana Cruz has a low IQ. She has to be told at least three times before she understands her daily work assignment. However, her work output is at least equal to the output of the least efficient worker in her work section. Is Ms. Cruz a handicapped worker? Explain. (2000) A: No. Low IQ or low efficiency does not make the worker "handicapped" in the contemplation of law. Under Art. 78, a handicap means such physical or mental infirmity that impairs capacity to work. The deficiency may also be due to age or injury. Rights of Persons with Disability Q: For humanitarian reasons, a bank hired several handicapped workers to count and sort out currencies. Their employment contract was for six (6) months. The bank terminated their employment on the ground that their contract has expired prompting them to file with the Labor Arbiter a complaint for illegal dismissal. Will their action prosper? (2006, 2012) A: No. Art. 80 provides that in cases of employing handicapped workers, an employment agreement must be contracted. Art. 80 further provides that such employment agreement shall contain the duration of the employment period. In the case at bar, the action will not prosper for the bank cannot be held liable for illegal dismissal for the handicapped employees themselves have agreed that their term of employment will only be limited to 6 months. Note: The contract signed by the workers is akin to a probationary employment, during which the bank determined the employees’  fitness  for  the  job.    If  the  bank   renewed the contract after the lapse of the six-month probationary period, the employees will then become regular employees since the task of counting and sorting bills is necessary and desirable to the business of the

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TERMINATION OF EMPLOYMENT EMPLOYER-EMPLOYEE RELATIONSHIP Q: Ruben Padilla entered into a written agreement with Gomburza College to work for the latter in exchange for the privilege of studying in said institution. Ruben's work was confined to keeping clean the lavatory facilities of the school. One school day, Ruben got into a fist fight with a classmate, Victor Monteverde, as a result of which the latter sustained a fractured arm. Victor Monteverde filed a civil case for damages against Ruben Padilla, impleading Gomburza College due to the latter's alleged liability as an employer of Ruben Padilla. Under the circumstances, could Gomburza College be held liable by Victor Monteverde as an employer of Ruben Padilla? (1997) A: No. Under Sec. 14, Rule X, Book III of the Implementing Rules and Regulations, there is no employer-employee relationship between students on the one hand, and schools, colleges or universities on the other, where students work for the latter in exchange for the privilege to study free of charge, provided the students are given real opportunity, including such facilities as may be reasonably necessary, to finish their chosen course under such agreement. Therefore, there being no employer-employee relationship between Gomburza College and Ruben Padilla, the former cannot be impleaded by Victor Monteverde in his complaint. Q: Complainants had worked five (5) years as waitresses in a cocktail lounge owned by the respondent. They did not receive any salary directly from the respondent but shared in all service charges collected for food and drinks to the extent of 75%. With respondent's prior permission, they could sit with and entertain guest inside the establishment and appropriate for themselves the tips given by guests. After five (5) years, the complainant’s individual shares in the collected service charges dipped to below minimum wage level as a consequence of the lounge's marked business decline. Thereupon, complainants asked respondent to increase their share in the collected service charges to 85% or the minimum wage level, whichever is higher. Respondent terminated the services of the complainants who countered by filing a consolidated complaint for unlawful dismissal, with prayer for 85% of the collected services or the minimum wage for the appropriate periods, whichever is higher. Decide. (2008) A: The waitresses were employees of the owner of the cocktail lounge. Article 138 of the Labor Code provides: “Any   woman   who  is   permitted   or   suffered   to   work,   with   or without compensation, in any night club, cocktail lounge, massage clinic, bar or similar establishment, under the effective control or supervision of the employer for a substantial period of time as determined by the Secretary of Labor, shall be considered as an

employee of such establishment for purposes of labor and social   legislation.”   Thus,   the   said   waitresses   are   employees with the right to security of tenure and cannot be dismissed just because they filed a complaint against the owner of the cocktail lounge. And as such waitresses, who are considered employees of the cocktail lounge, they are at the very least entitled to receive the applicable minimum wage. Four-fold Test Q: Asia Security & Investigation Agency (ASIA) executed a one-year contract with the Baron Hotel (BARON) for the former to provide the latter with twenty (20) security guards to safeguard the persons and belongings of hotel guests, among others. The security guards filled up Baron application form and submitted the executed forms directly to the Security Department of Baron. The pay slips of the security guards bore Baron's logo and showed that Baron deducted therefrom the amounts for SSS premiums, medicare contributions and withholding taxes. Assignments of security guards, who should be on duty or on call, promotions, suspensions, dismissals and award citations for meritorious services, were all done upon approval by Baron's chief security officer. After the expiration of the contract with Asia, Baron did not renew the same and instead executed another contract for security services with another agency. Asia placed the affected security guards on "floating status" on "no work no pay" basis. Having been displaced from work, the Asia security guards filed a case against the Baron Hotel for illegal dismissal, overtime pay, minimum wage differentials, vacation leave and sick leave benefits, and 13th month pay. Baron Hotel denied liability alleging that Asia is the employer of the security guards and therefore, their complaint for illegal dismissal and payment of money claims should be directed against Asia. Nevertheless, Baron filed a Third Party Complaint against Asia. a.

Is there an employer-employee relationship between the Baron Hotel, on one hand, and the Asia security guards, on the other hand? Explain briefly. b. Assuming that ASIA is the employer, is the act of ASIA in placing the security guards on "floating status" lawful? Why? (1999) A: a. Yes. As a general rule, in cases of job contracting, the employees of the job contracting agency remain as its employees and are not transferred under the wings of the principal. However, this case proves to be more of the exception rather than the general rule. Taking into consideration the attending circumstances that it is BARON which pays the wages as evident in the security   guards’   pay   slips   which   bears   the   logo   of   BARON, that it is BARON which deducts the SSS premiums and medicare contributions, that it is BARON which determines the assignment, promotions and suspension of the said security guards, it is clear that BARON is their employer and not ASIA. This is due to the fact that it is BARON which fulfills the requisites for the existence of an employer-employee relationship which are as follows: 1) the selection and management of employees; 2) the payment of wages; 3) the power of

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

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bank. (Bernardo et. al. v. NLRC and Far East Bank and Trust Co. G.R. No. 122917, July 12, 1999).

FOR LABOR LAW (1991-2015)

dismissal;  and  4)  the  employer’s  power  to  control  the   employee’s  conduct. Therefore, under the circumstances as well as the general rule and the exception provided by law, it appears that BARON had hired the security guards as its employees. b.

Yes.  Art.  286  recognizes  the  so  called  “floating  status”   of an employee. Under such status, the employeremployee relationship is not terminated, rather it is suspended for reasons such as suspension of business operations or the fulfillment by the employee of a military or civic duty. Art. 286 also mandates that the floating status of an employee shall not exceed 6 months. If the floating status exceeds the allowable period, the employee is deemed to have been illegally dismissed. (Valdez v. NLRC et al., G.R. No. 125028, February 9, 1998). Therefore, ASIA, for reasons that there are no jobs available for the security guards, may lawfully place them under floating status for a period not exceeding 6 months and shall reinstate them thereafter. Only when the floating status exceeds 6 months without reinstatement will ASIA be liable for illegal dismissal.

Q: Teofilo Lacson was one of more than one hundred (100) employees who were terminated from employment due to the closure of LBM Construction Corporation (LBM). LBM was a sister company of Lastimoso Construction, Inc. and RL Realty & Development Corporation. All three (3) entities formed what came to be known as the Lastimoso Group of Companies. The three (3) corporations were owned and controlled by members of the Lastimoso Family; their incorporators and directors all belonged to the Lastimoso family. The three (3) corporations were engaged in the same line of business, under one management, and used the same equipment including manpower services. Teofilo Lacson and his co-employees filed a complaint with the Labor Arbiter against LBM, RL Realty and Lastimoso Construction to hold them jointly and severally liable for backwages and separation pay. Lastimoso Construction, Inc. and RL Realty & Development Corporation interposed a Motion to Dismiss contending that they are Juridical entitles with distinct and separate personalities from LBM Construction Corporation and therefore, they cannot be held jointly and severally liable for the money claims of workers who are not their employees. Rule on the Motion to Dismiss. Should it be granted or denied? Why? (1999)

because in so far as Teofilo Lacson is concerned, it is only LBM which controls, directs and pays for his employment. Moreover, in the case of Concept Builders v. NLRC (G.R. No. 108734, May 29, 1996), the Supreme Court ruled that as a fundamental principle of Corporation Law, corporations are considered to have a separate and distinct entity from its stock holders and from other corporations which it may be connected to. In conclusion, Lastimoso Construction Inc. and RL Realty & Development must not be burdened with the fault of LBM in the ground that the sister companies had no control over the employment of Teofilo Lacson and the decision to dismiss him was purely made on the part of LBM. Q: Metro Grocery Inc. arranged with Mr. Juan Dado, a Barangay Chairman, to provide the grocery with workers who will work as cashiers, bag boys, shelf counter helpers and sanitation workers. The grocery will pay Mr. Dado an amount equivalent to the direct and hidden costs of the wages of each worker assigned, plus ten percent (10%) to cover the administrative costs related to their arrangement. Mr. Dado, in turn, will pay directly the workers their wages. As far as the workers are concerned, Mr. Dado is their employer. A group of concerned workers consulted you if Mr. Dado is really under the law their employer. a.

How will you analyze the problem in order to formulate your answer? b. What is the legal significance, if any, of the question of the concerned workers as to who is their employer? (2000) A: a. I will use the four-fold test in analyzing the situation. Under this test, in order to determine the existence of an employer-employee relationship, the following elements must be present: (1) the manner of selection and engagement; (2) the payment of wages; (3) the presence or absence of the power of dismissal and (4) the presence or absence of the power to control. (Abante, Jr. v. Ladmadrid Bearing and Parts Corporation et al., GR No. 159890, May 28, 2004). In the case at bar, it is clear that the grocery store is the employer because it pays to Mr. Dado of the hidden costs and other administrative costs related to the arrangement of the workers. This means that, although the manner of selection and engagement of the employees were in the hands of Mr. Dado, such is not within his full control for the funds needed for the selection and engagement were given by the grocery store. Secondly, it is the grocery store who pays their wages via the payment it gave to Mr. Dado for hidden costs. Lastly, it is clear that it is the grocery store who has  complete  control  over  the  workers’  conduct  and   it also had the power to dismiss them. Mr. Dado was only there to furnish the grocery store with its needed employees.

A: The Motion to Dismiss must be granted. In determining the existence of an employer-employee relationship, the following elements must be taken into consideration: 1) the selection and engagement of the employee; 2) the payment of wages; 3) the power of dismissal; and 4) the employer’s  power  to  control  the  employee’s  conduct. Applying the said elements in the case at bar, there is no doubt that it is LBM alone which is the employer of Teofilo Lacson because it is only LBM which exercises the abovementioned requisites. The fact that LBM and its sister companies Lastimoso Construction Inc. and RL Realty & Development are inter-related in terms of management, equipment and manpower is of no moment UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

b.

The legal significance of the above stated problem would arise in cases where the employees were illegally dismissed. Since the employee arrangement is that of a Labor Only Contracting, it is prohibited by law. Under Sec. 6 of DO 18-02 Series of 2002, labor only contracting has been expressly declared prohibited by law. It is defined as an arrangement

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Moreover, the determination of the real employer of the workers would result to the determination as to who is responsible for providing the workers with mandatory legal privileges and benefits that contractual employees are entitled to. Furthermore, in cases of illegal dismissal, the employees will know who between Mr. Dado and the grocery store are they going to file charges against. Q:"X" is a bona fide service contractor providing manpower services to various companies, possessing the necessary capital and equipment needed to effectively carry out its commitments. "Y" is an employee of "X" and assigned to work as a janitor in Company "Z". In the course of Y's assignment, Z's supervisors and employees would give verbal instructions to Y as to how and where to perform his work. X pays Y salary. Subsequently, Y's services were terminated by X. Y sued Z for Illegal dismissal. May Y's case against Z prosper? Why? (2001). A: No, the charges of Y will not prosper because Z is not his employer. It is X who is his employer even though he renders his services in the offices of Z. X is the independent contractor of Z. Applying the four-fold tests in determining who the employer of Y is, the following elements must be present: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal and (4) the employer’s  power  to  control  the  employee’s  conduct. In the present case, it is clear that the following elements are present in the relationship between X and Y. The fact that   Z’s   supervisors   give   verbal   orders   to   Y   during   the   performance of his service which may denote control over his conduct, it is insufficient to overthrow the other 3 elements present in the relationship of X and Y namely, (1) that it was X who selected and engaged in the employment   of   Y;   (2)   that   it   was   X   who   paid   Y’s   salaries   and (3) that it was X who had the power to dismiss X. Q: The Pizza Corporation (PizCorp) and Ready Supply Cooperative (RSC) entered into a "service agreement" where RSC in consideration of service fees to be paid by PizCorp's will exclusively supply PizCorp with a group of RSC motorcycle-owning cooperative members who will hence forth perform PizCorp's pizza delivery service. RSC assumes under the agreement --- full obligation for the payment of the salaries and other statutory monetary benefits of its members deployed to PizCorp. The parties also stipulated that there shall be no employer-employee relationship between PizCorp and the RSC members. However, if PizCorp is materially prejudiced by any act of the delivery impose disciplinary sanctions on, including the power to dismiss, the erring RSC member/s. (2008) a. Is the contractual stipulation that there is no employer-employee relationship binding on labor officials? Why? Explain fully.

A: The contractual stipulation that there is no employeremployee relationship between PizCorp and the RSC members is not binding on labor officials because what determines the existence or non-existence of employeremployee relationship is the actual factual situation between PizCorp and RSC members and not what is stipulated in the contract. b. Based on the test/s for employer-employee relationship, determine the issue of who is the employer of the RSC members. A: Using the control test, the employer of the RSC members is Piz Corp. According to the facts, the RSC members are supposed to make their deliveries in accordance with PizCorp directives and orders. In addition, the PizCorp can directly impose disciplinary sanction, including the power to dismiss the RSC members. c. Assume that RSC has a paid-up capitalization of P1,000.000.00. Is RSC engaged in "labor only" contracting, permissible job contracting or simply, recruitment? A: Even if the RSC has paid up capitalization of P1,000,000.00, it is not engaged in labor-only contracting, or permissible job contracting. It is engaged simply in recruiting. RSC merely provides PizCorp the former’s   motorcycle-owning members to deliver the product   of   PizCorp   in   accordance   with   PizCorp’s   directives and orders. Q: Assume that in the previous problem, Mario, an RSC member disgusted with the non-payment of his night shift differential and overtime pay, filed a complaint with the DOLE Regional Office against RSC and PizCorp. After inspection, it was found that indeed Mario was not getting his correct differential and overtime pay and that he was declared an SSS member (so that no premiums for SSS membership were never remitted). On this basis, the Regional Director issued a compliance order holding PizCorp and RSC solidarily liable for the payment of the correct differential and overtime pay and ordering PizCorp to report Mario for membership with SSS and remit overdue SSS premiums. Who has the obligation to report the RSC members for membership with the SSS, with the concomitant obligation to remit SSS premiums? Why? A: Ordinarily, if RSC is engaged in permissible job contracting, it would be RSC who would be the employer and, therefore, would have the obligation to report its employees to the SSS and remit its premiums. However,  since  RSC  is  only  a  “labor-only”  contractor  and,   therefore considered merely as agent of PizCorp, the latter as the real employer has the legal obligation to report the RSC members as its employees for membership with the SSS and remit its premiums. Q: Don Luis, a widower, lived alone in a house with a large garden. One day, he noticed that the plants in his garden needed trimming. He remembered that Lando, a 17-year old out-of-school youth, had contacted him in church the other day looking for work. He contacted Lando who immediately attended

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

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where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and that the contractor or subcontractor does not have substantial capital or investment and that he does not exercise the power of control over the contractual employee.

FOR LABOR LAW (1991-2015)

to   Don   Luis’s   garden   a   nd   finished   the   job   in   three   days.

compulsory upon all employees not over sixty (60) years of age and their employers.

a.

ANOTHER SUGGESTED ANSWER:

Is there an employer-employee relationship between Don Luis and Lando?

A: Yes. All the elements of employer-employee relationship are present, viz: 1. The selection and engagement of the employee; 2. The power of dismissal; 3. The payment of wages; 4. The  power  to  control  the  employee’s  conduct. There was also no showing that Lando has his own tools, or equipment so as to qualify him as an independent contractor. ALTERNATIVE ANSWER: None. Lando is an independent contractor for Don Luis does   not   exercise   control   over   Lando’s   means   and   method  in  tending  to  the  former’s  garden. b.

Does Don Luis need to register Lando with the Social Security System (SSS)? (2014)

A: Yes. Coverage in the SSS shall be compulsory upon all employees not over sixty (60) years of age. ALTERNATIVE ANSWER: No. Lando is not an employee of Don Luis. What the parties have is a contract for a piece of work which, while allowed by Article 1713 of the Civil Code, does not make Lando an employee under the Labor Code and Social Security Act. Q: Ador is a student working on his master's degree in horticulture. To make ends meet, he takes on jobs to come up with flower arrangements for friends. His neighbor, Nico, is about to get married to Lucia and needs a floral arranger. Ador offers his services and Nico agrees. They shake hands on it, agreeing that Nico will pay Ador P20,000.00 for his services but that Ador will take care of everything. As Ador sets about to decorate the venue, Nico changes all of Ador's plans and ends up designing the arrangements himself with Ador simply executing Nico's instructions. (2015) a.

Is there an employer-employee relationship between Nico and Ador?

A: Yes.  With  Ador’s  simply  executing  Nico’s  instruction,   Nico,  who  now  has  control  over  Ador’s  work,  has  become   the employer of Ador. In Royale Homes Marketing Corp. v. Fidel Alcantara (G.R. No. 195190, July 28, 2014) the Supreme Court held that control is the most important determinant of employer-employee relationship. ALTERNATIVE ANSWER: There is no employer-employee relationship. The case at hand pertains to a civil law arrangement. There is no business undertaken by Nico; what the parties have is a contract for a specific service. b. Will Nico need to register Ador with the Social Security System (SSS)? A: Yes, as under Section 9 of the Social Security Law (Art. 1611 as amended), coverage in the SSS shall be UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

If Ador is a purely casual employee: No. Casual employees are not subject to compulsory coverage of the SSS by express provision of law. (Section 8(5) (3), RA 1611, as amended). Kinds of Employment Probationary Q: What limitations, if any, do the law and jurisprudence impose on an employer's right to terminate the services of a probationary employee? (2001) A: The Labor Code [in Art. 281) provides that the services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. If the probationary employee is being terminated for just cause, he must, of course, be given due process before his termination Regular Q: A Construction Group hired Engineer "A" as a Project Engineer in 1987. He was assigned to five (5) successive separate projects. All five (5) Contracts of Employment he signed specified the name of the project, its duration, and the temporary-project nature of the engagement of his services. Upon completion of the fifth [5th) project in August 1998, his services were terminated. He worked for a total of ten (10) years (1987-1998) in the five (5) separate projects. Six months after his separation, the Group won a bid for a large construction project. The Group did not engage the services of Engineer "A" as a Project Engineer for this new project; instead, it engaged the services of Engineer "B". Engineer "A" claims that by virtue of the nature of his functions, i.e., Engineer in a Construction Group, and his long years of service he had rendered to the Group, he is a regular employee and not a project engineer at the time he was first hired. Furthermore, the hiring of Engineer "B" showed that there is a continuing need for his services. Is the claim of Engineer "A" correct? (1998) A: The claim of Engineer "A" that he is a regular employee and not a project employee is not correct. The Labor Code provides: Art. 280. Regular and Casual Employment. An employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except, where the employment has been fixed for a specific project or undertaking the time of the engagement of the employee.

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The fact that the petitioners worked for several projects of private respondent company is no basis to consider them as regular employees. By the very nature of their employer's business, they will always remain project employees regardless of the number of projects in which they have worked (De Ocampo v NLRC, 186 SCRA 361 [1990]). Project employees are not considered regular employees, their services, being needed only when there are projects to be undertaken. The rationale for this rule, is that if a project has already been completed, it would be unjust to require the employer to maintain them in the payroll while they are doing absolutely nothing except waiting for another project. Q: Kitchie Tempo was one of approximately 500 production operators at HITEC Semiconductors, Inc., and export-oriented enterprise whose business depended on orders for computer chips from overseas. She was hired as a contractual employee four years ago. Her contracts would be for a duration of five (5) months at a time, usually after a one-month interval. Her re-hiring was contingent on her performance for the immediately preceding contract. Six months after the expiration of her last contract, Kitchie went to HITEC's personnel department to inquire why she was not yet being recalled for another temporary contract. She was told that her performance during her last stint was "below average." Since there was no union to represent her, Kitchie seeks your advice as a labor lawyer about her chances of getting her job back. What will your advice be? (2005) A: The repeated rehiring and the continuing need of Kitchie's services for 4 years are sufficient evidence of the necessity and indispensability of her services to HITEC's business or trade (Magsalin v. National Organization for Working Men, et al., G.R. No. 148492, May 9, 2003). Where a person thus engaged has been performing the job for at least one year, even if the performance is not continuous or is merely intermittent, the law deems the employment as regular with respect to such activity and while such activity exists (Paguio v. NLRC, G.R. No. 147816, May 9, 2003). Hence, Kitchie is considered a regular employee of HITEC and as such, she cannot be terminated except for cause and only after due process. Q: After thirty (30) years of service, Beta Company compulsorily retired Albert at age 65 pursuant to the company's Retirement Plan. Albert was duly paid his full retirement benefits of one (1) month pay for every year of service under the Plan. Thereafter, out of compassion, the company allowed Albert to continue working and paid him his old monthly salary rate, but without the allowances that he used to enjoy. After five (5) years under this arrangement, the company finally severed all employment relations with Albert; he was declared fully retired in a fitting ceremony but the company did not give him any further retirement benefits. Albert thought this treatment unfair as he had rendered full service at

his usual hours in the past five (5) years. Thus, he filed a complaint for the allowances that were not paid to him, and for retirement benefits for his additional five (5) working years, based either on the company's Retirement Plan or the Retirement Pay Law, whichever is applicable. (2013) a.

After Albert's retirement at age 65, should he be considered a regular employee entitled to all his previous salaries and benefits when the company allowed him to continue working?

A: He would be considered a contractual employee, not a regular employee. His salaries and   benefits   will   be   in   accordance with the stipulations of the contract he signed with the company. The present case is similar to a case decided by the Supreme Court (Januaria Rivera v. United Laboratories, G.R. No. 155639, April 22, 2009) where the Court held that the company, in employing a retired employee whose knowledge, experience and expertise the company recognized, as an employee or as a consultant, is not an illegality; on the contrary, it is a recognized practice in this country. b. Is he entitled to additional retirement benefits for the additional service he rendered after age 65? A: No. He cannot be compulsorily retired twice in the same company. Q: Linda was employed by Sectarian University (SU) to cook for the members of the religious order who teach and live inside the campus. While performing her assigned task, Linda accidentally burned herself. Because of the extent of her injuries, she went on medical leave. Meanwhile, SU engaged a replacement cook. Linda filed a complaint for illegal dismissal, but her employer contended that Linda was not a regular employee but a domestic househelp. Decide. (2014) A: The  employer’s  argument  that  Linda  was  not  a  regular   employee has no merit. The definition of domestic servant or househelper contemplates one who is employed  in  the  employer’s  home  to  minister  exclusively   to  the  personal  comfort  and  enjoyment  of  the  employer’s   family. The Supreme Court already held that the mere fact that the househelper is working in relation to or in connection with its business warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee (Apex Mining Co., v. NLRC, G.R. No. 94951, April 22, 1991). Here, Linda was hired not to minister to the personal comfort and enjoyment  of  her  employer’s  family  but  to  attend  to  other   employees who teach and live inside the campus. ALTERNATIVE ANSWER: The complaint for illegal dismissal should be dismissed. There was no showing that in hiring a replacement cook, SU severed its employer-employee relationship with Linda. In illegal dismissal cases, an employee must first establish, by substantial evidence, the fact of dismissal before shifting to the employer the burden of proving the validity of such dismissal (Grand Asian Shipping Lines, Inc., Eduardo P. Francisco and William How v. Wilfred Galvez, et.al. G.R. No. 178184, January 29, 2014). Here Linda’s  dismissal  was  not  clearly  established. Q: Don Don is hired as a contractual employee of CALLHELP, a call center. His contract is expressly for

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

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In all the five (5) successive contracts of employment of Engineer "A" the name of the project, its duration, and the temporary project nature of the engagement of his services are clearly stated: hence, Engineer "A" falls within the exemption of Art. 280. The Supreme Court in Manansag v. NLRC, (218 SCRA 722 [1993]) has ruled as follows:

