Suggested Answers to the 2017 Bar Examinations Labor and Social Legislation

SUGGESTED ANSWERS TO THE 2017 BAR EXAMINATIONS LABOR AND SOCIAL LEGISLATION: PART ONE I A. What are the accepted tests to determine the existence of an employer-employee relationship? (5%) SUGGESTED ANSWER: The four elements of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s conduct. (Lakas sa Industriya ng Kapatirang Haligi ng Alyansa-Pinagbuklod ng Manggagawang Promo ng Burlingame v. Burlingame Corporation, G.R. No. 162833, June 15, 2007, 524 SCRA 690, 695, citing Sy v. Court of Appeals, 398 SCRA 301, 307-308 (2003); Pacific Consultants International Asia, Inc. v. Schonfeld, G.R. No. 166920, February 19, 2007, 516 SCRA 209, 228) NOTE: The foregoing answer in can be found in page 332 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on employer-employee relation has been time and again the subject matter of bar questions, more specifically during the 2016, 2014, 2012, 2011, 2010, 2008, 2002, 1996 and 1991 Bar Examinations. B. Applying the tests to determine the existence of an employer-employee relationship, is a jeepney driver operating under the boundary system an employee of his jeepney operator or a mere lessee of the jeepney? Explain your answer. (3%) SUGGESTED ANSWER: In a number of cases decided by the Supreme Court, (National Labor Union vs. Dinglasan, 98 Phil. 649, 652 (1996); Magboo vs. Bernardo, 7 SCRA 952, 954 (1963); Lantaco, Sr. vs. Llamas, 108 SCRA 502, 514 [1981]), it was ruled that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee.

It was explained that in the lease of chattels, the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The management of the business is in the owner’s hands. The owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. Now, the fact that the drivers do not receive fixed wages but get only that in excess of the so-called “boundary” they pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and employee. NOTE: The foregoing answer in can be found in pages 341-342 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on employer-employee relation has been time and again the subject matter of bar questions, more specifically during the 2016, 2014, 2012, 2011, 2010, 2008, 2002, 1996 and 1991 Bar Examinations. II. Procopio was dismissed from employment for stealing his co-employee Raul’s watch. Procopio filed a complaint for illegal dismissal. The Labor Arbiter ruled in Procopio’s favor on the ground that Raul’s testimony was doubtful, and, therefore, the doubt should be resolved in favor of Procopio. On appeal, the NLRC reversed the ruling because Article 4 of the Labor Code – which states that all doubts in the interpretation and implementation of the provisions of the Labor Code, including the implementing rules and regulations, shall be resolved in favor of labor – applied only when the doubt involved the “implementation and interpretation” of the Labor Code; hence, the doubt, which involved the application of the rules on evidence, not the Labor Code, could not necessarily be resolved in favor of Procopio. Was the reversal correct? Explain your answer. (3%) SUGGESTED ANSWER: In Peñaflor v. Outdoor Clothing Manufacturing, G.R. No. 177114, January 21, 2010, the Supreme Court explained the application of Article 4 of the Labor Code regarding doubts on respondent’s evidence on the voluntariness of petitioner’s resignation. Thus, the High Court said:

Another basic principle is that expressed in Article 4 of the Labor Code – that all doubts in the interpretation and implementation of the Labor Code should be interpreted in favor of the workingman. This principle has been extended by jurisprudence to cover doubts in the evidence presented by the employer and the employee. (Fujitsu Computer Products Corporation of the Philippines v. Court of Appeals, 494 Phil. 697 [2005]) As shown above, Peñaflor has, at very least, shown serious doubts about the merits of the company’s case, particularly in the appreciation of the clinching evidence on which the NLRC and CA decisions were based. In such contest of evidence, the cited Article 4 compels us to rule in Peñaflor’s favor. Thus, we find that Peñaflor was constructively dismissed given the hostile and discriminatory working environment he found himself in, particularly evidenced by the escalating acts of unfairness against him that culminated in the appointment of another HRD manager without any prior notice to him. Where no less than the company’s chief corporate officer was against him, Peñaflor had no alternative but to resign from his employment. (Unicorm Safety Glass, Inc. v. Basarte, 486 Phil. 493 [2004]) NOTE: The foregoing answer in can be found in page 30 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on Article 4 regarding the application of Article 4 on doubts in the evidence was asked last 2009 Bar Examination. III. A. Andrew Manning Agency (AMA) recruited Feliciano for employment by Invictus Shipping, its foreign principal. Meantime, AMA and Invictus Shipping terminated their agency agreement. Upon his repatriation following his premature termination, Feliciano claimed from AMA and Invictus Shipping the payment of his salaries and benefits for the unserved portion of the contract. AMA denied liability on the ground that it no longer had any agency agreement with Invictus Shipping. Is AMA correct? Explain your answer. (3%) SUGGESTED ANSWER: AMA is not correct. Section 10 of Republic Act 10022 provides that the liability of the principal/employer and the recruitment/placement agency for any and all

claims shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract. NOTE: The foregoing answer in can be found in page 675 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. B. As a rule, direct hiring of migrant workers is not allowed. What are the exceptions? Explain your answer. (2.5%) SUGGESTED ANSWER: Direct Hires — workers directly hired by employers for overseas employment as authorized by the Secretary of Labor and Employment and processed by the POEA, including: 1. Those hired by international organizations 2. Those hired members of the diplomatic corps. 3. Name hires or workers who are able to secure overseas employment opportunity with an employer without the assistance or participation of any agency. [Labor Code, POEA Rules] (Section 1(i), Rule II, Omnibus Rules and Regulations Implementing The Migrant Workers and Overseas Filipinos Act of 1995 as amended by Republic Act No. 10022) The direct hires are exceptions to the ban on direct-hiring under Article 18 of the Labor Code. NOTE: The foregoing answer in can be found in page 112 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on direct hiring was asked last 2010 Bar Examination. C.