FOR LABOR LAW (1991-2015)

a term of 4 months. Don Don is hired for 3 straight contracts of 4 months each but at 2-week intervals between contracts. After the third contract ended, Don Don is told that he will no longer be given another contract because of "poor performance." Don Don files a suit for "regularization" and for illegal dismissal, claiming that he is a regular employee of CALLHELP and that he was dismissed without cause. You are the Labor Arbiter. How would you decide the case? (2005, 2015) A: As Labor Arbiter, I will decide the case in favor of Don Don.  Given  the  nature  of  Don  Don’s  work,  which  consists   of activities usually or desirable in the usual business of CALLHELP, Don Don should be considered a regular employee. Where a person thus engaged has been performing the job for at least one year, even if the performance is not continuous or is merely intermittent, the law deems the employment as regular with respect to such activity and whiles such activity exists (Paguio v. NLRC, G.R. No. 147816, May 9, 2003). CALLHELP’s  termination  of  service   in  the  guise  of  “poor   performance”   is   not   valid.  Hence, Don Don is considered a regular employee of CALLHELP and as such, he cannot be terminated except for cause and only after due process. Project Employment Q: Design Consultants, Inc. was engaged by the PNCC to supervise the construction of the South Expressway Extension. Design Consultants, Inc. hired Omar as a driver for two (2) years. After his two-year contract expired, he was extended another contract for nine (9) months. These contracts were entered into during the various stages and before the completion of the extension project. Omar claims that because of these repeated contracts, he is now a regular employee of Design Consultants. Inc. Is he correct? Explain briefly. (2002) A: Yes. The principal test for determining whether a particular employee is a "project employee" as distinguished from a "regular employee" is whether or not the "PROJECT EMPLOYEE" was assigned to carry out a "specific project or undertaking," the duration and scope of which were specified at the time the employee was engaged for the projects. In the problem given, there is no showing that Omar was informed that he was to be assigned to a "specific project or undertaking." Neither has it been established that he was informed of the duration and scope of such project or undertaking at the time of his engagement (Philex Mining Corp. v. NLRC, G.R. No. 125132, August 10, 1999). Moreover, the re-hiring of Omar is sufficient evidence of the necessity or the indispensability of his services to the company's business (Aurora Land Projects Corp v. NLRC, G.R. No. 114733, January 2, 1997) Hence, Omar is correct in claiming that he is a regular employee of Design Consultants, Inc. ALTERNATIVE ANSWER: Omar is not correct Omar is a project employee as defined by Art. 280 of Labor Code. He was hired for a specific project with fixed periods of employment, specifically: two (2) years for the first contract, and nine (9) months for the second contract. A project employee who is hired for a specific project only is not a regular employee notwithstanding an extension of the project provided UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

that the contract of project employment clearly specifies the project and the duration thereof. (Palomares v. NLRC, G.R. No. 120064, August 15, 1997). Q: Tomas and Cruz have been employed for the last 22 years in various capacities on board the ships of BARKO Shipping Company. Their employment was made through a local manning company. They have signed several ten (10) month employment contracts with BARKO Shipping. The NLRC ruled that they were contractual employees and that their employment was terminated each time their contracts expired. Is the ruling of the NLRC correct? Explain your answer fully. (2002) A: Yes. A contract of employment for a definite period terminates by its own terms at the end of such period. Since Tomas and Cruz signed ten (10)-month contracts, their employment terminates by its own terms at the end of each ten (10)-month period. The decisive determinant in the term of employment should not be the activities that the employee is called upon to perform but the day certain agreed upon by the parties for the commencement and termination of their employment relation (not the character of his duties as being "usually necessary or desirable in the usual business of the employer"). Stipulation in the employment contracts providing for "term employment" or "fixed period employment" are valid when the period are agreed upon knowingly and voluntarily by the parties without force, duress or improper pressure exerted on the employee; and when such stipulations were not designed to circumvent the laws on security of tenure (Brent School v. Zamora, G.R. No. L-48494, February 5, 1990). Moreover, in Brent School v. Zamora, supra, the Supreme Court stated that Art. 280 of the Labor Code does not apply to overseas employment. In Pablo Coyoca v. NLRC (G.R. No. 113658, March 31, 1995), the Supreme Court also held that a seafarer is not a regular employee and Filipino seamen are governed by the rules and regulations governing overseas employment and the said rules do not provide for separation or termination pay. From the foregoing cases, it is clear that seafarers are considered contractual employees. They cannot be considered as regular employees under Art 280 of the Labor Code. Their employment is governed by the contracts they sign every time they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. They fall under the exception of Art 280 whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. We need not depart from the rulings of this court in the two aforementioned cases which indeed constitute stare decisis with respect to the employment status of seafarers. (Douglas Millares v. NLRC, et. al, G.R. No. 110524, March 14, 2000) Therefore, Tomas and Cruz are contractual employees. The ruling of the NLRC is correct. Q: A, a driver for a bus company, sued his employer for nonpayment of commutable service incentive leave credits upon his resignation after five years of employment. The bus company argued that A was not entitled to service incentive leave since he was

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QuAMTO for LABOR LAW (1991-2015)

A: I will grant the prayer of A. Payment on commission basis alone does not prove that A is a field personnel. There must be proof that A is left to perform his work unsupervised by his employer. Otherwise, he is not a field personnel, thus entitled to commutable service incentive leave (SIL) credits (Auto Bus v. Bautista, G.R. No. 156367, May 16, 2005). His action has not yet prescribed. In Auto Bus v. Bautista, the Supreme Court recognized that SIL is a unique labor standard benefit, because it is commutable. An employee may claim his accrued SIL throughout the years of his service with the company upon his resignation, retirement, or termination. Therefore, when A resigned after five years, he has now the right to claim ALL his SIL benefits and his right of action accrued at the time when the employer refused to pay him with his rightful SIL benefits. (Art. 291, Labor Code). Q: Lina has been working as a steward with a Miami, U.S.A-based Loyal Cruise Lines for the past 15 years. She was recruited by a local manning agency, Macapagal Shipping, and was made to sign a 10month employment contract every time she left for Miami.  Macapagal  Shipping  paid  for  Lina’s  round-trip travel expenses from Manila to Miami. Because of a food poisoning incident which happened during her last cruise assignment, Lina was not re-hired. Lina claims she has been illegally terminated and seeks separation pay. If you were the Labor Arbiter handling the case, how will you decide? (2014) A: I   will   dismiss   Lina’s   complaint.   Lina   is   a   contractual   employee and the length of her employment is determined by the contracts she entered into. Here, her employment was terminated at the time of the expiration of the contract. (Millares, et.al. v. NLRC, G.R. No. 110524, July 29, 2002). Seasonal Q: A was hired to work in a sugar plantation performing such tasks as weeding, cutting and loading canes, planting cane points, fertilizing and cleaning the drainage. Because his daily presence in the field was not required, A also worked as a houseboy at the house of the plantation owner. For the next planting season, the owner decided not to hire A as a plantation worker but as a houseboy instead. Furious, A filed a case for illegal dismissal against the plantation owner. Decide with reason. (2010) A: A is a regular seasonal employee. Therefore, he cannot be dismissed without just or valid cause. The primary standard for determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer (Pier 8 Arrastre & Stevedoring Services, Inc., et.al. v. Jeff B. Boclot, G.R. No. 173849, September 28, 2007). Considering that A, as plantation worker, performs work that is necessary and desirable to the usual business of the plantation owner, he is therefore a regular seasonal employee and is entitled to reinstatement upon onset of the next season unless he was hired for the duration of only one season (Hacienda

Bino v. Cuenca et al., G.R. No. 150478, April 15, 2005). Converting A to a mere houseboy at the house of the plantation owner amounts to an act of severing his employment relations as its plantation worker (Angeles v. Fernandez). Casual Q: A carpenter is employed by a private university in Manila. Is the carpenter a regular or a casual employee? Discuss fully. (2007) A: If the employment of the carpenter is sporadic and brief in nature or occasional, his employment is casual especially because the work he is performing is not in the usual   course   of   the   school’s   trade   or   business.   However,   if the carpenter has rendered services for at least one year, whether continuous or broken, he becomes a regular employee by operation of law, with respect to the activity in which he is employed and his employment shall continue while such activity exists. (Art. 280; See also Philippine Geothermal, Inc. vs NLRC, G.R. Nos. 8264367, August 30, 1990). Fixed-term Q: Mariano Martillo was a mason employed by the ABC Construction Company. Every time that ABC had a project, it would enter into an employment contract with Martillo for a fixed period that coincided with the need for his services, usually for a duration of three to six months. Since the last project involved the construction of a 40-storey building, Martillo was contracted for 14 months. During this period, ABC granted wage increases to its regular employees, composed mostly of engineers and rank-and-file construction workers as a result of the just concluded CBA negotiations, feeling aggrieved and discriminated against, Martillo and other similarlysituated project workers demanded that increases be extended to them, inasmuch as they should now be considered regular employees and members of the bargaining unit. Briefly explain your answers. If you were ABC's legal counsel, how would you respond to this demand? (2005) A: If I were ABC's legal counsel, I will argue that the project workers are not regular employees but fixedterm employees. Stipulation in employment contracts providing for term employment or fixed period were agreed upon knowingly and voluntarily by the parties without force, duress or improper pressure, being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. (Pangilinan v. General Milling Corp., G.R. No. 149329, July 12, 2004). Q: Lina and 20 other sales ladies filed a complaint for illegal dismissal, contending that they are SDS regular employees as they performed activities usually necessary or desirable in the usual business or trade of SDS and thus, their constitutional right to security of tenure was violated when they were dismissed without valid, just or authorized cause. SDS, in defense, argued that Lina, et al. agreed prior to engagement to a fixed-period employment and

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

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considered a field personnel and was paid on commission basis and that, in any event, his claim had prescribed. If you were the Labor Arbiter, how would you rule? Explain. (2010)

FOR LABOR LAW (1991-2015)

thus waived their right to full-term tenure. Decide the dispute. (2008) A: I would rule in favor of Lina et. al. In Pure Foods Corporation v. NLRC (G.R. No. 122653, December 12, 1997), the scheme of the employer in hiring workers on a uniformly fixed contract basis of 5 months and replacing them upon the expiration of their contracts with other workers with the same employment status was found to have   been   designed   to   prevent   “casual”   employees   from   attaining the status of a regular employee. ANOTHER SUGGESTED ANSWER: I will resolve the illegal dismissal case in favor of SDS. In Brent case, the Supreme Court en banc held that while fixed term employment has already been repealed by the various amendments to the Labor Code, the Civil Code still allows fixed term employment. Such kind of employment is valid as long as it is established that: 1.

2.

The fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstance vitiating his consent; and The employer and employee dealt with each other on more or less equal terms with no moral dominance on the latter.

Since it is admitted, that Lina, et.al. agreed, prior to their engagement, to the fixed term employment, and it appearing that their consent was not vitiated, and considering further that it has not been argued that the parties dealt with each other on less equal terms, it then follows that Lina et.al.’s  fixed term employment is valid. No illegal dismissal can take place upon expiration of such fixed term employment. Q: Lucy was one of approximately 500 call center agents at Hambergis, Inc. She was hired as a contractual employee four years ago. Her contracts would be for a duration of five (5) months at a time, usually after a one month interval. Her re-hiring was contingent on her performance for the immediately preceding contract. Six (6) months after the expiration of her last contract, Lucy went to Hambergis personnel department to inquire why she was not being recalled to work. She was told that her performance   during   her   last   contract   was   “below   average”.   Lucy   seeks   your   legal   advice   about   her   chances of getting her job back. What will your advice be? (2014) A: Lucy cannot get her job back. She is a fixed-term employee and as such, her employment terminates upon the expiration of her contract. (Rowell Industrial Corporation v. Court of Appeals, G.R. No. 167714, March 7, 2007). ALTERNATIVE ANSWER: I will advice Lucy that she can get her job back if she files a case for illegal dismissal where, as a general rule, the twin reliefs of backwages and reinstatement are available. In the instant case, Lucy is a regular employee because the employment contract for five (5) months at a time, for four (4) years are obviously intended to circumvent   an   employee’s   security   of   tenure   and   are   therefore void. As a regular employee, Lucy may only be dismissed from service based on just and authorized causes enumerated under the Labor Code, and after UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

observance of procedural due process prescribed under said law. (Magsalin, et. Al. v. NOWNM, G.R. No. 14892, May 9, 2003). JOB CONTRACTING Articles 106 to 109 of the Labor Code Q: Distinguish the liabilities of an employer who engages the services of a bonafide "independent contractor" from one who engages a "labor-only" contractor? (1994) A: An employer who engages the services of a bona fide independent contractor is jointly and severally liable with the said independent contractor in the event that it fails to pay the recruited workers of their wages in accordance with the law, as provided under Art. 106. Similarly, under the same above stated provision, an employer who engages into a labor only contracting, shall be fully responsible for the employees in the same manner and extent as if he is the one who directly employed or recruited them; as the labor-only contractor is considered by law as merely an agent of the employer. Q: Pandoy, an electronics technician, worked within the premises of Perfect Triangle, an auto accessory shop. He filed a complaint for illegal dismissal, overtime pay and other benefits against Perfect Triangle, which refused to pay his claims on the ground that Pandoy was not its employee but was an independent contractor. It was common practice for shops like Perfect Triangle to collect the service fees from customers and pay the same to the independent contractors at the end of each week. The auto shop explained that Pandoy was like a partner who worked within its premises, using parts provided by the shop, but otherwise Pandoy was free to render service in the other auto shops. On the other hand, Pandoy insisted that he still was entitled to the benefits because he was loyal to Perfect Triangle, it being a fact that he did not perform work for anyone else. Is Pandoy correct? Explain briefly. (2002) A: Pandoy is incorrect. An independent contractor is defined as one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subject to the control of his employer except as to the result of the work. In this case, the fact that Pandoy works within the premises   of   Perfect   Triangle’s   shop   is   not   tantamount   to   his employment as a worker of Perfect Triangle. The common practice for auto accessory shops like the Perfect Triangle in engaging the services of Pandoy and allowing him to conduct his work in accordance to his own methods and in permitting him to contract other services outside Perfect Triangle falls squarely within the definition of an independent contractor. Therefore, not being an employee, his claim will not stand as he is not legally entitled to the remedies accorded by law only to employees, no matter how loyal he is to Perfect Triangle. Q: Sta. Monica Plywood Corporation entered into a contract with Arnold for the milling of lumber as well as the hauling of waste wood products. The company provided the equipment and tools because Arnold had neither tools and equipment nor capital for the job. Arnold, on the other hand, hired his friends,

TEAM BAROPS ACADEMICS COMMITTEE 2016

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QUAMTO

QuAMTO for LABOR LAW (1991-2015)

a.

Is Arnold a job contractor? Explain briefly.

A: No. In the leading case of Baguio v. NLRC, (G.R. No. 79004, October 4, 1991), the Supreme Court had the occasion to state the circumstances leading to the existence of a job contracting arrangement. Job contracting exists when (1) 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 (2) the contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business. In the present case, it is obvious that Arnold is not a job contractor for he does not have the either the substantial capital or the control over the employees. b. Who is liable for the claims of the workers hired by Arnold? Explain briefly. (2002) A: In this case, it shall be Sta. Monica Plywood who is liable for the claims of the workers as it is the real employer of the latter; and not Arnold as he is a laboronly contractor who merely deals with the furnishing of manpower to Sta. Monica. Q: Clean Manpower Inc. (CMI) had provided janitorial services to the National Economic Development Authority (NEDA) since April 1988. Its service contract was renewed every three months. However, in the bidding held on July 1992, CMI was disqualified and excluded. In 1993, six janitors of CMI formerly assigned at NEDA filed a complaint for underpayment of wages. Both CMI and NEDA were impleaded as respondents for failure to comply with NCR Wage Orders Nos. 01 and 02, which took effect on November 1, 1990 and January 2, 1992, respectively. Should NEDA, a government agency subject to budgetary constraints, be held liable solidarily with CMI for the payment of salary differentials due the complainants? Cite the legal basis of your answer. (2004, 2014) A: Yes, NEDA should be impleaded as a defendant. Art. 106 provides that in the event that the contractor or subcontractor fails to pay the wages the wages of his employees, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to the employees directly employed by him. The fact that NEDA is a government agency is of no moment. In U.S.A v. Ruiz (G.R. No. L-35645, May 22, 1985), the Supreme Court ruled that the State may be sued if the contract it entered into is pursuant to its proprietary function.

Q: Antonio Antuquin, a security guard, was caught sleeping on the job while on duty at the Yosi Cigarette Factory. As a result, he was dismissed from employment by the Wagan Security Agency, an independent contractor. At the time of his dismissal, Antonio had been serving as a watchman in the factory for many years, often at stretches of up to 12 hours, even on Sundays and holidays, without overtime, nighttime and rest day benefits. He thereafter filed a complaint for illegal dismissal and non-payment of benefits against Yosi Cigarette Factory, which he claimed was his actual and direct employer. As the Labor Arbiter assigned to hear the case, how would you correctly resolve the following: a. Antonio’s  charge  of  illegal  dismissal. b. Antonio’s  claim  for  overtime  and  other  benefits.   (2005) A: a. This is a case involving permissible job contracting. Antonio’s   charge   of illegal dismissal against Yosi Cigarette Factory will not prosper. Wagan Security Agency,   an   independent   contractor,   is   Antonio’s   direct   employer.   Yosi   is   only   Antonio’s   indirect   employer. By force of law, there is in reality no employer-employee relationship between Yosi and Antonio. (Baguio v. NLRC, G.R.Nos.79004-08, October 4,1991). b. Antonio’s   claim   for   overtime   and   other   benefits   should be paid by Yosi Cigarette Factory. The Labor Code provides that in the event that the contractor or subcontractor fails to pay the wages of his employees, the employer shall be jointly and severally liable to the extent of the work performed under the contract in the same manner and extent that he is liable to employees directly employed by his contractor or subcontractor for any violation of any provision of the Labor Code. Q: Star Crafts is a lantern maker based in Pampanga. It supplies Christmas lanterns to stores in Luzon, Metro Manila, and parts of Visayas, with the months of August to November being the busiest months. Its factory employs a workforce of 2,000 workers who make different lanterns daily for the whole year. Because of increased demand, Star Crafts entered into a contractual arrangement with People Plus, a service contractor, to supply the former with 100 workers for only 4 months, August to November, at a rate different from what they pay their regular employees. The contract with People Plus stipulates that all equipment and raw materials will be supplied by Star Crafts with the express condition that the workers cannot take any of the designs home and must complete their tasks within the premises of Star Crafts. Is there an employer-employee relationship between Star Crafts and the 100 workers from People Plus? Explain. (2015) A: Yes. People Plus is a labor-only-contractor because it is not substantially capitalized. Neither does it carry on an independent business in which it uses its own investment in the form of tools, equipment, machineries or work premises. Hence, it is just an agent or recruiter of workers who perform work directly related to the trade of Star Crafts. Since both the essential element and the conforming element of labor-only contracting are

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

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relatives and neighbors for the job. Their wages were paid by Sta. Monica Plywood Corp. to Arnold, based on their production or the number of workers and the time used in certain areas of work. All work activities and schedules were fixed by the company.

FOR LABOR LAW (1991-2015)

present, Star Crafts becomes the employer of the supplies worker. As principal, Star Crafts will always be an employer in relation to the workers supplied by its contractor. Its status as employer is either direct or indirect depending on whether the contractor is legitimate or not. Thus even if People Plus were a legitimate contractor, still Star Crafts will be treated as a statutory employer for purposes   of   paying   the   worker’s   unpaid   wages   and   benefits. Department Order No. 18-A Q: What is a "labor-only" contract? (1994) A: A labor-only contract shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are present: (a) the contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and 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; or (b) the contractor does not exercise the right to control over the performance of the work of the contractual employee. This form of arrangement is expressly prohibited by law. (Sec. 5 DOLE DO 18-02 SERIES OF 2002). DISMISSAL FROM EMPLOYMENT Q: Gabriela Liwanag has been working as a bookkeeper at Great Foods, Inc. which operates a chain of high-end restaurants throughout the country, since 1970 when it was still a small eatery at Binondo. In the early part of the year 2003, Gabriela, who was already 50 years old, reported for work after a week-long vacation in her province. It was the height of the SARS (Severe Acute Respiratory Syndrome) scare, and management learned that the first confirmed SARS death case in the Philippines, a “balikbayan”   nurse   from   Canada,   is   a   townmate   of   Gabriela. Immediately, a memorandum was issued by management terminating the services of Gabriela on the ground that she is a probable carrier of SARS virus and that her continued employment is prejudicial to the health of her co-employees. Is the action taken by the employer justified? (2004) A: The   employer’s   act   of   terminating   the   employment   of   Gabriela is not justified. There is no showing that said employee is sick with SARS, or that she associated or had contact with the deceased nurse. They are merely townmates. Furthermore, there is no certification by a competent authority that the disease is of such a nature or such a stage that it cannot be cured within a period of six months even with proper medical treatment. (Implementing Rules, Book VI, Rule 1, Sec. 8, Labor Code). Q: Pepe Santos was an international flight steward of Flysafe Airlines. Under FSA's Cabin Crew Administration Manual, Santos must maintain, given his height and body frame, a weight of 150 to 170 pounds. After 5 years as a flight steward, Santos began struggling with his weight; he weighed 200 lbs., 30 pounds over the prescribed maximum weight. The Airline gave him a one-year period to attain the UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

prescribed weight, and enrolled him in several weight reduction programs. He consistently failed to meet his target. He was given a 6-month grace period, after which he still failed to meet the weight limit. FSC thus sent him a Notice of Administrative Charge for violation of company standards on weight requirements. He stated in his answer that, for medical reasons, he cannot have a rapid weight loss. A clarificatory hearing was held where Santos fully explained his predicament. The explanation did not satisfy FSA and so it decided to terminate Santos's service for violation of company standards. Santos filed a complaint for illegal dismissal, arguing that the company's weight requirement policy is unreasonable and that his case is not a disciplinary but a medical issue (as one gets older, the natural tendency is to grow heavier). FSA defended its policy as a valid exercise of management prerogative and from the point of view of passenger safety and extraordinary diligence required by law of common carriers; it also posited that Santos failure to achieve his ideal weight constituted gross and habitual neglect of duty, as well as willful disobedience to lawful orders of the employer. The Labor Arbiter found the dismissal illegal for there was neither gross nor habitual neglect of duty nor willful disobedience. Is the Labor Arbiter correct? Why or why not? Explain fully. (2008) A: The Labor Arbiter is not correct in finding the dismissal of Santos illegal. Pepe Santos, right at the commencement of his employment at FSA as flight steward, knew that he must maintain, given his height and body frame, a weight of 130 to 170 pounds as stated in   the   FSA’s   Cabin Crew Administrative Manual. This prerequisite is an exercise of management prerogative. When Santos became a flight steward at FSA, he accepted his employment with this pre-requisite which is not violative of any law but is instead positively based on passenger safety and extraordinary diligence required by law of common carrier. Thus, the termination of Santos was for a valid reason. He was no longer complying with a pre-requisite which was in his contract of employment from the very beginning. Q: Flight attendant A, five feet and six inches tall, weighing 170 pounds ended up weighing 220 pounds in two years. Pursuant to the long standing Cabin and Crew Administration Manual of the employer airline that set a 147-pound limit  for  A’s  height,  management   sent   A   a   notice   to   “shape   up   or   ship   out”   within   60   days. At the end of the 60-day period, A reduced her weight to 205 pounds. The company finally served her a Notice of Administration Charge for violation of company standards on weight requirements. Should A be dismissed? Explain. (2010) A: No. While the weight standards for cabin crew may be valid company policy in light of its nature as a common carrier, the airline company is now estopped from enforcing the Manual as a ground for dismissal against A. It hired A despite her weight of 170 pounds, in contravention of the same Manual it now invoked. The Labor Code gives to an airline the power to determine appropriate minimum age and other standards for requirement or termination in special occupation such as those of flight attendants and the like. Weight standards for cabin crew are a reasonable imposition by reason of flight safety (Yrasuegi v. PAL, G.R. No. 168081, October 17, 2008). However, A had already been employed for two (2)

TEAM BAROPS ACADEMICS COMMITTEE 2016

25

QUAMTO

QuAMTO for LABOR LAW (1991-2015)

Just Causes Q: Nonoy Santos was employed as a middle management employee in Company A. In the course of his employment he was told by his superiors of the possible merger between Company A and Company B. Fearing that he might lose his Job upon the merger of the two companies, he looked for and found another job. Upon resignation he was given separation pay equivalent to one month's pay per year of service, although technically speaking, he is not entitled thereto being a resigned employee. Mr. Santos executed a quitclaim and Waiver upon receipt of his separation pay benefits. The merger between the two companies turned out to be a buy-out by the latter of the former. At this point, Company A's employees, save for a handful, were dismissed upon payment of separation pays equivalent to three (3) months for every year of service because of the Union's efforts on the workers' behalf. Feeling aggrieved, Santos subsequently charged Company A with discrimination, constructive dismissal, underpayment, resignation, separation benefits and reinstatement. The Labor Arbiter and NLRC sustained Company A's position that Santos' quitclaim is valid, and that as a manager he knew the import of what he was signing and, therefore, estopped from claiming otherwise. Are the Labor Arbiter and the NLRC correct? (1994, 2010) A: The Labor Arbiter and the NLRC are correct. Santos was not coerced into resigning. He voluntarily resigned. Then, upon receipt of the separation pay that technically he was not entitled to receive, he voluntarily executed a quitclaim and waiver. These facts show beyond doubt that he is estopped from claiming he was a victim of discrimination. (Enieda Monttua vs. National Labor Relations Commission, et al, G.R No, 71504, December 17, 1993). Q: Sergio, an employee of Encantado Philippines, Inc. (EPI), was at the company canteen when Corazon, a canteen helper, questioned him for his use of somebody   else’s   identification   card   (ID).   Sergio   flared   up   and   shouted   at   Corazon   “Wala kang pakialam! Kung gusto mo, itapon ko tong mga pagkain ninyo!”   When   Sergio   noticed   that   some   people where staring at him rather menacingly, he left the canteen but returned a few minutes later to remark  challengingly  “Sino  ba  ang  nagagalit”  Sergio   then began smashing some food items that were on display for sale in the canteen, after which he slapped Corazon which caused her to fall and suffer contusions. The incident prompted Corazon to file a written complaint with Gustavo, the personnel manager of EPI, against Sergio. Gustavo required Sergio to explain in writing why no disciplinary action should be taken against him. In his written explanation Sergio admitted his misconduct but tried to explain it away by saying that he was under the influence of liquor at the time of the incident. Gustavo thereafter issued a letter of termination from the employment of Sergio for serious misconduct. Sergio

now flies a complaint for illegal dismissal, arguing that his acts did not constitute serious misconduct that would justify his dismissal. Decide. (1996) A: The dismissal is not justified because the serious misconduct committed by the employee is not in connection with his work. Art. 282(a) of the Labor Code provides that an employer may terminate an employment for serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. In order to constitute a "just cause" for dismissal, however, the act complained of must be related to the performance of the duties of the employee such as would show him to be thereby unfit to continue working for the employer." Q: Jose and Erica, former sweethearts, both worked as sales representatives for Magna, a multinational firm engaged in the manufacture and sale of pharmaceutical products. Although the couple had already broken off their relationship, Jose continued to have special feelings for Erica. One afternoon, Jose chanced upon Erica riding in the car of Paolo, a coemployee and Erica's ardent suitor; the two were on their way back to the office from a sales call on Silver Drug, a major drug retailer. In a fit of extreme jealousy, Jose rammed Paolo's car, causing severe injuries to Paolo and Erica. Jose's flare up also caused heavy damage to the two company-owned cars they were driving. (2013) a.

As lawyer for Magna, advise the company on whether just and valid grounds exist to dismiss Jose.

A: Jose can be dismissed for serious misconduct, violation of company rules and regulations, and commission   of   a   crime   against   the   employer’s   representatives. Article 282 of the Labor Code provides that an employer may terminate an employment for any serious misconduct or willful disobedience by the employee of the lawful orders of his employer or his representatives in connection with his work. Misconduct, involves   “the   transgression   of   some   established   and   definite  rule  of  action,  forbidden  act,  a  dereliction of duty, willful in character, and implies wrongful intent and not mere  error  in  judgment”   For misconduct to be serious and therefore a valid ground for dismissal, it must be of grave and aggravated character and not merely trivial or unimportant; and connected with the work of the employee. b. Assuming this time that Magna dismissed Jose from employment for cause and you are the lawyer of Jose, how would you argue the position that Jose's dismissal was illegal? A: The offense committed by Jose did not relate to the performance of his duties. For misconduct or improper behavior to be a just cause for dismissal, it (a) 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. On the basis of the foregoing guidelines, it can be concluded that Paolo was not guilty of serious misconduct.  Paolo  was  not  performing  official  work  at  the   time of the incident (Lagrosas v. Bristol Myers Squibb, GR. No. 168637/ 170684, September 12, 2008). Additionally,

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

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years before the airline company imposed on her this weight regulation, an incident which the airline company did not raise, thus it cannot now render her amiss of her duties.

FOR LABOR LAW (1991-2015)

there was no compliance with the rudimentary requirements of due process. Q: International Motors Corporation (IMC) undertook a reorganization of the company and right-sizing of its personnel complement due to the current financial crisis. The affected employees were given the option to resign with corresponding generous benefits attending such option. The said employees opted to resign on account of these negotiated benefits; and after receipt of which, they executed quitclaims in favor of IMC. Immediately thereafter, the employees voluntarily resigned for valuable consideration and that, in any case, they have executed quitclaims in favor of the company. The employees, however, claimed that they were forced to resign, and that they executed the quitclaims only because of dire necessity. Is the company guilty of Illegal dismissal? Why? (1999) A: No. The company is not guilty of illegal dismissal since the facts clearly indicate that the "employees were given the option to resign with corresponding generous benefits attending such option" and that these employees "opted for resignation on account of these negotiated benefits". Nothing in the facts indicate that their consent to the waiver of benefits under the Labor Code was vitiated by fraud, violence, undue influence or any other vice or defect. Q: During their probationary employment, eight (8) employees were berated and insulted by their supervisor. In protest, they walked out. The supervisor shouted at them to go home and never to report back to work. Later, the personnel manager required them to explain why they should not be dismissed from employment for abandonment and failure to qualify for the positions applied for. They filed a complaint for illegal dismissal against their employer. As a Labor Arbiter, how will you resolve the case? (2006) A: As a Labor Arbiter I will resolve the case in favor of the eight (8) probationary employees due to the following considerations: a. b.

c.

d. e.

Probationary employees also enjoy security of tenure (Biboso v. Victoria Milling, G.R. No. L- 44360, March 31, 1977). In all cases involving employees on probationary status, the employer shall make known to the employee at the time he is hired, the standards by which he will qualify for the positions applied for. The filing of the complaint for illegal dismissal effectively negates the employer's theory of abandonment (Rizada v. NLRC, G.R. No. 96982, September 21, 1999). The order to go home and not to return to work constitutes dismissal from employment. The eight (8) probationary employees were terminated without just cause and without due process.

In view of the foregoing, I will order reinstatement to their former positions without loss of seniority rights with full backwages, plus damages and attorney fees. UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Q: Domingo, a bus conductor of San Juan Transportation Company, intentionally did not issue a ticket to a female passenger, Kim, his long-time crush. As a result, Domingo was dismissed from employment for fraud or willful breach of trust. Domingo contests his dismissal, claiming that he is not a confidential employee and, therefore, cannot be dismissed from the service for breach of trust. Is Domingo correct? Reasons. (2009) A: Domingo as bus conductor holds a position wherein he was  reposed  with  the  employer’s  trust  and  confidence.  In   Bristol Myers Squibb (Phils.) v. Baban (G.R. No. 167449, December 17, 2008), the Court establishes a second class of positions of trust that involve rank-and-file employees, who, in the normal and routine exercise of their functions, regularly handle significant amounts of money. A bus conductor falls under such second class of persons. This does not mean, however, that Domingo should be dismissed. In Etcuban v. Sulpicio Lines (G.R. No. 148410, January 17, 2005), the Court held that where the amount involved is miniscule, an employee may not be dismissed for loss of trust and confidence. Q: Daisy, the branch manager of Tropical Footwear Inc.. was dismissed for serious misconduct. She filed a complaint for illegal dismissal and damages. The Labor Arbiter sustained Daisy's dismissal but awarded her separation pay based on social justice and as an act of compassion considering her 10-year service with the company. Was the award of the separation pay proper? Explain. (1996) A: No, the award of separation pay is not proper because the employee was terminated for serious misconduct and payment of separation pay will be to reward an employee for a wrong doing. In Philippine Long Distance Telephone Co., vs NLRC, (G.R. No. 80609, August 23, 1988) the Court held that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting his moral character. The policy of social justice is not intended to countenance wrongdoing. Compassion for the poor is an imperative of every human society but only when the recipient is not a rascal claiming an undeserved privilege. Those who invoke social justice may do so only if their hands are clean and their motives blameless. A contrary rule would have the effect of rewarding rather than punishing the erring employee for his offense. ALTERNATIVE ANSWER: The award of the separation pay was not proper. According to the Labor Code, SEPARATION PAY is to be paid to an employee whose employment is terminated due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking. When an employer terminates the services of an employee who has been found to be suffering from any disease, the employee is also to be paid separation pay. But on the basis of equity, the Supreme Court has ruled that an employee whose employment has been terminated for just cause may nevertheless, or humanitarian reasons, be granted financial assistance in the form of separation pay. However, the Supreme Court

TEAM BAROPS ACADEMICS COMMITTEE 2016

27

QUAMTO

QuAMTO for LABOR LAW (1991-2015)

Q: "A" worked for company "B" as a rank and file employee until April 1990 when A's services were terminated due to loss of confidence in A. However, before effecting A's dismissal, B accorded A due process including full opportunity to answer the charges against him in the course of the investigation. Was B justified in dismissing A after the investigation? Why? (2001) A: "B" is justified in dismissing "A" for loss of confidence after according him the right to procedural due process. However, the following guidelines must be observed, as ruled in Nokom vs. NLRC, (G.R. No. 140034, July 18, 2000): 1. 2. 3. 4.

Loss of confidence should not be simulated; It should not be used as subterfuge for causes which are improper, illegal or unjustified; It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and It must be genuine, not a mere after thought to justify their action

Q: Roman had been a driver of Double-Ten Corporation for ten (10) years. As early as his fifth year in the service he was already commended as a Model Employee and given a salary increase. On his seventh year, he became a steward of his labor union. Since then he became disputatious and obstinate and his performance fell below par. One day his manager told him to pick up some documents from a certain bank which were needed to close a business transaction. Roman did not obey. He said he had an important personal engagement. Moreover, he did not want to drive a vehicle that was not airconditioned. When his immediate supervisor asked him in the afternoon to drive an air-conditioned car, Roman again refused. He said he did not want to drive as he wanted to leave the office early. Roman was asked to explain. After hearing his explanation, Roman was dismissed for wilful disobedience. Roman filed a case for illegal dismissal against the Double-Ten Corporation with prayer for reinstatement and full back wages without loss of seniority rights, plus moral and exemplary damages and attorney's fees. Roman contended that since there was no emergency situation and there were other drivers available, his refusal to drive for the manager, and later for his supervisor, was not serious enough to warrant his dismissal. On the other hand, he claimed that he was being punished because of his activities as a steward of his union. If you were the Labor Arbiter, would you sustain Roman? Discuss fully. (1995) A: If I were the Labor Arbiter, I will not sustain Roman. It is true that it would be an unfair labor practice for an employer to discriminate against his employee for the latter's union activities. But in the present case, the corporation is not discriminating against Roman because he is a union official. When the Manager of Roman told him to pick up some documents from a certain bank, this was a lawful order and when Roman did not obey the order, he was disobedient; and when he disobeyed a similar request made later in the afternoon of same day,

he was guilty of wilful disobedience to do what management asked him to do. This is a just cause for his termination. Q: Oscar Pimentel was an agent supervisor, rising from the ranks, in a corporation engaged in real estate. In order to promote the business, the company issued a memorandum to all agent supervisors requiring them to submit a feasibility study within their respective areas of operation. All agent supervisors complied except Oscar. Reminded by the company to comply with the memorandum, Oscar explained that being a dropout in school and uneducated, he would be unable to submit the required study. The company found the explanation unacceptable and terminated his employment. Aggrieved, Oscar filed a complaint for illegal dismissal against the company. Decide the case. (2003) A: For failure to comply with the memorandum to submit a feasibility study on his area of operation, Oscar cannot be terminated (presumably for insubordination or willful disobedience) because the same envisages the concurrence of at least two requisites: (1) the employee's assailed conduct must have been wilful or intentional, the wilfulness being characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, or lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. In the case at bar, at least two requisites are absent, namely: (1) Oscar did not wilfully disobey the memorandum with a perverse attitude; and (2) the directive to make a feasibility study did not pertain to his duties. Hence, the termination from employment of Oscar Pimentel is not lawful. Q: Mariet Demetrio was a clerk-typist in the Office of the President of a multi-national corporation. One day she was berated by the President of the company, the latter shouting invectives at her in the presence of employees and visitors for a minor infraction she committed. Mariet was reduced to tears out of shame and felt so bitter about the incident that she filed a civil case for damages against the company president before the regular courts. Soon thereafter, Mariet received a memorandum transferring her to the Office of the General Manager without demotion in rank or diminution in pay. Mariet refused to transfer. With respect to the civil suit for damages, the company lawyer filed a Motion to Dismiss for lack of jurisdiction considering the existence of an employer-employee relationship and therefore, it is claimed that the case should have been filed before the Labor Arbiter. Will Mariet Demetrio's refusal to transfer constitute the offense of insubordination? Explain briefly. (1999) A: Mariet Demetrio's transfer constitutes the offense of insubordination. The transfer is a lawful order of the employer. It is the employer's prerogative, based on its assessment and perception of its employees' qualifications, aptitudes, and competence, to move its employees around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employee's right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him

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

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also ruled that a terminated employee is not deserving of said financial assistance if her termination is due to serious misconduct. In this case, Daisy was dismissed because of serious misconduct. Thus, she should not be paid separation pay.

FOR LABOR LAW (1991-2015)

where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not refuse to obey the order of transfer. (Philippine Japan Active Carbon Corp. v. NLRC, G.R. No. 83239, March 8, 1989). Q: Lionel, an American citizen whose parents migrated to the U.S. from the Philippines, was hired by JP Morgan in New York as a call center specialist. Hearing about the phenomenal growth of the call center   industry   in   his   parents’   native   land,   Lionel   sought and was granted a transfer as a call center manager   for   JP   Morgan’s   operations   in   Taguig   City.   Lionel’s   employment   contract   did   not   specify   a   period for his stay in the Philippines. After three years of working in the Philippines, Lionel was advised that he was being recalled to New York and being promoted to the position of director of international call center operations. However, because of certain "family reasons," Lionel advised the company of his preference to stay in the Philippines. He was dismissed by the company. Lionel now seeks your legal advice on: (2014) a.

Whether he has a cause of action

A: Lionel has a cause of action; he was illegally dismissed. Dismissal  due  to  an  employee’s   refusal  of  a  promotion  is   not within the sphere of management prerogative. There is no law that compels an employee to accept promotion. (Dosch v. NLRC et.al., G.R. No. L-51182, July 5, 1983). b. Whether he can file a case in the Philippines A: Yes. Since this is a case of illegal dismissal, the Labor Arbiters have jurisdiction over the same (Art. 217 (a) (2), Labor Code). Under the 2011 NLRC Rules of Procedure, all cases which Labor Arbiters have authority to hear and decide, may be filed in the Regional Arbitration branch having jurisdiction over the workplace of the complainant or petitioner. (Rule IV, Section 1). c.

What are his chances of winning

A: He has a big chance of winning. An employee cannot be promoted without his consent, even if the same is merely a  result  of  a  transfer,  and  an  employee’s  refusal  to  accept   promotion cannot be considered as insubordination or wilful disobedience of a lawful order of the employer. In this case, JP Morgan cannot dismiss Lionel due to the latter’s  refusal  to  accept  the  promotion.  (Norkis Trading Co., Inc. v. Gnilo, G.R. No. 159730, February 11, 2008). ALTERNATIVE ANSWER: His chances of winning is NIL because the objection to the transfer   was   grounded   solely   on   personal   “family   reasons”   that   will   be   caused   to   him   because   of   the   transfer. (OSS Security v. NLRC, G.R. No. 112752, February 9, 2000); Phil. Industrial Security Agency Corp. v. Dapitan, G.R. No. 127421, December 8, 1999). Authorized Causes Q: ABC Tomato Corporation, owned and managed by three (3) elderly brothers and two (2) sisters, has been in business for 40 years. Due to serious business losses and financial reverses during the last five (5) years, they decided to close the business. UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

a.

As counsel for the corporation, what steps will you take prior to its closure?

A: As counsel for the corporation, I shall advise the latter to serve a written notice of termination on the workers and the Department of Labor and Employment at least one month before the intended date thereof as provided under Article 283 of the Labor Code. b. Are the employees entitled to separation pay? (2006, 2012) A: No. In the case of JAKA Foods v. Pacot, (G.R. No. 151378, March 28, 2005), adopting the declaration of the Supreme Court in the case of Reah’s  Corporation  v.  NLRC (G.R. No. 117473, April 15, 1997), states that: when the closure of business or cessation of operations is due to serious business losses or financial reverses; duly proved, in which case, the right of affected employees to separation pay is lost for obvious reasons. Q: Soon after the Asian meltdown began in October 1997, ABC Realty and Management Corporation undertook a downsizing program and terminated nearly a third of its regular workforce. The affected employees questioned their termination arguing that the action was precipitate in that ABC had not proved that it sustained any losses. Is the claim of the employees correct? Explain your answer, (2001) A: The claim of the employees may or may not be correct. When   the   Corporation   undertook   its   “downsizing”   program, it may have terminated its employees on either one of the two grounds, namely, redundancy or retrenchment. For redundancy, there is no requirement of losses, whereas in retrenchment, substantial losses, actual or anticipated, is a requirement. In Atlantic Gulf and Pacific Company v. NLRC, (G.R. No. 127516, May 28, 1999), the Supreme   Court   ruled:   “it   is   necessary   to   distinguish   redundancy   from   retrenchment…Redundancy   exists   when the services of an employee are in excess of what is required by an enterprise. Retrenchment on the other hand, is resorted to primarily to avoid or minimize business  losses.” Q: What conditions must prevail and what requirements if any, must an employer comply with to justify/effect a valid redundancy program? (2001) A: In the case of Asian Alcohol Corporation v. NLRC, (G.R. No. 131108 March 25, 1999), the Supreme Court stated that redundancy exists when the service capability of the work is in excess of what is reasonably needed to meet the demands on the enterprise. A redundant position is one rendered superfluous by any number of factors, such as over hiring of workers, decreased volume of business dropping of a particular line previously manufactured by the company or phasing out of a service activity previously undertaken by the business. Under these conditions, the employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business. For the implementation of a redundancy program to be valid, the employer must comply with the following requisites:

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QUAMTO

TEAM BAROPS ACADEMICS COMMITTEE 2016

QuAMTO for LABOR LAW (1991-2015)

2. 3. 4.

Written notice served on both the employees and the Department of Labor and Employment at least one month prior to the intended date of retrenchment; Payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service whichever is higher; Good faith in abolishing the redundant positions Fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.

Q: Can redundancy exist where the same is due to the company’s  failure  to  properly  forecast  its  manpower   requirements? (2000) A: Yes. Redundancy exists when a position has become an excess or superfluous which, in turn, may be caused by reorganization, closure of a section or department, or adoption of labor-saving arrangements. Poor forecasting does not invalidate redundancy. Forecasting after all is not fail-free (Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249, February 7, 1991). Further, it may be the outcome of a number of factors such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. Q: Can redundancy exist where the work performed by twelve (12) workers can be performed as efficiently by ten (10) workers by increasing the speed of a machine without detriment to the health and safety of the workers? (2000) A: Yes. Redundancy can exist where work efficiency has been improved mechanically thus resulting in excessive or superfluous manpower. (Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249, February 7, 1991). Q: What conditions must prevail and what requirements, if any, must an employer comply with to justify/effect a valid retrenchment program? (2001) A: In the case of Danzas Intercontinental, Inc. v. Daguman (G.R. No. 154368, April 15, 2005), the Supreme Court stated that the requirements for a valid retrenchment must be proved by clear and convincing evidence: a.

b.

c. d.

e.

that the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; that the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; that the employer pays the retrenched employees separation pay equivalent to one month pay for every year of service, whichever is higher; 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; That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such

as status (i.e., whether they are temporary, casual, regular or managerial employees), efficiency, senority, physical fitness, age, and financial hardship for certain workers. Q:  Is  the  seniority  rule  or  “last  in  first  out  policy”  to  be   strictly followed in effecting a retrenchment or redundancy program? (2001) A: The Supreme Court stated that with regard the policy of  “first  in,  last  out”  in  choosing  which  positions  to  declare   as redundant or whom to retrench to prevent further business losses, there is no law that mandates such a policy. The reason is simple enough. A host of relevant factors come into play in determining cost efficient measures and in choosing the employees who will be retained or separated to save the company from closing shop. In determining these issues, management plays a pre-eminent role. The characterization of positions as redundant is an exercise of business judgment on the part of the employer. It will be upheld as long as it passes the test of arbitrariness. Due Process Twin-notice Requirement Hearing; Meaning of Opportunity to be Heard Q: Distinguish between the substantive and the procedural requirements for the dismissal of an employee. (1994) A: The substantive requirement for the valid dismissal of an employee means that there should be a just cause for the termination of an employee or that the termination is authorized by law. The procedural requirement is that the employers should furnish the employee whose employment is sought to be terminated a written notice containing a statement of the causes for termination and the employer should afford the employee to be terminated ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires. (Arts. 279 and 277 (b), Labor Code). Q: Inday was employed by Herrera Home Improvements, Inc. (Herrera Home) as interior decorator. During the first year of her employment, she did not report for work for one month. Hence, her employer dismissed her from the service. She filed with the Labor Arbiter a complaint for illegal dismissal alleging she did not abandon her work and that in terminating her employment, Herrera Home deprived her of her right to due process. She thus prayed that she be reinstated to her position. Inday hired you as her counsel. In preparing the position paper to be submitted to the Labor Arbiter, explain the standards of due process which should have been observed by Herrera Home in terminating your client’s  employment.  (2006,  2009) A: The Labor Code provides the following procedure to be observed in terminating the services of an employee based on just causes as defined in Art. 282 of the Code: a.

A written notice must be served on the employee specifying grounds for termination and giving him an opportunity to answer;

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

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1.

QUAMTO

The employee shall be given ample opportunity to defend himself, with or without the assistance of counsel; and A written notice of termination indicating the grounds to justify his termination. (Agabon v. NLRC, G.R.No. 158693, November 17, 2004).

Nonetheless,   the   employer’s   failure   to   comply   with   the procedure prescribed by law in terminating the services of the employee warrants the payment of nominal damages of Php 30,000, in accordance with the Supreme Court’s   ruling   in   the   case   of   Agabon v. NLRC (G.R. No. 158693, November 17, 2004).

Q: Joseph Vitriolo (JV), a cashier of Seaside Sunshine Supermart (SSS), was found after an audit, to have cash shortages on his monetary accountability covering a period of about five months in the total amount of P48,000.00. SSS served upon JV the written charge against him via a memorandum order of preventive suspension, giving JV 24 hours to submit his explanation. As soon as JV submitted his written explanation within the given period, the same was deemed unsatisfactory by the company and JV was peremptorily dismissed without any hearing. The day following his termination from employment. JV filed a case of illegal dismissal against SSS. During the hearing before the Labor Arbiter SSS proved by substantial evidence JV's misappropriation of company funds and various infractions detrimental to the business of the company. JV, however, contended that his dismissal was illegal because the company did not comply with the requirements of due process.

Q: Rico has a temper and, in his work as Division Manager of Matatag Insurance, frequently loses his temper with his staff. One day, he physically assaults his staff member by slapping him. The staff member sues him for physical injuries. Matatag Insurance decides to terminate Rico, after notice and hearing, on the ground of loss of trust and confidence. Rico claims that he is entitled to the presumption of innocence because he has not yet been convicted.

c.

Did SSS comply with the requirements of procedural due process in the dismissal from employment of JV? Explain briefly (1999) A: In connection with the right to due process in the termination of an employee, the Labor Code (in Article 277[b]) requires that the employer furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires. SSS did not comply with the above described requirements for due process. The memorandum order was for the preventive suspension of JV, not a notice for his termination. Q: Luisa was hired as a secretary by Asian Development  Bank  (ADB)  in  Manila.  Luisa’s  first  boss   was a Japanese national whom she got along with. But after two years, the latter was replaced by an arrogant Indian national who did not believe her work output was in accordance with international standards. One day, Luisa submitted a draft report filled with typographical errors to her boss. The latter scolded her, but Luisa verbally fought back. The Indian boss decided to terminate her services right then and there. Luisa filed a case for illegal dismissal with the Labor Arbiter claiming arbitrariness and denial of due process. If you were the Labor Arbiter, how would you decide the case? (2014) A: I will dismiss the case. ADB enjoys immunity from suit. (DFA v. NLRC, G.R. No. 113191, September 18, 1996). ALTERNATIVE ANSWER: I will decide in favor of Luisa, by granting nominal damages.   To   clarify,   however,   Luisa’s   dismissal   is   not   illegal, for it has been held that failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency, as in this case, may constitute as a just cause for dismissal (Iluminada Buiser, et.al. v. Leogardo, Jr., G.R. No. L-63316, July 31, 1984). UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Comment on Matatag's action in relation to Rico's argument. (2015) A: Matatg Insurance does not have to await the result of the criminal case before exercising its prerogative to dismiss. Dismissal is not affected by a criminal case. Under the Three-fold Liability Rule, a single act may result in three liabilities, two of which are criminal and administrative. To establish them, the evidence of the crime must amount to proof beyond reasonable doubt; whereas, the evidence of the ground for dismissal is substantial evidence only. In this regard, the company has some basis already for withholding the trust it has reposed   on   its   manager.   Hence,   Rico’s   conviction   need   not  precede  the  employee’s  dismissal. RELIEFS FOR ILLEGAL DISMISSAL Q: What damages can an illegally dismissed employee collect from his employer? (2001) A: An illegally dismissed employee may collect from his employer ACTUAL and COMPENSATORY damages, MORAL damages and EXEMPLARY damages, as well as attorney’s  fees  as  damages. Q: Eduardo Santiago, a project worker, was being assigned by his employer, Bagsak Builders, to Laoag, Ilocos Norte. Santiago refused to comply with the transfer claiming that it, in effect, constituted a constructive dismissal because it would take him away from his family and his usual work assignments in Metro Manila. The Labor Arbiter found that there was no constructive dismissal but ordered the payment of separation pay due to strained relations between Santiago and Bagsak Builders plus attorney's fees equivalent to ten percent (10%) of the value of Santiago's separation pay. a.

Is the award of attorney's fees valid? State the reasons for your answer.

A: Yes. What Art. 111 (b) prohibits is the demand or acceptance by any person in a judicial or administrative proceedings   for   the   recovery   of   wages,   attorney’s   fees   which exceed 10% of the amount of wages recovered. Since  in  this  case,  the  amount  of  attorney’s  fees  is  exactly   equivalent to the 10% of the separation fee recovered, the award is valid.

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b.

FOR LABOR LAW (1991-2015)

TEAM BAROPS ACADEMICS COMMITTEE 2016

QuAMTO for LABOR LAW (1991-2015)

A: No. In the case of Lirag Textile Mills, Inc. et al. v. Court of Appeals, et al., (GR No. L-30786, April 14, 1975), the Supreme Court held that when the termination of the services of an employee is attended by fraud or bad faith on the part of the employer as when the latter knowingly made false allegations of a supposed valid cause when none existed, moral and exemplary damages may be awarded in favour of the former. In this case, there was no showing that there was a bad faith on the part of the employer. In fact, the bad faith and false allegations were on the part of the employee when he refused to obey the transfer mandated by his employer solely on the shallow basis that he will be away from his family. Reinstatement Q: In the illegal dismissal case filed by Sharon Cometa against Up & Down Company, the labor Arbiter rendered a decision directing her immediate reinstatement and payment of full backwages. The Company appealed to the NLRC. Following her lawyer's advice that the reinstatement aspect of the decision is immediately executory, Sharon went to the HRD Office of the Company and demanded immediate reinstatement. When the Company refused, her lawyer, Atty. Maximiano Anunciacion, filed a motion to cite the employer in contempt. Acting on the motion, the NLRC ordered the payroll reinstatement of Sharon Cometa. a.

Can the company or any of its officials be cited for contempt for refusing to reinstate Sharon Cometa? Why?

A: Yes. The company or any of its officials can be cited for contempt. It is noted that in his decision, the Labor Arbiter specifically directed the immediate reinstatement of Sharon Cometa. This directive under the Labor Code (Article 223) is immediately executory, even pending appeal. (Pioneer Texturizing Corporation v. NLRC, G.R. No. 118651, October 16, 1997). b. May the NLRC order the payroll reinstatement of Sharon Cometa? Why? (1999) A: The NLRC may NOT order the payroll reinstatement of Sharon Cometa. The Labor Code (Article 223) provides that in the immediate reinstatement of a dismissed employee, the employee shall be admitted back to work under the same terms and conditions prevailing prior to the employee's dismissal or, at the option of the employer, merely reinstate the employee in the payroll. Thus, the reinstatement of the employee in the payroll is at the option of the employer and not of the NLRC or the Labor Arbiter who have the power only to direct reinstatement. Q: Discuss briefly the instances when noncompliance by the employer with a reinstatement order of an illegally dismissed employee is allowed. (2007) A: Despite a reinstatement order, an employer may not reinstate an employee in the following instances: (a)

when the position or any substantial equivalent thereof no longer exists; (b) when reinstatement has been rendered moot and academic by supervening events, such as insolvency of the employer as declared by the court or closure of the business; (c) the existence of strained relations between the employer and the illegally dismissed employee, provided the matter is raised before the Labor Arbiter. In the event that reinstatement is no longer feasible, or if the employee chooses not to be reinstated, the employer shall pay him separation pay in lieu of reinstatement. Pending Appeal (Article 223, Labor Code) Q: Alexander, a security guard of Jaguar Security Agency (JSA), could not be given any assignment because no client would accept him. He had a face only a mother could love. After six (6) months of being on "floating" status, Alexander sued JSA for constructive dismissal. The Labor Arbiter upheld Alexander’s   claim   of   constructive   dismissal   and   ordered JSA to immediately reinstate Alexander. JSA appealed the decision to the NLRC. Alexander sought immediate enforcement of the reinstatement order while the appeal was pending. JSA hires you as lawyer, and seeks your advice on the following: (2009) a.

Because JSA has no client who would accept Alexander, can it still be compelled to reinstate him pending appeal even if it has posted an appeal bond?