Phil, a resident alien, sought employment in the Philippines. The employer, noticing that Phil was a foreigner, demanded that eh first secures an employment permit from the DOLE. Is the employer correct? Explain your answer. (2.5%) SUGGESTED ANSWER: The employer is not correct. According to Section 2, Department Order No. 97-09 Series of 2009, issued on August 26, 2009 [Revised Rules for the Issuance of Employment Permits to Foreign Nationals]one of the foreign nationals that are exempt from securing an employment permit is a permanent permanent resident foreign nationals, probationary or temporary visa holders. Moreover, the Labor Code speaks of non-resident aliens that are required to obtain an alien employment permit. NOTE: The foregoing answer can be found in pages 270 and 271 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on alien employment permit has been time and again the subject matter of bar questions, more specifically during the 2007 and 1995 Bar Examinations. IV The Regional Tripartite and Productivity Board (RTWPB) for Region 3 issued a wage order on November 2, 2017 fixing the minimum wages for all industries throughout Region 3. (a) Is the wage order subject to the approval of the National Wages and Productivity Commission before it takes effect? (2%) SUGGESTED ANSWER: No. the National Wages and Productivity Commission function is to review the Wage Order issued by the Regional Tripartite and Productivity Board (RTWPB) (See Section 4, Rule IV, NWPC GUIDELINES NO. 01 Series of 2007, dated June 19, 2007) NOTE: The foregoing answer can be found in page 558 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano.

(b) The law mandates that no petition for wage increase shall be entertained within a period of 12 months from the effectivity of the wage order. Under what circumstances may the Kilusang Walang Takot, a federation of labor organizations that publicly and openly assails the wage order as blatantly unjust, initiate the review of the wage increases under the wage order without waiting for the end of the 12-month period? Explain your answer. (3%) SUGGESTED ANSWER: If Kilusang Walang Takot feels aggrieved by the Wage Order issued by the Board it may appeal such Order to the National Wages and Productivity Commission by filing a verified appeal with the Board not later than ten (10) days from the date of publication of the Order on the grounds of non-conformity with prescribed guidelines and/or procedures, questions of law and grave abuse of discretion. (See Section 1, Rule IV, in relation to Section 2 Rule V, NWPC GUIDELINES NO. 01 Series of 2007, dated June 19, 2007) NOTE: The foregoing answer can be found in pages 559-560 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. V A. Percival was a mechanic of Pacific Airlines. He enjoyed a meal break of one hour. However, during meal breaks, he was required to be on stand-by for emergency work. During emergencies, he was made to forego his meals or to hurry up eating. He demanded payment of overtime for work done during his meal periods. Is Percival correct? Explain your answer. (3%) SUGGESTED ANSWER: Percival is correct. While as a rule the eight hour period does not include the meal break however, in the case of Percival he was required to forego his meals or to hurry up eating. The meal period should therefore be considered compensable hours of work and a work beyond eight hours. Percival is therefore entitled to overtime time.

NOTE: The foregoing answer can be found in page 371 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. B. Distinguish a learner from an apprentice. (4%) SUGGESTED ANSWER: As to the agreement In Apprenticeship, the agreement entered by the parties is known as Apprenticeship Agreement. (Articles 58 [d], Labor Code); In learnership, the agreement entered by the parties is known as Learnership Agreement (Article 75, Labor Code); As to the period of agreement In Apprenticeship, the agreement shall not be less than four (4) months and not more than six (6) months; (Articles 58 [c] in relation to Article 61 and 3.10, TESDA Circular No. 16, Series of 2004); In learnership, the agreement period shall not be more than three (3) months; (Article 75 (c), Labor Code, 3.10, TESDA Circular No. 16, Series of 2004); As to obligations to hire In apprenticeship, the enterprise is not obliged to hire the apprentice after the apprenticeship period; (Articles 61, Labor Code, 3.10, TESDA Circular No. 16, Series of 2004); In learnership, the enterprise is obliged to hire the learner after the learnership period (Article 75 (d), Labor Code, 3.10, TESDA Circular No. 16, Series of 2004); As to pre-termination of the agreement In apprenticeship, upon pre-termination of the agreement there is no regular employment by operation of law; (Articles 57-72, Labor Code); In learnership, a learner allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners (Article 75 (d), Labor Code); As to the person hired