A: Yes, JSA can be compelled to reinstate Alexander, pending appeal of the decision of the Labor Arbiter to the NLRC, even if JSA post a bond. Art. 223. Appeal. xxx In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned shall be immediately executory, even pending appeal and the posting of a bond. b. Can the order of reinstatement be immediately enforced in the absence of a motion for the issuance of a writ of execution? A: Yes. In Pioneer Texturizing Corp. v. NLRC (G.R. No. 118651, October 16, 1997), the Court held that an award or order of reinstatement is self-executory and does not require a writ of execution to implement and enforce it. To require the application for and issuance of a writ of execution as prerequisite for the execution of a reinstatement award would certainly betray and run counter to the very object and intent of Article 223 of the Labor Code on the immediate execution of a reinstatement order. c.

If the order of reinstatement is being enforced, what should JSA do in order to prevent reinstatement?

A: The employer cannot prevent reinstatement but may, however, opt for reinstatement of the employee in the payroll of the company without requiring him to report back to his work. (Zamboanga City Water District v. Buat, G.R. No. 104389, May 27, 1994).

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

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b. Could the labor arbiter have validly awarded moral and exemplary damages to Santiago instead of attorney's fees? Why? (2001)

FOR LABOR LAW (1991-2015)

PLEASE NOTE: In connection with security guards, Department Order No.14 series of 2001 provides that if there is lack of assignment, then the security guard is entitled to separation pay. Separation Pay in Lieu of Reinstatement Q: Lyric Theater Corp. issued a memorandum prohibiting all ticket sellers from encashing any check from their cash collections and requiring them instead to turn over all cash collections to the management at the end of the day. In violation of this memorandum, Melody, a ticket seller, encashed five (5) checks from her cash collection. Subsequently the checks were dishonored when deposited in the account of Lyric Theater. For this action, Melody was placed under a 20-day suspension and directed to explain why she should not be dismissed for violation of the company's memorandum. In her explanation, she admitted having encashed the checks without the company's permission. While the investigation was pending, Melody filed a complaint against Lyric Theater for backwages and separation pay. The Labor Arbiter ordered Lyric Theater to pay Melody P115,420.79 representing separation pay and backwages. The NLRC affirmed the ruling of the Labor Arbiter. Is the ruling of the NLRC correct? Explain briefly. (2002) A: The ruling of the NLRC affirming the Labor Arbiter's decision ordering Lyric Theater to pay P115,420.79 representing separation pay and backwages is wrong. The Labor Arbiter's decision is wrong because: a.

b.

c.

It is premature. There was still no termination. All that was done by the employer (Lyric Theater) was to place the employee (Melody) under a 20-day suspension, meanwhile directing her to explain why she should not be dismissed for violation of company's memoranda. The order for Lyric Theater to pay separation pay has no factual basis. Separation pay is to be paid to an employee who is terminated due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment undertaking. None of these events has taken place. Neither is separation pay here in lieu of reinstatement applicable because there is just cause if Melody is terminated under the circumstances. The order for Lyric Theater to pay backwages has no factual basis either because there is just cause if she will be terminated after investigation. In this case, there is wilful disobedience by the employee of the lawful orders of her employer in connection with her work. She did not just violate the lawful order of the employer. She violated it five times. Melody did not give any justifiable reason for violating the company's memorandum prohibiting the encashment of checks. (Jo Cinema Corp. v. Avellana, G.R. No. 32837, June 28, 2001).

Backwages Q: Distinguish between an award for back wages and an award for unpaid wages. (1994) A: An award for backwages is to compensate an employee who has been illegally dismissed, for the wages, allowances and other benefits or their monetary UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

equivalent, which said employee did not receive from the time he was illegally dismissed up to the time of his actual reinstatement (Article 279). On the other hand, an award for unpaid wages is for an employee who has actually worked but has not been paid the wages he is entitled to receive for such work done. Computation Q: An employee was ordered reinstated with backwages. Is he entitled to the benefits and increases granted during the period for his lay-off? Explain briefly. (2002) A: Yes, an employee who is ordered reinstated with backwages is entitled to the benefits and increases granted during the period of his lay-off. The Supreme Court has ruled: Backwages are granted for earnings a worker lost due to his illegal dismissal and an employer is obliged to pay an illegally dismissed employee the whole amount of salaries plus all other benefits and bonuses and general increases to which the latter should have been normally entitled had he not been dismissed. (Sigma Personnel Services v. NLRC, G.R. No. 108284, June 30, 1993). Q: What economic components constitute backwages for a rank and file employee? Are these components equally applicable to a managerial employee? (2001) A: The Labor Code (Art. 279) provides that an employee who is unjustly dismissed from work is entitled to reinstatement and also to his full backwages, inclusive of allowances, and to this other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to his actual reinstatement. An employee is entitled to all the above benefit regardless of whether he is a rank-and-file employee or a managerial employee. However, backwages may also include the 13th month pay which is paid to rank and file employees, as well as benefits arising from a CBA given only to employees in the bargaining unit. Managerial employees cannot be given the same since they are ineligible to join a labor organization. Likewise, transportation and emergency allowances, vacation or service incentive leaves and sick leaves must also be taken into account. (St. Louis College of Tuguegarao v. NLRC, et.al. G.R.No. 74214, August 31, 1989). Q:   “A”   was   hired   by     company   “B”   in   January   1980   until A was illegally dismissed on April 30, 1990 as found by a Labor Arbiter who ordered reinstatement and full backwages from April 30, 1990 until reinstatement.   The   arbiter’s   decision   was   promulgated on April 29, 1995. B appealed claiming, among others, that the award for damage was excessive in that it went beyond three-year rule set forth   in   Mercury   Drug   v.   CIR   (56   SCRA   696).   Is   B’s   contention tenable? Why? (2001) A: B’s   contention   is   not   tenable.   Where   the   illegal   dismissal was effected after the effectivity on March 1, 1989 of Republic Act No.6715 amending among others Article 279, the Mercury Drug Formula should no longer be applied. Instead, Article 279 now provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights

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QUAMTO

QuAMTO for LABOR LAW (1991-2015)

In   the   case  at   bar,  “A”  was   illegally   dismissed  after   the   effectivity of R.A. 6715; hence, the Mercury Drug Formula will   no   longer   apply.   “A”   shall   receive   full   backwages   computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Note: The Mercury Drug Doctrine entitles the illegally dismissed employee to only three years backwages “without  deduction  or  qualification”  to  obviate  the  need   for further proceedings in the course of execution. This was amended by R.A.6715 (Sec 34) which took effect on March 21 1989. Q:  “A”,  an  employee  of  Company  “B”  was  found  to  have   been illegally dismissed and was ordered to be reinstated and paid backwages from the time of dismissal until actual reinstatement. The case was elevated all the way to the Supreme Court. By the time  the  Supreme  Court’s  decision  became  final  and   executory, B had closed down and was in the process of winding up. Nonetheless, B paid A his backwages and separation pay. A complained that   B’s   computation   was   erroneous   in   that   A’s   allowances   was not included. Is A correct in his claim? For what reasons? (2001) A: A is correct. Article 279 provides that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Clearly, based from the foregoing provision, A is entitled to his allowances. PREVENTIVE SUSPENSION Q: Karina Santos is a famous news anchor appearing nightly in the country's most watched newscast. She is surprised, after one newscast, to receive a notice of hearing before the station's Vice-President for Human Resources and calls the VP immediately to ask what was wrong. Karina is told over the phone that one of her crew filed a complaint against her for verbal abuse and that management is duty bound to investigate and give her a chance to air her side. Karina objects and denies that she had ever verbally assaulted her crew. The VP then informed her that pending the investigation she will be placed on a 30day preventive suspension without pay and that she will not be allowed to appear in the newscast during this time. Is the preventive suspension of Karina valid? Discuss the reasons for your answer. (2015) A: No. The preventive suspension of Katrina is not valid. The employer may place an employee under preventive suspension if his/her continued employment would pose a serious and imminent threat to the life or property of the employer or of his/her co-employees. These requirements are not present here.

CONSTRUCTIVE DISMISSAL Q: Mansueto was hired by the Philippine Packing Company (PPC) sometime in 1960 as an hourly paid research field worker at its pineapple plantation in Bukidnon. In 1970, he was transferred to the general crops plantation in Misamis Oriental. Mansueto was promoted to the position of a monthly paid regular supervisor four years after. Subsequently, research activity in Misamis Oriental was phased out to March of 1982 for having become unnecessary. Mansueto thereafter, received a written memorandum from the PPC, reassigning him to the Bukidnon plantation effective April 1, 1982, with assurance that his position of supervisor was still there for him to hold. Mansueto tried to persuade the PPC management to reconsider his transfer and if this was not possible, to at least consider his position as redundant so that he could be entitled to severance   pay.   PPC   did   not   accept   Mansueto’s   proposal. When Mansueto continuously failed to report for work at the Bukidnon plantation, PPC terminated his employment by reason of his refusal to accept his new assignment. Mansueto claims that his reassignment is tantamount to an illegal constructive dismissal. Do you agree with Mansueto? Explain. (1996) A: There is no constructive dismissal by the mere act of transferring an employee.   The   employee’s   contention   cannot be sustained simply because a transfer causes inconvenience. There is no constructive dismissal where, as in Philippine Japan Active Carbon Corp. v. NLRC (G.R. No. 83239, March 8, 1989), the Court ruled that the constructive dismissal means quitting because continued employment is rendered impossible, unreasonable or unlikable; as an offer involving demotion in rank and a diminution in pay. The transfer will not substantially alter the terms and conditions of employment of the Supervisor. The right to transfer  an  employee  is  part  of  the  employer’s  managerial   function. Furthermore, the Court ruled that an employee has no vested right to a position, and in justifiable cases employment may be terminated. An   employer’s   right to security of tenure does not give him such a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. When his transfer is not unreasonable, not inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal. MANAGEMENT PREROGATIVE DISCIPLINE Q: An exclusive school for girls, run by a religious order, has a policy of not employing unwed mothers, women with live-in partners, and lesbians.

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

34

and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

a.

FOR LABOR LAW (1991-2015)

Is the policy violative of any provision of the Labor Code on employment of women?

A: No. There was no violation of the provisions of the Labor Code against discrimination. Management prerogative is the right of an employer to regulate all aspects of employment such as hiring, work assignments, work methods, tools and equipment to be used and the process and procedures to be followed in performance of work, etc. However, it must be noted that such right is not absolute and may be limited by special laws. In the case at bar, the school had validly executed its right to management prerogative. As an educational institution, its very nature calls for the adoption of measures that would enable it to enhance and develop its laudable objectives. In fact, the policy adopted by the school is in consonance with the constitutional precept of incorporating ethical and moral values in schools. Furthermore, what the Labor Code prohibits is the discrimination of employees on the basis of their gender. The questioned policy is clearly not the discrimination prohibited under Art. 135 of the Labor Code because the school is still hiring women as teachers, however, by virtue of their management prerogative, they added an additional qualification that their employees must have an outstanding moral and ethical values. b. The same school dismissed two female faculty members on account of pregnancy out of wedlock. Did the school violate any provision of the Labor Code on employment of women? (2000) A: No. The Labor Code was not violated because the school clearly acted within its right to dismiss the two faculty members who got pregnant out of wedlock, because tolerating such immoral conduct would be in contradiction to the school's laudable mission. The dismissal of employees in order to ensure its adherence to the Constitutional precept is an exercise of management prerogative allowed by the law. Pursuant to such Constitutional precept, and by virtue of its nature of as an institution that caters only to female students, it is the school's right and responsibility to hire and maintain the employment of educators that would serve as good role models to their students not only in terms of academic competency, but also in terms of the moral standards, values and dignity of a woman. TRANSFER OF EMPLOYEES Q: Din Din is a single mother with one child. She is employed as a sales executive at a prominent supermarket. She and her child live in Quezon City and her residence and workplace are a 15-minute drive apart. One day, Din Din is informed by her boss that she is being promoted to a managerial position but she is now being transferred to the Visayas. Din Din does not want to uproot her family and refuses the offer. Her boss is so humiliated by Din Din's refusal of the offer that she gives Din Din successive unsatisfactory evaluations that result in Din Din being removed from the supermarket. Din Din approaches you, as counsel, for legal advice. What would you advise her? (2015)

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

A: I will advise Din Din to sue her boss and the supermarket for illegal dismissal. Din Din cannot be compelled to accept the promotion. Her unsatisfactory evaluations  as  well  as  her  boss’  insistence  that  she  should   agree to the intended transfer to Visayas are badges of an abuse of management prerogative. In Pfizer Inc. v. Velasco (G.R. No. 177467, March 9, 2011), the Supreme Court held that the managerial prerogative to transfer personnel must be exercised without abuse of discretion, bearing in mind the basic elements of justice and fair play. Hence, Din  Din’s  dismissal  is  illegal. GRANT OF BONUS Q: What is a bonus? When is it demandable as a matter of right? Explain. (1995) A: A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success  of  the  employer’s  business  and  made  possible  the   realization of profits. A bonus becomes a matter of right when it is included by the employer as a part of the employees’   salary,   wage   or   compensation.   (Alcantara, 2009). Q: The projected bonus for the employees of Suerte Co. was 50% of their monthly compensation. Unfortunately, due to the slump in the business, the president reduced the bonus to 5% of their compensation. Can the company unilaterally reduce the amount of bonus? Explain briefly. (2002) A: Yes. A bonus as a general rule is given on account of the employer’s  gratuity  or  an  act  of  his  liberality  in  which  the   recipient is under no legal right to demand such. However, by way of exception, a bonus becomes a matter of right when the employer had made it a part of the wage or salary or compensation of the employee. (Alcantara, 2009). In the case at bar, there is no showing that the management had constituted the bonus as a part of the salary, wages or compensation of the employees. Thus, the case falls under the general rule where the employees cannot demand the payment of a 50% bonus as a matter of right. Q: Lito was anticipating the bonus he would receive for 2013. Aside from the 13th month pay, the company has been awarding him and his other coemployees a two to three months bonus for the last 10 years. However, because of poor over-all sales performance for the year, the company unilaterally decided to pay only a one month bonus in 2013. Is Lito’s  employer  legally  allowed  to  reduce  the  bonus?   (2014) A: Yes. A bonus is an act of generosity granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits. The granting of bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due to the recipient. Thus, a bonus is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employees, a matter which is not in the facts of the case. (American Wire and Cable Daily Rated Employees Union v. American Wire and Cable Co., Inc. and the Court of Appeals, G.R. No. 15509, April 29, 2005).

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QUAMTO

QuAMTO for LABOR LAW (1991-2015)

SOCIAL WELFARE LEGISLATION (P.D. 626) Q: State the respective coverage of: a. Social Security Law b. Revised Government Service Insurance Act c. Employees Compensation Act. (1997) A: Social Security Law: Coverage of SSS includes (Sec. 9 and 9-A, Social Security Act of 1997): a. Employees not over sixty years of age and their employers b. Domestic Helpers provided their monthly income shall not be less than P 1,000 c. Self-employed persons as provided by law and as determined by the Commission d. Spouse that is fully devoted to management of household and family affairs, on voluntary basis e. Fiilipinos recruited by foreign-based employers abroad, on voluntary basis Note: Under R.A. 10361 (Kasambahay Law), domestic helpers who have rendered at least 1 month of service regardless of the amount of their salary shall be covered by the SSS. Premium payments or contributions shall be shouldered by the employer. However, if the domestic worker is receiving a wage of Five thousand pesos (P5,000.00) and above per month, the domestic worker shall pay the proportionate share in the premium payments or contributions, as provided by law. (Sec. 30, R.A. 10361). Revised GSIS Membership in the Government Service Insurance System (Art. 3, R.A. 8291) shall be compulsory for all employees receiving compensation who have not reached the compulsory retirement age, irrespective of employment status, except members of the AFP, PNP, and contractuals that have no employer-employee relationship with the agencies that they serve. Employees included are any person receiving compensation while in the service of employers, which includes the national government, its political subdivisions, branches, agencies or instrumentalities including GOCCs and financial institutions with original charters, constitutional commissions and judiciary, whether by election or appointment irrespective of status of appointment, including barangay and sanggunian officials. (Sec. 2 (c) and (d); Sec. 3, Government Service Insurance System Act of 1997). Employees Compensation Act Coverage in the State Insurance Fund (Art. 168, Labor Code) shall be compulsory upon all employers and their employees not over sixty (60) years of age; Provided, that an employee who is over (60) years of age and paying contributions to qualify for the retirement or life insurance benefit administered by the System shall be subject to compulsory coverage. The employer or employee may either belong to the public or private

sector as covered by their own respective systems. (Art. 168, Labor Code). Q: Is it necessary for an employee to litigate in order to establish and enforce his right to compensation? Explain. (1995) A: No. All that an employee has to do in order to claim employee's compensation is to file a claim for said benefits with the SSS (for those in the private sector) or GSIS (for those in the public sector). In the event that the claim is denied on the SSS/GSIS level, claimant may appeal to the Employees Compensation Commission where he may prove the causal connection between injury and nature of work. Q: What is the extent of an employer's intervention in the compensation process and the payment of benefits to employees under the State Insurance Fund? Explain. (1995) A: The new law establishes a State Insurance Fund built up by the contributions of employers based on the salaries of their employees (Art. 183, Labor Code). The employer does not intervene in the compensation process and it has no control over the payment of benefits. The payment of employees’ compensation is now from the State Insurance Fund which is constituted from the contributions collected from employers. (Art. 173, Labor Code). SOCIAL SECURITY LAW (R.A. 8282) Coverage Q: Luisa is an unwed mother with 3 children from different fathers. In 2004, she became a member of the Social Security System (SSS). That same year, she suffered a miscarriage of a baby out of wedlock from the father of her third child. She wants to claim maternity benefits under the SSS Act. Is she entitled to claim? (2000, 2007, 2010, 2015) A: Yes. Provided, Luisa has reported to her employer her pregnancy and date of expected delivery and paid at least three monthly contributions during the 12-month period immediately preceding her miscarriage then she is entitled to maternity benefits up to four deliveries. As to the fact that she got pregnant outside wedlock, as in her past three pregnancies, this will not bar her claim because the SS is non-discriminatory. Note: The  law  merely  says  “a  female  employee”.  It  does   not qualify the term to mean legally married woman. (Sec. 14-A, Social Security Act of 1997). Q: Carol de la Cruz is the secretary of the proprietor of an auto dealership in Quezon City. She resides in Caloocan City. Her office hours start at 8 a.m. and end at 5 p.m. On July 30, 2008, at 7 a.m. while waiting for public transport at Rizal Avenue Extension as has been her routine, she was sideswiped by a speeding taxicab resulting in her death. The father of Carol filed a claim for employee's compensation with the Social Security System. Will the claim prosper? Why? (2008)

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

36

ALTERNATIVE ANSWER: No. Having enjoyed for the last 10 years, the granting of the bonus has ripened into a company practice or policy which can no longer be peremptorily withdrawn. Art. 100 of the Labor Code prohibits the diminution of or elimination   by   the   employer   of   the   employees’   existing   benefits.

FOR LABOR LAW (1991-2015)

A: Yes, the claim will prosper. In a line of cases, it has been held that an injury sustained by the employee while on his way to or from his place of work, and which is otherwise compensable, is deemed to have arisen out of and in the course of his employment. (Lentejas v. Employees’   Compensation   Commission, G.R. No. 89168, May 14, 1991) Carol died while going to her place of work. As held in the case of Alano   v.   Employees’   Compensation   Commission (G.R. No. L-48594, March 16, 1988) she was at the place where job necessarily required her to be if she was to reach her place of work on time. There was nothing private or personal about Carol being at the place of the accident. She was there because her employment required her to be there. Q: Big Foot Company of Paete, Laguna, has been in the business of manufacturing wooden sandals for export since 5 November 1980. On 5 January 1994 it employed an additional labor complement of thirty workers, two supervisors and two department managers. On 5 February 1994 it hired five carpenters to fix the roof and walls of its factory which were destroyed by typhoon "Huaning." Who among the aforementioned persons are compulsorily covered by the Social Security Law and when should they be considered effectively covered? Discuss fully. (1995) A: Assuming that all of them were not yet over sixty years of age, the additional labor complement of thirty workers, two supervisors and two department managers were compulsorily covered by the Social Security Law on 5 January 1994, when they were employed (Sec. 9(a), Social Security Act of 1997). According to said law, workers are covered on the day of their employment (Sec. 10, Social Security Act of 1997). But the five carpenters whom the company hired to fix the roof and walls of its factory were not under the compulsory coverage of the Social Security Law because said carpenters are casual employees. The Social Security Law provides that employment purely casual and not for the purpose of occupation or the business of the employer are not under its compulsory coverage (Sec. 8(j), Social Security Act of 1997). Q: Marvin Patrimonio is a caddy rendering caddying services for the members and guests of the Barili Golf & Country Club. As such caddy, he is subject to Barili golfs rules and regulations governing Caddies regarding conduct, dress, language, etc. However, he does not have to observe any working hours, he is free to leave anytime he pleases; and he can stay away for as long as he likes. Nonetheless, if he is found remiss in the observance of club rules, he can be disciplined by being barred from the premises of Barili Golf. Is Marvin within the compulsory coverage of the Social Security System? Why? (1999) A: Yes. Although Marvin is not an employee of the golf club there being no employer-employee, since he is not under the orders of the club as regards employment, he is still within the compulsory coverage of the SSS being a self-employed person. Social Security Act of 1997 provides that self-employed persons are within the compulsory coverage of the law. (Sec. 9-A, Social Security Act of 1997). Note: Self-employed persons whose income is not derived from employment may be covered by the SSS on UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

a voluntary basis. The compulsory coverage of the selfemployed person shall take effect upon his registration with the SSS. (Sec. 9-10, Social Security Act of 1997) Q: The Collective Bargaining Agreement of the Golden Corporation Inc. and the Golden Corporation Workers Union provides a package of welfare benefits far superior in comparison with those provided for in the Social Security Act of 1997. The welfare plan of the company is funded solely by the employer with no contributions from the employees. Admittedly, it is the best welfare plan in the Philippines. The company and the union jointly filed a petition with the Social Security System for exemption from coverage. Will the petition for exemption from coverage prosper? Reason. (2000) A: No, because coverage under the SSS is compulsory where employer-employee relations exist. However, if the private plan is superior to that of the SSS, the plan may be integrated with the SSS plan. Still, it is integration and not exemption from SSS law. (Sec. 9(a), Social Security Act of 1997). Note: Coverage is compulsory upon all employees over sixty years of age and their employers. (Sec. 9(a), Social Security Act of 1997). Q: The owners of FALCON Factory, a company engaged in the assembling of automotive components, decided to have their building renovated. Fifty (50) persons, composed of engineers, architects and other construction workers, were hired by the company for this purpose. The work was estimated to be completed in three (3) years. The employees contended that since the work would be completed after more than one (1) year, they should be subject to compulsory coverage under the Social Security Law. Do you agree with their contention? Explain your answer fully. (2002) A: No. The Social Security Act of 1997 provides that employment of purely casual, those which are not for the purpose of occupation or business of the employer, are exempted from compulsory coverage (Sec. 8(j), Social Security Act of 1997). The 50 persons that were engaged by the company to renovate their factory are only casual employees because their work is not in connection with the purpose of the company which is assembling automotive components. As such, they are merely casual employees who are not under the compulsory coverage of the SSS. Exclusions from Coverage Q: Pablo was a farm-hand in a plantation owned by ABC & Co., working approximately 6 days a week for a good 15 years. Upon Pablo's death, his widow filed a claim for burial grant and pension benefits with the Social Security System (SSS). The claim was denied on the ground that Pablo had not been a registered member-employee. Pablo's widow filed a petition before the SSS asking that ABC & Co. be directed to pay the premium contributions of Pablo and that his name be reported for SSS coverage. ABC & Co. countered that Pablo was hired to plow, harrow and burrow, using his own carabao and other implements and following his own

TEAM BAROPS ACADEMICS COMMITTEE 2016

37

QUAMTO

QuAMTO for LABOR LAW (1991-2015)

If proven, would this factual setting advanced by ABC & Co. be a valid defense against the petition? (2003) A: Yes. ABC & Co. has a valid defense. If all the allegations are proven, it will be shown that Pablo was an independent contractor who does not fall under the compulsory coverage of SSS. As defined by law, an independent contractor is one who exercises independent employment and contracts to do a piece of work according to his own methods and without being subject to the control of his employer except as to the result of the work. (Phil. Mfg. Co. v. Geronimo, GR No. L6969, November 29, 1954). As shown by the facts of the case, Pablo had control over the method, equipment and schedule of the work that he had contracted to perform. Evidently, he is an independent contractor. Therefore, not falling under the category of an employee, ABC   &   Co.   cannot   be   directed   to   pay   Pablo’s   premium   contribution upon his death. Pablo however may be covered by a different SSS coverage as a self-employed person on a voluntary basis. Benefits Q: In 1960, Juan hired Pablo to drive for the former's lumber company. In 1970, Pablo got sick and was temporarily laid-off. In 1972, Pablo recovered and resumed working for the same lumber company, now run by Juan's wife since Juan had already passed away. In 1996, Pablo retired. When Pablo applied for retirement benefits with the SSS that same year, he discovered that the lumber company never enrolled him as an employee, much less remitted his contributions that were deducted from his salary. The lumber company agreed to pay for Pablo's contributions plus penalties but maintained that most of Pablo's claims had already prescribed under Art, 1150 of the Civil Code. (Art. 1150 provides "The time for prescription of all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought."). Is the Lumber company's contention correct? Why? (2001) A: The lumber company's contention is not correct. The Social Security Law of 1997 provides that the right to institute the necessary action against an employer may be commenced within twenty (20) years from the time the delinquency is known or the assessment is made by the SSS, or from the time the benefit accrues, as the case may be. (Sec. 22(b), Social Security Act of 1997). Q: Samson Security Agency [SAMSON) undertook to provide 24 hours security service to Jarillo Realty (JARILLO) in the latter's construction operations. The contract between SAMSON and JARILLO expressly stipulated that Samson's security guards are its employees and not that of JARILLO. SAMSON undertook to hold JARILLO free from any liability whatsoever resulting from injuries which its (SAMSON's) guards may suffer or be exposed to suffer as guards of JARILLO's construction operations. To facilitate payment. JARILLO undertook to pay directly to the guards the agreed wages, which are

subsequently deducted from the monthly payments to SAMSON under its contract with JARILLO. JARILLO, in turn, charges SAMSON for the equipment supplied to the guards such as uniforms, pistols and ammunition and cost of training of guards JARILLO wants replaced. During a storm, several scaffoldings of JARILLO fell and killed two (2) guards whose families later sued JARILLO. JARILLO, in turn, impleaded SAMSON as third-party defendant before the Arbiter. Decide who should be held liable. (1994) A: Liability lies against the State Insurance Fund administered by the SSS. This is a case of death in connection with the employees' work. Jarillo is deemed to be the employer of the guards in view of the direct payment of wages to the guards. Thus, if there are benefits arising from employer-employee relationship, Jarillo should be held answerable. Note: Employer as defined under the chapter on State Insurance Fund in the Labor code defines employer as “any   person,   natural   or   juridical,   employing   the   services of  the  employee”  (Sec. 167 (f), Labor code). GSIS LAW (R.A. 8291) Exclusion from Coverage Q: Odeck, a policeman, was on leave for a month. While resting in their house, he heard two of his neighbors fighting with each other. Odeck rushed to the scene intending to pacify the protagonists. However, he was shot to death by one of the protagonists. Zhop, a housemaid, was Odeck's surviving spouse whom he had abandoned for another woman years back. When she learned of Odeck's death, Zhop filed a claim with the GSIS for death benefits. However, her claim was denied because: (a) when Odeck was killed, he was on leave; and (b) she was not the dependent spouse of Odeck when he died. Resolve with reasons whether GSIS is correct in denying the claim. (2005) A: Yes, because under the law, a dependent is one who is a legitimate spouse living with the employee (Art. 167 [i], Labor Code). In the problem given, Zhop had been abandoned by Odeck who was then living already with another woman at the time of his death. Moreover, Odeck was on leave when he was killed. The 24-hour duty rule does not apply when the policeman is on vacation leave. (Employees’   Compensation   Commission   v. CA, G.R. No. 121545, November 14, 1996). Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claim for death benefits, namely: a. b. c.

That the employee must be at the place where his work requires him to be; That the employee must have been performing his official functions; and That the injury is sustained elsewhere, the employee must have been executing an order for the employer.

It  is  not  difficult  to  understand  then  why  Zhop’s  claim  was   denied by the GSIS (Tancinco v. GSIS, G.R. No. 132916, November 16, 2001). In the present case, Odeck was resting at his house when the incident happened; thus, he was not at a place where his work requires him to be. Although at

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

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schedule of work hours, without any supervision from the company.

FOR LABOR LAW (1991-2015)

the time of his death Odeck was performing a police function, it cannot be said that his death occurredelsewhere other than the place where he was supposed to be because he was executing an order for his employer. Q: Luis, a PNP officer, was off duty and resting at home when he heard a scuffle outside his house. He saw two of his neighbors fighting and he rushed out to pacify them. One of the neighbors shot Luis by mistake, which resulted in Luis's death. Marian, Luis's widow, filed a claim with the GSIS seeking death benefits. The GSIS denied the claim on the ground that the death of Luis was not service-related as he was off duty when the incident happened. Is the GSIS correct? (2015) A: No. The GSIS is not correct. Luis, a policeman, just like a soldier, is covered by the 24-Hour Duty Rule. He is deemed on round-the clock-duty unless on official leave, in which case his death outside performance of official peace-keeping mission will bar death claim. In this case, Luis was not on official leave and he died in the performance of a peace-keeping mission. Therefore, his death is compensable. Benefits Q: Atty. CLM, a dedicated and efficient public official, was the top executive of a government owned and controlled corporation (GOCC). While inspecting an ongoing project in a remote village in Mindanao, she suffered a stroke and since then had been confined to a wheelchair. At the time she stopped working because of her illness in line of duty, Atty. CLM was only sixty years old but she had been an active member of the GSIS for thirty years without any break in her service record. What benefits could she claim from the GSIS? Cite at least five benefits. (2004) A: 1. Separation Benefit (Sec. 11-12, GSIS Act of 1997) 2. Retirement Benefits (Sec. 13-14, GSIS Act of 1997) 3. Permanent Disability Benefits (Sec. 15-17, GSIS Act of 1997) 4. Temporary Disability Benefits (Sec. 18-19, GSIS Act of 1997) 5. Survivorship Benefits (Sec. 20-22, GSIS Act of 1997) 6. Funeral Benefits (Sec. 23, GSIS Act of 1997) 7. Life Insurance Benefits (Sec.24-27, GSIS Act of 1997) Beneficiaries Q: Pitoy Mondero was employed as a public school teacher at the Marinduque High School from July 1, 1983 until his untimely demise on May 27, 1997. On April 27, 1997, a memorandum was issued by the school principal, which reads: "You are hereby designated to prepare the MODEL DAM project, which will be the official entry of our school in the forthcoming Division Search for Outstanding Improvised Secondary Science Equipment for Teachers to be held in Manila on June 4, 1997. You are hereby instructed to complete this MODEL DAM on or before the scheduled date of the contest." Mondero complied with his superior's instruction and constructed an improvised electric microdam, which he took home to enable him to finish it before the deadline. On May 27, 1997, while working on the MODEL DAM Project in his house, he came to contact with a live wire and was electrocuted. He was UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

immediately brought to a clinic for emergency treatment but was pronounced dead on arrival. The death certificate showed that he died of cardiac arrest due to accidental electrocution. Pepay Palaypay (Pitoy Mondero's common-law wife for more than twenty years) and a Pitoy Mordero Jr. (his only son) filed a claim for death benefits with the Government Service Insurance System (GSIS), which was denied on the ground that Pitoy Mordero's death did not arise out of and in the course of employment and therefore not compensable because the accident occurred in his house and not in the school premises. Is Pepay Palaypay entitled to file a claim for death benefits with the GSIS? Why? (1999) A: The beneficiaries of a member of the GSIS are entitled to the benefits arising from the death of said member. Death benefits are called survivorship benefits under the GSIS Law. Pepay Palaypay is not entitled to receive survivorship benefits since she is not a beneficiary being a common-law wife and not a legal dependent spouse. (Sec. 2(g), GSIS Act of 1997). FOLLOW-UP QUESTION: Is the cause of death of Pitoy Mordero (cardiac arrest due to accidental electrocution in his house) compensable? Why? A: Yes. To be compensable under the GSIS Law, the death need not be work connected. Note: As long as the decedent-member was a) in service; b) rendered 3 years of service and at least paid 36 monthly contributions within the five-year period immediately preceding his death; or c) paid a total of at least 180 monthly contributions prior to his death. LIMITED PORTABILITY LAW (R.A. NO. 7699) Q: How are the "portability" provisions of Republic Act No. 7699 beneficial or advantageous to SSS and GSIS members in terms of their creditable employment services in the private sector or the government, as the case may be, for purposes of death, disability or retirement? Please explain your answer briefly. (2005) A: Portability provisions of R.A. No. 7699 shall benefit a covered worker who transfers employment from one sector to another or is employed in both sectors, whose creditable services or contributions in both systems credited to his service or contribution record in each of the system and shall be totalized for purposes of old-age, disability, survivorship and other benefits (Sec. 3, R.A. No. 7699). In the event the employees transfer from the private sector to the public sector, or vice-versa, their creditable employment services and contributions are carried over and transferred as well. Q: Luisito has been working with Lima Land for 20 years. Wanting to work in the public sector, Luisito applied with and was offered a job at Livecor. Before accepting the offer, he wanted to consult you whether the payments that he and Lima Land had made to the Social Security System (SSS) can be transferred or credited to the Government Service Insurance System (GSIS). What would you advice? (2014)

TEAM BAROPS ACADEMICS COMMITTEE 2016

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QUAMTO

QuAMTO for LABOR LAW (1991-2015)

EMPLOYEE’S  COMPENSATION COVERAGE AND WHEN COMPENSABLE Q: Victor was hired by a local manning agency as a seafarer cook on board a luxury vessel for an eightmonth cruise. While on board, Victor complained of chronic coughing, intermittent fever, and joint pains. He was advised by the ship's doctor to take complete bed rest but was not given any other medication. His condition persisted but the degree varied from day to day. At the end of the cruise, Victor went home to Iloilo and there had himself examined. The examination revealed that he had tuberculosis. (2015) a.

Victor sued for medical reimbursement, damages and attorney's fees, claiming that tuberculosis was a compensable illness. Do you agree with Victor? Why or why not?

A: TB is listed under Sec. 32-A of the POEA-SEC as a workrelated disease. It was also either contracted or aggravated   during   the   effectivity   of   Victor’s   contract.   Having shown its manifestations on board, Victor should have been medically repatriated for further examination and treatment in the Philippines. This obligation was entirely omitted in bad faith by the company when it waited for his contract to expire on him before signing him off. On this basis, Victor is entitled to medical reimbursement, damages and attorney’s  fees. b. Due to his prolonged illness, Victor was unable to work for more than 120 days. Will this entitle him to claim total permanent disability benefits? A: No.   Victor’s   TB   is   work-related and it developed on board, thereby satisfying the twin requisites of compensability. However, despite his knowledge of his medical condition, he failed to report to his manning agent within three days from his arrival as required by Sec. 20-B (3) of the POEA-SEC. Since he already felt the manifestations of TB before his sign-off, he should have submitted to post-employment medical examination (Jebsen Maritime Inc. v. Enrique Undag, G.R. No. 191491, December 14, 2011). The effect of his omission is forfeiture by him of disability benefits (Coastal Safeway Marine Services, Inc. v. Elmer t. Esguerra, G.R. No. 185352, August 10, 2011). In effect, the 120-day rule has no application at all. LABOR RELATIONS LAW RIGHT TO SELF-ORGANIZATION Who may Unionize for the Purpose of Collective Bargaining Q: How does the government  employees’  right  to  selforganization differ from that of the employees in the private sector? (1996)

A: There is no substantial difference of the right of selforganization between workers in the private sector and those in the public sector. In the public sector, Executive Order No. 180, the purpose of self-organization is stated as "for the furtherance and protection of their interest." In the private sector, Art. 243 of the Labor Code states "for the purpose of collective bargaining", and "for the purpose of enhancing and defending their interests and for their mutual aid and protection." Furthermore, no less than the Constitution itself guarantees that ALL workers have the right to self-organization. (Sec. 3, Article 13, 1987 Constitution). Q: Do workers have a right not to join a labor organization? A: Yes. The constitutional right to self-organization has two aspects, the right to join or form labor organizations and the right not to join said organization (Victoriano v. Elizalde Rope Worker’s  Union,  G.R.  No.  L-25246, September 12, 1974). Moreover, if they are members of a religious group whose doctrine forbids union membership, their right not to be compelled to become union members has been upheld. However, if the worker is not a "religious objector" and there is a union security clause, he may be required to join the union if he belongs to the bargaining unit. (Reyes v. Trajano, G.R. No. 84433, June 2, 1992). Q: Do the following workers have the right to selforganization? Reasons/basis: a. Employees of non-stock, non-profit organizations? b. Alien employees? (2000) A: a. Even employees of non-stock non-profit organizations have the right to self-organization. This is explicitly provided for in Art. 243 of the Labor Code. A possible exception, however, are employeemembers of non-stock, non-profit cooperatives. b. ALIEN EMPLOYEES with valid work permits may exercise the right to self-organization on the basis of parity or reciprocity, that is, if Filipino workers in the aliens' country are given the same right. (Art. 269, Labor Code). Q: Mang Bally, owner of a shoe repair shop with only nine (9) workers in his establishment, received proposals for collective bargaining from the Bally Shoe Union. Mang Bally refused to bargain with the workers for several reasons. First, his shoe business is just a service establishment. Second, his workers are paid on a piecework basis (i.e., per shoe repaired) and not on a time basis. Third, he has less than ten (10) employees in the establishment. Which reason or reasons is/are tenable? Explain briefly. (2002) A: None. First, Mang Bally's shoe business is a commercial enterprise, albeit a service establishment. Second, the mere fact that the workers are paid on a piece-rate basis does not negate their status as regular employees. Payment by piece is just a method of compensation and does not define the essence of the relation. (Lambo v. NLRC, G.R. No. 111042, October 26, 1999). Third, the employees' right to self organization is not delimited by their number. The right to selforganization covers all persons employed in commercial, industrial and agricultural enterprises and in religious,

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

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A: Yes. Under R.A. 7699, otherwise known as the Portiability Law, one may combine his years of service in the private sector represented by his contributions to the Social Security System (SSS) with his government service and contributions to the GSIS. The contributions shall be totalized for the purposes of old-age, disability, survivorship and other benefits in case the covered member does not qualify for such benefits in either or both Systems without totalization.

FOR LABOR LAW (1991-2015)

charitable, medical, or educational institutions whether operating for profit or not. (Art. 243, Labor Code). Q: At what particular point does a labor organization acquire a legal personality? a.

On the date the agreement to organize the union is signed by the majority of all its members; or b. On the date the application for registration is duly filed with the Department of Labor; or c. On the date appearing on the Certificate of Registration; or d. On the date the Certificate of Registration is actually issued; or e. None of the above. Choose the correct answer. (2003) A: d.) On the date the Certificate of Registration is actually issued. Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration. (Art. 234, Labor Code). Q: "Puwersa", a labor federation after having won in a certification election held in the company premises, sent a letter to respondent company reminding it of its obligation to recognize the local union. Respondent company replied that though it is willing, the rank-and-file employees had already lost interest in joining the local union as they had dissolved it. "Puwersa" argued that since it won in a certification election, it can validly perform its function as a bargaining agent and represent the rank-and-file employees despite the union's dissolution. Is the argument of "Puwersa" tenable? Decide with reasons. (2008) A: A new provision, Article 239-A is inserted into the Labor Code by RA 9481, as follows: Art. 239-A. Voluntary Cancellation of Registration. The registration of a legitimate labor organization may be cancelled by the organization itself. Provided that at least twothirds of its general membership votes, in a meeting duly called for that purpose to dissolve the organization. Provided, further, that an application to cancel registration is thereafter submitted by the board of the organization, attested  to  by  the  president  thereof.” If indeed the local union was dissolved in accordance with the above provision of the law, the argument of “Puwersa”  is  not  tenable.  This  is because  “Puwersa”  only   had the status of an agent, while the local union remained the basic unit of the association. (Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., G.R. No. L33987, September 4, 1975.; cited in Filipino Pipe and Foundry Corp. v. NLRC, G.R. No. 115180, November 16, 1999). Q: A supervisor's union filed a petition for certification election to determine the exclusive bargaining representative of the supervisory employees of Farmers Bank. Included in the list of supervisory employees attached to the petition are the Department Managers, Branch Managers, UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Cashiers and Comptrollers. Farmers Bank questioned this list arguing that Department Managers, Branch Managers, Cashiers and Comptrollers inherently possess the powers enumerated in Art. 212, par. (m), of the Labor Code, i.e., the power and prerogative to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. a.

Is the contention of Farmers Bank correct? Discuss fully. b. Is there any statutory basis for the petition of the union? Explain. (1995) A: a. The contention of the Farmers Bank is not correct, if, on examination of the actual powers exercised by the Department Managers, Bank Managers, Cashiers and Comptrollers, they are not vested with powers or prerogatives to lay down and execute management policies or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. If their powers are to carry out their duties and responsibilities in accordance with the policies promulgated by the Board of Directors of the Bank, or by external authorities, like the Central Bank, then, they are not managerial but may be supervisory personnel. It  is  the  nature  of  an  employee’s  functions   and not the nomenclature or title given to his job which determines whether he has a managerial status (Azucena, 2013). b. There is statutory basis for the petition of the supervisors' union. Under the Labor Code, supervisors have the right to form and join unions, but only unions of supervisory employees. Q: Solar Plexus Bar and Night Club allowed by tolerance fifty (50) Guest Relations Officers (GRO) to work without compensation in its establishment under the direct supervision of its Manager from 8:00 p.m. to 4:00 a.m. everyday, including Sundays and holidays. The GROs, however, are free to ply their trade elsewhere at anytime but once they enter the premises of the night club, they are required to stay up to closing time. The GROs earned their keep exclusively from commissions for food and drinks, and tips from generous customers. In time, the GROs formed the Solar Ugnayan ng mga Kababaihang Inaapi (SUKI); a labor union duly registered with DOLE. Subsequently, SUKI filed a petition for certification election in order to be recognized as the exclusive bargaining agent of its members. Solar Plexus opposed the petition for certification election on the singular ground of absence of employeremployee relationship between the GROs on one hand and the night club on the other hand. May the GROs form SUKI as a labor organization for purposes of collective bargaining? Explain briefly. (1999) A: Yes. Despite the work conditions agreed upon by the owner  of  Solar  Plexus  and  the  GRO’s,  Art.  138  of  the  Labor   Code mandates that women who work in certain workplaces such as night clubs, beer houses, cocktail lounges, massage clinics or bars, who are under the effective control or supervision of an employer shall be considered as employees of such establishments, for purposes of labor and social legislation.

41

QUAMTO

TEAM BAROPS ACADEMICS COMMITTEE 2016

QuAMTO for LABOR LAW (1991-2015) In the case at bar, SUKI, may form a labor organization for purposes of collective bargaining because in the eyes of the law they are employees of Solar Plexus; and as employees, the right to self-organization is granted by law.

Brewery v. Asia Brewery, Inc., G.R. No. 162025, August 3, 2010).

Q: Philhealth is a government-owned and controlled corporation employing thousands of Filipinos. Because of the desire of the employees of Philhealth to obtain better terms and conditions of employment from the government, they formed the Philhealth Employees Association (PEA) and demanded Philhealth to enter into negotiations with PEA regarding terms and conditions of employment which are not fixed by law.

A: Employees who are members of a cooperative cannot form a union because, as members, they are owners and owners cannot bargain with themselves. However, employees who are not members of the cooperative can form a union. (San Jose Electric Service Cooperative v. Ministry of Labor, G.R. No. 77231, May 31, 1989)

Are the employees of Philhealth allowed to selforganize and form PEA and thereafter demand Philhealth to enter into negotiations with PEA for better terms and conditions of employment?

A: Yes. Employees of Philhealth are allowed to selforganize under Section 8, Article III and Section 3, Article XIII of the Constitution which recognize the rights of all workers to self-organization. They cannot demand, however, for better terms and conditions of employment for the same are fixed by law (Art. 244, Labor Code), besides, their salaries are standardized by Congress. (Art. 276, Labor Code). b. In case of unresolved grievances, can PEA resort to strikes, walkouts, and other temporary work stoppages to pressure the government to accede to their demands? (2014) A: No. Although the right to organize implies the right to strike, law may withhold said right. E.O. 180 is that law which withholds from government employees the right to strike. Hence, they cannot resort to strikes and similar concerted activities to compel concessions from the government. Who Cannot Form, Join or Assist Labor Organizations Q: Malou is the Executive Secretary of the Senior Vicepresident of a bank while Ana is the Legal Secretary of the bank's lawyer. They and other executive secretaries would like to join the union of rank and file employees of the bank. Are they eligible to join the union? Why? Explain briefly. (2002) A: No. They are confidential employees who, by the nature of their functions, assist and act in confidential capacity to or have access to confidential matters of person who exercise managerial functions in the field of labor relations. As such the ineligibility of managerial employees to form or join labor unions equally applies to them. (Philips Industrial Development v. NLRC, G.R. No. 88957, June 25, 1992). Note: Confidential employees are 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 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. (Tunay na Pagkakaisa ng Manggagawa sa Asia

Note: Irrespective of the degree of their participation in the actual management of the cooperative, all members thereof cannot form, assist or join a labor organization for the purpose of collective bargaining. (Benguet Electric Cooperative, Inc. v. Ferrer-Calleja, G.R. No. 79025, December 29, 1989). Q: A, B, C and D (treasurer, accountant, elementary department Principal, and secretary of the Director, respectively), regular employees of a private educational institution, were administratively charged for their participation in a picket held in front of the campus after office hours. Several faculty members, non-academic staff and students joined the peaceful prayer rally organized by disgruntled employees to protest certain alleged abuses of the incumbent School Director. Subsequently, the rankand-file employees succeeded in forming the first and only union of the School. During the investigation, the administration discovered that two (2) days prior to the rally, A, B, C and D attended the meeting of the School’s   employees’   association   which   planned   the   protest activity. Two well-known organizers/leaders of a national labor federation were also present. A, B, C and D were dismissed by the School on the ground of violating the Labor Code which prohibits managerial   employees   to   “join,   assist   or   form   any   labor   organization”.   Is   the   contention   of   the   School   tenable? Is the dismissal of A, B, C and D valid? Explain. (2004) A: The dismissal of A, B, C and D on the ground that they violated the Labor Code provision which states that managerial employees "are not eligible to join, assist or form any labor organization" is not valid. The Labor Code does not provide for any sanction for the aforesaid acts. These acts could not be considered as just cause for the termination of employment, either. ALTERNATIVE ANSWER: A: The dismissal of the managerial employees is invalid. The dismissal of the management employees because of union activities, no matter how erroneous or tenuous may be the basis of the exercise, is a violation of the constitutional and statutory guaranteed rights of selforganization, and an act of unfair labor practice. (Sec. 3, Art. XIII, Constitution; Art. 243, Labor Code. See also Art. 248 (a), Labor Code). Q: On what ground or grounds may a union member be expelled from the organization? (2002) A: Union members may be expelled from the labor organization only on valid grounds provided for in the Union Constitution, By-Laws, or conditions for union membership. Example of valid reasons for expulsion: a) Refusal to pay union dues and special assessments; b)

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

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a.

Q: Do employees of a cooperative have a right to form a union? Explain briefly. (2002)

FOR LABOR LAW (1991-2015)

Disloyalty to the union; and c) Violation of the constitution and by-laws of the union. Q: Samahan ng mga Manggagawa sa Companya ng Tabaco (SMCT) filed a Petition for Certification Election among the supervisory employees of the Tabaco Manufacturing Company (Tabaco) before the NCR Regional Office of the Department of Labor and Employment. It alleged, among other things, that it is a legitimate labor organization, a duly chartered local of NAFLU; that Tabaco is an organized establishment; and that no certification election has been conducted within one year prior to the filing of its petition for certification election. The Petition filed by SMCT showed that out of its 50 members, 15 were rank-and-filers and two (2) were managers. Tabaco filed a Motion to Dismiss on the ground that SMCT union is composed of supervisory and rankand-file employees and, therefore, cannot act as bargaining agent for the proposed unit. SMCT filed an opposition to the said Motion alleging that the infirmity, if any, in the membership of the union can be remedied in the pre-election conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters. a.

Should the Motion to Dismiss filed by the Tabaco be granted or denied? Explain.

A: The Motion to Dismiss filed by Tabaco should be granted. According to the Labor Code (in Article 245), supervisory employees shall not be eligible for membership in a labor organization of rank and file employees but may join or form separate labor organizations of their own. Because of the above-mentioned provision of the Labor Code, a labor organization composed of both rank-andfile and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being a legitimate labor organization, it cannot possess the requisite personality to file a petition for certification election. (See Toyota Motor Philippines Corp. vs. Toyota Motor Philippines Corp. Labor Union, G.R. No. 121084, February 19, 1997). b. Can the two (2) Managers be part of the bargaining unit? Why? (1999) A: No, the two (2) Managers cannot be part of the bargaining unit composed of supervisory employees. A bargaining unit must effect a grouping of employees who have substantial, mutual interests in wages, hours, working conditions and other subjects of collective bargaining. (San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, G.R. No. 110399, August 15, 1997). The Labor Code (in Article 245) provides that managerial employees are not eligible to join, assist or form any labor organization. The above provision shows that managerial employees do not have the same interests as the supervisory employees which compose the bargaining unit where SMCT wishes to be the exclusive collective bargaining representative. UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Q: What is the rule on the "equity of the incumbent"? (2015) A: The Equity of the Incumbent Rule has it that all existing federations or national unions, possessing all qualifications of an LLO and none of the grounds for CR cancellation, shall continue to maintain their existing affiliates regardless of their location or industry to which they belong. In case of dissociation, affiliates are not required to observe the one union-one industry rule. Who Cannot Form, Join or Assist Labor Organizations Q: Which of the following groups does not enjoy the right to self-organization? (A) those who work in a non-profit charitable institution (B) those who are paid on a piece-rate basis (C) those who work in a corporation with less than 10 employees (D) those who work as legal secretaries. (2014) A: D. Those who works as legal secretaries (Tunay na Pagkakaisa v. Asia Brewery, G.R. No. 162025, August 3, 2010). Q: George is an American who is working as a consultant for a local IT company. The company has a union and George wants to support the union. How far can George go in terms of his support for the union? (2015) A: George, as a general rule, is prohibited by Art. 270(a) of the Labor Code from giving any donation, grant or other form of assistance, in cash or in kind, directly or indirectly to the Union. He can give a support only upon prior permission from the Secretary of Labor relative to “Trade  Union  activities”  as  defined  in  said  law. George, in addition to his alien employment permit, must first prove that the country whereof he is a national recognizes the right of Filipinos working therein to organize. Under these conditions, he is allowed to support the existing union by joining it as to its increase its membership. Bargaining Unit Test to Determine the Constituency of an Appropriate Bargaining Unit Q: The Ang Sarap Kainan Workers Union appointed Juan Javier, a law student, as bargaining representative. Mr. Javier is neither an employee of Ang Sarap Kainan Company nor a member of the union. Is the appointment of Mr. Javier as a bargaining representative in accord with law? Explain. (2000) A: Yes, the law does not require that the bargaining representative be an employee of the company nor an officer or member of the union. (Art 212 (j), Labor Code). Certification Election In an organized establishment Q: Can the Bureau of Labor Relations certify a union as the exclusive bargaining representative after

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A: The Bureau of Labor Relations CANNOT certify a union as the exclusive collective bargaining representative after showing proof of majority representation thru union membership cards without conducting a certification election. The Labor Code provides only for a certification election as the mode for determining the exclusive collective bargaining representative if there is a question of representation in an appropriate bargaining unit. (Arts. 256, 257 and 258). Note: Direct certification originally allowed under Art. 257 of the Labor Code has been discontinued as a method of selecting the exclusive bargaining agent of the workers. This amendment affirms the superiority of the certification election over the direct certification which is no longer available now under the change in said provision. (Central Negros Electric Cooperative, Inc. v. Secretary of Labor, G.R. No. 94045, September 13, 1991). Q: UNIDAD, a labor organization claiming to represent the majority of the rank and file workers of BAGSAK Toyo Manufacturing Corp. (BMTC), filed a petition for certification election during the freedom period obtaining in said corporation. Despite the opposition thereto by SIGAW Federation on the ground that UNIDAD was not possessed with all the attributes of a duly registered union, the Med-Arbiter issued an Order calling for a certification election on July 25, 2001. This Order was promulgated and served on the parties on July 12, 2001. On July 14, 2001, UNIDAD submitted and served the required documents for its registration as an independent union, which documents were approved by the DOLE on July 15, 2001. During the elections, UNIDAD won over SIGAW. SIGAW questioned UNIDAD's victory on the ground that UNIDAD was not a duly registered union when it filed the petition for a certification election. Shall SIGAWs case prosper or not? Why? (2001). A: No, SIGAW's case will not prosper. The application of technicalities of procedural requirements in certification election disputes will serve no lawful objective or purpose. It is a statutory policy that no obstacles should be placed on the holding of a certification election (Samahang ng Manggagawa sa Pacific Plastic vs. Laguesma, G.R. No. 111245, January 31, 1997) and that the law is indisputably partial to the holding of a certification election (Western Agusan vs. Trajano, G.R. No. 75724, May 6, 1991). At any rate, UNIDAD completed all the requirements for union registration on July 14, 2001, and legitimate union status was accorded on July 15, 2000, or at least ten (10) days before the scheduled date for holding the Certification Election. Q: PT & T Supervisory Employees Union filed a petition for the holding of a certification election among the supervisory employees of the PT & T Company. The company moved to dismiss the petition on the ground that Union members were performing managerial functions and were not merely supervisory employees. The company also alleged that a certified bargaining unit existed among its rank and file employees which barred the filing of the petition.

a.