In apprenticeship, the persons hired as trainees is known as apprentice; (Articles 58 [a], Labor Code, 2, TESDA Circular No. 16, Series of 2004); In learnership, the persons hired as trainees is known as learner (Articles 73, Labor Code, 2, TESDA Circular No. 16, Series of 2004); As to the supplement on theoretical instructions In apprenticeship, the training on the job is with compulsory related theoretical instructions; (Article 58 [a], Labor Code, Section 4 [j], R.A. 7796, and 2, TESDA Circular No. 16, Series of 2004); In learnership, the practical training on the job may or may not be supplemented by related theoretical instructions; (2, TESDA Circular No. 16, Series of 2004); As to the reasons for hiring In apprenticeship, the law did not provide any reasons where an apprentice may be hired (Articles 59-72, Labor Code); In learnership, the law provides the following reasons for hiring (1) when no experienced workers are available; (2) the employment of learners is necessary to prevent curtailment of employment opportunities; and (3) the employment does not create unfair competition in terms of labor costs or impair or lower working standards (Article 74, Labor Code); As to qualifications In apprenticeship, the qualifications are (a) At least fifteen (15) years of age; (b) Possess vocational aptitude and capacity for appropriate tests; and (c) Possess the ability to comprehend and follow oral and written instructions and no justifications or reasons given by law for hiring; (Articles 59, Labor Code); In learnership, the law did not provide such qualifications. However, reasons or justifications for hiring are provided by law (Articles 74, Labor Code); As to what occupations hired In apprenticeship, the occupations involves “highly technical industries” which means trade, business, enterprise, industry, or other activity, which is engaged in the application of advanced technology and apprenticeable occupations must be approved by TESDA; (Articles 60, Labor Code and 3.3, TESDA Circular No. 16, Series of 2004). In learnership, the occupations involves are semi-skilled and other industrial occupations which are non-apprenticeable and learnable occupations

must be approved by TESDA (Articles 73, Labor Code and 3.3, TESDA Circular No. 16, Series of 2004). NOTE: The foregoing answer can be found in pages 313-314 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on the distinctions between apprentice and learner has been the subject matter of bar questions during the 2016 and 2012 Bar Examinations. C. Are there differences between a househelper and a homeworker? Explain your answer? Domestic worker or “Kasambahay” refers to any person engaged in domestic work within an employment relationship such as, but not limited to, the following: general househelp, nursemaid or “yaya”, cook, gardener, or laundry person while (b) “Industrial Homeworker” means a worker who is engaged in industrial homework. NOTE: The foregoing answer can be found in pages 676 and 712 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. VI. A. One Pacific Airline’s policies was to hire only single applicants as flight attendants, and considered as automatically resigned the flight attendants at the moment they got married. Is the policy valid? Explain your answer. (2.5%) SUGGESTED ANSWER: The policy is not valid. The policy is a violation of the Labor Code’s prohibition on stipulation against marriage under Article 134. The requirement that a company policy must be reasonable under the circumstances to qualify as a valid exercise of management prerogative was also at issue in the 1997 case of Philippine Telegraph and Telephone Company v. NLRC, G.R. No. 118978, May 23, 1997. In said case, the employee was dismissed in violation of petitioner’s policy of disqualifying from

work any woman worker who contracts marriage. The Supreme held that the company policy violates the right against discrimination afforded all women workers under Article 136 (now 134) of the Labor Code. NOTE: The foregoing answer can be found in pages 623 and 627 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on stipulation against marriage has been time and again the subject matter of bar questions, more specifically during the 2012, 2010, 1997 and 1995 Bar Examinations. B. Tarcisio was employed as operations manager and received a monthly salary of P25,000.00 through his payroll account with DB Bank. He obtained a loan from Roberto to purchase a car. Tarcisio failed to pay Roberto when the loan fell due. Roberto sued to collect, and moved to garnish Tarcisio’s payroll account. The latter vigorously objected and argued that slaries were exempt from garnishment. Is Tarcisio correct? Explain your answer. (3%) SUGGESTED ANSWER: Tarciso is not correct. In Gaa v. Court of Appeals, G.R. No. L-44169 December 3, 1985, the Supreme Court ruled that Article 1708 used the word "wages" and not "salary" in relation to "laborer" when it declared what are to be exempted from attachment and execution. The monthly salary of Tarcisio is therefore subject to garnishment. NOTE: The foregoing answer can be found in page 450 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on the distinction between salary and wage has been the subject matter of bar questions during the 1994 Bar Examination. VII Dr. Crisostomo entered into a retainer agreement with AB Hotel and Resort whereby he would provide medical services to the guests and employees of AB Hoteland Resort, which, in turn, would provide the clinic premises and medical supplies. He received a monthly retainer fee of P60,000.00, plus a 70% share in the service charges from AB Hoteland Resort’s guests availing themselves of the clinic’s

services. The clinic employed nurses and allied staff, whose salaries, SSS contributions and other benefits he undertook to pay. AB Hotel and Resort issued directives giving instructions to him on the replenishment of emergency kits and forbidding the clinic staff from receiving cash payments from guests. In time, the nurses and the clinic staff claimed entitlement to rights as regular employees of AB Hotelnad Resort, but the latter refused on the ground that Dr. Crisostomo, who was their employer, was an independent contractor. Rule, with reasons. (4%) SUGGESTED ANSWER: The test of independent contractorship was applied in the case of Polyfoam-RGC International Corporation v. Concepcion, G.R. No. 172349, June 13, 2012. Thus, the High Court ruled: The test of independent contractorship is “whether one claiming to be an independent contractor has contracted to do the work according to his own methods and without being subject to the control of the employer, except only as to the results of the work.” (San Miguel Corporation v. Aballa, G.R. No. 149011, June 28, 2005, 461 SCRA 392, 421) In San Miguel Corporation v. Semillano, G.R. No. 164257, July 5, 2010, 623 SCRA 114 the Court laid down the criteria in determining the existence of an independent and permissible contractor relationship, to wit: “x x x [W]hether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer’s power with respect to the hiring, firing and payment of the contractor’s workers; the control of the premises; the duty to supply the premises, tools, appliances, materials, and labor; and the mode, manner and terms of payment.” (San Miguel Corporation v. Semillano, supra, at p. 124; Sasan, Sr. v. National Labor Relations Commission 4th Division, supra at p. 691) Applying the above-test, the nurses are employees of Dr. Crisostomo. The facts had clearly stated that Dr. Crisostomo was the one paying the salaries of the nurses and even reported them for SSS coverage. The element of payment of wages is present. NOTE: The foregoing answer can be found in page 497 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by