Does the company have the standing to file the motion to dismiss? Explain.

A: No, the company has no standing to file the Motion to Dismiss as the employer has no right to interfere in a purely union matter or concern (Philippine Fruits and Vegetable Industries, Inc. vs Torres, G.R. No. 92391, July 3, 1992). The Court would wish to stress once more the rule which it has consistently pronounced in many earlier cases that a certification election is the sole concern of the workers and the employer is regarded as nothing more than a bystander with no right to interfere at all in the election. b. If you were the Med-Arbiter, how would you resolve the petition? A: As the MED-ARBITER, I will order the holding of the certification election. The fact that there is already a certified collective bargaining representative of the rank and file employees of the Company is not a bar to the holding of a certification election for the determination of the collective bargaining representative of the supervisory employees. But I will exclude those employees found to be managerial from participating in the certification election. c.

What is the proper remedy of an employer to ensure that the employees are qualified to hold a certification election? (1996)

A: The employer has no remedy. The petition for certification election was initiated by the Union; hence, the employer is a total stranger or a bystander in the election process (Philippine Fruits and Vegetable Industries, Inc. v. Torres, G.R. No. 92391, July 3, 1992). To allow an employer to assert a remedy is an act of interference in a matter which is purely a concern of the Union. Note: The Labor Code expressly provides the role of the employer as a mere bystander in cases of certification election. Whether the petition for certification election is filed by an employer or a legitimate labor organization, the employer shall not be considered a party thereto with a concomitant right to oppose the petition. The employer’s  participation  is limited to: 1) being notified or informed of petitions or such nature and 2) submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably on the petition (Art. 258-A, Labor Code). Q: There are instances when a certification election is mandatory. What is the rationale for such a legal mandate? (2003) A: According to the Labor Code, in any establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor organization. In the above-described situation, a certification election is made mandatory because if there is no certified bargaining agent as determined by a certification election, there could be no collective bargaining in the said unorganized establishment. (Art. 257, Labor Code). Q: In what instance may a petition for certification election be filed outside the freedom period of a current collective bargaining agreement? (1999)

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showing proof of majority representation thru union membership cards without conducting an election? (1998)

FOR LABOR LAW (1991-2015)

A: As a general rule, in an establishment where there is in force and effect a CBA, a petition for certification election may be filed only during the freedom period of such CBA. But to have the above-mentioned effect, the CBA should have been filed and registered with the Department of Labor and Employment. (See Article 231, 253-A and 256). Thus, a CBA that has not been filed and registered with the Department of Labor and Employment cannot be a bar to a certification election and such election can be held outside of the freedom period of such CBA. Q: Are probationary employees entitled to vote in a certification election? Why? (1999) A: In a certification election, all rank-and-file employees in the appropriate bargaining unit are entitled to vote. This principle is clearly stated in Article 255 of the Labor Code which states that the "labor organization designated or selected by the majority of the employees in such unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining." Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all employees in the bargaining unit. Hence, all rank-and-file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. The Code makes no distinction as to their employment status as basis for eligibility to vote in the petition for certification election. The law refers to "all" the employees in the bargaining unit. All they need to be eligible to vote is to belong to the "bargaining unit". (Airtime Specialists, Inc. v. Ferrer-Calleja, G.R. No. 80612-16, December 29, 1989). Q: Liwayway Glass had 600 rank-and-file employees. Three rival unions A, B, and C participated in the certification elections ordered by the Med-Arbiter. 500 employees voted. The unions obtained the following votes: A – 200; B – 150; C – 50; 90 employees voted  “no  union”;  and  10  were  segregated  votes.  Out   of the segregated votes, four (4) were cast by probationary employees and six (6) were cast by dismissed employees whose respective cases are still on appeal. (2014) a.

Should the votes of the probationary and dismissed employees be counted in the total votes cast for the purpose of determining the winning labor union?

A: Yes. Rule IX, Section 5 of DOLE Department Order 4003  provides  that  “all  employees  who  are  members  of  the   appropriate bargaining unit sought to be represented by the petitioner at the time of the issuance of the order granting the conduct of a certification election shall be eligible to vote. An employee who has been dismissed from work but has contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of certification election shall be considered a qualified voter, unless his/her dismissal was declared valid in a final judgment at  the  time  of  the  conduct  of  the  certification  election.”

(Article 256, now Article 266, of the Labor Code). In the instant case, 500 out of 600 rank-and-file employees voted. c.

Should union A be declared the winner?

A: No. The Labor Code provides that the Labor Union receiving majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit (Article 256, now Article 266, of the Labor Code). Here, the number of the valid votes cast is 490; thus the winning union should receive at least 246 votes. Union A only received 200 votes. d. Suppose the election is declared invalid, which of the contending unions should represent the rank-and-file employees? A: None of them should represent the rank-and-file employees. (Article 255, now Article 256 of the Labor Code). e.

Suppose that in the election, the unions obtained the following votes: A-250; B-150; C-50; 40 voted “no  union”;  and  10  were  segregated  votes.  Should   Union A be certified as the bargaining representative?

A: Yes. The Labor Code provides that the Labor Union receiving majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit (Article 256, now Article 266, of the Labor Code). Here, the number of valid votes cast is 490. Thus the winning union should receive at least 246 votes; Union A received 250 votes. Q: Samahang East Gate Enterprises (SEGE) is a labor organization composed of the rank-and-file employees of East Gate Enterprises (EGE), the leading manufacturer of all types of gloves and aprons. EGE was later requested by SEGE to bargain collectively for better terms and conditions of employment of all the rank-and-file employees of EGE. Consequently, EGE filed a petition for certification election before the Bureau of Labor Relations (BLR). During the proceedings, EGE insisted that it should participate in the certification process. EGE reasoned that since it was the one who filed the petition and considering that the employees concerned were its own rank-and-file employees, it should be allowed to take an active part in the certification process. Is the contention of EGE proper? Explain. (2014) A: No. Under Article 258-A of the Labor Code, an employer is a mere bystander in certification elections, whether the certification for election is filed by said employer or a legitimate labor organization. The employer shall not be considered as a party thereto with a concomitant right to oppose the petition for certification election.

b. Was there a valid election?

Affiliation and Disaffiliation of the Local Union from the Mother Union

A: Yes. To have a valid election, at least a majority of all eligible voters in the unit must have cast their votes

Q: In the Collective Bargaining Agreement (CBA) between Royal Films and its rank-and-file Union

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

TEAM BAROPS ACADEMICS COMMITTEE 2016

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QUAMTO

QuAMTO for LABOR LAW (1991-2015)

a.

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

A: The action for illegal dismissal will prosper. The right of a local union to disaffiliate from its mother federation is well-settled. A local union, being a separate and voluntary association, is free to serve the interest of all its members including the freedom to disaffiliate when circumstances warrant this right is consistent with the constitutional guarantee of freedom of association. Thus, the act of initiating the move to disaffiliate is not an act of disloyalty. (Tropical Hut. Employee's Union-CGW, et al. vs. Tropical Hut Food Market, Inc., et. al, G.R. Nos. L-3495-99, January 20, 1990). Note: Disaffiliation cannot be considered an act of disloyalty. The very essence of self-organization is for the workers to form a group for the effective enhancement and protection of common interest. (PICEWO v. People Industrial & Commercial Corp.,G.R. No. L-37687, March 15, 1982). b. What are the liabilities of Royal and MFF to the dismissed employees, if any? (1994) A: MFF can be held liable to pay the backwages of the dismissed employees. Royal can be held jointly and severally liable for backwages if it acted with undue haste in dismissing the employees (Manila Cordage Co. v. CIR, G.R. No. L-27079, August 31, 1977). In addition, Royal can be ordered to reinstate the dismissed employees. Union Dues and Special Assessments Requirements for Validity Q: The union deducted P20.00 from Rogelio's wages for January. Upon inquiry he learned that it was for death aid benefits and that the deduction was made pursuant to a board resolution of the directors of the union. Can Rogelio object to the deduction? Explain briefly. (2002) A: Yes. In order that the special assessment (death aid benefit) may be upheld as valid, the following requisites must be compiled with: (1) Authorization by a written resolution of the majority of all the members at the general membership meeting duly called for the purpose; (2) Secretary's record of the meeting; and (3) Individual written authorization for the check-off duly signed by the employee concerned. (ABS-CBN Supervisors Employees Union Members v. ABS-CBN Broadcasting Corp, and Union

Officers, G.R. No. 106518, March 11, 1999) (Art. 241(n) and (o), Labor Code) In the problem given, none of the above requisites were complied with by the union. Hence, Rogelio can object to the deduction made by the union for being invalid. Note: Substantial compliance of the requirements is not enough in view of the fact that the special assessment will diminish the compensation of union members. (Palacol v. Ferrer-Calleja, G.R. No. 85333, February 26, 1990). Q: Atty. Facundo Veloso was retained by Welga Labor Union to represent it in the collective bargaining negotiations. It was agreed that Atty. Veloso would be paid in the sum of P20,000.00 as attorney's fees for his assistance in the CBA negotiations. After the conclusion of the negotiations Welga Labor Union collected from its individual members the sum of P100.00 each to pay for Atty. Veloso's fees and another sum of Pl00.00 each for services rendered by the union officers. Several members of the Welga Labor Union approached you to seek advice on the following matters. a.

Whether or not the collection of the amount assessed on the individual members to answer for the attorney's fees was valid?

A: The   assessment   for   attorney’s   fees   is   not   valid.   The   Labor   Code   prohibits   the   payment   of   attorney’s   fees   when it is effected through forced contributions from the workers from their own funds as distinguished from the union funds (Art. 222(b), Labor Code). The obligation to pay  the  attorney’s  fees  belongs  to  the  union  and  cannot   be shunted to the workers as their direct responsibility. (Bank of the Philippine Islands Employees’  Union  vs.  NLRC,   G.R. Nos. 69746-47, March 31, 1989). b. Whether or not the assessment of Pl00.00 from the individual members of the Welga Labor Union for services rendered by the union officers in the CBA negotiations was valid? (1997) A: The assessment for negotiation fees is not valid. The Labor Code prohibits negotiation fees and other similar charges of any kind arising from any collective bargaining negotiations to be imposed on any individual member of the contracting union. (Art. 222(b), Labor Code) Note: Special  assessments  may  be  allowed  like  attorney’s   fees and negotiation fees provided that there be strict compliance with the requisites of a valid special assessment. (Art. 241 (n) and (o), Labor Code). Q: What requisites must a Union comply with before it can validly impose special assessments against its members for incidental expenses, attorney's fees, representation expenses and the like? (2001) A: In order that the special assessment may be upheld as valid, the following requisites must be compiled with: (1) Authorization by a written resolution of the majority of all the members at the general membership meeting duly called for the purpose; (2) Secretary's record of the meeting; and (3) Individual written authorization for the check-off duly signed by the employee concerned. (ABSCBN Supervisors Employees Union Members v. ABS-CBN Broadcasting Corp, and Union Officers, G.R. No. 106518, March 11, 1999 ) (Art. 241(n) and (o), Labor Code).

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

FOR LABOR LAW (1991-2015)

RIGHT TO COLLECTIVE BARGAINING Duty to Bargain Collectively When there is CBA Q: What jurisdictional pre-conditions must be present to set in motion the mechanics of a collective bargaining? (1996) A: To set in motion the mechanics of collective bargaining, these jurisdictional pre-conditions must be present, namely: 1. The employees in a bargaining unit should form a labor organization; 2. The labor organization should be a legitimate labor organization; 3. As such legitimate labor organization, it should be recognized or certified as the collective bargaining representative of the employees of the bargaining unit; and 4. The labor organization as the collective bargaining representative should request the employer to bargain collectively. (See Arts. 243, 234, 255 and 250 of the Labor Code). Q: What is an appropriate bargaining unit for purposes of collective bargaining? (1999) A: An APPROPRIATE BARGAINING UNIT is a group of employees of a given employer comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with the interest of the employer, indicated to be the best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of the law. (See University of the Philippines v. Ferrer-Calleja, G.R. No. 96189, July 14, 1992). Collective Bargaining Agreement (CBA) Mandatory Provisions of CBA Q: Jenson & Jenson (J & J) is a domestic corporation engaged in the manufacturing of consumer products. Its rank-and-file workers organized the Jenson Employees Union (JEU), a duly registered local union affiliated with PAFLU, a national union. After having been certified as the exclusive bargaining agent of the appropriate bargaining unit, JEU-PAFLU submitted its proposals for a Collective Bargaining Agreement with the company. In the meantime, a power struggle occurred within the national union PAFLU between its National President, Manny Pakyao, and its National Secretary General, Gabriel Miro. The representation issue within PAFLU is pending resolution before the Office of the Secretary of Labor. By reason of this intra-union dispute within PAFLU, J & J obstinately and consistently refused to offer any counterproposal and to bargain collectively with JEUPAFLU until the representation issue within PAFLU shall have been resolved with finality. JEU-PAFLU filed a Notice of Strike. The Secretary of Labor UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

subsequently assumed jurisdiction over the labor dispute. a.

Will the representation issue that has arisen involving the national union PAFLU, to which the duly registered local union JEU is affiliated, bar collective bargaining negotiation with J & J? Explain briefly.

A: The representation issue that has arisen involving the national union PAFLU should not bar collective bargaining negotiation with J and J. It is the local union JEU that has the right to bargain with the employer J and J, and not the national union PAFLU. It is immaterial whether the representation issue within PAFLU has been resolved with finality or not. Said squabble could not possibly serve as a bar to any collective bargaining since PAFLU is not the real party-ininterest to the talks; rather, the negotiations are confined to the corporation and the local union JEU. Only the collective bargaining agent, the local union JEU, possesses the legal standing to negotiate with the corporation. A duly registered local union affiliated with a national union or federation does not lose its legal personality or independence. (Adamson and Adamson, Inc. v. The Court of Industrial Relations and Adamson and Adamson Supervising Union (FFW), G.R. No. L-35120, January 30, 1984). b. Can the Secretary of Labor decide the labor dispute by awarding the JEU CBA Proposals as the Collective Bargaining Agreement of the parties? Explain briefly. (1999) A: Yes, the Secretary of Labor can decide the labor dispute by awarding the JEU CBA proposals as the Collective Bargaining Agreement between the parties because when the Secretary of Labor (under Art. 263 [g]) assumes jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor exercises the power of compulsory arbitration over the labor dispute, meaning, that as an exception to the general rule, the Secretary of Labor now has the power to set or fix wages, rates of pay, hours of work or terms and conditions of employment by determining what should be the CBA of the parties. (See Divine Word University v. Secretary of Labor, G.R. No. 91915, September 11, 1992) ALTERNATIVE ANSWER: What is involved in the case is a corporation engaged in the manufacturing of consumer products. If the consumer products that are being manufactured are not such that a strike against the company cannot be considered a strike in an industry indispensable for the national interest, then the assumption of jurisdiction by the Secretary of Labor is not proper. Therefore, he cannot legally exercise the powers of compulsory arbitration in the labor dispute. Grievance Procedure Voluntary Arbitration Q: XYZ Company and Mr. AB, a terminated employee who also happens to be the President of XYZ Employees Union, agree in writing to submit Mr. AB's illegal dismissal case to voluntary arbitration. Is this agreement a valid one? (2015)

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QuAMTO for LABOR LAW (1991-2015)

Q: XYZ Company and XYZ Employees Union (XYZEU) reach a deadlock in their negotiation for a new collective bargaining agreement (CBA). XYZEU files a notice of strike; XYZ Company proposes to XYZEU that the deadlock be submitted instead to voluntary arbitration. If you are counsel for XYZEU, what advice would you give the union as to the: 1. propriety of the request of XYZ Company, and 2. the relative advantages/disadvantages between voluntary arbitration and compulsory arbitration? (2015) A: 1. As counsel, I will advise the union to accede to the request of the company. Besides being the constitutionally preferred mode of dispute settlement, voluntary arbitration is less adversarial and more expeditious. 2.

The advantages of voluntary arbitration are: a. b.

c.

The  parties’  dispute  is  heard  and  resolved  by  a   person whom both parties have chosen as their judge; hence likely to be impartial. If both parties are willing to submit their dispute, the decision is final and binding on them in general by reason of their submission agreement; and In the event of a challenge, the decision is elevated to the CA and then to the SC, i.e., less one layer of appeal because the NLRC is out of the way.

The disadvantages of voluntary arbitration are: a.

b.

In case of appeal by the employer to the CA, the monetary award will not be secured with an appeal bond which Rule 43 of the Rules of Court does not require; and In case of enforcement of judgment, the Voluntary Arbitrator has no sheriff to enforce it.

The advantages of compulsory arbitration are: a.

b. c.

Subject to pre-litigation mediation, a case can be initiated through the filing of a verified complaint by a union member, unlike in voluntary arbitration where the Voluntary Arbitrator acquires jurisdiction primarily through a submission agreement. In a case where the company is unwilling, the EBR (and only the EBR) may serve a notice to arbitrate; hence, a union member may be left out in the process if the EBR does not serve that notice; A monetary award is secured with the employer’s  appeal  bond;  and There is a system of restitution in compulsory arbitration.

The disadvantages of compulsory arbitration are: a. b.

State interference with the affairs of labor and management is maximized, disregarding the interparty nature of relationship; and The system of appeals entails a longer process.

Duration For Economic Provisions Q: Company "A" and Union "B" negotiated the last two years of their five-year CBA on April 1, 1990 to expire on March 31, 1992. Considering the amicable relations between the parties, neither one moved for the extension or termination of the agreement. Sometime in 1995, some disgruntled employees filed a complaint demanding that they be paid the annual salary increases and other related annual increases specified in the CBA of April 1990, citing the provision in Art. 253 of the Labor Code which requires the parties to "xxx keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60 day period and/or until a new agreement is reached by the parties". A, however, maintained that the annual salary increases and related benefits specifically provided for in the CBA were, pursuant to contract and law, effective only for the term specified therein, namely, until March 31, 1992 only. Who is correct? State the reason(s) for your answer. (2001) A: The disgruntled employees are correct in their claim that the expired CBA remains in full force and effect until a new CBA is signed in accordance with Article 253 of the Labor Code. The SC ruled in New Pacific Timber and Supply Co, Inc. vs. NLRC (GR No. 124224, March 17, 2000): "Article 253 of the Labor Code explicitly provided that until a new Collective Bargaining Agreement has been executed by and between the parties, they are duly bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement. The law does not provide for any exception or qualification as to which of the economic provisions of the existing agreement are to retain force and effect, therefore, it must be understood as encompassing all the terms and conditions in the said agreement." Freedom Period Q: What is the "automatic renewal clause" in a collective bargaining agreement? (1999, 2008) A: The "AUTOMATIC RENEWAL CLAUSE" in a CBA refers to that provision of the Labor Code (Article 253) which states that "It shall be the duty of both parties (to a CBA) to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day (freedom) period and/or until a new agreement is reached by the parties." Union Security Union Security Clauses; Closed Shop, Union Shop, Maintenance of membership shop, etc. Q: In a certification election conducted by the Department of Labor, Associated Workers

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A: The agreement is valid because the preferred mode of settling labor disputes is through voluntary modes, like voluntary arbitration. The agreement is consistent with Sec. 3, Art. XIII of the Constitution. Moreover, Art. 262 of the Labor Code authorize a voluntary arbitrator to hear and decide by agreement of the parties, all other labor disputes.

QUAMTO

FOR LABOR LAW (1991-2015)

Organization in Laguna (AWOL) headed by Cesar Montanyo, won over Pangkat ng mga Manggagawa sa Laguna (PML), headed by Eddie Gracia. Hence, AWOL was certified as the exclusive bargaining agent of the rank-and-file employees of the Laguna Transportation Company (LTC).

Union of the Philippines v. San Miguel Brewery, Inc., G.R. No. L-18170, August 31,1963).

Shortly, thereafter, a Collective Bargaining Agreement was concluded by LTC and AWOL which provided for a closed shop. Consequently, AWOL, demanded that Eddie Gracia and all the PML members be required to become members of AWOL as a condition for their continued employment otherwise, they shall be dismissed pursuant to the closed shop provision of the CBA. The union security clause of the CBA also provided for the dismissal of employees who have not maintained their membership in the union. For one reason or another, Francis Magallona, a member of AWOL, was expelled from the union membership for acts inimical to the interest of the union. Upon receipt of the notice that Francis Magallona failed to maintain his membership in good standing with AWOL, LTC summarily dismissed him from employment.

A: No. The right to join includes the right not to join by reason of religious beliefs. Members of said religious sect cannot be compelled or coerced to join the labor union even when the union has a closed shop agreement with the employer; that in spite of any closed shop agreement, members of said religious sect cannot be refused employment or be dismissed from their jobs on the sole ground that they are not members of the collective bargaining union. (Victoriano v. Elizalde Rope Workers' Union, G.R. No. L-25246, September 12,1974).

Can Eddie Gracia and all the PML members be required to become members of the AWOL pursuant to the closed shop provision of the CBA? Why?

A: Eddie Gracia and all the PML members cannot be required to become members of AWOL pursuant to the closed shop provision of the CBA. According to the Labor Code (Article 248(e)), a closed shop provision cannot be applied to those employees who are already members of another union at the time of the signing of the CBA. b. Is the termination from employment of Francis Magallona by LTC lawful? Why? (1999) A: Pursuant to the closed shop provision of the CBA entered into by AWOL with LTC, membership in AWOL has become a condition of employment in LTC. As long as the expulsion of Francis Magallona from AWOL was done in accordance with applicable provisions of law and with the Constitution and By-laws of the AWOL, then it was lawful for LTC to terminate Magallona. Q: A group of employees in XYZ Factory belonging to a religious sect, in conformity with the teachings and dictates of their religion, refused to join the labor union in the factory. The labor union was able to negotiate a substantial wage increase in its collective bargaining agreement with management. A provision therein stated that the wage increase would be paid to the members of the union only in view of a "closed shop" union security clause in the new agreement. The members of the sect protested and demanded that the wage increase be extended to them. The officers of the union countered by demanding their termination from the company pursuant to the "closed shop" provision in the just-concluded CBA. a.

Is the CBA provision valid?

A: No, the CBA provision is not valid. The benefits of a CBA are extendible to all employees regardless of their membership in the union because to withhold the same from non-union members would be to discriminate against them. (National Brewery & Allied Industries Labor UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Q: Reconcile the compulsory nature of the closed shop provision in a Collective Bargaining Agreement with the constitutional guarantee of freedom of association. Discuss fully. (1995) A: Among the policies of the State in the field of labor relations is to promote trade unionism and to foster the organization of a strong and united labor movement. UNION SECURITY CLAUSES, like a closed shop agreement, is one way of implementing the aforementioned labor relations policy. Implementing to some extent the concept of freedom of association, an employee who is already a member of a union could not be compelled to become a member of a bargaining union, even if there is a closed shop agreement. Explain the impact of the union security clause to the employees’  right  to  security  of tenure. (2009) A: A valid union security clause when enforced or implemented for cause, after according the worker his substantive and procedural due process rights (Alabang Country Club, Inc. v. NLRC, G.R. No. 170287, February 14, 2008) does not violate the  employee’s  right  to  security  of tenure. Art. 248(e) of the Labor Code allows union security clauses and a failure to comply with the same as a valid ground to terminate employment. Union security clauses are designed to strengthen unions and valid law policy. Unfair Labor Practice in Collective Bargaining Refusal to Bargain Q: The Kilusang Kabisig, a newly-formed labor union claiming to represent a majority of the workers in the Microchip Corporation, proceeded to present a list of demands to the management for purposes of collective bargaining. The Microchips Corporation, a multinational corporation engaged in the production of computer chips for export, declined to talk with the union leaders, alleging that they had not as yet presented any proof of majority status. The Kilusang Kabisig then chained Microchip Corporation with unfair labor practice, and declared a "wildcat" strike wherein means of ingress and egress were blocked and remote and isolated acts of destruction and violence were committed.

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a.

b. Should the company comply with the union's demand of terminating the members of the religious sect? (2005)

TEAM BAROPS ACADEMICS COMMITTEE 2016

QuAMTO for LABOR LAW (1991-2015)

A: No, the company is not guilty of unfair labor practice on two grounds. Firstly, although Art. 248 (g) states that the refusal to bargain collectively as prescribed under the Labor Code is considered as an unfair labor practice, it shall only apply in cases where the petitioning union which was refused is a legitimate labor organization or selected by the majority of the workforce. It is clearly inapplicable in the case at bar for there is no proof, aside from its mere verbal claim, that Kilusang Kabisig holds the majority status. Secondly, it cannot be concluded that the act of Microchip Corporation of asking for evidence of majority status is a refusal to bargain collectively. Its act is clearly a security measure ensuring that it would negotiate with the proper bargaining unit. A company cannot be faulted for ensuring that its time and effort in negotiating would not be wasted. Unfair Labor Practice (ULP)

f. g. h. i.

Art. 249. Provides that it shall be unfair labor practice for a labor organization, its officers, agents or representatives: a.

b.

Nature of ULP Q: Define unfair labor practice A: Art. 247 provides that unfair labor practices violate the constitutional right of workers and employees to selforganization, are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. Q: Give three (3) examples of unfair labor practices on the part of the employer and three (3) examples of unfair labor practices on the part of the labor union. (1996) A: Art. 248 provides that it shall be unlawful for an employer to commit any of the following unfair labor practices: a. b.

c.

d.

e.

To interfere with, restrain or coerce employees in the exercise of their right to self-organization; To require as a condition for employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs; To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their right to self-organization; To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters; To discriminate with regard to wages, hours of work, and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Provided, that the individual authorization required under Article 241, paragraph

(o) of this Code shall not apply to the non-members of the recognized collective bargaining agent; To dismiss, discharge, or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code; To violate the duty to bargain collectively as prescribed by this Code; To pay negotiation or attorney's fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute; or To violate a collective bargaining agreement.

c. d.

e. f.

To restrain or coerce employees in the exercise of their right to self-organization. However, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership; To cause or attempt to cause an employer to discriminate against an employee, including discrimination against an employee with respect to whom membership in such organization has been denied or to terminate an employee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members; To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of the employees; To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of value, in the nature of an exaction, for services which are not performed or not to be performed, including the demand for fee for union negotiations; To   ask   for   or   accept   negotiation   or   attorney’s   fees   from employers as part of the settlement of any issue in collective bargaining or any other dispute; or To violate a collective bargaining agreement.

Q: The Collective Bargaining Agreement (CBA) between Libra Films and its union, Libra Films Employees' Union (LFEU), contains the following standard clauses: 1. Maintenance of membership; 2. Check off for union dues and agency fees; and 3. No strike, no lock-out. While Libra Films and LFEU are in re-negotiations for an extension of the CBA, LFEU discovers that some of its members have resigned from the union, citing their constitutional right to organize (which includes the right NOT to organize). LFEU demands that Libra Films institute administrative proceedings to terminate those union members who resigned in violation of the CBA's maintenance of membership clause. Libra Films refuses, citing its obligation to remain a neutral party. As a result, LFEU declares a strike and after filing a notice of strike and taking a strike vote, goes on strike. The union claims that Libra Films grossly violated the terms of the CBA and engaged in unfair labor practice. (2015) a.

Are LFEU's claims correct? Explain.

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

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Was the company guilty of an unfair labor practice when it refused to negotiate with the Kilusang Kabisig? (1997)

FOR LABOR LAW (1991-2015)

A: LFEU’s  claim  that  Libra  Films  committed  ULP  based  on   its violation of the CBA is not correct. For violation of a CBA to constitute ULP, the violation must be violation of its economic provisions. Moreover, said violation must be gross and flagrant. Based on the allegation of the union, what was violated was the maintenance of membership clause which was a political or representational provision; hence no ULP was committed. (BPI Employees Union-Davao City v. BPI, 702 SCRA 42). b. Distinguish between a "closed shop" clause and a "maintenance of membership" clause. A: In  a  “closed  shop”  clause,  all  employees  are  required  to   be members of the union at the time of hiring. They too must remain members of good standing during the period of employment as a condition of continued employment. Maintenance of membership clause, on the other hand, requires all employees who are union members at the time of execution of the CBA to maintain their membership of good standing, as a condition of continued employment. c.

Distinguish between "union dues" and "agency fees."

A: Union dues are union funds paid by union members, normally through check-off by the employer on the basis of an individual written authorization duly signed by the employees pursuant to Art. 241 (o) of the Labor Code. Agency fee, on the other hand, is a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent. Art. 248 (e) of the Labor Code mandates that only non-union members who accept the benefits under the CBA may be assessed agency fees. Their check-off authorization is not required. ULP of Employers Q: Company "A" contracts out its clerical and janitorial services. In the negotiations of its CBA, the union insisted that, henceforth, the company may no longer engage in contracting out these types of services, which services the union claims to be necessary in the company's business, without prior consultation. Is the union's stand valid or not? For what reason(s)? (2001) A: No,   the   union’s   stand   is   not   valid.   The   act   of   the   employer to contract out services is an exercise of their management prerogative, a right that is recognized by law. It is not an act of unfair labor practice for Art. 248 (c) clearly states that in order for the act of contracting out of services by the employer to constitute unfair labor practice, it must interfere with, restrain or coerce employees in the exercise of their right to selforganization. In the case at bar, there being no resulting restriction to the right to self-organization of the union, their claim of unfair labor practice cannot stand. Q: Around 100 workers of a mill in a coconut plantation organized themselves for the purpose of promoting their common interest and welfare. The workers’   association   prepared   a   petition   for   increasing the daily pay of its members in compliance with minimum wage rates for their sector in the region, and for granting benefits to which they are entitled under the law. However, the workers became restless and anxious after the ownermanager threatened them with mass lay-off if the UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

association would press for their demands. Most of its members have worked in the mill for 10 to 15 years with no improvement in working conditions and   monetary   benefits.   The   leaders   of   the   workers’   association approached you and asked: what legal steps could they take to protect their security of tenure? What advice could you give them? (2004) A: Every man has a natural right to the fruits of his labors. One who has been employed and has to put into employment time and effort must be protected. (Alcantara, 2009). I   would  advice   them   to   register   the  worker’s   association   to DOLE and then sue the owner-manager for unfair labor practice. Registration is the condition sine qua non for the acquisition of its legal personality. Its acquisition of legal personality is important for it is the doorway for it to avail of the privileges granted by law to legitimate labor organizations (Phil. Association of Free Labor Unions (PAFLU) et al., v. The Secretary of Labor et al., GR No. L22228, February 27, 1969). In connection, one of the rights and privileges granted by law to legitimate labor organizations is the capacity to sue in its registered name (Art. 242 [e]) Therefore, once the registration process of the  workers’  association  has  been  completed,  it  may  now   sue the owner-manager for unfair labor practice and protect  not  only  the   right  of  the  workers’   to  security of tenure but also other rights. Q: Is the commission of an unfair labor practice by an employer subject to criminal prosecution? Please explain your answer briefly. (2005) A: Yes. Art. 247 states that unfair labor practices are not only violations of civil rights of both labor and management but are also criminal offenses against the State which shall be subject to prosecution and punishment as herein provided. Consequently, in order to strengthen the provisions under the Labor Code, BP 70 was a special law enacted which further grounded the change in concept that considered unfair labor practices as criminal offenses. Under the explanatory note of the said special law, the reason behind the change in concept was propelled by the observation that the mere administrative nature of unfair labor practices has brought more harm than good. Emboldened   by   the   law’s   liberality,   nay,   inadequacy,   irresponsible, sometimes vindictive employers, many of them aliens, ride high brazenly committing such unfair labor practices. Legitimate unions and labor organizations, most especially the weak and newly organized, easily get busted with impunity, harassed or discriminated against, and terms and conditions of employment retrogressing to sub-standard level instead of improving all on account of the lack of effective deterrents to and penal sanctions against pernicious practice. Add to this depressing spectacle the sight of many labor leaders and active members getting arrested, detained or languishing in jails for violations of the ban on strikes, picketing or unlawful assembly, or for having brought the law into their own hands, while you grope in frustration looking for a single instance where an unscrupulous employer has suffered the same fate for having illegally locked out his establishment resulting in countless workers losing jobs and their only means of livelihood.

TEAM BAROPS ACADEMICS COMMITTEE 2016

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QUAMTO

QuAMTO for LABOR LAW (1991-2015) Q: Harbor View Hotel has an existing Collective Bargaining Agreement (CBA) with the union of rankand-file employees consisting, among others, of bartenders, waiters, roomboys, housemen and stewards. During the lifetime of the CBA, Harbor View Hotel, for reasons of economy and efficiency, decided to abolish the position of housemen and stewards who do the cleaning of the hotel's public areas. Over the protest of the Union, the Hotel contracted out the aforementioned job to the City Service Janitorial Company, independent contractor which has a substantial capital in the form of janitorial tools, equipment, machineries and competent manpower. Is the action of the Harbor View Hotel legal and valid? (1994)

(G.R. No. 184517, October 8, 2013), which reversed Manlimos v. NLRC (G.R. No. 113337, March 2, 1995), pointed out that in asset sales, the rule is that the seller in good faith is authorized to dismiss the affected employees, but is liable for the payment of separation pay under the law. The buyer in good faith, on the other hand, is not obliged to absorb the employees affected by the sale, nor is it liable for the payment of their claims. In contrast with asset sales, in which the assets of the selling corporation are transferred to another entity, the transaction in stock sales takes place at the shareholder level. Because the corporation possesses a personality separate and distinct from that of its shareholders, a shift in the composition of its shareholders will not affect its existence and continuity.

A: Labor laws are designed to afford full protection to labor, and one of the avenues to which it upholds its constitutional mandate is through Art. 248 which provided the instances that constitute unfair labor practices. One specific provision in point is Art. 248 (c) which prohibits employers to contract out services in relation to tasks performed by union members, which would interfere or restrain the employees right to self organization.

Hence the corporation continues to be the employer and continues to be liable for the payment of their just claims. Absent a just or authorized cause, the corporation or its new majority shareholders are not entitled to lawfully dismiss corporate employees.

Q: Blank Garments, Inc. (BLANK), a clothing manufacturer, employs more than 200 employees in its manufacturing business. Because of its high overhead, BLANK decided to sell its manufacturing business to Bleach Garments, Inc. (BLEACH) lock, stock and barrel which included goodwill, equipment, and personnel. After taking on BLANK's business, BLEACH reduces the workforce by not hiring half the workers specifically the ones with seniority. BLANK and BLEACH are still discerned to be sister companies with identical incorporators. The laid-off employees sue both BLANK and BLEACH for unlawful termination. (2015) a.

How would you decide this case?

A: In transfer of ownership, the buyer corporation, as a general rule, is not duty-bound to absorb the employees of the selling corporation. The buyer corporation becomes liable to the displaced employees only if the change of ownership is done in bad faith or is used to defeat the rights of labor. In such a case, the successoremployer is duty-bound to absorb the displaced employees (Peñafrancia Tours and Travel Transport, Inc., v. Sarmiento, G.R. No. 178397, Oct. 20, 2010). Since the facts of the case do not show any bad fa544554ith   in   BLANK’s   sale   to   BLEACH,   BLEACH,   consequently, is not obliged to absorb the displaced employees of BLANK. The case at hand involves sales of assets as differentiated from sales of stocks. The ruling in SME Bank v. De Guzman

A: The “successor-employer”   doctrine   refers   to   a   sale   or   transfer in ownership of an entity that has been done in bad faith or to defeat the rights of labor. In such a case, it is as if there have been no changes in employer-employee relationship between the seller and its employees. The buyer   becomes   a   “successor-employer”   and  is   obliged   to   absorb the displaced employees. ULP of Labor Organizations Q: A labor union lawyer opined that a labor organization is a private and voluntary organization; hence, a union can deny membership to any and all applicants. Is the opinion of counsel in accord with law? (1998) A: NO, the opinion of counsel is not in accord with law. The Labor Code provides that a labor organization has the right to prescribe its own rules for the acquisition or retention of membership, but it is an unfair labor practice act for a labor organization to restrain or coerce employees in the exercise of their right to selforganization. Thus, a labor organization cannot discriminate against any employee by denying such employee membership in the labor organization on any ground other than the usual terms and conditions under which membership or continuation of union membership is made available to other members. (Article 249 (a) and (b), Labor Code). Note: However, although the rule is that union has the right to determine its membership and to prescribe conditions, it must be qualified in cases of union security clause wherein a labor union holding monopoly in the supply of labor, either in a given locality, or as regards a particular employer by reason of a closed-shop or similar agreements. (Salunga v. CIR, G.R. No. L-22456, September 27, 1967). RIGHT TO PEACEFUL CONCERTED ACTIVITES Q: What is the rationale for the State regulation of strike activity and what are the interests involved that the State must balance and reconcile? Cite two (2) examples on how the law regulates the use of the strike as a form of concerted activity. (2000)

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

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However, Art. 248 (c) only applies if there was interference or restraint to the employees' right to selforganization; and in the case at bar, there has been no clear indication of any violation. In fact, the action of the employer was a valid exercise of management prerogative, because the law recognizes that for reasons of economy and efficiency, an employer may validly exercise measures to keep his business in existence provided that there will be no violation of any of the rights of employees protected by the laws.

b. What is the "successor employer" doctrine?

FOR LABOR LAW (1991-2015)

A: The first rationale is the constitutional provision that the right to strike is to be exercised "in accordance with law". Another rationale is the Civil Code provision that the relations between employer and employee are imbued with public interest and are subject to the provisions of special law. A third rationale is the police power of the state. The interests to be balanced are the rights of the workers, as primary socio-economic force, to protection of the law, to security of tenure, to concerted activities, etc. These should be balanced with the right of the employer to reasonable return on investment and to expansion and growth. General welfare or the general peace and progress of society should also be considered. This is why assumption of jurisdiction and certification to NLRC are allowed in "national interest" cases. (Art. 263, Labor Code; Raw at Buklod ng Manggagawa v. NLRC, G.R. No. 91980, June 27, 1991; Lapanday Workers Union v. NLRC, G.R. Nos. 95494-97, September 7,1995)

Q: If due to the prolonged strike, ROSE Corporation hired replacements, can it refuse to admit the replaced strikers? (2006)

EXAMPLES: (1) procedural requirements should be observed, namely, filing of notice of strike, observance of cooling-off period, taking of strike note, and report of the strike vote; (2) use of violence, intimidation or coercion and blockade of ingress-egress are not allowed. (Art 263 (b)(c)(f)(g), Labor Code).

Q: Distinguish clearly but briefly between: Sympathy strike and general strike. (2004)

Q:  Because  of  alleged  “unfair  labor  practices”  by  the   management of GFI System, a government owned and controlled financial corporation, its employees walked out from their jobs and refused to return to work until the management would grant their union official recognition and start negotiations with them. The leaders of the walk-out were dismissed, and the other participants were suspended for sixty days. In arguing their case before the Civil Service Commission, they cited the principle of social justice for workers and the right to self-organization and collective action, including the right to strike. They claimed that the Constitution shielded them from any penalty because their walk-out was a concerted action pursuant to their rights guaranteed by the basic law. Is the position taken by the walk-out leaders and participants legally correct? Reason briefly. (2004) A: No. It is a settled rule that employees in the public sector may not engage in strikes. While the Constitution recognizes the right of government employees to organize, they are prohibited from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action to the stoppage and detriment of public services. (Bangalisan v. CA, G.R. No. 124678 July 31, 1997). The right to strike is not constitutional; it is statutory because the Constitution provides that the right should be "in accordance with law". And there is as yet no law giving government employees the right to strike. Note: Assuming that what we have is a chartered government-owned and controlled corporation, they cannot, under EO 180 and related jurisprudence, stage such walk-out which is basically a case of strike. Even if GFI was organized under the corporation law, still no such walk-out is allowed without the employees' complying with the requirements of a valid strike, among which is that said strike or walkout should be validly grounded on a (a) deadlock in collective bargaining, or (b) unfair labor practice, either of which is not present here.

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

A: No. While present law recognizes the right of the employer to continue his business in the course of an economic strike, it assures the right of the strikers to return to their former positions at the expense of the replacements. Art. 264(a) of the Labor Code provides that mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. (PT&T v. NLRC, G.R. No. 109281, December 7, 1995; Diwa ng Pagkakaisa v. Filtex International Corporation, G.R. Nos. L-23960 & L23961, February 26, 1968). Forms of Concerted Activities

A: In both a sympathy strike and in a general strike, there is a stoppage of work by the concerted action of employees. In both kinds of strike, the strike is not the result of a labor or industrial dispute. As the name implies, workers go on a SYMPATHY STRIKE to show their sympathy for certain workers who are on strike. On the other hand, in a GENERAL STRIKE, workers in the country or in a region, province, or city or municipality go on a strike to publicly protest a certain policy or action taken by the government. Thus, for instance, a general strike may be declared by workers to publicly protest the stand of President Arroyo that she is against an increase of the minimum wage at this time. Q: Eaglestar Company required a 24-hour operation and embodied this requirement in the employment contracts of its employees. The employees agreed to work on Sundays and Holidays if their work schedule required them to do so for which they would be paid additional compensation as provided by law. Last March 2000, the union filed a notice of strike. Upon Eaglestar's petition, the Secretary of Labor certified the labor dispute to the NLRC for compulsory arbitration. On April 20, 2000 (Maundy Thursday), while conciliation meetings were pending, the union officers and members who were supposed to be on duty did not report for work. Neither did they report for work on April 21 (Good Friday) and on April 22 (Black Saturday), disrupting the factory's operations and causing it huge losses. The union denied it had gone on a strike because the days when its officers and members were absent from work were legal holidays. Is the contention of the union correct? Explain briefly. (2000) A: The contention of the union is NOT correct. In the case, it is clear that the employees agreed to work on Sundays and Holidays if their work schedule required them to do so for which they would be paid additional compensation as provided by law. The above-mentioned agreement that the employees voluntarily entered into is valid. It is not contrary to law. It is provided in the agreement that if they will work Sundays or Holidays they will be paid additional compensation as provided by law. Neither is the agreement contrary to morals, good customs, public order or public policy. Thus, when the workers did not report for work when by agreement they were supposed

TEAM BAROPS ACADEMICS COMMITTEE 2016

53

QUAMTO

QuAMTO for LABOR LAW (1991-2015)

Q: The day following the workers' voluntary return to work, the Company Production Manager discovered an unusual and sharp drop in workers' output. It was evidently clear that the workers are engaged in a work slowdown activity. Is the work slowdown a valid form of strike activity? (1998) A: A WORK SLOWDOWN is not a valid form of strike activity. If workers are to strike, there should be temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute (See Article 2l2(o) of the Labor Code). The Supreme Court in Ilaw at Buklod ng Manggagawa v. NLRC (G.R. No. 91980, June 27, 1991) ruled that the Court is in substantial agreement with the petitioner's concept of a slowdown as a "strike on the installment plan", as a wilful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the employer, in relation to a labor dispute, as an activity by which workers, without a complete stoppage of work retard production or their performance of their duties. The Court also agrees that such slowdown is generally condemned as inherently illicit and unjustifiable, because while the employees "continue to work and remain at their positions, and accept wages paid to them", they at the same time select what part of their allotted tasks they care to perform of their own volition or refuse openly, or secretly, to the employers damage, to do other work; in other words, they work on their own terms. Likewise, a slowdown is not a valid form of concerted activity, absent a labor dispute between the parties. The Labor Code reads - Art. 212 – xxx Co) "Strike" means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. Who May Declare a Strike or Lockout? Requisites for a Valid Strike Q: Discuss the legal requirements of a valid strike. (2007) A: 1. No labor union may strike on grounds involving inter-union and intra-union dispute. 2. In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the Ministry at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days and in the absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by any legitimate labor organization on behalf of its members. However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately. 3. A decision to declare a strike must be approved by a majority of the total union membership in the

4.

5.

6.

7.

bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. In every case, the union or the employer shall furnish the Department of Labor the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein provided. No labor organization or employer shall declare a strike without first having bargained collectively or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Department of Labor. No strike shall be declared after assumption of jurisdiction by the President or the Department of Labor or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. In a strike, no person engaged in picketing should commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer’s  premises  for  lawful  purposes,  or  obstruct public thoroughfares.

Q: Union A filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment. Upon a motion to dismiss by the Company on the ground that the acts complained of in the notice of strike are nonstrikeable. The NCMB dismissed the Notice of Strike but continued to mediate the issues contained therein to prevent the escalation of the dispute between the parties. While the NCMB was conducting mediation proceedings, the Union proceeded to conduct a strike vote as provided for under the Labor Code. After observance of the procedural processes required under the Code, the Union declared a strike. a.

Is the strike legal?

A: No. The strike is not legal. The Labor Code provides that no labor organization shall declare a strike without first having bargained collectively in accordance with its Title VII of Book V, which in turn provides that during conciliation proceedings at the NCMB, the parties are prohibited from doing any act that may disrupt or impede the early settlement of the dispute. (Arts. 264(a), also 250(d); Labor Code). b. Can the employer unilaterally declare those who participated in the strike as having lost their employment status? A: The employer may unilaterally declare those who participated in the strike as having lost their employment status but such unilateral declaration does not necessarily mean that thereby the strikers are legally dismissed. The strikers could still file a case of illegal dismissal and prove, if they can, that there was no just cause for their dismissal. c.

What recourse do these employees (declared by the employer to have lost their employment status) have, if any? (1994)

A: They could file a case of illegal dismissal. The strikers who are union officers may contend that the strike is not illegal. The strikers who are mere union members may

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

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to be on duty, there was a temporary stoppage of work by the concerted action of the employees as a result of an industrial or labor dispute because they were on strike. (See Interphil Laboratories Employees Union-FFW v. Interphil Laboratories Inc., GR No. 142824, December 19, 2001).

FOR LABOR LAW (1991-2015)

contend that they did not commit any illegal acts during the strike. (Art, 264, Labor Code). The procedural requirements of a valid strike include: a. A claim of either unfair labor practice or deadlock in collective bargaining b. Notice of strike filed at least 15 days before a ULPgrounded strike or at least 30 days prior to the deadlock in a bargaining grounded strike c. Majority of the union membership must have voted to stage the strike with notice thereon furnished to the National Conciliation and Mediation Board (NCMB) at least 24 hours before the strike vote is taken d. Strike vote results must be furnished to the NCMB at least seven (7) days before the intended strike. (2014) A: b. notice of strike filed at least 15 days before a ULPgrounded strike or at least 30 days prior to the deadlock in a bargaining grounded strike. (Article 263 (c), Labor Code). ALTERNATIVE ANSWER: c. majority of the union membership must have voted to stage the strike with notice thereon furnished to the National Conciliation and Mediation Board (NCMB) at least 24 hours before the strike vote is taken. (Article 263 (f), Labor Code). d. strike vote results must be furnished to the NCMB at least seven (7) days before the intended strike. (Article 263 (f), Labor Code). Q: The Alliance of Independent Labor Unions (AILU) is a legitimate labor federation which represents a majority of the appropriate bargaining unit at the Lumens Brewery (LB). While negotiations were ongoing for a renewal of the collective bargaining agreement (CBA), LB handed down a decision in a disciplinary case that was pending which resulted in the termination of the AILU's treasurer and two other members for cause. AILU protested the decision, claiming that LB acted in bad faith and asked that LB reconsider. LB refused to reconsider. AILU then walked out of the negotiation and declared a strike without a notice of strike or a strike vote. AILU members locked in the LB management panel by barricading the doors and possible exits (including windows and fire escapes). LB requested the DOLE to assume jurisdiction over the dispute and to certify it for compulsory arbitration. The Secretary of Labor declined to assume jurisdiction, finding that the dispute was not one that involved national interest. LB then proceeds to terminate all of the members of the bargaining agent on the ground that it was unlawful to: (1) barricade the management panel in the building, and (2) participate in an illegal strike. (2015) a.

Was AILU justified in declaring a strike without a strike vote and a notice of strike? Why or why not?

A: No. Firstly, a Notice of Strike is always required by Art. 263 (c) of the Labor Code before a strike may be staged – be it grounded on bargaining deadlock or Unfair Labor Practice. Secondly, the Supreme Court already held in UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Sukothai that while AILU may not exhaust the 15-day cooling-off period in case of dismissal from employment of its officers who were duly elected in accordance with the Union constitution and by-laws and the dismissal constitutes   union   busting   and   a   threat   to   AILU’s   existence, still, Art. 263 (f) requires that a strike vote be undertaken through a secret ballot and approved by a majority of the total union membership in the bargaining unit.  Devoid  of  a  notice  of  strike  and  a  strike  vote,  AILU’s   strike is therefore illegal. b. Was the Secretary of Labor correct in declining to assume jurisdiction over the dispute? A: The refusal of the Secretary to assume jurisdiction is valid. Par.(g) of Art. 263 (old) of the Labor Code leave it to his sound discretion to determine if national interest is involved. Assumption power is full and complete. It is also plenary and discretionary (Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-AGLO, G.R. No. 180962, February 26, 2014). Thus, if in his opinion national interest is not involved, then the company cannot insist that he assume jurisdiction. c.

Was LB justified in terminating all those who were members of AILU on the two grounds cited?

A: If dismissal is based on illegal strike: The company has to file a complaint for illegal strike first. Once the strike is declared by final judgment to be illegal, it can dismiss the union officers. As to members, their dismissal must be based on their having committed illegalities on the occasion of their illegal strike. Since the company prematurely and indiscriminately dismissed the AILU members then their dismissal is illegal. If dismissal is based on the unlawful acts of barricading to lock the AILU members: Yes. Article 264 (a) of the Labor Code authorizes the employer to declare the loss of employment status of “ANY   WORKER”   or   union   officer   who   knowingly   participates in the commission of illegal cts during a strike. Requisites for a Valid Lockout Q: Fifty percent (50%) of the employees of Grandeur Company went on strike after negotiations for a collective bargaining agreement ended in a deadlock. Grandeur Company, being a public utility, immediately petitioned the Secretary of Labor and Employment to assume jurisdiction and certify the case to the NLRC. On the fourth day of the strike and before the DOLE Secretary could assume jurisdiction or certify the case to the NLRC, the strikers communicated in writing their offer to return to work. Grandeur Company refused to accept the offer of the strikers because it realized that they were not at all capable of paralyzing the operations of the company. The strikers accused Grandeur Company of illegal lockout. Has Grandeur Company committed the act charged by refusing to accept the offer of the strikers to return to work? Discuss fully. (1995) A: There is no law that prohibits strikers to decide not to continue with a strike that they have started. Thus, the company committed an illegal lockout in refusing to

TEAM BAROPS ACADEMICS COMMITTEE 2016

55

QUAMTO

QuAMTO for LABOR LAW (1991-2015)

Assumption of Jurisdiction by the DOLE Secretary or Certification of the Labor Dispute to the NLRC for Compulsory Arbitration Q: Company X, a transportation company, and Union Y were in the process of negotiating a new Collective Bargaining Agreement (CBA) to replace the one which expired on March 15. 1990. The negotiations reached an impasse on economic issues on June 30, 1990. The Secretary of Labor assumed Jurisdiction over the dispute and certified the same to the NLRC for proper disposition. Proceedings before the NLRC ended on November 30, 1990 and a decision was rendered on December 15, 1990, The said decision made retroactive to March 15, 1990 the new CBA containing the issues resolved by the NLRC, as well as those concluded and agreed upon by the parties prior to their arriving at a deadlock in their negotiations. Company X questioned the retroactivity of the CBA alleging that the same contravenes Art. 253-A of the Labor Code, which provides for the automatic retroactivity of the renewed CBA only if the same is entered into within six (6) months from its expiry date, and, if not, the parties must agree on the duration of retroactivity. a.

Is Company X's position correct?