Atty. Voltaire T. Duano. The topic on the distinction between salary and wage has been the subject matter of bar questions during the 1994 Bar Examination. The problem can also be resolved by characterizing the relationship of Dr. Crisostomo and AB Hoteland Resort as to whether it is a legitimate contracting or labor-only contracting. The topic on contracting/subcontracting has been time and again the subject matter of bar questions, more specifically during the 2016, 2014, 2013, 2012, 2011, 2009, 2004, 2002, 2001, 2000, 1997 and 1994 Bar Examinations. VIII Marciano was hired as Chief Engineer on board the vessel M/V Australia. His contract of employment was for nine months. After nine months, he was re-hired. He was hired a third time after another nine months. He now claims entitlement to the benefits of a regular employee based on his performed tasks usually necessary and desirable to the employer’s business for a continuous period of more than one year. Is Marciano’s claim tenable? Explain. SUGGESTED ANSWER: Marciano’s claim is not tenable. The Supreme Court squarely passed upon the issue in Millares v. NLRC, G.R. No. 110524, July 29, 2002, where one of the issues raised was whether seafarers are regular or contractual employees whose employment are terminated every time their contracts of employment expire. The Supreme Court explained: [I]t is clear that seafarers are considered contractual employees. They can not be considered as regular employees under Article 280 of the Labor Code. Their employment is governed by the contracts they sign everytime they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. They fall under the exception of Article 280 whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. We need not depart from the rulings of the Court in the two aforementioned cases which indeed constitute stare decisis with respect to the employment status of seafarers.

NOTE: The foregoing answer can be found in page 739 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on the seafarers has been time and again the subject matter of bar questions, more specifically during the 2014 and 2002 Bar Examinations. IX Section 255 (245) of the Labor Code recognizes three categories of employees , namely: managerial, supervisory, and rank-and-file. (a) Give the characteristics of each category of employees, and state whether the employees in each category may organized and form unions. Explain your answer. (5%) SUGGESTED ANSWER: Under Article 255 [245] of the Labor Code the following are provided: Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or legitimate labor organizations of their own. The rank-and-file union and the supervisors’ union operating within the same establishment may join the same federation or national union. (b) May confidential employees who assist managerial employees, and who act in a confidential capacity or have access to confidential matters being handled by persons exercising managerial functions in the field of labor relations form, or assist, or join labor unions? Explain your answer? (2.5%) SUGGESTED ANSWER: No. In Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., G.R. No. 162025, August 3, 2010, the High Court explained, who are those confidential employees covered by the prohibition to join, form and assist any labor organization under Article 245 [now 255] of the Labor Code, as follows: Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two (2) criteria are cumulative, and both

must be met if an employee is to be considered a confidential employee that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the confidential employee rule. (San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, G.R. No. 110399, August 15, 1997, 277 SCRA 370, 374-375, citing Westinghouse Electric Corp. v. NLRB (CA6) 398 F2d 669 (1968), Ladish Co., 178 NLRB 90 (1969) and B.F. Goodrich Co., 115 NLRB 722 [1956]) NOTE: The foregoing answer can be found in page 273 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on the confidential employees covered by the prohibition has been time and again the subject matter of bar questions, more specifically during the 2014, 2011, 2009, 2002 and 1999 Bar Examinations. X. A. The labor sector has been loudly agitating for the end of labor-only contracting, as distinguished from job contracting. Explain these two kinds of labor contracting, give the effect of a finding that one is a labor-only contractor. Explain your answers. (4%) SUGGESTED ANSWER: The Supreme Court in Polyfoam-RGC International Corporation vs. Concepcion, G.R. No. 172349, June 13, 2012 citing Sasan, Sr. v. National Labor Relations Commission 4th Division, G.R. No. 176240, October 17, 2008, 569 SCRA 670 distinguished permissible job contracting or subcontracting from “labor-only” contracting, to wit: “Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out to a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. A person

is considered engaged in legitimate job contracting or subcontracting if the following conditions concur: (a) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof; (b) The contractor or subcontractor has substantial capital or investment; and (c) The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits. In contrast, labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal. In labor-only contracting, the following elements are present: (a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility; and (b) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal.” (Sasan, Sr. v. National Labor Relations Commission 4th Division, supra, at pp. 689-690. [Citations omitted]) In PCI Automation Center, Inc. v. NLRC, G.R. No. 115920, January 29, 1996, the effect of a finding that one is a labor-only contractor was ruled as follows: In legitimate job contracting, no employer-employee relationship exists between the employees of the job contractor and the principal employer. Even then, the principal employer becomes jointly and severally liable with the job contractor for the payment of the employees’ wages whenever the contractor fails to pay the same. In such case, the law creates an employer-employee relationship between the principal employer and the job contractor’s employees for a limited purpose,