A: The Company's position is not correct. In the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by the Secretary of Labor, the same is deemed vested with plenary and discretionary powers to determine the effectivity thereof. (St Luke's Medical Center, Inc. vs. Hon. Ruben O. Torres, et. al,-G.R. No. 99395, 29 June 1993) b. Would your answer be different if the assumption of jurisdiction by the Secretary of Labor was at the request or instance of Company X? (1994) A: No. Regardless of which party sought the assumption by the Labor Secretary, the effect would be the same. An assumption case gives the Labor Secretary the plenary arbitration powers to rule on the issues presented for resolution, including the retroactivity of the new CBA. Q: What are the objectives of the Secretary of Labor and Employment in certifying a labor dispute to the NLRC for compulsory arbitration? Explain. (1995) A: The objectives of the Secretary of Labor and Employment in certifying a labor dispute to the NLRC for compulsory arbitration is to prevent a work stoppage that may adversely affect the national interest and to see to it that a labor dispute is expeditiously settled. Q: Philippine Electric Company is engaged in electric power generation and distribution. It is a unionized company with Kilusang Makatao as the union representing its rank-and-file employees. During the negotiations for their expired collective bargaining agreement (CBA), the parties duly served their

proposals and counter-proposals on one another. The parties, however, failed to discuss the merits of their proposals and counter-proposals in any formal negotiation meeting because their talks already bogged down on the negotiation ground rules, i.e., on the question of how they would conduct their negotiations, particularly on whether to consider retirement as a negotiable issue. Because of the continued impasse, the union went on strike. The Secretary of Labor and Employment immediately assumed jurisdiction over the dispute to avert widespread electric power interruption in the country. After extensive discussions and the filing of position papers (before the National Conciliation and Mediation Board and before the Secretary himself) on the validity of the union's strike and on the wage and other economic issues (including the retirement issue), the DOLE Secretary ruled on the validity of the strike and on the disputed CBA issues, and ordered the parties to execute a CBA based on his rulings. Did the Secretary of Labor exceed his jurisdiction when he proceeded to rule on the parties' CBA positions even though the parties did not fully negotiate on their own? (2013) A: No. The power of the Secretary of Labor under Article 263(g) is plenary. He can rule on all issues, questions or controversies arising from the labor dispute, including the legality of the strike, even those over which the Labor Arbiter has exclusive jurisdiction. (Bagong Pagkakaisa ng mga Manggagawa sa Triumph International v. Secretary, G.R. Nos. 167401 and 167407, July 5, 2010) Nature of Assumption Order or Certification Order Q: A deadlock in the negotiations for the collective bargaining agreement between X College and the Union prompted the latter, after duly notifying the DOLE, to declare a strike on November 5 which totally paralyzed the operations of the school. The Labor Secretary immediately assumed Jurisdiction over the dispute and issued on the same day (November 5) a return to work order. Upon receipt of the order, the striking union officers and members on November 7 filed a motion for reconsideration thereof questioning the Labor Secretary's assumption of jurisdiction, and continued with the strike during the pendency of their motion. On November 30, the Labor Secretary denied reconsideration of his return to work order and further noting the striker's failure to immediately return to work terminated their employment. In assailing the Labor Secretary's decision, the Union contends that: 1. The Labor Secretary erroneously assumed jurisdiction over the dispute since X College could not be considered an industry indispensable to national interest; 2. The strikers were under no obligation to immediately comply with the November 5 return to work order because of their then pending motion for reconsideration of such order: and 3. the strike being legal, the employment of the striking Union officers and members cannot be terminated. Rule on these contention. Explain. (1996)

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

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accept the offer of the strikers to return to work. Under the set of facts in the question, the Company did not give the required notice to lockout, much less did it observe the necessary waiting period, nor did it take a needed vote on the lockout. Thus, the lockout is illegal.

FOR LABOR LAW (1991-2015)

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

The striking workers must immediately comply with a Return to Work Order even pending their motion for reconsideration. Compliance is a duty imposed by law, and a Return to Work Order is immediately executory in character. The nature of a Return to Work Order was characterized by the Supreme Court in Sarmiento v. Tuico, (G.R. No. 72571-73, June 27, 1988) as: It is also important to emphasize that the return to work order not so much confers a right as it imposes a duty. It must be discharged as a duty even against the workers' will. Returning to work in this situation is not a matter of option or voluntariness but of obligation. In Baguio Colleges Foundation v. NLRC, (G.R. No. 98043, May 26, 1993) the Court ruled that assumption and certification orders are executory in character and are to be strictly complied with by the parties even during the pendency of any petition questioning their validity.

3.

The continuing strike is illegal because it is in defiance of a return to work order of the Secretary of Labor and Employment, hence, termination of employment of all those who participated whether officer or member, is legal. In Sta.   Scholastica’s   College v. Torres, (G.R. No. 100158, June 29, 1992), the Court ruled: Any worker or union officer who knowingly participates in a strikedefying a return to work order may consequently, be declared to have lost his employment status in accordance with Art. 246 of the Labor Code.

Q: In a labor dispute, the Secretary of Labor issued an "Assumption Order". Give the legal implications of such an order. (2003) A: Under Art. 263(g) of the Labor Code, such assumption shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption order. If one had already taken place at the time of assumption, all striking or lockout employees shall immediately return to work and the employer shall immediately resume operations and re-admit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. The mere issuance of an assumption order by the Secretary of Labor automatically carries with it a returnto-work order, even if the directive to return to work is not expressly stated in the assumption order. Those who violate the foregoing shall be subject to disciplinary action or even criminal prosecution. Under Art. 264 of the Labor Code, no strike or lockout shall be declared after the assumption of jurisdiction by the Secretary.

UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Illegal Strike Liability of Union Officers Q: Magdalo, a labor union in Oakwood, a furniture manufacturing firm, after failing in its negotiations with Oakwood filed with the Department of Labor and Employment (DOLE) a notice of strike. The DOLE summoned Magdalo and Oakwood for conciliation hearings to resolve the deadlock. Unable to agree despite efforts of the DOLE, Magdalo called a strike participated in by its officers and union members including Cesar Trinio, a rank-and-file employee, who led the "walk out." Oakwood filed a petition to declare illegal the strike which Magdalo staged without observing the seven-day ban under the Labor Code. Oakwood claimed that the strike being illegal, all those who participated therein, including Cesar Trinio, could be dismissed as, in fact, they were so dismissed by Oakwood. Decide the case. (2003) A: When Oakwood dismissed all the officers and members of the union who participated in the strike which was declared illegal because it was staged without observing the seven-day ban under the Labor Code, Oakwood illegally dismissed the union members, including Cesar Trinio. The Labor Code provides that a union officer who knowingly participates in an illegal strike loses his employment status. Thus, the union officers were legally dismissed. But for a union member to lose his employment status, he should have committed illegal acts during the strike, like acts of violence, coercion or intimidation or obstruction of ingress to or egress from the employer's premises for lawful purposes or obstruction of public thoroughfares. The union members, including Cesar Trino, did not commit any of these acts. Thus, it would be illegal to dismiss them. Q: A division manager of a company taunted a union officer two days after the union submitted to the Department of Labor and Employment (DOLE) the result of the strike vote. The division manager said: The union threat of an unfair labor practice strike is phony or a bluff. Not even ten percent (10%) of your members will join the strike." To prove union member support for the strike, the union officer immediately instructed its members to cease working and walk out. Two hours after the walkout, the workers voluntarily returned to work. a.

Was the walkout a strike? And if so, was it a valid activity? b. Can the union officer who led the short walkout, but who likewise voluntarily led the workers back to work, be disciplined by the employer? (2000) A: a. Yes, it was a strike because there was a work stoppage by concerted action and there is an existing labor dispute. It was not a valid activity because the requisites for a valid strike were not observed, (Art. 212, (o), (l) Labor Code). b. Yes, the employer may discipline the union officer. An illegal strike is a cause for the union officer to be declared to have lost his employment status. [Art 263 (c), (d),(e), (f); Art 264 (a), Labor Code].

57

QUAMTO

TEAM BAROPS ACADEMICS COMMITTEE 2016

QuAMTO for LABOR LAW (1991-2015)

Q: Assuming the company admits all the strikers, can it later on dismiss those employees who committed illegal acts? (2006) A: No, when the company admits all the strikers, it is deemed to have waived the issue and condoned the strikers who committed illegal acts. (Citizen's Labor Union v. Standard Vacuum Oil Co., G.R. No. L-7478, May 6, 1955; TASLI-ALU v. CA, G.R. No. 145428, July 7, 2004). Q: As a result of a bargaining deadlock between Lazo Corporation and Lazo Employees Union, the latter staged a strike. During the strike, several employees committed illegal acts. Eventually, its members informed the company of their intention to return to work. (2006, 2014) a.

Can Lazo Corporation refuse to admit the strikers?

A: No. The commission of illegal acts during a strike does not automatically bring about the loss of employment status. Due process must be observed by the employer before any dismissal can be made. (Stamford Marketing Corp. v. Julian, G.R. No. 145496, February 24, 2004). b. Assuming the company admits the strikers, can it later on dismiss those employees who committed illegal acts? A: No. The employer may be considered as having waived its right to dismiss employees who committed illegal acts during the strike. (Reformist Union of R.B. Liner v. NLRC, G.R. No. 120482, January 27, 1997). c.

If due to the prolonged strike, Lazo Corporation hired replacements, can it refuse to admit the replaced strikers?

A: No. Sec. 3 Art. XIII of the Constitution guarantees workers the right to strike in accordance with law. With Art.  212  (o)  defining  strike  as  “any  temporary stoppage of work as a result of an industrial or labor dispute, it is the prerogative of strikers to cut short or prolong a strike. By striking, the employees have not abandoned their employment. Rather, they have only ceased temporarily from rendering work. The striking employees have not lost their right to go back to their positions, because the declaration of a strike is not a renunciation of their employment, much less their employer-employee relationship. ALTERNATIVE ANSWER: No. As a general rule, replacements take their employment as conditional, i.e., subject to the rights of strikers to return to work. However, since this is an economic strike, the strikers are entitled to reinstatement only in case Lazo Corporation has not yet hired permanent replacements. (Consolidated Labor Association v. Marsman & Co., G.R. No. L-17038, July 31, 1964). Liability of Employer Q: A strike was staged in Mella Corporation because of a deadlock in CBA negotiations over certain economic provisions. During the strike, Mella

Corporation hired replacements for the workers who went on strike. Thereafter, the strikers decided to resume their employment. Can Mella Corporation be obliged to reinstate the returning workers to their previous positions? (1997) A: Yes. Mella Corporation can be obligated to reinstate the returning workers to their previous positions. Workers who go on strike do not lose their employment status except when, while on strike, they knowingly participated in the commission of illegal acts. The Labor Code expressly provides: Mere participation of a worker in a lawful strike should not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. PROCEDURE AND JURISDICTION LABOR ARBITER Jurisdiction Q: Company A and Union B had a 3-year CBA that expired on June 12, 1990. Negotiations proved futile so the unresolved issues were referred to an Arbiter who rendered a decision on March 15, 1992 retroactive to December 14, 1990. Is the Arbiter's decision providing for retroactivity tenable or not? Why? (2001) A: The referral of the unresolved issues of the collective bargaining negotiations to an Arbiter is not within the jurisdiction of the Arbiter. But assuming that the unresolved issues in the collective bargaining negotiations were properly referred to the Arbiter pursuant to the provision of the Labor Code (Art. 262) that states that a Voluntary Arbitrator may hear and decide any labor dispute, including bargaining deadlocks, the Arbiter's decision providing for retroactivity is tenable. Exercising his compulsory arbitration power, the Arbiter could decide the issue of retroactivity in any way which is not contrary to law, morals, good customs, public order or public policy. But in the case Manila Electric Co vs. Secretary of Labor Leonardo Quisumbing (G.R. No. 127598, February 22, 2000), the Supreme Court said that an arbitral award shall retroact to the first day after the six-month period following the expiration of the last day of the CBA that was being re-negotiated. Q: Mario comes from a family of coffee bean growers. Deciding to incorporate his fledgling coffee venture, he invites his best friend, Carlo, to join him. Carlo is hesitant because he does not have money to invest but Mario suggests a scheme where Carlo can be the Chief Marketing Agent of the company, earning a salary and commissions. Carlo agrees and the venture is formed. After one year, the business is so successful that they were able to declare dividends. Mario is so happy with Carlo's work that he assigns 100 shares of stock to Carlo as part of the latter's bonus. Much later on, it is discovered that Carlo had engaged in unethical conduct which caused embarrassment to the company. Mario is forced to terminate Carlo but he does so without giving Carlo the opportunity to explain. Carlo filed a case against Mario and the company for illegal dismissal. Mario objected on the ground that

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

58

Liability of Ordinary Workers

FOR LABOR LAW (1991-2015)

the Labor Arbiter had no jurisdiction over the case as it would properly be considered as an intracorporate controversy cognizable by the RTC. Further, Mario claimed that because Carlo's dismissal was a corporate act, he cannot be held personally liable. a.

As the Labor Arbiter assigned to this case, how would you resolve the jurisdiction question. (2015)

A: The   Labor   Arbiter   has   jurisdiction   over   Carlo’s   illegal   dismissal complaint as he was  hired  by  Mario  on  a  “salary   and   commission”   basis.   In   Grepalife v. Judico (G.R. No. 73887, December 21, 1989) it was held that a worker who is paid on a salary plus commission basis is an employee. While   regular   courts   have   jurisdiction   over   Mario’s   corporate act of severing ties with Carlo, the Labor Arbiter, pursuant to Art. 217 A-(2) of the Labor Code, has jurisdiction  over  Carlo’s  illegal  dismissal  complaint.   ALTERNATIVE ANSWER: Carlo is party to a joint-venture. Hence, he is not related to Mario as an employee. As a business organization, the affairs of that joint-venture are not governed by Labor Law, except in relation to its employees. Any issue arising from that affair, therefore, must be brought to the RTC. Thus, the NLRC has no jurisdiction because the matter did not arise from employer-employee relationship and the issue between the disputants is not resolvable solely through the application of Labor Law. b. What is the rule on personal liability of corporate officers for a corporate act declared to be unlawful? (2015) A: Corporate officers are not, as a general rule, personally liable for the corporate acts they performed in behalf of the corporation they represent. They are, however, personally liable for their corporate acts if they acted with malice or bad faith (Girly Ico v. Systems Technology Institute, Inc., G.R. No. 185100, July 9, 2014). NATIONAL LABOR RELATIONS COMMISSION (NLRC) Jurisdiction Q: What is the jurisdiction of the National Labor Relations Commission? (1995) A: 1. Exclusive Original Jurisdiction a. Certified labor disputes causing or likely to cause a strike or lockout in an industry indispensable to national interest, certified to it by the Secretary of Labor or the President for compulsory arbitration b. Injunction in ordinary labor disputes to enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith may cause grave or irreparable damage to any party c. Injunction in strikes or lockouts under Art. 264 of the Labor Code d. Contempt cases e. Claims arising out of an employeremployee relationship or by virtue of any law or contract involving Filipino UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage. 2.

Exclusive Appellate Jurisdiction a. All cases decided by the Labor Arbiters (Sec. 217(b), Labor Code) b. Cases decided by the Regional Offices of DOLE in the exercise of its adjudicatory function. (Art. 129, Labor Code).

Q: Company "A", within the reglementary period, appealed the decision of a Labor Arbiter directing the reinstatement of an employee and awarding backwages. However, A's cash bond was filed beyond the ten day period. Should the NLRC entertain the appeal? Why? (2001). A: No, the NLRC should not entertain the appeal, as the same was not perfected for failure to file a bond. The latest rules of NLRC provide that a mere notice of appeal without complying with the other requisites provided for by law, like the bond, shall not stop the running of the period  for  perfecting  an  appeal.  Since  Company  A’s  bond   was not filed on time, the appeal was not deemed perfected and as such NLRC has no jurisdiction to entertain the appeal. (Sec. 4(b), Rule 6, 2011 NLRC Rules Of Procedure). Q: Company "A" and Union "B" could not resolve their negotiations for a new CBA. After conciliation proceedings before the NCMB proved futile, B went on strike. Violence during the strike prompted A to file charges against striker-members of B for their illegal acts. The Secretary of Labor assumed jurisdiction, referred the strike to the NLRC and issued a return-to-work order. The NLRC directed the parties to submit their respective position papers and documentary evidence. At the Initial hearing before the NLRC, the parties agreed to submit the case for resolution after the submission of the position papers and evidence. Subsequently, the NLRC issued an arbitral award resolving the disputed provisions of the CBA and ordered the dismissal of certain strikers for having knowingly committed Illegal acts during the strike. The dismissed employees elevated their dismissal to the Court of Appeals claiming that they were deprived of their right to due process and that the affidavits submitted by A were self-serving and of no probative value. Should the appeal prosper? State the reason(s) for your answer clearly. (2001). A: The appeal should not prosper. The Supreme Court, in many cases, has ruled that decisions made by the NLRC may be based on position papers. In the question, it is stated that the parties agreed to submit the case for resolution after the submission of position papers and evidence. Given this fact, the striker-members of B cannot now complain that they were denied due process. They are in estoppel. After voluntarily submitting a case and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. A party cannot adopt a posture of double dealing. (Marquez vs. Secretary of Labor, G.R. No. 80685, March 16, 1989). Note: In the determination of whether or not the quantum of proof was satisfied by a party contending for a particular proposition, the procedure by which issues

TEAM BAROPS ACADEMICS COMMITTEE 2016

59

QUAMTO

QuAMTO for LABOR LAW (1991-2015)

Q: "A", an employee, sued company "B" for unfair labor practice, Illegal dismissal and damages as a consequence thereof. The Arbiter granted A's prayer for reinstatement, backwages, and included an award for attorney's fees. On appeal to the NLRC, the Commission affirmed the Arbiter's decision but deleted the award for attorney's fees since fees were not claimed in A's complaint. a. Who was correct, the Arbiter or the NLRC? Why? b. Would your answer be different if the attorney's fees awarded by the Arbiter was over fifteen percent of the total award? Why? (2001) A: a.

Yes, the NLRC was correct in deleting the award for attorney’s   fees.   The   awarding   of   attorney’s   fees,   as   declared in the policy of the law, was more of an exception than the general rule. It is necessary for the NLRC to make express findings of fact and law that would bring the case within the exception and justify the  grant  of  such  award.  The  matter  of  attorney’s  fees   cannot be touched upon only in the dispositive portion of the decision. The text itself must state the reasons  why  the  attorney’s  fees  are  being  awarded.   (Valiant Machinery & Metal Corp. et al., v. NLRC, G.R. No. 105877, January 25, 1996). Therefore,  attorney’s  fees  cannot  be  awarded  in  this   case for the reason that the law requires the awarding to have a basis; and the fact that the award given was neither mentioned in the prayer nor in the entire body of the petition filed, such circumstance deprives the NLRC of a basis and much needed evidence upon which the reason for the award is to be hinged.

b.

Yes. Art. 111 expressly prohibits that in cases of unlawful witholding of wage, the culpable party may be  assessed  attorney’s  fees  equivalent  to  10%  of  the   amount of wages recovered. Moreover, it shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery   of   wages,   attorney’s   fees   which   exceeded   10% of the amount of wages recovered. In the case at bar, not only was the award of attorney’s   fees   not   prayed   for, but the amount awarded was clearly in excess of what is allowed by law. Therefore, the NLRC was justified in deleting the said award. However, assuming arguendo that the award for attorney’s  fees  was  prayed  for,  but  is  still  in  excess  of   the amount allowed by law, the NLRC must not completely delete the award. Rather, in the interest of justice, and as recognition of the amount of time and   effort   invested   by   the   winning   party’s   counsel,   the award must only be lowered and placed within the amount bracket allowed by law.

The jurisdiction of the National Labor Relations Commission does not include original jurisdiction to act

as a compulsory arbitration body over labor disputes certified to it by the Regional Directors. (Article 129, Labor Code). (2014) Q: Philippine News Network (PNN) engages the services of Anya, a prominent news anchor from a rival station, National News Network (NNN). NNN objects to the transfer of Anya claiming that she is barred from working in a competing company for a period of three years from the expiration of her contract. Anya proceeds to sign with PNN which then asks her to anchor their nightly newscast. NNN sues Anya and PNN before the National Labor Relations Commission (NLRC), asking for a labor injunction. Anya and PNN object claiming that it is a matter cognizable by a regular court and not the NLRC. a.

Is NNN's remedy correct? Why or why not? (2015)

A: The NLRC has no jurisdiction. As to PNN, there is no employer-employee relationship between itself and NNN; hence, the NLRC cannot hear and resolve their dispute (Reasonable Causal Connection Rule). As to Anya, the injunctive power of the NLRC is ancillary in nature; hence, it requires a principal case, which is absent. Besides, the dispute between her and PNN is not resolvable solely through the application of Labor Code, other labor statutes, CBA or employment contract. (Reference to Labor Law Rule) b. What are the grounds for a labor injunction to issue? (2015) A: The NLRC may issue an injunctive writ to enjoin an illegal activity under Art. 264 (old) of the Labor Code; as an ancillary remedy to avoid irreparable injury to the rights of a party in an ordinary labor dispute pursuant to Rule X, 2011 NLRC Rules of Procedure, as amended; and to  correct  the  Labor  Arbiter’s  grave abuse of discretion pursuant to Rule XII of the 2011 NLRC Rules of Procedure, as amended. Moreover, for labor injunction to issue, it must be proven under Art. 218(e) Labor Code: i. That the prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained; ii. That substantial and irreparable injury to the complainant’s  property  will  follow; iii. That greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief; iv. That complainant has no adequate remedy at law; and v. That public officers charged with the duty to protect complainant’s   property   are   unable   or   unwilling   to   furnish adequate protection. c.

Distinguish the jurisdiction of a Labor Arbiter from that of the NLRC. (2015)

A: As to jurisdiction, the Labor Arbiter can hear and resolve cases under Art. 217 (old) of the Labor Code, money claims under Sec. 7 of R.A. 10022; and referred wage distortion disputes in unorganized establishments, as well as the enforcement of compromise agreements pursuant to the 2011 NLRC Rules of Procedure, as amended. On the other hand, the NLRC reviews decisions

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

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are resolved based only on position papers, affidavits or documentary evidence, if agreed upon by the parties, may be availed of by the arbiter and it is not violative of the due process clause. The affidavits may take the place of their direct testimony. (Coca-Cola Bottlers Philippines, Inc. vs. NLRC, G.R. No. 78787, December 18, 1989).

FOR LABOR LAW (1991-2015)

rendered by the LA; decisions or orders rendered by the RD under Art. 129 of the Labor Code; and conducts compulsory arbitration in certified cases. As to the power to issue a labor injunction, the NLRC can issue an injunctive writ. On the other hand, the Labor Arbiter cannot issue an injunctive writ. BUREAU OF LABOR RELATIONS – MED-ARBITERS Jurisdiction (original and appellate) Q: Some disgruntled members of Bantay Labor Union filed with the Regional Office of the DOLE a written complaint against their union officers for mismanagement of union funds. The Regional Director did not rule in the complainants' favor. Not satisfied, the complainants elevated the Regional Director's decision to the NLRC. The union officers moved to dismiss on the ground of lack of Jurisdiction. Are the union officers correct? Why? (2001). A: Yes. NLRC has no jurisdiction over the appealed ruling since the appellate authority over decisions of the Regional director involving examination of union accounts is expressly conferred upon the Bureau of Labor Relations of DOLE by the Rule of Procedure on Mediation Arbitration. (Barles vs. Bitonio, G.R. No. 120270, June 16, 1999). NATIONAL CONCILIATION AND MEDIATION BOARD DOLE REGIONAL DIRECTORS Jurisdiction Q: Lina and 20 other sales ladies filed a complaint for illegal dismissal, contending that they are SDS regular employees as they performed activities usually necessary or desirable in the usual business or trade of SDS and thus, their constitutional right to security of tenure was violated when they were dismissed without valid, just or authorized cause. SDS, in defense, argued that Lina, et al. agreed - prior to engagement - to a fixed period employment and thus waived their right to full-term tenure. (2008) a.

Assume that no fixed-term worker complained, yet in a routine inspection a labor inspector of the Regional Office of the Labor Code's security of tenure provisions and recommended to the Regional Director the issuance a compliance order. The Regional Director adopted the recommendation and issued a compliance order. Is the compliance order valid? Explain your answer. (2008)

A: No, the Compliance Order is not valid. The Regional Director only exercises both visitorial and enforcement powers over labor standard cases, and empowered to adjudicate uncontested money claims of persons still employed. The  Regional  Director  has  no  jurisdiction  to  rule  on  SDS’s   5-month term policy. Q: AB, a non-resident American, seeks entry to the country to work as Vice-President of a local telecommunications company. You are with the UNIVERSITY OF SANTO TOMAS FACULTY OF CIVIL LAW

Department of Labor and Employment (DOLE). What permit, if any, can the DOLE issue so that AB can assume as Vice-President in the telecommunications company? Discuss fully. (1995, 2007) A: Art.  40  of  the  Labor  Code  states  that  “Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor. The employment permit may be issued to a nonresident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired.”   Thus,   AB   should   be   issued   the   abovementioned employment permit so that AB can assume as Vice President of the Telecommunication Company. DOLE SECRETARY Visitorial and Enforcement Powers Q: Under what conditions may the Secretary of Labor or his duly authorized representative inquire into the financial activities or legitimate labor organizations? (2001). A: The Labor Code authorizes the Secretary of Labor and Employment or his duly authorized representative to inquire into the financial activities of any labor organization on the basis of a complaint under oath, supported by 20% of the membership in order to determine compliance or noncompliance with the law and to aid in the prosecution of any violation thereof. (Art. 274, Labor Code). Power to Suspend/Effects of Termination Assumption of Jurisdiction Q: Lina and 20 other sales ladies filed a complaint for illegal dismissal, contending that they are SDS regular employees as they performed activities usually necessary or desirable in the usual business or trade of SDS and thus, their constitutional right to security of tenure was violated when they were dismissed without valid, just or authorized cause. SDS, in defense, argued that Lina, et al. Agreed - prior to engagement - to a fixed period employment and thus waived their right to a full-term tenure. (2008) a.

The owner of SDS considered the hunger strike staged by Lina, et al., an eyesore and disruptive of SDS business. He wrote the Secretary of Labor a letter asking him to assume jurisdiction over the dispute and enjoin the hunger "strike". What answer will you give if you were the Secretary of Labor? (2008)

A: I will deny the letter-request of SDS because its business is not indispensable to the national interest. Although the Secretary of Labor has a wide latitude of discretion in deciding whether or not to assume jurisdiction over a labor dispute or certify the same to the NLRC   for   compulsory   arbitration,   SDS’s   business   is   clearly not one which is indispensable to national interest. Moreover, the grounds relied upon by SDS, to wit:  “eyesore   and   disruptive   of   its   business”,  betrays   the   weakness of the case.

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