that is, to ensure that the employees are paid their wages. Other than the payment of wages, the principal employer is not responsible for any claim made by the employees. (Philippine Bank of Communications vs. NLRC, 146 SCRA 347 [1986]) On the other hand, in labor-only contracting, an employer-employee relationship is created by law between the principal employer and the employees of the laboronly contractor. In this case, the labor-only contractor is considered merely an agent of the principal employer. The principal employer is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. The principal employer therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees. (Philippine Bank of Communications vs. NLRC, 146 SCRA 347 [1986]) Thus, in legitimate job contracting, the principal employer is considered only an indirect employer, (Article 107, Labor Code, as amended) while in labor-only contracting, the principal employer is considered the direct employer of the employees. (last paragraph of Article 106, Labor Code, as amended) In short, the legitimate job contractor provides services while the labor-only contractor provides only manpower. The legitimate job contractor undertakes to perform a specific job for the principal employer while the labor-only contractor merely provides the personnel to work for the principal employer. NOTE: The foregoing answer can be found in pages 507508 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on job-contracting and labor-only contracting has been time and again the subject matter of bar questions, more specifically during the 2014, 2013, 2012, 2011, 2009, 2004, 2002, 2001, 2000, 1997 and 1994 Bar Examinations. B. What are the grounds for validly terminating the services of an employee based on a just cause? (5%) SUGGESTED ANSWER: An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and (e) Other causes analogous to the foregoing. (Art. 297 [282], Labor Code) NOTE: The foregoing answer can be found in pages 899-890 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on the just cause for termination has been time and again the subject matter of bar questions, more specifically during the 2015, 2014, 2013, 2012, 2011, 2009, 2008, 2006, 2003, 2001, 1995, 1996, 1995, 1999 Bar Examinations. C. Give the procedure to be observed for validly terminating the services of an employee based on a just cause? (4%) SUGGESTED ANSWER: As defined in Article 297 of the Labor Code, as amended, the requirement of two written notices served on the employee shall observe the following: (a) The first written notice should contain: 1. The specific causes or grounds for termination as provided for under Article 297 of the Labor Code, as amended, and company policies, if any; 2. Detailed narration of the facts and circumstances that will serve as basis for the charge against the employee. A general description of the charge will not suffice; and 3. A directive that the employee is given opportunity to submit a written explanation within a reasonable period. “Reasonable period” should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employee an opportunity to study the accusation, consult or be represented by a lawyer or union officer, gather data and

evidence, and decide on the defenses against the complaint. (Unilever v. Rivera, G.R. No. 201701, June 3, 2013; Section 12, DOLE Department Order 18-A) (b) After serving the first notice, the employer should afford the employee ample opportunity to be heard and to defend himself/herself with the assistance of his/her representative if he/she so desires, as provided in Article 299 (b) of the Labor Code, as amended. “Ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him/her and submit evidence in support of his/her defense, whether in a hearing, conference or some other fair, just and reasonable way. A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it. (Perez v. PT&T, G.R. No. 152048, April 7, 2009, Section 12, DOLE Department Order 18-A) (c) After determining that termination of employment is justified, the employer shall serve the employee a written notice of termination indicating that: (1) all circumstances involving the charge against the employee have been considered; and (2) the grounds have been established to justify the severance of their employment. The foregoing notices shall be served personally to the employee or to the employee’s last known address. (Section 5, 5.1, Rule I-A, D.O. No. 147-15, Series of 2015) NOTE: The foregoing answer can be found in pages 899-890 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on the procedural due process has been time and again the subject matter of bar questions, more specifically during the 2012, 2009, 2006, 1999 and 1998 Bar Examinations. XI A.

The modes of determining the exclusive bargaining agent of the employees in a business are: (a) voluntary recognition; (b) certification election; and (c) consent election. Explain how they differ from one another. (4%) SUGGESTED ANSWER: Voluntary Recognition refers to the process by which a legitimate labor union is recognized by the employer as the exclusive bargaining representative or agent in a bargaining unit, reported with the Regional Office in accordance with Rule VII, Section 2 of these Rules. Certification Election” or Consent Election refers to the process of determining through secret ballot the sole and exclusive representative of the employees in an appropriate bargaining unit for purposes of collective bargaining or negotiation. A certification election is ordered by the Department, while a consent election is voluntarily agreed upon by the parties, with or without the intervention by the Department. (Rule I, Section 1, Book V, Rules to Implement the Labor Code) NOTE: The foregoing answer can be found in pages 21 and 22 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on the representation issue has been time and again the subject matter of bar questions, more specifically during the 2006, 2004, and 2000 Bar Examinations. B. Marcel was the Vice President for Finance and Administration and a member of the Board of Directors of Mercedes Corporation. He brought a complaint for illegal suspension and illegal dismissal against Mercedes Corporation, which moved to dismiss the complaint on the ground that the complaint pertained to the jurisdiction of the RTC due to the controversy being intracorporate based on his positions in the corporation. Marcel countered that he had only been removed as Vice President for Finance and Administration, not as a member of the Board of Directors. He also argued that his position was not listed as among the corporate offices in Mercedes Corporation’s by-law. Is the argument of Marcel correct? Explain your answer. (2.5%) SUGGESTED ANSWER:

Marcel’s contention is correct. It is settled in Matling Industrial and Commercial Corporation v. Coros, G.R. No. 157802, 13 October 2010, cited in Marc II Marketing Inc. v. Joson, G.R. No. 171993, December 12, 2011, where it held, thus: Conformably with Section 25, a position must be expressly mentioned in the [b]y[l]aws in order to be considered as a corporate office. Thus, the creation of an office pursuant to or under a [b]y-[l]aw enabling provision is not enough to make a position a corporate office. [In] Guerrea v. Lezama [citation omitted] the first ruling on the matter, held that the only officers of a corporation were those given that character either by the Corporation Code or by the [b]y-[l]aws; the rest of the corporate officers could be considered only as employees or subordinate officials. xxx It is relevant to state in this connection that the SEC, the primary agency administering the Corporation Code, adopted a similar interpretation of Section 25 of the Corporation Code in its Opinion dated November 25, 1993 [citation omitted], to wit: Thus, pursuant to the above provision (Section 25 of the Corporation Code), whoever are the corporate officers enumerated in the by-laws are the exclusive Officers of the corporation and the Board has no power to create other Offices without amending first the corporate [b]y-laws. However, the Board may create appointive positions other than the positions of corporate Officers, but the persons occupying such positions are not considered as corporate officers within the meaning of Section 25 of the Corporation Code and are not empowered to exercise the functions of the corporate Officers, except those functions lawfully delegated to them. Their functions and duties are to be determined by the Board of Directors/Trustees. (Matling Industrial and Commercial Corporation v. Coros, supra at 26-27) [Emphasis supplied.] With the given circumstances and in conformity with Matling Industrial and Commercial Corporation v. Coros, Marcel was not a corporate officer of Mercedes Corporation because his position as Vice President for Finance and Administration was not specifically mentioned in the roster of corporate officers in its corporate by-laws.

NOTE: The foregoing answer can be found in page 46 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on the on whether an position is a corporate officer has been time and again the subject matter of bar questions, more specifically during the 2015, 2014, 2011 and 1996 Bar Examinations. C. State the jurisdiction of the Voluntary Arbitrator, or Panel of Voluntary Arbitrators in labor disputes? (4%) SUGGESTED ANSWER: The voluntary arbitrator or panel of voluntary arbitrators shall have exclusive and original jurisdiction to hear and decide all unresolved grievances arising from: 1. The implementation or interpretation of the collective bargaining agreements; (Article 274 [261], Labor Code, Section 4, Rule XIX, Book V, Omnibus Rules Implementing the Labor Code) 2. The interpretation or enforcement of company personnel policies which remain unresolved after exhaustion of the grievance procedure; (Article 274 [261], Labor Code, Section 4, Rule XIX, Book V, Omnibus Rules Implementing the Labor Code) 3. Wage distortion issues arising from the application of any wage orders in organized establishments; (par. 4, Article 124, Labor Code, Section 4, Rule XIX, Book V, Omnibus Rules Implementing the Labor Code) 4. The interpretation and implementation of the productivity incentive programs under RA 6971. 5. Upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. (Article 275. [262], Labor Code, Section 4, Rule XIX, Book V, Omnibus Rules Implementing the Labor Code) 6. Violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement; (Article 274. [261], Labor Code)

NOTE: The foregoing answer can be found in page 442 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on jurisdiction of the voluntary arbitrators or panel of voluntary arbitrators has been time and again the subject matter of bar questions, more specifically during the 2008, 2001, 1997 and 1995 Bar Examinations. XII A. Juanito initiated a case for illegal dismissal against Mandarin Company. The Labor Arbiter decided in his favor, and ordered his immediate reinstatement with full backwages and without loss of seniority and other benefits. Mandarin Company did not like to allow him back in its premises to prevent him from influencing his co-workers to move against the interest of the company; hence, it directed his payroll reinstatement and paid his full backwages and other benefits even as it appealed to the NLRC. A few months later, the NLRC reversed the ruling of the Labor Arbiter and declared that Juanito’s dismissal was valid. The reversal ultimately became final. May Mandarin Company recover the backwages and other benefits paid to Juanito pursuant to the decision of the Labor Arbiter in view of the reversal by the NLRC? Rule, with reasons. (2.5%) SUGGESTED ANSWER: Mandarin Company cannot recover the backwages and other benefits paid to Juanito pursuant to the decision of the Labor Arbiter despite the reversal by the NLRC. The refund doctrine has already been reversed in Garcia v. Philippine Airlines, Inc., G. R. No. 164856, July 20, 2009, where the Supreme Court then stressed that as opposed to the abovementioned Genuino v. National Labor Relations Commission, G.R. Nos. 142732-33 & 142753-54, December 4, 2007, 539 SCRA 342 the social justice principles of labor law outweigh or render inapplicable the civil law doctrine of unjust enrichment. NOTE: The foregoing answer can be found in pages 636-638 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano.

The topic on refund doctrine was asked for the first time for this year’s bar examinations. B. Gene is a married regular employee of Matibay Corporation. The employee and Matibay Corporation had an existing CBA that provided for funeral or bereavement aid of P15,000.00 in case of the death of a legal dependent of a regular employee. His widowed mother, who had been living with him and his family for many years, died; hence, he claimed the funeral aid. Matibay Corporation denied the claim on the basis that she had not been his legal dependents as the term legal dependent was defined by the Social Security Law. (a) Who may be the legal dependents of Gene under the Social Security Law? (2.5%) SUGGESTED ANSWER: Section 8 (e) of the Social Security Law provides that the dependents shall be the following: (1) The legal spouse entitled by law to receive support from the member; (2) The legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed, and has not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally; and (3) The parent who is receiving regular support from the member. NOTE: The foregoing answer can be found in page 862 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on dependents has been time and again the subject matter of bar questions, more specifically during the 2014 and 2002 Bar Examinations. (b) Is Gene entitled to the funeral aid for the death of his widowed mother? Explain your answer. (2%) SUGGESTED ANSWER:

Gene is entitled to the funeral aid for the death of his widowed mother under CBA. This is because the said CBA clearly provided for funeral or bereavement aid of P15,000.00 in case of the death of a legal dependent of a regular employee. But in so far as the SSS law is concerned, the only way that Gene can recover is that if he will qualify as the primary beneficiary of his widowed mother provided he has the restrictions on the definition of dependent children. NOTE: The foregoing answer can be found in pages 862-864 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano in so far as the definition of beneficiary in relation to dependents are concerned. C. Rosa was granted vacation leave by her employer to spend three weeks in Africa with her family. Prior to her departure, the General Manager of the company requested her to visit the plant of the company in Zimbabwe in order to derive best manufacturing practices useful to the company. She accepted the request because the errand would be important to the company and Zimbabwe was anyway in her itinerary. It appears that she contracted a serious disease during the trip. Upon her return, she filed a claim for compensation, insisting that she had contracted the disease while serving the interest of her employer. Under the Labor Code, the sickness or death of an employee, to be compensable, must have resulted from an illness either definitely, accepted as an occupational disease by the Employee’s Compensation Commission, or caused by employment subject to proof that the risk of contracting the same is increased by working conditions. Is the serious disease Rosa contracted during her trip to Africa compensable? Explain your answer. (2.5%) SUGGESTED ANSWER: In Government Service Insurance System vs. Besitan, G.R. No. 178901, November 23, 2011, explained the concept of increased theory as follows: Corollarily, for the sickness or resulting disability or death to be compensable, the claimant must prove either (1) that the employee’s sickness was the result of an

occupational disease listed under Annex “A” of the Amended Rules on Employees’ Compensation, or (2) that the risk of contracting the disease was increased by his working conditions. Certainty is not required only probability Under the increased risk theory, there must be a reasonable proof that the employee’s working condition increased his risk of contracting the disease, or that there is a connection between his work and the cause of the disease. (CastorGarupa v. Employees’ Compensation Commission, G.R. No. 158268, April 12, 2006, 487 SCRA 171, 180) Only a reasonable proof of work-connection, not direct causal relation, however, is required to establish compensability of a non-occupational disease. (Government Service Insurance System v. Cordero, G.R. Nos. 171378 & 171388, March 17, 2009, 581 SCRA 633, 640) Probability, and not certainty, is the yardstick in compensation proceedings; thus, any doubt should be interpreted in favor of the employees for whom social legislations, like PD No. 626, were enacted. (Government Service Insurance System v. Corrales, G.R. No. 166261, June 27, 2008, 556 SCRA 230, 243-244) Applying the above ruling, Rosa must present a reasonable proof that her working condition increased his risk of contracting the disease, or that there is a connection between his work and the cause of the disease otherwise the same is not compensable. NOTE: The foregoing answer can be found in page 766 of the book entitled Principles and Cases Labor Standards and Social Legislation, First Edition 2015, by Atty. Voltaire T. Duano. The topic on compensation proceedings has been time and again the subject matter of bar questions, more specifically during the 2012, 2005 and 1996 Bar Examinations. . XIII A. Given that the liability for an illegal strike is individual, not collective, state when the participating union officers and members may be terminated from employment because of the illegal strike. Explain your answer. (4%)

SUGGESTED ANSWER: The following are the effects of participation in an illegal strike and commission of illegal acts during strike: 1. Any union officer who knowingly participates in an illegal strike; and 2. Any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status; (Third paragraph, Article 279 (a) [264 (a)], Labor Code) NOTE: The foregoing answer can be found in page 520 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on the effects of participation in illegal strike has been time and again the subject matter of bar questions, more specifically during the 2015, 2014, 2012, 2010, 2008, 2007, 2006, 1997, 1995 and 1994 Bar Examinations. B. A sympathetic strike is stoppage of work to make common cause with other strikers in another establishment or business. Is the sympathetic strike valid? Explain your answer. (1%) SUGGESTED ANSWER: The illegal stoppage of work by way of sympathetic strike has been settled in the case of Biflex Phils. Labor Union (NAFLU) v. Filflex Industrial and Manufacturing Cororation, G.R. No. 155679, 19 December 2006, where it was ruled that stoppage of work due to welga ng bayan is in the nature of a general strike, an extended sympathy strike. It affects numerous employers including those who do not have a dispute with their employees regarding their terms and conditions of employment.Employees who have no labor dispute with their employer but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage. Even if petitioners joining the welga ng bayan were considered merely as an exercise of their freedom of expression, freedom of assembly or freedom to petition the government for redress of grievances, the exercise of such rights is not absolute. For the protection of other significant state interests such as the right of enterprises to reasonable returns on investments, and to expansion and growth enshrined in the 1987 Constitution must

also be considered, otherwise, oppression or self-destruction of capital in order to promote the interests of labor would be sanctioned. And it would give imprimatur to workers joining demonstrations/rallies even before affording the employer an opportunity to make the necessary arrangements to counteract the implications of the work stoppage on the business, and ignore the novel principle of shared responsibility between workers and employers aimed at fostering industrial peace. There being no showing that petitioners notified respondents of their intention, or that they were allowed by respondents, to join the welga ng bayan on October 24, 1990, their work stoppage is beyond legal protection. NOTE: The foregoing answer can be found in page 506 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on sympathetic strike has been the subject matter of bar questions during the 2004 Bar Examinations. C. Due to business recession, Ballistic Company retrenched a part of its workforce. Opposing the retrenchment, some of the affected employees staged a strike. Eventually, the retrenchment was found to be justified, and the strike was declared illegal; hence, the leaders of the strike, including the retrenched employees, were declared to have lost their employment status. Are the striking retrenched employees still entitled to separation pay under Sec. 298 (283) of the Labor Code despite the illegality of their strike? Explain your answer. (2%) SUGGESTED ANSWER: The strikers including the union officers should be paid their separation pay by virtue of retrenchment notwithstanding the illegal strike was declared illegal. The issue on entitlement to separation pay due to authorized cause and the ground for termination due to knowingly participating in illegal strike are distinct and different. XIV Pursuant to his power under Sec. 278(g) (263(g)) of the Labor Code, the Secretary of Labor assumed jurisdiction over the 3-day old strike in Armor Steel Plates, Inc., one of the country’s bigger manufacturers of steel plates, and ordered all the

striking employees to return to work. The striking employees ignored the order to return to work. (a) What conditions may justify the Secretary of Labor to assume jurisdiction? (2.5%) SUGGESTED ANSWER: Pursuant to Article 263 (g) [now 278 (g)], when a labor dispute causes or is likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the National Labor Relations Commission (NLRC) for compulsory arbitration. (Section 1, Operational Guidelines of Department Order No. 40-G-03, Series of 2010, dated February 24, 2011) For a valid exercise of the assumption of jurisdiction authority, any of the following conditions must be present: a. Both parties have requested the Secretary of Labor and Employment to assume jurisdiction over the labor dispute; or b. After a conference called by the Office of the Secretary of Labor and Employment on the propriety of the issuance of the Assumption or Certification Order, motu proprio or upon a request or petition by either party to the labor dispute. In the said conference. the parties shall also be encouraged to amicably settle the dispute. (Section 2, Operational Guidelines of Department Order No. 40-G-03, Series of 2010, dated February 24, 2011) NOTE: The foregoing answer can be found in pages 468-487 of the book entitled Principles and Cases Labor Relations, First Edition 2016, by Atty. Voltaire T. Duano. The topic on the assumption of jurisdiction has been time and again the subject matter of bar questions, more specifically during the 2012, 2004 and 1996 Bar Examinations. (b) What are the consequences of the assumption of jurisdiction by the Secretary of Labor, and of the disobedience to the return to work? Explain your answer. (2.5%) The consequences of assumption of jurisdiction are as follows:

a. If a strike or lockout has not taken place, the parties are enjoined to conduct any untoward action that may lead to a strike or lockout. b. if a strike or lockout has already taken place, all striking and locked out workers shall, within twenty-four (24) hours from receipt of an Assumption or Certification Order, immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike. c. At any point in time, the parties are not prevented from submitting the dispute to Voluntary Arbitration with the Secretary of Labor and Employment or his/her duly authorized representative as Voluntary Arbitrator or Panel of Voluntary Arbitrators. (Section 3, Operational Guidelines of Department Order No. 40-G-03, Series of 2010, dated February 24, 2011) While the consequence of disobedience to the return to work has been ruled in the case of Manila Hotel Employees Association v. Manila Hotel Corporation, G.R. No. 154591, March 5, 2007. In holding that defiance of the assumption order or a return-to work order by a striking employee, whether a union officer or a member, is an illegal act and, therefore, a valid ground for loss of employment status. The High Court explained: The law explicitly prohibits such acts. ART. 263. STRIKES, PICKETING, AND LOCKOUTS x x x x (omitted) ART. 264. PROHIBITED ACTIVITIES (a) x x x x (omitted)

More to the point, the Court has consistently ruled in a long line of cases spanning several decades that once the SOLE assumes jurisdiction over a labor dispute, such jurisdiction should not be interfered with by the application of the coercive processes of a strike or lockout. Defiance of the assumption order or a return-to work order by a striking employee, whether a union officer or a member, is an

illegal act and, therefore, a valid ground for loss of employment status. (Grand Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel, Restaurant and Allied Industries (GLOWHRAIN), G.R. No. 153664, 18 July 2003, 406 SCRA 688, 710; Telefunken Semiconductors Employees Union-FFW v. Court of Appeals, G.R. Nos. 143013-14, 18 December 2000, 348 SCRA 565, 582; Federation of Free Workers v. Inciong, G.R. No. 49983, 20 April 1982, 208 SCRA 157, 165)